[Congressional Record Volume 144, Number 95 (Thursday, July 16, 1998)]
[Senate]
[Pages S8330-S8374]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND 
             INDEPENDENT AGENCIES APPROPRIATIONS ACT, 1999

  Mr. LOTT. I ask unanimous consent that the Senate now resume the HUD-
VA appropriations bill.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report.
  The legislative clerk read as follows:

       A bill (S. 2168) making appropriations for the Departments 
     of Veterans Affairs and Housing and Urban Development, and 
     for sundry independent agencies, commissions, corporations, 
     and offices for the fiscal year ending September 30, 1999, 
     and for other purposes.

  The Senate resumed consideration of the bill.
  Pending:

       Daschle amendment No. 3063, to amend the Public Health 
     Service Act and the Employee Retirement Income Security Act 
     of 1974 to protect consumers in managed care plans and other 
     health coverage.

  Mr. LOTT. Mr. President, I ask unanimous consent that with respect to 
the HUD-VA appropriations bill, all first-degree amendments must be 
offered and debated tonight, and if votes are ordered with respect to 
those amendments, they occur, in a stacked sequence, beginning at 9 
o'clock in the morning--I want to emphasize to our colleagues, we are 
beginning a little earlier than normal; it will be 9 o'clock; and we 
will go right to the stacked sequence, with 2 minutes of debate prior 
to each vote for explanation, as has been requested and is the normal 
practice--and that all succeeding votes be limited to 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LOTT. Now, Mr. President, I know that there are several 
amendments that need to be worked through. I see that Senator Wellstone 
is here on the floor ready to go. And I believe we can get some time 
agreements on other issues.
  Does the manager, Senator Bond, wish to comment?
  Mr. BOND. Thank you.
  Mr. President, I believe Senator Nickles was prepared to go, and I 
know that Senator Wellstone wants to go right after that. But I believe 
before we move forward, I need to yield to the distinguished minority 
leader who has to deal with this. It was our understanding from the 
discussions that Senator Nickles would move forward on a major 
amendment he has, and then I would hope we would be able to turn to 
Senator Wellstone.
  With that, let me yield to the minority leader.
  Mr. DASCHLE addressed the Chair.
  The PRESIDING OFFICER. The minority leader.


                      Amendment No. 3063 Withdrawn

  Mr. DASCHLE. Mr. President, the majority leader and I have been 
talking throughout the day. And I believe we are making progress in 
setting up a procedure by which at some point in the not too distant 
future--I think the prospects are greater tonight than they have been 
in some time--we might have a good debate on the Patients' Bill of 
Rights. Because I believe that these negotiations are proceeding 
successfully, I withdraw the pending amendment on HUD-VA with an 
expectation that we will come to some successful conclusion at a later 
date.
  The PRESIDING OFFICER. The amendment is withdrawn.
  The amendment (No. 3063) was withdrawn.
  Mr. WELLSTONE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. Might I make a request for 1 second?
  I ask unanimous consent that I be able to follow the Nickles 
amendment, so I can go back to the office and come back.
  Mr. BOND. No objection.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BOND addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Mr. President, I thank the majority leader and the minority 
leader for allowing us to get back to this VA-HUD bill. We have had 
good discussions on it. We have had a very important amendment debated 
at length on

[[Page S8331]]

the space station. This is always one of the important points that we 
have to debate on the VA-HUD bill.
  We have had great cooperation from Senators on both sides. I think we 
have narrowed the list of amendments. And we hope to be able to accept 
and include in the managers' amendment many of the things that have 
been raised by our colleagues.
  We are now waiting for Senator Nickles to come forward to debate an 
amendment on the FHA limits. But we do have a number of amendments we 
can accept while we are waiting.


                           Amendment No. 3195

       (Purpose: To increase funds for VA homeless grant and per 
     diem program)
  Mr. BOND. First, I send an amendment to the desk on behalf of myself, 
Senator Cleland, and Senator Mikulski and ask for its immediate 
consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Missouri [Mr. Bond], for himself, Mr. 
     Cleland, and Ms. Mikulski, proposes an amendment numbered 
     3195.

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

       On page 7, line 18, add the following new provisos prior to 
     the period: ``: Provided further, That of the funds made 
     available under this heading, $14,000,000 shall be for the 
     homeless grant program and $6,000,000 shall be for the 
     homeless per diem program: Provided further, That such funds 
     may be used for vocational training, rehabilitation, and 
     outreach activities in addition to other authorized homeless 
     assistance activities''.

  Mr. BOND. Mr. President, this amendment would provide, within the 
$17.2 billion medical care appropriation, $20 million for VA's homeless 
grant and per diem program. The amendment would make these funds 
available for vocational training, outreach, shelter, and other 
important activities to aid homeless veterans in a comprehensive 
manner.
  This should help meet the needs of the 275,000 veterans who are 
estimated to be homeless on any given night of the year. Together with 
funds already included in the bill, we will have provided $100 million 
in VA homeless assistance. This is a critical need. I commend the other 
Senators who worked on supporting this. I urge adoption of the 
amendment.
  Mr. CLELAND. Mr. President, I would like to thank the Chairman and 
Ranking Member for their outstanding leadership on this important piece 
of legislation. Given the hard work that went into this bill, I wanted 
to first express my appreciation for what they have done. I am reminded 
of the old phrase ``too many cooks spoil the broth.'' Sometimes the 
legislative branch might be thought of in that way. As I offer this 
amendment, I have attempted to be mindful not to ``spoil the broth.''
  As the former head of the Veterans Administration, the veterans 
portion of this bill continues to be near and dear to my heart. I am 
extremely pleased to see that the Appropriations Committee under the 
leadership of Senator Bond and Senator Mikulski has increased funding 
for the Department of Veterans Affairs by over $1.5 billion when 
compared to last year's budget. This represents a real increase in 
funding even when inflation is factored in. Senator Bond and Senator 
Mikulski are true friends of America's veterans, and we thank them.
  The amendment I have offered attempts to fill a void that exists with 
respect to services for veterans. When I was head of the Veterans 
Administration, it was clear to me that the VA could not be everywhere 
at all times. We relied heavily on other government agencies and 
private entities in our attempt to assure that all veterans could 
obtain the benefits they were entitled to and the assistance they 
needed. Today, in an era of balanced budgets, we cannot depend solely 
on federal dollars to solve every problem. The era of balanced budgets 
brings with it the era of partnership.
  The VA must continue to partner with other entities to fulfill its 
mission. For instance, in this year's Defense Authorization bill, I 
have authored language which would strongly encourage the VA to partner 
with the Department of Defense to provide health care for our nation's 
military personnel, their dependents, military retirees, and veterans.
  Today, I am advocating much stronger partnering between the VA and 
the private sector to fill the basic needs of our nation's veterans. 
The Homeless Providers Grant and Per Diem Program was established in 
1992 to fund the development and operation of transitional housing for 
homeless veterans who are free of alcohol and drugs. Over 2,000 beds 
have been made available under this program. Over $21 million has been 
appropriated for this purpose.
  Unfortunately, the current program is completely inadequate in the 
face of the overwhelming need which exists for housing for homeless 
veterans. The VA estimates that over 275,000 veterans are currently 
homeless on any given night. In a given year, over 500,000 veterans 
find themselves homeless at some point. In Atlanta, Georgia, nearly 
10,000 veterans are in need of homeless assistance. This is clearly 
unacceptable. A mere 2,000 beds, while important, would not meet the 
needs of one state, let alone the entire nation. The program does not 
come close to fulfilling the entire need. Currently at approximately $7 
million, it represents less than two-hundredths of a percent of the 
entire VA budget.
  The amendment I have offered would set aside $20 million for the 
Homeless Providers Grant and Per Diem program. This would nearly triple 
the amount available for this program. It would also insure that funds 
are available for rehabilitation, vocational training, and outreach. 
These are critical elements because the list of successful programs 
have demonstrated that helping veterans become drug and alcohol free 
and employable is the best way to insure that they not find themselves 
homeless again. Furthermore, it is important to provide for successful 
outreach to veterans in need to insure that veterans are able to take 
advantage of the services, both public and private, that are available 
to them.
  Several groups have contacted me since I was elected to the Senate to 
seek support for the veterans assistance projects they are trying to 
establish or expand. I would like to take a few moments to describe two 
such programs.
  Last year, the Georgia Military College conducted a pilot program in 
which veterans voluntarily undergoing drug rehabilitation were offered 
a college course. The program was paid for through the proceeds of a 
golf tournament sponsored by the Atlanta Veterans Administration 
Medical Center. Eighteen veterans participated in the original program. 
In light of the initial success, the Georgia Military College seized on 
the idea of expanding the program not only to provide for education but 
to offer additional counseling and to provide shelter for the 
participants. The College is in the process of establishing a 5-year 
program aimed at improving the lives of Georgia's homeless veterans. 
This is the type of program that can truly make a difference. Instead 
of a ``band-aid'' approach, it offers true skills training, and the 
transitional housing these veterans need to be able to continue with 
the program.
  The National Veterans Foundation offers perhaps one of the most 
important services a nation can provide to our veterans in need--a 
human voice. The Foundation was founded by Floyd ``Shad'' Meshad in 
1985 to help veterans recover from the pain of war. It has aided over a 
quarter of a million veterans, funding housing, legal services, job 
training, counseling, and rehabilitative programs. A major focus of the 
Foundation is its toll-free Information and Referral Line. Shad Meshad 
refers to it as a ``Clearing House'' to direct veterans and their 
families to the assistance they need. It is a real human voice on the 
other end of the line, not a recording. Over the years, the National 
Veterans Foundation has logged thousands of calls. Unfortunately, this 
critical outreach program is only available during business hours, 
Monday through Friday. Our veterans deserve the kind of service 
provided by the National Veterans Foundation--but they deserve it 24 
hours a day, 7 days a week.
  These are just two of the types of programs that deserve the support 
of the VA. In my view, it is only lack of resources which currently 
limits that support. It should be made clear that what we are talking 
about is not the old give-away of federal funds. This is not new 
``corporate welfare.'' I was introduced to the Homeless Providers

[[Page S8332]]

Grant and Per Diem program fairly recently. I was surprised to learn 
that the Veterans Administration does not currently have a 
comprehensive grant program that could fund meritorious projects, but 
it does have this program. I believe the Homeless Providers Grant and 
Per Diem Program combined with a future comprehensive grant program 
will leverage federal dollars with private, state, and local money to 
create a multiplier effect that will aid our nation's veterans for 
years to come. It is my intent to introduce legislation in the future 
to provide the necessary statutory authority to establish a 
comprehensive grant program that goes beyond the current homeless 
assistance program.
  Mr. President, I would like to thank Senator Bond and Senator 
Mikulski for their cooperation and support for this amendment. Without 
their leadership, this amendment would not be possible. I look forward 
to working closely with them in the future to further assist our 
nation's veterans.
  I yield the floor.
  Ms. MIKULSKI. Mr. President, I am proud to concur with Senators 
Cleland and Bond on this amendment. It will increase by $13 million the 
amount for the homeless grants for the VA. Nobody who fought to save 
our country should be out on the street. These men have borne the 
permanent wounds of war, some of which have caused deep-seated 
emotional problems--unable to find a job.
  What I like about the VA homeless program is, it not only provides a 
shelter but tries to get them focused on starting a new way of life. We 
have an outstanding one in Maryland. I am proud of it. And I look 
forward to accepting this amendment and say hats off to try to give the 
vets a new lease on life.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  Without objection, it is so ordered.
  The amendment (No. 3195) was agreed to.
  Mr. BOND. I move to reconsider the vote.
  Ms. MIKULSKI. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 3196

    (Purpose: To require entities that operate homeless shelters to 
     identify and provide certain counseling to homeless veterans)

  Mr. BOND. Mr. President, on behalf of Senator McCain, I send an 
amendment to the desk and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Missouri [Mr. Bond], for Mr. McCain, 
     proposes an amendment numbered 3196.

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

       On page 93, between lines 18 and 19, insert the following:
       Sec. 423. (a) Each entity that receives a grant from the 
     Federal Government for purposes of providing emergency 
     shelter for homeless individuals shall--
       (1) ascertain, to the extent practicable, whether or not 
     each adult individual seeking such shelter from such entity 
     is a veteran; and
       (2) provide each such individual who is a veteran such 
     counseling relating to the availability of veterans benefits 
     (including employment assistance, health care benefits, and 
     other benefits) as the Secretary of Veterans Affairs 
     considers appropriate.
       (b) The Secretary of Veterans Affairs and the Secretary of 
     Housing and Urban Development shall jointly coordinate the 
     activities required by subsection (a).
       (c) Entities referred to in subsection (a) shall notify the 
     Secretary of Veterans Affairs of the number and identity of 
     veterans ascertained under paragraph (1) of that subsection. 
     Such entities shall make such notification with such 
     frequency and in such form as the Secretary shall specify.
       (d) Notwithstanding any other provision of law, an entity 
     referred to subsection (a) that fails to meet the 
     requirements specified in that subsection shall not be 
     eligible for additional grants or other Federal funds for 
     purposes of carrying out activities relating to emergency 
     shelter for homeless individuals.

  Mr. BOND. Mr. President, this amendment will assist homeless veterans 
by requiring the federally funded homeless shelters report to the 
Veterans' Administration the number of homeless veterans they serve, 
and it seeks to ensure that these homeless veterans be provide 
information regarding the availability of veterans benefits.
  The amendment will improve the Federal Government's database on 
homeless veterans and will help homeless veterans know about programs 
which can help them address critical needs. It has been cleared on both 
sides.
  I urge its adoption, and yield the floor.
  Mr. McCAIN. Mr. President, I rise to offer an amendment to the VA/HUD 
Appropriations bill for Fiscal Year 1999. The amendment will assist 
homeless veterans and seek to eliminate some of the suffering of those 
less fortunate Americans who served their country in the military.
  This amendment will develop better methods for identifying veterans 
who utilize federally funded homeless shelters so that they can be 
educated about veteran benefits to which they are entitled, including 
Department of Veterans Affairs health care. A homeless shelter which 
receives federal funding would be required to inquire if a person, man 
or woman, entering the shelter is a veteran. This information would be 
used solely to assist in tracking the number of homeless veterans and 
providing counseling to the veteran regarding all available benefits, 
including job search, veterans preference rights, and medical benefits. 
Additionally, the Secretary of Veterans Affairs and the Secretary of 
Housing and Urban Development will coordinate these activities and 
specify a schedule for notifying the Department of Veteran Affairs of 
the status of these homeless veterans. It is the intent of this 
amendment to require homeless shelters to follow this procedures if 
they are to be eligible for additional Federal grants.
  Today, there is no easy or accurate way to track the number of 
homeless veterans in the United States. I find this astonishing. We 
just celebrated Independence Day, and this country owes a great deal to 
the men and women who bore arms to keep America free. It is astonishing 
to me that there would be no mechanism or process set up to accurately 
track or keep national records on homeless veterans. The Department of 
Veterans Affairs estimates the number of homeless veterans to be 
between 275,000 and 500,000 over the course of a year. Conservatively, 
one out of every three individuals who is sleeping in a doorway, alley, 
or box in our cities and rural communities has worn a uniform and 
served our country. Mr. President, the time is right, right now, to 
give a helping hand.
  Of the figures the Department of Veterans Affairs does acknowledge, 
homeless veterans are mostly male; about three percent are women. The 
vast majority are single; most come from poor, disadvantaged 
communities; forty percent suffer from mental illness; and half have 
substance abuse problems. More than seventy-five percent served our 
country for at least four years and Vietnam veterans account for more 
than forty percent of the total number estimated.
  Mr. President, there are many complex factors affecting all 
homelessness: extreme shortage of affordable housing, poverty, high 
unemployment in big cities, and disability. A large number of displaced 
and at-risk veterans live with lingering effects of Post Traumatic 
Stress Disorder (PTSD) and substance abuse, compounded by a lack of 
family and social support networks.
  I do not mean to be critical of the Secretary of Veterans Affairs or 
the Secretary of Housing and Urban Development in offering this 
amendment. To a certain degree the Department of Veterans Affairs is 
responsive in taking care of some homeless veterans. But the ones that 
are receiving critical medical treatment and veterans benefits are 
those who know that such programs exist. It is incumbent on our 
government to reach out to all homeless veterans. However, to do that, 
there must be a process in place.
  Homeless veterans need a coordinated effort, between the Secretaries 
of Veterans Affairs and Housing and Urban Development, that provides 
secure housing and nutritional meals, essential physical health care, 
substance abuse aftercare and mental health counseling. They may need 
job assessment, training and placement assistance. To those that may 
argue that this is a new entitlement program, I

[[Page S8333]]

would say that these rights and benefits currently exist for veterans 
today. Why would we as a nation not do everything in our power to 
provide this help for those less fortunate veterans.
  Mr. President, our veterans deserve no less. I hope my colleagues 
will support this amendment and support our veterans.
  Ms. MIKULSKI. Mr. President, no one can speak for the veterans the 
way a former POW can. I wish to be associated with the remarks of 
Senator McCain and move the adoption of the amendment.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  Without objection, the amendment is agreed to.
  The amendment (No. 3196) was agreed to.
  Mr. BOND. I move to reconsider the vote.
  Ms. MIKULSKI. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 3197

  (Purpose: To provide funds for the Primary Care Providers Incentive 
                         Act, once authorized)

  Mr. BOND. Mr. President, I send an amendment to the desk on behalf of 
myself, Senator Mikulski, and Senator Rockefeller and ask for its 
immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Missouri [Mr. Bond] for himself, Mr. 
     Rockefeller and Ms. Mikulski, proposes an amendment numbered 
     3197.

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

       On page 7, line 18, add the following new provisos prior to 
     the period: ``: Provided further, That of the funds made 
     available under this heading, $10,000,000 shall be for 
     implementation of the Primary Care Providers Incentive Act, 
     contingent upon enactment of authorizing legislation''.

  Mr. BOND. This amendment has been cleared on both sides and would 
provide $10 million within the VA medical appropriation for the Primary 
Care Providers Incentive Act contingent upon authorization.
  Senators Mikulski and Rockefeller have been working to create a 
program to facilitate the employment of primary care personnel at the 
VA, including an education debt reduction program which Senator 
Mikulski has long been interested in establishing. This program is 
intended to improve the recruitment and retention of primary care 
providers, a very important element in the service to the VA.
  The Primary Care Providers Incentive Act seeks to update VA's 
educational assistance programs for prospective employees, particularly 
in areas where recruitment has been difficult. I urge the authorizing 
committees to act expeditiously on this important program.
  I urge adoption of the amendment.
  Mr. BOND. I yield to my distinguished colleague from Maryland.
  Ms. MIKULSKI. Mr. President, this does attempt to recruit the very 
best and brightest in the field of primary care to the VA. I proposed 
the debt reduction program, a student debt reduction program, back in 
1992.
  Now, why do I approach this as debt reduction rather than 
scholarships? The scholarship program is very worthwhile, but there are 
many very talented people who have already graduated. They have a 
substantial student debt from studying either nursing or other primary 
care practices. What the $5 million would do would go towards reducing 
their student debt if they would enter VA services; they would get a 
year's worth of debt reduction for a year's worth of service.
  This way, we know they have completed their training, they have 
passed their licensing requirement, they are as fit for duty as the 
veterans they will serve. That is why we approached it from that policy 
standpoint. It also joins with the outstanding efforts being made by 
Senator Rockefeller to also develop other tools.
  I concur in the amendment, and I urge its adoption and ask it be 
accepted unanimously.
  Mr. ROCKEFELLER. Mr. President, I am delighted that $10 million to 
fund S. 2115, the Department of Veterans Affairs Primary Care Providers 
Incentive Act, has been provided through a managers' amendment to the 
VA/HUD appropriations bill. I thank the Chairman and Ranking Member of 
the VA/HUD Subcommittee, Senator Bond and Senator Mikulski, for their 
cooperation in making this possible.
  The new scholarship and educational debt reduction programs that are 
contained in S. 2115 are designed to revitalize the Health 
Professionals Education Assistance Program at VA. This program was 
originally intended to help VA to recruit and retain health 
professionals, but it has atrophied in recent years, despite an ongoing 
demand for educational financial aid by health professionals employed 
by or interested in working at VA. This funding will help breathe new 
life into the educational assistance programs, and provide much needed 
incentives to improve recruitment and retention of primary care 
providers.
  The VA health care system is in the midst of a major reorganization 
that is simultaneously reducing the current workforce and creating the 
need for more primary care health professionals. VHA's five-year 
strategic plan includes the activation and/or planning of nearly 400 
community-based outpatient clinics, to be staffed by primary care 
health professionals. Yet hiring of these professionals and retraining 
of current employees, to prepare for these changes, has lagged behind 
the planning process. The Primary Care Providers Incentive Programs 
that will be funded through this amendment will motivate current 
employees to get training in new areas of need by providing 
scholarships, and assist in the recruitment of new primary care 
providers by helping to pay off student loans.
  VA needs educational assistance programs such as these to effectively 
recruit and retain trained primary care health professionals. In VA 
hospitals and clinics, some of the most difficult positions to fill are 
those of nurse practitioners, physical therapists, and occupational 
therapists. In my own state of West Virginia, for example, at one of 
the VA hospitals, there has been a vacancy for an occupational 
therapist for over 12 years! Two of the VA hospitals have no physical 
therapists at all. This is simply unacceptable.
  The plain fact is that starting salaries in the VA are not 
competitive with those in private practice. The Education Debt 
Reduction Program gives the VA a financial recruitment tool that will 
be an enormous help in making the VAMCs more competitive for these 
much-needed and highly skilled individuals. In fact, one of the most 
frequently asked questions by prospective new employees is whether or 
not VA has a debt reduction program. Clearly, this program will answer 
a critical need.
  But improving recruitment is only half of the story. Retention of 
trained people is equally important. Funding the employee incentive 
scholarship program can help solve this very real problem. Eligibility 
is limited to current VA employees, providing a way for vulnerable 
individuals to protect themselves against future RIFs by acquiring 
training in the new areas of need. This will go a long way toward 
improving staff morale at the VA, which has been severely undermined in 
the last few years due to the necessary streamlining that resulted from 
significant budget cuts.
  The educational assistance programs in S. 2115 are a valuable 
investment, enhancing morale of the VA health care providers in the 
short term, while building a workforce that matches VA's needs and 
improves veterans' health care in the long run. In the coming months, I 
will be working with my colleagues on the Senate Committee on Veterans' 
Affairs to authorize these worthwhile programs.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  The amendment (No. 3197) was agreed to.
  Mr. BOND. I move to reconsider the vote.
  Ms. MIKULSKI. I move to lay it on the table.
  The motion to lay on the table was agreed to.

[[Page S8334]]

                           Amendment No. 3198

 (Purpose: To provide for the National Fallen Firefighters Foundation)

  Mr. BOND. Mr. President, I send an amendment to the desk on behalf of 
Senators Sarbanes and Mikulski and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Missouri [Mr. Bond] for Mr. Sarbanes, for 
     himself and Ms. Mikulski, proposes an amendment numbered 
     3198.

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

       At the appropriate place, insert the following:

     SEC. ____. NATIONAL FALLEN FIREFIGHTERS FOUNDATION.

