[Congressional Record Volume 144, Number 34 (Tuesday, March 24, 1998)]
[Senate]
[Pages S2463-S2481]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    SUPPLEMENTAL APPROPRIATIONS FOR NATURAL DISASTERS AND OVERSEAS 
               PEACEKEEPING EFFORTS FOR FISCAL YEAR 1998

  The Senate continued with the consideration of the bill.


    changes to the budget resolution aggregates and appropriations 
                          committee allocation

  Mr. DOMENICI. Mr. President, section 314(b)(3) of the Congressional 
Budget Act, as amended, requires the chairman of the Senate Budget 
Committee to adjust the appropriate budgetary aggregates and the 
allocation for the Appropriations Committee to reflect an amount of 
budget authority provided that is the dollar equivalent of the Special 
Drawing Rights with respect to: (1) an increase in the United States 
quota as part of the International Monetary Fund Eleventh General 
Review of Quotas (United States Quota); and (2) any increase in the 
maximum amount available to the Secretary of the Treasury pursuant to 
section 17 of the Bretton Woods Agreements Act, as amended from time to 
time (New Arrangements to Borrow).
  I ask unanimous consent to have printed in the Record a revision to 
the budget authority aggregates for fiscal year 1998 contained in 
section 101 of H. Con. Res. 84.
  There being no objection, the revision was ordered to be printed in 
the Record, as follows:

 
                                                       Budget authority
 
Current aggregates..................................   1,387,577,000,000
Adjustments.........................................     +17,861,000,000
                                                     -------------------
    Revised aggregates..............................   1,405,438,000,000
 

  Mr. DOMENICI. Mr. President, I also ask unanimous consent that 
revisions to the 1998 Senate Appropriations Committee allocation, 
pursuant to section 302 of the Congressional Budget Act, be printed in 
the Record,
  There being no objection, the revisions were ordered to be printed in 
the Record, as follows:

------------------------------------------------------------------------
                                      Budget authority       Outlays
------------------------------------------------------------------------
         CURRENT ALLOCATION
 
Defense discretionary..............    269,000,000,000   266,823,000,000
Nondefense discretionary...........    252,214,000,000   283,293,000,000
Violent crime reduction fund.......      5,500,000,000     3,592,000,000
Mandatory..........................    277,312,000,000   278,725,000,000
                                    ------------------------------------
    Total..........................    803,026,000,000   832,433,000,000
                                    ====================================
            ADJUSTMENTS
 
Defense discretionary..............  .................  ................
Nondefense discretionary...........    +17,861,000,000  ................
Violent crime reduction fund.......  .................  ................
Mandatory..........................  .................  ................
                                    ------------------------------------
    Total..........................    +17,861,000,000  ................
                                    ====================================
         REVISED ALLOCATION
 
Defense discretionary..............    269,000,000,000   266,823,000,000
Nondefense discretionary...........    270,075,000,000   283,293,000,000
Violent crime reduction fund.......      5,500,000,000     3,592,000,000
Mandatory..........................    277,312,000,000   278,725,000,000
                                    ------------------------------------
    Total..........................    821,887,000,000   832,433,000,000
------------------------------------------------------------------------

  Mr. McCONNELL. Mr. President, it is the desire of the chairman of the 
Appropriations Committee that we proceed with an amendment to the 
supplemental to add to the supplemental an agreement painfully worked 
out over the last few weeks with regard to the IMF new arrangements for 
borrowing and quota increase.


                           Amendment No. 2100

(Purpose: To provide supplemental appropriations for the International 
 Monetary Fund for the fiscal year ending September 30, 1998, and for 
                            other purposes)

  Mr. McCONNELL. Mr. President, I send an amendment on behalf of 
Senator Stevens, myself, Senator Hagel, and Senator Gramm of Texas to 
the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Kentucky (Mr. McCONNELL) for himself, Mr. 
     Stevens, Mr. Hagel, and Mr. Gramm, proposes an amendment 
     numbered 2100.

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

       At the appropriate place, insert the following new title:

                 TITLE   --INTERNATIONAL MONETARY FUND

       That the following sums are appropriated, out of any money 
     in the Treasury and otherwise appropriated, for the 
     International Monetary Fund for the fiscal year ending 
     September 30, 1998, and for other purposes, namely:

                    MULTILATERAL ECONOMIC ASSISTANCE


                  funds appropriated to the president

                  loans to international monetary fund

                       new arrangements to borrow

       For loans to the International Monetary Fund (Fund) under 
     the New Arrangements to Borrow, the dollar equivalent of 
     2,462,000,000 Special Drawing Rights, to remain available 
     until expended; in addition, up to the dollar equivalent of 
     4,250,000,000 Special Drawing Rights previously appropriated 
     by the Act of November 30, 1983 (Public Law 98-181), and the 
     Act of October 23, 1962 (Public Law 87-872), for the General 
     Arrangements to Borrow, may also be used for the New 
     Arrangements to Borrow.


                          united states quota

       For an increase in the United States quota in the 
     International Monetary Fund, the dollar equivalent of 
     10,622,500,000 Special Drawing Rights, to remain available 
     until expended.

                           GENERAL PROVISIONS

       Section   . Conditions for the Use of Quota Resources.--(a) 
     None of the funds appropriated in this Act under the heading 
     ``United States Quota, International Monetary Fund'' may be 
     obligated, transferred or made available to the International 
     Monetary Fund until 30 days after the Secretary of the 
     Treasury certifies that the major shareholders of the 
     International Monetary Fund, including the United States, 
     Japan, the Federal Republic of Germany, France, Italy, the 
     United Kingdom, and Canada have publicly agreed to, and will 
     seek to implement in the Fund, policies that provide 
     conditions in stand-by agreements or other arrangements 
     regarding the use of Fund resources, requirements that the 
     recipient country--
       (1) liberalize restrictions on trade in goods and services 
     and on investment, at a minimum consistent with the terms of 
     all international trade obligations and agreements; and
       (2) to eliminate the practice or policy of government 
     directed lending on non-commercial terms or provision of 
     market distorting subsidies to favored industries, 
     enterprises, parties, or institutions.
       (b) Subsequent to the certification provided in subsection 
     (a), in conjunction with the annual submission of the 
     President's budget, the Secretary of the Treasury shall 
     report to the appropriate committees on the implementation 
     and enforcement of the provisions in subsection (a).
       (c) The United States shall exert its influence with the 
     Fund and its members to encourage the Fund to include as part 
     of its conditions of stand-by agreements or other uses of the 
     Fund's resources that the recipient country take action to 
     remove discriminatory treatment between foreign and domestic 
     creditors in its debt resolution proceedings. The Secretary 
     of the Treasury shall report back to the Congress six months 
     after the enactment of this Act, and annually thereafter, on 
     the progress in achieving this requirement.
       (d) Nothing in this section shall be construed to create 
     any private right of action with respect to the enforcement 
     of its terms.
       Sec.   . Transparency and Oversight.--(a) Not later than 30 
     days after enactment of this Act, the Secretary of the 
     Treasury shall certify to the appropriate committees that the 
     Board of Executive Directors of the International Monetary 
     Fund has agreed to provide timely access by the Comptroller 
     General to information and documents relating to the Fund's 
     operations, program and policy reviews and decisions 
     regarding stand-by agreements and other uses of the Fund's 
     resources.
       (b) The Secretary of the Treasury shall direct, and the 
     U.S. Executive Director to the International Monetary Fund 
     shall agree to--
       (1) provide any documents or information available to the 
     Director that are requested by the Comptroller General;
       (2) request from the Fund any documents or material 
     requested by the Comptroller General; and
       (3) use all necessary means to ensure all possible access 
     by the Comptroller General to the staff and operations of the 
     Fund for the purposes of conducting financial and program 
     audits.
       (c) The Secretary of the Treasury, in consultation with the 
     Comptroller General and the U.S. Executive Director of the 
     Fund, shall develop and implement a plan to obtain timely 
     public access to information and documents relating to the 
     Fund's operations, programs and policy reviews and decisions 
     regarding stand-by agreements and other uses of the Fund's 
     resources.
       (d) No later than July 1, 1998 and, not later than March 1 
     of each year thereafter, the Secretary of the Treasury shall 
     submit a report to the appropriate committees on the

[[Page S2464]]

     status of timely publication of Letters of Intent and Article 
     IV consultation documents and the availability of information 
     referred to in (c).
       Sec.   . Advisory Commission.--(a) The President shall 
     establish an International Financial Institution Advisory 
     Commission (hereafter ``Commission'').
       (b) The Commission shall include at least five former 
     United States Secretaries of the Treasury.
       (c) Within 180 days, the Commission shall report to the 
     appropriate committees on the future role and 
     responsibilities, if any, of the International Monetary Fund 
     and the merit, costs and related implications of 
     consolidation of the organization, management, and activities 
     of the International Monetary Fund, the International Bank 
     for Reconstruction and Development and the World Trade 
     Organization.
       Sec.   . Bretton Woods Conference.--Not later than 180 days 
     after the Commission reports to the appropriate committees, 
     the President shall call for a conference of representatives 
     of the governments of the member countries of the 
     International Monetary Fund, the International Bank for 
     Reconstruction and Development and the World Trade 
     Organization to consider the structure, management and 
     activities of the institutions, their possible merger and 
     their capacity to contribute to exchange rate stability and 
     economic growth and to respond effectively to financial 
     crises.
       Sec.   . Reports.--(a) Following the extension of a stand-
     by agreement or other uses of the resources by the 
     International Monetary Fund, the Secretary of the Treasury, 
     in consultation with the U.S. Executive Director of the Fund, 
     shall submit a report to the appropriate committees providing 
     the following information--
       (1) the borrower's rules and regulations dealing with 
     capitalization ratios, reserves, deposit insurance system and 
     initiatives to improve transparency of information on the 
     financial institutions and banks which may benefit from the 
     use of the Fund's resources;
       (2) the burden shared by private sector investors and 
     creditors, including commercial banks in the Group of Seven 
     Nations, in the losses which have prompted the use of the 
     Fund's resources;
       (3) the Fund's strategy, plan and timetable for completing 
     the borrower's pay back of the Fund's resources including a 
     date by which he borrower will be free from all international 
     institutional debt obligation; and
       (4) the status of efforts to upgrade the borrower's 
     national standards to meet the Basle Committee's Core 
     Principles for Effective Banking Supervision.
       (b) Following the extension of a stand-by agreement or 
     other use of the Fund's resources, the Secretary of the 
     Treasury shall report to the appropriate committees in 
     conjunction with the annual submission of the President's 
     budget, an account of the direct and indirect institutional 
     recipients of such resources: Provided, That this account 
     shall include the institutions or banks indirectly supported 
     by the Fund through resources made available by the 
     borrower's Central Bank.
       (c) Not later than 30 days after the enactment of this Act, 
     the Secretary shall submit a report to the appropriate 
     committees of Congress providing the information requested in 
     paragraphs (a) and (b) for the countries of South Korea, 
     Indonesia, Thailand and the Philippines.
       Sec.   . Certifications.--(a) The Secretary of the Treasury 
     shall certify to the appropriate committees that the 
     following conditions have been met--
       (1) No International Monetary Fund resources have resulted 
     in direct support to the semiconductor, steel, automobile, or 
     textile and apparel industries in any form;
       (2) The Fund has not guaranteed nor underwritten the 
     private loans of semiconductor, steel, automobile, or textile 
     and apparel manufacturers; and
       (3) Officials from the Fund and the Department of the 
     Treasury have monitored the implementation of the provisions 
     contained in stabilization programs in effect after July 1, 
     1997, and all of the conditions have either been met, or the 
     recipient government has committed itself to fulfill all of 
     these conditions according to an explicit timetable for 
     completion; which timetable has been provided to and approved 
     by the Fund and the Department of the Treasury.
       (b) Such certifications shall be made 14 days prior to the 
     disbursement of any Fund resources to the borrower.
       (c) The Secretary of the Treasury shall instruct the United 
     States Executive Director of the International Monetary Fund 
     to use the voice and vote of the Executive Director to oppose 
     disbursement of further funds if such certification is not 
     given.
       (d) Such certifications shall continue to be made on an 
     annual basis as long as Fund contributions continue to be 
     outstanding to the borrower country.
       Sec.   . Definitions.--For the purposes of this Act, 
     ``appropriate committees'' includes the Appropriations 
     Committee, the Committee on Foreign Relations, Committee on 
     Finance and the Committee on Banking, Housing and Urban 
     Affairs of the Senate and the Committee on Appropriations and 
     the Committee on Banking and Financial Services in the House 
     of Representatives.
       This title may be cited as the ``1998 Supplemental 
     Appropriations Act for the International Monetary Fund''.

  Mr. McCONNELL. Mr. President, I will not propose a time agreement at 
this point. Rather, let me say with regard to the amendment that after 
a great deal of work with my colleagues, Senator Stevens and Senator 
Hagel, who spent an endless amount of time on this--and Senator 
Roberts, as well, was heavily involved in it; Senator Gramm also spent 
a great amount of time on this; Senator Craig of Idaho is on the floor 
and spent hours on this proposition--
  Mr. CRAIG. Mr. President, will the Senator yield?
  Mr. McCONNELL. Yes.
  Mr. CRAIG. Let me ask an instructive question, if I might, Mr. 
President. On page 8 of the amendment, line 13, you will find the word 
``direct.'' If the chairman has no difficulty with the removal of that 
word, I ask unanimous consent that it be stricken from the amendment.
  Mr. McCONNELL. It is my understanding that the Senator from Idaho 
would like to delete the word ``direct.''
  Mr. CRAIG. That is correct; to read, ``have resulted in support to.''
  The PRESIDING OFFICER. The Senator has the right to modify his 
amendment.
  Mr. McCONNELL. Mr. President, I therefore modify the amendment.
  The modification to amendment (No. 2100) is as follows:

       On page 8, line 13, strike the word ``direct''.

