[Congressional Record Volume 144, Number 56 (Thursday, May 7, 1998)]
[Senate]
[Pages S4528-S4538]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. BAUCUS (for himself, Mr. Graham, Mr. Breaux, Mr. Reid, Mr. 
        Grassley, Ms. Mikulski, and Mr. Johnson):
  S. 2040. A bill to amend title XIX of the Social Security Act to 
extend the authority of State medicaid fraud control units to 
investigate and prosecute fraud in connection with Federal health care 
programs and abuse of residents of board and care facilities; to the 
Committee on Finance.


               the senior citizen protection act of 1998

  Mr. BAUCUS. Mr. President, today I rise to introduce the Senior 
Citizen Protection Act of 1998. The legislation aims to protect our 
nation's seniors from patient and elder abuse. The bill also protects 
our federal health care programs, most notably Medicare, from fraud.
  In the past two years, we have made great strides against fraud and 
abuse by passing new initiatives. These initiatives include closing 
loopholes, improving coordination between Federal, State, and local law 
enforcement programs, and enhancing the powers of the Inspector General 
of the Department of Health and Human Services to combat fraud and 
recover lost money.
  These measures are helping, but there is another vision which I think 
will help us stay ahead of those who endlessly scheme to defraud our 
health care programs. The Senior Citizen Protection Act deputizes 
Medicaid investigators and enables them to weed out fraud and abuse in 
our federal health program.
  Currently, when a Medicaid Fraud Control Unit investigates a state 
Medicaid fraud case and finds a similar violation in Medicare, the Unit 
cannot investigate the Medicare infraction. Common sense will tell you 
that an unscrupulous actor defrauding Medicaid will likely do the same 
to federal health programs.
  In Montana, for example, the Medicaid Fraud Control Unit routinely 
finds co-existing cases of Medicaid and Medicare fraud in patient 
records. While the Unit has the documents right in front of them, they 
can not pursue the Medicare abuses.
  Federal authorities must conduct a new and separate investigation. 
Unfortunately, these violations may be too small to justify a federal 
investigation. The majority of health care fraud recoveries, 62%, are 
more than a million dollars. Even more striking, only 6% of federal 
fraud recoveries are in an amount lower than $100,000. Thus, the 
Federal Government is doing a good job of weeding out the big actors in 
the anti-fraud war, but the smaller actors--which still cost money--
continue to ride scot-free.
  That is where our legislation can help. If a fraud Unit is 
investigating a fraudulent doctor, for example, and finds some Medicare 
claims that look false, currently the investigator has to call the 
Inspector General's office and report their suspicions.
  In many cases, however, they hear back from Washington that the 
claims may be fraudulent, but the fraud is not

[[Page S4529]]

widespread enough to justify the expense of a federal investigation. 
Under our legislation, the Units will now be able to wrap the Medicare 
case into their own investigation and the Federal Government will be 
able to continue spending their resources on larger fraud operations.
  The Senior Citizen Protection Act allows state Fraud Control Units to 
investigate federal violations which come to their attention during an 
existing state Medicaid investigation. By giving the Units this 
discreet authority, we can take another step toward reducing fraud and 
abuse.
  While most fraud cases are the result of overbilling, false billing, 
or a provider performing unnecessary services, almost 25% of health 
care fraud cases are due to poor quality of care or care not provided. 
And that is when these problems cross over from health care fraud to 
actual patient abuse and neglect. It alarms all of us when we hear 
stories of older individuals being harmed by unscrupulous persons. What 
upsets me so much about elderly abuse is how vulnerable these victims 
are, especially since they depend so much on their health care 
providers for actual daily activities.
  Some Senators may have heard about the egregious case in Arizona 
where two defendants pled guilty to three counts of aggravated assault 
for sexually assaulting, intimidating and abusing patients. Their 
crimes included spitting at and kicking patients, and threatening to 
give a pill to a patient so he would never wake up. Some patients were 
so afraid they would not eat or drink. This is a modern tragedy.
  Other stories include incidents of physical abuse, verbal ridicule 
and mockery, and neglect, such as depriving patients of food, water and 
the opportunity for communication.
  Under current law, state Medicaid Fraud Control Units can only 
investigate and prosecute cases of elder abuse in state-funded 
facilities. However, more and more seniors are moving into assisted 
living and residential treatment settings that receive no state funds. 
Let me be clear: I support this trend, as it gives seniors more choices 
about the type of long-term care they receive. I am concerned, however, 
that assisted living facilities have little oversight to prevent 
patient neglect and abuse. Local authorities often lack the resources 
and skill to investigate health care cases.
  In Montana, our state Medicaid Fraud Control Unit routinely receives 
calls from local law enforcement agencies, local public health 
departments, and even Adult Protective Services requesting assistance 
with elder abuse cases. However, the Fraud Unit's hands are tied; they 
lack the jurisdictional authority to offer help.
  The Senior Citizen Protection Act will enable state Medicaid Fraud 
Control Units to investigate cases of patient abuse and neglect in 
residential facilities that do not receive state reimbursement. 
Medicaid investigators have the experience and expertise to assist 
local authorities with this job. Allowing the Medicaid Fraud Control 
Units to lend their expertise to cases in non-Medicaid facilities makes 
good sense and is right for our seniors.
  Mr. REID. Mr. President, I rise in support of S. 2040 the Senior 
Citizens Protection Act introduced by Senator Baucus earlier this 
morning.
  I am pleased to be an original cosponsor on this important 
legislation.
  There are 47 federally certified Medicaid Fraud Control Units across 
the country. Since the program began in 1978, more than 8,000 cases 
have been prosecuted. They do an excellent job.
  Millions of dollars have been returned as a result of their work.
  The ``Senior Citizens Protection Act of 1998'' makes two very simple 
changes to Medicaid Fraud Control Unit authority.
  First it gives MFCU's the authority to investigate violations in our 
federal health programs--primarily Medicare in addition to their 
current authority to investigate violations in Medicaid.
  Secondly, the bill would enable MFCU's to investigate patient abuse 
and neglect in residential health care facilities that do not receive 
Medicaid reimbursement.
  In short the bill has two goals: to stop health care fraud and to 
protect vulnerable seniors.
  As the face of long-term care changes, local authorities need the 
resources to investigate claims of patient and elder abuse.
  Rather than create new bureaucracies, this bill allows us to build 
upon the expertise of an existing entity--the state Medicaid Fraud 
Control Units.
  During two Aging Committee field hearings that I held in Las Vegas 
and Reno in January 1998, I heard first hand from the Nevada Attorney 
General, Frankie Sue Del Papa, how important this legislation was.
  She made it very clear to me that her Medicaid Fraud Control Unit has 
the expertise to investigate these cases. They simply need the 
authority.
  The MFCU's have the know how and experience to protect seniors in 
residential health care facilities. They merely lack the authority to 
get involved in non-Medicaid cases.
  This legislation will give them the needed authority. That is why 
this bill is endorsed by the National Association of Attorneys General, 
the Department of Justice, the American Association of Retired Persons 
and the Department of Health and Human Services Office of the Inspector 
General.
  Simply put, it is the right thing to do.
  It is unfortunate that when MFCU investigators involved in a case of 
Medicaid fraud discover evidence that this fraud may also be happening 
in the Medicare program, or other federally funded health care 
programs, they are restricted from taking action. This bill will change 
that.
  Under current law, the MFCU can only investigate patient abuse in 
medical facilities which receive Medicaid funds.
  In 1996 and 1997, the Nevada MFCU received 120 referrals but only 
opened 20 investigations due in part to limited jurisdiction.
  Although many of these cases are referred to local law enforcement, 
they may never be criminally investigated or prosecuted due to lack of 
expertise or available resources.
  State MFCUs are able to conduct these investigations and this bill 
will give them the needed authority.
  In Nevada 47 nursing homes and 54 adult group homes receive Medicaid 
funding.
  When abuse or neglect occurs in such facilities, the state MFCU can 
investigate.
  However, we also have approximately 265 residential facilities for 
groups and 321 registered homes which could fall within the definition 
of ``board and care facilities'' set forth in this bill.
  With the passage of this bill, seniors and other residents in these 
facilities would be protected regardless of whether the facility 
receives Medicaid funding or not.
  This bill would give the state MFCU the authority to investigate 
allegations of abuse and neglect in these facilities.
  As we collectively strive to reduce fraud and abuse in our Medicare 
and Medicaid programs, we cannot overlook any opportunity to make a 
difference.
  This bill is a welcome weapon in our arsenal to fight abuse.
  I commend Senators Baucus of Montana and Graham of Florida for their 
sponsorship of this bill and Senators Mikulski, Grassley, Johnson, and 
Breaux for their original cosponsorship of this important legislation.
  We need all the ammunition possible in the war against health care 
fraud and in assuring the protection of our nation's most vulnerable 
seniors in the spectrum of long-term care facilities.
  The bill introduced by my colleagues today is a major step in the 
right direction.
  I am pleased to join them in sponsoring this important legislation.
  Ms. MIKULSKI. Mr. President, I am pleased to be an original cosponsor 
of the Senior Citizens Protection Act of 1998, introduced by Senator 
Baucus. I support this legislation for two reasons--it fights fraud and 
protects seniors.
  Fraud and abuse pose a serious threat to Medicare and Medicaid. We 
cannot afford to tolerate any more abuse of the system. The job of 
Medicaid Fraud Control Units (MFCUs) is to investigate and prosecute 
Medicaid fraud in state programs. MFCUs have prosecuted thousands of 
cases and recovered hundreds of thousands of Medicaid dollars. Every 
dollar saved by MFCUs is another dollar we can use to provide quality 
service to those who need it.