       (a) Establishment and Purposes.--Section 202 of the 
     National Fallen Firefighters Foundation Act (36 U.S.C. 5201) 
     is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) primarily--
       ``(A) to encourage, accept, and administer private gifts of 
     property for the benefit of the National Fallen Firefighters' 
     Memorial and the annual memorial service associated with the 
     memorial; and
       ``(B) to, in coordination with the Federal Government and 
     fire services (as that term is defined in section 4 of the 
     Federal Fire Prevention and Control Act of 1974 (15 U.S.C. 
     2203)), plan, direct, and manage the memorial service 
     referred to in subparagraph (A)'';
       (2) in paragraph (2), by inserting ``and Federal'' after 
     ``non-Federal'';
       (3) in paragraph (3)--
       (A) by striking ``State and local'' and inserting 
     ``Federal, State, and local''; and
       (B) by striking ``and'' at the end;
       (4) in paragraph (4), by striking the period at the end and 
     inserting a semicolon; and
       (5) by adding at the end the following:
       ``(5) to provide for a national program to assist families 
     of fallen firefighters and fire departments in dealing with 
     line-of-duty deaths of those firefighters; and
       ``(6) to promote national, State, and local initiatives to 
     increase public awareness of fire and life safety in 
     coordination with the United States Fire Administration.''
       (b) Board of Directors of Foundation.--Section 203(g)(1) of 
     the National Fallen Firefighters Foundation Act (36 U.S.C. 
     5202(g)(1)) is amended by striking subparagraph (A) and 
     inserting the following:
       ``(A) appointing officers or employees;''.
       (c) Administrative Services and Support.--Section 205 of 
     the National Fallen Firefighters Foundation Act (36 U.S.C. 
     5204) is amended to read as follows:

     ``SEC. 205. ADMINISTRATIVE SERVICES AND SUPPORT.

       ``(a) In General.--During the 10-year period beginning on 
     the date of enactment of the Departments of Veterans Affairs 
     and Housing and Urban Development, and Independent Agencies 
     Appropriations Act, 1999, the Administrator may--
       ``(1) provide personnel, facilities, and other required 
     services for the operation of the Foundation; and
       ``(2) request and accept reimbursement for the assistance 
     provided under paragraph (1).
       ``(b) Reimbursement.--Any amounts received under subsection 
     (a)(2) as reimbursement for assistance shall be deposited in 
     the Treasury to the credit of the appropriations then current 
     and chargeable for the cost of providing that assistance.
       ``(c) Prohibition.--Notwithstanding any other provision of 
     law, no Federal personnel or stationery may be used to 
     solicit funding for the Foundation.''.

  Mr. BOND. Mr. President, this amendment by Senator Sarbanes and 
Senator Mikulski affects the National Fallen Firefighters Foundation, 
which is a federally chartered corporation dedicated to helping 
families of fallen firefighters in assisting State and local efforts to 
recognize firefighters who die in the line of duty.
  The Federal Emergency Management Agency, U.S. Fire Administration, is 
a member of the foundation's board. Senator Sarbanes sponsored the 
original legislation creating this foundation.
  His amendment, along with Senator Mikulski, makes some technical 
changes to the law and eliminates the cap on staff. We understand it 
has been approved by FEMA. It has been cleared by the Commerce 
Committee. It would have no impact on spending and will ensure that the 
foundation is able to employ the staff it needs to operate.
  I urge adoption of the amendment, and I yield to the sponsors.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Mr. President, I thank the chairman of the subcommittee 
for his support for this amendment.
  The National Fallen Firefighters Foundation has done an absolutely 
outstanding job. I think it bears out the wisdom of the Congress in 
establishing it. The services they are now providing to the families of 
deceased firefighters are really exemplary. We have had many 
communications from spouses, from children, from parents, of how much 
the activities of the Fallen Firefighters Foundation mean to them.
  They have enlisted very significant support from the private sector 
for their activities. These changes are technical in nature in order to 
enable the foundation to carry out its responsibilities with greater 
efficacy and greater efficiency.
  I didn't want to let this opportunity pass without underscoring the 
tremendously fine work that is being done by the National Fallen 
Firefighters Foundation.
  Ms. MIKULSKI. Mr. President, I concur with the remarks of my 
distinguished Senator. He has really done the heavy lifting on this 
policy issue. I want to thank him for doing this. I absolutely concur 
with the direction in which we are going. I think it will be an 
important memorial and a way to staff it properly.
  I urge this amendment be agreed to.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  The amendment (No. 3198) was agreed to.
  Mr. BOND. I move to reconsider the vote.
  Ms. MIKULSKI. I move to lay it on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 3199

  (Purpose: To restore veterans tobacco-related benefits as in effect 
  before the enactment of the Transportation Equity Act for the 21st 
                                Century)

  Mr. WELLSTONE. Mr. President, I will get started on this amendment.
  Mr. BOND. Might I ask for clarification? I ask the Senator which 
amendment he has that he wants to discuss.
  Mr. WELLSTONE. This is the amendment that will restore benefits to 
veterans for smoking-related diseases.
  Mr. President, this amendment which I now send to the desk is on 
behalf of myself, Senator Murray and Senator McCain.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Minnesota [Mr. Wellstone] for himself, 
     Mrs. Murray, and Mr. McCain, proposes an amendment numbered 
     3199.

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

       On page 16, between lines 19 and 20, insert the following:
       Sec. 110. (a)(1) Section 1103 of title 38, United States 
     Code, is repealed.
       (2) The table of sections at the beginning of chapter 11 of 
     such title is amended by striking the item relating to 
     section 1103.
       (b) Upon the enactment of this Act--
       (1) the Director of the Office of Management and Budget 
     shall not make any estimate of changes in direct spending 
     outlays under section 252(d) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 for any fiscal year 
     resulting from the enactment of this section; and
       (2) the Chairmen of the Committees on the Budget shall not 
     make any adjustments in direct spending outlays for purposes 
     of the allocations, functional levels, and aggregates under 
     title III of the Congressional Budget Act of 1974 for any 
     fiscal year resulting from the enactment of this section.

  Mr. WELLSTONE. Mr. President, my amendment would restore benefits to 
veterans with smoking-related diseases. How would we do that? It is 
simple. The TEA 21 highway program canceled the disability benefits 
that veterans would have received under existing rules and procedures, 
and it used that money instead to pay for more highway projects. My 
amendment would simply return the favor. It would repeal that offset 
from the highway bill.
  Let me go through the procedural history of this to review how we got 
to where we are today. This offset first appeared in the President's 
1999 budget request. The administration, I think, wildly overestimated 
the cost of benefits for smoking-related disabilities. But this money 
was then taken from veterans and it was used elsewhere. There is a 
tremendous amount of indignation in the veterans community over this, 
and there should be. Congress decided to play the same game. In the 
budget resolution they agreed to deny benefits to veterans and use the 
money

[[Page S8335]]

elsewhere just like it had been done by the administration. But the 
budget priorities were a little different. The savings were used for 
highway projects. That didn't happen on the Senate side, but by the 
time it came back from the House, that is what happened. That was the 
major reason I voted against that bill.
  The appropriate place to repeal this offset and restore veterans' 
benefits would have been in the technical corrections to the TEA 21 
highway bill. Senator Rockefeller and I intended to offer an amendment 
which would have done just that, but we never got a chance because that 
amendment was folded into another conference report so we could never 
get an up-or-down vote. We all know that conference reports, as I just 
said, cannot be amended.
  As I have said before on the floor, it is only right that we should 
have a clean vote on this issue. This is not only a question of 
veterans, it is a question of accountability. There is simply no excuse 
for hiding behind procedural gimmicks to avoid responsibility. Some 
have said we have already voted on this bill, or we have already voted 
on this question, but I don't think that is true.
  Let me explain. The two votes we had on the budget resolution did not 
deal directly with this question. Senators got a chance to pretend they 
were for veterans and against the offset, knowing that 5 minutes later 
we could cast a vote in the opposite direction.
  We had some camouflage about doing a study sometime in the future. 
But I think we all recognize it was only a study. And the vote on the 
IRS reform bill was not a clean up-or-down vote; it was only a 
procedural vote, a point of order. We need to have a clean vote up or 
down, no subterfuge, no trickery. It is not enough to take these 
benefits away from veterans. Congress will add insult to injury by not 
having a clean up-or-down vote on this question.
  I think veterans should take a clear position on this issue, and that 
should go on the Record. Now, some may object to this amendment because 
it is legislation on an appropriations bill, or they may think that 
this appropriations bill is the wrong place to remedy this particular 
problem. Let me remind my colleagues that this offset was a 
jurisdictional raid to begin with. Transportation conferees stole the 
money without ever going through the Veterans' Affairs Committee. This 
was originally the Veterans' Affairs Committee. If we now repeal this 
offset through the Veterans' Affairs Committee, we will have to pay for 
it by taking even more money away from veterans. The highway bill took 
that money away. It was not taken away by the Veterans' Committee. 
Nobody wants to do that. Nobody wants to take more funding away from 
veterans.
  There are a few misconceptions that I would like to clear up. First 
and foremost, compensation for veterans with smoking-related illnesses 
was not a new program. It was not an expansion of a program. It was a 
benefit to which disabled veterans were entitled to under existing law. 
Veterans who had become addicted to tobacco because of their service in 
the military had the right to apply for disability. The highway bill 
took that right away.
  It is a very tough test that the veterans have to meet. Only 300 have 
passed it. These were not special rules, either. Those veterans had to 
meet the same legal and evidentiary requirements as for any other 
service-connected disability. They had to prove that their addiction 
began in the military service. They had to prove that their addiction 
continued without interruption. They had to prove that their addiction 
resulted in an illness. They had to prove that their addiction resulted 
in a disability.
  There is another thing that ought to be pointed out tonight. We are 
not really talking about $17 billion here. Let's be clear about it. OMB 
first came up with that figure based on an estimate of 500,000 claims 
granted every year. But over the past 6 years, a grand total of only 
8,000 veterans have applied, and only 300 of those claims have been 
granted. CBO came in with a lower, but still high, estimate of $10.5 
billion. But the TEA 21 conferees needed more money, so they took 
advantage of the higher OMB number to pay for a huge increase in 
funding for highways.
  The administration's cost projections are based on many, many 
unknowns. More importantly, OMB is assuming VA will grant 100 percent 
of all claims but, to date--listen to this, colleagues--VA has granted 
only 5 percent of the claims. The test veterans have to meet is simply 
much harder than OMB seems to think.
  There are a number of other unknowns with the administration's 
methodology. On the percentage of veterans who currently smoke or are 
heavy smokers, VA experts made what we consider to be a questionable 
assumption that veterans who smoke more than 100 cigarettes in their 
lifetime would have the same disease rates as smokers; the percentage 
of veterans who may file claims for tobacco-related illnesses that are 
already receiving compensation for those or other conditions; the rate 
at which the VA can adjudicate these claims. There are lots of 
assumptions I would question.
  Let me get right down to the very nitty-gritty of what this amendment 
is about. My first choice would be to keep the old rules for deciding 
disability claims--the ones we had before the TEA 21 highway bill. I 
don't see why Congress should go out of its way to deny disability 
benefits to veterans. Don't we have better places to look for spending 
offsets? Back in World War II, these veterans had free and discounted 
cigarettes included in their rations, and those packs didn't even have 
warning labels on them. Soldiers were encouraged to smoke to relieve 
the stress of military strain. And now some of them are suffering the 
consequences and they are not getting the compensation. That is what is 
so outrageous about what we have done, and that is what this amendment 
intends to correct.
  The second choice--even if Congress does decide to deny these 
benefits, I find it hard to understand why this money should be taken 
away from veterans' programs. I believe, at the very least, it should 
stay with veterans. It is quite one thing to argue, look, though they 
deserve this compensation, they have to meet strict criteria to get 
this compensation. We handed cigarettes out like candy and we know 
veterans became addicted. They should have been entitled to this 
benefit. It is quite one thing to take away the compensation benefit, 
which we have done; it is adding insult to injury to not at least have 
to put that money, scored by OMB and CBO, back into veterans' health 
care.
  That is why I come to the floor and I speak with so much indignation 
about this. That is why Senator Murray from Washington and Senator 
McCain from Arizona join me in this amendment. If this offset proposal 
had been considered in the Veterans' Affairs Committee, as it should 
have been, I doubt that it would have seen the light of day. But if it 
had passed the committee, those savings would have remained within the 
committee's jurisdiction. Those savings would have been plowed right 
back into veterans' programs. That would have been my second choice.
  So let me be clear again. The first choice: This compensation should 
have gone to the veterans. This is an injustice; it really is. 
Secondly, if we weren't going to do that, it should have stayed in the 
Veterans' Committee. I can tell you that committee would have at least 
made sure that this money would have been invested in veterans' health 
care. Only because it is late at night and because there are other 
colleagues who have amendments--trust me, I think I can talk, without 
notes, for 2 hours about the holes right now--gaping holes--in 
veterans' health care, in the financing and delivery of veterans' 
health care.
  After all, we are running out of excuses for underfunding veterans' 
programs. Remember, for many years, Congress used deficit reduction as 
an excuse. That was the justification for flat-lining the VA budget in 
the 1997 budget deal. By the way, the flat-line budget is not going to 
work. It doesn't take into account inflation. It doesn't take into 
account all of the veterans now living to be 85--an ever-aging veterans 
population. It won't work. But now the deficit is gone and we can no 
longer claim that there are no offsets available. The first time an 
offset comes down the pike, and it is a real whopper, Congress 
immediately whisks it away to pay for other programs--

[[Page S8336]]

programs that obviously have a much higher priority.
  I can't imagine how Congress can make its budget priorities any 
clearer. I have to tell you that if our priority is to live up to our 
commitment to veterans, then I believe we should have 100 votes for 
this amendment.
  The VA-HUD appropriations bill does include a significant $222 
million increase over the President's request in funding for veterans' 
health care. I thank my colleagues, the Senators from Missouri and 
Maryland, for their very fine leadership.
  Let me bring something to my colleagues' attention. As the Veterans 
Affairs' Committee wrote in its letter to Appropriations, an increase 
of over $500 million is necessary to maintain the current level of 
services. My argument is that not only did we not give the veterans the 
compensation they would have gotten if we hadn't raided--really, what 
was their funding for their addiction, for their illness--but to add 
insult to injury, if we didn't do that, we should have at least put it 
into veterans' health care because we are not properly funding health 
care for veterans in this country. Before the budget deal, we just 
simply did not take into account the inflation that is taking place. 
The budget is not enough.

  Finally, let me be clear about what this amendment will do and what 
it will not do.
  First of all, this amendment does not cancel or deny any 
transportation projects. Those projects are already in law. This 
amendment would not affect them in any way.
  Second, this amendment that I have introduced with Senator Murray and 
Senator McCain would not trigger a budget sequester. It includes the 
same protection against sequestration, the same budget gimmickry that 
was included in the TEA 21 bill.
  It may be argued that this amendment would be using the surplus to 
pay for veterans' benefits. I would argue that the highway bill was 
spending the surplus because it was using an unreasonably high estimate 
for this offset. That is going to happen whether or not we repeal that 
offset.
  But to the extent we do restore previous law on veterans' disability 
benefits and waive the Budget Act--I am asking colleagues to waive the 
Budget Act--the cost is not going to be anywhere near $17 billion. I 
want to be clear about that.
  In the summer of 1997, the VA said it wouldn't be able to process 
more than a couple billion dollars worth of claims over 5 years.
  Mr. President, and colleagues, let me just summarize. I have decided 
to really try to be brief. There is a lot that I feel strongly about, 
and there is a lot that I would like to talk about. But I think my 
colleagues from Missouri and Maryland were gracious enough to let me 
come to the floor with this amendment and get to work on it.
  I summarize this way. This amendment would restore benefits to 
veterans with smoking-related diseases. This amendment that I introduce 
on behalf of myself and Senator Murray and Senator McCain does what we 
should have done--to have provided this funding for compensation to go 
to veterans for smoking-related disease. We did not do that through a 
whole lot of gimmickry and a whole lot of zigs and zags. We took that 
funding away from veterans.
  My second choice would have been to have at least invested this 
funding into veterans' health care.
  We have got so many needs for those that are 85, and elderly 
veterans; so many needs for veterans that are walking around and 
struggling with PTSD; so many needs for more drop-in centers; so many 
needs to fill the gaps in our current VA health care system. And we 
didn't put the money into the veterans' health care.
  Then, finally, I want to make real clear what this will do and what 
it will not do.
  I don't want anybody to be able to say that we are now going to 
cancel any transportation projects. That is not what this amendment 
does.
  I don't want anybody to say it is going to trigger a budget 
sequester. It has the same protection that we had against 
sequestration.
  I don't want anybody to argue that we will waive a budget order, that 
we will have to go into a surplus. We have a huge surplus. We put the 
surplus into the highways. Now, I am just saying take it back, even 
though you don't take it from the highways, because you have already 
funded that. You should at least take that money that belongs to the 
veterans that should have gone to them directly for compensation.
  I don't think we can avoid an up-or-down vote on this any longer. We 
should have a clear up-or-down vote. We should all be accountable. I 
feel very strongly about this, and I hope that I will receive very 
strong support for this amendment.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Mr. President, I think the Senator from Alaska has another 
amendment. I was going to say that I believe the Senator from New 
Mexico, the chairman of the Budget Committee, will raise a point of 
order tomorrow. As the Senator from Minnesota knows, the Senator from 
Maryland and I have supported his position. There will be a Budget Act 
point of order.
  But I ask for the yeas and nays on Senator Wellstone's amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Ms. MIKULSKI addressed the Chair.
  The PRESIDING OFFICER. The Senator from Maryland.
  Ms. MIKULSKI. Mr. President, first of all, I would like to thank 
Senator Wellstone for his cooperation in this debate, and for his 
willingness to stay on the floor. I also appreciate his remarks. I know 
the passion that the Senator from Minnesota has on behalf of veterans. 
He spoke in behalf of atomic veterans, and in behalf of a group of 
veterans in his own State that have been ignored. He has spoken for the 
homeless, for the mentally ill veterans, and also for the need for 
long-term care for the veterans. I thank him for that.
  Mr. President, when we debated both the highway bill and the budget 
bill, I supported the sense-of-the-Senate resolution that we not raid 
the veterans' medical care. Thence, when we voted on the highway bill, 
I voted for final passage, but was very clear saying we should not fix 
America's potholes on the backs of America's veterans and their needs 
for health care, many of whom bear the permanent wounds of war.
  I thank the Senator for raising this issue again. I want the Senator 
from Minnesota to know that I support his policy position on this. I, 
too, believe that promises made should be promises kept to the 
veterans, and we should find other ways of funding that highway bill.
  I look forward to further work with him on this topic.
  Mr. McCAIN. Mr. President, I rise to offer my strong support, as an 
original cosponsor of the amendment offered by Mr. Wellstone to the VA/
HUD Appropriations bill for fiscal year 1999 which will rightfully 
transfer approximately $10.5 billion back to the Department of Veterans 
Affairs for veterans programs. I understand from the managers of the 
bill that the vote on this critical amendment will not occur until 
tomorrow. I would have voted for this provision if I was not called out 
of town on a prior commitment. Furthermore, I urge my colleagues to 
show their support for veterans and vote for this measure.
  On July 8, 1998, I submitted for the Record a statement regarding 
veterans' health care activities for tobacco-related illnesses and 
disabilities. At that time, I had every intention to offer an amendment 
to the VA/HUD Appropriations bill that would restore the $10.5 billion 
in funding that was so egregiously and eagerly taken from our nation's 
veterans to fund pork-laden highway programs in the Intermodal Surface 
Transportation Efficiency Act of 1998 (ISTEA). Unfortunately, there was 
simply no possibility that this amendment would be adopted, simply 
because of the inflexibility of the Appropriations Committee's 
allocation of funds between the Transportation and VA/HUD Committees.
  Because of the arcane rules of the Senate, I and my cosponsors are 
precluded from righting this profound wrong that has been perpetrated 
against those who have served and sacrificed for our country. I am not 
sure that our efforts will be more successful this evening, but I do 
know, that it is

[[Page S8337]]

the right thing to do. This issue is far from dead.
  It is important, I believe, that my colleagues fully understand the 
facts regarding the funding shortfall for veterans health care and 
compensation for tobacco related diseases.
  First, the Department of Veterans Affairs critical funding shortfall 
is a result of President Clinton's legislative proposal to Congress to 
disallow service-connected disability or death benefits based on 
tobacco-related diseases arising after discharge from the military. 
Congress, eager to fund pork-laden highway programs, then transferred 
nearly $10.5 billion to the Intermodal Surface Transportation 
Efficiency Act of 1998 (ISTEA), H.R. 2400, earlier this year. This 
egregious act was fully supported by President Clinton.
  Second, on April 2, 1998 the Senate voted for an amendment sponsored 
by Senators Domenici, Lott, and Craig on the Balanced Budget Act which 
transferred approximately $10.5 billion over five years from the 
Department of Veterans Affairs for veterans' tobacco-related diseases 
to the ISTEA bill for transportation related projects. I voted for this 
amendment, in part, because I believed that the tobacco companies, 
rather than the taxpayers, should bear the burden for tobacco-related 
diseases caused partially by smoking and using other tobacco products 
while they were in military service. Military service did not force 
servicemembers to smoke, but I acknowledge that for morale reasons, the 
services made cigarettes available for free or at inexpensive prices. 
The services also give servicemembers condoms and birth control pills 
at no cost to military personnel, but that does not mean that they want 
our men and women in uniform to be promiscuous.
  Third, on the tobacco bill, I sponsored legislation that would 
provide not less than $600 million per year to the Department of 
Veterans' Affairs for veterans' health care activities for tobacco-
related illnesses and disability and directed the Secretary of 
Veterans' Affairs to assist such veterans as is appropriate. The 
amendment would have provided a minimum of $3 billion over five years 
for those veterans that are afflicted with tobacco-related illnesses 
and disability. Additionally, the amendment would have provided smoking 
cessation care to veterans from various programs established under the 
tobacco bill.
  Now that the tobacco bill has been returned to the Commerce, Science, 
and Transportation Committee, I feel more compelled to rectify this 
situation. As a conferee on the ISTEA bill, I refused to support and 
sign the ISTEA Conference Report. I opposed the ISTEA Conference Report 
for a number of reasons, particularly because of my objections to 
shifting critical veterans funding to support pork barrel spending in 
this massive highway bill. It seems that the Congress has no hesitation 
in breaking budget agreements, when it suits their own purposes to do 
so, to spend far more on transportation than agreed to in the balanced 
budget plan. What's worse, it seems that the Congress has no problem 
with robbing from veterans, whose programs have been seriously under 
funded for years, to pay for this luxury.
  Furthermore, Mr. President, the facts are clear with respect to 
tobacco related health care costs and the impact on veterans:
  Tobacco-related diseases, for example, include cancers of the lip, 
oral cavity, and pharynx; esophagus; pancreas; larynx; lung; bladder; 
kidney; coronary heart disease; cerebrovascular disease (stroke); 
various circulatory diseases; and chronic bronchitis.
  The Department of Veteran Affairs' (VA) fiscal year 1997 expenditures 
for health care for veterans with tobacco-related illnesses are 
estimated to be $2.6-$3.6 billion.
  In fiscal year 1997, the VA treated 405,000 patients with at least 
one tobacco-related illness.
  In fiscal year 1997, the VAs' average cost per patient with at least 
one tobacco-related illness was $8,800.
  In fiscal year 1997, patients with tobacco-related illnesses 
accounted for over 6.5 million visits to the VAs' health care 
facilities.
  The projected additional health care costs for tobacco related-
illnesses for the VA are estimated to be $2.9 billion over the next 
five years.
  The projected additional health care costs for tobacco related-
illnesses for the VA are estimated to be negligible for fiscal year 
1999.
  The projected cost for tobacco claims in fiscal year 1999 is about 
$500 million based on the number of claims that could be processed. 
Processing time for claims is expected to increase with an influx of 
tobacco claims.
  Our nation's veterans should not be excluded from payments by tobacco 
companies for health care costs associated with tobacco-related 
diseases. The failure to address the tobacco-related health care needs 
of our men and women who faithfully served their country in uniform 
would be wrong. Congress cannot continue to rob from veterans, whose 
programs have been seriously under funded for years, to pay for these 
and other special interest projects.
  Mr. President, our veterans deserve no less. I hope my colleagues 
will support this amendment and support our veterans. Thank you.
  Mr. WELLSTONE. Mr. President, if there is more comment on this 
amendment, I will wait. I ask my colleague from Alaska whether he 
intends to move on to another amendment, or comment on this amendment.
  Mr. MURKOWSKI. Mr. President, in response to my friend, it would be 
my intent to ask unanimous consent that the amendment be set aside so I 
can offer mine.
  Mr. WELLSTONE. Mr. President, other colleagues may want to speak to 
that. I will take 2 minutes, I say to all of my colleagues.
  I would like to thank the Senator from Maryland for her very kind 
remarks. I have to say that I will not go now through the technical 
part of what happened. I am telling you that this was a real injustice. 
We sort of went on record saying we wouldn't do this, and we have done 
it. We shouldn't have. This amendment restores that funding to where it 
should go.
  I wish to say to my colleagues that we have a huge surplus. We really 
essentially took some of that money and put it in the highways. We 
shouldn't have. We got the highways. But we left the veterans out in 
the cold. They know that. All of these veterans organizations know 
that. I will say this tomorrow again. All these veterans know that. 
Senator Murray, Senator McCain, and many of my colleagues know it as 
well.
  I hope that there will be very strong support for this, Democrats and 
Republicans alike, because, again, the money should have gone to deal 
with the problem, to deal with veterans who really are struggling with 
illness based upon addiction to tobacco, and, if not, it should have 
gone into the veterans' health care. It should not have gone, as my 
colleague from Maryland said, to pay for additional highways, which is 
what happened.
  So let's correct a wrong. Please. Let's have a very strong vote on 
this tomorrow morning.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alaska.


