[Congressional Record Volume 144, Number 94 (Wednesday, July 15, 1998)]
[Senate]
[Pages S8241-S8253]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. GRAHAM (for himself, Mr. Chafee, Mr. Johnson, Mr. 
        Grassley, Mr. Harkin, Mr. Hollings, and Mr. Inouye):
  S. 2308. A bill to amend title XIX of the Social Security Act to 
prohibit transfers or discharges of residents of nursing facilities as 
a result of a voluntary withdrawal from participation in the Medicaid 
Program; to the Committee on Finance.


                  NURSING HOME PATIENT PROTECTION ACT

  Mr. GRAHAM. Mr. President, I rise today, along with Senators Chafee, 
Johnson, Grassley, Harkin, Hollings, and Inouye to introduce the 
Nursing Home Patient Protection Act--legislation to protect our 
nation's seniors from indiscriminate patient dumping. This bill 
modifies the original legislation to include several simple changes to 
alleviate the concerns of the nursing home industry and senior citizen 
advocates. It is with their support that we encourage the Senate to 
take action on this important piece of legislation. I have also 
included the following letters of support from the American Home Care 
Association and the National Seniors Law Center.
  A few months ago, it looked like 93-year old Adela Mongiovi might 
have to spend her 61st Mother's Day away from the assisted living 
facility that she has called home for the last four years.
  At least that's what son Nelson and daughter-in-law Gina feared when 
officials at the Rehabilitation and Healthcare Center of Tampa told 
them that their Alzheimer's Disease-afflicted mother would have to be 
relocated so that the nursing home could complete ``renovations.''
  As the Mongiovis told me when I met with them and visited their 
mother in Tampa last March, the real story far exceeded their worst 
fears. The supposedly temporary relocation was actually a permanent 
eviction of all 52 residents whose housing and care were paid for by 
the Medicaid program.
  The nursing home chain which owns the Tampa facility and several 
others across the United States wanted to purge its nursing homes of 
Medicaid residents, ostensibly to take more private insurance payers 
and Medicare beneficiaries which pay more per resident.
  This may have been a good financial decision in the short run, 
however, its effects on our nation's senior citizens, if practiced on a 
widespread basis, would be even more disastrous.
  In an April 7, 1998 Wall Street Journal article, several nursing home 
executives argued that state governments and Congress are to blame for 
these evictions because they have set Medicaid reimbursement rates too 
low.
  While Medicaid payments to nursing homes may need to be revised, 
playing Russian roulette with elderly patients' lives is hardly the way 
to send that message to Congress. And while I am willing to engage in a 
discussion as to the equity of nursing home reimbursement rates, I and 
my colleagues are not willing to allow nursing facilities to dump 
patients indiscriminately.
  The fact that some nursing home companies are willing to sacrifice 
elderly Americans for the sake of their bottom-line is bad enough. 
What's even worse is their attempt to evade blame for Medicaid 
evictions.
  The starkest evidence of this shirking of responsibility is found in 
the shell game many companies play to justify evictions. Current law 
allows nursing homes to discharge patients for inability to pay.
  If a facility decreases its number of Medicaid beds, the state and 
federal governments are no longer allowed to pay the affected 
residents' bills. They can then be conveniently and unceremoniously 
dumped for--you guessed it--their inability to pay.
  Evictions of nursing home residents have a devastating effect on the 
health and well-being of some of society's most vulnerable members.
  A recent University of Southern California study indicated that those 
who are uprooted from their homes undergo a phenomenon known as 
``transfer trauma.'' For these seniors, the consequences are stark. The 
death rate among these seniors is two to three times higher than that 
for individuals who receive continuous care.
  Those of us who believe that our mothers, fathers, and grandparents 
are safe because Medicaid affects only low-income Americans, we need to 
think again.
  A three-year stay in a nursing home can cost upwards of $125,000. As 
a result, nearly half of all nursing home residents who enter as 
privately-paying patients exhaust their personal savings and lose 
health insurance coverage during their stay. Medicaid becomes many 
retirees' last refuge of financial support.
  On April 10, the Florida Medicaid Bureau responded to evidence of 
Medicaid dumping in Tampa by levying a steep, $260,000 fine against the 
Tampa nursing home. That was a strong and appropriate action, but it 
was only a partial solution. Medicaid funding is a shared 
responsibility of states and the federal government.
  And while the most egregious incident occurred in Florida, Medicaid 
dumping is not just a Florida problem. While nursing homes were once 
locally-run and family-owned, they are increasingly administered by 
multi-state, multi-facility corporations that have the power to affect 
seniors across the United States.
  Mr. President, let me also point out that the large majority of 
nursing homes in America treat their residents well and are responsible 
community citizens. Our bill is designed solely to prevent potential 
future abuses by bad actors.
  And this new bill is better, simple and fair. It would prohibit 
current Medicaid beneficiaries or those who ``spend down'' to Medicaid 
from being evicted from their homes. And that is a crucial point, Mr. 
President.
  Adela Mongiovi is not just a ``beneficiary.'' She is also a mother 
and grandmother. And to Adela Mongiovi, the Rehabilitation and Health 
Care Center of Tampa is not an ``assisted living facility.'' To Adela 
Mongiovi--this is home.
  This is the place where she wants--and deserves--like all seniors--to 
live the rest of her life with the security of knowing that she will 
not be evicted. And through passage of this bill, Mr. President, we can 
provide that security to Adela Mongiovi and all of our nation's 
seniors.
  Mr. President, I ask unanimous consent that letters in support of the 
legislation be printed in the Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                             American Health Care Association,

                                    Washington, DC, June 11, 1998.
     Hon. Bob Graham,
     Hart Senate Office Building, Washington, DC.
       Dear Senator Graham: I am writing to lend the support of 
     the American Health Care Association to your legislation 
     which helps to ensure a secure environment for residents of 
     nursing facilities which withdraw from the Medicaid program. 
     Understand you will be filing this legislation in the next 
     few days.
       We know firsthand that a nursing facility is one's home, 
     and we strive to make sure residents are healthy and secure 
     in their home. We strongly support the clarifications your 
     bill will provide to both current and future nursing facility 
     residents, and do not

[[Page S8242]]

     believe residents should be discharged because of 
     inadequacies in the Medicaid program.
       This bill addresses a troubling symptom of what could be a 
     much larger problem. The desire to end participation in the 
     Medicaid program is a result of the unwillingness of some 
     states to adequately fund the quality of care that residents 
     expect and deserve. Thus, some providers may opt out of the 
     program to maintain a higher level of quality than is 
     possible when relying on inadequate Medicaid rates. Nursing 
     home residents should not be the victims of the inadequacies 
     of their state's Medicaid program.
       In 1996, the Congress voted to retain all standards for 
     nursing facilities. We support those standards. In 1997, 
     Congress voted separately to eliminate requirements that 
     states pay for those standards. These two issues are 
     inextricably linked, and must be considered together. 
     Importantly, your legislation mandates the Department of 
     Health and Human Services study the link between payment and 
     the ability to provide quality care. We welcome the 
     opportunity to have this debate as Congress moves forward on 
     this issue.
       Again, we appreciate the chance to work with you to provide 
     our residents with quality care in a home-like setting that 
     is safe and secure. We also feel that it would be most 
     effective when considered in the context of the relationship 
     between payment and quality and access to care.
       Finally, we greatly appreciate the inclusive manner in 
     which this legislation was crafted, and strengthened. When 
     the views of consumers, providers, and regulators are 
     considered together, the result, as with your bill, is 
     intelligent public policy.
           Sincerely yours,
                                             Dr. Paul R. Willging,
     Executive Vice President.
                                  ____

                                         National Senior Citizens,


                                                   Law Center,

                                    Washington, DC, June 26, 1998.
     Senator Bob Graham,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Graham: Earlier this year, the Vencor 
     Corporation began to implement a policy of withdrawing its 
     nursing facilities from participation in the Medicaid 
     program. The abrupt, involuntary transfer of large numbers of 
     Medicaid residents followed. Although Vencor reversed its 
     policy, in light of Congressional concern, state agency 
     action, and adverse publicity, the situation highlighted an 
     issue in need of a federal legislative solution--what happens 
     to Medicaid residents when a nursing facility voluntarily 
     ceases to participate in the federal payment program.
       I have read the draft bill that your staff has written to 
     address this issue. The bill protects residents who were 
     admitted at a time when their facility participated in 
     Medicaid by prohibiting the facility from involuntarily 
     transferring them later when it decides to discontinue its 
     participation. As you know, many people in nursing facilities 
     begin their residency paying privately for their care and 
     choose the facility because of promises that they can stay 
     when they exhaust their private funds and become eligible for 
     Medicaid. In essence, the bill requires the facility to honor 
     the promises it made to these residents at admission. It 
     continues to allow facilities to withdraw from the Medicaid 
     program, but any withdrawal is prospective only.
       This bill gives peace of mind to older people and their 
     families by affirming that their Medicaid-participating 
     facility cannot abandon them if it later chooses to end its 
     participation in Medicaid.
       The National Senior Citizens Law Center supports this 
     legislation. We look forward to working with your staff on 
     this legislation and on other bills to protect the rights and 
     interests of nursing facility residents and other older 
     people.
           Sincerely,
                                                  Toby S. Edelman.
                                 ______
                                 
      By Mr. SPECTER (for himself and Mr. Santorum):
  S. 2309. A bill to authorize the Secretary of the Interior to enter 
into an agreement for the construction and operation of the Gateway 
Visitor Center at Independence National Historical Park; to the 
Committee on Energy and Natural Resources.


            gateway visitor center authorization act of 1998

 Mr. SPECTER. Mr. President, today I introduce legislation to 
authorize the Interior Department to enter into an agreement with the 
nonprofit Gateway Visitor Center Corporation for the construction and 
operation of the Gateway Visitor Center in Independence National 
Historical Park in Philadelphia, Pennsylvania.
  This legislation is needed because the Visitor Center will provide 
some services which are beyond the scope of existing National Park 
Service statutory authority at the Park. As a result, I am advised that 
construction may not begin until this bill is enacted. I have worked 
with the National Park Service and the Gateway Visitor Center 
Corporation to develop this bill and note that similar legislation has 
been introduced in the House of Representatives by Congressmen Jon Fox 
and Robert Borski. The bill also has the strong support of Philadelphia 
Mayor Edward Rendell.
  The Gateway Visitor Center is part of the revitalization of 
Independence Mall and is critical to creating an outstanding visitor 
experience. It will serve as the gateway into the Park and will orient 
visitors as to the rich history of the National Historical Park, the 
city of Philadelphia, and the region as a whole. I was pleased to 
assist in obtaining funds in the TEA-21 Act for the road and 
infrastructure improvements necessary for the redevelopment of the 
Independence Mall and would note that the Senate FY99 Interior 
Appropriations bill also includes funding for this project.
  The legislation is necessary because, in addition to its role as the 
Park's primary visitor center, the Gateway Visitor Center will be 
permitted to charge fees, conduct events, and sell merchandise, 
tickets, and food to visitors to the Center. These activities will 
allow the Gateway Visitor Center to meet its park-wide, city-wide and 
regional missions while defraying the operating and management expenses 
of the Center.
  The Gateway Visitor Center holds enormous potential for Independence 
National Historical Park and the greater Philadelphia region as a 
whole, and I urge my colleague to support this legislation.
                                 ______
                                 
      By Mr. MOYNIHAN (for himself, and Mr. D'Amato):
  S. 2310. A bill to designate the United States Post Office located at 
297 Larkfield Road in East Northport, New York, as the ``Jerome Anthony 
Ambro, Jr. Post Office Building''; to the Committee on Governmental 
Affairs.