[[Page S4530]]

  This legislation expands the authority of Medicaid Fraud Control 
Units in two ways. It allows MFCUs to investigate federal fraud 
violations discovered during a state Medicaid investigation. Currently, 
MFCUs cannot investigate Medicare fraud or other federal fraud 
violations. Under the Senior Citizens Protection Act, MFCUs will be 
able to investigate federal fraud, and return recovered funds to the 
federal government.
  I am firmly committed to protecting seniors from elder abuse. This 
legislation protects seniors by authorizing to MFCUs to investigate 
patient abuse in residential health care facilities that do not receive 
Medicaid reimbursement. The number of residential facilities is 
growing, but local authorities often lack the resources to investigate 
elder abuse. MFCUs are already investigating elder abuse in facilities 
that receive Medicaid funding. But under the Senior Citizens Protection 
Act, MFCUs will be able to protect all of our senior citizens living in 
residential facilities.
  I want to let those who depend on Medicaid and Medicare know that we 
are fighting to stop fraud and waste. We have done an outstanding job 
in protecting Medicaid-covered seniors from fraud and abuse. It is now 
time to extend that protection to all of our senior citizens.
                                 ______
                                 
      By Mr. SMITH of Oregon:
  S. 2041. A bill to amend the Reclamation Wastewater and Groundwater 
Study and Facilities Act to authorize the Secretary of the Interior to 
participate in the design, planning, and construction of the Willow 
Lake Natural Treatment System Project for the reclamation and reuse of 
water, and for other purposes; to the Committee on Energy and Natural 
Resources.


                      the willow lake project act

  Mr. SMITH of Oregon. Mr. President, today I am introducing 
legislation to authorize the Secretary of the Interior to participate 
in the design, planning and construction of the Willow Lake Natural 
Treatment System Project for the reclamation and reuse of water by the 
city of Salem, Oregon. This project is an innovative approach to an 
ongoing sewer overflow problem. It will not only provide environmental 
benefits for the city and the Willamette Valley, but could also provide 
irrigation water for the local farming community.
  This natural treatment system is one component of the city's recently 
adopted Wastewater Master Plan. Currently, the city has a combined 
sanitary sewer system. Unfortunately, each winter season during the wet 
weather, sewer overflows spill into Salem-area creeks and streams, as 
well as the Willamette River.
  The proposed natural treatment system, working in conjunction with 
the city's wastewater treatment plant, will provide Salem with the 
ability to meet regulatory requirements by storing and treating all 
wastewater from Salem's sewer system and significantly reducing wet 
weather sewer system overflows. The finished system will meet Oregon 
Department of Environmental Quality (DEQ) standards, and be fully 
operational by 2010. Although the specific site has not yet been 
selected, I am hopeful that any land needed for the project will be 
acquired on a willing buyer-willing seller basis.
  The natural treatment system proposed includes both overland flow 
treatment and constructed wetlands treatment. The overland flow system 
will include grassy swales and poplar trees to provide a high level of 
wastewater treatment. The constructed wetlands will include shallow 
ponds with wetland-type vegetation, and provide both treatment and 
storage. This system will be capable of producing between 10 and 20 
million gallons per day of high quality effluent during the summer 
months that could potentially be used as a source of irrigation water 
for the farming community in the area. A separate feasibility study 
will have to be conducted before a determination is made on whether to 
use this water for irrigation purposes. Any application of this water 
would have to be in accordance with state water quality standards and 
the requirements of the food processing industry.
  This bill would authorize the Secretary to participate in this 
project under the Bureau of Reclamation's existing Title XVI water 
reuse program. This program requires a feasibility study for all 
projects authorized, and caps the federal cost-share of the 
construction costs. Under the Title XVI program, the city would have 
title to the project, and be responsible for all operation and 
maintenance costs.
  This project will provide multiple benefits for the environment. It 
will naturally treat wastewater, provide habitat for fish and wildlife, 
improve water quality in Salem-area streams and the Willamette River, 
and reduce wintertime sewer system overflows. As water supplies tighten 
throughout the western United States, we need to look at innovative, 
cost-effective programs such as this to reuse water as efficiently as 
possible.
  I urge my colleagues to support enactment of this legislation, and 
will ask for its timely consideration by the Committee on Energy and 
Natural Resources. Mr. President, I ask unanimous consent to have the 
bill printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2041

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

     SECTION. 1. WILLOW LAKE NATURAL TREATMENT SYSTEM PROJECT.

       (a) In General.--The Reclamation Wastewater and Groundwater 
     Study and Facilities Act (43 U.S.C. 390h et seq.) is 
     amended--
       (1) by redesignating sections 1631, 1632, and 1633 as 
     sections 1632, 1633, and 1634, respectively; and
       (2) by inserting after section 1630 the following new 
     section 1631:

     ``SEC. 1631. WILLOW LAKE NATURAL TREATMENT SYSTEM PROJECT.

       ``(a) Authorization.--The Secretary, in cooperation with 
     the City of Salem, Oregon, is authorized to participate in 
     the design, planning, and construction of the Willow Lake 
     Natural Treatment System Project to reclaim and reuse 
     wastewater within and without the service area of the City of 
     Salem.
       ``(b) Cost Share.--The Federal share of the cost of a 
     project described in subsection (a) shall not exceed 25 
     percent of the total cost.
       ``(c) Limitation.--The Secretary shall not provide funds 
     for the operation and maintenance of a project described in 
     subsection (a).''.
       (b) Conforming Amendments.--That Act is further amended--
       (1) in section 1632 (43 U.S.C. 390h-13) (as redesignated by 
     subsection (a)(1)), by striking ``section 1630'' and 
     inserting ``section 1631'';
       (2) in section 1633(c) (43 U.S.C. 390h-14) (as so 
     redesignated), by striking ``section 1633'' and inserting 
     ``section 1634''; and
       (3) in section 1634 (43 U.S.C. 390h-15) (as so 
     redesignated), by striking ``section 1632'' and inserting 
     ``section 1633''.
       (c) Clerical Amendment.--The table of contents in section 2 
     of the Reclamation Projects Authorization and Adjustment Act 
     of 1992 is amended by striking the items relating to sections 
     1631 through 1633 and inserting the following:

``Sec. 1631. Willow Lake Natural Treatment System Project.
``Sec. 1632. Authorization of appropriations.
``Sec. 1633. Groundwater study.
``Sec. 1634. Authorization of appropriations.''.
                                 ______
                                 
      By Mr. FAIRCLOTH:
  S. 2042. A bill to provide for a program to improve commercial motor 
vehicle safety in the vicinity of the borders between the United States 
and Canada and the United States and Mexico; to the Committee on 
Commerce, Science, and Transportation.


                     the safe highways act of 1998

  Mr. FAIRCLOTH.
  Mr. President, I rise to introduce the Safe Highways Act.
  This bill authorizes $20 million per year over the next five years 
for enforcement activities to prevent unsafe foreign trucks from 
rolling across our borders under NAFTA. This bill will fund inspections 
at our borders to keep these Mexican and Canadian trucks off our roads 
unless they meet our tough truck safety standards. Our standards are 
higher than in Mexico and Canada, and, certainly, I do not want these 
trucks rumbling down our roads and threatening the safety of our 
families.
  Mexican trucks are already permitted to operate in limited areas in 
the United States and, in fact, they have been doing so for two 
decades. We can enforce these standards at the border, but it will take 
training and an increased effort to handle the additional traffic from 
NAFTA, so we need to step up and put this money aside. These foreign 
trucks will soon roam more of our roads under NAFTA. We need to be 
ready. This is literally a matter of life and death for American 
families who share the road with these trucks.
                                 ______
                                 
      By Mrs. BOXER (for herself, Mr. Bumpers, and Mr. Durbin):

[[Page S4531]]

  S. 2043. A bill to repeal the limitation on use of appropriations to 
issue rules with respect to valuation of crude oil for royalty 
purposes; to the Committee on Energy and Natural Resources.