                           Amendment No. 3200

  Mr. MURKOWSKI. Mr. President, I send an amendment to the desk.
  The PRESIDING OFFICER. Without objection, the pending amendment is 
set aside, and the clerk will report.
  The legislative clerk read as follows:

       The Senator from Alaska (Mr. Murkowski) proposes an 
     amendment numbered 3200.

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

     SEC.  . VIETNAM VETERANS ALLOTMENT.

       The Alaskan Native Claims Settlement Act (43 U.S.C. 1600, 
     et seq.) is amended by adding at the end the following:


     open season for certain native Alaskan veterans for allotments

       Sec. 41. (a) In General.--(1) During the eighteen month 
     period following promulgation of implementing rules pursuant 
     to paragraph (6), a person described in subsection (b) shall 
     be eligible for an allotment of not more than 160 acres of 
     land under the Act of May 17, 1906 (chapter 2469; 34 Stat. 
     197), as such Act was in effect before December 18, 1971.
       (2) Allotments selected under this section shall not be 
     from existing native or non-native campsites, except for 
     campsites used primarily by the person selecting the 
     allotment.
       (3) Only federal lands shall be eligible for selection and 
     conveyance under this Act.
       (4) All conveyances shall be subject to valid existing 
     rights, including any right of

[[Page S8338]]

     the United States to income derived, directly or indirectly, 
     from a lease, license, permit, right-of-way or easement.
       (5) All state selected lands that have not yet been 
     conveyed shall be ineligible for selection under this 
     section.
       (6) No later than 18 months after enactment of this 
     section, the Secretary of the Interior shall promulgate, 
     after consultation with Alaska Natives groups, rules to carry 
     out this section.
       (7) The Secretary of the Interior may covey alternative 
     federal lands, including lands within a Conservation System 
     Unit, to a person entitled to an allotment located within a 
     Conservation System Unit if--
       (A) the Secretary determines that the allotment would be 
     incompatible with the purposes for which the Conservation 
     System Unit was established.
       (B) the person entitled to the allotment agrees in writing 
     to the alternative conveyance; and
       (C) the alternative lands are of equal acreage to the 
     allotment.
       (b) Eligible Individuals.--(1) A person is eligible under 
     subsection (a) if that person would have been eligible under 
     the Act of May 17, 1906 (chapter 2469; 34 Stat. 197), as that 
     Act was in effect before December 18, 1971, and that person 
     is a veteran who served during the period between January 1, 
     1968 and December 31, 1971.
       (c) Study.--The Secretary of the Interior shall--
       (1) conduct a study to identify and assess the 
     circumstances of veterans of the Vietnam era who were 
     eligible for allotments under the Act of May 17, 1906 but who 
     did not apply under that Act and are not eligible under this 
     section; and
       (2) within one year of enactment of this section, issue a 
     written report with recommendations to the Committee on 
     Appropriations and the Committee on Energy and Natural 
     Resources in the Senate and the Committee on Appropriations 
     and the Committee on Resources in the House of 
     Representatives.
       (d) Definitions.--For the purpose of this section, the 
     terms `veteran' and ``Vietnam era'' have the meanings given 
     those terms by paragraphs (2) and (29) respectively, of 
     section 101 of title 38, United States Code.

  Mr. MURKOWSKI. Mr. President, I think we have given the amendment to 
both of the floor leaders.
  The simple reality of this amendment is that this affects a group of 
native Alaskans--Aleut, Eskimo, and Indian--who served in uniform 
during the Korean or Vietnam war, and as a consequence of that service 
were unavailable and not in the State at the time when they would have 
had the opportunity to take advantage of an individual allotment, which 
was authorized under the 1906 Alaska Native Allotment Act, allowing the 
collection of up to 160 acres of nonmineral, vacant, unappropriated, 
unreserved land in Alaska to any qualified Alaska Native head of a 
household.
  What happened during that timeframe between 1968 and 1972, which is 
the 3 years that are explicitly addressed in this amendment, is that 
the authorization for the selection ended. So what we have here is the 
passage of the Alaska Native Claims Settlement Act in 1971 that 
terminated this selection opportunity, and there were a number of 
Alaska Natives serving in the military who did not have an opportunity 
to take advantage of the 160 acres that were due them under the 1906 
law.
  Now, Mr. President, it is fair to say that we do not have a scoring 
on this. We hope to have one tomorrow. It is fair to say also that 
scoring would be very insignificant because this is land where they 
traditionally have fished, they have hunted, they have subsisted, and 
it is not land in areas of sensitivity relative to parks, wilderness 
areas, and wildlife areas. In all candor, it is also appropriate to say 
that the Department of Interior will be in opposition to it from the 
standpoint of any public land transferring to any individuals, even the 
indigenous people who were given by congressional action the right to 
the selection of this land.
  Now, it is also fair to reflect on the fact that Alaska contains 
about 365 million acres. We are talking about authorization for those 
valid recipients of land in an amount less than 300,000 acres. So it 
would be equivalent to dropping, if you will, a tack in the State of 
Virginia in relationship to the footprint.
  I recognize the effect that anything of significant scoring would 
have on this bill. We do not want to jeopardize the bill. I have talked 
to the floor manager. It is my hope that we can get an accurate scoring 
that reflects reality. It is also my hope that we recognize this truly 
belongs in the category of veterans issues. I am on the Veterans' 
Committee. I have been on that committee for 18 years. These veterans 
simply were unable to take advantage of the opportunity because they 
were serving in the Armed Forces.
  So the amendment would restore the right of the Vietnam era Alaskan 
Native veterans to apply for these allotments as a right that they were 
denied only because they were serving in the uniform of our Nation.
  The Amendment calls for the same standards that were in effect under 
the Allotment Act to be used to evaluate the new applications. 
Additionally, it calls for DOI to develop rules to implement this bill 
in consultation with Alaska Natives.
  This amendment allows the Department of the Interior ample time to 
promulgate regulations needed to carry out the provisions of this 
amendment.
  The amendment protects the current valid rights of the Federal 
Government.
  The amendment also addresses the concerns of the administration about 
possible Veteran allotments within Conservation System Units.
  If an Allotment is within a Conservation System Unit The Secretary of 
the Interior is authorized to offer other lands to the allottee.
  I think this is a fair solution as these veterans had rights to these 
lands long before they were ever made part of a CSU.
  This amendment is appropriate on this bill as it addresses a specific 
problem incurred by Veterans of the Vietnam war who are Alaska Natives 
and were denied a privilege offered other Alaska Natives, for the sole 
reason that they were overseas defending our freedom.
  I know the administration would like to see this amendment 
``tightened'' to include a smaller class of veterans and I think that 
is plain wrong.
  Where our veterans are concerned I think we should always err on the 
side of greater participation as without every one of them we would not 
be here today as free people.
  On a per capita basis, Alaska Natives represent the largest group of 
minorities serving in active duty in the U.S. Armed Forces.
  It is my intention to ask for the yeas and nays tomorrow sometime, 
but I hope to have the opportunity to have further discussion with the 
floor managers on the scoring unless they have specific questions for 
me at this time.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Mr. President, the Senator from Alaska presents a very 
compelling case. As a Senator interested in that area, I can see the 
importance of the case he makes. The problem is, this deals with a 
subject matter over which this subcommittee does not have primary 
jurisdiction, and therefore I would have to say, No. 1, I cannot 
comment on or respond properly to the views of the appropriate 
appropriations subcommittee, nor could I respond to the questions that 
might be raised by the authorizing committee.
  The Senator has advised us that we do not have the scoring from CBO. 
He has assured us it will be minimal. Frankly, this bill is very close 
to our limits, and if the scoring turns out to push us over the 
allocations, we will have to raise a Budget Act point of order.
  So I urge the Senator to talk with the chairman of the Appropriations 
Committee--the chairman and ranking member, and the chairman and 
ranking member of the appropriations subcommittee, and seek their 
counsel on it. We will be happy to have a vote on it or to deal with it 
tomorrow. While it does involve veterans, the subject matter is not one 
which is within the expertise of this subcommittee, and we do need to 
hear from the other appropriations subcommittees and the authorizing 
committee on it.
  Mr. MURKOWSKI. If I may respond to the floor manager, I appreciate 
his understanding. I don't want to jeopardize activities of the 
committee. If there is a significant scoring, I will be willing to 
withdraw the amendment. But if it is a significant scoring, I would 
appreciate your consideration. If I may leave it at that, I would 
reserve the right--it would be my intention to have it listed on the 
pending amendments. I will ask for the yeas and nays.
  Mr. BOND. I would be happy to join in asking for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?

[[Page S8339]]

  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. MURKOWSKI. I will address it in the morning. I thank the floor 
managers, the gentlelady from Maryland, and the gentleman from 
Missouri.
  I yield the floor.
  Ms. MIKULSKI. Mr. President, I concur in the remarks of Chairman 
Bond. It sounds as if it is a worthwhile endeavor, a complex issue, and 
not necessarily appropriate to our subcommittee. So we await further 
information in the morning to see what are the appropriate next steps. 
I concur that the Senator always has a right to ask for a vote on his 
amendment. So we will just wait to hear what we hear on the scoring and 
what the Interior subcommittee chairman and ranking member say.
  Mr. FEINGOLD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Wisconsin.


                           Amendment No. 3201

         (Purpose: To provide class size demonstration grants)

  Mr. FEINGOLD. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. Without objection, the pending amendment is 
laid aside. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Wisconsin [Mr. Feingold] proposes an 
     amendment numbered 3201.

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

       On page 93, between lines 18 and 19, insert the following:

     SEC.____. CLASS SIZE DEMONSTRATION GRANTS.

       Subpart 3 of part D of title V of the Higher Education Act 
     of 1965 (20 U.S.C. 1109 et seq.) is amended to read as 
     follows:

              ``Subpart 3--Class Size Demonstration Grants

     ``SEC. 561. PURPOSE.

       ``It is the purpose of this subpart to provide grants to 
     State educational agencies to enable such agencies to 
     determine the benefits, in various school settings, of 
     reducing class size on the educational performance of 
     students and on classroom management and organization.

     ``SEC. 562. PROGRAM AUTHORIZED.

       ``(a) Program Authorized.--
       ``(1) In general.--The Secretary shall award grants, on a 
     competitive basis, to State educational agencies to pay the 
     Federal share of the costs of conducting demonstration 
     projects that demonstrate methods of reducing class size that 
     may provide information meaningful to other State educational 
     agencies and local educational agencies.
       ``(2) Federal share.--The Federal share shall be 50 
     percent.
       ``(b) Reservation.--The Secretary may reserve not more than 
     5 percent of the amount appropriated under section 565A for 
     each fiscal year to carry out the activities described in 
     section 565.
       ``(c) Selection Criteria.--The Secretary shall make grants 
     to State educational agencies on the basis of--
       ``(1) the need and the ability of a State educational 
     agency to reduce the class size of an elementary school or 
     secondary school served by such agency;
       ``(2) the ability of a State educational agency to furnish 
     the non-Federal share of the costs of the demonstration 
     project for which assistance is sought;
       ``(3) the ability of a State educational agency to continue 
     the project for which assistance is sought after the 
     termination of Federal financial assistance under this 
     subpart; and
       ``(4) the degree to which a State educational agency 
     demonstrates in the application submitted pursuant to section 
     564 consultation in program implementation and design with 
     parents, teachers, school administrators, and local teacher 
     organizations, where applicable.
       ``(d) Priority.--In awarding grants under this subpart, the 
     Secretary shall give priority to demonstration projects that 
     involve at-risk students in the earliest grades, including 
     educationally or economically disadvantaged students, 
     students with disabilities, and limited English proficient 
     students.
       ``(e) Grants Must Supplement Other Funds.--A State 
     educational agency shall use the Federal funds received under 
     this subpart to supplement and not supplant other Federal, 
     State, and local funds available to the State educational 
     agency to carry out the purpose of this subpart.

     ``SEC. 563. PROGRAM REQUIREMENTS.

       ``(a) Annual Competition.--In each fiscal year, the 
     Secretary shall announce the factors to be examined in a 
     demonstration project assisted under this subpart. Such 
     factors may include--
       ``(1) the magnitude of the reduction in class size to be 
     achieved;
       ``(2) the level of education in which the demonstration 
     projects shall occur;
       ``(3) the form of the instructional strategy to be 
     demonstrated; and
       ``(4) the duration of the project.
       ``(b) Random Techniques and Appropriate Comparison 
     Groups.--Demonstration projects assisted under this subpart 
     shall be designed to utilize randomized techniques or 
     appropriate comparison groups.

     ``SEC. 564. APPLICATION.

       ``(a) In General.--In order to receive a grant under this 
     subpart, a State educational agency shall submit an 
     application to the Secretary that is responsive to the 
     announcement described in section 563(a), at such time, in 
     such manner, and containing or accompanied by such 
     information as the Secretary may reasonably require.
       ``(b) Duration.--The Secretary shall encourage State 
     educational agencies to submit applications under this 
     subpart for a period of 5 years.
       ``(c) Contents.--Each application submitted under 
     subsection (a) shall include--
       ``(1) a description of the objectives to be attained with 
     the grant funds and the manner in which the grant funds will 
     be used to reduce class size;
       ``(2) a description of the steps to be taken to achieve 
     target class sizes, including, where applicable, the 
     acquisition of additional teaching personnel and classroom 
     space;
       ``(3) a statement of the methods for the collection of data 
     necessary for the evaluation of the impact of class size 
     reduction programs on student achievement;
       ``(4) an assurance that the State educational agency will 
     pay, from non-Federal sources, the non-Federal share of the 
     costs of the demonstration project for which assistance is 
     sought; and
       ``(5) such additional assurances as the Secretary may 
     reasonably require.
       ``(d) Sufficient Size and Scope Required.--The Secretary 
     shall award grants under this subpart only to State 
     educational agencies submitting applications which described 
     projects of sufficient size and scope to contribute to 
     carrying out the purpose of this subpart.

     ``SEC. 565. EVALUATION AND DISSEMINATION.

       ``(a) National Evaluation.--The Secretary shall conduct a 
     national evaluation of the demonstration projects assisted 
     under this subpart to determine the costs incurred in 
     achieving the reduction in class size and the effects of the 
     reductions on results, such as student performance in the 
     affected subjects or grades, attendance, discipline, 
     classroom organization, management, and teacher satisfaction 
     and retention.
       ``(b) Cooperation.--Each State educational agency receiving 
     a grant under this subpart shall cooperate in the national 
     evaluation described in subsection (a) and shall provide such 
     information to the Secretary as the Secretary may reasonably 
     require.
       ``(c) Reports.--The Secretary shall report to Congress on 
     the results of the evaluation conducted under subsection (a).
       ``(d) Dissemination.--The Secretary shall widely 
     disseminate information about the results of the class size 
     demonstration projects assisted under this subpart.

     ``SEC. 565A. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     subpart $15,000,000 for fiscal year 1999 and each of the 4 
     succeeding fiscal years.''.

     SEC. ____. PROHIBITION REGARDING RESEARCH AND DEVELOPMENT BY 
                   NASA RELATING TO SUPERSONIC OR SUBSONIC 
                   AIRCRAFT.

       (a) In General.--Notwithstanding any other provision of 
     law, the Administrator of the National Aeronautics and Space 
     Administration may not carry out research and development 
     activities relating to supersonic aircraft or subsonic 
     aircraft.
       (b) Deficit Reduction.--Upon the date of enactment of this 
     Act, savings resulting from amounts reduced pursuant to the 
     application of subsection (a) shall be subject to the 
     following provisions:
       (1) Budget authority and spending limits.--The Office of 
     Management and Budget shall--
       (A) reflect the reduction in discretionary budget authority 
     that results from the application of subsection (a) in the 
     estimates required by section 251(a)(7) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985 in 
     accordance with that Act, including an estimate of the 
     reduction of the budget authority for each outyear; and
       (B) include a reduction to the discretionary spending 
     limits for budget authority and outlays in accordance with 
     the Balanced Budget and Emergency Deficit Control Act of 1985 
     for each applicable fiscal year set forth in section 251(c) 
     of that Act by amounts equal to the amounts for each fiscal 
     year estimated pursuant to subparagraph (A).
       (2) Adjustments to spending limits.--The Office of 
     Management and Budget shall make the reduction required by 
     paragraph (1)(B) as part of the next sequester report 
     required by section 254 of the Balanced Budget and Emergency 
     Deficit Control Act of 1985.
       (3) CBO estimates.--As soon as practicable after the date 
     of enactment of this Act, the Director of the Congressional 
     Budget Office shall provide to the Committee on the Budget of 
     the House of Representatives and the Committee on the Budget 
     of the Senate an estimate of the reduction of the budget 
     authority and the reduction in outlays flowing from such 
     reduction of budget authority for each outyear.
       On page 78, line 24, strike ``$1,305,000,000'' and insert 
     ``$866,000,000''.


[[Page S8340]]


  Mr. FEINGOLD. Mr. President, just briefly, my amendment accomplishes 
three things: It provides States some modest funding to promote one of 
the single most effective reforms we can make to improve the education 
of our children, and that is smaller class size; it eliminates a 
notorious piece of corporate welfare in the budget; and it reduces our 
budget deficit by $2.1 billion over the next 5 years.
  The amendment authorizes a limited number of innovative demonstration 
grant programs to assist States in their efforts to reduce public 
school class size and to improve learning in the earliest grades.
  My State of Wisconsin has been a leader in the effort to reduce 
public school class size, and this amendment is modeled after 
Wisconsin's successful pilot program, the so-called Student Achievement 
Guaranty in Education, or the SAGE Program.
  Mr. President, we have been very proud of this program. It has worked 
well, and I think a model for it on the national level would be 
extremely helpful.
  The amendment is fully offset by cuts in a wasteful and unnecessary 
Federal subsidy that benefits research and development for the world's 
largest aircraft manufacturer. We can fully fund this important SAGE 
Program and still reduce the Federal budget by more than $2.1 billion 
over 5 years if this amendment is adopted.
  As we near the end of the 105th Congress, I fear that Congress will 
somehow go home having done nothing to reduce public school class size. 
My amendment approaches this issue without expanding the deficit and it 
eliminates an expensive corporate subsidy.
  Briefly, passage of this amendment will save $2.2 billion by dealing 
with certain research efforts that have the explicit goal of 
maintaining the company's market share in the global aircraft market.
  For the information of my colleagues, this company has reported 
profits in excess of $5 billion over the last 5 years, and I don't 
think there is any justification for this kind of subsidy. It flies in 
the face of free-market economics and it wastes billions of our 
constituents' tax dollars.
  My distinguished colleague, the senior Senator from Texas, in 
speaking out against this subsidy, said, ``The market system is much 
more efficient at creating jobs and opportunities than the Government 
is.''
  So I urge my colleagues to take his heed and eliminate this form of 
corporate welfare. As I noted before, we would produce in our amendment 
a $2.1 billion net deficit reduction over the next 5 years. To some of 
us, we may sometimes feel we are belaboring the obvious, but I feel 
constrained to point out that we still do have a deficit in our Federal 
budget and that this amendment will be very helpful in that regard.

  I thank the Senator from Oklahoma and my friend, the senior Senator 
from Wisconsin, for deferring to me briefly so I could have the 
opportunity to speak about this amendment and offer it. In light of the 
understanding that the Senate wants to move forward on this bill, let 
me, in a moment, withdraw my amendment, but indicate I hope to offer it 
on another appropriations bill later this year.
  With that, Mr. President, I withdraw the amendment and yield the 
floor.
  The PRESIDING OFFICER. Without objection, the amendment is withdrawn.
  The amendment (No. 3201) was withdrawn.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Mr. President, I express my appreciation to the Senator 
from Wisconsin. We are now ready for the amendment by the Senator from 
Oklahoma. The Senator from Rhode Island has an amendment to go after 
this one. I ask the Chair to recognize him after this amendment has 
been dealt with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Oklahoma.


                           Amendment No. 3202

   (Purpose: To amend the bill with respect to single family maximum 
               mortgage amounts, and for other purposes)

  Mr. NICKLES. Mr. President, on behalf of myself and Senators Kohl, 
Mack, Allard, Feingold, DeWine and Faircloth, I send an amendment to 
the desk and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Oklahoma [Mr. Nickles], for himself, Mr. 
     Kohl, Mr. Mack, Mr. Allard, Mr. Feingold, Mr. DeWine and Mr. 
     Faircloth, proposes an amendment numbered 3202.

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

       On page 53, strike lines 9 through 25 and insert the 
     following:

     SEC. 219. INCREASE IN FHA SINGLE FAMILY MAXIMUM MORTGAGE 
                   AMOUNTS AND GNMA GUARANTY FEE.

       (a) FHA Single Family Maximum Mortgage Amounts.--Section 
     203(b)(2)(A) of the National Housing Act (12 U.S.C. 
     1709(b)(2)(A)) is amended by striking ``38 percent'' and 
     inserting ``48 percent''.
       (b) GNMA Guaranty Fee.--Ssection 306(g)(3)(A) of the 
     National Housing Act (12 U.S.C. 1721(g)(3)(A)) is amended by 
     striking ``No Fee or charge'' and all that follows through 
     ``or collected'' and inserting ``A fee or charge in an amount 
     equal to not less than 12 basis points shall be assessed and 
     collected''.