       jerome anthony ambro, jr. post office building legislation

  Mr. MOYNIHAN. Mr. President, I rise today with my friend and 
colleague, Senator D'Amato, to introduce a bill to designate the East 
Northport, New York Post Office as the ``Jerome Anthony Ambro, Jr. Post 
Office Building.''
  Jerry Ambro's life was one dedicated to serving the people of New 
York. A Brooklyn native, he was educated in the New York City public 
schools and was graduated from New York University. After a two-year 
stint in the United States Army, he began working for the Town of 
Huntington, New York. He went on to serve on the Suffolk County Board 
of Supervisors and was elected Town Supervisor of Huntington for four 
terms.
  First elected to Congress in 1974, in the wake of President Nixon's 
resignation, Jerry Ambro was a leader among leaders. He served as the 
chairman of the 82-member New Members Caucus, a reform-minded group 
that instituted campaign finance reform and new procedures for 
selecting committee chairmen. The Caucus aided in deposing three 
committee and subcommittee chairmen.
  As Chairman of the House Subcommittee on Natural Resources and the 
Environment, he fought to protect the environment. He prevented the 
Long Island Lighting Company from converting from oil to coal and he 
preserved wetlands in Massapequa. As Town Supervisor, he enacted one of 
the first municipal bans on DDT.
  Following his years in Congress, he went on to serve ably as the 
Washington lobbyist for then-Governor Hugh L. Carey. He died in 1993 
from complications from diabetes.
  I am pleased to introduce this bill today to name a post office after 
such a distinguished New Yorker. Congressman Gary L. Ackerman has 
introduced a similar measure in the House. That it has the support of 
the entire New York delegation demonstrates how widely admired Jerry 
Ambro was. I urge the swift passage of this legislation.
  Mr. President, I ask unanimous consent that the full text of the bill 
be placed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2310

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

     SECTION 1. DESIGNATION.

       The United States Post Office located at 297 Larkfield Road 
     in East Northport, New York, shall be known and designated as 
     the ``Jerome Anthony Ambro, Jr. Post Office Building''.

     SEC. 2. REFERENCES.

       Any reference in a law, map, regulation, document, paper, 
     or other record of the

[[Page S8243]]

     United States to the United States Post Office referred to in 
     section 1 shall be deemed to be a reference to the ``Jerome 
     Anthony Ambro, Jr. Post Office Building''.

  Mr. D'AMATO. Mr. President, I rise to join my colleague, Senator 
Moynihan, in introducing this bill that will designate that the U.S. 
Post Office located at 297 Larkfield Road in East Northport, New York, 
as the ``Jerome Anthony Ambro, Jr. Post Office Building.''
  The designation will be a tribute to the life and legacy of a strong 
and able local and federal representative and I am proud to be a co-
sponsor of this bill. In doing so, we join the entire New York 
delegation in supporting this bill.
  The designation will be a tribute to the life and legacy of a strong 
and able local and federal representative and I am proud to be a co-
sponsor of this bill. In doing so, we join the entire New York 
delegation in supporting this bill.
  Anthony Ambro was a full fledge New Yorker. He had his own ideas and 
his own means of accomplishing his goals--and those goals greatly 
assisted his constituency. He was a great man from a different 
political persuasion. But one thing is certain, he put people ahead of 
politics.
  Born in Brooklyn, he attended New York University where he received 
his Bachelor's degree. He served in the United States Army, Military 
Police before he began his career in public service. He was budget 
officer, purchasing and personnel director for the Town of Huntington, 
served on Suffolk County Board of Supervisors and was elected to four 
terms as Supervisor of the Town of Huntington. In addition, he was 
president of the freeholders of the Town of Huntington and co-founder 
of the New York State Coalition of Suburban Towns.
  To reward him for the tremendous accomplishments for the people of 
Suffolk County, he was elected to the House of Representatives 
beginning in 1975, for three terms. Beginning in 1981, he operated a 
consulting business bringing his own brand of humor and sagacity to 
bear on behalf of hundreds of New Yorkers as they struggled to make 
sense of Washington's labyrinth.
  During his tenure he served as Chairman of the House Subcommittee on 
Natural Resources and the Environment, working on environmental issues, 
including the prohibiting the dumping of dredged material in Long 
Island Sound. As a local official, he supported housing projects for 
the elderly. He was a free-thinking man whose primary purpose was to 
represent the needs of his constituency and whose tenacity was driven 
by his beliefs.
  I counted him as a friend and advisor who made many a lunch-time meal 
at the Monocle a pleasure as well as an education.
  Anthony Ambro passed away in March, 1993 from diabetes complications. 
I am sure he is missed terribly by his wife Antoinette Salatto Ambro, 
and his children, step children and grandchildren. His qualities 
endeared him to the people of New York and I hope these sentiments will 
be reflected in the passage of this measure. I thank the senior Senator 
from New York and urge its enactment.
                                 ______
                                 
      By Mr. KOHL (for himself and Mr. Sessions):
  S. 2311. A bill to amend section 201 of title 18, United States Code, 
to increase prosecutorial effectiveness and enhance public safety, and 
for other purposes; to the Committee on the Judiciary.


          effective prosecution and public safety act of 1998

 Mr. KOHL. Mr. President, Senator Sessions and I today are 
introducing a bill that guarantees prosecutors can exercise their full 
power to keep criminals off our streets. The ``Effective Prosecution 
and Public Safety Act of 1998'' makes clear that prosecutors can offer 
plea bargains to accomplices in exchange for their testimony--a long-
standing, accepted and necessary practice--without tainting a 
conviction resulting from such testimony. This measure puts to rest any 
concerns raised by an overwhelmingly disputed decision issued recently 
by a panel of three appellate court judges. And it makes it less likely 
that courts could overturn convictions of dangerous criminals like 
Oklahoma City bomber Timothy McVeigh.
  Until a court decision two weeks ago, there was no doubt that 
prosecutors could build criminal cases by offering leniency to 
accomplices in exchange for their testimony at trial. But in U.S. 
versus Singleton, a Tenth Circuit panel held that a federal anti-
bribery statute, which had been on the books for over 35 years, barred 
these kinds of leniency deals. This unprecedented decision has been 
criticized virtually unanimously. Subsequently, the full Tenth Circuit 
put the decision on hold, pending a full court rehearing scheduled for 
November.
  There is little doubt that the Tenth Circuit's decision is just plain 
wrong. Nothing in the legislative history suggests that Congress ever 
intended to take away a prosecutor's ability to make deals for 
testimony. And it is no surprise that in 35 years no court ever found 
the anti-bribery statute to apply to this reasonable exercise of 
prosecutorial discretion. This decision is simply a case of Scalia-ism 
taken to the extreme, beyond the bounds of common sense and in the face 
of established practices. I cannot believe that even Justice Scalia, 
the high priest of literalism, would agree with this result.
  As wrong as this decision is, it still cannot be taken lightly. 
Prosecutors make deals with cooperating witnesses all the time. So this 
decision puts tens of thousands of convictions in jeopardy. For an 
example, we need look no further than the conviction of Timothy 
McVeigh, which was based in large part on the testimony of Michael 
Fortier, who was allowed to plea to lesser charges in exchange for his 
testimony. And McVeigh's conviction is on appeal in the same Tenth 
Circuit--could that be the next conviction it will try to overturn?
  In my view, the risks posed by this decision are too great to leave 
this issue to the courts--even though I am confident that in the end 
they would do the right thing. Indeed, until this issue works its way 
to the Supreme Court, the potential dangers are serious. Prosecutors 
may feel the need to hold back on cutting deals with potential 
witnesses, making it tougher to convict dangerous criminals. And 
criminals behind bars will have a better chance than ever at 
overturning their convictions. Already, jailhouse lawyers are probably 
foaming at the mouth anticipating making this argument in courts all 
over the nation.
  Congress can act now to put this issue behind us, to guarantee that 
prosecutors are not hampered in their efforts to put criminals behind 
bars, and to make sure that is where criminals stay. This bill is 
simple and effective. It amends the anti-bribery statute to exempt 
deals for leniency made by prosecutors in exchange for testimony. And 
it applies to past as well as future deals, so that no criminal--
including the Oklahoma City bomber--can try to use this awful decision 
as a ``get out of jail card'' at the expense of the safety of the 
American people.
  Mr. President, let me make clear what this proposal does and what it 
does not do. All it does is reinforce what Congress always intended--to 
allow plea bargains in exchange for testimony. It does not permit 
prosecutors to ``buy'' testimony with cash payoffs. That is still 
illegal. It does not allow prosecutors to knowingly elicit false 
testimony. That is obstruction of justice. And it does not prevent a 
defense attorney from raising a deal at trial to try to cast doubt on 
the credibility of a witness. That is what cross-examination is all 
about.
  Mr. President, prosecutors will be most effective and the public will 
be safest if we set the Record straight now and correct the Tenth 
Circuit's outrageous decision. I urge my colleagues to join me in 
support of this bill. And I offer for the Record the following two 
articles--an editorial from the Washington Post criticizing the 
decision and a piece from Legal Times explaining its impact and recent 
developments, and ask unanimous consent that these articles be printed 
in the Record.
  There being no objection, the articles were ordered to be printed in 
the Record, as follows:

               [The Washington Post, Wed., July 8, 1998]

                            Judicial Trouble

       Every now and then, a federal appeals court issues a ruling 
     that is, at once, so wrongheaded and so sweeping that it 
     results in a brief period of uncertainty in the legal world 
     before being reversed. The decision last week by the U.S. 
     Court of Appeals for

[[Page S8244]]

     the 10th Circuit in the case of U.S. v. Singleton is one such 
     bombshell. A unanimous three-judge panel threw out the drug 
     conspiracy and money laundering conviction of a woman named 
     Sonya Singleton, finding that the government had violated a 
     criminal anti-gratuity statute by promising leniency to a 
     witness in exchange for his testimony.
       On its face, the decision seems faintly reasonable. There 
     is, after all, a federal law that holds criminally liable 
     anyone who, ``directly or indirectly, gives, offers or 
     promises anything of value to any person, for or because of 
     the testimony under oath or affirmation given . . . by such 
     person as a witness.'' This law contains no explicit 
     exception for the government, and leniency in sentencing is 
     certainly of value to a person who is facing jail. Hence, the 
     court held, the government violated the law by using bought 
     testimony, and Ms. Singleton's conviction must be thrown out.
       Logical, perhaps, but dead wrong. What the government 
     actually promised the witness was, in fact, a standard plea 
     agreement of a sort prosecutors rely on every day. Oklahoma 
     City bomber Timothy McVeigh was convicted based, in 
     substantial part, on testimony by Michael Fortier--who was 
     allowed to plead guilty to lesser charges. Many, if not most, 
     significant investigations rely on witnesses who are 
     ``flipped'' by prosecutors in exchange for some sort of 
     special treatment, almost all of which could be considered 
     ``of value.''
       This practice can be--self-evidently--corrupting. A witness 
     who knows that his cooperation will get him a cut sentence 
     has a strong incentive to say what prosecutors want to hear. 
     But the traditional remedy is the cross examination of the 
     witness by defense lawyers, and no court has previously 
     deemed a run-of-the-mill plea agreement to be a felony by a 
     prosecutor.
       Though the law does not explicitly exempt the government, 
     this appears to reflect only the fact that members of 
     Congress never considered the possibility that they were 
     criminalizing normal prosecutorial practice. In fact, 
     Congress has adjusted the law in question without balking at 
     the behavior of prosecutors. And the Supreme Court, in Giglio 
     v. U.S., held that when the government makes a deal with a 
     witness, that a deal must be disclosed to the defense as 
     exculpatory evidence--a holding that seems to concede that 
     the deal-making itself is legitimate. The 10th Circuit's 
     decision is at odds both with assumed prosecutorial practice 
     and--by the judges' own admission--with the other judicial 
     authorities in the books.
                                  ____


