[Congressional Record Volume 144, Number 44 (Tuesday, April 21, 1998)]
[Senate]
[Page S3359]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FAIRCLOTH:
  S. 1962. A bill to provide for an Education Modernization Fund, and 
for other purposes; to the Committee on Finance.


              the education modernization fund act of 1998

  Mr. FAIRCLOTH. Mr. President, today I am introducing legislation that 
would provide nearly $5 billion in federal loans for school 
modernization and construction.

  Mr. President, this legislation would transfer $5 billion from the 
Exchange Stabilization Fund at the Treasury Department to the 
Department of Education and create an Education Modernization Fund.
  The legislation would create a new account called the ``Education 
Modernization Fund'' that would be used to offer low interest, long 
term, loans to states for the purpose of building and modernizing 
elementary and secondary schools. The loans would be used for school 
districts with fast growing elementary and secondary student 
populations.
  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% of schools report that they have at least one inadequate 
building. Fully 90% of schools report that they have some construction 
needs. The state estimates that $3.5 to $10 million is needed for 
school repair needs. North Carolina has one of the fastest growing 
student populations.
  The purpose of my legislation Mr. President 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. Over 
the past four years--he has used it to supplement international 
bailouts, which I think is very wrong.
  He loaned $12 billion to Mexico. I have to ask, why not $12 billion 
for schools if New Mexico?
  He has promised Indonesia $3 billion. Why not funds for schools in 
Indiana?
  He has promised South Korea $5 billion. Why not $5 billion for South 
Carolina?
  We have our priorities backwards with this Administration.
  The ESF has all been used without any Congressional approval or 
authorization. Further, the fund has more than $30 billion available to 
it.
  I think it is time that we transfer a small part of this money and 
put it to good use by using it for school construction.
  Additionally, Mr. President, in my opinion this plan is far better 
that the Democrat alternative that is being offered today, the one 
offered by Senator Moseley-Braun.
  The Moseley-Braun formula is skewed so that much of the money will go 
to the larger cities and low income communities--whether or not there 
is a need for new schools. My plan is formulated for student population 
growth. For example, under the Coverdell, Republican bill--Rockingham 
County, North Carolina would be the first school district eligible for 
school construction bonds because of student growth.
  But under the Democrats' plan, my state would receive less than its 
fair share. For example, North Carolina ranks 11th in national 
population, and Massachusetts, ranks 13th, but under the Moseley-Braun 
bill, Massachusetts would receive $20 million more in funds. Louisiana 
which ranks 22nd in population would receive nearly $90 million more 
than North Carolina. Of course, its no surprise that New York, 
California and Illinois, under their plan, receive nearly 25% of all 
the money.
  The Democrats alternative would also put the Department of Education 
in charge of school districts. The DOE would have to approve any school 
construction plans. Schools that receive the federal benefit would have 
to meet certain curriculum standards and have federal mandates about 
graduation and employment rates.
  Finally, in order to finance the government's school construction, it 
wipes out the increased IRA savings for education. There is no more 
starker contrast between two visions of education: parents being 
allowed to keep their money for their children's education --or the 
federal government taking it to enhance the power of the Department of 
Education.
  In my view the solution is simple, we don't need to rob parents of 
their savings for education to pay for school construction--we need to 
take the foreign aid slush fund from the Treasury Department and put it 
to worthy domestic uses, like school construction.
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