  Mr. CRAIG. I thank the chairman.
  Mr. McCONNELL. I thank the Senator from Idaho and thank him as well 
for his considerable involvement in this discussion, which led to the 
final amendment that we have before us.
  In addition, Senator Bennett and Senator Faircloth were also involved 
in these discussions, and, of course, the usual and valuable 
contribution of the ranking member of the subcommittee, Senator Leahy.
  I believe we have produced a tough but fair bill. This bill would 
change the way IMF does business.
  Let me offer some brief highlights of the reforms which we have 
agreed upon. This bill appropriates funds for the IMF's emergency 
facility, the new arrangements to borrow without any restrictions, just 
as the Senate did, I might add, in the last year, in fiscal year 1998. 
However, for the new subscription to the IMF, the U.S. funding of the 
$14.5 billion quota cannot be released--I repeat, cannot be released--
unless the Secretary certifies that the group of seven nations have 
publicly committed and are working toward changing the IMF's lending 
policies.
  The conditions which we expect to see included in future loans 
tackled the systemic problems which caused the Asian crisis. The bill 
sets out the two conditions for future IMF agreements.
  First, borrowers will have to comply with their international trade 
obligations and liberalize trade restrictions. Monopolies, protected 
tariffs for family or friendly enterprises, and off-budget accounts 
each have contributed to financial weaknesses and collapse in Asia. 
This legislation will ensure that the IMF meets those problems head on 
before sinking funds into a troubled economy.
  Just as important, the bill attacks phony capitalism. Economies in 
trouble are often economies which have experienced chronic government 
manipulation and intervention where ministries subsidize favored 
individuals or enterprises. As a matter of routine, this bill expects 
market-distorting subsidies and government-directed lending to good 
friends rather than good business partners to come to an end.
  In addition to setting new conditions for IMF lending, we have 
improved accountability and transparency in fund operations. Senator 
Helms was deeply concerned about the General Accounting Office having 
access to the IMF decisionmaking process. I believe we have not only 
addressed this issue, but have also taken a step in the right direction 
in terms of expanding public access and involvement.
  Public access is a problem that Senator Leahy has drawn attention to 
for some years, so I especially appreciate his help in moving this bill 
in the right direction on that issue. As I pointed out in markup back 
in committee, Treasury only produces reforms and results when Congress 
requires action in law. While Treasury and the administration would 
have preferred a blank check, that would have been both unwise as well 
as unachievable. It was not possible to fund the NAB and Quota

[[Page S2465]]

now and hope for reforms down the road. Not one of my colleagues was 
willing to support $18 billion with no strings attached at all.
  While the crisis in the Pacific has created a sense of alarm and 
generated an urgency to passing this bill, I hope everyone understands 
that not one dime--not one dime of this money is planned for Asia. 
These funds are being appropriated to take care of some unknown country 
at some unknown time for unknown purposes. After today, however, what 
we will know is that IMF lending practices will, in fact, improve. We 
will know that U.S. resources will not be wasted on corrupt 
governments. We will know we are not going to subsidize unfair trading 
practices. In sum, we will know we have permanently and substantially 
changed the way IMF does business.
  Mr. President, that completes my statement. I am going to yield the 
floor here momentarily. I see my good friend from Nebraska, Senator 
Hagel, here. No one has spent more time on this complex question than 
the distinguished Senator from Nebraska. He has brought to this his 
usual intellect and energy and has been a very important part of 
working all this out in a way that I believe is going to improve the 
way IMF does business in the future.
  So with that I yield the floor.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. HAGEL. Mr. President, I thank my friend and distinguished 
colleague, the chairman of the appropriations subcommittee that is 
handling this piece of legislation. I am grateful.
  I might add, Mr. President, there were many people who worked hard, 
and some even diligently, on this to get an achievable reform package 
that really would do what the chairman from Kentucky has pointed out it 
would accomplish. There is not one among us in this body who did not 
want real reform, nor understand that real reform was required within 
the IMF structure. That was accomplished. I am proud of what we have 
done here and how we have done it. I am proud of the product.
  Beyond that, I think it is important to recognize that today we live 
in a global community, anchored by a global economy. Certainly all the 
markets of the world are important to the United States. Not just 
farmers and ranchers and small businesspeople, but every person in 
America is affected when markets go down and when currencies are 
devalued. Not that the United States should rescue or has the 
obligation or responsibility to rescue every economy, but we must lead 
because it is relevant, it is in our best interests, our national 
interest.
  We know that markets respond to confidence. What we are doing here is 
projecting the leadership that America must project in a global economy 
and with that is attached a certain amount of confidence. Investors and 
others around the globe, regardless where they look for those 
investments and opportunities in stable, secure areas, can do so with 
some confidence that all nations of the world are interconnected and 
have some global responsibility for those markets.
  I might also add to something the distinguished Senator McConnell 
from Kentucky mentioned. This is not foreign aid. There is some 
confusion about that when it is portrayed as a bailout to big bankers 
and big investors who care little about jeopardizing their own 
interests, thinking that there is some safety net of taxpayers' dollars 
under them. This is not a foreign aid bill. This is a process where for 
50 years the United States has been essentially on a credit/demand 
process loaning money into the International Monetary Fund. We are 
repaid for those loans, and we are repaid with interest for those 
loans. We can get our money out of the IMF at any moment. The IMF 
moneys and accounts are backed up by gold reserves. The United States 
has never lost one dollar on any loan it has made to the IMF. As a 
matter of fact, it should be pointed out the United States, in fact, in 
1978, took advantage of the IMF.
  So it is my opinion, and I think the opinion of many of my 
colleagues, that the IMF can play an important role in the world. It 
should not be the banker for everyone. It should not be the safety net 
for every investor, no. But, in a world that is interconnected--and 
when markets in Asia go down that backs up to every market in America; 
that we are connected--the IMF institute, and that kind of institution, 
is important as we trade and become more globally linked.
  So I am pleased that I have had an opportunity, along with many of my 
colleagues who were mentioned by Senator McConnell, to have played a 
small role in this. I encourage my colleagues to support what has been 
done here today and what has been agreed upon and the language that is 
in this amendment.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. McCONNELL. Mr. President, once again I thank the distinguished 
Senator from Nebraska. I am told that the other side has cleared, now, 
a time agreement on this amendment.
  So I ask unanimous consent there be a 20-minute time agreement on 
this amendment.
  The PRESIDING OFFICER. Is there objection to the request? Without 
objection, it is so ordered.
  Mr. McCONNELL. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There is a 
sufficient second.
  The yeas and nays were ordered.
  Mr. McCONNELL. Mr. President, I am not prepared to speak any further. 
I don't know whether the Senator from Nebraska would like to speak 
further or not. Therefore, seeing no one on the floor, 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. McCONNELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. McCONNELL. Mr. President, I have been around here long enough 
where I should have realized a quorum call was counting against the 20 
minutes. So I think what I will do is ask unanimous consent that there 
be 20 minutes on this amendment beyond the current time, equally 
divided.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. McCONNELL. Mr. President, the distinguished Senator from North 
Carolina, an enthusiastic supporter of the compromise that we have 
worked out--just joking, Mr. President. I am unaware of any opponents 
of the compromise, other than the distinguished Senator from North 
Carolina. So I think it would be appropriate to yield him some of the 
time against the amendment.
  The PRESIDING OFFICER. The Senator from North Carolina.
  Mr. FAIRCLOTH. Thank you, Mr. President, and I thank Senator 
McConnell.
  I do not support the IMF compromise because I think it is incredibly 
weak. I did not support IMF funding out of the committee, and I think 
it is absolutely sinful to support $14 billion more to go to the IMF. 
It is everything but an emergency. It probably isn't even needed. In 
fact, Federal Reserve Chairman Greenspan said there was just the remote 
possibility of it ever being needed. The IMF is the problem; it is not 
the cure. Once people realize that, I think they will be in less of a 
hurry to give them $90 billion.
  Further, this has no possibility of ending our international economic 
problems. There will be other bailouts. The IMF has created a safety 
net for international lenders. We have put together a corporate welfare 
project, the likes of which we have never in this world seen. We have 
privatized the profit, and we have socialized the losses. We are asking 
today for $18 billion for Asia. Well, it sounds fine. Why don't we go 
ahead and ask for $40 billion so we can be ready for Russia in 6 
months? We might as well have it in reserve.
  We do not want to do anything that would inconvenience Mr. Camdessus, 
who flies around the country in leased jets with 2,000 economists--
2,000. On October 25, 1997, his 2,000 economists said that South Korea 
was an excellent country in superb financial shape, a banking system to 
really be emulated by the rest of the world, a governance of a country 
you couldn't improve upon. And before the ink dried on the

[[Page S2466]]

report, the whole thing was in chaos. If he had had 3,000, he might 
have done better.
  We have said three things had to be done before they could get the 
money:
  They had to comply with international trade agreements that the 
countries have already signed. One thing.
  Two, ensure no crony capitalism;
  Three, ensure that foreign borrowers, i.e., U.S. borrowers, were not 
going to be discriminated against.
  How tough would it be for each country to comply with those rules 
before they get an IMF loan? Obviously, way too tough because we have 
now weakened the language. The new language says that G-7 countries 
will require a public commitment. Will somebody tell me what requiring 
a public commitment means? If it gets weaker than that, it couldn't run 
off the table.

  Anybody who votes for this amendment is voting for corporate welfare 
of the highest order; we are voting for international banking welfare 
of the highest order; we are saying to any lending institution anywhere 
in the world, ``Lend anybody anything, 20 percent, 30 percent, whatever 
rate you can get, and the American taxpayer will bail you out.'' That 
is simply what we are doing here. It is the ultimate in bad business, 
it is the ultimate in foolishness, but we are determined to do it. I 
intend to vote against it.
  Thank you, Mr. President. I yield back my time.
  Mr. McCONNELL addressed the Chair.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. McCONNELL. I yield 3 minutes to the distinguished Senator from 
Minnesota.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. GRAMS. Thank you very much, Mr. President. I thank the Senator 
from Kentucky.
  I rise to briefly state my strong support for the $3.5 billion in 
NAB, the new arrangements to borrow, and also the additional $14.5 
billion in replenishment. The conditions attached to this amendment, I 
believe, are a good compromise based on the Hagel-Gramm-Roberts bill 
that was introduced last week, which will make the IMF, I believe, work 
better in the future than it has worked up to now. It is my hope there 
can be further improvements also in conference.
  I thank the majority leader Senator Lott for his strong leadership 
and support and also the hard work that Senator Hagel and Senator 
Roberts, also Senator McConnell and Senator Phil Gramm, Senator Mack of 
Florida and also Senator Craig, among others, who have worked very hard 
to reach this compromise over the last few days. I really believe the 
IMF is too important at this time not to replenish, not to continue to 
show strong American leadership in this area.
  The financial crisis of other nations can no longer exist in a 
vacuum. They affect every other nation as we move closer to a global 
economy. I encourage the support of my colleagues for this very 
important amendment.
  I thank you very much, Mr. President, and I yield the floor.
  Mr. McCONNELL. I yield 4 minutes to the distinguished Senator from 
Idaho.
  The PRESIDING OFFICER. The Senator from Idaho is recognized.
  Mr. KEMPTHORNE. Mr. President, thank you very much.
  As we debate the issue of increasing the American share in reserve 
funds of the International Monetary Fund, I think we should first 
consider the following two questions: Would it make sense for U.S. 
companies and employees to pay taxes to bail out foreign competitors of 
American business? Should Americans pay taxes to bail out foreign 
countries that have engaged in unfair business practices that 
previously made it difficult for American companies to sell their goods 
at home and abroad?
  The resounding answer to these questions is no. These would, however, 
be the precise ramifications were Congress to approve IMF funding 
legislation that does not require all countries who receive IMF loans 
to engage in just and fair business practices that do not threaten the 
American companies whose very tax dollars make these IMF contributions 
possible.
  I would like to touch on the recent IMF loan to South Korea, which I 
believe is a compelling example for why the IMF must be reformed.

  By many accounts, South Korea's economic crisis stems in large part 
from the government's practice of extending favorable loans to 
industrial conglomerations to rapidly expand in export-oriented 
sectors. When world markets could not absorb the resulting excess 
production capacity in these industries, the prices for South Korea's 
major export products declined, which in turn threatened South Korea's 
ability to repay these loans.
  Such government-directed subsidization for expansion can be seen in 
the 350 percent debt-to-equity ratio of the three major South Korean 
semiconductor manufacturers, nearly 10 times the U.S. average. This 
practice of the government subsidizing rapid industrial expansion in 
overcrowded industrial sectors has threatened American industry. It has 
allowed South Korea to sell its products below market costs, 
jeopardizing American competitors, who operate in a free-market 
economic structure.
  South Korean dumping has been well documented and has resulted in 
several antidumping rulings against the country's semiconductor 
conglomerations.
  The results of these practices have been devastating for domestic 
semiconductor producers, including those in Idaho. Take, for example, 
Micron Technology, America's largest producer of dynamic random access 
memory computer chips headquartered in Idaho, which employs more than 
10,000 people. From their perspective, a United States-backed IMF loan 
to South Korea that does not put an end to some of South Korea's 
unsound and unfair economic practices would mean they would pay taxes 
to bail out foreign competitors who have engaged in business practices 
designed to undermine the U.S. semiconductor industry generally, and 
Micron specifically. American Microsystems, Incorporated, also in 
Idaho, would suffer from IMF loans that could be used to support their 
foreign competitors.
  So as we consider this funding increase for the IMF, we have a unique 
opportunity to place some reforms on the IMF which would prevent loans 
such as the one granted to South Korea from threatening American 
businesses in the future.
  The supplemental appropriations bill that was passed by the 
Appropriations Committee requires the Secretary of the Treasury to 
certify that IMF borrowers have to end government lending and subsidies 
to businesses, as well as comply with all international trade 
obligations they have made.
  In addition, the Secretary of the Treasury would be required to 
certify that no IMF resources have resulted in supporting the borrower 
country's semiconductor, steel, automobile, or textile and apparel 
industries, and that both the IMF and the Treasury Department will 
strictly monitor these conditions.
  These are good steps toward ensuring that IMF money, which is backed 
largely by the American taxpayer, will not in the future be used to 
undermine the American businesses and workers who generate this 
revenue.
  Mr. President, that concludes my statement. I want to thank the 
Senators from Alaska and Kentucky and Nebraska for their leadership on 
this issue.
  Mr. McCONNELL. I say thank you to the Senator from Idaho.
  The PRESIDING OFFICER. The time allocated to the Senator from 
Kentucky has expired.
  Mr. McCONNELL. Mr. President, I ask unanimous consent that the 
distinguished Senator from Idaho have 2 minutes to address the Senate.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. CRAIG. Mr. President, I thank Senator McConnell and Senator Hagel 
for the work they have done on reform issues tied with this most 
critical IMF funding. I must tell you that at the outset I was not a 
champion of the idea that we bail out anybody--and I am still not. But 
clearly what we have done here is say to the IMF and to nations who 
would benefit from their loans that there needs to be the establishment 
of some clear-cut rules that impact loaning policies and the economy of 
those countries.
  My colleague from Idaho has just spoken to an issue that I think so

[[Page S2467]]