                            TAX LEGISLATION

  Mrs. BOXER. Mr. President, today Senator Durbin and Senator Bumpers 
join me in introducing legislation to repeal a special-interest rider 
attached to the emergency supplemental appropriations bill last week. 
Representatives Caroyln Maloney and George Miller are introducing 
companion legislation in the House.
  This rider is a taxpayer rip-off. It blocks the Interior Department 
from implementing a proposed rule to ensure that oil companies pay a 
fair royalty for oil drilled on public lands. These royalties are 
shared between the federal government and the state.
  California law requires that all royalty payments be credited 
directly to the State Schools Fund. So every penny the oil companies 
fail to pay is stolen directly form our state's classrooms and our 
children's education.
  If allowed to stand, this special interest rider will cost American 
taxpayers an estimated $5.5 million per month, approximately $25 
million by the end of this fiscal year. California's share of this lost 
revenue could be used to hire new teachers, help rebuild crumbling 
schools, or put dozens of computers in our classrooms.
  When oil companies drill on public lands, they pay a royalty to the 
federal government, which in turn sends a share of these royalties to 
the states. The royalty is calculated as a percentage of the value of 
the oil drilled.
  Here is where the problem lies. The oil companies currently 
understate the value of the oil drilled, and as a result, they underpay 
their royalties. Now, and after years of study and Congressional 
prodding, the Department of the Interior has finally decided to do 
something about it.
  The Department of the Interior has billed 12 major oil companies over 
$260 million for back royalty payments. It will have to sue to collect 
because the current system is so fraught with ambiguity.
  To guarantee taxpayers a fair royalty payment in the future, the 
Interior Department proposed a simple and common sense solution: pay 
royalties based on actual market prices, not estimates the oil 
companies themselves make up. The rule was first proposed 2\1/2\ years 
ago. It has held 14 public workshops and published 5 separate requests 
for industry comments. And now it has been stopped cold in the dead of 
night.
  This is one of the clearest examples of a special interest taxpayer 
rip-off I have ever seen. It saves the wealthiest oil companies in the 
world millions of dollars while shortchanging taxpayers and California 
schoolchildren. What does this say about our nation's priorities? This 
action must not stand, and my colleagues and I will fight it to the 
end.
  I ask unanimous consent that the text of the legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2043

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

     SECTION 1. REPEAL OF LIMITATION ON ISSUANCE OF RULES 
                   REGARDING VALUATION OF CRUDE OIL FOR ROYALTY 
                   PURPOSES.

       Section 3009 of the 1998 Supplemental Appropriations and 
     Rescissions Act is repealed.
                                 ______
                                 
      By Mr. KENNEDY (for himself, Mrs. Murray, Mr. Levin, Mr. Inouye, 
        Mr. Dodd, and Mr. Kerry):
  S. 2044. A bill to assist urban and rural local education agencies in 
raising the academic achievement of all of their students; to the 
Committee on Labor and Human Resources.


             the educational opportunity zones act of 1998

  Mr. KENNEDY. Mr. President, it is an honor to introduce President 
Clinton's Education Opportunity Zones bill to strengthen urban and 
rural public schools where the need is greatest. Congress needs to do 
more to improve teaching and learning for all students across the 
nation, and that means paying close attention to school districts and 
children with the greatest needs.

  Too many schools now struggle with low expectations for students, 
high dropout rates, watered-down curricula, unqualified teachers, and 
inadequate resources. This legislation will lead to the designation of 
approximately 50 high-poverty urban and rural school districts as 
``Education Opportunity Zones,'' and help them to implement the 
effective reforms needed to turn themselves around.
  These school districts will become models of system-wide, standards-
based reform for the nation. They must agree to specific benchmarks for 
improved student achievement, lower dropout rates, and other indicators 
of success. Schools in these districts will also be eligible for 
greater flexibility in the use of federal education funds.
  Our goal is to increase achievement, raise standards, upgrade teacher 
skills, and strengthen ties between schools, parents, and the community 
as a whole. Under this proposal, schools can use effective reform 
measures such as ending social promotion, increasing accountability, 
improving teacher recruitment and training, and providing students and 
parents with school report cards.
  We know that this approach can work. Last fall, I visited the Harriet 
Tubman Elementary School in New York City, where 95 percent of the 
pupils are from low-income families. Before 1996, it was one of the 
lowest achieving schools in the city. In September, 1996, the 
principal, the superintendent, teachers, and parents worked together to 
reorganize the school. They put extra resources into training teachers 
to teach reading. They upgraded the curriculum to reflect high 
standards. They created a parent resource center to increase family and 
community involvement. These and other reforms worked.
  Each day, many parents are at the school too, helping maintain 
discipline and at the same time expanding their own education.
  Each morning, teachers stop their regular classwork and teach reading 
to their students for 90 minutes. Since 1996, scores on statewide 
reading exams have risen by 20 percent.
  In Boston, under the leadership of Superintendent Tom Payzant, 
schools are making significant progress by creating new curriculum 
standards, setting higher achievement standards, and expanding 
technology through public and private sector partnerships. They are 
focusing on literacy, after-school programs, and school-to-career 
opportunities.
  These successes are not unusual. Public schools can improve even when 
facing the toughest odds. We need to do all we can to help such schools 
get the resources they need, so that they can implement the changes 
they know will work and help children learn more effectively.
  Under the Education Opportunity Zone approach, urban and rural school 
districts can apply for funds to implement a wide range of reforms. 
School districts will apply to the Secretary of Education for three-
year grants. The Secretary will ensure a fair distribution of grants 
among geographic regions, and among various sizes of urban and rural 
schools districts.
  In determining the amount of each grant, the Secretary will consider 
factors such as the scope of activities in the application, the number 
of students from poor families in the school district, the number of 
low-performing schools in the district, and the number of low-achieving 
children in the district.
  This legislation proposes funding of $200 million in fiscal year 1999 
and $1.5 billion over the next 5 years to support these grants.
  I commend President Clinton for developing this worthwhile 
initiative, and I look forward to its enactment. Investing in students, 
teachers, and schools is one of the best investments America can make. 
For schools across the nation, help can't come a minute too soon.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2044

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

                           *   *   *   *   *



                                Findings

       Sec. 2. The Congress finds as follows:

[[Page S4532]]

       (1) Students in schools that have high concentrations of 
     poor children begin school academically behind their peers in 
     other schools and are often unable to close the gap as they 
     progress through school. In later years, these students are 
     less likely than other students to attend a college or 
     university and more likely to experience unemployment.
       (2) Many children who attend these high-poverty schools 
     lack access to the challenging curricula, well-prepared 
     teachers, and high expectations that make better achievement 
     possible. More specifically, they are often educated in over-
     crowded classrooms and by teachers who are assigned to teach 
     in subject areas outside their areas of certification.
       (3) Data from the National Assessment of Educational 
     Progress consistently show large gaps between the achievement 
     of students in high-poverty schools and those in other 
     schools. High-poverty schools will face special challenges in 
     preparing their students to reach high standards of 
     performance on national and State assessments, such as 
     voluntary national tests and the assessments States are 
     developing under the Goals 2000 and ESEA, Title I programs.
       (4) Recent reports have found that students in urban 
     districts are more likely to attend high-poverty schools; 
     more frequently taught by teachers possessing only an 
     emergency or temporary license; and less likely to score 
     above the basic level on achievement tests than are nonurban 
     students.
       (5) High-poverty rural schools, because of their isolation, 
     small size, and low levels of resources, also face particular 
     challenges. For example, teachers in rural districts are 
     nearly twice as likely as other teachers to provide 
     instruction in three or more subjects.
       (6) Notwithstanding these general trends, some high-poverty 
     school districts have shown that they can increase student 
     achievement, if they adopt challenging standards for all 
     children, focus on improving curriculum and instruction, 
     expand educational choice among public schools for parents 
     and students, adopt other components of systemic educational 
     reform, and hold schools, staff, and students accountable for 
     results.
       (7) Districts that have already established the policies 
     needed to attain widespread student achievement gains, and 
     have attained those gains in some of their schools, can serve 
     as models for other districts desiring to improve the 
     academic achievement of their students. The Federal 
     Government can spur more districts in this direction by 
     providing targeted resources for urban and rural districts 
     willing to carry out solid plans for improving the 
     educational achievement of all their children.


                                purpose

       Sec. 3. The purpose of this Act is to assist urban and 
     rural local educational agencies that: (1) have high 
     concentrations of children from low-income families; (2) have 
     a record of achieving high educational outcomes, in at least 
     some of their schools; (3) are implementing standards-based 
     systemic reform strategies; and (4) are keeping their schools 
     safe and drug-free, to pursue further reforms and raise the 
     academic achievement of all their students.


                              Definitions

       Sec. 4. As used in this Act, the following terms have the 
     following meanings:
       (1) the term ``central city'' has the meaning given that 
     term by the Office of Management and Budget.
       (2) the term ``high-poverty local educational agency'' 
     means a local educational agency in which the percentage of 
     children, ages 5 through 17, from families with incomes below 
     the poverty level is 20 percent or greater or the number of 
     such children exceeds 10,000.
       (3) The term ``local educational agency''--
       (A) has the meaning given that term in section 14101(18)(A) 
     and (B) of the Elementary and Secondary Education Act of 
     1965; and
       (B) includes elementary and secondary schools operated or 
     supported by the Bureau of Indian Affairs.
       (4) the term ``metropolitan statistical area'' has the 
     meaning given that term by the Office of Management and 
     Budget.
       (5) the term ``rural locality'' means a locality that is 
     not within a metropolitan statistical area and has a 
     population of less than 25,000.
       (6) The term ``urban locality'' means a locality that is--
       (A) a central city of a metropolitan statistical area; or
       (B) any other locality within a metropolitan statistical 
     area, if that area has a population of at least 400,000 or a 
     population density of at least 6,000 persons per square mile.


                              eligibility

       Sec. 5. (a) Eligible LEAS.--(1) A local educational agency 
     is eligible to receive a grant under this Act if it is--
       (A) a high-poverty local educational agency; and
       (B) located in, or serves, either an urban locality or a 
     rural locality.
       (2) Two or more local educational agencies described in 
     paragraph (1) may apply for, and receive a grant under this 
     Act as a consortium.
       (b) Determination of Eligibility.--The Secretary shall 
     determine which local educational agencies meet the 
     eligibility requirements of subsection (a) on the basis of 
     the most recent data that are satisfactory to the Secretary.