  Mr. NICKLES. Mr. President, before I describe the amendment, first I 
would like to just express my appreciation to my colleagues, Senator 
Bond from Missouri and Senator Mikulski from Maryland. I have the 
pleasure of serving with them on the Appropriations Committee, on this 
subcommittee, and I enjoyed the work on this subcommittee. This 
subcommittee is a hard committee because it deals with so many 
agencies. It is not easy. It is not just one agency. The bill is 
commonly VA-HUD and other agencies. It includes EPA, the Science 
Foundation, NASA and so on. So it requires an enormous amount of work 
by staff and by Senators to try to stay on top of all the demands, and 
the multitude of requests by the agencies and Senators who are involved 
with them. So I compliment them for their work.
  Mr. President, I agree with most of the things they have in their 
bill, although I have some questions about the cost of the bill, but I 
will may raise that at another time. I notice in the committee report 
the bill has about a $5 billion increase in requests compared to last 
year. I do not know of any other appropriations bill that has that kind 
of increase. I am going to have to check into that, but that is not 
what I raise tonight. I may vote against the bill because of the $5 
billion compared to last year's level. I am concerned about that, but I 
am going to do my homework on that.
  The reason I am rising to introduce this amendment is because in the 
committee bill it increases the FHA loan limits and increases them 
rather significantly. For those who are not familiar with this, FHA, 
the Federal Housing Administration, insures mortgage loans. These 
mortgages are 100 percent guaranteed by the Federal Government. It was 
started many, many years ago, and its purpose was to expand housing in 
areas where people maybe could not afford it. It had a noble purpose. 
We had a housing shortage. We had people who could not get money, could 
not borrow money. The private sector markets were not there and money 
was not available to assist people to buy a home.
  One of the basic, fundamental principles we have in this country is 
we want people to be able to buy their own homes. We want people to be 
able to own their own homes, not just rent, we want people to own their 
own homes. So the Federal Government assisted in this program with the 
Federal Housing Administration.
  But we have limits. We have guiding principles that say, if we are 
going to have the Federal Government insure home loans to individuals, 
they basically be limited to about 95 percent of the median home price 
for that area. It kind of makes sense. You should not be able to get 
100 percent Federal insurance for home loans far in excess of the value 
of homes in the area. That does not make sense.
  There is in effect, base amounts or a bottom amount so every county 
across the country would not fall below a particular amount. And then 
there is also a cap. We ought to have some kind of limit. We should not 
have the Federal Government insuring loans very expensive homes. I see 
my colleague from Rhode Island. There are some areas of Rhode Island, 
at least one area there,

[[Page S8341]]

where there are probably all million-dollar homes.
  Mr. REED. That is in Massachusetts.
  Mr. NICKLES. Maybe that is in Massachusetts, I am not sure. But the 
Federal Government should not be insuring those million dollar homes. 
So we have a maximum limit to make sure the federal government doesn't 
insure million dollar homes. The bottom loan limit is $86,000 this 
year. Last year, it was $81,000, so it has increased. The top limit it 
is $170,000. So you have limits set at 95 percent of the median value 
of homes, but everywhere in this country is going to have at least this 
base limit, $86,000. Right now, current law, you can get a home Loan, 
insured 100 percent by the Federal Government, guaranteed by the 
taxpayers, in an amount equal to $86,000. In some areas, the higher 
price home areas, up to $170,000.
  The committee increased both of those limits. They increased the base 
amount from $86,000 to $109,000. And they also increased the top limit 
from $170,000 to $197,000--almost $200,000. Our amendment strikes the 
increase in the top limit.
  I hope my colleagues would say, wait a minute, $170,000 is enough for 
the Federal Government to insure. Shall we really go up to $200,000? 
Last year, it was $160,000, so, because it is tied to a percentage of 
the Freddie Mac conforming loan limit, it already goes up from last 
year's level in the top areas, from $160,000 it goes to $170,000. Isn't 
that enough? But, no, the committee said let's go on up to almost 
$200,000.
  The purpose of this program was to assist low-income people, or 
people who could not get loans to be able to get a loan with a Federal 
guarantee; a loan that is guaranteed by taxpayers 100 percent. But now 
the committee is going all the way up to $200,000? I think that is too 
high. I do not think that was the purpose of the program.
  The Secretary of Housing called me two or three times and said, 
``Can't we do this?'' I disagreed with him. He wanted to do it on the 
highway bill, and I respect the Secretary of Housing, but I said, ``No. 
That is bad public policy.'' They tried to get this put in the highway 
bill and I disagreed with him and we were successful in stopping it. 
Now the VA-HUD appropriations subcommittee is doing it.
  Our amendment does not touch the bottom increase. I might tell my 
colleagues, I think we should. I did not want to increase the bottom 
amount, but I also know how to count votes. I didn't have the votes to 
prevent the increase in the bottom limit. I hope we will have the votes 
to not increase the top limit. I hope we will keep the Federal Housing 
Administration targeted to lower income individuals. You have to have a 
pretty good income in order to be able to afford a $200,000 mortgage. 
Is that the purpose of the Federal Government, to insure loans and 
mortgages up to $200,000? I don't think so. I don't think that is why 
FHA was created.
  What brought us here? The Secretary of Housing wants to increase the 
loan limits. I guess there was a Housing Affairs letter, an internal 
industry newsletter that quoted a HUD official saying, ``The increase 
in the loan limit is vital to the President's nationwide home ownership 
campaign, and if it passes Congress, it will surely translate into 
votes in the next Presidential campaign.''
  I'm not sure that is why we have this increase. I just don't think 
that is what the Federal Government should be doing. I might mention 
the administration wanted to take it up to $227,000, so maybe I should 
thank my colleagues from Maryland and Missouri because they did not go 
to $227,000. They did not accede to the President's request. The 
President wanted to take it to $227,000 nationwide. That is a quarter 
of a million dollars. That was the administration's proposal. To me, 
that is absolutely wrong and we should not do that.
  What kind of a job has FHA been doing? Have they done such a great 
job that we should be encouraging them to make more and more loans? I 
might mention, when you are having a Federal insured loan, you are 
crowding out private sector loans. Shouldn't the private sector be 
making loans? If we are talking about loans of $200,000, shouldn't the 
private sector be making those loans with the risk that is involved? Or 
are we going to have the Federal Government do it and have the 
taxpayers at risk? I think the private sector should do it. If somebody 
wants to build or buy a $200,000 home, great, I hope they do. But I 
don't think the taxpayers should be at risk for it.
  I have a young son who is working. When he looks at his paycheck he 
says, ``Hey, Dad, thank you very much. You guys are taking a big chunk 
out of my check. Thank you very much.'' I don't think we should put his 
tax dollars at risk for somebody having a $200,000 home. He doesn't 
have one. My daughter doesn't have one. Why in the world should we be 
putting them at risk to be guaranteeing $200,000 loans? I don't think 
we should be doing that. But we are getting ready to do it in this 
bill. So I think that is a serious mistake.
  Is FHA doing such a great job? They have three times the default rate 
of conventional loans. They are not doing that great if they have a 
default rate running at 8.4 percent, three times the national rate in 
conventional loans.
  They have a smaller downpayment, which means a much greater risk. If 
you have a loan with FHA, I believe the loan-to-value ratio is 96 
percent. That is far lower than conventional loans, so you have a lot 
more risk and three times the default rate.
  FHA is not doing such a great job. We have a system that really 
encourages lenders to make FHA-insured loans, and that is another part 
of our amendment. We try to take some of the incentive away from 
lenders steering home buyers into FHA. Right now the system is really 
loaded, really geared towards FHA. You get a 100 percent Federal 
guarantee if you go FHA, and if you happen to be in the business of 
lending, you are going to get a much better deal going through FHA than 
you do through the private sector.
  In our amendment, we also change the point level dealing with Ginnie 
Mae. We raise the Ginnie Mae guaranty fee from 6 basis points to 12. I 
might mention, under most conventional loans, servicing fees to lenders 
are usually about half, about 25 points, but under current law, FHA, it 
is 44 points.
  What does that mean? If you are servicing a $100,000 loan, under a 
conventional mortgage you will get about half of those 50 basis points, 
or $250 on a $100,000 mortgage. If you do it for FHA, you get $440, a 
much better deal if you go with the Government-guaranteed loan. There 
is a much lower downpayment, and the Federal Government is going to 
guarantee it 100 percent. There is a real encouragement for people to 
steer home buyers into FHA. The Government is going to take care of it.
  I might mention, that has had a catastrophic effect in many, many 
neighborhoods. This is sad.
  Let me read a little summary. And, Mr. President, I will have several 
articles printed in the Record from people who studied this issue far 
more than I. But this is from a report that was done by the Chicago 
Area Fair Housing Alliance policy paper dated March of 1998, and it 
talks about the two faces of FHA. I will read a couple points:

       The Chicago Area Fair Housing Alliance has conducted 
     studies which indicate that when FHA lending is concentrated, 
     it has disastrous effects on these areas of concentration, 
     resulting in undue levels of blight and disinvestment.

  It goes on. It says:

       Yet our research clearly indicates that a pattern of FHA 
     lending that limits housing opportunities contributes to 
     segregation, perpetuates a myth of race as a contributor to 
     community disinvestment and ultimately leads to community 
     decline itself. The racially discriminatory effects of FHA 
     single-family programs have been known to HUD for more than 
     25 years. However, HUD has failed to take its share of 
     responsibility for the role FHA plays in the destruction of 
     these communities.

  It goes on:

       FHA has allowed itself to be a direct contributor to 
     community disinvestment and decline.

  We should be ashamed of ourselves. In other words, FHA in many areas 
has done more damage than good and has contributed to the decline of 
many, many neighborhoods.
  This didn't come from Don Nickles, from my research, this came from a 
group, the Chicago Area Fair Housing Alliance.
  Mr. President, I will point out a few other comments that were made 
by people who have studied this issue, again, far more than I, just for 
the information of our colleagues, so they can see what a lot of people 
have said, that raising the FHA loan limits is not the right thing to 
do.

[[Page S8342]]

  There is a letter from the Cato Institute, dated July 16, 1998. I 
will read a section.
  Mr. President, it says:

       I wish to remind you that in the late 1980s the FHA lost 
     over $2 billion of taxpayer funds when it became 
     overextended. I fear that we may soon be facing the same 
     problem today.
       It is also worth noting that the FHA already has a very 
     poor lending record. At a time when the average conventional 
     mortgage default rate hovers between 2 and 3 percent, FHA 
     incredibly has an 8.4 percent default rate. I am very fearful 
     that the FHA is becoming a ticking timebomb that will explode 
     in the taxpayers' laps.

  That was by Stephen Moore.
  Americans for Tax Reform--I will highlight one page:

       The time has long passed since potential homeowners needed 
     drastic federal intervention to qualify for affordable loans. 
     With today's home ownership at an all-time high and with an 
     innovative private mortgage market meeting the needs of 
     homeowners across the bracket, logic would strongly suggest 
     scaling back the FHA.

  The bill we have before us doesn't scale back the FHA, Mr. President, 
it expands it, and expands it rather dramatically.
  The Heritage Foundation issued an executive memorandum, dated July 
16, 1998. I will read a short part of it:

       If ultimately enacted into law, these provisions--referring 
     to the expansion, raising the loan limits--would expand the 
     federal government's role even deeper into the residential 
     mortgage market, provide windfall profits to a select group 
     of mortgage financiers, undermine the viability of private 
     mortgage insurers, and expose the U.S. taxpayers to a costly 
     bailout for an already faltering FHA insurance fund.
       According to budget data provided to Congress by HUD, the 
     FHA's 1997 property acquisitions through foreclosure were up 
     117 percent, or a staggering $2.3 billion, from initial 
     projections.

  I might mention, if my memory serves me correct, in 1997, FHA 
foreclosed on $5 billion worth of properties. This is not a success 
story in housing.
  I will read from a different group. I have read from the Heritage 
Foundation, from the Cato Institute, and from a taxpayers group. Those 
groups are usually perceived to be free enterprise, conservative think-
tanks and institutions.
  This is from the Consumer Federation of America. It doesn't fall into 
the above category. It says:
  ``I am writing to express our strong support for your amendment''--
the amendment by myself, Senator Kohl and others--``to the HUD 
Appropriations bill when it comes to the Senate floor.''
  The amendment eliminates a proposed increase in the high-cost FHA 
loan limit, which will keep FHA focused on the moderate-income home 
buyers it was created by Congress to serve.
  It continues:

       Your amendment discourages lenders from inappropriate 
     behavior by bringing the fee they make on FHA loans more in 
     line with private sector fees--without any increase in the 
     cost of an FHA loan to consumers.

  They are right. Again, I reiterate, one of the things that we did in 
adjusting the guaranty fees on Ginnie Mae, going from 6 points to 12 
points, will be to bring down the staggering servicing fees to the 
lenders from 44 basis points to 38. That is not much, but it moves it 
closer to being in line with the private marketplace. The marketplace 
is a lot closer to 25 basis points. Right now this very high fee is a 
real incentive for people to steer loans to FHA. We shouldn't have a 
Federal policy making it more profitable for people to send their loans 
FHA insurance with the Federal Government guaranteeing the loans. That 
doesn't make sense, but that happens to be current policy.
  I ask unanimous consent that letters and statements from the Cato 
Institute, from the Americans for Tax Reform, and the National 
Taxpayers Union, as well as the Consumer Federation of America, be 
printed in the Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                               Cato Institute,

                                    Washington, DC, July 16, 1998.
     Hon. Don Nickles,
     U.S. Senate, Washington, DC.
       Dear Senator Nickles: I just wanted to write you to thank 
     you for your efforts to block any increase in the top FHA 
     loan limit this year. With the FHA already holding over $300 
     billion of loans in its portfolio, it is the height of fiscal 
     folly to be substantially increasing the size of the FHA loan 
     portfolio, particularly since this policy would mostly affect 
     higher income homebuying. Taxpayers are already at great risk 
     of default, especially if the housing market goes into 
     slowdown. I wish to remind you that in the late 1980s the FHA 
     lost over $2 billion of taxpayer funds when it became 
     overextended. I fear that we may soon be facing the same 
     problem today.
       It is also worth noting that the FHA already has a very 
     poor lending record. At a time when the average private 
     mortgage insurance claims rate hovers between 2 and 3 
     percent, FHA incredibly has an 8.4 percent default rate. I am 
     very fearful that the FHA is becoming a ticking timebomb that 
     will explode in taxpayers' laps. just as the savings and loan 
     bailout required billions of dollars of taxpayer rescue funds 
     in the late 1980s.
       There is no reason that a federally subsidized agency 
     should compete with the private market place, when private 
     companies are quite adequately serving market need. The 
     primary effect of increasing the FHA loan limit will be to 
     divert homebuyers from PMI insurance to FHA insurance.
       I'm enclosing a recent article of mine on FHA policy as 
     well as my recent testimony before the Banking Committee. My 
     position has been and continues to be that we ought to move 
     aggressively towards privatizing the FHA, not expanding it.
           Best wishes,
                                                    Stephen Moore,
     Director of Fiscal Policy Studies.
                                  ____



                                     Americans For Tax Reform,

                                    Washington, DC, June 18, 1998.
     Hon. Don Nickles,
     U.S. Senate, Washington, DC.
       Dear Senator Nickles: I am writing to applaud your efforts 
     to reject the provision in the FY 99 VA/HUD Appropriations 
     bill that unnecessarily hikes the current Federal Housing 
     Administration (FHA) loan limits to $197,490 in high-cost 
     areas and to nearly $109,000 in lower-cost markets. Though 
     lower than the $227,150 nationwide limit requested by the 
     Administration, the new limits put forth in the Senate bill 
     would substantially hinder the private market's ability to 
     provide adequate mortgage capital and subsequently place the 
     taxpayer at a higher risk of losses.
       In what may have seemed like a plausible solution to 
     solving mortgage debt defaults during the Great Depression, 
     today's FHA loan program has changed little to meet the 
     current structure of the market. The time has long passed 
     since potential homeowners needed drastic federal 
     intervention to qualify for affordable loans. With today's 
     home ownership at an all-time high and with an innovative 
     private mortgage market meeting the needs of homeowners 
     across the income bracket, logic would strongly suggest 
     scaling back the FHA.
       Instead of limiting such loan programs, however, the 
     Clinton Administration wants to increase the guaranteed loan 
     rate for the most affluent homeowners, making it possible for 
     higher-income individuals who cannot qualify for credit in 
     the private market to obtain taxpayer-insured loans. Why 
     should Americans, at any level of income, run the risk of 
     paying higher taxes to cover the potential mortgage defaults 
     of higher-income individuals with poor credit ratings?
       The FHA loan program, which requires minimal payments yet 
     loses $4 billion per year, has a default rate of three times 
     the national average in comparison to the private sector. 
     Lacking any credible economic wisdom, we must assume that the 
     Clinton Administration will use the taxpayer-funded loans to 
     harvest votes.
       The Congress should not place American taxpayers at a 
     higher risk of losses by increasing FHA's loan limits. 
     Americans for Tax Reform, and the undersigned groups, in 
     support of limiting the tax burden on all Americans, 
     considers such an increase as fiscally irresponsible and a 
     gross intrusion into the private market. On behalf of all 
     taxpayers, we applaud your efforts to defeat this provision.
           Sincerely,
                                                Grover G. Norquist
     (And 6 others).
                                  ____



                                      The Heritage Foundation,

                                                    July 16, 1998.

  Executive Memorandum--Why Raising the FHA Mortgage Insurance Limit 
                          Would Be Bad Policy

                         (Ronald D. Utt, Ph.D.)

       As Congress moves to consider the House and Senate 
     appropriations bills for the Departments of Housing and Urban 
     Development (HUD) and Veterans Affairs (VA), lawmakers will 
     have to consider provisions to raise the maximum mortgage 
     amount that can be backed by the Federal Housing 
     Administration (FHA) insurance fund. If ultimately enacted 
     into law, these provisions would expand the federal 
     government's role even deeper into the residential mortgage 
     market, provide windfall profits to a select group of 
     mortgage financiers, undermine the viability of private 
     mortgage insurers, and expose the U.S. taxpayers to a costly 
     bailout for the already faltering FHA insurance fund.
       Since early this year, the FHA has been confronting much-
     higher-than-expected loan defaults and insurance claims. 
     According to budget data provided to Congress by HUD, the 
     FHA's 1997 property acquisitions through foreclosure were up 
     117 percent, or a staggering $2.3 billion, from initial 
     projections. The FHA further announced that it anticipated 
     this higher rate of foreclosure to continue,

[[Page S8343]]

     and that it was revising 1998 foreclosed property acquisition 
     estimates upward from an initial $1.9 billion to almost $4 
     billion. The FHA's declining confidence in the quality of its 
     mortgage insurance portfolio has been justified by events. In 
     the first quarter of 1998, despite the booming economy and 
     rising employment throughout the United States, the FHA's 
     delinquency rate reached an all-time high of 8.35 percent, 
     meaning that nearly one in ten FHA borrowers were behind in 
     their payments. This compares with a default rate of just 
     2.91 percent on conventional mortgages, the market on which 
     the FHA seeks congressional approval to encroach.
       Apparently having learned little from the devastating 
     collapse of the savings and loan industry in the 1980s and 
     the subsequent scandals that revealed shoddy underwriting 
     standards in billions of dollars of mortgages, some Members 
     of Congress are proposing that the FHA be allowed to insure a 
     greater share of the market by moving into riskier, higher-
     valued mortgages. They also are recommending that the FHA's 
     minimum down-payment requirement be reduced from its already 
     inadequate levels. Minimal down-payment requirements under 
     current law allow the FHA to insure 99.6 percent of a 
     $100,000 loan, leaving little or no equity cushion to protect 
     FHA reserves in the event of loan default and/or foreclosure.
       HUD Secretary Andrew Cuomo has proposed that the FHA 
     maximum loan limit be increased to $227,150 throughout the 
     country, and that FHA's already generous down-payment 
     requirements be made even more generous. House and Senate 
     appropriators have agreed to propose much of what Cuomo is 
     asking for: upping the regional cap on the minimum loan 
     from $86,000 to $109,000, raising the maximum cap from 
     $170,000 to $197,000, and allowing borrowers to make an 
     even smaller down payment.
       If enacted into law, these changes would worsen an already 
     deteriorating situation within the FHA's insured portfolio by 
     exposing it to disproportionately greater risks. With FHA 
     out-of-pocket losses typically running at a rate equivalent 
     to 30 percent of the value of the loan on the foreclosed 
     property, the unanticipated foreclosed property acquisitions 
     in 1997 and 1998 could lead to additional losses of $1.26 
     billion against the FHA's reserves.
       Rather than placing the taxpayer at far greater risk of 
     having to pick up the tab on foreclosed FHA-backed mortgages, 
     a better alternative for Congress to consider is an amendment 
     to the Senate bill that will be offered by a bipartisan 
     coalition composed of Senators Don Nickles (R-OK), Herbert 
     Kohl (D-WI), Connie Mack (R-FL), Wayne Allard (R-CO), and 
     Russell Feingold (D-WI). Their amendment would raise the 
     floor on the maximum-size mortgage the FHA can insure from 
     the current $86,000 to $109,000 to target first-time and 
     moderate-income home buyers more accurately while also 
     eliminating much of the windfall corporate welfare benefits 
     FHA mortgages bestow on some mortgage financiers. Whereas 
     conventional mortgages allow mortgage originators to keep 
     just 20 to 25 basis points in servicing fees, the FHA 
     currently allows them 44 basis points, which largely explains 
     the real estate industry's enthusiasm for the further 
     federalization of the market. Under the bipartisan 
     coalition's plan, these excessive servicing fees would be cut 
     back to 38 basic points, with the 6-basis-point difference 
     applied to the Government National Mortgage Association, a 
     part of HUD that repackages and reinsures FHA and VA 
     mortgages for final sale to investors.
       Although the bipartisan coalition's amendment is a step in 
     the right direction, an even better alternative would be for 
     Congress to reject any expansion of the FHA's scope and 
     instead hold oversight hearings to determine the reason the 
     FHA and the mortgage originators that use the program have 
     done such a consistently poor job of maintaining the 
     financial integrity of a program that could be of 
     considerable value to first-time home buyers. By failing to 
     achieve underwriting standards common in the conventional 
     mortgage market, the existing management of the FHA has 
     exposed the U.S. taxpayer to the risk of a costly bailout and 
     made it likely that many more FHA home buyers will face the 
     humiliation and financial loss of foreclosure.
       [Ronald D. Utt, Ph.D. is Grover M. Hermann Fellow in 
     Federal Budgetary Affairs at The Heritage Foundation. For 
     additional information, see the author's ``HUD Wants Federal 
     Housing Administration to Offer More Corporate Welfare,'' 
     Heritage Foundation Executive Memorandum No. 512, March 9, 
     1998.]
                                  ____



                               Consumer Federation of America,

                                    Washington, DC, July 13, 1998.
     Hon. Don Nickles and Hon. Herb Kohl,
     U.S. Senate, Washington, DC.
       Dear Senator Nickles and Senator Kohl: I am writing to 
     express our strong support for your amendment to the HUD 
     Appropriations bill when it comes to the Senate Floor.
       The amendment eliminates a proposed increase in the high-
     cost FHA loan limit, which will keep FHA properly focused on 
     the moderate-income home buyers it was created by Congress to 
     serve. Congress should not increase FHA's loan limit to 
     enable borrowers making as much as $75,000 a year to use a 
     government program to buy a home.
       The amendment also is a step in the right direction in 
     lowering lender incentives to steer borrowers to FHA-insured 
     mortgages when they may not be the best financing option. 
     Lenders now make nearly twice the amount servicing FHA loans 
     than they do servicing conventional loans. Your amendment 
     discourages lenders from inappropriate behavior by bringing 
     the fee they make on FHA loans more in line with private 
     sector fees--without any increase in the cost of an FHA loan 
     to consumers. Lowering lenders' fees on FHA loans even 
     further would serve as a more effective disincentive for such 
     anti-consumer lender action.
           Sincerely,
                                                  Stephen Brobeck,
     Executive Director.
                                  ____