clearly demonstrates why we need to do what we need to do. Senator 
Kempthorne and I, for the last several years, have worked in my State 
with a company that has fought overwhelming odds. They fought a major 
government of a growing economic power --the Korean Government--and a 
major industry in Korea. Why? Because of a very cozy relationship 
between this industry and its government to build an extremely large 
and excessive capacity to dominate a world market and, therefore, 
substantially underbid in the market the efficiencies of this company 
that was leading the world in technology and productivity. We should 
not allow this nor should we allow the taxpayers of this country to be 
a part in this bailing out.
  Well, we are no longer doing that. We are making a major move to 
create transparency in the relationships that governments and their 
banking institutions and private industry in those countries have. That 
is what will strengthen the Asian economy. That is what will disallow 
the kind of Asian flu that currently exists, when we can work on equal 
footing, when all are treated relatively equal in a growing global 
economy.
  That is what strengthens what the Senate is doing today. And clearly, 
the amendments that Senator McConnell and Senator Hagel and others have 
worked on will do just that in bringing about reforms. The United 
States must have a major voice in this issue.
  The IMF and our support of it can, in fact, be that voice to bring 
about uniformity around the world for all citizens of the world, and 
certainly the citizens of our country, the banking institutions of our 
country, but most importantly, the private industry of our country 
which without Government support and without Government subsidy must 
compete in a world market where that subsidy and support exists.
  So I thank my colleagues for working jointly together to accomplish 
what I think these amendments, included with the IMF funding, will 
accomplish.
  The PRESIDING OFFICER. Who yields time?
  Mr. McCONNELL. I thank the distinguished Senator from Idaho for his 
important contribution to this compromise.
  I say to my chairman, I thought Senator Roberts was going to come 
over. He also was interested in this issue and has been significantly 
involved in it. But I do not see Senator Roberts yet.
  Mr. STEVENS. I do commend Senator McConnell, as chairman of the 
subcommittee, and Senators Hagel, Roberts, Kempthorne, Craig, Senator 
Grams of Minnesota, Senator Phil Gramm of Texas, and my good friend 
from New Mexico also on this matter. I think it has brought about a 
better understanding of what we are doing. I must also say that the 
Secretary of Treasury, Mr. Rubin, has been working with us and helping 
to iron out this problem. He has had a working relationship with us, 
which I think bodes well for the future.
  Did the Senator from New Mexico wish to say something? Time has 
expired.
  Mr. DOMENICI. Could I speak for 2 minutes? One minute?
  Mr. STEVENS. Does the Senator from North Carolina seek time?
  Mr. HELMS. A couple minutes.
  Mr. STEVENS. I yield back all of the time for the opposition, but ask 
unanimous consent to convert 4 minutes--2 minutes for the Senator from 
New Mexico and 2 minutes for the Senator from North Carolina. And that 
would be the end of the time on this amendment.
  The PRESIDING OFFICER (Mr. Kempthorne). Without objection, it is so 
ordered.
  The Senator from New Mexico is recognized.
  Mr. DOMENICI. Mr. President, I thank the distinguished chairman for 
finding 2 minutes for me.
  There are so many Senators who worked on this to get this amendment 
done with the appropriate reforms that will stand the test of 
international participation and yet be something that will be 
accommodating. I do not want to mention names, except I want to mention 
one freshman Senator--Chuck Hagel. I say to Senator Hagel, it has been 
a pleasure working with you on this. And I compliment you for your 
leadership.
  Mr. President, fellow Senators, there will be some Senators who 
disagree with this statement, but I think the final test of how you 
ought to vote in the Senate is whether the measure before you is the 
right thing to do. I do not think there is any question that, looking 
at our country and how we might suffer, if the countries that are in 
trouble in Asia do not have an opportunity consistent with reasonable 
reforms to get their economies back as soon as possible, we are going 
to suffer.
  I am already suggesting that inland States, like New Mexico, are 
suffering immensely by way of layoffs in the computer chip business 
because of the slowdown in that market.
  Now, I do not know that we are smart enough to know how to fix 
everything that went wrong there, but the amendments and this extension 
will, indeed, give the international community an opportunity to see if 
they cannot get vital reforms and make this International Monetary Fund 
functional and operative as those countries in that part of the world 
attempt to put their banking system and their monetary policy back on 
sound ground.
  Ultimately, it will never cost America anything. I do not believe it 
is going to cost us anything but reserves behind these loans. And 
participatory arrangements are adequate to cover any obligation that 
will be forthcoming. But we need a significant reserve. This amendment 
will let the other countries come in with their part and we will have a 
significant reserve for the future.
  Mr. President, I support the pending amendment to the supplemental 
appropriations bill, authorizing and providing appropriations to the 
International Monetary Fund.
  Primarily, it is the depletion of funds at the IMF that has brought 
the urgency of this matter to our attention. There are two funding 
issues before the Congress in the supplemental request: a $3.5 billion 
appropriation to the IMF's emergency reserve--the New Arrangements to 
Borrow, and the periodic appropriation for the US quota subscription, 
the regular pool of money at the IMF, equal to $14.5 billion.
  The Budget Committee in February held a meeting with the Managing 
Director of the International Monetary Fund, Mr. Michel Camdessus to 
engage us in a frank discussion about the IMF. What I learned then I 
hope to share with many members inclined to vote against the IMF 
funding today.
  I know that many Members are very suspicious of foreign aid--but let 
me explain today why this is not foreign aid and why the Senate should 
do everything possible to fund the IMF.
  First, last Thursday we received the most current economic data and 
it shows the effects of the ongoing Asian financial crisis. January's 
US trade deficit surged to $12.0 billion, its highest level since 1987. 
This was led by a near doubling of our deficit with Asian countries 
excluding Japan and China.
  This is a direct result of the Asian financial crisis--which has cut 
demand in Asia for U.S. exports. Because of the cheaper Asian 
currencies against the dollar, now Asian imports are much cheaper and 
much more competitive in the United States.
  Second, the Asian crisis has convinced many of our top technology 
companies to warn of lower profits, including IBM, Compaq, Intel, 
Motorola, as well as many smaller companies.
  In my state of New Mexico, the result has been announcements by 
Philips and Motorola that they will furlough or lay off hundreds of 
employees.
  Mr. President, let me explain the problem facing the IMF and why the 
Senate must act and act quickly.
  Presently the IMF has uncommitted resources to lend a further $10 to 
$15 billion to its members before its liquidity is reduced to 
historically low levels.
  The lowest ratio ever allowed at the IMF by its members was 33%. 
Historically a comfortable level was 120-140%, but after the Mexico and 
Russian loans, liquidity fell to 88%. Presently the liquidity ratio is 
47%. To lower today's ratio to 33% would require only $10-15 billion in 
possible loans to countries in crisis.
  Mr. President, the 182-members of the IMF decided last year before 
the Asian crisis that the reserves of the IMF were too low. That was 
before they lent $20 billion to Korea, $10 billion to Thailand, and $5 
billion to Indonesia.

[[Page S2468]]

  Mr. President, let me be clear about one fact--If the US chooses not 
to fund our share of the increase, there will be no increases from the 
other 181 members of the IMF. 85% of current members must increase 
their quotas for it to be implemented, and since the US holds over 17%, 
no US participation would guarantee no world participation in the 
increased funding.
  This would mean that any more crises in Asia or other emerging 
markets, could see the IMF run seriously short of cash. And that is a 
risk neither America nor the US Senate should take.
  While the IMF was created in 1944 originally to support global trade 
and economic growth by helping maintain stability in the international 
monetary system, as the monetary system has evolved, so has the IMF's 
duties.
  With the Mexican peso crisis in 1995 and the current Asian financial 
crisis, this new IMF has become more apparent to all of us.
  While the exact economic causes of the Mexico crisis are quite 
different from Asia, Mexico and Asia have one striking similarity. They 
represent a major structural change in international capital markets 
that has occurred over the past decade--the increasing capital flows 
into and out of emerging economies. Capital flows into emerging markets 
rose from $25 billion in 1986 to $235 billion in 1996.
  Given the potentially destabilizing role of investor confidence 
especially when directing capital flows, we must ask --what is the role 
for domestic government policy or the IMF in addressing instability?
  Mr. President, the Asian financial crisis has also raised an 
important policy question for the IMF--whether the Fund's willingness 
to lend in a crisis contributes to ``moral hazard''--the tendency for 
countries or investors to behave recklessly while expecting the IMF 
will likely bail them out in an emergency.
  There is no consensus on what role private financiers play in such 
crises and how they should bear the consequences of their actions. The 
IMF and the US still need to figure out how to safeguard a financial 
system without bailing out investors who are guilty of making bad 
decisions.
  Mr. President, I believe most Senators can agree on one factor: the 
IMF is too secretive in its operations and escapes accountability and 
public debate.
  The bill as written by Senator Hagel would address this concern by 
requiring greater transparency by the IMF in its lending practices, its 
strategies with respect to borrowing countries, economic data 
collection, and its own accounting and financial information.
  Demands for greater transparency at the IMF are forthright and 
appropriate as we consider the supplemental request, and given the 
IMF's extreme secrecy, this is an important condition we should insist 
upon for any US dollars spent at any international organization.
  Mr. President, as more and more evidence becomes stronger on the 
long-term benefits of free trade, it is surely time that the IMF does 
more to promote it. In Senator Hagel, he specifically addresses this as 
a condition of the IMF funding.
  Immediately the WTO Financial Services Agreement comes to mind--what 
better way for many of the Asian countries to introduce needed 
competition to their banking industries than by signing on to the WTO 
Financial Services Agreement. The WTO and the IMF should be working 
more closely together to achieve the same goals--economic growth 
through free trade.
  Mr. President, while many US Senators today may debate whether or not 
we should even have an IMF, a time of crisis such as today in Asia is 
not the appropriate time for the US to effectively gut the IMF.
  Regarding the budgetary treatment of the IMF, the way we count the 
IMF contributions is a little unusual. Since 1967, the budget has 
treated contributions to the IMF as budget authority only; 
contributions to the IMF do not affect outlays or the budget deficit, 
or surplus. Only since 1980 has the Congress required an appropriation.
  Last year's Balanced Budget Agreement specifically addresses the IMF 
funding until fiscal year 2002 and effectively allows legislation that 
provides an increase in U.S. contributions to the IMF to not be 
required to offset the budget authority. Section 314 provides a 
procedure to adjust the discretionary spending caps and budget totals.
  Some in Congress have argued that the IMF is putting the US taxpayer 
at risk similar to the US savings and loan crisis in the 1980s. There 
is one stark difference: savings and loan institutions held a US 
government guarantee. With the IMF, there is no US guarantee in times 
of default. And even most economists agree that the prospects of an IMF 
default are negligible. No country has ever defaulted on its IMF loans, 
arrears on IMF loans are modest, and gold and currency reserves 
substantially exceed any foreseeable losses in the event of a 
liquidation.
  The IMF has not cost the US Treasury the loss of any federal 
resources over the years.
  In a democracy such as ours, the debate over replenishing the IMF's 
reserves is the perfect time to debate what role the IMF should play in 
the global capital market and its accountability to member nations. 
This is no different than the examination we give to our domestic 
programs to decide if they are still relevant in today's world.
  Mr. President, today's financial world is an uncertain one--but the 
IMF has been a key component to the stability the United States has 
enjoyed over the last few years and also a key proponent of many US 
economic policies around the world.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from North Carolina is recognized 
for 2 minutes.
  Mr. HELMS. Mr. President, thank you for recognizing me.
  I think at this point it would be appropriate to insert in the 
Record--and in a moment I shall ask that it be done--a piece written 
jointly for the Wall Street Journal by three distinguished people, all 
of whom are friends of most of us: First, Bill Simon, who was Secretary 
of the Treasury, and George Shultz, who was Secretary of State; and 
Walter Wriston, who was former chairman of City Bank.
  Now, I will make no comment except that I share the views of my 
distinguished colleague from North Carolina. I ask unanimous consent 
that the aforementioned article published in the Wall Street Journal be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

              [From the Wall Street Journal, Feb. 3, 1998]

                           Who Needs the IMF?

     (By George P. Shultz, William E. Simon, and Walter B. Wriston)

       President Clinton and the International Monetary Fund have 
     shifted into overdrive in their effort to save the economies 
     of Indonesia, the Philippines, South Korea and Thailand--or, 
     to be more accurate, to save the pocketbooks of international 
     investors who could face a tide of defaults if these markets 
     are not now shored up. But this must be the last time that 
     the IMF acts in this capacity. If it is not, further 
     bailouts, unprecedented in scope, will follow. Therefore, 
     Congress should allocate no further funds to the IMF.
       It is the IMF's promise of massive intervention that has 
     spurred a global melt-down of financial markets. When such 
     hysteria sweeps world markets, it becomes more difficult to 
     do what should have been done earlier--namely, to let the 
     private parties most involved share the pain and resolve 
     their difficulties, perhaps with the help of a modest program 
     of public financial support and policy guidance. With the IMF 
     standing in the background ready to bail them out, the 
     parties at interest had little incentive to take these 
     painful, though necessary, steps.


                          largest bailout ever

       The $118 billion Asian bailout, which may rise to as much 
     as $160 billion, is by far the largest ever undertaken by the 
     IMF. A distant second was the 1995 Mexican bailout, which 
     involved some $30 billion in loans, mostly from the IMF and 
     the U.S. Treasury. The IMF's defenders often tout the Mexican 
     bailout as a success because the Mexican government repaid 
     the loans on schedule. But the Mexican people suffered a 
     massive decline in their standard of living as a result of 
     that crisis. As is typical when the IMF intervenes, the 
     governments and the lenders were rescued, but not the people.
       The promise of an IMF bailout insulates financiers and 
     politicians from the consequences of bad economic and 
     financial practices, and encourages investments that would 
     not otherwise have been made. Recall how the Asian crisis 
     came about. Asia's ``tiger'' economies were performing well, 
     with strong growth, moderate price inflation, fiscal 
     discipline and high rates of saving. But these countries 
     encountered a currency crisis because their 
     governments attempted to maintain an exchange rate

[[Page S2469]]

     pegged to the U.S. dollar, while conducting monetary 
     policies that diverged from that of the U.S. Capital 
     inflows covered up this disparity for a time. But when the 
     Thai currency wobbled on rumors of exchange controls and 
     devaluation, the currency markets quickly swept aside 
     increasingly unrealistic currency values.
       This led quickly to a solvency crisis. It became difficult, 
     if not impossible, to repay loans made in foreign currency on 
     time. The devaluations shrank the values of local assets, 
     which were often the product of speculative excesses, unwise 
     ventures directed by government, and crony capitalism. The 
     private lenders and borrowers involved were in deep trouble. 
     They were, and are, more than ready for money from the IMF.
       The world financial system has changed fundamentally since 
     1946, when the Bretton Woods agreement was approved. The gold 
     standard has been replaced by the information standard, an 
     iron discipline that no government can evade. Foreign 
     exchange rates are now set by tens of thousands of traders at 
     computer terminals around the globe. Their judgments about 
     monetary and economic policies are instantly translated in 
     the cross rates of currencies.
       No country can hide from the new global information 
     standard--but the IMF can lull nations into complacency by 
     acting as the self-appointed lender of last resort, a 
     function never contemplated by its founders. When the day of 
     reckoning finally does arrive, the needed financial reforms 
     are extremely difficult politically because they are imposed 
     by the IMF under duress, rather than undertaken by the 
     countries themselves. The photograph, widely published 
     throughout Asia, of Indonesian President Soeharto signing on 
     to IMF conditions with IMF Managing Director Michael 
     Camdessus standing over him imperiously reinforces the 
     perception of an outside institution dictating policy to a 
     sovereign government.
       Even though the IMF recognizes the causes of the crises and 
     conditions its loans on remedial measures, many observers 
     believe that these remedies often make the situation worse. 
     In any event they are rarely carried out in a timely fashion. 
     There are already indications that several Asian countries 
     have violated the terms of their agreements. Furthermore, 
     IMF-prescribed tax increases and austerity will cause pain 
     for the people of these nations, producing a backlash against 
     the West. There is already talk of a conspiracy to beat down 
     Asian asset values in order to provide bargains and control 
     for Western investors.
       And yet, because these countries are able to avoid 
     fundamental economic reforms, their currencies continue to 
     collapse. Indonesia, South Korea and Thailand have each seen 
     their currencies lose more than half their value against the 
     U.S. dollar in recent weeks, despite the promised IMF 
     bailouts. The loans from the IMF are, in fact, trivial when 
     compared to the size of the international currency market, in 
     which some $2 trillion is traded daily. These markets' 
     instant verdicts on unsound economic and financial policies 
     overwhelm the feeble efforts of politicians and bureaucrats.
       The IMF's efforts are, however, effective in distorting the 
     international investment market. Every investment has an 
     associated risk, and investors seeking higher returns must 
     accept higher risks. The IMF interferes with this fundamental 
     market mechanism by encouraging investors to seek out risky 
     markets on the assumption that if their investments turn 
     sour, they still stand a good chance of getting their money 
     back through IMF bailouts. This kind of interference will 
     only encourage more crises.
       Asian nations are facing financial difficulties not because 
     outside forces have imposed bad economic policies on them but 
     because they have imposed these policies on themselves. The 
     issue is not whether the IMF can move from country to country 
     dispensing financial and economic medicine. The issue is 
     whether the governments in these countries have the political 
     will to fix problems of their own making.
       What should we do about the problem? We certainly shouldn't 
     follow the advice of George Soros, a well known figure in the 
     international currency markets, who has called for the 
     creation of a new International Credit Insurance Corporation 
     to be underwritten by taxpayers of the member countries. The 
     new institution, which would operate in tandem with the IMF, 
     would guarantee international loans up to a point deemed safe 
     by the bureaucrats running the organization. ``The private 
     sector is ill-suited to allocate international credit,'' Mr. 
     Soros writes in the Financial Times. ``It provides either too 
     little or too much. It does not have the information with 
     which to form a balanced judgment.''


                           appalling comment

       When will we ever learn? This appalling comment is exactly 
     the opposite of the truth. The protected markets, not the 
     open ones, are in trouble. Only the market, with its millions 
     of interested participants, is capable of generating the 
     information needed to make sound financial decisions and to 
     allocate credit (or any other resource) efficiently and 
     rationally. Governments and politically directed institutions 
     like the IMF have shown time and again that they are 
     incapable of making these kinds of decisions without creating 
     the kinds of crises we are now facing in Asia.
       The IMF is ineffective, unnecessary and obsolete. We do not 
     need another IMF, as Mr. Soros recommends. Once the Asian 
     crisis is over, we should abolish the one we have.