                              applications

       Sec. 6. (a) Applications Required.--In order to receive a 
     grant under this Act, an eligible local educational agency 
     shall submit an application to the Secretary at such time, in 
     such form, and containing such information as the Secretary 
     may require.
       (b) Contents.--Each application shall include evidence that 
     the local educational agency meets each of the following 
     conditions:
       (1) It has begun to raise student achievement, as measured 
     by State assessments under title III of the Goals 2000: 
     Educate America Act, title I of the Elementary and Secondary 
     Education Act of 1965, or comparably rigorous State or local 
     assessments; or it has shown significant progress on other 
     measures of educational performance, including school 
     attendance, high school competition, and school safety. 
     Student achievement evidence shall include data disaggregated 
     to show the achievement of students separately by race and by 
     gender, as well as for students with disabilities, students 
     with limited English proficiency, and students who are 
     economically disadvantaged (compared to students who are not 
     economically disadvantaged), throughout the district or, at a 
     minimum, in schools that have implemented a comprehensive 
     school improvement strategy.
       (2) It expects all students to achieve to challenging State 
     or local content standards, it has adopted or is developing 
     or adopting assessments aligned with those standards, and it 
     has implemented or is implementing comprehensive reform 
     policies designed to assist all children to achieve to the 
     standards.
       (3) It has entered into a partnership that includes the 
     active involvement of representatives of local organizations 
     and agencies and other members of the community, including 
     parents, and is designed to guide the implementation of the 
     local educational agency's comprehensive reform strategy.
       (4) It has put (or is putting) into place effective 
     educational reform policies, including policies that--
       (A) hold schools accountable for helping all students, 
     including students with limited English proficiency and 
     students with disabilities, reach high academic standards. 
     The application shall describe how the agency will reward 
     schools that succeed and intervene in schools that fail to 
     make progress;
       (B) require all students, including students with 
     disabilities and students with limited English proficiency, 
     to meet academic standards before being promoted to the next 
     grade level at key transition points in their careers or 
     graduating from high school. The application shall describe 
     the local educational agency's strategy for providing 
     students with a rich curriculum tied to high standards, and 
     with well-prepared teachers and class sizes conducive to high 
     student achievement;
       (C) identify, during the early stages of their academic 
     careers, students who have difficulty in achieving to high 
     standards, and provide them with more effective educational 
     interventions or additional learning opportunities such as 
     after school programs, so that the students are able to meet 
     the standards at key transition points in their academic 
     careers;
       (D) hold teachers, principals, and superintendents 
     accountable for quality, including a description of the local 
     educational agency's strategies for ensuring quality through, 
     among other things--
       (i) development of clearly articulated standards for 
     teachers and school administrators, and development, in 
     cooperation with teachers organizations, of procedures for 
     identifying, working with, and, if necessary, quickly but 
     fairly removing teachers and administrators who fail to 
     perform at adequate levels, consistent with State law and 
     locally negotiated agreements;
       (ii) implementation of a comprehensive professional 
     development plan for teachers and instructional leaders, such 
     as a plan developed under title II of the Elementary and 
     Secondary Education Act of 1965; and
       (iii) encouraging excellent teaching, such as by providing 
     incentives for teachers to obtain certification by the 
     National Board for Professional Teaching Standards; and
       (E) provide students and parents with expanded choice 
     within public education.
       (5) It is working effectively to keep its schools safe, 
     disciplined, and drug-free.
       (c) Description of Proposed Program.--The application shall 
     also include a description of how the local educational 
     agency will use the grant made available under this Act, 
     including descriptions of--
       (1) how the district will use all available resources 
     (Federal, State, local, and private) to carry out its reform 
     strategy;
       (2) the specific measures that the applicant proposes to 
     use to provide evidence of future progress in improving 
     student achievement, including the subject areas and grade 
     levels in which it will measure that progress, and an 
     assurance that the applicant will collect such student data 
     in a manner that demonstrates the achievement of students 
     separately by race and by gender, as well as for students 
     with disabilities, students with limited English proficiency, 
     and students who are economically disadvantaged (compared to 
     students who are not economically disadvantaged); and
       (3) how the applicant will continue the activities carried 
     out under the grant after the grant has expired.

[[Page S4533]]

                       selection of applications

       Sec. 7. (a) Criteria.--The Secretary shall, using a peer-
     review process, select applicants to receive funding based 
     on--
       (1) evidence that--
       (A) the applicant has made progress in improving student 
     achievement or the other measures of educational performance 
     described in section 6(b)(1), in at least some of its schools 
     that enroll concentrations of children from low-income 
     families;
       (B) the applicant has put (or is putting) into place 
     effective reform policies as described in section 6(b)(4); 
     and
       (C) the applicant is working effectively to keep its 
     schools safe, disciplined, and drug-free; and
       (2) the quality of the applicant's plan for carrying out 
     activities under the grant, as set forth in the application.
       (b) Equitable Distribution.--In approving applications, the 
     Secretary shall seek to ensure that there is an equitable 
     distribution of grants among geographic regions of the 
     country, to varying sizes of urban local educational 
     agencies, and to rural local educational agencies, including 
     rural local educational agencies serving concentrations of 
     Indian children.


             presidential designation; technical assistance

       Sec. 8. (a) Designation as Education Opportunity Zone.--The 
     President shall designate each local educational agency 
     selected by the Secretary to receive a grant under this Act 
     as an ``Education Opportunity Zone''.
       (b) Technical Assistance.--The President may instruct 
     Federal agencies to provide grant recipients with such 
     technical and other assistance as those agencies can make 
     available to enable the grantees to carry out their 
     activities under the program.


           amount and duration of grants; continuation awards

       Sec. 9. (a) Grant Amounts.--In determining the amount of a 
     grant, the Secretary shall consider such factors as--
       (1) the scope of the activities proposed in the 
     application;
       (2) the number of students in the local educational agency 
     who are from low-income families;
       (3) the number of low-performing schools in the local 
     educational agency; and
       (4) the number of children in the local educational agency 
     who are not reaching State or local standards.
       (b) Duration of Grants.--(1) Each grant shall be for three 
     years, but may be continued for up to two additional years if 
     the Secretary determines that the grantee is achieving 
     agreed-upon measures of progress by the third year of the 
     grant.
       (2) The Secretary may increase the amount of a grant in the 
     second year, in order to permit full implementation of grant 
     activities, except that--
       (A) the amount of a second-year award shall be no more than 
     140 percent of the award for the first year;
       (B) the amount of a third-year award shall be no more than 
     80 percent of the second-year award;
       (C) the amount of a fourth-year award shall be no more than 
     70 percent of the second-year award; and
       (D) the amount of a fifth-year award shall be no more than 
     50 percent of the second-year award.
       (c) Expected Achievement Levels and Continuation Awards.--
     (1) Before receiving its award, each grantee shall develop 
     and adopt, with the approval of the Secretary, specific, 
     ambitious levels of achievement that exceed typical 
     achievement levels for comparable local educational agencies 
     and that the local educational agency commits to attaining 
     during the period of the grant.
       (2) The agreed-upon levels shall--
       (A) reflect progress in the areas of--
       (i) student academic achievement;
       (ii) dropout rates;
       (iii) attendance; and
       (iv) such other areas as may be proposed by the local 
     educational agency or the Secretary; and
       (B) provide for the disaggregation of data separately by 
     race and by gender, as well as for students with 
     disabilities, students with limited English proficiency, and 
     students who are economically disadvantaged students 
     (compared to students who are not economically 
     disadvantaged).


                             USES OF FUNDS

       Sec. 10. (a) In General.--Each grantee shall use its award 
     only for activities that support the comprehensive reform 
     efforts described in its application or that are otherwise 
     consistent with the purpose of this Act.
       (b) Authorized Activities.--Activities that may be carried 
     out with funds under this Act include--
       (1) implementing school-performance-information systems to 
     measure the performance of schools in educating their 
     students to high standards, maintaining a safe school 
     environment, and achieving the anticipated school-attendance 
     and graduation rates;
       (2) implementing district accountability systems that 
     reward schools that raise student achievement and provide 
     assistance to, and ultimately result in intervention in, 
     schools that fail to do so, including such intervention 
     strategies as technical assistance on school management and 
     leadership, intensive professional development for school 
     staff, institution of new instructional programs that are 
     based on reliable research, and the reconstitution of the 
     school;
       (3) providing students with expanded choice and increased 
     curriculum options within public education, through such 
     means as open-enrollment policies, schools within schools, 
     magnet schools, charter schools, distance-learning programs, 
     and opportunities for secondary school students to take 
     postsecondary courses;
       (4) implementing financial incentives for schools to make 
     progress against the goals and benchmarks the district has 
     established for the program;
       (5) providing additional learning opportunities, such as 
     after-school, weekend, and summer programs, to students who 
     are failing, or are at risk of failing, to achieve to high 
     standards;
       (6) providing ongoing professional development 
     opportunities to teachers, principals, and other school staff 
     that are tailored to the needs of individual schools, and 
     aligned with the State or local academic standards and with 
     the objectives of the program carried out under the grant;
       (7) implementing programs, designed in cooperation with 
     teacher organizations, to provide recognition and rewards to 
     teachers who demonstrate outstanding capability at educating 
     students to high standards, including monetary rewards for 
     teachers who earn certification from the National Board for 
     Professional Teaching Standards;
       (8) implementing procedures, developed in cooperation with 
     teacher organizations, for identifying ineffective teachers 
     and administrators, providing them with assistance to improve 
     their skills and, if there is inadequate improvement, quickly 
     but fairly removing them from the classroom or school, 
     consistent with State law and locally negotiated agreements;
       (9) establishing programs to improve the recruitment and 
     retention of well-prepared teachers, including the use of 
     incentives to encourage will-prepared individuals to teach in 
     areas of the district with high needs;
       (10) designing and implementing procedures for selecting 
     and retaining principals who have the ability to provide the 
     school leadership needed to raise student achievement;
       (11) strengthening the management of the local educational 
     agency so that all components of management are focused on 
     improving student achievement;
       (12) carrying out activities to build stronger partnerships 
     between schools and parents, businesses, and communities; and
       (13) assessing activities carried out under the grant, 
     including the extent to which the grant is achieving its 
     objectives.