                                     National Taxpayers Union,

                                    Alexandria, VA, July 14, 1998.
     Hon. Don Nickles,
     U.S. Senate, Washington, DC.
       Dear Senator Nickles: On behalf of the 300,000-member 
     National Taxpayers Union (NTU), I am writing to applaud your 
     opposition to any increase in FHA mortgage insurance 
     ceilings.
       The Federal Housing Administration was created in 1934 to 
     fill a void in the marketplace created by the Depression. Its 
     aim has been to assist lower income families in obtaining 
     their first home through mortgage insurance and lower down 
     payments. Thanks to the enormous economic growth experienced 
     in America since World War II, first time homeowners' 
     reliance of FHA subsidized loans has fallen from 50% of the 
     market during the 1950s, to the current level of only 10%. 
     Yet, instead of trumpeting the success in lowering the number 
     of Americans reliant upon government assistance to enter the 
     housing market, the Clinton Administration is seeking to 
     expand this entitlement to the wealthiest 14% of American 
     households.
       Now, some in Congress are pushing a ``compromise'' that 
     would raise the top FHA limit to $198,000 and the base FHA 
     limit to $109,000 (up from $86,000). This ``compromise'' will 
     expand FHA benefits to the richest 16% of Americans and will 
     direct FHA away from low and moderate income borrowers.
       Defenders of the FHA note that the agency provides an 
     important resource to lower-income families and minorities 
     who wish to purchase a home. NTU fails to see how low income 
     families will be served by FHA loans to those in the middle-
     to upper-class income range. This is especially curious since 
     approximately 90% of Americans at this income level already 
     own a home or have owned a home in the past. In most cases, 
     families in this income bracket who cannot obtain private 
     mortgages are trying to purchase homes out of their price 
     range. Apparently, supporters of raising the ceilings will 
     not be happy until every wealthy American owns a home at 
     government expense.
       In fact, the evidence suggests that low income families 
     would actually be hurt by increasing the mortgage ceiling. A 
     recent GAO report shows that in 1994, the FHA insured only 
     24% of all loans made to minorities, 20% of all loans to low-
     income families, and 21% of all loans to first time buyers--
     all of whom the FHA was supposedly created to help. Under the 
     current system, the only means FHA has to direct loans to 
     these target groups is through the loan insurance ceilings. 
     Raising the ceilings would direct even less FHA assistance to 
     these presumably needy groups. Who can defend lessening 
     federal entitlements to the poor and minorities in order to 
     expand benefits to the richest Americans?
       This move also represents an unnecessary government 
     intervention into the private sector--which could have 
     disastrous results. As a document prepared by the House 
     Banking Committee notes:
       ``Since the FHA pays mortgage lenders significantly higher 
     servicing fees than either Fannie Mae or Freddie Mac (.44% of 
     a loan value compared to .25%) and the agency assumes the 
     total risk, allowing the FHA to expand into this market would 
     skew the incentives of mortgage lenders against dealing with 
     private entities to no justifiable public end.''
       In other words, the federal government would crowd private 
     mortgage insurers out of the home mortgage business, leaving 
     the government as the main mortgage insurer for most 
     Americans. What's next? The official U.S. Government Visa 
     card? This represents a clearly unneeded and harmful 
     intrusion into the private sector by the federal government 
     and should be stopped.
       In fact, there is some question as to whether the FHA is 
     even necessary in today's market. Presently, home ownership 
     is at an all time high of 65.7%. In 1997 alone, there was a 
     27.7% surge in minority home ownership. Clearly, the days 
     when most Americans couldn't afford their own home are over.
       While the need for the FHA has been decreasing, there has 
     been a serious increase in mismanagement at the FHA. In fact, 
     as recently as last year, the GAO designated the FHA as 
     ``high-risk.'' Within the last year, FHA was forced to change 
     its adjustable rate mortgage program as a result of high 
     losses caused by weak underwriting. A report prepared by the 
     House Banking Committee notes that:
       ``[I]n 1997, the FHA fund paid 71,599 claims, an 18% 
     increase from the previous year. These foreclosures occurred 
     despite reforms to the FHA fund, the Omnibus Budget 
     Reconciliation Act of 1990, a record low levels of 
     unemployment, increasing real wages, historically low 
     mortgage interest rates, and a period of sustained economic 
     prosperity since 1993. According to the Mortgage Bankers of 
     America, FHA delinquencies have

[[Page S8344]]

     risen by 23% since 1988. During that same period, Department 
     of Veterans Affairs Single Family Mortgage Guaranty Program 
     delinquencies rose at a much lower rate (only 9%) and 
     conventional mortgage delinquencies actually fell by 8%.''
       Plainly, wise lending practices are not being followed by 
     the FHA. What the FHA needs is reform, not expansion.
       To put it simply, Washington wants to expand an inefficient 
     federal program that barely helps those it is intended to 
     help in order to provide an entitlement to the richest 14% of 
     American families--done at the expense of low income and 
     minority families.

  Mr. NICKLES. Mr. President, I also ask unanimous consent to have 
printed in the Record an editorial that was in the Wall Street Journal 
on June 8 of this year talking about vote building, which is an 
excellent editorial that talks about how this policy will hurt areas, 
large cities, blighted areas, and how this policy will increase, 
unfortunately, the plight of many, many neighborhoods, as well as the 
exposure to taxpayers.
  There being no objection, the editorial was ordered to be printed in 
the Record, as follows:

                [The Wall Street Journal, June 8, 1998]

                            Review & Outlook


                             vote building

       It seemed like a worthy idea at the time. In 1934, when 
     Congress created the Federal Housing Administration, half the 
     nation's mortgage debt was in default. It was felt some 
     entity was needed to help home buyers who couldn't qualify 
     for conventional mortgages. Today, home ownership's at an 
     all-time high and an innovative private mortgage market keeps 
     coming up with new products to extend credit to low and 
     moderate income home buyers. Logic suggests scaling back the 
     FHA: instead, the Clinton Administration wants to make it 
     easier for the affluent to qualify for 100% taxpayer-insured 
     loans. This is intriguing.
       FHA's share of the mortgage market has fallen to 9.1% in 
     1996 from 13.1% in 1990. This has prompted Housing and Urban 
     Development Secretary Andrew Cuomo to propose a plan he says 
     will let the FHA ``maintain its market share'' by increasing 
     its maximum loan amount to $227,150, a one-third increase 
     over current levels.
       Not only would this reorient the program to higher-income 
     borrowers who don't need government help to purchase a home, 
     but it would increase the taxpayer risk of loans going sour. 
     Democratic Senator Herb Kohl of Wisconsin notes that the 
     default rate on FHA lending, which requires minimal down 
     payments, is almost three times as high as in the private 
     sector. This year, the FHA is losing $4 billion in loan 
     defaults.
       Even at current loan levels, the FHA is having a perverse 
     effect on neighborhoods. The Chicago Area Fair Housing 
     Alliance issued a study this month that found the FHA's 100%-
     backed loans offer service fees that are twice as large as 
     those for privately insured loans and that encourage mortgage 
     lenders to create loans likely to fail. The result is 
     clusters of abandoned and boarded-up homes in marginal 
     neighborhoods. ``Large inventories of FHA foreclosed, vacant 
     and deteriorating properties are found concentrated in 
     minority and racially changing areas,'' the study concluded. 
     ``It is this blight that creates the impression that racial 
     change causes neighborhood decline.''
       There are better ways to open the housing market. Financing 
     isn't the only restraint on supply; there are politically 
     created obstacles. In 1991 a commission headed by then-HUD 
     Secretary Jack Kemp called for removing unnecessary barriers 
     to the creation of housing. New studies have estimated that 
     in high-priced California, where many new FHA loans would be 
     made, the amenity and code requirements can boost prices as 
     much as $60,000 a home.
       Despite the taxpayer risks inherent in increasing the FHA 
     loan limit, the Clinton Administration is trying to sell the 
     expansion as a revenue raiser. Added premiums from FHA 
     mortgage insurance would add some $1 billion to the Treasury 
     over five years.
       But it may also be an attempt to use a taxpayer-funded 
     program to harvest votes. The April 17 issue of the Housing 
     Affairs Letter, an internal industry newsletter, quoted a HUD 
     official as saying, ``The increase in the loan limit is vital 
     to the president's nationwide homeownership campaign, and if 
     it passes Congress, it will surely translate into votes in 
     the next presidential campaign.'' Former HUD Secretary Kemp 
     calls raising FHA loans limits a ``classic Clinton-Gore 
     strategy: courting suburbanites with proposals that they 
     could rationalize through the prism of politics, but couldn't 
     defend as sound policy.''
       Under ideal conditions, a political playpen like the FHA 
     would be privatized and local governments encouraged to fine-
     tune their zoning and code requirements to help home buyers 
     now frozen out of high-priced markets. But so long as that 
     doesn't happen, it makes little sense to expand FHA loans to 
     people with upper-middle-class incomes.
       Who should be eligible for FHA loans? Why not restrict such 
     loans only to those families in the 15% tax bracket. If the 
     Clinton Administration wants to help more people buy homes, 
     it can lower the number of people subject to the steeper 28% 
     bracket, and at the same time provide them with more money to 
     meet the loan payments and avoid default. But with its more 
     upscale ``reform,'' it appears that the White House prefers 
     buying votes the old-fashioned way.

  Mr. NICKLES. Mr. President, I have a letter from Jack Kemp, who was 
former Secretary of Housing and Urban Development, dated July 15, 1998. 
I will read one short paragraph. He says:

       Your amendment will also stop a brash move by the 
     administration to push the FHA further and further away from 
     its core mission of supporting the home ownership dreams of 
     low- and moderate-income American families, a noble mission 
     that has enjoyed bipartisan support in Congress.
       The drive to raise the FHA loan limit to $197,000 is 
     motivated by a desire for votes in the fall elections. It 
     would take an income of about $75,000 a year to qualify for 
     such a loan, or the top 16% of wage earners.

  Mr. President, I ask unanimous consent to have that letter printed in 
the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                    July 15, 1998.
     Hon. Don Nickles,
     SH-133 Hart Senate Office Building, Washington, DC.
       Dear Senator Nickles: I am writing to you today to support 
     your efforts to stop yet another attempt by the federal 
     government to expand its power, harm those it intends to 
     serve and trample on the private sector mortgage market. As 
     you know, I have opposed raising the FHA loan limits at all. 
     And the provision in the current HUD/VA Appropriations Bill 
     raising the limits to the proposed level would expose the 
     federal taxpayer to $10 billion in contingent liability. It 
     also would increase economic incentives for mortgage lenders 
     to steer borrowers to the FHA program even though it may not 
     be the best financing option. Therefore, I cannot support 
     raising the FHA loan limits a single dollar.
       However, if you have concluded that the provision has 
     sufficient support to pass, I believe your amendment to raise 
     Ginnie Mae's guarantee fees from 6 to 12 basis points goes a 
     long way toward making a bad idea a livable one. And on its 
     own merits, I believe you have an excellent proposal. Without 
     costing a homebuyer an extra cent, your amendment removes the 
     incentive for mortgage companies to unnecessarily direct 
     buyers toward FHA loans. Currently, lenders make twice as 
     much in servicing fees from FHA loans than they do in 
     servicing conventional loans. Even though they require lower 
     downpayments, FHA loans are more costly to the borrower over 
     the life of the loan. By reducing lenders' fees for servicing 
     FHA loans, lenders will have less incentive to steer 
     borrowers to these higher cost FHA loans when they might have 
     qualified for cheaper conventional financing.
       Furthermore, the point must be made that without your 
     amendment, the contingent liability on the American people 
     will increase by $10 billion. With FHA delinquencies already 
     at an all-time high, an economic slowdown or recession could 
     render the FHA insurance fund insolvent and that contingent 
     liability would come due.
       Your amendment also will stop a brash move by the 
     administration to push the FHA further and further away from 
     its core mission of supporting the homeownership dreams of 
     low- and moderate-income American families, a noble mission 
     that has enjoyed bipartisan support in Congress.
       The drive to raise the FHA loan limit to $197,000 is 
     motivated by a desire for votes in the fall elections. It 
     would take an income of about $75,000 a year to qualify for 
     such a loan, or the top 16% of wage earners. Among these 
     borrowers, 86% are homeowners today. It would make more sense 
     to target families making less than $50,000, 40% of whom own 
     their home, and can use the FHA program at today's levels.
       I applaud you for your efforts to sensibly raise money for 
     housing programs and keep the FHA program true to its mission 
     of serving low- and moderate-income Americans.
           Very sincerely yours,
                                                        Jack Kemp.

  Mr. NICKLES. Let me just conclude by stating that I regret coming in 
and opposing my friends and colleagues from Missouri and Maryland on 
this issue. But if my memory serves, several years ago the Senator from 
Maryland and I wrestled with this issue on the floor of the Senate.
  At that time there was an effort for people to raise the limits. I 
said, ``Wait a minute. Why are we having the Federal Government 
guaranteeing more and more loans?'' Home ownership, I might mention, in 
this country is at an all-time high. I think that is great. Most of 
that is done in the private sector. It just so happens FHA is losing 
its percentage share as the private sector has exploded. I think that 
is good.
  I think this increase is an effort by the Secretary of Housing to 
say, ``Wait a minute. We want the Federal Government to be making more 
loans.'' I also think it is also driven by a desire to generate more 
money for the Government. Because as you increase the loan

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limits, you increase the fees, and so on, and that allows the 
Government to spend more money.
  I will not get too technical on the budget, but if the committee 
raises money through fees and so on, that allows them to stay within 
the ``budget caps'' because they get an offset for the increase in 
fees, and as a result, by increasing the fees both on the bottom and 
the top, the committee is going to get about an extra $80 million a 
year over and above the budget that we agreed to last year, that the 
President signed. I am not saying it is not within the rules of the 
Congress. I am just saying I think it is an attempt to have more money 
to spend. I personally am somewhat troubled by that.
  Under existing law, loan rates on both the low end and the top end 
have already increased. They increased on the low end from $81,000 to 
$86,000. This committee bill increases it to $109,000. We do not touch 
that. I think maybe we should, but we do not.
  Our amendment just says we should not increase the top limit from 
$170,000--keep in mind, last year's was $160,000--to $197,000. A 
$10,000 increase in Federal Government loan guarantees in the high 
income areas, surely that is enough. The committee wants to take it 
almost $200,000. I think that is a serious mistake. I think that takes 
FHA away from its core mission. FHA's mission was to help low- and 
moderate-income people, not the wealthiest 15 percent of society.
  I urge my colleagues to vote in favor of this amendment. We will be 
voting on it early tomorrow morning. I think it is very important that 
we protect taxpayers from greater risk, and that we keep FHA focused on 
low and moderate income home buyers. I thank my colleague from 
Wisconsin for his leadership and support on this amendment, his 
coauthorship of this amendment, as well as my colleague, Senator Mack, 
from Florida, who happens to be chairman of the authorizing committee. 
I also want to thank Senators Faircloth, Allard, and Feingold for their 
support in trying to eliminate this expansion of the higher income 
limits for FHA.
  Mr. President, I yield the floor.
  Mr. BOND addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Mr. President, it is always good to see our former 
colleague on the VA-HUD committee come to the floor to talk about the 
difficult issues. We certainly appreciate his kind comments.
  The VA-HUD-Independent Agencies is a very challenging and interesting 
area. He raised the question about the increase in spending; and to 
explain that will perhaps give my colleagues some idea why this is such 
a complex area.
  The total spending includes--total spending is about $93 billion--
includes $22 billion in mandatory spending for veterans administration 
categories. That is about a $4 billion increase over fiscal year 1998. 
The increase is attributable largely to the following--about a $1.5 
billion increase in veterans administration, primarily mandatory 
spending, things over which our subcommittee has no control.
  In addition, there is, HUD figures, about $2.6 billion over last 
year's figure. And that is because money was taken from section 8 
contracts earlier in the year to pay for a supplemental. This is the 
budget that is always raided. And the broader Appropriations Committee 
has raided these section 8 contracts. That would be good except for the 
fact that the cost of renewing section 8 contracts in HUD continues to 
escalate.
  In fiscal year 1997, we needed $3.6 billion in budget authority to 
renew existing section 8 contracts. Because we had moved to shorter and 
shorter term contracts, from multiyear contracts down to 2-year and 1-
year contracts, it then shot up to $8.2 billion in budget authority for 
fiscal year 1998, the current year; and it jumps to $11.1 billion in 
fiscal year 1999. That is the result of the length of the contracts.
  But it means, in order to continue providing the same assistance we 
do currently under section 8, we have to have about $2.9 billion more 
in budget authority for fiscal year 1999 than we did for fiscal year 
1998. If you say we do not want to increase it, it means, in essence, 
that we are going to have to take away section 8 housing contracts and 
kick people out. That is just a simple choice.
  I must oppose the amendment of my good friend from Oklahoma to strike 
the increase in FHA mortgage insurance limits for high-cost areas and 
to offset that with an increase of 6 basis points to the fees that 
Ginnie Mae charges for servicing costs.
  The first point we need to make is that the FHA mortgage insurance 
increase is a bipartisan proposal, a bipartisan congressional proposal, 
that enjoys wide support from both Republicans and Democrats in this 
body. I do not see this modest increase as growing government. Rather, 
the FHA mortgage increase represents an approach to fill a gap that 
allows Americans of modest means--moderate-income Americans--to own 
their own homes, one of the great American dreams for all families.
  The FHA was established in 1934 as a result of nearly impossible 
lending conditions during the Great Depression, and in over 60 years 
the public-private partnership of FHA and private lenders has enabled 
more than 25 million families to realize the dream of home ownership. 
Moreover, the FHA Mortgage Insurance Program supplements and 
complements the role of private mortgage insurance by assisting 
families who do not have adequate resources to meet the private 
mortgage markets' downpayment requirement, which is often 20 percent of 
the mortgage amount.
  While the private mortgage insurance market has made tremendous 
strides in providing new products to assist families in purchasing 
homes, many families would be unable to purchase their home without the 
benefit of FHA mortgage insurance. In brief, the Senate VA-HUD fiscal 
year 1999 appropriations bill provides modest increases in the FHA 
mortgage insurance limits, raising the floor from 38 percent of the 
Freddie Mac conforming loan limit, or about $86,000, to 48 percent of 
the conforming loan limit, or some $109,000. It establishes a new 
ceiling for high-cost areas from the existing 75 percent of the 
conforming loan limit, or some $170,000, to 87 percent of the 
conforming loan limit, or some $197,000.
  And let me indicate where these higher loan limits would be 
implemented. Right now--this is a chart which shows the United States. 
The colors of the chart indicate where the low rate, the base limit, is 
in place. These are the areas in blue. This is where the base lending 
rate would go from $86,000 to roughly $109,000.
  The green areas on here are 95 percent of the local median.
  The high-low rate, the one which is being challenged in this 
amendment which is raised to $197,000, would be in these few red areas 
on the East Coast--essentially, Boston, New York, Washington, DC area, 
Denver, CO, and California along the coastline. The rest of the country 
is not affected by the increases in the higher-end loan limit.
  I think the legislation seeks to strike a reasonable balance to 
promote additional home ownership and would allow home ownership for 
some 30,000 families, 20,000 in high-cost areas and 10,000 basically 
nonurban areas. In particular, these new FHA mortgage insurance limits 
will help in nonurban areas where the price of new housing has 
escalated beyond the capacity of first-time home buyers to use FHA 
mortgage insurance to buy a house in some areas because the FHA lower-
limits financing is not available for construction of first homes for 
families of workers with lower wages.
  The problem is that the existing FHA mortgage insurance limits do not 
reflect the higher cost of new homes. New homes cost more than existing 
homes because of the cost of materials and labor. In addition, there 
are many other expenses. For example, the cost to develop new housing 
subdivisions is expensive because of the cost of utility hookups, 
environmental requirements, local taxes and surcharges for things like 
schools, roads, fire protection, as well as the cost of buildable land. 
Currently, the median price for a new home is $142,000, while the 
median price for an existing home is $126,500, for a $15,500 
difference.
  Now, this difference is very important for Missouri as well as the 
rest of the Nation. Home ownership in housing construction has been and 
always will be a locomotive for the U.S. economy. In addition to the 
jobs created through

[[Page S8346]]

the development of new housing, many nonurban areas in particular will 
be able to provide the affordable housing that is so critical to 
attracting new business and to maintaining existing businesses.
  I have talked with people in areas just outside the metropolitan 
Kansas, MO area, in areas of north Missouri, where they are benefiting 
from new jobs coming into the area but they are strangled because the 
new jobs bring in people who can't get housing. They can't get 
affordable housing. This is one of the critical needs for people in 
those areas so that they can continue to create jobs and see their 
communities grow. They need to have affordable housing. I am hoping 
that the raising of the lower limit will enable them to get FHA 
financing and build new homes.
  Now, I don't want to confuse anyone. As I said, Senator Nickles' 
amendment does not seek to reduce the increase to the FHA mortgage 
insurance floor, the one I was just talking about, as provided in the 
VA-HUD 1999 appropriations bill. Senator Nickles' concern, as well as 
those of his colleagues, is that the proposed new mortgage insurance 
limit of $197,000 for high-cost areas is too high. In particular, in a 
``Dear Colleague'' letter, Senators Nickles, Mack, Allard, Kohl, and 
Feingold state that to qualify for a mortgage of $197,000, a family 
would need an income of at least $75,000. Well, $197,000 is a lot of 
money for a house. That cost, however, is the reality in many areas and 
it needs to be addressed.
  In addition, I think it is fair to say that $75,000 is not an 
extraordinary amount of income for a family. For example, it means that 
a two-income family, a schoolteacher and a firefighter, will be able to 
live in a community in which they serve. This is important. I do not 
think we should lose sight of the importance of mixed-income 
communities while providing opportunities for home ownership.
  Moreover, as part of Secretary Kemp's FHA reform initiative as 
enacted in the National Affordable Housing Act, Price Waterhouse 
conducts an actuarial review of the FHA Mutual Mortgage Insurance Fund 
on an annual basis. From the perspective of actuarial soundness, NAHA 
mandated a fund to achieve a capital ratio of at least 2 percent by 
fiscal year 2000. However, the fund reached a capital ratio of 2.81 
percent in fiscal year 1997 and is expected to reach 3.21 percent by 
fiscal year 2000. Moreover, the projected economic value of the Mutual 
Mortgage Insurance Fund was $11.3 billion at the end of fiscal year 
1997. This represents a more than $14 billion increase in the value of 
the fund since Secretary Kemp's reforms in 1990, when it was a negative 
$2.7 billion.
  In addition, the FHA Single Family Mortgage Insurance Program is 
self-sustaining, has not cost the American taxpayer any money in its 
entire existence. Insurance premiums and loan loss recovery proceeds 
pay for all costs incurred in the administration of the program, 
leaving sufficient reserves from an actuarial perspective to pay all 
future claims.
  I note that Senators Nickles, Mack, and Faircloth have developed a 
number of very worthwhile reforms to the FHA mortgage insurance program 
which have been agreed to and will be included in the next managers' 
amendment. As with my colleagues, I remain concerned over HUD's 
capacity to administer its many programs, including its FHA mortgage 
insurance programs. These FHA management reforms would require that 
each lender provide a comparison of FHA mortgage funding with three of 
a lender's most frequently employed mortgage loan structures, an annual 
study by GAO on steering by lenders to FHA, and a requirement that HUD 
submit an initial report within 60 days annually on how HUD plans to 
correct mortgage problems in the FHA Single Family Mortgage Insurance 
Program.