  Mr. HELMS. I thank the Chair.
  Mr. STEVENS. Is all time now expired on this amendment?
  The PRESIDING OFFICER. All time has expired on this amendment.
  Mr. STEVENS. Mr. President, we had a request not to go to a vote yet 
because of other circumstances and the presence of Members. I ask 
unanimous consent that this amendment be set aside to be called up by 
either the majority leader or myself when it is time to vote.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. STEVENS. Mr. President, I do have more amendments I want to take 
right away, but I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. STEVENS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. STEVENS. Mr. President, I ask unanimous consent that the 
following Senators be added as original cosponsors of amendment No. 
2085 relating to the National Guard Youth Challenge Program: Senators 
Lott, Bond, and Ford.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 2101

    (Purpose: To expedite consideration of slot exemption requests)

  Mr. STEVENS. Mr. President, I send an amendment to the desk on behalf 
of Senator Frist and Senator Byrd.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Alaska [Mr. Stevens], for Mr. Frist, for 
     himself and Mr. Byrd, proposes an amendment numbered 2101.

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

       At the appropriate place, insert the following:

     SEC.   . EXEMPTION AUTHORITY FOR AIR SERVICE TO SLOT-
                   CONTROLLED AIRPORTS.

       (a) In General.--Section 41714(i) of title 49, United 
     States Code, is amended by--
       (1) striking ``Certain'' in the caption;
       (2) striking ``120'' and inserting ``90''; and
       (3) striking ``(a)(2) to improve air service between a 
     nonhub airport (as defined in section 41731(a)(4)) and a high 
     density airport subject to the exemption authority under 
     subsection (a),'' and inserting ``(a) or (c),''.
       (b) Effective Date.--
       (1) In general.--The amendments made by subsection (a) 
     apply to applications for slot exemptions pending at the 
     Department of Transportation under section 41714 of title 49, 
     United States Code, on the date of enactment of this Act or 
     filed thereafter.
       (2) Application to pending requests.--For the purpose of 
     applying the amendments made by subsection (a) to 
     applications pending on the date of enactment of this Act, 
     the Secretary of Transportation shall take into account the 
     number of days the application was pending before the date of 
     enactment of this Act. If such an application was pending for 
     80 or more days before the date of enactment of this Act, the 
     Secretary shall grant or deny the exemption to which the 
     application relates within 20 calendar days after that date.

  Mr. STEVENS. Mr. President, this has been agreed to. It is an 
amendment that deals with slots at airports for commuter airlines. And 
it is a problem that, as I said, has been agreed to on both sides.
  Mr. President, I urge the adoption of Senator Frist's and Senator 
Byrd's amendment.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  If there is no objection, the amendment is agreed to.
  The amendment (No. 2101) was agreed to.
  Mr. STEVENS. I move to reconsider the vote and move to lay that 
motion on the table.
  The motion to lay on the table was agreed to.
  Mr. STEVENS. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. STEVENS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.

[[Page S2470]]

  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. STEVENS. Mr. President, the Senator from Washington, Mr. Gorton, 
will offer an amendment to the IMF title of the bill. I will ask 
unanimous consent that there be a time agreement on that amendment. He 
can explain the amendment.
  I ask unanimous consent that we have a 15-minute-per-side time 
agreement and that the vote on the Gorton amendment follow after the 
vote on the IMF amendment that has been set aside.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The Senator from Washington is recognized.


                           Amendment No. 2102

  (Purpose: To limit International Monetary Fund loans to Indonesia.)

  Mr. GORTON. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Washington [Mr. Gorton] proposes an 
     amendment numbered 2102.

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

     SEC.     . LIMITATIONS ON INTERNATIONAL MONETARY FUND LOANS 
                   TO INDONESIA.

       The Secretary of the Treasury shall instruct the United 
     States Executive Director of the International Monetary Fund 
     to use the voice and vote of the United States to prevent the 
     extension by the International Monetary Fund of loans or 
     credits that would--
       (1) personally benefit the President of Indonesia or any 
     member of the President's family, or
       (2) benefit any financial institution or commercial 
     enterprise in which the President of Indonesia or any member 
     of the President's family has a financial interest.

  Mr. GORTON. Mr. President, I speak to you and my colleagues here 
today as a supporter of the International Monetary Fund. I believe that 
the crisis in Southeast Asia is one that is important to the economy of 
the United States, and that those nations in Southeast Asia that are in 
great financial difficulty can be helped to work their own way out of 
these economic difficulties by the kind of prescriptions to which the 
International Monetary Fund has subjected them. One of those nations, 
South Korea, is bound to us by the close-as-possible ties of blood and 
sentiment over almost half a century and, reflecting the views of the 
people of the United States, has become a free market and a democracy.
  Another of those nations, the Philippine Republic, has been tied to 
us for a full century and has struggled in the direction of free 
markets and of a democracy during that period of time. Today, it is a 
rather considerable success at both.
  Thailand and Malaysia are trying, with great difficulty, to meet the 
financial challenges with which they have been faced.
  One nation, however, does not fall into any of these categories. In 
Indonesia, President Soeharto is a wholly owned family enterprise. Its 
economy--behind those of all the other nations in Southeast Asia, from 
the point of view of the degree to which its benefits have been 
distributed among its people--is corrupt, undemocratic, and designed to 
primarily, it seems, at least through its economy, to benefit the 
immediate family and the close friends and henchmen of the now seven-
term President of Indonesia, Mr. Soeharto. Indonesia has resisted, at 
every turn, the prescriptions that the International Monetary Fund has 
laid down for the recovery of its economy. As a consequence, I believe, 
and I believe firmly, that we in the United States should not bow to 
the will of this dictator, should not say that requirements that are 
being imposed on other nations that are trying, with great 
difficulties, to work their way out, with democratic institutions in 
place in those countries, should not be imposed on Indonesia.
  This amendment is quite simple. It doesn't attempt to dictate to the 
International Monetary Fund what it does, but it does direct our 
Secretary of the Treasury to instruct our representative on the 
International Monetary Fund to use the voice and vote of the United 
States to prevent the extension by the International Monetary Fund of 
loans or credits that would personally benefit the President of 
Indonesia or any member of the President's family or benefit any 
financial institution or commercial enterprise in which the President 
of Indonesia or any member of the President's family has a financial 
interest.
  Now, I understand, curiously enough, that there are those who object 
to this amendment on the grounds that that covers everything in 
Indonesia, that every institution that would be helped is owned, in 
whole or in part, by the President or by members of his family. In my 
view, that is the best possible argument in favor of this amendment. We 
have a financial structure in that country that has been built up to 
benefit the family of the President and his close associates, and only 
them. While my heart goes out to the people of Indonesia, I believe 
that if there is to be any International Monetary Fund aid to Indonesia 
with the consent and help of the United States, it should be to the 
people and not to the family of the President.
  Essentially, Mr. President, that is what this amendment says--neither 
more nor less. We should not use our credits in the International 
Monetary Fund, with our vote, to bail out a President whose sole 
interest seems to be in the aggrandizement of his own family, who is 
indifferent to the requirements that the International Monetary Fund 
has laid out to them, who has caused the crisis in his country to 
become much worse, sharply worse, as a result of his inaction than it 
would have been had he followed the requirements of the IMF some time 
ago. We should not lend ourselves to his intransigence in any respect 
whatsoever, Mr. President. As a consequence, I ask my colleagues to 
support the amendment. I will reserve the remainder of my time.
  Mr. President, I ask for the yeas and nays on the amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. Who yields time? The time will be deducted 
equally if no one yields time.
  Mr. FAIRCLOTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Carolina is recognized.
  Mr. FAIRCLOTH. Mr. President, I ask unanimous consent that the 
pending amendment be set aside so that I may offer an amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 2103

       (Purpose: To provide for an Education Stabilization Fund)

  Mr. FAIRCLOTH. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from North Carolina [Mr. Faircloth] proposes an 
     amendment numbered 2103.

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

       At the appropriate place, add the following:

     SEC. __. EDUCATION STABILIZATION LOANS AND FUND.

       (a) Loans.--
       (1) In general.--The Secretary of Education (referred to in 
     this subsection as the ``Secretary'') shall make loans to 
     States for the purpose of constructing and modernizing 
     elementary schools and secondary schools.
       (2) Terms.--The Secretary shall make low interest, long-
     term loans, as determined by the Secretary, under paragraph 
     (1). The Secretary shall determine the eligibility 
     requirements for, and the terms of, any loan made under 
     paragraph (1).
       (3) Allocation of funds.--The Secretary shall determine a 
     formula for allocating the funds made available under 
     subsection (b)(4) to States for loans under paragraph (1). 
     The Secretary shall ensure that the formula provides for the 
     allocation of funds for such loans to each eligible State. In 
     determining the formula, the Secretary shall take into 
     consideration the need for financial assistance of States 
     with significant increases in populations of elementary 
     school and secondary school students.

[[Page S2471]]

       (4) Definitions.--In this subsection, the terms 
     ``elementary school'' and ``secondary school'' have the 
     meanings given the terms in section 14101 of the Elementary 
     and Secondary Education Act of 1965 (20 U.S.C. 8801).
       (b) Fund.--
       (1) Establishment.--There is established in the Treasury of 
     the United States a trust fund, to be known as the 
     ``Education Stabilization Fund'', consisting of the amounts 
     transferred to or deposited in the Trust Fund under paragraph 
     (2) and any interest earned on investment of the amounts in 
     the Trust Fund under paragraph (3).
       (2) Transfers and deposits.--
       (A) Transfer.--The Secretary of the Treasury shall transfer 
     to the Trust Fund an amount equal to $5,000,000,000 from the 
     stabilization fund described in section 5302 of title 31, 
     United States Code.
       (B) Deposits.--There shall be deposited in the Trust Fund 
     all amounts received by the Secretary of Education incident 
     to loan operations under subsection (a), including all 
     collections of principal and interest.
       (3) Investment of trust fund.--
       (A) In general.--The Secretary of the Treasury shall invest 
     the portion of the Trust Fund that is not, in the Secretary's 
     judgment, required to meet current withdrawals.
       (B) Obligations.--Such investments may be made only in 
     interest-bearing obligations of the United States or in 
     obligations guaranteed as to both principal and interest by 
     the United States. For such purpose, such obligations may be 
     acquired--
       (i) on original issue at the issue price; or
       (ii) by purchase of outstanding obligations at the market 
     price.
       (C) Purposes for obligations of the united states.--The 
     purposes for which obligations of the United States may be 
     issued under chapter 31 of title 31, United States Code, are 
     extended to authorize the issuance at par of special 
     obligations exclusively to the Trust Fund.
       (D) Interest.--Such special obligations shall bear interest 
     at a rate equal to the average rate of interest, computed as 
     to the end of the calendar month next preceding the date of 
     such issue, borne by all marketable interest-bearing 
     obligations of the United States then forming a part of the 
     Public Debt, except that where such average rate is not a 
     multiple of \1/8\ of 1 percent, the rate of interest of such 
     special obligations shall be the multiple of \1/8\ of 1 
     percent next lower than such average rate.
       (E) Determination.--Such special obligations shall be 
     issued only if the Secretary of the Treasury determines that 
     the purchase of other interest-bearing obligations of the 
     United States, or of obligations guaranteed as to both 
     principal and interest by the United States on original issue 
     or at the market price, is not in the public interest.
       (F) Sale of obligation.--Any obligation acquired by the 
     Trust Fund (except special obligations issued exclusively to 
     the Trust Fund) may be sold by the Secretary of the Treasury 
     at the market price, and such special obligations may be 
     redeemed at par plus accrued interest.
       (G) Credits to trust fund.--The interest on, and the 
     proceeds from the sale or redemption of, any obligations held 
     in the Trust Fund shall be credited to and form a part of the 
     Trust Fund.

  Mr. FAIRCLOTH. Mr. President, this amendment would transfer $5 
billion from the Exchange Stabilization Fund at the Treasury Department 
to the Department of Education. There would be a new account 
established, the Education Stabilization Fund. This fund would be used 
to offer low-interest, long-term loans to States for the purpose of 
building and modernizing elementary and secondary schools.
  The GAO has estimated that one-third of all schools, housing 14 
million students, are in need of repair. In my home State of North 
Carolina, 36 percent of schools report they have at least one 
inadequate building, 90 percent of the schools report that they have 
construction needs up from $3.5 million to $10 million. We have a fast-
growing student population, and many, many students are housed in 
trailers--literally hundreds of thousands are housed in trailers.
  The purpose of this amendment is very simple. We have a slush fund at 
the Treasury Department called the Exchange Stabilization Fund. This 
fund is under the personal control of the Secretary of the Treasury. He 
can do whatever he wants with it. I think this is totally wrong. What 
has the Secretary done with the fund? Over the last 4 years, he has 
used it to supplement international bailouts, which was never the 
original intent for the funds. He loaned Mexico $12 billion. He 
promised Indonesia--which the Senator from Washington was just talking 
about--$3 billion. He has promised South Korea $5 billion, and 
everything indicates that Korea is going to call for the money quickly. 
He has done all of this without any congressional approval or 
authorization.
  This fund has over $30 billion available in it. It seems to be only 
common sense that if we can lend to Indonesia $3 billion, $5 billion to 
Korea, $12 billion to Mexico, and who knows where in the future it will 
be going, without any advice or consent from the Congress, then we can 
provide loans for school construction. I don't see how we can do 
otherwise.
  The President had wanted $20 billion in new tax-free bonds. But with 
this amendment, we can start immediately with $5 billion in loans to 
schools. This would be loans, and it would have no budget impact. This 
is not an outlay; it's a revolving loan fund.
  I urge all my colleagues to support the amendment. Mr. President, if 
we can provide $18 billion for the IMF, we can provide $5 billion for 
our schools.
  I ask for the yeas and nays on the amendment, with the time for the 
vote to be determined by the manager of the bill.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is not a sufficient second at this time.
  Mr. FAIRCLOTH. Mr. President, we will hold until we get a sufficient 
second.
  Mr. GRAMM. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. GRAMM. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRAMM. Mr. President, what is the pending business of the Senate?
  The PRESIDING OFFICER. The pending question is the amendment offered 
by the Senator from North Carolina.
  Mr. GRAMM. Mr. President, let me ask unanimous consent that the 
amendment of the Senator from North Carolina be temporarily set aside 
so that Senator Santorum and I might offer an amendment.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.


                           Amendment No. 2104

(Purpose: To ensure that the surplus in fiscal years 1999 through 2003, 
proposed by the President to be dedicated to save Social Security, will 
              not be lowered by the enactment of this Act)

  Mr. GRAMM. Mr. President, I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Texas (Mr. Gramm), for himself, and Mr. 
     Santorum, proposes an amendment numbered 2104.

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

       At the appropriate place, insert the following:
       Sec.   . Notwithstanding any other provision of this Act or 
     any other provision of law, only that portion of budget 
     authority provided in this Act that is obligated during 
     fiscal year 1998 shall be designated as an emergency 
     requirement pursuant to section 251(b)(2)(D)(i) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985. 
     All remaining budget authority provided in this Act shall not 
     be available for obligation until October 1, 1998.