                              flexibility

       Sec. 11. (a) Eligibility for Schoolwide Programs Under 
     ESEA, Title I.--Each school operated by a local educational 
     agency receiving funding under this authority that is 
     selected by the agency to receive funds under section 1113(c) 
     of the Elementary and Secondary Education Act of 1965 shall 
     be considered as meeting the criteria for eligibility to 
     implement a schoolwide program as described in section 1114 
     of that Act.
       (b) Carrying Out Schoolwide Programs.--All schools in the 
     local educational agency that qualify for eligibility for a 
     schoolwide program based solely on the agency's receiving 
     funding under this Act and that wish to carry out a 
     schoolwide program shall--
       (1) develop a plan that satisfies the requirements of 
     section 1114(b)(2) of the Elementary and Secondary Education 
     Act of 1965; and
       (2) develop a program that includes the components of a 
     schoolwide program described in section 1114(b)(1) of that 
     Act.


         participation of private school students and teachers

       Sec. 12. (a) Requirements.--(1)(A) If a local educational 
     agency uses funds under this Act to provide for training of 
     teachers or administrators, it shall provide for the 
     participation of teachers or administrators from private 
     nonprofit elementary or secondary schools, in proportion to 
     the number of children enrolled in those schools who reside 
     in attendance areas served by the local educational agency's 
     program under this Act.
       (B) A local educational agency may choose to comply with 
     subparagraph (A) by providing services to teachers or 
     administrators from private schools at the same time and 
     location it provides those services to teachers and 
     administrators from public schools.
       (C) The local educational agency shall carry out 
     subparagraph (A) after timely and meaningful consultation 
     with appropriate private school officials.
       (2) If the local educational agency uses funds under this 
     Act to develop curricular materials, it shall make 
     information about those materials available to private 
     schools.
       (b) Waiver.--If, by reason of any provision of law, a local 
     educational agency is prohibited from providing the training 
     for private school teachers or administrators required by 
     subsection (a)(1)(A), or if the Secretary determines that the 
     agency is unable to do so, the Secretary shall waive the 
     requirement of that subsection and shall use a portion of the 
     agency's grant to arrange for the provision of the training.


                               evaluation

       Sec. 13. The Secretary shall carry out an evaluation of the 
     program supported under this Act, which shall address such 
     issues as the extent to which--
       (1) student achievement in local educational agencies 
     receiving support increases;

[[Page S4534]]

       (2) local educational agencies receiving support expand the 
     choices for students and parents within public education; and
       (3) local educational agencies receiving support develop 
     and implement systems to hold schools, teachers, and 
     principals accountable for student achievement.


                          national activities

       Sec. 14. The Secretary may reserve up to five percent of 
     the amount appropriated under section 15 for any fiscal year 
     for--
       (1) peer review activities;
       (2) evaluation of the program under section 13 and 
     measurement of its effectiveness in accordance with the 
     Government Performance and Results Act of 1993;
       (3) dissemination of research findings, evaluation data, 
     and the experiences of districts implementing comprehensive 
     school reform; and
       (4) technical assistance to grantees.


                    authorization of appropriations

       Sec. 15. For the purpose of carrying out this Act, there 
     are authorized to be appropriated $200 million for fiscal 
     year 1999, and such sums as may be necessary for each of the 
     four succeeding fiscal years.
                                 ______
                                 
      By Mr. FAIRCLOTH:
  S. 2045. A bill to amend title 10, United States Code, to permit 
certain beneficiaries of the military health care system to enroll in 
Federal employees health benefits plans, and for other purposes; to the 
Committee on Armed Services.


                 THE IMPROVED MILITARY MEDICAL PLAN ACT

  Mr. FAIRCLOTH. Mr. President, today I am introducing the Improved 
Military Medical Plan Act, IMMPACT for short, to ensure that military 
retirees and their families will continue to be given proper medical 
care. This past May 1, the Defense Department implemented its new 
health care program, known as TRICARE, in two more regions of the 
country, including in North Carolina. As the number of TRICARE 
enrollees increases and as the Military Health Services System is 
downsized, military retirees will have an even harder time finding 
space available at military facilities.

  Effectively, those military retirees over 65 are left with no 
military medical benefit, since they are unlikely to get into military 
facilities.
  Mr. President, this is a far cry from the promise that our government 
made to these retirees when they put in a full career in uniform 
risking their lives for our freedom. They were promised medical care 
for life, and everyone believed that it would be at base medical 
facilities. It just is not right to renege on that promise after all 
that these men and women have done for our country.
  We can and must do better. IMMPACT will allow Medicare-eligible 
military retirees, their dependents, and their survivors to participate 
in the Federal Employees Health Benefits program. It will also provide 
a very strong incentive for the Department of Defense to ensure that 
TRICARE is offering active duty personnel and younger retirees and 
their families a medical benefit equivalent to the federal civilian 
program.
  IMMPACT sets up a three-year demonstration. Ideally, the 
demonstration would be conducted on a nationwide basis, but I realize 
that such a broadly geographical demonstration could be difficult to 
manage. So the bill directs the Administration to have as expansive a 
demonstration as practicable, as long as at least six sites around the 
country are selected.
  The IMMPACT demonstration is simple. Medicare-eligible retirees of 
the uniformed services as well as their dependents and survivors at the 
selected demonstration sites will be able to apply for enrollment in 
the health care plans of the Federal Employees Health Benefits program. 
Every year, the Administration will report to Congress on the value of 
this health care option, how many eligible beneficiaries want to 
enroll, how much the demonstration is costing, how it compares to other 
health care options available to the beneficiaries, to name just a few 
of the metrics.
  The IMMPACT demonstration is only open to Medicare-eligible retirees. 
But, as I mentioned earlier, IMMPACT provides strong incentives for the 
Department of Defense to make TRICARE as comprehensive as FEHBP. The 
fine men and women now serving in the Armed Services and those who went 
before them deserve to be treated at least as well as civilian federal 
employee and retirees.
  This is very important to me. We have all heard of, or even 
experienced, health care plans where ``cost'' is a more important 
factor than ``service.'' Two health care plans could appear equivalent 
on the surface--their premiums could be about the same, they could have 
many locations for treatment, etc. But, if one plan is more 
bureaucratic than another, or it delays payments to doctors, or it is 
too tight on the definition of what is a ``reasonable and customary 
charge,'' eventually, the best doctors are going to drop out. In the 
Federal Employees Health Benefits program, civilian employees and 
retirees can opt out of a bad plan because they have a choice of many 
plans. But, in TRICARE, there is no real choice. There are no 
competitive pressures to keep TRICARE equivalent to the better civilian 
plans.
  IMMPACT will fix that. Within six months after the passage of 
IMMPACT, the Administration must submit a report to Congress that sets 
forth a plan to enhance TRICARE, if necessary, so that it is at least 
as comprehensive as the plans used by civilian federal employees and 
retirees.
  IMMPACT is independent of other demonstration programs. Some may 
argue that IMMPACT is not needed because we are running a Medicare 
Subvention demonstration. But, there is no reason why IMMPACT should 
wait for that program to be completed and evaluated. In fact, I want 
IMMPACT to be offered to the same retirees that could chose the 
Medicare Subvention plan. In this manner, we will have some clear 
market signals about the value of each of these options within the same 
customer community.
  At the end of the IMMPACT demonstration program, the Administration 
will advise the Congress of the need to extend the eligibility of 
participation in the Federal Employees Health Benefits program, first 
nationwide to all Medicare-eligible retirees, and then to all retirees 
or active duty personnel, if TRICARE proves to be inferior to the 
civilian health care benefit.
  Mr. President, some may complain that this program will increase the 
Defense Department's cost of delivering medical benefits. Perhaps it 
will. But, I think our military men and women and their families 
deserve a better health care program than they are being offered now. 
Clearly, if we can find the money to fund our extravagances in the arts 
and entertainment, we can find funding for medical care for those who 
have been willing to risk their own lives in defense of our liberty and 
freedom.
  Mr. President, I urge my colleagues to support IMMPACT.
                                 ______
                                 
      By Mr. ASHCROFT:
  S. 2046. A bill to ensure that Federal, State and local governments 
consider all nongovernmental organizations on an equal basis when 
choosing such organizations to provide assistance under certain 
government programs, without impairing the religious character of any 
of the organizations, and without diminishing the religious freedom of 
beneficiaries of assistance funded under such programs, and for other 
purposes; to the Committee on Governmental Affairs


              the charitable choice expansion act of 1998

  Mr. ASHCROFT. Mr. President, for years, America's charities and 
churches have been transforming shattered lives by addressing the 
deeper needs of people--by instilling hope and values which help change 
behavior and attitudes. By contrast, government social programs have 
failed miserably in moving recipients from dependency and despair to 
responsibility and independence.