  Finally, I have concerns about any changes to the Ginnie Mae 
servicing structure. I have been advised that any change in the 
servicing fee will likely result in increased home ownership costs to 
families, with estimates that it could cost consumers some $250 million 
per year and price some 15,000 home buyers out of the market each year.
  I have a letter from a significant group of veterans organizations 
that I will place at the end of my statement for the Record from the 
AMVETS, Disabled American Veterans, Non Commissioned Officers 
Association, Blind Veterans Association, and Paralyzed Veterans of 
America, saying that any increase in Ginnie Mae fees will result in an 
added cost to lenders which will invariably be passed on to VA loan 
recipients. We estimate that even just a 6-basis-point increase in the 
Ginnie Mae guarantee fee will cost VA borrowers over $67 million 
annually, with a typical veteran paying over $250 in upfront closing 
costs. With the veterans already struggling to afford their first 
homes, this cost increase would be devastating.
  I expect the argument of my colleagues will be that lenders currently 
receive a fee for servicing FHA-insured mortgages of 38 basis points, 
almost double the fee that lenders receive for servicing loans in the 
private sector. For example, as opposed to the 38 basis points lenders 
receive in service fees under FHA, lenders receive between 20 and 25 
basis points for servicing fees associated with conventional mortgages 
guaranteed by Fannie Mae and Freddie Mac. Nevertheless, Ginnie Mae 
operates significantly different from Fannie Mae and Freddie Mac, 
particularly when Fannie Mae and Freddie Mac take on the responsibility 
that all security holders receive their payments, whereas the servicer 
is responsible for the pass-through on a Ginnie Mae security, and where 
a servicer fails, it is no longer permitted to participate in a Ginnie 
Mae program. That is a significant responsibility and merits additional 
fees.
  I send this letter of July 14 to the desk. It happens to be addressed 
to the distinguished occupant of the Chair. This is a letter from 
AMVETS, Disabled Veterans, Non Commissioned Officers, Blind Veterans, 
and the Association of Paralyzed Veterans of America.
  I ask unanimous consent to have it printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                    July 14, 1998.
     Hon. Wayne Allard,
     U.S. Senate, Washington, DC.
       Dear Senator Allard: The Senate is scheduled to consider 
     the FY 99 VA/HUD Appropriations bill, S. 2168 in the next few 
     days. As organizations that share a deep commitment to our 
     nation's veterans, we ask that you oppose any amendments to 
     increase the Ginnie Mae guaranty fee. Specifically, this fee 
     increase would mean added costs to veterans taking out VA 
     mortgages. Quite simply, this policy would make homeownership 
     more expensive for veterans.
       Because VA mortgages are typically placed into mortgage-
     backed securities guaranteed by Ginnie Mae, the VA home loan 
     program is linked to the capital markets. This link means 
     lower cost mortgage funds for veteran borrowers. Ginnie Mae, 
     which charges lenders a fee for the guaranty, makes the whole 
     process possible.
       However, any increase in Ginnie Mae fees will result in an 
     added cost to lenders, which will invariably be passed on to 
     VA loan recipients. We estimate that even just a six basis 
     point increase in the Ginnie Mae guaranty fee would cost VA 
     borrowers over $67 million annually--with the typical veteran 
     paying over $250 more in up-front closing costs. With many 
     veterans already struggling to afford their first homes, this 
     cost increase could be devastating.
       Please vote against any amendments to increase the Ginnie 
     Mae guaranty fee.
           Sincerely,
     AMVETS.
     Disabled American Veterans.
     Non Commissioned Officers Association of the USA.
     Blinded Veterans Association.
     Paralyzed Veterans of America.

  Mr. BOND. I urge my colleagues, when the vote is held on this very 
important amendment tomorrow morning, that they oppose this amendment. 
I believe the time has come to provide this modest increase in the loan 
limits, and I hope our colleagues will support the committee in this 
effort.
  I yield the floor.
  Mr. KOHL addressed the Chair.
  The PRESIDING OFFICER. The Senator from Wisconsin.
  Mr. KOHL. Mr. President, I rise as a cosponsor of the amendment 
offered by my colleague from Oklahoma, Senator Nickles. As my 
colleagues know, this amendment would strike the increase to the high-
end FHA loan limit included in the VA/HUD bill.
  FHA is intended to fill an important mission--helping low- and 
middle-income Americans purchase their first

[[Page S8347]]

homes--helping those who are not served by the private market.
  For this reason, our amendment leaves the proposed increase to the 
low-end FHA loan limit in place, ensuring that in the vast majority of 
States across the country--97 percent of the counties in the United 
States--the loan limit will be more than sufficient for low- to 
moderate-income people to purchase homes of their own.
  But we should all be reminded that any decision to raise the loan 
limits on the high end should be approached with caution. FHA loans are 
100 percent insured by the Federal Government. If a home owner goes 
into default, it is the taxpayer, not the lender, that bares the risk. 
And that's no small risk--FHA default rates are three times higher than 
defaults on conventional mortgages. Last year, foreclosures on FHA 
homes resulted in over $5 billion in claims.
  There is no reason to extend that risk on behalf of home buyers who 
are already well-served by the private market. Raising the high end 
limit and expanding FHA to cover expensive homes may very well 
jeopardize the health of the entire program. Higher priced home loans, 
especially when combined with the relatively low downpayments required 
by FHA, default more often--and obviously cost more when they default. 
Raising the high end limit would clearly place the Federal Government 
in competition with the private sector, needlessly expose taxpayers to 
more risk, and give upper income home buyers access to mortgage credit 
they don't need.
  Changing the high end limit will steer the program away from working 
families--at a higher cost to taxpayers--with more devastation to the 
communities that hold abandoned, foreclosed-upon FHA properties.
  With this amendment, we have the chance to ensure that the program 
stays focused on borrowers who legitimately need help and also to 
create a strong, healthy FHA that works for everyone--home buyers, 
lenders, and the taxpayers.
  So I urge my colleagues to support the Nickles amendment.
  Mr. FEINGOLD. Mr. President, I rise today to join my colleagues, 
Senator Nickles, Senator Kohl and Senator Mack in supporting this 
amendment to strike language raising the ceiling on mortgage limits 
insured by the Federal Housing Administration.
  Mr. President, the appropriations bill we are currently considering 
includes language that would raise the ceiling on the Federal Housing 
Administration's loan limit from the current level of 75% of the 
conforming loan limit--approximately $170,000--to 87% of the conforming 
loan limit, which is approximately $197,000.
  Mr. President, it is--quite frankly--astounding to me that Congress 
is considering action that would raise the FHA loan limit. In a time 
when Congress needs to be focusing on balancing the budget, it is truly 
ironic to me that some members seem to want to increase the burden to 
taxpayers by expanding a government program into an area already well-
served by the private sector. In case you or any of our colleagues is 
wondering, a $197,000 loan translates to a house worth over $200,000. 
To afford such a house, a family would have to have annual earnings of 
over $75,000--an income level that only about 16% of American families 
are at. I don't know about you, Mr. President, but in Wisconsin, we 
don't consider folks who own $200,000 homes to be ``needy.'' These 
upper-income families are already well-served by the private market.
  Mr. President, the arguments against raising FHA loan limits are 
overwhelming: HUD's own FY 1999 Budget proposal predicts a 100% 
increase in the default rate for 1998--totaling $4 billion. The very 
same Committee Report seeking to raise the loan limits also 
acknowledges, and I quote, ``concern[s] about HUD's capability to 
manage the FHA mortgage insurance programs and the potential exposure 
of the Federal Government if there is an economic downturn.'' Since 
1990, while the mortgage delinquency rate in the conventional market 
fell by 8%, the FHA delinquency rate rose by 23%. FHA backs 100% of 
every loan it insures, and so those delinquencies and defaults are 
borne 100% by taxpayers. It would seem to me, Mr. President, that those 
who seek to increase FHA's loan-limits are sending a strong message 
that they are willing to let American taxpayers pick-up the tab.
  Mr. President, I have here a letter from the National Taxpayers Union 
to Congressman Bob Livingston, Chair of the House Appropriations 
Committee. The letter, which I would ask be inserted in the record, 
sums-up--I think very nicely--the manifold concerns with increasing the 
loan limit ceiling:

       Defenders of the FHA note that the agency provides an 
     important resource to lower-income familes and minorities who 
     wish to purchase a home. NTU fails to see how low-income 
     families will be served by FHA loans to those in the middle-
     to upper-class income range . . . Apparently, supporters of 
     raising the ceilings will not be happy until every wealthy 
     American owns a home at government expense.

  It would seem to me, Mr. President, that rather than raising the FHA 
loan limits, Congress needs to be thinking critically about what steps 
we can take to improve the actuarial safety and soundness of FHA 
programs so that it can continue to help working families purchase 
their homes. Rather than expanding the program for the benefit of 
upper-income borrowers and special interest groups, we ought to be 
thinking about how we can make sure those working families of modest 
means are truly being served by the existing FHA programs.
  Mr. President, the amendment my colleagues and I are introducing 
today would remove language raising the FHA loan limit ceiling and 
increase the Ginnie Mae guaranty fee by 12 basis points. I believe that 
raising the loan limit ceiling to $197,000 is fiscally irresponsible, 
unnecessarily expands a government program into an area already well-
served by the private sector, and distracts the FHA from its mission to 
serve lower-income home-buyers. I hope my colleagues will give careful 
consideration to these concerns and support our amendment.
  I yield the floor.
  Mr. SARBANES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Maryland is recognized.
  Mr. SARBANES. Mr. President, I rise in opposition to the Nickles 
amendment. The simple fact is that the Nickles amendment would greatly 
reduce the availability of FHA loans, which have helped millions of 
first-time, low-income and minority home buyers share in the American 
dream of home ownership. S. 2168, before us, currently includes a 
provision that would expand the FHA loan limits in high-cost markets 
only--in high-cost markets only--from a current cap of $170,000 to a 
new cap of $197,000 in such high-cost markets. My able colleague from 
Missouri earlier indicated on a map where those markets would be 
located.
  Now, the committee's proposal represents, I think, a very significant 
and appropriate compromise to the administration's request. The 
administration's request was to institute a single, nationwide loan 
limit of $227,000. The committee did not go down that path. The 
committee, instead, went down the path of raising the lower limit 
which, interestingly enough, this amendment does not try to strike, 
apparently, according to my colleague from Oklahoma, because of just 
political realities of the matter, and also raise the high-cost limit, 
maintaining that distinction. I think it represents a very significant 
compromise. I urge my colleagues to support the committee and to reject 
the amendment.
  Now, we are experiencing a time when almost two-thirds of American 
families own their own homes today. This would not have been possible 
without the FHA Single Family Mortgage Insurance Program. Each year, 
about 700,000 Americans purchase homes using FHA insurance. The vast 
majority of these home buyers could not qualify for a conventional home 
loan. If the FHA weren't available, they would not have been able to 
break into the ranks of homeowners.
  The point is made that the default rate within the FHA is somewhat 
greater, at 8 percent, than it is in the private insurance market. But 
that is because, of course, the FHA is making this opportunity 
available to people who would otherwise be closed out of the market 
altogether. Of course, the reverse side of the 8 percent is the 92 
percent who were able to break into the home ownership market.
  It is estimated that 77 percent of first-time home buyers and 85 
percent of minority home buyers who use FHA

[[Page S8348]]

would not have qualified for private mortgage insurance. And since the 
FHA insurance premium is financed through borrower premiums, it does 
not end up costing the taxpayer.
  One of the difficulties is that FHA insurance, at a set figure, 
cannot be utilized effectively in all parts of the country. Nationwide, 
there are 43 metropolitan areas, representing 25 percent of the 
population, which are capped at the current ceiling of $170,000. In 32 
out of the 43 metropolitan areas, the median home price exceeds the 
$170,000 figure. So at the $170,000 figure, in 32 of the 43 
metropolitan areas, the median home price exceeds that figure. In 
Maryland, half of our counties--12 of our 24 countries--are now capped 
at $170,000. Now, by striking the provision in S. 2168 which raises the 
loan limits in high-cost areas to $197,000, the result of the Nickles 
amendment would be that hundreds of thousands of Americans would be 
denied the opportunity to purchase modestly priced homes simply because 
they live and work in high-cost parts of the country.
  These are not wealthy Americans. These are teachers, policemen, and 
firemen who serve in communities where they often cannot afford to 
live. Now, this isn't just unfortunate, this is also unfair. What has 
to be understood is that a limit that will work in one part of the 
country will not work in another part of the country. In other words, 
if you say, well, we ought to give moderate-income people an 
opportunity to have home ownership, you have some parts of the country 
where the cost of housing is low, incomes are lower, costs are lower, a 
whole different dynamic works, and other parts of the country where 
costs are much higher and housing costs in particular are much higher.
  I can take you on a very short ride from here to jurisdictions where 
ordinary working people would not have a chance at home ownership, 
except through the FHA program. We need to raise those limits in those 
areas because the median housing cost is now well above the existing 
cap.
  Furthermore, I want to know--because of the split which the Senator 
from Oklahoma has made where he said he doesn't go after the lower 
limits, which, of course, have a much broader application throughout 
the country--the Nickles amendment imposes substantial increases in 
Ginnie Mae user fees. This imposes a double hit on consumers. First, 
the increased cost to lenders will be passed along to FHA consumers in 
the form of higher interest rates and/or larger downpayments. Second, 
FHA lenders may opt out of the program if the cost of participation 
becomes too high.
  The net result of these changes, the increase in the Ginnie Mae user 
fees, would be a substantial reduction in FHA use and availability even 
within the current loan limits. And to those of my colleagues who do 
not have high-cost areas in their State, I point out that the Nickles 
amendment provision to increase the Ginnie Mae user fees would hurt all 
FHA users regardless of the size of their loans. By contrast, S. 2168 
would increase FHA participation without placing a cost on the 
taxpayers or any additional financial burdens upon FHA consumers.
  Mr. President, the FHA program has helped millions of Americans 
purchase homes who would not otherwise qualify. The FHA program serves 
a much higher percentage of first-time, low- and moderate-income and 
minority home buyers than any conventional loan product.
  If we as a Nation are committed to supporting home ownership for all 
Americans, we should reaffirm our commitment to the FHA program.
  I really want to commend the committee, I think, for the very careful 
balance which they developed. This is a far departure from what the 
administration's request was. In fact, I think the committee obviously 
took into account the number of points that had been raised by 
proponents of the Nickles amendment in making their calculations and 
reaching their judgments in terms of what to do. But unless we raise 
the cap in the high-cost markets, they are really going to get excluded 
from the possibility of home ownership. People really qualify as low- 
and moderate-income people in those high-cost areas. The Nickles 
amendment allows the floor figure to come up, which in those areas of 
the country means that the very sort of people that I am concerned 
about in the high-cost areas would, in fact, not be able to obtain home 
ownership. I don't think the people in the high-cost areas who confront 
a whole different economic circumstance ought to be denied that 
opportunity.
  This program has been enormously important and successful in moving 
Americans into home ownership who would not otherwise have had that 
opportunity.
  I urge my colleagues to vote against the Nickles amendment.
  I yield the floor.
  Mr. MACK addressed the Chair.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. MACK. Mr. President, I rise in support of the Nickles amendment.
  At the outset, I want to say to the chairman of the VA-HUD 
Subcommittee, both to Senator Bond and Senator Mikulski, that I 
congratulate them for their effort in putting together what is 
generally a good and balanced HUD appropriations bill.
  As chairman of the HUD's authorizing subcommittee, I appreciate the 
difficulty of funding the most important parts of HUD's mission, while 
also addressing the critical need of the Department to reform its 
management and operations.
  I especially appreciate Senator Bond's cooperation in helping ensure 
the effective implementation of the section 8 ``mark-to-market'' 
program we enacted last year. However, on the issue of FHA loan limits, 
Senator Bond and I disagree.
  I am concerned that the Appropriations Committee did not consider the 
views of the authorizing committee. This is a major policy change that 
is being implemented through the appropriations process despite 
evidence gathered in hearings that would indicate that the change is 
ill-advised.
  Last month, the Housing Opportunity and Community Development 
Subcommittee held two days of oversight hearings on FHA. The 
Subcommittee heard extensive testimony from HUD, GAO, the HUD Inspector 
General and outside witnesses on the programs, operations and mission 
of FHA, and on proposals for reform. I heard little testimony at those 
hearings that made a compelling case to raise the FHA loan limit. As 
chairman of the authorizing subcommittee, I would not have recommended 
an increase in the loan limits.
  This bill does not contain the Administration's initial proposal for 
raising the loan limits--a proposal I strongly oppose. However, the 
proposal contained in the bill does focus attention away from the 
traditional mission of FHA of serving low- and moderate-income families 
and first-time home buyers. Further, it covers up some of the 
fundamental problems in the FHA single-family insurance program that 
jeopardize its long-term stability.
  This proposal would result in targeting FHA, in part, to households 
well above median income, the vast majority of whom are already 
homeowners. An increase in the maximum mortgage amount would do little 
to help the households that FHA is intended to serve, namely moderate 
income families who for one reason or another do not have access to the 
conventional mortgage market.
  Mr. President, Senator Nickles, I think, did a good job of arguing 
his position, and the points that Senator Sarbanes raised is one of the 
central areas of debate.
  I would like to focus my attention on some other aspects of FHA. I 
want to focus the bulk of my comments now on a series of management 
problems in FHA which should be corrected before FHA expands its 
program and assumes further risks.
  At a Housing Subcommittee hearing in May, we heard testimony 
concerning serious material weaknesses in internal controls, financial 
systems and resource management that make the Department vulnerable to 
waste, fraud and mismanagement. Although HUD is in the process of a 
major management reform program, the ultimate success of that effort is 
questionable.
  FHA, with about $400 billion of insurance-in-force and a portfolio of 
6.7 million single-family loans, is HUD's largest, most visible--and 
most vulnerable--program area. Many of the material weaknesses 
identified and described by the HUD Inspector General,

[[Page S8349]]

the General Accounting Office and others, involve FHA programs. 
Further, these problems have been identified in each independent audit 
of FHA conducted since fiscal year 1991.
  First, FHA's staffing resources have significantly declined over the 
past several years. Furthermore, the majority of staffing reductions 
that have already occurred or are planned under HUD's 2020 Management 
Reform come out of FHA's single-family operations. FHA's staffing 
resources have declined during a period where its insured portfolio has 
continued to increase. In 1992, FHA's staff was about 6,800, but today, 
its staff is down to around 4,100. This is equivalent to a 40 percent 
reduction. This raises concerns about the quality of skilled staff that 
remain at FHA today, since many senior staff have left the Department. 
Replacing this staff is problematic, since unlike private entities, FHA 
does not have the authority to hire staff or the ability to quickly 
invest more resources in automated tools or staff training when its 
business increase.
  Second, FHA has serious weaknesses with its accounting and financial 
management systems. The main problems with its information system is 
that the systems are not linked and integrated or configured to meet 
all financial reporting requirements. Also, data quality problems exist 
in its default monitoring system. Although these problems have been 
recognized for several years. The HUD Inspector General has found that 
``resources needed to develop state-of-the-art systems are lacking'' 
because of budgetary constraints or the lack of prioritizing these 
matters.
  FHA's accounting and financial management systems will also be 
affected by the so-called ``Year 2000'' or ``Y2K'' problem. FHA has 19 
critical systems that OMB has mandated to be Y2K compliant by March 
1999. However, only two systems have been programmed to address Y2K, 
and neither has been certified as Y2K compliant. The GAO recently 
warned that failure to address the Y2K problem could result in system 
failures that would interrupt the processing of applications for 
mortgage insurance and the payment of mortgage insurance claims.
  Third, data integrity problems with its default monitoring system has 
affected FHA's ability to effectively monitor the performance of its 
mortgagees. FHA also lacks an effective underwriting system that can 
predict which borrowers pose the greatest risk. Identifying and 
managing risk is absolutely critical to the long-term soundness of FHA.
  While FHA's single-family insurance fund currently exceeds its 
capital reserve requirement, there have been recent indications 
of potential problems in the FHA program. If these problems are not 
corrected, then FHA faces financial instability. For example, FHA 
defaults are serveral times higher than either the VA or the 
conventional mortgage market. During fiscal year 1997 claim payments 
for FHA-insured loans, especially for adjustable rate mortgages, were 
far higher than expected. The inventory of single-family properties 
owned by HUD increased by about 30 percent to more than 30,000. We have 
also heard and seen evidence that the geographic concentration of 
mortgage defaults, and FHA's inability to manage and monitor its 
portfolio, have damaged neighborhoods and permitted families to 
purchase homes that are either substandard or unafforable. In addition, 
Fannie Mae and Freddie Mac have recently introduced lower down payment 
mortgage products that may attract some of FHA's lower-risk borrowers, 
leaving FHA with more of the high-risk market.