  Mr. GRAMM. Mr. President, I am very happy to come over here this 
afternoon and be joined by my distinguished colleague from Pennsylvania 
in alerting the American people. I say the American people rather than 
alerting the Senate because I don't think the Senate wants to be 
alerted to a fraud that we continually perpetrate on the American 
people. That fraud is that we set out spending limits, we adopt 
budgets, and we know with absolute certainty that the way we define 
emergencies, floods, hurricanes--many things that are natural 
disasters--but the way we define emergencies is we know with certainty 
that every year we are going to have emergencies, and, yet, we don't 
put any money in the budget for that purpose.
  So, for example, since Bill Clinton has been President, we have 
averaged $7.3 billion in emergency spending every single year. There 
was a time when we wrote budgets and we set aside money for the purpose 
of paying for natural disasters, because in a big country like America 
we know with absolute certainty that we are going to

[[Page S2472]]

have natural disasters and that we are going to have to pay for them. 
In fact, we have averaged over the last 7 years on natural disasters 
$5.6 billion in spending. We have spent that amount every year on 
average for the last 7 years. Yet, during this time we have provided no 
money in the budget for this purpose.
  So what we play is a little game. Here is how the game works:
  The President stands before the American people in the Chamber of the 
House of Representatives, and says ``Put Social Security first.'' Don't 
spend the surplus. Take that surplus and put it into Social Security. 
We all stand and we have a standing ovation. And the lead story in the 
Washington Post and on every network is ``President Says Put Social 
Security First.''
  So the American people believe that the projected surplus in the 
President's budget that has come to the Congress and that shows a 
surplus of about $8 billion next year--people really believe that we 
are setting that aside to help save Social Security. And then at the 
same time, the President sends a disaster bill to Congress, says don't 
pay for it, simply take it out of the surplus, which has the effect of 
taking the money away from Social Security and has the effect of 
allowing us every single year to bust the budget that we have adopted.
  The first point I would like to make is these are not unexpected 
expenses. In fact, I would like to predict right now that this won't be 
the last disaster bill we will have this year. This disaster bill, as 
it stands now, is for $2.6 billion, and we will end up spending at 
least twice this amount this year. And we will take every penny of it 
from the surplus, and we will take every penny of it, therefore, away 
from our effort to save and to rebuild the financial base of Social 
Security because we will not pay for this bill.
  The second thing I want to note is there is a lot in this bill that 
is not an emergency; that is not unexpected. The President is now 
asking us to pay for the cost of having troops in Bosnia. Is anybody 
shocked that a bill was going to come due over the Bosnian deployment? 
Everybody knew this bill was going to come due. Why didn't we, the 
Senate and the President, provide the money in the appropriations bill 
for the Defense Department? We didn't provide it in the appropriations 
bill because we decided to cheat and not put the money in the 
appropriations bill, knowing that we would come back here today and 
that we would add that money in, and, as a result, we wouldn't have to 
count it against the budget and we could simply take it from the 
surplus.
  We have a bill before us that has an emergency designation, and it 
has two kinds of outlays. It has outlays that are going to occur for 
the remainder of this year. Then it has outlays that will occur in 1999 
and then on out through the year 2003.
  The Senator from Pennsylvania and I have a very modest amendment. 
What we ought to be doing is paying for every bit of this spending 
because we knew every bit of it was coming. This is a shell game that 
we play every single year, which is why people are totally skeptical, 
as they should be, about our whole budget process. But while we should 
be paying for every bit of it, we know that we don't have the votes to 
do that.

  So here is what we are saying. Take the money that we are going to 
spend this year and spend it and don't offset it. But the money that 
will be spent under this bill in 1999, 2000, 2001, 2002, and 2003, over 
that 5-year period, don't have an emergency designation for that 
spending, which means it will have to count against the spending caps 
in 1999.
  For 1999, we have spending caps for discretionary spending, 
nondefense, and for the Defense Department. We are spending under this 
bill $1.979 over a 5-year period, and we are spending $1.5 billion in 
1999--not this year, but next year.
  So what we are saying is spend the money but then count the money as 
part of next year's budget and against next year's spending cap so you 
can't commit today to spend next year, and not then commit to count it 
against the budget.
  So the issue here is simple and straightforward. Should we count 
these outlays as part of the Federal budget next year when the 
expenditures occur next year and each year through the year 2003? I 
believe we should. Some of our colleagues are going to say, ``Well, you 
know we can't make cuts this year because we would have to interrupt 
the expenditures of the various Government agencies that are spending 
money and we are halfway or more through the fiscal year.'' We are not 
talking about this year. We are talking about spending money in 1999. 
We have not even written the budget for 1999 yet. All we are saying is 
when we do write the budget in 1999, take the money we are spending 
under this bill in that year and count it as part of the money being 
spent that year. That way the surplus does not go down. That way we do 
not take money away from Social Security.
  So I see this as being a test of whether all that rhetoric that the 
President said about putting Social Security first was phony or not. 
The fact that the President sent this bill with an emergency 
designation that said we are going to spend the Social Security money 
next year through this bill--that says, to begin with, that his 
position was phony. But now we are questioning whether or not the 
Senate is phony on this issue. Do we want to take money that is 
designated to save Social Security and spend it next year and for the 
remaining 4 years that this bill will spend out, or do we want to count 
that money against the budgets in those years so the surplus we expect 
can be used to save Social Security?
  That is what this amendment is about.
  So if you meant it when you stood up and applauded the President when 
he said ``Put Social Security first,'' then you are going to want to 
vote for the amendment that I am offering with Senator Santorum. On the 
other hand, if that was your position then and now is another day and 
you are for it in the abstract, but when it gets down to spending the 
money you are not for that, then you are going to want to vote against 
this amendment.
  So I yield the floor to let my cosponsor speak.
  Mr. SANTORUM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Pennsylvania is recognized.
  Mr. SANTORUM. Mr. President, the Senator from Texas did an excellent 
job of outlining the amendment. I think his comments are very 
persuasive. Let me add one element to the veracity of the comments of 
the Senator from Texas.
  He said this bill has some $2.5 billion for offset emergencies. He 
said but on average, about this fiscal year, that we will get up to 
five. There was discussion in the Cloakroom about an amendment to add 
another $1.6 billion of emergency spending. So maybe before the day is 
out, as opposed to before the year is out, we will get to our $5 
billion in emergency spending for this year.
  When I say ``emergency,'' people tend to think when you hear the term 
``emergency,'' an ambulance, or something that has to be done right 
away. A lot of these things don't have to be done right away. As the 
Senator from Texas laid out, a lot of this spending doesn't get spent 
right away. It gets spent in the long term.

  What we are trying to do is say, look, if you have an emergency now, 
we have to spend the money now. We are in the middle of the fiscal 
year. We understand that to go back and ask to try to offset this money 
within the FEMA budget, or the Defense Department, or wherever the 
other spending proposals come from, would be very difficult. We 
understand the difficulty in these departments.
  But there is no reason why our good friends, the appropriators, 
cannot within the context of this year's budget for this additional 
spending that we are going to pass today and appropriate today--whether 
they can't put it within their appropriations amounts for the fiscal 
year. That is responsible budgeting. That is, in fact, truth in 
budgeting.
  The Senator from Texas is right about the issue of Social Security. I 
chair the leader's task force on the issue of Social Security here in 
the Senate. I was one of those people who stood up and applauded the 
President for saying ``Save Social Security First.'' Use that money, 
use that surplus out there to direct the Social Security to save the 
Social Security system in the future.
  If we are going to box this money, remember, we said we are going to 
put

[[Page S2473]]

this money and set it aside. Well, here is the money. Here is the 
money. Here are those first few dollars that we had planned to set 
aside. They want to spend it right now.
  That is not a good-faith promise to the American public. We know the 
President is not going to keep his promises. But that doesn't mean we 
shouldn't keep our promises.
  I noticed, because I was watching across the aisle, that every single 
one of my Democratic colleagues jumped up when the President said 
``save Social Security first.'' Use that money that is there, that 
surplus that is coming down the road, and use that to save Social 
Security. They jumped up, and said, ``Yes; we are going to use that 
money to save Social Security.''
  Here is the first vote of whether we are going to use the surplus to 
help transition for future generations the Social Security system, or 
whether we are going to use it for current political needs.
  I will be honest with you. These are not emergency needs in the real 
sense of the word. These are not unpredictable needs. As the Senator 
from Texas said, with respect to defense, I think most Members of the 
Senate knew we were going to be in Bosnia. I certainly believe the 
President knew we were going to be in Bosnia. He certainly knew the 
costs associated with being in Bosnia. I think the President and the 
people at FEMA and the people here in the Senate knew that the money we 
appropriated for disasters was not going to be sufficient to be able to 
fund it. It has not been for the past 7 or 8 years that I can recollect 
since I have been here. We have always, or seemingly, had some money--
some years more, some years less--for disasters, natural disasters that 
are out there because we never adequately appropriated.
  I have to say I took my hat off to the Senator from Missouri, Senator 
Bond. That is his subcommittee. He has done a tremendous amount of work 
in trying to get FEMA to come forward with reforms so we don't have 
this open spigot where the money just flows out of here for natural 
disasters in some places not particularly well-accounted for. He has 
done a great job, and, in fact, has a bill before the Environment and 
Public Works Committee, I believe, to make some reforms in FEMA so we 
aren't back here every year with the President having this wide 
latitude to declare emergencies and spend all sorts of money outside of 
the confines of what we believe emergencies should be.
  So we have hopefully in place some tools in the future to control the 
growth or the expansion of these emergencies we have to end up dealing 
with. But the issue before us now is a very simple one. It is one that 
I hope we can agree to because it does not affect current outlays, it 
does not affect the current year budget, and it doesn't put any pain on 
the administration to come up with money in this year's budget cycle.

  I had a meeting the other day with the Chief of Naval Operations. He 
told me that as a result of the operations they deployed--whether it is 
the gulf, Korea, or Bosnia, or whatever--because of these extended 
deployments that they have had they have had to continually reprogram--
not money; they can find the money other places within the Defense 
Department--he is spending more of his time doing bookkeeping or 
reprogramming money than he is out there leading our sailors. That is 
not a good position for our CNO to be in. We want him to pay attention, 
not just to the accounting within the service, but how we are going to 
be an effective fighting force.

  So I understand the problems and the concerns. Senator Gramm's 
amendment and my amendment deals with the issue of not making the CNO 
go back and find money and shift it all around, but it says: Declare 
the emergency. You have the money this year, but in future years when 
we do have an opportunity to put it in context, keep it under the caps.
  I know the caps are tough. I know Senator Gramm and I, as well as 
every Member of the Senate, will come to the chairman of the 
Appropriations Committee and say: Mr. Chairman, I am going to need help 
for this project, or I am going to need this--and I understand that. 
But I also expect him to do it within the caps, as I expect him to do 
this within the caps for future year funding.
  If we do not do that, then that downpayment on transitioning Social 
Security, that downpayment on creating that pool of money that is going 
to be so crucial for us to begin to develop a system in Social Security 
which is going to allow that transition for future generations of 
Americans to have some hope, some hope that Social Security will be 
there when they retire, will be frittered away, and all the promises 
that were made about how we are going to put Social Security first will 
go by the wayside when some other thing comes up first.
  I suspect this will not be the last time we do this. We will be back 
with another emergency bill, I am sure, before the end of the year, and 
we will have other plans. The President in his budget already has spent 
some of the surplus with overprojecting his revenues and 
underprojecting his expenditures, and so the surplus has already been 
eaten up.
  Look, I think there is a sincere feeling in this Chamber actually to 
take the surpluses that we are expecting in the next few years and use 
them for Social Security. I believe my colleagues, when they say that 
is what they would like to do with it, that they would like to save 
Social Security first, we can say that and we can mean it, but we have 
to do something to ensure that it is there. We have to make sure we are 
not robbing future generations with appropriations bills, year-to-year 
appropriations bills, spending more than the caps and thereby winnowing 
away that surplus.
  This is our first opportunity to stand up and say we are going to 
live within the budget and thereby, living within the budget, we will 
have money available to do what is right for the American public and 
that is create a Social Security system that will be there for future 
generations.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Smith of Oregon). The Senator from Alaska.
  Mr. STEVENS. Mr. President, to begin with, let me say to my friend 
from Texas, I hope he will never again say that this Senator brought a 
bill to the floor to cheat. If he wants to start arguments here 
sometime, this Senator is fairly well ready for that. But I will just 
put that aside for now and discuss the merits of the issue that the 
Senator has brought to the Senate.
  We have followed the Budget Act. If you look at our report that we 
filed with the Senate, on page 36, Members of the Senate will see the 
5-year projection of outlays is in compliance with section 308(a)(1)(C) 
of the Congressional Budget Act of 1974 as amended. We have provided 
the 5-year projection associated with the budget authority that we 
provide in this bill. There are, in fact, follow-on costs for the 
outlays for moneys that are expended this year. They have to continue 
to spend for a period of years, and the Budget Act requires us to do 
this. It requires us not only to do it but to inform the Senate how 
much it is going to cost. There has been no cheating here. As a matter 
of fact, we have gone out of our way to make certain we have complied 
to the exact letter and dot and paragraph of that bill.

  Now, I want the Senate to know the effect of this amendment was just 
the contrary to what the Senator from Pennsylvania said. If we do not 
provide this money on the basis of ongoing accounts based upon the 
emergency that exists now, every year subsequently, when there are 
amounts to be expended, the commanders will have to do the reverse of 
what the Senator from Pennsylvania said. They will have to take 
something out of their budget. Remember, we have a flat line budget now 
for 5 years. They will have to take something out to accommodate for an 
emergency that existed in 1998. We are providing money pursuant to the 
President's designation of an emergency, primarily for Southwest Asia 
and for Bosnia.
  There are ongoing costs to this emergency. We have deployed people to 
Kuwait City and to the Persian Gulf. When the emergency is over, they 
will have to be brought back. Those costs are part of the emergency. 
But under the amendment of the Senator from Texas, they will be part of 
the normal operating costs of that year, and it will be just that much 
less available for training or for acquisition, for procurement of 
various items. Whatever the

[[Page S2474]]

bill authorizes that year, these moneys will have to come out first 
because they have already been obligated first.
  For instance, the Department of Defense estimates that it will cost 
$250 million to redeploy these forces that went to Southwest Asia. Once 
they are redeployed to the United States, they are reconstituted in 
their units, and that cost of reassociating with various units, the 
total cost of that is $250 million. That is still part of the 
emergency. That is not something that is just a normal event taking 
place in subsequent years, in the year 1999 or the year 2000. The 
impact of what the Senator from Texas has suggested would be to say: 
``The President can declare an emergency and have the funds not be 
counted for this year only'' means that the emergency is over on 
September 30. Right? Wrong. Even if the deployment stopped at the end 
of September 30--I hope it will stop sooner--there would be ongoing 
costs associated with the emergency, and that is what we have covered 
as the Budget Act requires us to cover.
  If this emergency designation is lifted, what are the consequences in 
1999? We go into 1999, according to the CBO, with a $3.7 billion outlay 
deficit. What the Senator from Texas is saying is, notwithstanding 
that, we are going to add all the costs associated with the emergency 
from 1998 that are actually paid in 1999. If you talk about 
complicating the bookkeeping of the Department of Defense, I don't know 
of any better way to do it. If there is $400 million that remains 
unobligated as of September 30, and it pays out in 1999, CBO is going 
to score that $400 million for 1999. Even though it was an obligation 
that came about because of the 1998 emergency, and it is spent in 1999, 
we are going to have to take $400 million out. I wonder how many things 
are going to come out of Texas or Pennsylvania if that happens.
  I am not going to do it because that is over to the Department of 
Defense. But I can assure you that any State involved that has outlays 
is going to suffer, and the program will be reduced. Accommodating this 
amendment will bring about $2 billion in 1999 of budget authority being 
utilized because it will take the outlays for that year based upon 
procurement rates of outlays and say you cannot start $2 billion worth 
of acquisitions because of an emergency that happened in 1998. We 
should tell the Department of Defense, cancel the F-18s, cancel the 
ships, cancel whatever it is we are going to try to procure. I am 
talking about procurement outlays, which are the ones that are going to 
suffer the most.
  Mr. President, we have in this proposal--the Budget Act is very wise, 
really. There is an incentive to manage the money correctly, to not 
wish to spend it before the end of this year. The effect of the 
Senator's amendment would be if you can get the money spent before the 
end of the fiscal year, then you can take it all off this year, it 
doesn't count. But if you take anything into the next year, guess what. 
It counts against your next year's outlay allowance. So what does that 
do? It is a rush to the cash register for September 30; a total 
disincentive to manage money right.