  Successful faith-based organizations now have a new opportunity to 
transform the character of our welfare system under the ``Charitable 
Choice'' provision contained in the 1996 welfare reform law. Charitable 
Choice allows--but does not require--states to contract with 
charitable, religious or private organizations, or to create voucher 
systems, to deliver welfare services within the states. The provision 
requires states to consider these organizations on an equal basis with 
other private groups once a state decides to use nongovernmental 
organizations.
  The Charitable Choice legislation provides specific protections for 
religious organizations when they provide services. For example, the 
government cannot discriminate against an organization on the basis of 
its religious

[[Page S4535]]

character. A participating faith-based organization retains its 
independence from government, including control over the definition, 
development, practice, and expression of its religious beliefs.
  Additionally, the government cannot require a religious organization 
to alter its form of internal governance or remove religious art, 
icons, or symbols to be eligible to participate. Finally, religious 
organizations may consider religious beliefs and practices in their 
employment decisions.
  The Charitable Choice legislation also provides specific protections 
to beneficiaries of assistance. A religious organization can't 
discriminate against a beneficiary on account of religion. And if a 
beneficiary objects to receiving services from a religious 
organization, he or she has a right to an alternate provider.
  Finally, there is a limitation on use of government funds. Federal 
contract dollars cannot be used for sectarian worship, instruction, or 
proselytization.
  I would like to give a couple of examples of how the Charitable 
Choice provision of the welfare law is currently working.
  Last fall, Payne Memorial Outreach Center, the non-profit community 
development arm of the 100-year-old Payne Memorial African Methodist 
Episcopal Church, in Baltimore, received a $1.5 million state contract 
to launch an innovative job training and placement program. In a matter 
of only five months, over 100 welfare recipients successfully obtained 
employment through their participation in Payne's program. A brochure 
from this dynamic faith-based institution describes why Payne is 
successful: ``The Intensive Job Service Program reaches out in love to 
Baltimore's most disenfranchised, helping them to identify and 
strengthen their God-given talents--releasing and developing their 
human possibilities.''
  Another example of Charitable Choice at work is in Shreveport, 
Louisiana, where the ``Faith and Families'' program, under a contract 
with the state, is running a successful job placement program. Faith 
and Families offers job-readiness classes in northwestern Louisiana, 
helps set up job interviews, and opens doors into the workplace.
  The program also links welfare families with faith communities. 
Churches are asked to adopt a family and provide assistance--possibly 
child care, transportation, work experience, tutoring, and 
encouragement--that will help them make the transition from welfare to 
work.
  I spoke with the director of Faith and Families in Shreveport just 
last week, and he told me that his organization has helped 400 people 
get off welfare and find jobs.
  These examples demonstrate that under the Charitable Choice provision 
of the welfare law, caring, faith-based organizations are providing 
effective services that help individuals move from dependency to 
independence, from despair to dignity.
  With this in mind, today I am introducing ``The Charitable Choice 
Expansion Act of 1998,'' which expands the Charitable Choice concept to 
all federal laws which authorize the government to use non-governmental 
entities to provide services to beneficiaries with federal dollars.

  The substance of the Charitable Choice Expansion Act is virtually 
identical to that of the original Charitable Choice provision of the 
welfare reform law. The only real difference between the two provisions 
is that the new bill covers many more federal programs than the 
original provision.
  While the original Charitable Choice provision applies mainly to the 
new welfare reform block grant program, the Charitable Choice Expansion 
Act applies to all federal government programs in which the government 
is authorized to use nongovernmental organizations to provide federally 
funded services to beneficiaries. Some of the programs that will be 
covered include: housing, substance abuse prevention and treatment, 
juvenile services, seniors services, the Community Development Block 
Grant, the Community Services Block Grant, the Social Services Block 
Grant, abstinence education, and child welfare services.
  The legislation does not cover elementary and secondary education 
programs--except it does cover GED programs--or higher education 
programs. Further, the bill does not affect the Head Start program or 
the Child Care Development Block Grant program, both of which already 
contain certain provisions regarding the use of religious organizations 
in delivering services under those programs.
  We have taken measures to strengthen the bill by providing more 
protections to both beneficiaries and religious organizations. For 
example, the government must ensure that beneficiaries receive notice 
of their right under the bill to object to receiving services from a 
religious organization. Additionally, religious organizations must 
segregate their own private funds from government funding.
  This proposal is necessary because while some areas of the law may 
not contain discriminatory language towards religious organizations, 
many government officials may assume wrongly that the Establishment 
Clause bars religious organizations from participating as private 
providers.
  The Charitable Choice Expansion Act embodies existing case precedents 
to clarify to government officials and religious organizations alike 
that it is constitutionally allowable, and even constitutionally 
required, to consider religious organizations on an equal basis with 
other private providers. It is my hope that these protections in the 
law will encourage successful charitable and faith-based organizations 
to expand their services while assuring them that they will not have to 
extinguish their religious character when receiving government funds.
  I am pleased to say that there is broad-based support for the 
Charitable Choice Expansion Act. Some of the organizations supporting 
the concept of this legislation include Agudath Israel, American Center 
for Law and Justice, Call to Renewal, Center for Public Justice, 
Christian Coalition, Christian Legal Society, the Coalition on Urban 
Renewal and Education, National Association of Evangelicals, the 
National Center for Neighborhood Enterprise, the Salvation Army, Teen 
Challenge International USA, and World Vision.
  America's faith-based charities and nongovernmental organizations, 
from the Salvation Army to Catholic Charities, have moved people 
successfully from dependency and despair to the dignity of self-
reliance. Government alone will never cure our societal ills. We need 
to find ways to help unleash the cultural remedy administered so 
effectively by charitable and religious organizations. Allowing a 
``charitable choice'' will help transform the lives of those in need 
and unleash an effective response to today's challenges in our culture.
                                 ______
                                 
      By Mr. KERREY (for himself, Mr. Bond, Mr. Durbin, Mr. Kennedy, 
        Mr. DeWine, and Mr. Moynihan):
  S. 2049. A bill to provide for payments to children's hospitals that 
operate graduate medical education programs; to the Committee on 
Finance.


      the children's hospitals education and research act of 1998

  Mr. KERREY. Mr. President, I am pleased to submit this proposal to 
provide critical support to teaching programs at free-standing 
children's hospitals. I am also honored to be joined by Senators Bond, 
Durbin, Kennedy, DeWine and Moynihan on this bill.

  Children's hospitals play an important role in our nation's health 
care system. They combine high-quality clinical care, a vibrant 
teaching mission and leading pediatric biomedical research within their 
walls. They provide specialized regional services, including complex 
care to chronically ill children, and serve as safety-net providers to 
low-income children.
  Teaching is an everyday component of these hospitals' operations. 
Pediatric hospitals train one-quarter of the nation's pediatricians, 
and the majority of America's pediatric specialists. Pediatric 
residents develop the skills they need to care for our nation's 
children at these institutions.
  In addition, pediatric hospitals combine the joint missions of 
teaching and research. Scientific discovery depends on the strong 
academic focus of teaching hospitals. The teaching environment attracts 
academics devoted to research. It attracts the volume and spectrum of 
complex cases needed for clinical research. And the teaching

[[Page S4536]]

mission creates the intellectual environment necessary to test the 
conventional wisdom of day-to-day health care and foster the 
questioning that leads to breakthroughs in research. Because these 
hospitals combine research and teaching in a clinical setting, these 
breakthroughs can be rapidly translated into patient care.
  Children's hospitals have contributed to advances in virtually every 
aspect of pediatric medicine. Thanks to research efforts at these 
hospitals, children can survive once-fatal diseases such as polio, grow 
and thrive with disabilities such as cerebral palsy, and overcome 
juvenile diabetes to become self-supporting adults.
  Through patient care, teaching and research, these hospitals 
contribute to our communities in many ways. However, their training 
programs--and their ability to fulfill their critical role in America's 
health care system--are being gradually undermined by dwindling 
financial support. Maintaining a vibrant teaching and research program 
is more expensive than simply providing patient care. The nation's 
teaching hospitals have historically relied on higher payments--
payments above the cost of clinical care itself--in order to finance 
their teaching programs. Today, competitive market pressures provide 
little incentive for private payers to contribute towards teaching 
costs. At the same time, the increased use of managed care plans within 
the Medicaid program has decreased the availability of teaching dollars 
through Medicaid. Therefore, Medicare's support for graduate medical 
education is more important than ever.