  There is no denying that the FHA single-family insurance program has 
been a success. More than 24 million households have used FHA since its 
creation in 1934. FHA has traditionally been a preferred tool for 
homeownership by young families and first-time homebuyers and by lower 
income and minority households who for many reasons have not been 
served well by the conventional marketplace. And, thanks to reforms 
begun under Secretary Jack Kemp, FHA has made significant strides 
toward financial stability. I have a strong interest in ensuring that 
FHA take all of the necessary steps to ensure that it continues to 
serve the people and communities the program is intended to serve and 
will ultimately make the program more financially stable.
  However,I question whether it is prudent for any business, let alone 
one ultimately subsidized by the taxpayer, to expand its operations 
while attempting to deal with serious management problems. And on the 
basis of this concern alone, an increase in FHA loan limits would not 
be prudent.
  Mr. President, I yield the floor.
  Mrs. BOXER, Mr. President, I take the floor to stand in opposition to 
the amendment that would strike the raise in the ceiling on the Federal 
Housing Administration loan limit. I believe the raise in the ceiling 
is critical for high cost real estate market areas, and I urge my 
colleagues to vote no on this amendment.
  This bill raises the ceiling on FHA loans from 75 percent of the 
Freddie Mac conforming loan limit, which is about $170,000, to 87 
percent of the conforming loan limit, or about $197,000. This is 
particularly good for my state, where the cost of housing is so high, 
especially in Los Angeles and San Francisco.
  FHA loans encourages lenders to make mortgage credit available in 
areas and to borrowers who may not otherwise qualify for conventional 
loans on affordable terms, such as first-time home buyers. Raising the 
loan limit will help those who have not been able to get conventional 
loans because of small credit blemishes or a lack of a large cash 
downpayment. These are the gaps in homeownership that FHA now fills, 
across income levels, and home prices.
  This is a modest proposal, and one that helps consumers residing in 
high-cost areas of the country who are currently locked out of housing 
because the FHA maximum of $170,362 is less than the average cost of 
housing.
  The cost of housing is so high in the Bay Area, that Bridge Housing 
Corporation rarely uses FHA. Carol Galante, the president of Bridge, 
one of the largest non-profit housing developers in the country, says 
she rarely can use FHA insurance because the loan limits are so far 
below the median home price for Northern California.
  Raising the FHA loan limit will enable FHA to reach more borrowers 
and more communities which are not currently being served by the 
private mortgage industry. The raise in the FHA loan limit as provided 
for in this bill will help between 125,000 and 175,000 worthy American 
families, including 16,500 to 23,100 California families, to have 
access to homeownership over the next 5 years.
  In the 15 highest cost U.S. housing markets, the homeownership rate 
is only 58%. That is more than 7 percentage points below the national 
average, and in these markets, FHA is the only credit program not 
available to moderate-income households. Thus, in places like New York, 
Boston, Los Angeles, and San Francisco, over 7% of families are 
systematically denied access to homeownership. This increase in the 
loan limit will allow 18 counties in California to raise their loan 
limits.
  The increase in the loan limit will generate revenues of about $80 
million a year. FHA has never called upon the taxpayers for a bailout, 
and certainly will not under this proposal.
  Ms. MIKULSKI addressed the Chair.
  The PRESIDING OFFICER. The Senator from Maryland.
  Ms. MIKULSKI. Mr. President, I rise in opposition to the Nickles 
amendment.
  I wish to associate myself with the remarks by the chairman of the 
subcommittee, the Senator from Missouri, Mr. Bond, as well as the 
senior Senator from Maryland, Mr. Sarbanes, who also is the ranking 
member on the Housing, Banking, and Urban Affairs Committee. Senator 
Sarbanes outlined, I think in rather solid, logical terms, exactly why 
the Nickles amendment really is, though well-intentioned, flawed in its 
public policy ramifications, as did Senator Bond.
  I must say that initially, when Secretary Cuomo came and presented 
this idea, I really raised my eyebrows. I thought, my gosh, FHA--he 
wanted to raise the limit to $227,000. That is a quarter of a million 
dollars. That is a lot of money. Now, from the time I either chaired 
the subcommittee or now, as ranking, it has been my passion and my 
commitment to public policy to expand opportunities for first-time home 
ownership, and two significant tools

[[Page S8350]]

were in the VA-HUD Subcommittee--the VA mortgage itself, which has been 
a significant empowerment tool for minorities and for others who might 
have been really segregated out of the mortgage market, and also FHA 
has been very, very important in terms of first-time home buyers.
  But yet as we looked at the facts, it really became important for us 
to lift the limit, and we felt that a reasonable approach would be to 
raise the FHA loan limit in high-cost areas, many of which are in my 
State, from $170,000 to $197,000, and also to raise the limit in low-
cost areas from $86,000 to $108,000, which are also in my State, and to 
streamline the downpayment calculations to reduce administrative costs 
and burdens.
  The administration wanted to have just that one limit of $227,000 for 
all communities. I do not believe that one size fits all. I do believe 
we need to recognize the realities of the market.
  In addition to that, we are concerned about foreclosures, and we did 
not want to risk people getting into so much debt early in their lives 
or risking the loss of a home because they got in over their heads. We 
did not want to end up with heartbreak for the families and heartburn 
for the taxpayers.
  I believe what we have here is a good middle ground. Included in the 
language, in addition to the mortgage, we direct HUD to consult with 
Congress before beginning its bulk sale of foreclosed properties so 
that we can deal with the way they deal with foreclosed properties, 
which I am not happy about and I know the Presiding Officer is not 
either. I do not want to see those properties go at fire sale prices or 
end up blighting a community when it should have been a tool of 
empowerment. The Federal Government ends up being a slum landlord, 
selling it to someone who either cannot afford it or chooses to use it 
to downgrade the neighborhood. FHA should be a tool for first-time home 
buyers and not a tool for neighborhood deterioration.
  Let me just give you some figures from Maryland and why I think this 
bill is good for Maryland and also good for the Nation. There are three 
counties in Maryland at the current low end limit of $86,000. They are 
Allegany, Garrett, and Somerset. And I also know Dorchester sits 
somewhere in there as well. In Garrett, the realtors report that the 
median home price is $124,000 in a county where the FHA limit is 
$86,000. That is a poor county. FHA is a very important tool. It is not 
a poor county, but it is of very modest means.
  Eleven counties out of our 23 and Baltimore have limits at the FHA 
limit of $170,000, yet in Montgomery County housing the median price is 
$174,000. Raising these limits, I note, could help create 2,000 new 
home buyers in the State of Maryland.
  Well, Mr. President, that talks about Maryland, and I have a whole 
set of facts here on why it would be good for the Nation and also why 
increasing the Ginnie Mae fees would really give me pause, and I 
absolutely oppose raising the Ginnie Mae fees.
  What applies in Maryland will also apply in many communities around 
the country.
  This is especially true in many urban high cost areas, particularly 
in the Northeast and California. It is also true that in many rural 
areas in the heartland of the country. FHA does not meet the local 
market realities.
  HUD estimates that the provision we have included in our bill will 
provide for 17,000 new home buyers annually and generate $80 million a 
year in revenue for the FHA fund.
  HUD estimates the Senate's FHA increase will raise the limits in 32 
high-cost metropolitan areas and 174 lower cost areas.
  But let's be clear; we're not talking about buying a place, but we 
are talking about buying a home. It is estimated that the average loan 
amount under the Senate proposal will only be $142,000.
  We have raised the limits enough to meet today's market realities 
without unduly increasing the risks for foreclosures.
  FHA is also a critical resource to fill the gap for potential home 
buyers who are credit worthy, but don't have the money for large down 
payments. Two-thirds of FHA loans have down payments of 5 percent or 
less, while only 8 percent of private mortgage insurance purchases are 
low down payment loans.
  Why oppose the Nickles amendment? Two reasons: it eliminates the 
high-cost area increase and increases GNMA fees by 6 basis points, from 
6 to 12.


          eliminates increase in loan limit in high cost areas

  Striking the high-end increase will affect people in 32 high-cost 
areas across the country, including several areas in Maryland--
Baltimore City, and three counties: Baltimore, Montgomery, and Prince 
Georges.
  For thousands of people in high cost cities and counties across the 
country, FHA will be severely limited in its ability to provide this 
real resource for families shopping in the local housing markets.


                          increases gnma fees

  The Nickles amendment also increase the GNMA fees for those who 
handle FHA loans. This can get really technical, and the ``experts'' 
have a nice time detailing the intricacies.
  The bottom line is that it will cost more for a lender to have GNMA 
securitize both FHA and VA loans and despite what people may say, I 
think we all would agree that when costs go up for a product provider, 
costs often go up for the consumer.
  Simply put, this amendment could make FHA and VA loans more costly 
for consumers. HUD estimates that it will increase the cost to the 
lender by an average of $2,200. Several veterans services organizations 
have also estimated that the increase in GNMA fees will increase costs 
for veterans purchasing a home by $250. These costs may be passed along 
to those trying to purchase their first homes.
  We do not want to burden our first-time home buyers or our veterans 
with pass-through costs.
  Mr. President, home ownership is critical step in a person or 
family's attempt to obtain assets and become a more permanent fixture 
in a community.
  Like many of my colleagues, I share the concern about the effect that 
foreclosures can have on individuals' credit and the stability of a 
community. My own hometown of Baltimore has been a victim of 
foreclosures harming neighborhoods.
  We have provided a modest increase that does not raise the limit too 
much too quickly.
  Our objective is clear, for those who FHA serves, ensure that it is a 
useful tool. The objective is not to put the private mortgage insurance 
companies out of business or to move FHA away from providing for low- 
and moderate-income buyers.
  I believe that the FHA provision included in the Senate bill before 
us is good for Maryland and good for the Nation.
  I believe that this is a positive step in rewarding investment and 
provides relief to working families.
  I encourage my colleagues to oppose the Nickles amendment and support 
the Appropriations Committee's attempt to help home buyers across the 
country.
  Mr. President, I hope that we defeat the Nickles amendment at 
tomorrow's vote and I look forward to hearing my colleagues' comments.
  Mr. BOND. Mr. President, I think the distinguished Senator from 
Colorado wishes to speak on this. Has the Senator from North Carolina 
spoken yet? I believe he also wishes to speak. And then I believe we 
are ready to go on to the amendment by the Senator from Rhode Island. 
So I thank the Chair.
  The PRESIDING OFFICER (Mr. Mack). The Senator from Colorado.
  Mr. ALLARD. I thank the Senator from Missouri. I thank the Chair for 
recognizing me. I appreciate the other Members who are on the floor 
allowing me to go ahead and speak. I was presiding, and the Senator 
from Florida has graciously consented to give me some relief from the 
Chair while I come down and make some comments on this important piece 
of legislation.
  I want to talk a little bit about my State because I think it gives 
some idea of how this issue impacts my State.
  I happen to be rising in favor of the Nickles amendment, the Senator 
from Oklahoma. You see the map on the Senate floor entitled ``FHA Loan 
Limits by County,'' which was alluded to during comments made by my 
colleague from Missouri. During his comments, he pointed to the Rocky 
Mountain region in my State. That region

[[Page S8351]]

characterizes counties of high levels of income which would be impacted 
by the upper loan limit increase in the VA/HUD Appropriations bill. 
These counties have a high preponderance of second homes. The reason 
these counties have a higher FHA loan limit is that they are recreation 
counties. People who go to these counties and have second homes make a 
considerable amount of money.
  Now, there is no doubt that there is a housing problem in those 
counties for individuals who have to run the ski lifts, individuals who 
work in the ski lodges, but they do not have the income level to afford 
a loan of $197,000 for a home. In fact, some may not even qualify for 
the lower loan limit range, which we are raising from $86,000 to 
$109,000. In addition to this disparity of wages that you see in these 
areas, many of these counties have implemented a no-growth policy.
  Finding affordable housing is certainly a problem we all should 
strive to deal with, not just at the Federal level, but also at the 
local level, at the county level, and particularly at the city level. 
Many counties in Colorado, because of their rapid growth rate, have 
decided to try to slow down that growth by increasing the costs of 
development, increasing the costs of homes.
  If we have a problem in those counties with obtaining affordable 
housing, I think that local governments should have a responsibility 
and should implement some programs that would hold the costs of those 
homes down so that those with lower and median incomes can afford them.
  I think my colleague from Oklahoma, Senator Nickles, did a very good 
job in explaining what the current situation is, and the proposed 
increase of the FHA loan limit. Currently, the lower FHA loan limit is 
$86,000 and the upper limit is $170,000. This appropriations bill 
raises both of these limits to a lower limit of $109,000 and an upper 
limit of $197,000. I like the idea that we raise up the lower loan 
limits. I think that helps us meet the needs of lower income and 
median-income families. The higher income limits, in my view, don't 
need to be subsidized. Most of that market is already met by 
conventional loans. In fact, in order to have a $197,000 mortgage, a 
buyer typically needs an income level of $74,000 or more. These 
individuals are the top 16 percent of the income earners in the United 
States. Nearly 85 percent of households earning more than $50,000 
already own homes. I think that is reflected in the State of Colorado.
  I point out this idea of raising the loan limits is a rather 
controversial issue, as far as Colorado is concerned. The mortgage 
lenders in my State cannot reach a consensus as to whether this ought 
to happen or not. They are divided. So it is with a considerable amount 
of thought and concern that I enter into the debate as it applies to my 
State of Colorado.
  I see no reason why the Congress should be advocating that HUD 
compete against a very successful private market. I would also point 
out, from some of the testimony that was received by the Banking 
Committee on which I serve with the Senator from Florida, Senator Mack, 
there is really no clear connection between FHA loan limit increases 
and greater access to financing affordable houses.
  So when I put all these factors together, I find myself opposing 
raising the upper loan limit, and yet supporting an increase in the 
lower FHA loan limit. I think a lot of the testimony that was heard by 
the Banking Committee, the authorizing committee, was significant in 
pointing out that there is a three-times higher default rate for higher 
loans than there is for lower loans. In other words, the higher the 
loan is for the home, the higher the default rate is, as far as FHA is 
concerned.
  In this program, if there is a default on a loan, the taxpayers must 
pick up the cost. I do not think it is necessary for us to provide for 
that indirect subsidy.
  If we look at the lower loan limit, 73 percent of all mortgages of 
$85,000 or less are already provided by the private sector. Therefore, 
I think we can assume that this market is being serviced sufficiently. 
The FHA program is set up to make riskier loans to individuals who are 
not serviced in the private sector. By allowing the loan limit to 
increase, FHA will be insuring higher valued loans and will be, as a 
consequence, exposed to an increased risk.
  As I pointed out earlier, as these loan limits increase, the number 
of defaults will simply increase. I don't think that we should be 
increasing the upper loan limit. Therefore, I am supporting the Nickles 
amendment. I think it is the correct approach to the problem, 
particularly as it applies to my State. I think it is also the right 
approach as far as the country is concerned since only three percent of 
the counties will be affected by the upper limit.
  Without any further ado, I yield the floor. I thank Senators for 
their indulgence.
  Mr. FAIRCLOTH. Mr. President, I rise to support this amendment. This 
amendment does two things. First, it limits the FHA loan limit increase 
to the base level. Second, it creates an equal playing field for 
private sector and FHA loans.
  The current FHA limit for low-cost areas is $86,000. Although it gets 
indexed every year to median home sale prices in that area (so that it 
is increased annually), many believe that the limit is too low. Some 
argue that you cannot build new construction for $86,000.
  Now, I thought FHA was for first-time and low and moderate income 
home buyers. And I didn't realize that first-time home buyers were 
entitled to a brand new house. I thought FHA was supposed to help with 
``starter homes''. But some people feel otherwise and so this amendment 
will leave the increase in place that raises the limit from $86,000 to 
almost $109,000.
  However, I feel very strongly that we should not be raising the 
ceiling from the current $170,000 to more than $197,000. To qualify for 
a mortgage of $197,000 a person must make more than $75,000 a year. 
Only 15% of the people in this country make salaries that high--and 
most of those folks already own homes through the private sector.
  I don't think when President Roosevelt created FHA back in 1934 that 
he intended the program to help people making $75,000 a year. I don't 
think he intended for the federal government to back 100% of those 
loans. He believed that FHA should step in where the private sector 
cannot. The private sector is making these loans already. There is no 
reason to raise the limit to almost $200,000.
  Second, the amendment establishes a more level playing field between 
FHA and private sector loans so that borrowers are not steered towards 
FHA. Currently, lenders receive huge financial incentives to make loans 
through FHA.
  The first incentive is that the federal government insures 100% of 
the loan amount. There is no risk to the lender. Total to taxpayer. In 
the private sector, the lender assumes some of the risk of the loan so 
there is a greater stake in making sure that a borrower can pay back 
the loan.
  Second, under FHA, the lender makes twice the amount in servicing the 
loan than what he makes in the private sector. A servicing fee is 
charged for collecting the monthly mortgage payment, escrowing real 
estate taxes, etc. There is no justification why lenders should get 
much bigger servicing fees for FHA loans. CRS said that it would have 
no effect on FHA loans or increasing costs on homeownership. It only 
goes to the profit that the servicers make.
  Until we level the playing field lenders will have every economic 
incentive to steer borrowers towards FHA. Remember we've already given 
the lender a 100% federal guarantee that the loan will be paid back. 
Now we are making them rich in servicing fees.
  I urge my colleagues to support this amendment. FHA has a lot of 
problems already. Default rates for FHA loans are already three to four 
times the rate of the private sector. Unless we take steps to change 
the situation and deter borrowers from being steered towards FHA, 
things may only get worse for the program and, ultimately, the country. 
Join consumer groups, the National Taxpayer Union and others in 
supporting this amendment.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Mr. President, as the ranking member on the Committee 
on Banking, Housing and Urban Affairs, I echo the comments made by 
others praising the work that has been

[[Page S8352]]

done by Senator Bond and Senator Mikulski in framing the housing part 
of this appropriations bill. I have had a chance to go over it. I think 
they have been very sensitive to the various concerns existing in this 
field. I think they have done a very good job on the legislation. So as 
the ranking member on the authorizing committee, I want to enter that 
into the Record as others have done, recognizing the general work they 
have done on this legislation.
  Ms. MIKULSKI. I thank my colleague.
  The PRESIDING OFFICER. Does the Senator wish a recorded vote?
  Mr. BOND. Mr. President, I do not see any other Senators wishing to 
speak on this amendment.
  Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. BOND. I ask this amendment be set aside and the Senator from 
Rhode Island be recognized to offer his amendment.
  The PRESIDING OFFICER. The Senator from Rhode Island.


                           Amendment No. 3203

   (Purpose: To increase the funding for community development block 
                                grants)

  Mr. REED. Mr. President, I have an amendment at the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Rhode Island [Mr. Reed] proposes an 
     amendment numbered 3203.

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

       On page 33, line 17, strike ``$60,000,000'' and insert 
     ``$70,000,000''.
       On page 33, line 21, insert ``Provided: That none of these 
     funds shall be available for the Healthy Homes Initiative'' 
     before the period.

  Mr. REED. Mr. President, I am offering this amendment tonight not 
only on behalf of myself, but Mr. Abraham, Mr. Chafee, Mr. Leahy, Mr. 
Wellstone, and Ms. Mikulski. My amendment would add a modest $10 
million increase to the budget for the Office of Lead Hazard in the 
Department of Housing and Urban Development.
  I first want to commend and thank the chairman and ranking member for 
their assistance and their help. Both Senator Bond and Senator Mikulski 
have committed to finding more resources to prevent the exposure of 
young children to the lead hazard which is so prevalent in older 
housing throughout the United States. They have worked very closely 
with my staff and myself. I thank them for that. I am also very 
confident they will continue these efforts in conference so we can 
increase even more the funds that are allocated to this important 
endeavor.
  Over the last 20 years, the United States has made great strides in 
reducing lead exposure among our population, particularly among our 
children. Since the enactment of a ban on lead-based paint, since the 
elimination of lead solder in food cans and the deleading of gasoline, 
we have seen a significant decrease in blood level exposures of 
American citizens by about an order of 80 percent. However, it is still 
estimated that approximately 1 million children nationwide still have 
excessive levels of lead in their blood, making lead poisoning a 
leading childhood environmental disease and a disease that can be 
prevented.
  Today, the key culprit in this exposure is lead-based paint in 
housing. It is the major source of exposure and is responsible for most 
cases of childhood lead poisoning. It has been estimated that 
approximately half of America's housing stock, roughly 64 million 
homes, contain some lead-based paint. Twenty million of these homes 
contain lead-based paint in a hazardous condition, paint which is 
peeling, cracked or chipped, paint that can be ingested by children, 
taken into their bloodstream, causing them severe health problems.
  The problem of lead-based paint is particularly severe in my home 
State of Rhode Island. Forty-three percent of our housing stock was 
built before 1950, the time in which lead paint was universally used in 
painting homes.
  But the problem of lead-paint exposure and lead-paint poisoning in 
children is not related to Rhode Island; it is truly a national 
problem. One in 11 children nationwide have elevated blood levels, and 
if you refer to the chart on my left, you can see that, for example, in 
the city of Baltimore, 22 percent of children age 1 through 6 have 
dangerously high levels of blood--Chicago, 12 percent; Davenport, Iowa, 
18 percent; Denver, CO, 16 percent; Milwaukee, 36 percent; St. Louis, 
MO, 23 percent; my home State, Providence, RI, 28 percent of children 
tested have higher than normal levels of lead in their bloodstream. 
This is a nationwide problem. It is a problem particularly severe in 
the older urban areas of the country, but not exclusively there.
  Again, one of the key factors is housing stock of the community. 
Housing built before 1950 typically have extensive lead paint still 
residing in these homes. If you look across the country, there are 
States everywhere that have significant totals of housing built before 
1950. For example, in Illinois, 36 percent of the housing was built 
before 1950; in Michigan, 31 percent; in New York, 47 percent.
  All of this points to an extremely important public health problem. 
It is important because childhood lead poisoning has a profound health 
effect on children, a profound educational impact on children, their 
ability to learn and their ability to develop intellectually. Children 
with high blood levels can suffer from brain damage, behavior and 
learning problems, slow growth and hearing problems.
  Children with a history of lead poisoning frequently require special 
education to compensate for intellectual deficits and behavior 
problems. In my State of Rhode Island, officials believe special 
education services are 40 percent higher among children with 
significant lead exposure, and in 1990 dollars, it costs roughly an 
additional $10,000 to provide special education services to a child.
  By failing to eliminate the hazard of lead in homes, we are harming 
not only the children directly, but we are also incurring huge 
additional costs for education and health care. This is truly a problem 
that we must address, and we have to address it with the resources 
necessary to address this problem effectively.
  Mr. President, childhood lead poisoning is a significant health, 
educational and fiscal issue. We must do everything to eliminate this 
lead-based paint hazard to our children. By providing sufficient 
funding to the HUD's Office of Lead Hazard Control, which has the 
primary responsibility for addressing this hazard in housing, and since 
1992, the Office of Lead Hazard Control has been a highly effective 
component of the Federal Government's effort to address childhood lead 
poisoning.
  Through its grant program, this office has provided grants to State 
and local governments to reduce the exposure of young children to lead-
based paint hazards in their homes. Specifically, they have given 
grants to privately owned homes, to low-income occupied, and rental 
housing, all in an attempt to help them eliminate the source of lead 
poisoning in children, the most common source, and that is lead paint 
within homes.
  Since 1993, $385 million has been awarded to 30 States and the 
District of Columbia. These grants have helped abate or mitigate lead-
based paint hazards in 50,000 homes where young children reside. 
Regrettably, this is just, in effect, the tip of the iceberg, because 
there are so many homes that have these particular hazards to children.
  In addition to helping mitigate and abate lead exposure in homes, 
they have also supported programs to test children for lead-based paint 
exposure, and also to test the homes. All of these efforts together 
have helped in some small way to eliminate this problem, and I have had 
the opportunity in my own home State of Rhode Island to visit and look 
at the efforts that are undertaken to eliminate these exposures to 
children. They are important.
  What is most important is ensuring that we have the resources so that 
we can protect the health of all of these young children. As I stated 
before, this is a problem that is terribly frustrating. We know that 
children, if they ingest lead into their system, will suffer some type 
of health effect. This health effect will usually result in poor 
intellectual development and behavioral problems. We will be paying 
later through special education and through

[[Page S8353]]

the lifetime of these children who then become adults.
  We can at this point take an effective step to ensure that these 
problems are addressed. It is preventable. It is a pediatric disease we 
can prevent if we simply get the lead out. My amendment this evening 
will increase the resources to the Office of Lead Hazard Mitigation so 
that we can, in fact, help local communities ensure that the housing 
these young children are living in is lead free.
  Oftentimes, the families of these children have no choice. They must 
go to homes that is the best available housing, but in providing a 
shelter for their child, in some cases unwittingly they are exposing 
their child to a hazard which will claim not only their health, but 
also their intellectual development.
  I urge all of my colleagues to support this amendment. I am prepared 
to yield to the chairman at this time.
  Mr. BOND addressed the Chair.
  The PRESIDING OFFICER (Mr. Allard). The Senator from Missouri.
  Mr. BOND. Mr. President, I commend the Senator from Rhode Island 
because there is no question about the dangers of lead-based paint, 
what hazards they present. This is a critical program. The program is 
funded at $60 million. The Senator's amendment will increase it to $70 
million.
  There is a great need to reduce lead-based paint hazards for 
children. As the Senator has pointed out, some of the statistics of 
lead-based paint and the dangers in some of our more mature urban areas 
is really frightening. I believe the figures are that there are some $3 
billion in housing rehabilitation needs existing out there to address 
all of the lead-based paint problems in the country.
  It is our desire to accept the amendment on this side. The funding 
will be taken from the overall CDBG funding of $4.75 billion, which is 
$75 million over last year's level. We are willing to accept it on this 
side.
  Ms. MIKULSKI. Mr. President, I, too, concur with the chairman. I 
thank the Senator from Rhode Island for his leadership. The facts speak 
for themselves. The situation in Baltimore of 22 percent of children in 
Baltimore city have some type of lead in their blood, this is a serious 
issue. I won't go into all the public health aspects and pediatric 
consequences this late. But I will tell you what it means.
  It means lower intellectual achievement. It means a lethargy, a 
sluggishness that is perpetual. Unless the child has their blood 
chelated, and if you go into Johns Hopkins and you are going to have 
your blood chelated because there was lead paint dust on your mom's 
kitchen table that kind of got mixed up with after-school cookies, then 
it is going to cost $8,000 in Medicaid to clean out your blood.
  Even if we can clean that blood out, we can't necessarily clean out 
the consequences that have already set this child back, particularly in 
cognitive development.
  I thank the Senator from Rhode Island for raising this, to move it 
up.
  I am glad we can finally accept it with an offset. I asked that I be 
a cosponsor of the amendment. And we know that we need more research. 
We need the type of licensed people to be able to clean out the lead 
paint and protect our children. I view this as an important public 
health, get-behind-our-kids initiative. I look forward to just 
accepting it and defending it in conference.
  The PRESIDING OFFICER. Is there further debate on the amendment?
  The question is on agreeing to the amendment.
  Without objection, it is so ordered.
  The amendment (No. 3203) was agreed to.
  Mr. BOND. I move to reconsider the vote.
  Mr. REED. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. BOND. I thank the Senator from Rhode Island.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.