  I have seen amendments that have been brought to the floor that 
attempted to reconstruct the whole apparatus of the Budget Act, and I 
have to say I have some problems with the Budget Act, and the Senate 
will hear about those later with regard to scoring. But this is not one 
of them. The Budget Act was correct. When we have an emergency or a 
disaster--this would cover the disaster money too, by the way.
  I don't quite understand what they are doing, because we have 
disasters. When we had our great earthquake in 1964, we did not pay for 
some of those things that we had to do until 1966. Look at what is 
going on in Georgia right now, and Mississippi and Alabama. Does anyone 
think that all of those levees are going to be reconstructed by 
September 30? I want the Senate to start thinking, and, above all, I 
want to say again, I want the Senator from Texas to be careful when he 
accuses this Senator of cheating with an appropriations bill. That does 
not go down lightly with me.
  I remember the days before when I saw majority Members arguing, and I 
can tell you the majority didn't last very long. The majority doesn't 
last very long when people come out and accuse chairmen of motives that 
are just absolutely unfounded.
  Mr. President, at the appropriate time I will move to table the 
Senator's amendment. I can tell the Senate I will remember the Senators 
who do not vote to table this amendment.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Mr. President, first of all, I want to answer the question 
about the cheating. I said the Senate and the President were cheating 
on a commitment that we made, and I stand by that point. I don't single 
any Senator out in the process. But the bottom line is, facts are 
stubborn things. Let me review the facts.
  Eight weeks ago today the President of the United States stood at the 
Speaker's table at the House of Representatives, we were all there, and 
talked about the fact that we were about to have a surplus. And he used 
his words, great slogan--he has no program, as we know, but he has a 
great slogan--save Social Security first. We are going to have a 
program to save Social Security. In fact, there are three Members right 
here on the floor who are working on one.
  But we can't save Social Security if we don't have the money. So, 
when the President said ``save Social Security first, take the surplus 
and use it to save Social Security,'' there was an eruption of 
applause. We all stood up. We all applauded. And now we are in the 
process on this bill of taking $1,979,000,000 away from Social 
Security, money that would have gone to help us make the system solvent 
not just for our parents but for our children, and we are taking it 
away from Social Security because we are going around the budget.
  The Senator from Alaska points out that we have had floods, we have 
had disasters. No one is saying not to provide the help.
  Our amendment provides the assistance. We are for the assistance. But 
what we are saying is give the assistance this year and we won't even 
make you pay for it this year. But this bill spends money not just this 
year but for the next 5 years. All we are saying is, the money that 
will be spent next year and through the year 2003, count it as part of 
the budgets in those years.
  Our colleague from Alaska tells us, ``Well, the departments will have 
to change their budgets next year and in 2000 and 2001 and 2002 and 
2003'' if we make them count spending that they are incurring in those 
years. How many families have the option when Johnny falls down the 
steps and breaks his arm and they have to take Johnny to the emergency 
room and they have to have the arm set can say, ``Well, now, we have 
already planned our vacation next year. We were going to buy a new 
refrigerator. You can't expect us to go back now and change our budget 
and not buy a refrigerator because Johnny broke his arm.'' That would 
be a great world for real Americans to be able to say, ``Well, you 
know, we had planned on this and this thing happened and we don't want 
to have to change our plans.''
  The point is real American families change their plans every single 
day. So, far from being this outrageous proposal that is going to put 
great hardship on the American Government, we are not saying don't fund 
the emergencies; we are saying fund it. What we are saying is that we 
should pay for them. We are not even asking that they be paid for this 
year, but we are saying when you haven't even written the budget yet 
for 1999, why should you spend $1.533 billion next year and not even 
count it in next year's budget?
  Finally, let me say that with regard to projects in Texas and 
Pennsylvania, I never thought we were going to balance the budget 
without making tough decisions. If we have to affect defense spending 
or nondefense spending in all 50 States and the District of Columbia to 
balance the budget and save Social Security, I thought that's what we 
were about.
  But this amendment is eminently reasonable. You can be for it or you 
can be against it. Both those positions are perfectly legitimate. But 
you cannot say that we are going to use the surplus to save Social 
Security and put Social Security first and defend the surplus as the 
President has said and then turn around, as the President has done, and 
start spending the surplus,

[[Page S2475]]

which he did when he sent this bill to Congress without offsetting 
spending. You can't do that and claim that you are serious about 
wanting to protect the surplus. You can't have it both ways. You can be 
for all these programs, you can be for this emergency spending without 
offsetting it, but you can't turn around and say that you are living up 
to the commitment that we have made.
  So this is a serious issue. It seems every year that I and others end 
up offering these amendments saying we know there are going to be 
emergencies, we ought to be setting aside the money as we used to.
  Let me just read you these numbers. Last year, we had $5.4 billion of 
emergency spending that we added directly to the deficit, some of it 
being spent this moment. The year before, we added $6.4 billion, the 
year before $10.1 billion, the year before $9 billion and the year 
before that $5.4 billion.
  When we go back to 1991 and 1992, the numbers were pretty small, but 
beginning in the Clinton administration, we have averaged, if you take 
the actual outlays, $7.3 billion of emergency spending every single 
year since Bill Clinton has been President.
  Now, did any of these expenditures occur because we had no way of 
anticipating they would occur? Absolutely not. We knew there were going 
to be emergencies. America is a big country, and we have emergencies 
every single year. But we set aside no money for the purpose of paying 
for them. How can anybody call the Bosnian deployment a new, unexpected 
emergency this year? Why didn't the President put the money in his 
budget last year? He didn't do it because it was a way of jimmying the 
books. It was a way of spending money without saying he was spending 
it, knowing that we would pay for it in a supplemental appropriation. 
And I can tell you what will happen this year. We will not provide 
money for Bosnia in the defense bill, and we will do the same thing 
again next year.

  So here is the point: We do have the power under the Budget Act, with 
the compliance of the President and Congress, to spend the surplus. We 
have the power to do that by declaring an emergency. What Senator 
Santorum and I are saying is declare an emergency for spending this 
year, but the spending that is going to occur in 1999, 2000, 2001, 
2002, and 2003, for the money that will be spent under this bill all 
the way out 5 years from now, go ahead and build that into the regular 
budget so that we don't raise total spending in those years from this 
bill and so that the surplus in those years that we are counting on for 
a budget that we have not yet brought to the floor of the Congress, but 
money we are counting on to put Social Security first, will actually be 
there to put Social Security first.
  So that is what we are trying to do in this amendment. It is an 
amendment you can be for or against, but it is not very confusing. It 
basically says pay for these programs. We don't have to. We, obviously, 
have the power not to, and we haven't in any year since Bill Clinton 
has been President. Not that we haven't voted on it. We voted on it 
regular like clockwork. I or another Senator have offered an amendment 
to each and every one of them, and all of these amendments have failed. 
But the point is we have it within the power to pay for them, and I 
hope we will pay for them.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. STEVENS. Mr. President, the law we passed in August 1997, Public 
Law 105-33, contains this provision, which is the one I referred to 
before, but I want to read it now. It pertains to sequestration. When 
the OMB determines spending--they determine whether we lived up to the 
caps that are in the budget agreement--it first is instructed to 
examine those budgets. What it says is this:

       OMB shall calculate in the sequestration report and 
     subsequent budgets submitted by the President under section 
     1105(a) of title 31, United States Code, shall include 
     adjustments to discretionary spending limits and those limits 
     as adjusted for the fiscal year in and each succeeding year 
     through 2002 as follows: Emergency appropriations--If for any 
     fiscal year appropriations for discretionary accounts are 
     enacted that the President designates as emergency 
     requirements and the Congress so designates in statute, the 
     adjustment shall be the total of such appropriations in 
     discretionary accounts designated as emergency requirements 
     and the outlays flowing in all fiscal years from such 
     appropriations.

  Mr. President, what we are looking at is a finding by the 
Congressional Budget Office which has determined--that is what we put 
in our report on page 36, the 5-year projection. Incidentally, just as 
a footnote, I hope everyone knows, they assumed we won't pass this 
bill, it won't become law until July 1; therefore, the outlays cannot 
be made until subsequently in July, possibly August and September. So 
they moved into 1999 a considerable amount of money that actually is 
going to be spent this year because we are going to pass this bill and 
it is going to become law before the end of April. There is no question 
about that. It will, hopefully, become law the 1st of April.
  But in any event, what has happened is we have complied with the law, 
and the law says we list the amounts. Although they are authorized for 
emergencies that have taken place this year, the spending may continue 
for a series of years.
  The Senator used an interesting analogy about Johnny breaking his 
arm. We have disaster money here, and there are lots of homes that have 
been broken. If those homes were covered by insurance, they take a look 
at it, the insurance adjustor says we are going to pay X dollars, and 
you proceed to spend that money over a period of years. You get it from 
your insurance account.

  They don't come by and say, ``OK, you only get the amount of money 
you can spend this year.'' That is what the Senator from Texas is 
saying. The disaster account is a taxpayer insurance against the 
calamity of disasters that take place in this country. And as such, the 
impact of the Senator's amendment--anyone who has had a disaster in 
their State this year better listen to me now because he is saying that 
all you can do is count the emergency only for the money that can be 
spent this year. It is outlays. Very little of that money is going to 
be outlaid this year. We know that. It is primarily the disaster money 
that is carried out for a period of years.
  The Senator mentions Bosnia, and I have opposed the Bosnian 
deployment. He is not correct in saying we have not budgeted and spent 
money, programmed money on a nonemergency basis. We have, in fact, 
appropriated money for Bosnia. We did this year but only through July 
1. The emergency came about when the President of the United States 
found that we could not withdraw. Under his determination and the Joint 
Chiefs, they decided we have to stay there. We face the problem of 
paying between now and July 1 and through the end of the year for that 
deployment.
  If we do not put up the money, the money comes, as I said before, 
from the readiness accounts for moneys we have already appropriated for 
the fiscal year 1998. That will mean the readiness accounts for the 
rest of the military not deployed to Bosnia or to Southwest Asia will 
pay the cost of the emergency.
  Mr. President, that is a nice question, whether this is an emergency, 
but the President has declared it is an emergency and we have agreed it 
should be an emergency because we really believed when we made the bill 
up last year for 1998 that the troops would be out by July 1.
  Having done that, we spent the balance of the money in the 
procurement accounts and in the readiness accounts. We were operating 
under a ceiling. What the Senator from Texas does now, if it is not 
considered emergency as the President declares it is an emergency, is 
we have to go back, as I said, and take it out of moneys that we put 
into, whatever it might be--aircraft acquisition, whatever it might 
be--in the Department of Defense.
  It is not easy to find that kind of money, particularly when we have 
troops deployed in the field. Over 40 percent of our personnel are 
deployed overseas right now. If we are going to readjust anything, it 
has to be in the procurement accounts, and the procurement does not 
outlay dollar for dollar. If we cancel procurement, we only probably 
get 10, 15, 20 percent adjustment for outlays.
  Again, I say, it will take billions from the 1990 account to deal 
with the millions that are involved in this bill for expenditure.

[[Page S2476]]

  I am not going to belabor it except to say, once again, this is a 
killer amendment. I think it is against the Budget Act. I leave that to 
the Senator from New Mexico. I hope he will talk about it. At least in 
purpose it is against it. I think actually it is subject to a point of 
order, but I don't intend to raise a point of order. If the Senate 
doesn't understand this amendment, it doesn't understand defense 
economics and defense spending. I understand there are some people here 
who want to put the screws on us in terms of the next year.
  Remember this, Mr. President. We have no firewall between defense and 
nondefense next year. We have to legislate it if we can get it. The 
effect of this is to take money out of defense when defense is already 
going to be under attack as far as money in 1999.
  I just cannot be emphatic enough to deal with this in terms of what 
it means. It means that we are readjusting the concept of the 
accounting for emergency money. If you look at just the disaster 
account alone, it reneges on the commitment we have made to the people 
who are in the disaster area to help them pay for the cost of adjusting 
to that disaster.
  My State has more disasters than any State in the Union. We don't 
have any right now, except me, and I feel like a disaster right now 
because I really don't like this amendment.
  I think if Members of the Senate think about it, they will understand 
what we have done. This amendment impacts defense most damagingly 
because the funds for Southwest Asia assume current force levels and 
the current op tempo--the tempo of operations. We made these moneys 
available until expended. That means they can be expended in 1999 and 
subsequent years. That gives an incentive to the Department to manage 
their money wisely and not rush to expend it before the end of this 
year.
  The effect of the Senator's amendment would be to reverse that 
decision of our committee.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SANTORUM. Thank you, Mr. President.
  Mr. President, first, I say to the Senator from Alaska, he is 
absolutely right. I do not think either Senator Gramm or I are 
intending, or what the Appropriations Committee did here, is somehow 
outside the Budget Act or illegal or against the law. Absolutely not. 
The chairman and the committee followed the Budget Act to a ``t.'' They 
declared the emergency. The President asked for emergency spending. 
They went ahead and spent the money outside of the parameters of the 
budget that we have for the country this year and for future years.
  We just do not agree that we should do that. I think we do have the 
right, because we have done it in the past, to make that spending this 
year, frankly, for future years, to stay within the caps and to allow 
some reprogramming to be done within those accounts.
  So my argument has never been, and I think the Senator from Texas 
would admit that his argument has never been, that what they have done 
is somehow wrong. Not wrong; certainly it is within the law. But to 
suggest that it is the right thing to do is another matter.
  I understand the problems that the Senator has with the defense 
budget. I have as many concerns as he does with the top line number of 
defense. I think we are at a very tight defense budget for this year. I 
serve as a subcommittee chairman on the Armed Services Committee, and I 
understand the tough choices that have to be made.
  I do not have as big a budget to oversee in my authorization. I have 
about $9 billion to oversee. But I have to make tough choices, and 
sometimes projects in Pennsylvania do not make it on there. They did 
not make it on there because they are not worthy projects, not because 
they are from Pennsylvania or from North Carolina or Texas or anywhere 
else. And I will assume and I will hope that the appropriations process 
is a similar one; that we look at the merits of the projects that are 
on there being requested by the Department and we sort it out on the 
basis of merit.
  That is what I will continue to do and that is what I hope the 
Appropriations Committee will continue to do. It is a tough job. The 
resources are very slim. I accept what the Senator from Alaska is 
saying, that if we adopt this amendment, it will make that job somewhat 
tougher to do--next year by the tune of about $1.6 billion, and the 
following year $391 million, and then it sort of trails off to a couple 
million. But I understand that is a difficult task.
  The point we are trying to make is, we did not require you to do it 
this year because you are halfway through the budget year and it would 
be very difficult to reprogram that money having been put in a cycle 
where you had a certain expectation of money, you spent to that level, 
so you spent half your money and then you are basically taking savings 
out of the last half of the money that is there, which requires a 
commensurately higher percentage of cuts than the overall amount.
  So I understand that problem. That is why we tried to avoid that 
problem by saying, if you spend the money this year, you do not have to 
reprogram it. You can declare the emergency and you can spend it above 
the budget level.
  I find it somewhat curious that the Senator from Alaska would attack 
our amendment by saying it creates an incentive to spend the money 
unwisely this year and that he opposes this amendment because we are 
going to have money being forced out of the pipeline prematurely so it 
can be spent on an emergency basis as opposed to being kept under the 
caps in future years.