  Independent children's hospitals, however, serve an extremely small 
number of Medicare patients. Therefore, they do not receive Medicare 
graduate medical education payments to support their teaching 
activities. In 1997, Medicare provided an average of $65,000 per 
resident to all teaching hospitals, compared to an average of $230 per 
resident in total Medicare GME payments at independent children's 
hospitals.
  This proposal will address, for the short-term, this unintended 
consequence of current public policy. It will provide time-limited 
support to help children's hospitals train tomorrow's pediatricians, 
investigate new treatments and pursue pediatric biomedical research. It 
will establish a four-year fund, which will provide children's 
hospitals with a Federal teaching payment equal to the national average 
per resident payment through Medicare. Total spending over four years 
will be less than a billion dollars.
  All American families have great dreams for their children. These 
hopes include healthy, active, happy childhoods, so they seek the best 
possible health care for their children. And when these dreams are 
threatened by a critical illness, they seek the expertise of highly-
trained pediatricians and pediatric specialists, and rely on the 
research discoveries fostered by children's hospitals. All families 
deserve a chance at the American dream. Through this legislation, we 
will help children's hospitals--hospitals such as Children's Hospital 
in Omaha, Boys' Town, St. Louis Children's Hospital, Children's 
Memorial Hospital in Chicago, Children's Hospital in Boston and 
others--train the doctors and do the research necessary to fulfill this 
dream. Through this legislation, Congress will be doing its part to 
help American families work towards a successful future.
  Mr. President, this legislation will address a short-term problem--
actually a problem that is a short-term solution to a problem that we 
have with graduate medical education for pediatricians. Pediatric 
hospitals perform a very important part of the teaching and the 
training of our pediatricians. But because they see very few Medicare 
patients, which is obvious, they don't receive Medicare graduate 
education payments to support their teaching activities. What that 
means is there is a huge difference in Federal support across teaching 
hospitals--about $65,000 per resident in Medicare GME payments to all 
teaching hospitals, compared to an average of $230 per resident in 
total Medicare GME payments to independent children's hospitals.
  It is a very big problem as we increasingly pay attention to the need 
for good pediatric health care for our children. We have to make sure 
that we solve this problem. This is a short-term solution.
  I mentioned the short-term solution. The Presidential Commission on 
Medicare will be making its recommendation next year. One of its 
responsibilities is to deal with the question of graduate medical 
education--coming up with a solution of how we can fund it in an 
environment where more and more health care is going into managed care. 
That will be an especially difficult problem for us to solve.
  But inside of that overall problem is an even more compelling 
problem, as I think Members will see when they look at the differential 
in reimbursement for teaching costs in pediatric hospitals versus all 
residents nationwide.
  Thank you, Mr. President. I ask that the complete text of this 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2049

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Children's Hospitals 
     Education and Research Act of 1998''.

     SEC. 2. PROGRAM OF PAYMENTS TO CHILDREN'S HOSPITALS THAT 
                   OPERATE GRADUATE MEDICAL EDUCATION PROGRAMS.

       (a) Payments.--
       (1) In general.--The Secretary shall make payment under 
     this section to each children's hospital for each hospital 
     cost reporting period beginning after fiscal year 1998 and 
     before fiscal year 2003 for the direct and indirect expenses 
     associated with operating approved medical residency training 
     programs.
       (2) Capped Amount.--The payment to children's hospitals 
     established in this subsection for cost reporting periods 
     ending in a fiscal year is limited to the extent of funds 
     appropriated under subsection (d) for that fiscal year.
       (3) Pro rata reductions.--If the Secretary determines that 
     the amount of funds appropriated under subsection (d) for 
     cost reporting periods ending in a fiscal year is 
     insufficient to provide the total amount of payments 
     otherwise due for such periods, the Secretary shall reduce 
     the amount payable under this section for such period on a 
     pro rata basis to reflect such shortfall.
       (b) Amount of Payment.--
       (1) In general.--The amount payable under this section to a 
     children's hospital for direct and indirect expenses relating 
     to approved medical residency training programs for a cost 
     reporting period is equal to the sum of--
       (A) the product of--
       (i) the per resident rate for direct medical education, as 
     determined under paragraph (2), for the cost reporting 
     period; and
       (ii) the weighted average number of full-time equivalent 
     residents in the hospital's approved medical residency 
     training programs (as determined under section 1886(h)(4) of 
     the Social Security Act) for the cost reporting period; and
       (B) the product of--
       (i) the per resident rate for indirect medical education, 
     as determined under paragraph (3), for the cost reporting 
     period; and
       (ii) the number of full-time equivalent residents in the 
     hospital's approved medical residency training programs for 
     the cost reporting period.
       (2) Per resident rate for direct medical education.--
       (A) In general.--The per resident rate for direct medical 
     education for a hospital for a cost reporting period ending 
     in or after fiscal year 1999 is the updated rate determined 
     under subparagraph (B), as adjusted for the hospital under 
     subparagraph (C).
       (B) Computation of updated rate.--The Secretary shall--
       (i) compute a base national DME average per resident rate 
     equal to the average of the per resident rates computed under 
     section 1886(h)(2) of the Social Security Act for cost 
     reporting periods ending during fiscal year 1998; and
       (ii) update such rate by the applicable percentage increase 
     determined under section 1886(b)(3)(B)(i) of such Act for the 
     fiscal year involved.
       (C) Adjustment for variations in labor-related costs.--The 
     Secretary shall adjust for each hospital the portion of such 
     updated rate that is related to labor and labor-related costs 
     to account for variations in wage costs in the geographic 
     area in which the hospital is located using the factor 
     determined under section 1886(d)(3)(E) of the Social Security 
     Act.
       (3) Per resident rate for indirect medical education.--
       (A) In general.--The per resident rate for indirect medical 
     education for a hospital for a cost reporting period ending 
     in or after fiscal year 1999 is the updated amount determined 
     under subparagraph (B).
       (B) Computation of updated amount.--The Secretary shall--
       (i) determine, for each hospital with a graduate medical 
     education program which is paid under section 1886(d) of the 
     Social Security Act, the amount paid to that hospital 
     pursuant to section 1886(d)(5)(B) of such Act

[[Page S4537]]

     for the equivalent of a full twelve-month cost reporting 
     period ending during the preceding fiscal year and divide 
     such amount by the number of full-time equivalent residents 
     participating in its approved residency programs and used to 
     calculate the amount of payment under such section in that 
     cost reporting period;
       (ii) take the sum of the amounts determined under clause 
     (i) for all the hospitals described in such clause and divide 
     that sum by the number of hospitals so described; and
       (iii) update the amount computed under clause (ii) for a 
     hospital by the applicable percentage increase determined 
     under section 1886(b)(3)(B)(i) of such Act for the fiscal 
     year involved.
       (c) Making of Payments.--
       (1) Interim payments.--The Secretary shall estimate, before 
     the beginning of each cost reporting period for a hospital 
     for which a payment may be made under this section, the 
     amount of payment to be made under this section to the 
     hospital for such period and shall make payment of such 
     amount, in 26 equal interim installments during such period.
       (2) Final payment.--At the end of each such period, the 
     hospital shall submit to the Secretary such information as 
     the Secretary determines to be necessary to determine the 
     final payment amount due under this section for the hospital 
     for the period. Based on such determination, the Secretary 
     shall recoup any overpayments made, or pay any balance due. 
     The final amount so determined shall be considered a final 
     intermediary determination for purposes of applying section 
     1878 of the Social Security Act and shall be subject to 
     review under that section in the same manner as the amount of 
     payment under section 1886(d) is subject to review under such 
     section.
       (d) Limitation on Expenditures.--
       (1) In general.--Subject to paragraph (2), there are hereby 
     appropriated, out of any money in the Treasury not otherwise 
     appropriated, for payments under this section for cost 
     reporting periods beginning in--
       (A) fiscal year 1999 $100,000,000;
       (B) fiscal year 2000, $285,000,000;
       (C) fiscal year 2001, $285,000,000; and
       (D) fiscal year 2002, $285,000,000.
       (2) Carryover of excess.--If the amount of payments under 
     this section for cost reporting periods ending in fiscal year 
     1999, 2000, or 2001 is less than the amount provided under 
     this subsection for such payments for such periods, then the 
     amount available under this subsection for cost reporting 
     periods ending in the following fiscal year shall be 
     increased by the amount of such difference.
       (e) Relation to Medicare and Medicaid Payments.--
     Notwithstanding any other provision of law, payments under 
     this section to a hospital for a cost reporting period--
       (1) are in lieu of any amounts otherwise payable to the 
     hospital under section 1886(h) or 1886(d)(5)(B) of the Social 
     Security Act to the hospital for such cost reporting period, 
     but
       (2) shall not affect the amounts otherwise payable to such 
     hospitals under a State medicaid plan under title XIX of such 
     Act.
       (f) Definitions.--In this section:
       (1) Approved medical residency training program.--The term 
     ``approved medical residency training program'' has the 
     meaning given such term in section 1886(h)(5)(A) of the 
     Social Security Act (42 U.S.C. 1395ww(h)(5)(A)).
       (2) Children's hospital.--The term ``children's hospital'' 
     means a hospital described in section 1886(d)(1)(B)(iii) of 
     the Social Security Act (42 U.S.C. 1395ww(d)(1)(B)(iii)).
       (3) Direct graduate medical education costs.--The term 
     ``direct graduate medical education costs'' has the meaning 
     given such term in section 1886(h)(5)(C) of the Social 
     Security Act (42 U.S.C. 1395ww(h)(5)(C)).
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.