             [From the Legal Times, Week of July 13, 1998]

       Federal Court Watch--Appeals Panel Retracts Snitch Ruling

                          (By Robert Schmidt)

       It was a revolutionary federal appeals court decision--a 
     unanimous ruling by three judges that the time-honored 
     prosecutorial tactic of offering witnesses leniency in 
     exchange for their testimony is illegal--and it sent 
     prosecutors and defense lawyers into a frenzy.
       The ruling's sweeping implications also apparently caught 
     the very judges who issued it off guard.
       In a highly unusual move late last week, the U.S. Court of 
     Appeals for the 10th Circuit, acting on its own motion, 
     vacated the July 1 opinion in United States v. Singleton so 
     it could address the issue en banc.
       The decision stunned defense lawyers across the nation, 
     some of whom had already filed motions in other federal 
     courts based on the precedent. The 10th Circuit's reversal, 
     however, pleased prosecutors--especially officials at Main 
     Justice, who have been scrambling to develop for U.S. 
     attorneys' offices legal guidelines that take Singleton into 
     account.
       On July 9, Justice announced it was planning on asking the 
     10th Circuit to hear the case en banc, but it had not yet 
     filed the motion when the court acted on its own.
       ``This does not seem like the kind of case where they would 
     grant en banc sua sponte because they felt that [the 
     decision] was right,'' says a Justice official working on the 
     matters. ``This is a hopeful sign.''
       John ``Val'' Wachtel, the Wichita, Kan., lawyer who 
     initially triumphed before the three-judge panel, says he is 
     disappointed but eager to argue before the entire court.
       ``We plan to write our brief and go out and argue and win 
     this case,'' says Wachtel, a partner of Wichita's Klenda, 
     Mitchell, Austerman & Zuercher. ``The decision of the panel 
     is right.''
       The court's unusual move followed a firestorm in federal 
     courts across the six Western states that make up the 10th 
     Circuit. Although the panel noted that its ruling would not 
     ``drastically alter'' prosecutors' tactics, no one else 
     seemed to agree.
       Trial lawyers of all stripes predicted that if the 
     opinion's holding stood, it would dramatically change the way 
     prosecutors investigate and try many types of criminal cases, 
     including major conspiracies involving drug trafficking, 
     money laundering, and fraud.
       And last week, those predictions were already coming true 
     in the 10th Circuit.
       According to press accounts and lawyers who practice in the 
     circuit, ongoing federal criminal cases there were virtually 
     paralyzed as lawyers and even judges tried to decide what to 
     do.
       Stephen Saltzburg, a former Justice official who now 
     teaches at George Washington University Law School, says that 
     this type of paralysis plus the widespread media attention 
     likely prompted the 10th Circuit to issue its order late last 
     week.
       ``They may not have paid careful attention to this when it 
     was lurking,'' posits Saltzburg. ``Once they had the uproar, 
     and focused on it, they realized that every criminal case 
     that went to trial is now at risk.''
       Indeed, the court did see that as a potential problem. In 
     its July 10 order, signed by 11 of the 12 judges, the court 
     asked attorneys for both sides to file briefs that ``address 
     whether any opinion reversing the district court would have 
     prospective or retrospective application.''
       The Circuit ordered that the briefs be submitted in August 
     and said it would hear oral argument in November.
       While criminal law experts like Saltzburg almost all 
     predict that the entire court will reverse Singleton, defense 
     lawyers say they are confident the opinion will be affirmed.
       The underlying case involved Sonya Singleton, who was 
     convicted of one count of conspiracy to distribute cocaine 
     and seven counts of money-laundering. The main evidence 
     against Singleton was the testimony of Napoleon Douglas, a 
     fellow alleged conspirator who cut a plea deal with the 
     government.
       Singleton's lawyer, Wachtel, argued that Douglas' testimony 
     should be suppressed, claiming that 18 U.S.C. 
     Sec. 201(c)(2)--the law governing bribery of public officials 
     and witnesses--applies to prosecutors just as it applies to 
     everyone else.
       The section reads: ``Whoever . . . directly or indirectly, 
     gives, offers or promises anything of value to any person, 
     for or because of the testimony under oath or affirmation 
     given or to be given by such person as a witness upon a 
     trial, hearing or other proceeding, before any court . . . 
     shall be fined under this title, or imprisoned for not more 
     than two years, or both.''
       The panel did not suggest that prosecutors should go to 
     jail or be fined for violating the law. But it did determine 
     that the statute was broad enough to include federal 
     prosecutors.
       The court then noted that Douglas' plea agreement, which 
     incorporated standard boilerplate language used by U.S. 
     attorneys' offices nationwide, made three specific promises 
     to Douglas in exchange for his testimony.
       Those promises--not to prosecute him for any other crimes 
     stemming from the investigation and to tell both the 
     sentencing court and his parole board about the extent of his 
     cooperation--constituted ``something of value,'' the court 
     reasoned. Thus, they amounted to an illegal gratuity.
       ``The obvious purpose of the government's promised actions 
     was to reduce his jail time,'' wrote U.S. Circuit Judge Paul 
     Kelly Jr., ``and it is difficult to imagine anything more 
     valuable than personal physical freedom.''
       Despite the 10th Circuit's decision last week, local 
     defense lawyers say they are eager to raise the issue in 
     Washington's federal court.
       ``I guess, given the attention it received, [the 10th 
     Circuit's action] is not all that surprising, but it is 
     definitely disappointing,'' says L. Barrett Boss, an 
     assistant federal public defender in Washington. ``The 
     argument that is made, that testimony in exchange for 
     leniency violated the bribery statute, is rock solid, so 
     we're definitely going to be pursuing that issue at every 
     opportunity.''
                                 ______
                                 
      By Mr. GREGG (for himself, Mr. Breaux, Mr. Thompson, Mr. Robb, 
        Mr. Thomas, and Mr. Coats):
  S. 2313. A bill to amend title II of the Social Security Act to 
provide for individual security accounts funded by employee and 
employer Social Security payroll deductions, to extend the solvency of 
the old-age, survivors, and disability insurance program, and for other 
purposes; to the Committee on Finance.


                  TWENTY-FIRST CENTURY RETIREMENT ACT

 Mr. GREGG. Mr. President, today I introduce--I believe I can 
say without exaggeration--a landmark piece of legislation, the Twenty-
First Century Retirement Act.
  Joining me as principal co-sponsor of this legislation is Senator 
John Breaux, with whom I served as co-chair of the National Commission 
on Retirement Policy during the last year. Also this week, the same 
legislation will be introduced by our House colleagues, Congressmen Jim 
Kolbe and Charles Stenholm.
  With many pieces of legislation, naming the cosponsors upon 
introduction is merely a perfunctory exercise. With this one, it is 
significant. Also as original cosponsors of this legislation, we have 
Senators Fred Thompson, Chuck Robb, Craig Thomas, and Dan Coats. 
Several cosponsors from both sides of the aisle are also joining on the 
House bill.
  This in and of itself is almost an unprecedented accomplishment. This 
simply does not happen with Social Security, long considered the 
``third rail'' of American politics. We are turning this

[[Page S8245]]

``third rail'' into a passenger train--a bipartisan, bicameral process 
for reform.
  Two months ago, the National Commission on Retirement Policy voted 
24-0 to approve the recommendations that this legislation would 
implement. Today we are introducing it with several cosponsors from 
both sides of the aisle. Given the difficulty that most experts see 
with restoring the Social Security system to balance, our proposal has 
set a modern record for the most support attracted to any proposal to 
place Social Security on sound long-term footing.
  For several years, we have seen numerous Commissions divide among 
themselves, breaking into factions, issuing separate minority opinions 
instead of coming to agreement. We have seen various--many of them 
visionary and constructive--individual legislators introduce reform 
proposals that could attract little support beyond the original co-
sponsors. But today we stand here with a proposal that has received 
endorsements that have not been given to other Social Security 
proposals in recent years.
  What have we done that has enabled us to build such support?
  The first thing we did was to take careful note of what Social 
Security has meant to Americans, and what they insist that it mean in 
the future. Social Security has long been the principal government 
program lifting senior citizens out of poverty. In addition to 
providing a basic level of protection against poverty, the program has 
also been sold to Americans as not a welfare program, but rather a 
program under which benefits paid will bear a reasonable relationship 
to the contributions that people have put in.
  So we set about to ensure that this remained the case. We wanted to 
have a system that, in the end, would do an even better job of lifting 
Americans out of poverty--and would, at the same time, ensure that 
people received a fair deal for the investment that they made in the 
program.
  Let me step back a bit, Mr. President, and review why action is 
necessary to achieve this purpose. This requires me to review the 
projections for Social Security under current law.
  It is often said that Social Security faces an actuarial problem. It 
is said that the program is solvent only through the year 2032. That is 
true. But it does not begin to describe all of the problems with the 
program.
  Even an actuarially sound Social Security program would face enormous 
financing problems under its current structure. It is a ``pay as you 
go'' system. Any surplus assets it holds are invested in the federal 
government--which then has to pay it back at some date in the future. 
So, even if the books were balanced--and they are trillions of dollars 
out of balance--the general taxpayer would still face the problem of 
paying off more than $4 trillion in Trust Fund assets. This would be 
needed above and beyond payroll taxes (!) in order to pay the benefits 
that have been promised to the baby boom generation of retirees.
  So what would that mean? It would mean raising taxes on future 
generations of Americans. The payroll tax would ultimately have to go 
up by almost 50%! That is because the net cost of the system would 
ultimately top 18% of payroll, as opposed to today's 12.4% tax rate.
  Raising the FICA tax today, immediately, by 2.2% of payroll, would 
not solve this problem. It would just mean that future taxpayers would 
have a larger Trust Fund to pay off later on, and that the 50% payroll 
tax increase would be borne indirectly, through general taxation.
  But there would be another dire effect of such a change. Under 
current law, rates of return under Social Security are dropping. If you 
are a single male, the chances are very good that you will never get 
back the value of the contributions that you put in. The situation is 
comparably grim for single females--and for two-earner couples.
  If we were to raise taxes to restore the system to solvency--or, for 
that matter, if we simply and mindlessly cut benefits--that situation 
would grow far worse. More and more Americans would be losing money 
through the program. Ultimately, its political support would be 
imperiled. The basic societal consensus in favor of Social Security--
based on the premise that it treats everyone fairly--would be 
undermined.
  So we must find another way to restore Social Security to health--and 
to enable it to provide the kind of retirement income that Americans 
have a right to expect from the program.
  I believe that it is imperative that we begin to ``pre-fund'' the 
future liabilities of Social Security. A ``pay as you go'' system is 
not built for a demographic shift on the order of the baby boom 
generation. A ``pay as you go'' system assumes that there is always a 
demographic pyramid--that each generation coming through at the bottom 
is more numerous than the generation that they are supporting above 
them.
  But with the baby boomers coming through in such great numbers--and 
having comparatively fewer kids--the pyramid looks more like a 
rectangle. And the individuals at the bottom will bear a crushing 
burden unless we reduce some of it by putting additional funding aside 
now.
  Fortunately, we have an opportunity to do this. We have projections 
of near-term budget surpluses--and we already have short-term Social 
Security surpluses. We are collecting money that the government does 
not need to meet current operations, and we are collecting it through 
the Social Security system.
  The very first thing we should do is to give this extra money 
directly back to taxpayers, allow them to own it once again, and to 
fund a portion of their future retirement benefits through those 
personally-owned retirement accounts.
  Our legislation would do that. It would refund 2% of the current 
payroll tax back to individual Americans, to be used to directly 
finance some of their future Social Security benefits. We will move 
that portion of the benefit--and of future unfunded liabilities--off of 
the federal ledger.
  We would set up these personal accounts on the model of the Thrift 
Savings Plan currently provided to federal employees. We do this 
because it is an obvious way to reduce administrative costs. We also do 
it to avoid new mandates on employers. Employers would continue to pay 
the payroll tax just as they do now, and individuals would decide in 
which fund they want 2% of the current 12.4% payroll tax to be 
invested.
  The Thrift Savings Plan is a tested, workable way of generating 
investment wealth for beneficiaries. It strikes a reasonable balance 
between providing good investment opportunities and limiting individual 
risk. Perhaps most importantly, all Americans would have the 
opportunity to save for retirement on a payroll deduction basis--not 
just those who have pension plans, or who have gone through the trouble 
of setting up IRAs. This will do a tremendous amount to provide 
investment wealth to the millions of Americans who have not thus far 
had the opportunity to share in that wealth.
  Our legislation would also permit individuals to make $2,000 in extra 
voluntary contributions--above the 2% automatically redirected for 
them--to these personal savings accounts. This means that we have 
created a vehicle through which net national savings should increase. 
The more that individuals contribute to their personal accounts--the 
more retirement income they will have--and the greater the chances that 
they will be able to retire early, just as is the case with other 
retirement saving.
  This proposal is the most comprehensive one developed to date. It has 
been scored by the Social Security actuaries as achieving solvency 
through the next century. Perhaps even more importantly, it eliminates 
the enormous financing gap under current law. If we enact this 
legislation, we will remove the need for taxpayers to pony up hundreds 
of billions of dollars, above payroll taxes, in order to pay current 
benefits. Each year, the cash flow for the system will be smooth and 
manageable, and there will be a much closer balance between payroll tax 
revenue and the benefits that must be paid from it.
  Moreover, we have compared the results of our plan with a plan that 
would simply balance the current system within the existing 12.4% tax 
rate. In general, beneficiaries will receive much more income from our 
plan than they would from a plan that simply balanced the old system 
without personal accounts.