  The only reason we have released the pressure valve, if you will, for 
this year is because we know the objections that the Senator from 
Alaska would have if we put the caps on it this year. He would be 
opposed to it, I suspect, even more vociferously if we made the 
relevant departments stay within the caps every year as opposed to just 
future years. So I am not too sure that is necessarily a valid 
argument.
  The bottom line here is very simple. What we are suggesting is to 
take the money that we know is going to be there for the surplus and 
use it for Social Security, not for emergency spending, particularly 
given the fact that I understand from the cloakroom there is another 
$1.6 billion to throw on top of this bill. It is going to be spent out 
over the next few years, money that the President has just asked for.
  I have voted against disaster bills in the past. In fact, I stood on 
the floor of the Senate just a few years ago and said I would vote 
against a disaster bill when most of the money for that bill was going 
to Pennsylvania--my State. And I said I would do so unless we did 
something to make sure that that money was offset within the budget, 
because I feel it is that important. I think there is not truth in 
budgeting with this administration and with our budgets in the past 
when it comes to disaster assistance. We chronically have this problem 
that we do not appropriate enough money.
  Again, I do not point to Senator Bond and his subcommittee as the 
problem. I point down to 1600 Pennsylvania Avenue to a President who 
just willy-nilly, in many cases, declares items eligible for assistance 
and expands the definition beyond what congressional intent is as to 
what is covered. Not that he declares disasters willy-nilly. In fact, 
they are very serious disasters. But what should be and is eligible to 
be paid for by the Federal Government is, in fact, where I think we 
have a problem with this administration, which I think the Senator from 
Missouri, Mr. Bond, is attempting to correct. So I give credit to him. 
But we still have the problem.
  The problem has shown up in huge amounts of outlays that we spend 
every year on disasters because we continue to pay ever-increasing 
amounts from the Federal level on disasters around this country. That 
is a problem. All we are doing is allowing that spending to continue 
and not keeping within the discipline that we promised the American 
public. We promised, us right here in the Senate, we promised the 
American public that we would stand here and stick to our agreement, 
that we would not continue this stream of red ink, we would not just 
continue to spend money like there was no tomorrow, that we were going 
to put a budget agreement in concrete, we were going to stick to it, 
and, as a result of that, we would have surpluses, we

[[Page S2477]]

would have a balanced budget, and we would have surpluses and, as a 
result, the economic prosperity that would come with that.
  Right here today we are just saying, oh, we didn't mean it. You know, 
we had an unexpected--not so unexpected--expense so we have to break 
the deal. We are going to break the deal. We are just going to say, 
fine, we are going to spend more.
  I am surprised there is just $1.6 billion more in the cloakroom ready 
to come down here to be spent. Let us throw in some more. I mean, this 
is open season. We have lied once. We have broken our promise once to 
the American public. We said we were going to keep the deal. Now we are 
not going to keep the deal. Why just 1.6 billion? Let us throw in a few 
more billion. Once you break it--I mean, it is like being a little bit 
pregnant--let us really have a party. Let us spend it all. Let us throw 
some more money down here and find out how much more we can throw on 
that we can consider an emergency that all we have to do is declare. We 
do not have to follow any law here. For those of you who think that 
there is a law that we follow that says ``this is actually an 
emergency'' and ``this isn't an emergency''--no, no, no. We just have 
to say it is. That is all. We just say it is, and it is an emergency.

  So let us bring all the turkeys out. Let us start flying around and 
shooting everything around here. And, by the way, there is lots of 
stuff in here that is not emergency, just supplemental spending that we 
are just going to throw out here and say, ``Well, we'll just include it 
in. It's something we really wanted to do. Couldn't fit it in last 
year's budget, may not be able to fit it in this year's budget. It's 
going to fly. It's going to pass and we can help out some of our 
Members.'' It is just not the way we should do business.
  Mr. STEVENS. Will the Senator yield for a question?
  Mr. SANTORUM. I will be happy to.
  Mr. STEVENS. Does the Senator mean to say with regard to disaster 
money that is in this bill, that only the money that is spent this year 
will be treated as an emergency?
  Mr. SANTORUM. That is correct. Under the legislation, that is 
correct.
  Mr. STEVENS. So that the cost of repairing the levees in Georgia or 
Alabama or fixing the frozen trees in New Hampshire, wherever they 
might be, that money, if it is not spent this year, will have to be 
charged against the regular bill for that purpose in the next fiscal 
year?
  Mr. SANTORUM. That is correct. Just like next year. When we 
appropriate money this year, when we appropriate money for next year, 
we will have in the FEMA budget money for anticipated disasters. That 
is what we will be putting money aside for. That is what we appropriate 
the money for in FEMA, for anticipated disasters and for spending on 
those disasters.
  What we are saying is, we now have a leg up. We know what money we 
need to spend this year, so we are going to include it in that budgeted 
amount. So, yes.
  Mr. STEVENS. Does the Senator understand, first we have to declare a 
disaster for that not to be accounted?
  Mr. SANTORUM. That is correct.
  Mr. STEVENS. That is what this bill does?
  Mr. SANTORUM. Yes.
  Mr. STEVENS. Some money is already over there in FEMA, but when it is 
spent, it is emergency money.
  Mr. SANTORUM. That is correct.
  Mr. STEVENS. I am not sure the Senator is understanding me yet. The 
money that we appropriate to FEMA, we just put in FEMA.
  Mr. SANTORUM. Right.
  Mr. STEVENS. It is counted in the budget. But when they spend it for 
real emergencies, we relieve them from accounting for that as far as 
sequestrations are concerned because it does not count against this 
year's allocation or the allocation in any year for which the outlay is 
made. Do you understand that?
  Mr. SANTORUM. What we are suggesting is that money should count 
within the budget, that it should count within the amount for that 
appropriation.
  Mr. STEVENS. I say to the Senator, I do not know if a disaster can 
recover under that situation--not one. We declared a disaster in South 
Dakota. We declared a disaster because of the earthquakes in 
California. We did it because of the fact we had to have the emergency 
designation in order to spend the money.
  As a matter of fact, the Senator from New Mexico says there was not 
enough money. We had to add to it. That is what we are doing to it; we 
are adding to the money that we previously had. But whatever you spend 
in connection with these disasters, you do not have to account for it 
at the time of sequestration. It is only at the time of sequestration.
  Mr. SANTORUM. I understand that. All I am saying is that money is 
going to be spent next year. That money is going to be spent next year. 
And in the appropriations bill that deals with these different 
accounts, we are saying we want to keep it under that cap, and that 
means to find money other places in the legislation, absolutely. That 
means that we are going to have to reduce other accounts to make sure 
we stay within those caps.

  This is about, in our opinion--I know the Senator from Texas agrees--
controlling the growth, controlling Government spending. What we are 
doing is saying, there is in fact a budget that says there is so much 
to spend, and whether we declare an emergency or not we are going to 
stay within that. If we declare an emergency, we can spend the money 
for that particular purpose --fine--but it is still going to stay in 
the aggregate cap for our total spending. That is the point we are 
trying to make.
  Mr. DOMENICI. Will the Senator yield for a question?
  Mr. SANTORUM. I am happy to.
  Mr. DOMENICI. How big does a disaster have to be in terms of its 
outyear cost for you not to expect it to be paid for out of education 
money and NIH money and others? How about the Alaskan earthquake? I 
assume we had 5, 6 percent of the entire budget of the United States in 
one or two of those years. Is that big enough? Or should we assimilate 
that and reduce education funding and NIH funding and all the other 
funds, highway funds?
  Mr. SANTORUM. I say to the Senator, I would expect in a $1.6-some 
trillion budget, that we can in fact find in this case for disasters 
some $2-plus billion, of which it is not even $2 billion. I think in 
our opinion it is $3.1 billion--no; less than that--it is $2.5 billion 
overall. And we are allowing this year's to go as an emergency. So I 
think $1.5 billion. So we can find $1.5 billion out of the next 5 
years'--out of the next 5 years--spending. I think we can do that.
  Mr. DOMENICI. I say to the Senator, because I know you intend always 
to be very precise and specific, and I laud you for that, and you are 
eloquent in your remarks, I hope you do not speak of a $1.7 trillion 
budget unless you want to take money out of Social Security and 
Medicare and all the other entitlements. That is two-thirds of the 
budget. So we ought to be talking about the right number. Nobody is 
expecting this to come out of Social Security. Are you?
  Mr. SANTORUM. No, I am not.
  Mr. DOMENICI. Out of Medicare?
  Mr. SANTORUM. No. Roughly a third is discretionary.
  Mr. DOMENICI. That is about right.
  Mr. SANTORUM. Roughly a third. So roughly a third of the $1.7 
trillion. So you are talking about around $550 billion. And we are 
talking about $1.5 billion out of $550 billion.
  Mr. DOMENICI. That includes defense, which more than half of that is. 
Do you want it to come out of defense?
  Mr. SANTORUM. Yes. Part of it does come out of defense within our 
amendment, yes, absolutely.
  Thank you, Mr. President.
  Mr. D'AMATO addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. D'AMATO. Mr. President, I did not intend to speak to this 
particular amendment because I have an amendment that is sponsored by 
Senator Moynihan, Senator Jeffords, Senator Leahy, Senator Snowe, 
Senator Collins and I believe has been accepted by both sides.
  But I think it is rather germane because it seems to me that in times 
of crisis our Nation sets aside its differences and we come to the aid 
of our neighbors. I do not say that because you had a disaster in the 
State of Washington, we are not going to be

[[Page S2478]]

there to help you. That is what happened, and this country came forward 
together and made available emergency aid, some several billions of 
dollars. Then we had floods along the rivers. Those rivers were not in 
New York, but they were in the United States of America, and my State 
is part of this country. I think that our citizens would have been very 
upset with this Senator and my colleague if we had voted against 
providing aid to those who had their farms wiped out, their homes wiped 
out, their lives disrupted.

  What are we doing? I mean, what in the world are we saying here? Are 
we saying, really, that you should cut the National Institutes of 
Health by half a percent to provide emergency relief? For whom? For our 
citizens. My gosh, we have sent troops all over the world to help out 
others. Are we really seriously saying that we should not make 
available disaster relief to our citizens without this clap trap of 
finding it under a budget cap next year? If it is an emergency, by 
gosh, the American citizens expect us to rally to our neighbors and to 
our friends and stop this parliamentary nonsense. That is what this is.
  I want to tell you something. We should move to table this now. I am 
not going to do it because that is the chairman's spot. It is his 
responsibility. We have some important business to get done here. I 
have an amendment that I am going to offer to help the dairy farmers of 
New York and the people of New York who are devastated--hundreds of 
millions of dollars worth of damage, thousands and thousands of 
manhours lost. Thousands of homes were ravaged as a result of the ice 
storm when people's power went out for 2 or 3 weeks, and when they came 
back to their homes, they found them flooded because the pipes had 
burst.
  Now, we have to get to the business of the people and do it here and 
now and not get into this business of saying we are going to offset 
next year's expenditures. They have to rebuild those homes, and these 
are people of modest incomes. Are we really going to say here and now, 
oh, no, we are not going to do that unless we cut low-income assistance 
programs next year or unless we are going to cut--what program? Tell 
me. Tell me. What happens if you have a $10 billion disaster? Next year 
someplace we are going to start offsetting it? Let's get to the 
business of the people. This isn't the business of the people. This is 
playing games.

  I would like to be able to offer my amendment, and I would like to 
move to set aside the pending business. I am going to withhold. New 
Yorkers have been devastated to the tune of hundreds of millions of 
dollars.
  I just think what is being done absolutely puts us in a light that is 
irresponsible. If we want to make cuts and say that there are programs 
here that are not of an emergency nature, I will vote on them. If you 
want to build bicycle trails--I was here when that was put up, and I 
voted against bicycle trails--and if you want to build igloos someplace 
and say that is a disaster when it is not, I am going to vote against 
it. By gosh, let us not simply say that all of the emergency relief 
should be treated as a nondisaster. That is not being fair to our 
colleagues.
  Mr. GRAMM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Mr. President, I think we can wrap this debate up and have 
a vote, if we are ready to do it. I do not know if the chairman is 
going to move to table the amendment or just have an up-or-down vote on 
it. But I would like to conclude by making several very simple points:
  No. 1, no one is saying, and nothing in this amendment has the effect 
of saying, don't provide emergency money. That is not what the issue is 
here. This has nothing to do with providing emergency money. Nobody is 
saying provide it only this year. What we are saying is pay for it. 
What we are saying is that when you are committing to spend money over 
the next 5 years--and we have not even written budgets for those 5 
years--that these expenditures ought to be counted in the budget.
  Do we really take the position that anything we declare is an 
emergency, and what we are going to spend 4 or 5 years from now should 
have nothing to do with the budgets we are writing for those years 4 or 
5 years from now? I reject that. If this is not the people's business, 
I don't know what the people's business is.
  Finally, the example has been used about an insurance company paying 
a claim. We want the insurance company to pay the claim but we want the 
insurance company to cut their dividends. What we want to do here is to 
be sure that we are helping people who have suffered but that we pay 
for it by cutting other programs so that we don't end up in a position 
of claiming that we are setting aside money to rebuild Social Security, 
and, yet, if this amendment fails, we are going to have $2 billion less 
to rebuild Social Security with than if our amendment succeeds. That is 
what the issue is about.
  It is pretty simple. And I suggest we vote on it.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. I thank the Chair. I actually would ask the Senator 
from Alaska, if he wants to respond, I would follow. I would be pleased 
to yield to the Senator from Alaska, but I would like to follow.
  Mr. STEVENS. Does the Senator wish to speak on this amendment?
  Mr. WELLSTONE. There are a number of amendments out here. I want to 
speak on another amendment.
  Mr. STEVENS. I intend to make a short statement and move to table. 
Could the Senator make his comments after that?
  Mr. WELLSTONE. I ask unanimous consent that after the Senator moves 
to table and we have the vote, I then be allowed to speak.
  Mr. STEVENS. For how long?
  Mr. WELLSTONE. Ten minutes.
  Mr. STEVENS. I might say to the Senator that we have a 5:30 cloture 
vote, and we have an agreement. I am informed that following the vote 
on my motion to table we will have an agreement dividing time between 
the proponents and opponents of the cloture motion and then vote on the 
cloture motion. I will be more than willing to say the Senator gets the 
first 10 minutes after the cloture vote. The cloture vote was supposed 
to take place at 5:30. We are jammed in on it right now.
  Mr. WELLSTONE. Mr. President, I say to my colleague, I want him to 
have a chance to respond. I know he wants to. I would then ask 
unanimous consent after we have the debate on the cloture vote and the 
cloture vote that I be allowed to speak after that vote.
  The PRESIDING OFFICER. Is there objection?
  Mr. STEVENS. Mr. President, I am not prepared to agree to that 
because I understand that we have a commitment that we will go out of 
session at that time.
  Mr. WELLSTONE. Mr. President, let me try one other unanimous consent. 
I ask unanimous consent that I be allowed to speak for 10 minutes 
before the vote on the IMF amendment.
  Mr. STEVENS. I have no objection.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. STEVENS. Mr. President, let me make sure that everybody 
understands what we are voting on. The Senator from Texas complains--
and I think rightly--that we are spending really a great deal of money 
on disasters. They grow every year, and it is because the moneys that 
we have allocated to disasters under authorization laws and under 
regulations have increased.
  I tell the Senator that the money available during the period right 
after the great earthquake in Alaska in 1964 compared to the amount of 
money that was available to those people who were harmed by the 
California earthquake--the California program for recovery--was much 
more heavily financed, and necessarily so. New concepts of assistance 
have grown since that time.
  If the Senator wants to examine and ask the Congress to examine and 
put limits on what we spend after a disaster, this Senator would be 
pleased to work with him on it. If the Senator wants to say that we 
ought to predict how much money we are going to have available for 
disasters and put a cap on that, this Senator would never agree with 
that.
  If the great Madrid Fault down by Tennessee ever slips again, as it 
did in the middle of the last century, to the extent that the bells in 
Boston rang

[[Page S2479]]

when that earthquake took place in the middle of our continent, if that 
would happen today, the cost of that disaster would be just 
overwhelming. There is no way to predict how much money we are going to 
spend on disasters.
  As applied to this bill now, I say to the Senator, if the Senate 
adopts this amendment, I will move to recommit this bill to the 
Appropriations Committee because we cannot afford to have such a heavy 
balance on the 1999 bill that we are working on now for fiscal year 
1999 if the Senate adopts the amendment of the Senator from Texas. 
Disasters aside, the major impact of this amendment is on defense. It 
would say that any moneys that are spent for the Bosnian or Iraqi 
deployments after September 30 would count against the allocations that 
we are already looking at for 1999 under the budget that the President 
has submitted to us.
  I have said before to the Senate, we believe that the impact of this 
amendment would mean procurement cuts--cuts in the amount of money we 
allocate to procurement of $2 billion in 1999. That is because when we 
authorized the use of $2 billion in 1999, the amount that actually 
would be spent would be about $400 million. That is what it does to the 
bill we are planning now.
  I just do not think that we should have a supplemental that so 
hamstrings the budget for the full year of 1999 in a way that was never 
contemplated by the President's budget nor is it contemplated by the 
budget before the Budget Committee and ready for submission to the 
Senate. This issue should come up but should come up in other ways, and 
that is how much money we will spend per person on a disaster.
  Does the Senator seek time before I make a motion to table?
  Mr. NICKLES. If the Senator will yield, I know there are two or three 
amendments in line.
  Mr. STEVENS. The Senator is correct.
  Mr. NICKLES. I have an amendment. I would be happy to introduce it 
now and you can stack it as well.
  Mr. STEVENS. I might say to the Senator that we just had a discussion 
with the Senator from Minnesota, and I understand there is an agreement 
to postpone the cloture vote that has been scheduled for 5:30.