  Mr. BOND. Mr. President, I am pleased to rise today as an original 
cosponsor with Senator Bob Kerrey of the ``Children's Hospitals 
Education and Research Act of 1998.'' This bill seeks to address an 
unintended inequity in federal support for graduate medical education. 
If not addressed, this inequity will jeopardize the future of the 
pediatric health care work force as well as the pediatric biomedical 
research enterprise for our nation's children.
  Specifically, this bill will provide capped, time-limited, interim 
commensurate federal funding for the nearly 60 independent children's 
teaching hospitals, including the children's hospitals in Kansas City 
and St. Louis, which are so important to the training of the nation's 
physicians who serve children. They are equally important to the 
conduct of research to benefit children's health and health care.
  Let me illustrate the magnitude of the inequity in federal investment 
in graduate medical attention (GME). In 1977, the federal Medicare 
program reimbursed teaching hospitals, on average, more than $76,000 
for each resident trained. In contrast, Medicare reimbursed independent 
children's teaching hospitals--children's hospitals that do not share a 
Medicare provider number with a larger medical institution--less than 
$400 per resident, because children's hospitals care for children, not 
the elderly, and therefore do not serve Medicare patients, except for a 
small number of children with end stage renal disease.
  Until recently, this inequity was not a problem as long as all payers 
of health care were willing to reimburse teaching hospitals enough for 
their patient care to cover the extra costs of GME. As the health care 
market has become increasingly competitive, it has become harder and 
harder for all teaching hospitals to generate patient care revenues to 
help cover their GME costs. But only independent children's teaching 
hospitals face these competitive pressures without the significant 
federal GME support, which the rest of the teaching hospital community 
relies upon.
  This is more than a problem for the financial well-being of the 
education programs of a small number of children's hospitals--less than 
one percent of the nation's hospitals. It is a problem for our entire 
pediatric workforce and pediatric research enterprise, because these 
institutions play such a disproportionately large role in academic 
medicine for children. On average, their education programs are equal 
in size to the GME programs of all teaching hospitals, but they train 
twice as many residents per bed as do other teaching hospitals.
  As a consequence, independent children's teaching hospitals train 
about 5 percent of all physicians, 25 percent of all pediatricians, and 
the majority of many pediatric subspecialists who care for children 
with the most complex conditions, such as children with cancer, cystic 
fibrosis, cerebral palsy, and more.
  Recommendations to address the inequity in federal GME support for 
children's teaching hospitals are supported by the National Association 
of Children's Hospitals as well as the American Academy of Pediatrics 
and the Association of Medical School Pediatric Department Chairs. Last 
month, the American Academy of Pediatrics wrote to President Clinton, 
to express support for the establishment of interim federal support for 
the GME program of freestanding, independent children's hospitals. The 
AAP said, ``(w)e regard the education programs of independent 
children's hospitals as important to our pediatric workforce and 
therefore to the future health of all children, because they educate an 
important proportion of the nation's pediatricians.''
  Last year, many members of the Senate, including myself, recommended 
that any comprehensive reform of graduate medical education financing 
should include commensurate federal GME support for children's teaching 
hospitals. Instead of enacting GME reform, Congress directed the 
Bipartisan Commission on the Future of Medicare and the Medicare 
Payment Assessment Commission to prepare recommendations for the future 
of GME financing, including for children's teaching hospitals.
  Since it will be at least another year before Congress receives those 
recommendations and potentially several years before Congress is able 
to act on them, the ``Children's Hospitals Education and Research Act'' 
will provide interim funding for just four years. It will be 
commensurate to federal GME support for all teaching hospitals. 
Specifically, the bill provides, in a capped fund, $100 million in FY 
1999 and $285 million in each of the three succeeding fiscal years, for 
eligible institutions. It will be financed by general revenues, not 
Medicare HI Trust Funds.
  I know what a critical role children's hospitals play in the ability 
of families and communities to care for all children, including 
children with the most complex conditions and children on families with 
the most limited economic means. Through their education and research 
programs, they are also devoted to serving future generations of 
children, too. Certainly, the children of Missouri as well as Kansas 
and Southern Illinois, depend vitally on the services and research of 
independent children's teaching hospitals such as Children's Mercy in 
Kansas City, St. Louis Children's Hospital, and Cardinal Glennon 
Children's Hospital, and the care givers they educate.
  Children's hospitals are places of daily miracles. Healing that we 
would

[[Page S4538]]

never have thought possible a few years ago for children who are burn 
victims, or trauma victims, or even cancer victims now occurs daily at 
these hospitals. And while I am sure divine intervention plays a role 
in this healing, it is also due to the very hard work of skilled 
doctors, nurses, and dedicated staff that is second to none. We must 
therefore ensure that these facilities have the resources to continue 
their noble mission of saving children from the clutches of death and 
disease.
  I know trustees, and medical and executive leaders of these 
institutions. All are committed to controlling the cost of children's 
health to the best of their ability. But their future ability to 
sustain their education and research programs will also depend on 
commensurate federal GME support for them. I urge my colleagues to join 
me in supporting the enactment of the ``Children's Hospital Education 
and Research Act.''
  Mr. KENNEDY. Mr. President, I am honored to join my colleagues 
Senator Kerrey, Senator Bond, Senator Durbin, and Senator DeWine in 
sponsoring this legislation to assure adequate funding for resident 
training in independent children's teaching hospitals.
  These hospitals, such as Children's Hospital in Boston, have 60 
pediatric training programs. They represent less than 1 percent of the 
training programs across the country, yet these hospitals train 5 
percent of all physicians, 25 percent of all pediatricians, and the 
majority of many pediatric subspecialist.
  Too often today, these hospitals are hard-pressed for financial 
support. Medicare is the principal source of federal funds that 
contributes to the costs of graduate medical education for most 
hospitals, but independent children's hospitals have few Medicare 
patients, since Medicare coverage for children applies only to end-
stage kidney disease. Medicaid support is declining, as the program 
moves more and more toward managed care.
  No hospital in the current competitive marketplace can afford to 
shift these costs to other payers. As a result, many children's 
hospitals find it very difficult to make ends meet.
  In 1997, all teaching hospitals relieved a $76,000 in Medicare 
graduate medical education support for each medical resident they 
trained, but the average independent children's teaching hospital 
received only $400.
  Last year, Children's Hospital in Boston lost over $30 million on its 
patient operations. Two-thirds of this loss was directly attributable 
to the direct costs of graduate medical education. Will limited 
resources and increasing pressure to reduce patient costs, such losses 
cannot continue.
  The academic mission of these hospitals is vital. Since its founding 
as a 20-bed hospital in 1869, Children's Hospital in Boston has become 
the largest pediatric medical center and research facility in the 
United States, and an international leader in children's health. It is 
also the primary teaching hospital for pediatrics for Harvard Medical 
School. For eight years in a row, it has been named the best pediatric 
hospital in the country in a nationwide physicians' survey conducted by 
U.S. News and World Report.
  Clinicians and investigators work together at the hospital in an 
environment that fosters new discoveries in research and new treatments 
for patients. Scientific breakthroughs are rapidly translated into 
better patient care and enhanced medical education. We must assure that 
market pressures to not interfere with these advances.
  Independent children's hospitals deserve the same strong support that 
other hospitals receive for graduate medical education. The current 
lack of federal support is jeopardizing the indispensable work of these 
institutions and jeopardizing the next generation of leaders in 
pediatrics.

  Congress needed to do all it can to correct this inequity. This 
legislation we are introducing will provide stop-gap support stabilize 
the situation while we develop a fair long-run solution to meet the 
overall needs of all aspects of graduate medical education. I look 
forward to early action by the Senate on this important measure.
  Mr. MOYNIHAN. Mr. President, I am pleased to join Senators Bob 
Kerrey, Bond, Kennedy, Durbin and DeWine in introducing the 
``Children's Hospital Education and Research Act of 1998.'' This 
legislation recognizes the value of supporting medical training. it 
establishes an interim source of funding for financing residency 
training expenses for free-standing children's hospitals until a 
permanent source of funding for all medical education is developed.
  Medical education is one of America's most precious public resources. 
It is a public good--a good from which everyone benefits, but for which 
no one is willing to pay. As a public good, explicit and dedicated 
funding for residency training programs must be secured so that the 
United States will continue to lead the world in the quality of its 
health care system. This legislation provides for such dedicated 
funding for residency training programs in children's hospitals.
  I have introduced legislation--S. 21--which creates a medical 
education trust fund to support all accredited medical schools and 
teaching hospitals. Additionally, I requested that specific language be 
inserted in the Balanced Budget Act of 1997 charging the National 
Bipartisan Commission on the Future of Medicare to:

       . . . make recommendations regarding the financing of 
     graduate medical education (GME), including consideration of 
     alternative broad-based sources of funding for such education 
     and funding for institutions not currently eligible for such 
     GME support that conduct approved graduate medical residency 
     programs, such as children's hospitals.

  Children's hospitals have a vitally important mission providing 
patient care, medical training and research in the face of an 
increasingly competitive health system. I am pleased to support Senator 
Kerrey's bill and look forward to working with him and other members of 
the National Bipartisan Commission on the Future of Medicare as we seek 
stable and sufficient funding for medical education.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 2050. A bill to amend title 10, United States Code, to prohibit 
members of the Armed Forces from entering into correctional facilities 
to present decorations to persons who commit certain crimes before 
being presented such decorations; to the Committee on Armed Services.

                          ____________________