[[Page S8246]]

  We have also compared the benefits that our plan would provide to 
beneficiaries relative to current law, presuming that current benefits 
were made whole with tax increases. A 2.2% payroll tax hike to make the 
current system actuarially sound was compared with the income that 
individuals would receive if they made 2.2% voluntary contributions to 
our personal accounts. Virtually across the board, individuals would do 
much, much better under our plan.
  These are among the reasons why a personal account system is so vital 
for Social Security reform. Not only will they remove some of the 
unfunded liabilities of the federal government, but they will provide 
greater income to individual beneficiaries.
  We have also carefully thought through the relationship between 
personal account income and income through the traditional Social 
Security system. I would like to comment about some of what our 
legislation would accomplish in this regard.
  Personal accounts, by their nature, are not progressive. There is a 
direct relationship between money put in and benefits received. It is 
not redistributed from wealthy beneficiaries to needier ones.
  Accordingly, if we move towards a system that includes personal 
accounts, benefits on the traditional side must be made more 
progressive if we are ultimately to have a system that is just as 
progressive, as a whole, as is our current one. We have done this with 
our plan.
  Our plan includes a new ``minimum benefit'' poverty protection that 
would strengthen the safety net for low-income beneficiaries. If an 
individual works for a full 40 years, we would guarantee that they will 
not retire in poverty. An individual becomes eligible for some of the 
protection after 20 years of work, and receives increased protection 
for every quarter of work after that.
  Thus, for low-income beneficiaries, our plan would provide additional 
income security, even without the personal accounts. The personal 
account income would be a pure bonus for them. Even if they invest 
badly, their basic protections will be secure--not only secure, but 
strengthened.
  In the short term, because of these protections, the Social Security 
system would become more progressive than it is now. Ultimately, when 
the personal accounts have built up to be much larger, in the year 2050 
or 2060, the progressivity of the system would be essentially what is 
now--the main difference being that individuals would have much more 
income.
  We also did much to correct the flawed incentives of the current 
system. We eliminate the earnings test above the normal retirement 
age--a disincentive for continued work.
  We would also increase the delayed retirement credit, and restore the 
proper relationship between normal retirement and early retirement 
benefits. Under current law, an individual has little incentive to wait 
until normal retirement age, because the extra payroll taxes he pays 
during those years will never fully be received back in benefits. We 
would change this, so that for each year an individual works, benefits 
would increase more sharply, and work would be rewarded.
  We also would credit an individual for every year of earnings in the 
benefit formula. Right now, the Social Security system only calculates 
a benefit based on the average of the highest 35 years of earnings. 
Many reform proposals would increase this number of years, effectively 
reducing benefits. Our proposal also recognizes the necessity of 
increasing the number of computation years in the denominator of this 
formula--but on the other hand, we would credit an individual in the 
numerator for every year of earnings, no matter how small.
  I am certain that my colleagues have received letters from senior 
citizens who say, ``I am working part-time at the age of 64, but it is 
not among my highest years of lifetime earnings. I won't get any credit 
for this in my Social Security benefits. Why not?'' We believe that we 
should reward all work, and this proposal would. We even would have the 
minimum benefit guarantee also depend on the total number of years 
worked. If we enact this proposal, rewards for continued work would be 
greatly strengthened, and our country will benefit as a result.
  At this point, I feel compelled to point out that there is no ``free 
lunch'' in Social Security reform. It is essential that we enact 
personal accounts, but we must enact them in the right way.
  Our proposal would explicitly replace unfunded benefits with funded 
benefits. We move part of the current payroll tax into personal 
accounts, to fund future benefits. This only makes policy sense if we 
use such a change to reduce federal liabilities. If we set up personal 
accounts--but leave all of the old, traditional liabilities in place--
we have not achieved anything. Indeed, we could make the financing 
problem worse.
  So we gradually replace unfunded benefits with funded ones. Every 
responsible proposal to move towards pre-funded benefits will be 
vulnerable to the attack that it is ``cutting'' benefits, even though 
in sum, total benefits would be higher than under a ``traditional 
fix.'' It is imperative that Congress and the public not buy into such 
misrepresentations as we undertake Social Security reform. If we leave 
in place all of the unfunded liabilities, and all of the old unfunded 
benefit promises, then we will leave in place all of the projected tax 
increases as well.
  For example. Our proposal would, in order to prevent the traditional 
system from posing an ever-increasing burden on taxpayers, gradually 
raise the age of eligibility for full benefits to 70 in the year 2037 
(for individuals turning 62 in the year 2029.) No one over the age of 
31 would be affected by the full phase-in of this change.
  At the same time, it must be noted--we do not set an age for access 
to the personal retirement accounts. Our proposal would allow people to 
retire on these accounts once they are capable of providing a poverty-
level annual benefit--even if this earlier than early retirement age. 
This is an incentive for individuals to put more money into these 
accounts, and it provides them with flexibility on their age of 
retirement that they do not have under current law.
  We would also require additional reforms to the Consumer Price Index, 
and adjust the bend points in the Social Security benefit formula in a 
progressive manner, to gradually phase down the liabilities on the 
traditional side as we move those benefits over into funded accounts.
  I would repeat: Personal accounts are an indispensable component of a 
Social Security reform program that delivers more retirement income 
than merely balancing an unreformed system can possibly provide. But 
they will not solve our long-term financing problems unless we use them 
to phase down the unfunded liabilities of the old system. This means 
directly addressing the growth of the unfunded benefits we are 
promising to pay out, at the same time that we are replacing them with 
funded benefits.
  As a result, we believe our plan is the most fiscally responsible 
proposal yet devised. The net liabilities upon the federal government 
in any year during the baby boom retirement period--whether you pick 
2020, 2025, 2030, or beyond--would be significantly less than under 
almost any other proposal. We have avoided any and all tax increases--
while at the same time avoided unseen financing costs above and beyond 
the explicit tax rates.
  We have also produced a proposal that will give beneficiaries the 
opportunity to generate more retirement income through self-directed 
investments, provide a Social Security system that the economy can 
sustain, and at the same time enhance protections against the risk of 
poverty.
  I want to thank my co-sponsors--especially Senator John Breaux, 
Congressman Kolbe, and Congressman Stenholm--and their staffs, who have 
worked so closely with me and with my staff throughout a long and 
difficult process.
  I also want to thank all others who are constructively participating 
in the Social Security reform debate. We have made it this far without 
turning this critical issue into a partisan shooting match. I am 
pleased that the President has remained open to various proposals for 
reform, and we have been reaching out to him to explain our ideas. I am 
also appreciative that Senators Moynihan and Kerrey have also produced

[[Page S8247]]