  So I am going to move to table, and I would renew the request of the 
Senator from Minnesota that following that vote on my motion to table 
he get 10 minutes, and after that we will be happy to have any 
amendments that the Senator from Oklahoma has. All right.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. STEVENS. Mr. President, I reluctantly but enthusiastically move 
to table the amendment of the Senator from Texas and ask for the yeas 
and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There is a 
sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to the motion of 
the Senator from Alaska to lay on the table the amendment of the 
Senator from Texas. On this motion, the yeas and nays have been 
ordered, and the clerk will call the roll.
  The legislative clerk called the roll.
  The result was announced--yeas 76, nays 24, as follows:

                      [Rollcall Vote No. 40 Leg.]

                                YEAS--76

     Akaka
     Baucus
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Bryan
     Bumpers
     Burns
     Byrd
     Campbell
     Chafee
     Cleland
     Cochran
     Collins
     Conrad
     Coverdell
     Craig
     D'Amato
     Daschle
     DeWine
     Dodd
     Domenici
     Dorgan
     Durbin
     Feinstein
     Ford
     Frist
     Glenn
     Gorton
     Graham
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Hollings
     Inouye
     Jeffords
     Johnson
     Kempthorne
     Kennedy
     Kerrey
     Kerry
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lott
     Lugar
     McConnell
     Mikulski
     Moseley-Braun
     Moynihan
     Murkowski
     Murray
     Reed
     Reid
     Roberts
     Rockefeller
     Roth
     Sarbanes
     Shelby
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thompson
     Thurmond
     Torricelli
     Warner
     Wellstone
     Wyden

                                NAYS--24

     Abraham
     Allard
     Ashcroft
     Brownback
     Coats
     Enzi
     Faircloth
     Feingold
     Gramm
     Grams
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Kohl
     Kyl
     Mack
     McCain
     Nickles
     Robb
     Santorum
     Sessions
     Smith (NH)
     Thomas
  The motion was agreed to.
  Mr. LOTT addressed the Chair.
  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. LEAHY. Mr. President, can we have order?
  The PRESIDING OFFICER. The Senate will come to order. The majority 
leader is recognized.
  Mr. LOTT. Mr. President, let me withhold while we confer a few 
minutes more. I don't seek recognition at this time.
  Mr. LEAHY. Mr. President, parliamentary inquiry: What is the regular 
order at this point?
  The PRESIDING OFFICER. The regular order is for the Senator from 
Minnesota to be recognized.
  Mr. LEAHY. Mr. President, further, has all time run out on the 
pending amendment?
  The PRESIDING OFFICER. That is correct.
  Mr. LEAHY. And will the Chair explain why it would not be the regular 
order to vote on that?
  The PRESIDING OFFICER. The pending amendment is a Faircloth amendment 
No. 2103.
  Mr. STEVENS. Under the unanimous consent agreement, the Senator from 
Minnesota has 10 minutes coming now.
  The PRESIDING OFFICER. That is correct.
  Mr. LEAHY. A further parliamentary inquiry, Mr. President. After that 
10 minutes, what would then be the regular order?
  The PRESIDING OFFICER. The cloture vote.
  Mr. D'AMATO addressed the Chair.
  The PRESIDING OFFICER. The Senator from Minnesota is recognized.
  Mr. D'AMATO. Mr. President, if I might----
  The PRESIDING OFFICER. Does the Senator from Minnesota yield?
  Mr. WELLSTONE. Mr. President, I want to make sure that I have my time 
on the floor. I will be pleased to yield.
  Mr. D'AMATO. Mr. President, I thank the Senator from Minnesota. I ask 
unanimous consent that I be given up to 2 minutes to submit an 
amendment, that has been agreed to by both sides, on behalf of Senator 
Moynihan, Senator Leahy, Senator Snowe, Senator Collins and myself, 
with respect to the disaster bill and ask that the pending amendment be 
set aside for that purpose.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.


                           Amendment No. 2109

(Purpose: To provide funds to compensate dairy producers for production 
                    losses due to natural disasters)

  Mr. D'AMATO. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from New York [Mr. D'Amato], for himself, Mr. 
     Moynihan, Mr. Jeffords, Mr. Leahy, Ms. Snowe, and Ms. 
     Collins, proposes an amendment numbered 2109.

  Mr. D'AMATO. 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 5, line 5, strike ``DAIRY AND''. On page 5, line 8, 
     strike ``and dairy''. On page 5, line 10, strike ``and 
     milk''.
       On page 5, line 20, beginning with the word ``is'', strike 
     everything down through and including the word ``amended'' on 
     line 23, and insert in lieu thereof:
       ``shall be available only to the extent that an official 
     budget request for $4,000,000, that includes designation of 
     the entire amount of the request as an emergency requirement 
     as defined in the Balanced Budget and Emergency Deficit 
     Control Act of 1985, as amended, is transmitted by the 
     President to the Congress: Provided further, That the entire 
     amount is designated by the Congress as an emergency 
     requirement pursuant to section 251(b)(2)(A) of such Act.''
       On page 5, after line 23, insert the following:


             ``dairy production disaster assistance program

       ``Effective only for natural disasters beginning on 
     November 27, 1997, through the date of enactment of this Act, 
     $10,000,000 to implement a dairy production indemnity program

[[Page S2480]]

     to compensate producers for losses of milk that had been 
     produced but not marketed or for diminished production 
     (including diminished future production due to mastitis) due 
     to natural disasters designated pursuant to a Presidential or 
     Secretarial declaration requested during such period: 
     Provided, That payments for diminished production shall be 
     determined on a per head basis derived from a comparison to a 
     like production period from the previous year, the disaster 
     period is 180 days starting with the date of the disaster and 
     the payment rate shall be $4.00 per hundredweight of milk: 
     Provided further, That in establishing this program, the 
     Secretary shall, to the extent practicable, utilize gross 
     income and payment limitations established for the Disaster 
     Reserve Assistance Program for the 1996 crop year: Provided 
     further, That the entire amount is available only to the 
     extent that an official budget request for $10,000,000, that 
     includes designation of the entire amount of the request as 
     an emergency requirement as defined in the Balanced Budget 
     and Emergency Deficit Control Act of 1985, as amended, is 
     transmitted by the President to the Congress: Provided 
     further, That the entire amount is designated by the Congress 
     as an emergency requirement pursuant to section 251(b)(2)(A) 
     of such Act.''

  Mr. D'AMATO. Mr. President, in response to the 100-year ice storm 
which hit the Northeast area of the country, and to address the unmet 
needs of our dairy farmers, I offer this amendment with my colleagues, 
Senator Moynihan, Senator Jeffords, Senator Leahy, Senator Snowe, and 
Senator Collins, to reimburse dairy farmers for up to $10 million for 
their milk losses.
  Our amendment covers two types of dairy losses: first, the losses 
that farmers experienced by having to dump their milk because it either 
could not be shipped to market or it could not be processed properly; 
and, second, the losses they will see through decreased milk production 
over the next few months.
  In addition, this amendment will allocate $4 million to provide 
relief to the dairy farmers who have had a cow die because of the 
storm. Our amendment, along with the provisions of this bill, will help 
prevent a lot of dairy farmers who have had thousands of dollars of 
losses from going out of business.
  When disaster strikes, America responds. The damage, adversity, and 
loss experienced in the North Country and in New England deserves the 
attention and assistance of our Government.
  I thank the chairman of the Appropriations Committee, Senator 
Stevens, and the chairman of the Agriculture Subcommittee, Senator 
Cochran, as well as the two ranking members, Senator Byrd and Senator 
Bumpers, for their support.
  In times of crisis, our Nation sets aside its differences and our own 
troubles in order to help-out those who are truly in need.
  Beginning on January 5, 1998, six counties in the northernmost part 
of New York State were ravaged by a fierce winter storm that covered 
the area in a three-inch blanket of ice. On January 10th, President 
Clinton declared the region a Federal disaster area.
  This storm caused tremendous damage to homes, farms, roads and 
infrastructure throughout this area of northern New York--which we call 
the North Country.
  Tragically, the effects of this storm led to nine deaths in New York.
  This ice storm damaged thousands of utility poles, brought down 
countless miles of power lines and left several hundred thousand people 
in the dark for up to three weeks.
  The loss of power in this region had a particularly difficult impact 
on North Country dairy farmers.
  As some of my colleagues know, dairy cows must be milked at least 
twice a day, every day. Modern farms use electric milking machines to 
do this task and then transfer the milk to cooling tanks until it is 
picked up and taken to an area processing plant.
  With no power, farmers did their best to try and milk their cows. For 
those who had generators and were able to milk their cows, they had to 
then store the milk.
  Unfortunately, for a number of dairy farmers, the lack of power to 
cool the storage tanks made their milk unfit for consumption.
  Farmers also faced the possibility that the milk truck could not 
reach the farm because icy road conditions, downed trees or downed 
utility poles made it impossible.
  As these circumstances piled up, individual dairy farmers across the 
entire Northeast region were forced to dump their milk incurring 
thousands of dollars of losses along the way.
  Farmers also have had to worry about mastitis. Mastitis is an 
inflammation of a cow's udder which can take hold in a cow when it is 
not milked regularly.
  This inflammation can reduce milk production and cause a cow to 
become sick, requiring treatment with antibiotics. When a cow is being 
treated with antibiotics, that cow's milk cannot be used.
  When a cow gets out of its milking cycle, there is nothing that can 
be done to make up for that lost production. That milk, and that 
income, is lost forever.
  Overall, dairy production losses may likely add up to millions of 
dollars for dairy farmers in the North Country and northern New 
England.
  Dairy farmers already run their operations on very tight margins--
even a slight decrease in production can cost thousands of dollars and 
be the deciding factor in determining whether a farmer stays in 
business or not.
  That is why I am offering this amendment--to help provide a measure 
of relief for New York and New England dairy farmers.
  With the passage of this amendment, I believe we will help meet the 
needs of our dairy farmers as they continue to recover from the effects 
of this storm.
  I am pleased to join with my colleagues in offering this amendment 
and I urge its adoption.
  Mr. LEAHY. Mr. President, I would like to join my colleagues from the 
Northeast in support of Senator D'Amato's amendment providing 
assistance to dairy farmers devastated by an ice storm earlier this 
year. I am proud to be a cosponsor of this amendment which will provide 
much needed assistance to dairy farmers in Vermont and throughout the 
Northeast.
  This storm which hit the Northeast on January 9 left dairy farmers in 
Vermont, New York, New Hampshire and Maine without power for days at a 
time. I was happy to see that the disaster bill proposed by the 
administration and passed by the Appropriations Committee includes $4 
million to reimburse dairy farmers for production losses suffered 
during the storm for milk that farmers were forced to dump.
  Unfortunately the bill did not consider the long term losses that 
will be suffered by farmers until milk production returns to pre-storm 
levels. Now cows don't know whether the power is on or off, they still 
need to be milked twice a day every day. In addition to the costs 
incurred by the dumped milk, many cows suffered mastitis as a result of 
the delayed milking or were thrown off in their milking cycle to the 
extent that their milk production levels were significantly affected. 
In Vermont, it is estimated that the cost of long-term production 
losses will be $186,300. The total damages throughout the region will 
be much higher. For small dairy farms, this is just one more cost they 
can not afford to shoulder.
  I urge my colleagues to support this important amendment.
  Mr. MOYNIHAN. Mr. President, I rise to join my colleagues in 
emphasizing the importance of providing adequate assistance to the 
dairy farmers of the Northeast, who suffered tremendous losses due to 
the ice storm of January 1998. Our amendment will address an important 
gap in the Dairy and Livestock Disaster Assistance Program described in 
the supplemental--by providing for compensation for diminished milk 
production for the remainder of this year.
  In the days and weeks following the January ice storm, my staff met 
with dairy farmers from upstate New York, and listened while they 
detailed the extent and the nature of their losses. My staff realized 
that one of the main needs expressed by our farmers--compensation for 
the diminished production which they knew would ensue for the remainder 
of the year--was not being addressed. Working with the New York Farm 
Service Agency, my staff developed an approach which will provide 
crucial assistance to our farmers for these losses. I am pleased to see 
that compensation for diminished milk production is included in this 
amendment.
  Without electric power, farmers were unable to use electrical milking 
machines, in some cases for several days.

[[Page S2481]]

Veterinarians at Cornell University estimate that two days of missed 
milkings will result in an average loss in milk production of ten 
percent for the remainder of the lactation cycle. The situation is 
analogous to damages to fruit trees, which suffer production losses in 
the months--or years--following a storm, in addition to the initial 
losses suffered at the time of the storm.
  Diminished milk production losses will greatly surpass the value of 
milk dumped at the time of the storm. For example, in New York, the 
value of milk dumped in the days immediately following the storm is 
estimated to be $1 million. The New York Farm Service Agency projects 
$12 million in losses due to diminished milk production. Dairy farmers 
in Vermont and Maine will be similarly affected.
  The amount provided for dairy and livestock in the Administration's 
request--$4 million--drastically under represents the amount of damage. 
The $10 million which this amendment will provide for dairy and 
livestock farmers is based on the best estimates of damages available 
from the Farm Service Agencies of the affected states. Through this 
amendment, we will be able to compensate dairy farmers for 30 percent 
of the value of their demonstrated losses--the same proportion provided 
to other farmers under previous disaster relief programs.
  The farmers of the Northeast dairy industry do not have sufficient 
means of emergency support outside of Federal aid. Many farmers were 
shocked to find that their private insurance policies, which do cover 
losses sustained due to fires, floods, and other natural disasters, 
will not cover damages sustained during ice storms. The states of New 
York, Maine and Vermont are offering limited assistance to their dairy 
farmers, but additional Federal aid is sorely needed.
  Mr. President, I thank Senator Stevens and Senator Byrd for their 
assistance with this amendment.
  The PRESIDING OFFICER. Without objection, the amendment is agreed to.
  The amendment (No. 2109) was agreed to.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The majority leader is recognized.

                          ____________________