an actuarially sound proposal, and that discussions of the differences 
between our proposals have been made on a constructive basis. I would 
extend a similar appreciation for a number of other Senators who are 
exploring this issue seriously--everyone from Congressmen Mark Sanford 
and Nick Smith, to Senators Roth, Santorum and Phil Gramm in our own 
chamber.
 Mr. THOMPSON. Mr. President, I am delighted to join my 
colleagues today as an original cosponsor of an exciting new proposal 
to reform Social Security.
  We all know that the Social Security program gets in serious 
financial trouble when the Baby Boomers start retiring early in the 
next century. The Social Security actuaries tell us that, just 15 years 
from now, in 2013, Social Security will begin paying out more in 
benefits than it receives in taxes and will have to begin redeeming the 
treasury bonds issued to the Trust Funds. By 2032, the Trust Funds will 
be exhausted, and the program will be running annual cash deficits of 
hundreds of billions of dollars.
  As more and more people become aware of these financial realities, 
Social Security has quickly ceased to be the untouchable third rail of 
politics. In my view, it should soon become the brass ring of politics. 
Entitlement reform is one of the greatest challenges our nation faces, 
and we should all be reaching for the solution that will enable Social 
Security to provide for our grandchildren like it did for our 
grandparents.
  Fortunately, right now we have a tremendous window of opportunity for 
real reform. Our economy is strong; the federal budget is balanced for 
the first time in 30 years; and the Congressional Budget Office is 
actually projecting budget surpluses each year for the next decade. 
Just as important, the 76 million Baby Boomers are still in the 
workforce paying taxes into the Social Security system. If we wait 
until this enormous group stops paying taxes and instead begins drawing 
benefits, the fixes will have to be much more severe.
  Over the past 15 months, Senators Judd Gregg and John Breaux, along 
with Congressmen Jim Kolbe and Charles Stenholm, have served as 
congressional co-chairmen for the National Commission on Retirement 
Policy, sponsored by the Center for Strategic and International 
Studies. This 24-member group of politicians, businessmen, and policy 
experts developed and unanimously approved a broad proposal for 
reforming Social Security. The Senators and Congressmen then crafted 
bipartisan legislation based on the commission's recommendations.
  The outline of the Gregg-Breaux plan is simple. It would reduce the 
Social Security payroll tax by 2 percentage points and divert the money 
into a mandatory savings account for every worker under age 55. The 
accounts would supplement--not replace--benefits guaranteed through the 
traditional system. Workers could pick from a limited number of 
investment funds dealing in stocks, government bonds, or a combination 
of the two, much like the Thrift Savings Plan available to members of 
Congress and federal employees. The benefits of current retirees and 
workers age 55 or older would not be affected by the private accounts, 
and benefits to survivors of deceased workers and the disabled would 
also be protected.
  Meanwhile, Gregg-Breaux would make changes to the remaining pay-as-
you-go system to bring it into actuarial balance. It would accelerate 
the scheduled increase in the retirement age, raising the age for full 
benefits to 70 and the age for early retirement benefits to 65 by 2029. 
It would reduce the Consumer Price Index by half a percentage point so 
that it more accurately reflects the rate of inflation, and it would 
scale back benefits to wealthier retirees, who are likely to fare 
better with their individual accounts. Unlike several of the proposals 
that are on the table, however, the Gregg-Breaux plan does not raise 
taxes, period. In fact, the payroll tax is reduced from 12.4 to 10.4 
percent and never rises above 10.4 percent again.
  Some groups continue to insist that only minor adjustments are needed 
to put Social Security back on sound financial footing. What they often 
won't tell you is that all of these adjustments would either raise 
taxes or cut benefits. For me, it's clear that ``reforming'' Social 
Security in this way will no longer suffice. These kinds of traditional 
reforms were last used by the 1983 Greenspan Commission to ``fix'' 
Social Security for 75 years. Today, we know the program will be in 
trouble again in 2013, when tax revenues are no longer sufficient to 
pay promised benefits.
  Instead of taxing Americans at ever-higher rates while scaling back 
their retirement benefits, our goal should be to enable all workers to 
accumulate a level of wealth that will allow them to retire with a 
basic level of economic security. That's why private accounts are a 
central part of the plan I support.
  Private accounts would give working-class Americans the same access 
to the power of compound interest that the rich enjoy today. This 
notion terrifies those who want to keep workers as dependent on 
government as possible, but more and more people acknowledge that 
private accounts are the best way to simultaneously solve the two 
crises facing Social Security--the impending insolvency of the program 
due to enormous demographic shifts, and the lower and lower rates of 
return for each new generation of workers. First, private accounts 
would allow younger workers to take advantage of the higher returns 
available to private investment. Second, because these workers would be 
giving up some of their future claims on traditional Social Security 
benefits, the unfunded liability of the program would be reduced.
  As the American people learn more about the issue of Social Security 
reform, public opinion on the issue of private accounts has clearly 
shifted. Depending on how the question is phrased, between 60 and 80 
percent of Americans now say they favor letting workers invest some 
portion of their Social Security tax payments. Most of the current 
reform plans have an element of private investment, and I am pleased 
that several of our Democratic colleagues in the Senate have openly 
endorsed them.
  In my view, reforming Social Security is the most significant 
political issue on the horizon for the foreseeable future, and I am 
encouraged that the American people and elected officials on both sides 
of the aisle recognize its importance to our nation's continued 
prosperity. History has shown us that an issue of this magnitude can 
only be addressed successfully through a bipartisan process. The Gregg-
Breaux plan is a thoughtful approach to reform, and I expect it to 
wield considerable influence in shaping the important debate that lies 
ahead.
 Mr. COATS. Mr. President, I rise today as a cosponsor of the 
sweeping Social Security Legislation introduced by my colleagues--
Senators Gregg and Breaux. The ``21st Century Retirement Security Plan 
of 1998'' is designed to strengthen Social Security now, encourage 
personal savings, and expand the availability of private pension plans.
  Senators Gregg and Breaux recently co-chaired the National Commission 
on Retirement Policy. This bipartisan commission of lawmakers, 
economists, pension experts, and businessmen released a report calling 
for legislation including, among other things, personal savings 
accounts and a gradual increase in the retirement age. The ``21st 
Century Retirement Plan'' implements both these provisions and aims to 
serve a two-fold purpose: It strengthens the Social Security system--
ensuring payment to all of the hard-working Americans that have paid 
into it. And it expands opportunities for private retirement savings--
which will provide Americans with more options to save and invest in 
their future.
  As we approach the dawn of the 21st century, it is common knowledge 
that the aging baby boom will create huge financial problems for future 
generations. Without changes, the Social Security trust funds will be 
unable to pay full benefits beginning around the year 2030. Therefore, 
a thirty-eight year old individual, making an average wage, will have 
to live until the age of 91 to get back what he paid into the system. 
This is not the time to propose patchwork solutions to this problem, 
but rather to seize this unique opportunity to restructure the entire 
system. I believe that this legislation is a logical first step toward 
achieving that goal.
  President Clinton has also jumped on the save Social Security 
bandwagon,

[[Page S8248]]

although his plan is to sit back and wait until we have three or four 
``national town meetings'' to discuss the ramifications of changing the 
system. Coincidentally, those meetings conclude at the end of this 
year--which just happens to be an election year. This epitomizes the 
lack of courage of the part of most of our elected officials.
  This legislation will save the Social Security system through the 
next century without raising taxes. In fact, under this plan, taxpayers 
would be able to invest 2 percent of their current payroll tax in 
private savings accounts modeled after the Government's thrift savings 
plan. This change would not affect current retirees, but would rather 
assist current tax-paying Americans preparing for their retirement. As 
a tax-paying American, I trust myself to manage my money much more than 
I trust the Federal Government to provide for my future.
  This allocation of part of the payroll tax would be offset by our 
current budget surplus and a gradual rise of the retirement age from 67 
to 70 by 2029. Further, these accounts would provide a higher rate of 
return for recipients. This would, as provided by the bill, lower 
guaranteed Social Security payments and ease the burden on the system.
  This plan improves retirement security and protects future 
generations by strengthening the safety-net aspect of the Social 
Security system and providing Americans more options for savings and 
investment. The ``21st Century Retirement Security Plan of 1998'' 
contains the courage and common sense necessary to save our children 
and our children's children from the economic strife that is bound to 
arise if we do not address this impending problem.
                                 ______
                                 
      By Mr. LEAHY:
  S. 2314. A bill to clarify that prosecutors and other public 
officials acting in the performance of their official duties may enter 
into cooperation agreements and make other commitments, assurances, and 
promises, as provided by law in consideration of truthful testimony; to 
the Committee on the Judiciary.


     prosecutors' cooperation agreements clarification legislation

  Mr. LEAHY. Mr. President, earlier this month, a three-judge panel of 
the Tenth Circuit decided United States v. Singleton, in which it found 
that the prosecutor had violated the federal gratuity statute and a 
state ethics rule by entering a plea agreement with a cooperating 
defendant that made certain promises in exchange for the cooperator's 
truthful testimony at trial. The promises in question were the sort of 
plain vanilla promises that appear in virtually every cooperation 
agreement, and are the lifeblood of bringing successful prosecutions.
  As a former prosecutor, I found this decision bizarre and dangerous. 
In effect, it makes it illegal--a federal felony--for prosecutors to 
offer leniency in return for testimony on the theory that leniency is a 
form of bribery. Defense attorneys across the country have already 
begun to jump on the Singleton bandwagon. In my state, Vermont, the 
decision has already triggered new motions in a major drug smuggling 
case involving a billion dollars worth of hashish. The defendant, 
Martin Scott, is scheduled to go to trial in September, and the 
government's evidence includes testimony by cooperating codefendants. 
Scott has now moved to exclude this testimony on the ground that it was 
obtained unlawfully in return for government promises of leniency, 
citing Singleton.
  If this controversial decision stands, prosecutors would be exposed 
to the threat of felony liability and disciplinary action just for 
doing their jobs. In addition, this decision could result in a tidal 
wave of reversals and suppression rulings in cases involving cooperator 
testimony.
  I was relieved to see that the Tenth Circuit acted swiftly to vacate 
the panel decision and set the case down for en banc rehearing in 
November, and I am confident that the ruling will eventually be thrown 
out--but not before the issue has been raised and relitigated at every 
turn in every district and circuit court in the land. At a minimum, 
this will delay trials, squander scarce judicial resources, and 
generally waste everyone's time.
  We need to insure that prosecutors have the tools they need to do 
their jobs effectively, and being able to enter into cooperation 
agreements is critical. That's why I am introducing legislation today 
to make crystal clear that prosecutors and other public officials 
acting in the performance of their official duties may enter 
cooperation agreements and make other such commitments, assurances and 
promises in return for truthful testimony.
  I look forward to working with my colleagues on this matter, and ask 
unanimous consent that the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2314

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

     SECTION 1. CLARIFICATION OF PROSECU- TORIAL AUTHORITY.

       Section 201 of title 18, United States Code, is amended--
       (1) in subsection (c)--
       (A) by redesignating paragraphs (2) and (3) as paragraphs 
     (3) and (4), respectively;
       (B) by striking ``Whoever'' and all that follows through 
     ``otherwise than'' and inserting ``Whoever, otherwise than'';
       (C) by redesignating subparagraphs (A) and (B) as 
     paragraphs (1) and (2), respectively, and indenting 
     appropriately; and
       (D) in paragraph (1), as so designated, by striking ``or'' 
     at the end; and
       (2) in subsection (d), by striking ``paragraphs (2) and 
     (3)'' and inserting ``paragraphs (3) and (4)''.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself, Mr. D'Amato, and Mr. Ford):
  S. 2315. A bill to amend the Public Health Service Act, Employee 
Retirement Income Security Act of 1974, and titles XVIII and XIX of the 
Social Security Act to require that group and individual health 
insurance coverage and group health plans and managed care plans under 
the medicare and medicaid programs provide coverage for hospital 
lengths of stay as determined by the attending health care provider in 
consultation with the patient; to the Committee on Labor and Human 
Resources.


                  hospital length of stay act of 1998

  Mr. FEINSTEIN. Mr. President, today Senator D'Amato, Senator Ford and 
I are introducing a bill to require health insurance plans to cover the 
length of hospital stay for any procedure or illness as determined by 
the attending physician, in consultation with the patient, to be 
medically appropriate.

  This bill will return medical decision-making to medical 
professionals because it is time to stop insurance plans' interference 
into this important area of physician decision-making.
  It is endorsed by the American Medical Association, the American 
College of Surgeons, the American College of Obstetricians and 
Gynecologists, the American Academy of Neurology and the American 
Psychological Association. Only a physician, taking care of the patient 
who understands the patient's history, medical condition and needs, can 
make a decision on how much hospital care a person needs. Physicians 
are trained to evaluate all the unique needs and problems of each 
individual patient. Every patient is different and the course of 
illness has great variation.
  Lengths of stay should not be determined by insurance company clerks, 
actuaries or non-medical personnel. It is the attending physician, not 
a physician or other representative of an insurance company, that 
should decide when to admit and discharge someone.
  Professional physician organizations develop practice guidelines that 
guide them in determining medical necessity. These are intended as 
guidance and are medical judgments made by qualified medical people. 
Physicians know what medical necessity and generally accepted medical 
practice are.
  We are introducing this bill because we have had a virtual parade of 
doctors come to us and in essence say, ``We are fed up. We spend too 
much of our time trying to justify our decisions on medical necessity 
to insurance companies. Insurance company rules have supplanted doctor 
decision making.''
  Donna Damico, a nurse in a Maryland psychiatric unit of a hospital, 
told National Public Radio on October 1, 1997:

       I spend my days watching the care on my unit be directed by 
     faceless people from insurance companies on the other end of 
     the phone. My hospital employs a full-time nurse whose entire 
     job is to talk to insurance reviewers. . . . The reviewer's 
     background can

[[Page S8249]]

     range anywhere from high school graduate to nurse, social 
     worker or even actual physicians.

  A number of examples have come to my attention:
  In 1996, we addressed the problem of ``drive-through'' baby 
deliveries, insurance plans covering minimal hospital stays for 
newborns and their mothers because of examples like this: One 
California new mother was readmitted after a Caesarean section because 
of severe anemia from excessive blood loss. She didn't know how much 
blood loss was normal after a delivery. Two California women were 
readmitted after vaginal deliveries with endometritis, an infection of 
the uterus.
  We've had examples of ``drive-through'' mastectomies, insurance plans 
shoving women out the door to deal on their own with drainage tubes, 
pain and disfigurement. S. 249, which I introduced with Senator D'Amato 
last year, addresses that abuse and we are trying to get it passed.
  A California pediatrician told us of a child with very bad asthma. 
The insurance plan authorized 3 days in the hospital; the doctor wanted 
4-5 days. He told us about a baby with infant botulism (poisoning), a 
baby with a toxin that had spread from the intestine to the nervous 
system so that the child could not breathe. The doctor thought a 10-14 
day hospital stay was medically necessary for the baby; the insurance 
plan insisted on one week.
  A California neurologist told us about a seven-year-old girl with an 
ear infection who went to the doctor feverish. When her illness 
developed into pneumonia, she was admitted to the hospital. After two 
days she was sent home, but she then returned to the hospital three 
times because her insurance plan only covered a certain number of days. 
The third time she returned she had meningitis which can be life 
threatening. The doctor said that if this girl had stayed in the 
hospital the first time for five to seven days, the antibiotics would 
have killed the infection and the meningitis would never have 
developed.
  A 27-year-old man from central California had a heart transplant and 
was forced out of the hospital after 4 days because his HMO would not 
pay for more days. He died.
  Nurses in St. Luke's Hospital, San Francisco, say that women are 
being sent home after only two nights after a hysterectomy and two 
nights for a Caesarean section delivery, both of which are major 
abdominal surgeries, even though physicians think the women are not 
ready to go home..
  Just last week Lisa Breakey, a San Jose speech pathologist, came to 
my office and told us that she is providing home healthcare for stroke 
patients she used to see in the hospital. She sees patients in their 
homes who have G tubes in their stomachs for feeding and trach tubes in 
their throats for breathing. The trach tubes have an inflated balloon 
or cuff which a family members must deflate and inflate by using a 
needle. Family members are supposed to suction the patient's mouth and 
throat before they deflate the cuff. Families, she stressed, are 
providing intensive care, for which they are unprepared and untrained. 
Bedrooms have become hospital rooms.
  Another California physician told us about a patient who needed total 
hip replacement because her hip had failed. The doctor believed a 
seven-day stay was warranted; the plan authorized five.
  Rep. Greg Ganske, a physician serving in the House, told the story of 
a six-year-old child who nearly drowned. The child was put on a 
ventilator and it appeared that he would not live. The hospital got a 
call from the insurance company, asking if the doctor had considered 
sending the boy home because home ventilation is cheaper.
  These cases can be summarized in the comments of a Chico, 
California, maternity ward nurse: ``People's treatment depends on the 
type of insurance they have rather than what's best for them.''

  As these cases illustrate, premature discharges can increase 
readmissions and medical complications. During the ``drive-through 
delivery'' debate, we heard about babies who were jaundiced and 
dehydrated and had to come back to the hospital.
  Similarly, as reported in American Medical News on March 23, 1998, 
according to Dr. David Phillips, ``a shift toward outpatient treatment 
actually has come at quite a high price . . . an increased loss of 
lives.'' This University of California study found that medication 
errors are 3 times higher among outpatients than inpatients; that 
medications side effects provides limited oversight by medical 
personnel and that the patient-physician relationships is compromised.
  Ms. Damico said, ``Patients return to us in acute states because 
their insurance will no longer pay the same amount for their outpatient 
treatment . . . [They] deteriorate to the point of suicidal thoughts or 
attempts and need to return to the hospital.'' She cited the example of 
a suicidal woman whose plan denied a hospital admission requested by 
her physician. After the doctor told her of the denial, she took twenty 
50-milligram tabs of Benadryl, was then admitted, and the plan then had 
to pay for hospital care, an ambulance and emergency room fees.
  So not only do premature discharges compromise health, they 
ultimately cost the insurer more.
  Physicians say they battle daily with insurance companies to give 
patients the hospital care they need and to justify their decisions on 
medical necessity.
  An American Medical Association review of a managed care contract 
(Aetna US Healthcare) found that the contract gives ``the company the 
unilateral authority to change material terms of the contract and to 
make determinations of medical necessity . . . without regard to 
physician determinations or scientific or clinical protocols . . . .,'' 
according to the January 19, 1998 American Medical News.
  A study by the American College of Surgeons found that guidelines 
published by Milliman and Robertson and used by many insurers represent 
a minimum length of stay, compared with surgeons' estimates.
  A study by the American Academy of Neurology found that the Milliman 
and Robertson guidelines on length of stay are ``extraordinarily short 
in comparison to a large National Library of Medicine database . .. And 
that [the guidelines] do not relate to anything resembling the average 
hospital patient or attending physician . . . .'' The neurologists 
found that these guidelines were ``statistically developed,'' not 
scientifically sound or clinically relevant.
  A study in the April 1997 Bulletin of the American College of 
Surgeons found that surgeons stated that the appropriate length of stay 
for an appendectomy is zero to five days, while insurance industry 
guidelines set a specific coverage limit of one day.
  According to 134 interviews reported in the March 15, 1998 Washington 
Post, 7 in 10 physicians said, in dealing with managed care plans, they 
have exaggerated the severity of an patient's condition to ``prevent 
him or her from being sent home from a hospital prematurely.'' Dr. 
David Schriger, at UCLA Medical Center in Los Angeles, said that he 
routinely has patients, such as a frail, elderly woman with the flu, 
who is not in imminent danger, but could encounter serious problems if 
she is sent home during the night. He told the Post, ``At this point I 
have to figure out a way to put her in the hospital. . . And typically, 
I'll come up with a reason acceptable to the insurer,'' and orders a 
blood test and chest x-ray, to justify admission.
  The Post article also cited Kaiser Permanente's Texas division which 
``warned doctors in urgent care centers not to tell patients they 
required hospitalization, as one Kaiser administrator recalled. ``We 
basically said [to] the UCC doctors, `If you value your job, you won't 
say anything about hospitalization. All you'll say is, I think you need 
further evaluation . . . .'''
  Ms. Damico, the psychiatric nurse interviewed on NPR said, ``Our 
utilization review nurse gives all of us, including the doctors, good 
advice on how to chart so that our patients' care will be covered . . . 
We all conspire quietly to make certain the charts look and sound bad 
enough.''
  The American College of Surgeons wrote: ``We believe very strongly 
that any health care system or plan that removes the surgeon and the 
patient from the medical decision-making process only undermines the 
quality of that patient's care and his or her health and well being . . 
. . specific, single numbers [of days] cannot and should not be used to 
represent a

[[Page S8250]]

length of stay for a given procedure.'' (April 24, 1997) ACS on March 5 
wrote, ``We believe very strongly that any health care system or plan 
that removes the surgeon and the patient from the medical decision 
making process only undermines the quality of that patient's care and 
his or her health and well being.''
  The American Medical Association wrote on May 20, 1998, ``We are 
gratified that this bill would promote the fundamental concept, which 
the AMA has always endorsed that medical decisions should be made by 
patients and their physicians, rather than by insurers or legislators . 
. . We appreciate your initiative and ongoing efforts to protect 
patients by ensuring that physicians may identify medically appropriate 
lengths of stay, unfettered by third party payers.''
  The American Psychological Association, on March 4, 1998 wrote me, 
``We are pleased to support this legislation, which will require all 
health plans to follow the best judgment of the patient and attending 
provider when determining length of stay for inpatient treatment.''
  Americans' faith in their medical system has plummeted as almost 
daily we hear of more horror stories of care denied and HMO hassles. 
Arbitrary insurance company rules cannot address the subtleties of 
medical care. A March 1998 U.S. News and Kaiser Family Foundation 
survey found that three in four Americans are worried about their 
health care coverage and half say they are worried that doctors are 
basing treatment decisions strictly on what insurance plans will pay 
for.
  The bill we introduce today begins to address some of these problems. 
I am also a cosponsor of the Patient Bills of Rights (S. 1890) and the 
Patient Access to Responsible Care Act (S. 644), bills proposing 
comprehensive reforms.
  I hope these initiatives will send a strong message to the health 
insurance industry and return medical decision-making to those medical 
professionals trained to make those decisions.
  Mr. President, I ask unanimous consent that a summary of the bill and 
letters in support be printed in the Record.
  There being no objection, the items were ordered to be printed in the 
Record, as follows:

           Summary of the Hospital Length of Stay Act of 1998

       Requires plans to cover hospital lengths of stay for all 
     illnesses and conditions as determined by the physician, in 
     consultation with the patient, to be medically appropriate.
       Prohibits plans from requiring providers (physicians) to 
     obtain a plan's prior authorization for a hospital length of 
     stay.
       Prohibits plans from denying eligibility or renewal for the 
     purpose of avoiding these requirements.
       Prohibits plans from penalizing or otherwise reducing or 
     limiting reimbursement of the attending physician because the 
     physician provided care in accordance with the requirements 
     of the bill.
       Prohibits plans from providing monetary or other incentives 
     to induce a physician to provide care inconsistent with these 
     requirements.
       Includes language clarifying that--nothing in the bill 
     requires individuals to stay in the hospital for a fixed 
     period of time for any procedure; plans may require 
     copayments but copayments for a hospital stay determined by 
     the physician cannot exceed copayments for any preceding 
     portion of the stay.
       Does not pre-empt state laws that provide greater 
     protection.
       Applies to private insurance plans, Medicare, Medicaid and 
     Medigap.
                                  ____



                                 American Medical Association,

                                                     May 20, 1998.
     Hon. Dianne Feinstein,
     U.S. Senate, Washington, DC.
       Dear Senator Feinstein: On behalf of the American Medical 
     Association (AMA), we would like to express our support for 
     your draft legislation the ``Hospital Length of Stay Act of 
     1998''. We hope you introduce this legislation that would 
     require coverage of an inpatient's hospital stay to the 
     extent determined medically appropriate by the attending 
     physician in consultation with the patient.
       We are gratified that this bill would promote the 
     fundamental concept, which the AMA has always endorsed, that 
     medical decisions should be made by patients and their 
     physicians rather than by insurers or legislators. As you may 
     know, on several occasions the AMA has supported legislative 
     initiatives that would require coverage on a diagnosis by 
     diagnosis basis for medically appropriate minimum lengths of 
     stay. While those bills have moved us in the right direction, 
     this legislation would take us where we want to be.
       We appreciate your initiative and ongoing efforts to 
     protect patients by ensuring that physicians may identify 
     medically appropriate lengths of stay, unfettered by third 
     party payors. We offer you our assistance in helping to enact 
     this legislation.
           Sincerely,
                                                   Lynn E. Jensen,
     Interim Executive Vice President.
                                  ____



                                 American College of Surgeons,

                                                    July 15, 1998.

           Statement: Postoperative Lengths of Hospital Stay

     Edward R. Laws, Jr., MD, FACS,
     Member of the Board of Regents,
     American College of Surgeons.
       On behalf of the American College of Surgeons, I would like 
     to commend Senator Feinstein for her continuing concern for 
     high-quality patient care. In particular, I want to praise 
     her and her cosponsor, Senator D'Amato, for their most recent 
     effort to protect patients by introducing legislation to ban 
     the practice of imposing arbitrary coverage limits on 
     hospital length of stay--a practice that is currently being 
     used by some third-party payers.
       The issue of ``drive-through'' maternity care, followed 
     more recently by the issue of outpatient mastectomy 
     operations, clearly illustrate the patient care problems that 
     are created when third-party payers set a specific number of 
     days as the appropriate length of stay for a given procedure. 
     For some maternity and breast cancer patients, the outpatient 
     setting may well be medically appropriate and personally 
     preferred, but for many others this certainly is not the 
     case. As many state and federal legislators have come to 
     realize, each of these patients has her own set of unique 
     medical problems and related issues, and it is inappropriate 
     to expect them to conform to cost containment goals that were 
     designed with the ``optimum'' patient in mind.
       What few people seem to recognize, however, is that these 
     problems are not limited to new mothers and breast cancer 
     patients. Indeed, thousands of patients whose illnesses do 
     not occupy a high profile on the nation's health care agenda 
     face the same dilemma. A variety of factors--such coexisting 
     illnesses, the optimum treatment method selected, 
     complications arising during the operation, and differences 
     in response to the treatment--can vary significantly among 
     individual patients, making it impossible to accurately or 
     precisely predict the appropriate length of stay for a given 
     procedure. Such factors may also determine the appropriate 
     site for performing a particular operation or procedure. 
     Despite these important considerations, efforts to restrain 
     growth in spending for health care services, although a 
     legitimate concern, are coming into conflict with individual 
     patient needs.
       We need to view the issue of length-of-stay coverage limits 
     from a broader perspective than we have in the past. 
     Congress, state legislatures, and the managed care industry 
     have acted on a procedure-specific basis in response to 
     concerns raised about coverage limits placed on maternity 
     care and mastectomy operations. But, it is time to take the 
     next step.
       Senator Feinstein's legislation, the ``Hospital Length of 
     Stay Act'' would take this step by proposing to protect 
     medical decisionmaking on behalf of all patients. The 
     legislation specifies that decisions about the medical 
     appropriateness of a hospital length of stay should be 
     determined by the attending physician, in consultation with 
     the patient. Further, the legislation would prohibit health 
     plans from penalizing patients, physicians, or hospitals for 
     following through on these medical decisions.
       The American College of Surgeons believes strongly that, 
     for all surgical patients, the responsibility for making the 
     decisions to operate, what type of operation the patient 
     should have, and how long the patient stays in the hospital 
     following the operation must rest with the surgeon and the 
     patient. The College has always encouraged its members to 
     keep their patients' length of stay as short as possible. 
     However, we do believe very strongly that any health care 
     system or plan that removes the surgeon and the patient from 
     the medical decision-making process only undermines the 
     quality of that patient's care and his or her health and 
     well-being.
       Once again, we congratulate Senator Feinstein and Senator 
     D'Amato for their courageous efforts on behalf of quality 
     patient care. The College looks forward to working closely 
     with them and their colleagues in the House of 
     Representatives, including Congressman Tom Coburn and 
     Congresswoman Rosa DeLauro, to ensure swift passage of this 
     important legislation.
       The American College of Surgeons is a scientific and 
     educational organization of surgeons that was founded in 1913 
     to raise the standards of surgical practice and to improve 
     the care of the surgical patient. The College is dedicated to 
     the ethical and competent practice of surgery. Its 
     achievements have significantly influenced the course of 
     scientific surgery in America, and have established it as an 
     important advocate for all surgical patients. The College has 
     more than 62,000 members and is the largest organization of 
     surgeons in the world.
                                  ____

  



                                 American College of Surgeons,

                                                    March 5, 1998.
     Hon. Dianne Feinstein,
     U.S. Senate, Washington, DC.
       Dear Senator Feinstein: On behalf of the 62,000 Fellows of 
     the American College of

[[Page S8251]]

     Surgeons, I want to commend you for introducing the 
     ``Hospital Length of Stay Act of 1998.'' Your legislation 
     will contribute significantly to the effort to educate 
     Congress and the public about the practice of imposing 
     arbitrary coverage limits on hospital length of stay that do 
     not take into account an individual patient's unique health 
     care needs.
       For all surgical patients, the responsibility for making 
     the decision to operate, the type of operation, and how long 
     the patient stays in the hospital following the operation 
     must rest with the surgeon and the patient. The College has 
     always encouraged its members to keep their patients' length 
     of stay as short as possible. However, we believe very 
     strongly that any health care system or plan that removes the 
     surgeon and the patient from the medical decisionmaking 
     process only undermines the quality of that patient's care 
     and his or health and well being.
       Once again, we appreciate your continuing concern, and 
     congratulate you on introducing legislation that acknowledges 
     the importance of preserving the surgeon-patient relationship 
     and ensuring that they are able to exercise their 
     responsibility for making medical treatment decisions.
           Sincerely,
                                                    Paul A. Ebert,
     Director.
                                  ____



                    American Academy of Neurology',

                                                   April 22, 1998.
     Hon. Dianne Feinstein,
     Attn: Glenda Booth and Ann Garcia, Washington, DC.
       Dear Senator Feinstein: The American Academy of Neurology, 
     an association of over 15,000 neurologists, has been in the 
     forefront of discussions and debate concerning the necessary 
     protections that should be afforded our patients in a health 
     care environment increasingly dominated by corporate and 
     managed care structures. We believe that it is imperative 
     that patients, who often feel powerless in today's health 
     care environment, be protected through the implementation of 
     basic health care standards including such protections as 
     appropriate health plan disclosure, adequate choice of plans 
     and providers, and appropriate grievance processes.
       Your bill, the Hospital Length of Stay Act of 1998, 
     contains many of the elements that we deem important, 
     especially its fundamental premise to protect and preserve 
     the patient and provider relationship. Physicians need to be 
     allowed to exercise their decision-making without obstruction 
     when they consult with their patients concerning the 
     appropriate treatment or care for their health care 
     condition.
       A survey by the National Coalition on Health Care found 
     that 80% of Americans believe that their quality of care is 
     often compromised to save money. Many Americans feel insecure 
     about their health care plan and question whether or not the 
     plan will take care of them when they really need it such as 
     when they become hospitalized. It is out of this demonstrated 
     national concern that the President of the United States as 
     well as several leading medical societies, such as the 
     Academy, are now calling on members of Congress to implement 
     national health care standards or more commonly known as 
     consumer ``bill of rights''.
       The Academy applauds and endorses your bill as a bill of 
     rights component and we hope that this is one of many steps 
     that will be taken by you and your colleagues in helping us 
     to be able to confidently tell our patients that their health 
     care plan will take care of them when they are sick or are in 
     need of health care.
       I have included a copy of the Academy's patient protection 
     statement that I hope you will review and consider as the 
     debate on this important issue continues throughout this 
     legislative session.
           Sincerely,
                                                 Steven P. Ringel,
     President.
                                  ____



                           American Psychological Association,

                                                    March 4, 1998.
     Senator Dianne Feinstein,
     Washington, DC.
       Dear Senator Feinstein: On behalf of the American 
     Psychological Association, I am writing to thank you for your 
     sponsorship of the Hospital Length of Stay Act of 1998. We 
     are pleased to support this legislation, which will require 
     all health plans to follow the best judgment of the patient 
     and attending provider when determining length of stay for 
     inpatient treatment.
       We appreciate your sensitivity to our concerns over the 
     reality that psychologists in many states are attending 
     providers under their state license and scope of practice. 
     Accordingly, your bill extends this quality of care 
     protection to the patients of psychologists as well as 
     ``physicians'', as did the Coburn-Strickland amendment to the 
     House Commerce Committee version of the Balanced Budget Act 
     last year.
       There is obviously enormous public interest in having 
     Congress act this year to pass enforceable federal standards 
     of consumer protection in managed care. Our members are also 
     supportive of a bill that you have cosponsored, the Patient 
     Access to Responsible Care Act (S. 644), and we are very 
     appreciative of your visible involvement in this issue. The 
     Hospital Length to Stay Act addresses another important issue 
     that should be addressed in this debate and we commend you 
     for taking it on.
           Sincerely,

                                          Marilyn S. Richmond,

                                  Assistant Executive Director for
                                             Government Relations.
                                 ______
                                 
      By Mr. McConnell (for himself and Mr. DeWine):
       S. 2316. A bill to require the Secretary of Energy to 
     submit to Congress a plan to ensure that all amounts accrued 
     on the books of the United States Enrichment Corporation for 
     the disposition of depleted uranium hexafluoride will be used 
     to treat and recycle depleted uranium hexafluoride; read the 
     first time.


           united states enrichment corporation privatization

  Mr. McCONNELL. Mr. President, I rise today to introduce a must-pass 
piece of legislation to ensure that the Department of Energy is not 
stuck with a massive unfunded mandate as a result of privatizing the 
United States Enrichment Corporation. I am pleased to be joined by 
Senator DeWine who is an original cosponsor of this legislation.
  Last month, the administration, the Department of Energy, and the 
USEC Board came to a decision on how they intend to privatize the USEC. 
This deal, which was struck in secret, is a complicated and confusing 
matter that I am only just beginning to understand. The facts, I have 
discovered, are not welcome news to the communities of Paducah, 
Kentucky, and Portsmouth, Ohio, where the two USEC gaseous diffusion 
plants are located. These facilities employ approximately 4,000 people, 
making them the largest employers in those regions.
  The most discouraging aspect of this privatization proposal is the 
impact this deal will have on jobs. The administration has tried to put 
a positive spin on things by claiming that only 600 jobs would be lost 
over the next 2 years. Unfortunately, this may be the tip of the 
iceberg, because after the first 2 years, the administration has made 
no guarantees on the number of jobs that might be lost. In fact, after 
reading the fine print of this agreement, union and community leaders 
feel that closure of one of the two plants is a very real possibility. 
This could result in the loss of nearly 2,000 jobs. Without some 
efforts to mitigate the job losses, these communities will be 
economically devastated.
  The second item of concern is that the Department of Energy--and 
taxpayers--will be stuck with an unfunded environmental liability. As 
you may know, under the terms of the USEC Privatization Act of 1996, 
the responsibility for the treatment and disposal of the uranium waste 
will be transferred from USEC to the Department of Energy. To prepare 
for this reality, USEC has collected nearly $385 million from its 
customers for the specific purpose of cleaning up their environmental 
liability. Unfortunately, the administration's proposal only provides 
$50 million of that total to be used to address this problem, while the 
remaining $335 million is due to be deposited into the General 
Treasury.

  Mr. President, there are two problems with this scenario. First, I 
fail to see the logic behind the decision to use only one-eighth of the 
money which has been collected for the purpose of addressing the 
nuclear waste at the USEC plants. Second, the administration's plan 
calls for the $50 million to be given to USEC, Inc.--the private 
corporation. Why should we, as legislators, allow the government to 
give a $50 million handout to a private corporation to clean up a 
Federal entity's mess when $385 million is already available for 
environmental clean up? What is worse, the administration's plan will 
add to the tens of thousands of canisters of depleted uranium 
hexafluoride already stored at the plants, further expanding the 
environmental problems of the plants and the cost to clean up this site 
for the Department of Energy.
  Mr. President, I am not one to look a gift horse in the mouth, but 
this deal is not good for Kentucky and is an abrogation of the Federal 
Government's responsibility to clean up this nuclear mess. We need to 
ensure that the taxpayers and the workers at these facilities get a 
better deal than what is being offered. That is why I have introduced 
this legislation to ensure that all the funds raised and earmarked for 
the clean up of USEC's environmental legacy will remain available for 
that purpsoe--and that purpose only. This bill mandates that the 
administration hold these earmarked funds until the Secretary of Energy 
submits a plan and

[[Page S8252]]

legislation to implement and operate a facility to cleanup the nuclear 
waste at Paducah and Portsmouth. Once this plan is submitted, then the 
funding can flow to clean up this environmental nightmare.
  This bill will ensure that taxpayers aren't stuck with an unfunded 
mandate and makes a commitment to the communities that this toxic 
hazard will be disposed of in a timely manner. Unlike the 
administration's plan to simply store additional uranium waste, my bill 
will create many more jobs to construct and operate this facility. The 
new facility will convert the depleted uranium from an unstable and 
toxic hexaflouride form to a stable and non-threatening oxide. During 
this process many useful commercial by-products can also be recovered 
and sold.
  Mr. President, I have here a letter from the Governors of Kentucky, 
Ohio, and Tennessee urging Secretary Pena to take immediate steps to 
convert the toxic uranium hexafluoride into a more stable, non-
threatening oxide form. The Governors urge the Secretary to seek the 
necessary funding to begin this process and they specifically 
identified the funding I have identified in my amendment. I ask 
unanimous consent that the letter signed by Governors Patton, Sunquist, 
and Voinovich be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                   April 27, 1998.
     Hon. Federico Pena,
     Secretary, Department of Energy, Washington, DC.
     Re ``Draft PEIS for Alternative Strategies for the Long-Term 
     Management and Use of Depleted Uranium Hexafluoride,'' DOE/
     EIS-0269 dated December 1997.
       Dear Secretary Pena: More than forty years ago the U.S. 
     Department of Energy began the uranium enhancement initiative 
     that created a common link between Ohio, Kentucky, and 
     Tennessee. This commonality includes the U.S. Department of 
     Energy's legacy of waste, a significant portion of which is 
     made up of depleted uranium hexafluoride. Today, our three 
     states are working together in order to recommend the 
     selection of an appropriate and lawful alternative for the 
     long-term management and use of depleted uranium 
     hexafluoride. We believe that such an alternative must 
     minimize impacts on human health and the environment, as well 
     as benefit the overall mission of our states and the U.S. 
     Department of Energy (``DOE'').
       Ohio, Kentucky, and Tennessee have the following 
     significant concerns regarding the above-referenced document:
       DOE should consider the immediate conversion of all 
     depleted uranium hexafluoride (DUF6) to the less hazardous 
     uranium oxide (U308) and provide above ground storage of the 
     U308. We do not believe that waiting for possible market 
     demands for the DUF6 is justification for delaying this 
     project. It is incumbent upon DOE to immediately begin 
     seeking funds from Congress for this conversion. We urge DOE 
     to complete conversion by the year 2018 or earlier and reduce 
     the mortgage of maintaining the cylinders.
       A long-term strategy for DUF6 must include DOE's entire 
     cylinder inventory, including heel and small cylinders. The 
     10,000+ cylinders of DUF6 generated by the United States 
     Enrichment Corporation (USEC), which will revert to DOE 
     ownership upon privatization of USEC, must also be considered 
     in any plans.
       An estimated $480 million has been accrued by USEC since 
     1993 in order to offset the cost of the future conversion of 
     DUF6 generated by USEC. DOE should work with Congress now to 
     ensure this fund is not diverted into the federal treasury 
     for an unrelated use. In addition, DOE might consider 
     partnering with the future owner of USEC in a long-term 
     strategy for managing and converting DUF6, in order to avoid 
     redundancy of efforts. Any partnering effort, however, must 
     not slow progress toward conversion.
       Natural phenomena events or accidents may not have been 
     adequately considered in the PEIS. DOE must identify the 
     ``worse-case'' cylinder conditions and explicitly use this 
     information in the hazard modeling descriptions.
       In order for states to effectively evaluate the potential 
     impact of the preferred alternative DOE must provide 
     information on the location of the sites where conversion 
     would occur and how wastes generated from this process will 
     be managed. In order to avoid the undue risk of transporting 
     deteriorating cylinders, we recommend that DOE evaluate the 
     feasibility of on-site conversion plants.
       DOE must ensure that funding for safe storage and 
     maintenance of DUF6 cylinders and storage yards is at an 
     adequate level to protect human health and the environment.
       The States welcome the opportunity to work closely with the 
     Department of Energy in addressing these complex issues and 
     moving rapidly toward an alternative that will well serve the 
     public and the environment. In addition we urge DOE to 
     carefully consider the more detailed comments being submitted 
     by each of our states environmental regulatory agencies.
           Sincerely,
     Governor Paul E. Patton,
     Governor George V. Voinovich,
     Governor Don Sundquis.

  Mr. McCONNELL. Mr. President, I also have a letter from the Oil, 
Chemical and Atomic Workers Union, which represents 2,200 hourly 
workers at the Paducah and Portsmouth uranium enrichment facilities. 
They have also advocated for the use of those funds to begin the clean 
up of this toxic material. I ask unanimous consent that this letter 
also be printed in the record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

         Oil, Chemical and Atomic Workers International, Union, 
           AFL-CIO,
                                                     Lakewood, CO,
                                                    July 14, 1998.
     Senator Mitch McConnell,
     U.S. Senate,
     Washington, DC.
       Dear Senator McConnell: On June 29, 1998 the Administration 
     announced that it will soon privatize the United States 
     Enrichment Corporation (USEC), which operates the two uranium 
     enrichment plants owned by the Department of Energy in 
     Portsmouth, Ohio and Paducah, Kentucky. Coinciding with this 
     announcement, USEC declared that:
       (1) ``to the extent commercially practicable'' it will 
     eliminate no more than 600 jobs during over the next two 
     years, consistent with an undisclosed USEC ``Strategic 
     Plan'', and
       (2) it will transfer thousands of canisters of its depleted 
     uranium hexaflouride waste to the Department of Energy who 
     will inherit the disposition responsibility for wastes that 
     were created by USEC between July 1, 1993 and the date of 
     privatization. USEC has accrued approximately $400 million on 
     its balance sheet to cover the disposition costs of this 
     waste.
       Approximately $1.2 billion is presently in a revolving fund 
     account in USEC's name at the Treasury Department--a fund 
     which was created pursuant to Section 1308 of the Energy 
     Policy Act of 1992. Of that amount, $400 million represents 
     the funds collected from utility customers for enrichment 
     services to cover the costs for disposition of these wastes. 
     The Administration has advised us that, absent legislation, 
     these funds will be swept out of this revolving fund 
     immediately after privatization.
       To date, Treasury Department officials have been unwilling 
     to secure these funds for the purpose of which they were 
     reserved; to threat the massive quantities of waste left by 
     USEC for the government to clean up. If the funds accrued on 
     USEC's pre-privatization balance sheet were transferred into 
     a dedicated fund at the Department of Energy, these extremely 
     corrosive radioactive wastes would not sit untreated and 
     approximately 240 displaced workers could be re-employed 
     preforming waste treatment activity at Paducah and 
     Portsmouth.
       We understand that you are planning legislation which will 
     secure the $400 million in USEC's account at Treasury for the 
     purpose for which it was reserved: to treat waste 
     generated by USEC. Your legislation will fence these funds 
     until the Administration submits a waste treatment plan to 
     Congress with its FY 2000 budget request. The plan will 
     include the construction of two treatment plants--one in 
     Ohio and one in Kentucky. This approach will reduce the 
     hazards associated with the transport of radioactive 
     wastes.
       In April of this year the Governors from Kentucky, Ohio and 
     Tennessee wrote to Secretary of Energy Federico Pena 
     endorsing the concept of using the funds from USEC's balance 
     sheet for the treatment and disposition of the depleted 
     uranium hexaflouride tails.
       The Oil, Chemical & Atomic Workers Union (OCAW), which 
     represents 2,200 hourly workers at the two gaseous diffusion 
     plants in Paducah and Portsmouth, applauds your efforts to 
     pass legislation which will fence these funds prior to the 
     privatization of USEC.
       As you deliberate this legislation, we urge you to ensure 
     that the Department of Energy will require the cleanup 
     contractor(s) to provide a right of first refusal to 
     displaced workers from the gaseous diffusion plants, and to 
     require the contractor(s) to minimize the social and economic 
     impacts by bridging health and pension benefits. Such an 
     arrangement is consistent with the amendment you proposed to 
     offer as part of the FY 99 Energy and Water Development 
     Appropriations Act.
       We look forward to working with you and other members to 
     ensure swift passage of this legislation in the House and 
     Senate prior to the privatization date.
           Sincerely,
                                                   Richard Miller,
                                                   Policy Analyst.

  Mr. McCONNELL. Mr. President, I have also cleared this bill with 
Chairman Murkowski of the Energy Committee and Senator Domenici, who is 
the chairman of the relevant subcommittee on the Appropriations 
Committee. Neither Senator has any objection to the immediate passage 
of this

[[Page S8253]]

legislation. Finally, I have cleared this proposal with the 
Congressional Budget Office and they have scored this bill as having 
zero budget impact.
  Mr. President, we need to ensure that the people, economies and 
environment of Western Kentucky and Southeastern Ohio are not 
sacrificed to make a quick buck off the sale of the uranium enrichment 
facilities, especially when funding is available. I urge my colleagues 
to approve this legislation and protect taxpayers from paying an 
additional cost for clean up.
  Mr. DeWINE. Mr. President, I rise in strong support of the 
legislation offered by our distinguished friend from Kentucky, Senator 
McConnell, to ensure that the Energy Department has the resources to 
address an important public health issue and is not saddled with a 
massive unfunded mandate in the wake of the privatization of the United 
States Enrichment Corporation (USEC).
  This privatization will entail the purchase of nuclear material from 
the Russians--material which it is clearly in our national security 
interest to have removed from the international market. There is 
currently a fund within USEC which deals with the ``disposition of 
depleted uranium hexafluoride''--and this fund contains an estimated 
$400 million. If no changes are made, this money will go to the U.S. 
Treasury when the Initial Public Offering occurs, possibly as soon as 
next week.
  This fund was created explicitly to handle the disposition of this 
kind of material. But if the law isn't changed, the Department of 
Energy (DOE) would have to find new funding sources in order to treat 
the material--and it may not be able to come up with the money.
  This would be a vary undesirable result. The material under 
discussion is highly toxic--and disposing of it is and should remain an 
important national security priority. That $400 million is needed to 
stabilize this material, and to process it so that parts of it can be 
recycled and other parts can be safely secured.
  This bill would provide that, ``the Secretary of Energy shall 
prepare, and the President shall include in the budget request for 
fiscal 2000, a plan and proposed legislation to ensure that all amounts 
accrued on the books of the United States Enrichment Corporation for 
the disposition of depleted uranium hexafluoride will be used to 
commence construction of, not later than January 31, 2004, and to 
operate, an onsite facility at each of the gaseous diffusion plants at 
Paducah, Kentucky, and Portsmouth, Ohio, to treat and recycle depleted 
uranium hexafluoride.''
  The bill will address this key challenge. And it will also prevent a 
major economic dislocation in two communities--Portsmouth, OH (whose 
USEC plant has 2,400 employees) and Paducah, KY (whose USEC plant has 
2,000 employees). This bill will support new decontamination and 
decommissioning jobs at these plants, which may experience limited job 
loss through the privatization.
  It is an important investment in these two communities--and in a 
sensible toxic-materials disposal policy for America. I thank Senator 
McConnell for his leadership on this legislation, and I am proud to be 
an original cosponsor of this effort.

                          ____________________