                           Amendment No. 3204

(Purpose: To prohibit the Administrator of the Environmental Protection 
Agency from implementing or enforcing the public water system treatment 
requirements related to the copper action level of the national primary 
 drinking water regulations for lead and copper until certain studies 
                            are completed.)

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

       The Senator from Nebraska [Mr. Kerrey], for himself and Mr. 
     Hagel, proposes an amendment numbered 3204.

  Mr. KERREY. I ask unanimous consent that reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:
       On page 93, between lines 18 and 19, insert the following:

     SEC. 423. TEMPORARY PROHIBITION ON IMPLEMENTATION OR 
                   ENFORCEMENT OF PUBLIC WATER SYSTEM TREATMENT 
                   REQUIREMENTS FOR COPPER ACTION LEVEL.

       (a) In General.--None of the funds made available by this 
     or any other Act for any fiscal year may be used by the 
     Administrator of the Environmental Protection Agency to 
     implement or enforce the national primary drinking water 
     regulations for lead and copper in drinking water promulgated 
     under the Safe Drinking Water Act (42 U.S.C. 300f et seq.), 
     to the extent that the regulations pertain to the public 
     water system treatment requirements related to the copper 
     action level, until--
       (1) the Administrator and the Director of the Centers for 
     Disease Control and Prevention jointly conduct a study to 
     establish a reliable dose-response relationship for the 
     adverse human health effects that may result from exposure to 
     copper in drinking water, that--
       (A) includes an analysis of the health effects that may be 
     experienced by groups within the general population 
     (including infants) that are potentially at greater risk of 
     adverse health effects as the result of the exposure;
       (B) is conducted in consultation with interested States;
       (C) is based on the best available science and supporting 
     studies that are subject to peer review and conducted in 
     accordance with sound and objective scientific practices; and
       (D) is completed not later than 30 months after the date of 
     enactment of this Act; and
       (2) based on the results of the study and, once peer 
     reviewed and published, the 2 studies of copper in drinking 
     water conducted by the Centers for Disease Control and 
     Prevention in the State of Nebraska and the State of 
     Delaware, the Administrator establishes an action level for 
     the presence of copper in drinking water that protects the 
     public health against reasonably expected adverse effects due 
     to exposure to copper in drinking water.
       (b) Current Requirements.--Nothing in this section 
     precludes a State from implementing or enforcing the national 
     primary drinking water regulations for lead and copper in 
     drinking water promulgated under the Safe Drinking Water Act 
     (42 U.S.C. 300f et seq.) that are in effect on the date of 
     enactment of this Act, to the extent that the regulations 
     pertain to the public water system treatment requirements 
     related to the copper action level.

  Mr. KERREY. Mr. President, I ask for the yeas and nays on this 
amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  Mr. KERREY. Mr. President, I am offering this amendment together with 
my colleague from Nebraska, Senator Hagel, to delay implementation of a 
rule that has been promulgated by the Environmental Protection Agency. 
This delay would be required until the agents review existing 
scientific data to determine whether there is ample evidence to support 
the rule.
  Mr. President, this rule, together with the rule on lead, is there to 
protect Americans, to give us safe drinking water. Unlike lead, 
however, copper is an essential element and is regulated in a much 
different fashion. I intend with my statement to lay before the body an 
appeal.
  Nebraska has an unusual situation. Perhaps other States do have a 
similar situation. But ours is essentially this: The Environmental 
Protection Agency has a limit with their rule of 1.3 milligrams per 
liter. There isn't a single city in Nebraska that has 1.3 milligrams 
per liter. Here is the problem. In some communities, the water level is 
sufficiently acidic if it remains in the pipes for 6 hours or longer. 
When you turn the water on, you will get more than 1.3 milligrams per 
liter. Run the water for a minute, and the water drops below 1.3 
milligrams per liter.
  The EPA is saying, it does not matter. The EPA is saying, ``We test 
the

[[Page S8354]]

water. It comes out of the pipe immediately. It is over 1.3 milligrams; 
therefore, you have to make investments, substantial investments.''
  Hastings, NE, is having to invest about $1 million initially, and 
$250,000 per year. Sixty communities are being asked to make 
substantial investments in their water systems to remove copper from 
their water, even though not a single citizen in Nebraska is getting 
sick--not a single person. I emphasize this.
  The EPA comes into Nebraska and says, ``You are right, Senator, 
nobody is getting sick.'' I say, ``Wait a minute, what is the Safe 
Drinking Water Act for?'' They say, ``Well, it is to make the water 
safe.'' I say, ``The water is safe, is it not? If somebody was getting 
sick, then we would have unsafe water.'' They say, ``Yes, that is 
right. But we have established 1.3 milligrams per liter as the level 
allowed.'' And even though there is not a single community with 1.3 
milligrams per liter--if it sets in the pipe 6 hours--even though it is 
flushed out immediately, and even though the State public health people 
are willing to implement a program of public education to make sure 
they stay below 1.3 milligrams, the EPA says, ``It doesn't matter.''
  Unfortunately, Mr. President, this has become one of those litmus 
test issues. I have talked to many people in the environmental 
community. And they have said to me, ``Gee, Senator, you can't put this 
on this bill because it is another rider.'' They compare it to the 1995 
bill--I guess it was 1995 or 1996--the year when a lot of riders were 
attached. ``We don't want another rider.'' I said, ``Well, what does 
that have to do with anything? Do you think the public health data 
supports what you are trying to do in Nebraska? Is there a reason?'' 
They say, ``No, it doesn't matter. What we are talking about here, 
Senator,'' they say, ``is politics. We don't disagree with the public 
health aspect of this.''
  Mr. President, I ask unanimous consent that two studies be printed in 
the Record, both done by the Centers for Disease Control, that say 
there isn't a problem.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

        Interim Trip Report: Cu Health Effects in Delaware, 1996


                            Dates and Places

       Washington, DC: Feb. 12.
       Dover, DE: July 10-12, July 29-Aug. 7, Nov. 7-8.


                               Background

       Copper is an established gastro-intestinal irritant which 
     has been documented to cause nausea, vomiting, stomach 
     cramps, and diarrhea in humans. The lowest level at which 
     these adverse effect occur has not been well defined. 
     Following amendments to the Safe Drinking Water Act in 1986, 
     EPA promulgated a revised standard for Cu. The new copper 
     standard required action, such as the installation of 
     corrosion control measures, when the highest 10% of first 
     morning flush household tap samples exceeds 1.3 mg/1 for a 
     given water distribution system. During a state-wide survey 
     of water systems in Delaware in 1995, 35 systems exceeded the 
     action level for copper. Thirteen of these systems had 10% of 
     their samples higher than 5.3 mg/1, the EPA's LOEL (lowest 
     observable effect level).
       Out of concern for the health of individuals consuming high 
     levels of copper, and to utilize the unique social and 
     geological conditions in Delaware to better document the 
     consequences of such exposure. Delaware Health and Social 
     Services contacted CDC for technical assistance. Many small 
     communities in Delaware have older houses with copper pipes 
     and utilize untreated, acidic groundwater sources from high 
     silica soils. The results of this collaborative effort are 
     presented herein. Note that data collection is ongoing and 
     the results presented are those of a work in progress.


                         Principle Persons Met

       EPA: Jeff Cohen, Office of G.W. and D.W.; Ken Baily, ORD; 
     Bruce Mintz, ORD; Ed Hoddum.
       Delaware: Ed Hallock, Barbara Ashby, Raymond C. Davidson, 
     and Donna Stulir, Office of Drinking Water, Health and Social 
     Services; Gerald Llewellyn, Dir. of Public Health, Health and 
     Social Services; Mahhadeo Verma, Director, Public Health 
     Laboratory; and Christopher Zimmerman, Dep. Dir., Public 
     Health Laboratory.


                                Methods

       Those communities which has high levels of copper during 
     the state-wide survey of 1995, had a population over 100, and 
     which were suspected of not having installed adequate 
     corrosion control measures as of June, 1996 were included in 
     the study. Because of the widespread installation of 
     corrosion control systems in the preceding year, only 4 
     communities met this criteria. One additional trailer park 
     which not in violation during the 1955 survey but which had 
     older homes with acidic water was also visited. All household 
     in the area with homes built before 1980 were visited.
       Contacted households were given a copper free container and 
     asked to capture the first water of the day out of whichever 
     tap they usually drank on the following morning. Participants 
     were asked not to run any other taps and not to flush their 
     toilets in the morning until after they had collected the 
     water sample. On the morning after the bottles were handed 
     out, samples were picked-up by investigators, stored in a 
     cooler, and taken to the State Public Health Laboratory by 1 
     PM.
       Households with > 5.0 mg/l copper in the first flush sample 
     were revisited and interviewed. For each of these ``High 
     Copper'' households, 2 neighborhood matched ``Control'' 
     households were interviewed. Potential control households 
     were those with less than 0.5 mg/l copper in the first flush 
     water sample they had provided. A copy of the interview form 
     is attached.
       To attempt to estimate individual doses, all ``High 
     Copper'' individuals and 10 individuals from ``Control'' 
     households were asked to collect a daily water intake 
     sample in a provided bucket. To do this, each time a 
     person ingested coffee, or water, or any other drink 
     containing water, they were asked to put an equal volume, 
     taken from the same tap at the same time, into a bucket. 
     Houses were also revised at the end of the study to obtain 
     a second first flush water sample to help confirm that 
     their exposure status did not change over the course of 
     the study. Blank samples consisted of bottles filled with 
     store bought distilled water. Some bucket samples were 
     shaken and two bottles were filled to serve as duplicates. 
     The laboratory was blinded to the cohort status and the 
     sample type (first flush vs. blank vs. bucket) by a sample 
     numbering scheme. Duplicate samples were separated in the 
     numbering sequence.
       Households were contacted by phone once per week over a 
     period of 12 weeks between August 5th and October 21st. 
     Interviewees were asked, ``Has anyone in your household been 
     ill during the past week?'' If the answer was yes, a 
     questionnaire regarding patient symptoms was completed. No 
     individuals were ill with the same symptoms for more than one 
     phone interview. A copy of the illness inquiry form is 
     attached.
       Households that were called 3 times without an answer were 
     considered ``not contacted'' for that week. Households who 
     departed for the season or asked to no longer be contacted 
     were terminated and information from the household was 
     included for those person-weeks during which successful phone 
     contact took place. Weeks in which interviewers neglected to 
     call households were also excluded from the analysis.
       Self-reported nausea, vomiting, stomach cramps, diarrhea, 
     and constipation were all defined as being consistent with 
     copper toxicity (CCT). Having acute nausea and/or vomiting 
     alone or with a headache, or any 3 of the 5 symptoms 
     consistent with copper toxicity was defined as indicative of 
     copper toxicity (ICT).


                                results

     Cohort selection
       867 houses were approached and 365 successfully contacted 
     (42%). Of those, 7 (1.9%) refused to participate, 32 (8.8%) 
     drank bottled water exclusively, and the remaining 326 self-
     reported tap water drinkers were asked to collect a first 
     flush sample. Forty-seven households (14.4%) did not return 
     the sample bottle. Of the 279 samples collected, 23 were 
     above 5.0 mg/l copper.
       Of these 23 high copper households, 3 could not be re-
     contacted, and 3 decided that they did not drink the water by 
     the time they were re-contacted. 17 high copper households 
     were enrolled in the study. During the course of the study, 2 
     households began drinking bottled water, 1 used a RO unit 
     which had been by-passed during our initial sampling, and 1 
     pregnant woman was advised by the investigators to drink only 
     bottled water. Thus, 13 households and 40 individuals were 
     followed over the entire course of the study. Of the 40 
     enrolled control households, 3 acquired filters during the 
     course of the study and 7 reported beginning to use bottled 
     water exclusively. These control households were not excluded 
     from the analysis since the new water source did not change 
     their copper exposure status. Two control households and 1 
     ``High Copper'' household asked to be dis-enrolled during the 
     study.
     Water
       The average ``High Copper'' household first flush 
     concentration was 7.21 mg/l Cu among the 17 households 
     enrolled. Nine bucket samples were collected from nine 
     individuals. The average first flush concentrations for these 
     people was 7.00 mg/l Cu while the average daily intake value 
     was 2.91 mg/l Cu. Thus, average intake was 41% of first flush 
     values. These 9 people ingested an average of 2.3 quarts per 
     day according to our bucket collection procedure.
     Health
       A summary of the weekly phone surveillance results is 
     presented below.

------------------------------------------------------------------------
              Parameter                     Control          High Cu    
------------------------------------------------------------------------
No. of households....................               40               13 
No. of individuals...................              102               40 
Person/week-phone contacts as a % of                                    
 attempts............................    818/1127 (72%)    346/413 (84%)
Illness events (all).................               26               15 
Persons ill at some time during study        20 (19.6%)       11 (27.5%)

[[Page S8355]]

                                                                        
Cases consistent with Cu toxicity                                       
 (CCT)...............................               31                9 
Cases CCT/all person-weeks...........     31/818 (3.8%)     9/346 (2.6%)
No. of people with CCT at some point.        13 (12.6%)        8 (20.0%)
Cases indicative of copper toxicity                                     
 (ICT)...............................               22                4 
Cases ICT/all person-weeks...........     22/818 (2.7%)     4/346 (1.2%)
No. of people with ICT at some point.          9 (8.8%)        4 (10.0%)
------------------------------------------------------------------------

     Other findings
       It is possible that more people (as a fraction of the 
     population) consume high levels of copper (>5 mg/l) in their 
     water in Southern Delaware as anywhere in the U.S. Therefore 
     Gerald Llewellyn and Laurie Cowen of Delaware's Dept. of 
     Health and Social Services searched the state databases to 
     look at the incidence of Wilson's Disease, an illness 
     previously associated with copper ingestion. Between 1979 and 
     the present, only one case of Wilson's Disease was reported 
     in the State and that case occurred in the Wilmington area 
     where systems have little problem with corrosion control. 
     This is a Statewide reported rate of .08 illnesses per 
     million population per year. Nationally, approximately 15 
     deaths per year were recorded between 1979 and 1992 with 
     Wilson's Disease being listed as the primary cause. Between 
     1988 and 1990, less than 700 hospital discharges were 
     estimated to occur nationally via the NCHS Hospital Discharge 
     Database (less than 2.8 hospitalizations per million 
     population per year). Given the rarity of Wilson's Disease 
     and the potential for incomplete reporting of this illness, 
     little significance can be attributed to Delaware's 
     apparently lower rate of the illness.


                               Discussion

       While the study reported herein included far fewer 
     households than initially intended, there seems to be no 
     difference in the symptoms typically associated with copper 
     toxicity among the two study groups. If copper is a gastro-
     intestinal irritant at the levels observed in the 40 
     individuals included in our study, the effect was not 
     observed here. The most specific and direct indicator for a 
     persistent irritant would be displayed by contrasting the 
     persons meeting the most specific case definition divided by 
     the number of person/week observation periods, ``Cases ICT/
     all person weeks'' in this study. Individuals in the ``High 
     Copper'' household had a statistically similar, but lower 
     rate of symptoms ``Indicative of Copper Toxicity'' than did 
     the individuals in the ``Control'' households.
       There are three possible explanations for this finding.
       (1) People drinking water with an average of 2.7 mg/l Cu 
     and with a first flush level of 7.2 mg/l are not ingesting 
     enough copper to develop G.I. symptoms.
       (2) The ``High Copper'' exposure level in this study is 
     enough to make people sick, but not the people in this study.
       (3) These copper levels do make people sick, but the study 
     failed to detect this fact.
       Addressing these issues in reverse order, while the sample 
     size in this study was small, it is likely that a major 
     effect from copper ingestion would have been detected. People 
     displayed symptoms, like those expected in copper toxicity 
     cases (ICT), during approximately 2% of the person weeks 
     surveyed (2.7% in control households, 1.2% in high copper 
     households). Thus, if the effect was missed due to a lack of 
     power in the study, the effect is likely to be less than 3 
     episodes of nausea or vomiting per person per year, which is 
     not consistent with the ongoing symptoms of copper toxicity 
     typically described in the scientific literature. The final 
     data set was sufficient in size to detect a relative risk of 
     2.5 in ``cases ICT/all person weeks'' and a relative risk of 
     3.5 in the ``number of people with ICT at some point'' with 
     95% confidence and 80% power. While self-described symptoms 
     via a phone interview can produce lower quality data than 
     some other methods, for exmaple, medical examinations, it is 
     unlikely in this case that a systematic bias on the part of 
     the interviewee or the interviewer resulted in an 
     underreporting in the ``High Copper'' cohort. The 
     interviewers were blinded to the cohort status of the study 
     participants.
       Explanation 2, that the study population was not 
     susceptible to copper induced illness, is somewhat more 
     problematic. People may be susceptible to copper for a short 
     period and then acclimate. This study had very few transient 
     participants and most households had been at their present 
     location for months or years. Likewise, within a population, 
     some individuals may be particularly susceptible to copper 
     toxicity, realize that their water is making them ill, and 
     change sources. Because households who reported not 
     drinking their water were not enrolled in the study, the 
     data here cannot address that possibility. Several people 
     during the initial interview process reported becoming ill 
     after moving to their present address and attributed their 
     illness to their water. Several of these individuals lived 
     in ``High Copper'' homes.
       Explanation 1, that the ingested levels of copper in the 
     study were not sufficient to cause illness, seems the most 
     likely explanation, perhaps in conjunction with the self-
     exclusion bias described above. Given that the average intake 
     was 2.4 liters with a Cu concentration of 2.9 mg/l, and given 
     this level is below the EPA LOEL, this is not surprising. 
     What is surprising is that, in perhaps the systems serving 
     some of the most corrosive water in the U.S., studying just 
     the older homes with copper pipes, no adverse health effects 
     can be detected. Houses in the study were receiving water at 
     6 times the concentration of EPA's 90th percentile action 
     level, and represented the 92nd percentile, of the oldest 
     portions of the State's most problematic systems (therefore, 
     perhaps the 99th percentile of their communities). Thus, it 
     is unlikely that there is widespread acute illness in 
     Delaware from the ingestion of copper in people's homes.


                                findings

       (1) This study indicated that those people drinking the 
     highest levels of copper identified in Delaware are not 
     suffering adverse acute effects from this exposure.
       (2) No evidence of Wilson's Disease can be seen in the 
     state registry in this population with some of the highest 
     water copper levels seen in the U.S.
       (3) Average daily intakes of copper are not well predicted 
     by first flush values. A time and volume weighed daily intake 
     was typically 41% of the Cu concentrations found in the first 
     flush samples.
       (4) The bucket collection procedure employed here for 
     estimating daily dose was easy and quantitative. Future 
     studies should use urine collection techniques to confirm its 
     accuracy.


                            recommendations

     To Delaware
       Future inquiries regarding population concerns over Cu in 
     drinking water in Delaware should be addressed with a one 
     page summary of this study since it represents a best effort 
     to identify the most problematic systems and households in 
     the state. Susceptible individuals may exist and individual 
     complaints regarding systems with corrosive water should be 
     investigated and copper toxicity events reported to the CDC.
       Many good reasons exist for promoting corrosion control 
     measures independent of copper and lead toxicity. The results 
     of this investigation should not be used by utilities to 
     avoid undertaking prudent investments in municipal 
     infrastructures or treatment processes.
       Cooperation between the Department of Epidemiology, the 
     State Public Health Laboratory, and the Drinking Water 
     Program has been exemplary throughout this study. The study 
     should be held forward as a model cooperatively and thriftily 
     addressing public health concerns.
       Phone monitoring efforts in future studies should remain 
     directly under the supervision of the Delaware official with 
     principle responsibility for the study.
     To CDC
       CDC should not conduct future studies to identify and 
     quantify the copper LOEL in a stable domestic population 
     without reports of symptomatic illness. It is unlikely that 
     ongoing illness from copper exposure in drinking water is a 
     major problem anywhere in the U.S. among domestic users. If 
     the EPA LOEL of 5.3 is an accurate estimate of where health 
     effects begin to be seen, this study indicated that first 
     flush levels of 13 mg/l would be needed to inflict daily 
     average tap water level of 5.3 mg/l Cu. No households in our 
     study or the state-wide survey had such high concentrations 
     of Cu.
       the daily dose method employed here was appears to be 
     effective and should be validated.
       Support of the kind provided to Delaware in this modest 
     study: (a) is a cost-effective way to produce valuable public 
     health data, (b) established excellent ties for future 
     cooperation, (c) is educational for both State and Federal 
     participants who often have dramatically different 
     perspectives.
                                  ____


                             Interim Report

       Evaluating Gastrointestinal Irritation among Humans From 
     Copper in Drinking Water, Lincoln, Nebraska (Epi-E94-73)--
     Sharunda D. Buchanan,\1\ Ph.D., Robby Diseker,\1\ M.P.H., 
     Jack Daniel,\2\ Thomas Floodman,\2\ Thomas Sinks,\1\ Ph.D.

     \1\ Division of Environmental Hazards and Health Effects, 
     National Center for Environmental Health, Centers for Disease 
     Control and Prevention (CDC), 4770 Buford Highway, N.E., 
     Atlanta, Georgia 30341-3724.
     \2\ Division of Drinking Water and Environmental Sanitation, 
     Nebraska Department of Health, 301 Centennial Mall South, 
     P.O. Box 95007, Lincoln, Nebraska 68509-5007.
                                  ____


                                Abstract


   evaluating Human Gastrointestinal Irritation From Copper (Cu) in 
                Drinking Water, Lincoln, Nebraska, 1994

       Background: In 1993, Nebraska copper (Cu) drinking water 
     levels exceeded EPA's action level of 1.3 mg/L Cu in 50% (19 
     of 38) of public water systems serving 3,300 to 10,000 
     people. The action level is based on gastrointestinal illness 
     (GI) including vomiting, nausea, stomach cramps, or diarrhea. 
     Officials at the state health department were concerned that 
     Nebraskan's were suffering adverse health effects as a result 
     of this exposure and requested assistance from the Centers 
     for Disease Control and Prevention.
       Methods: To determine if Nebraskan's were at increased risk 
     of GI due to Cu concentrations in drinking water, we 
     interviewed people living in homes having Cu levels (measured 
     in 1993) of >3 mg/L (51 homes), 2 to 3 mg/L (54 homes), and 
     <1.3 mg/L (42 homes). Case-subjects were those who had rapid 
     onset of vomiting or nausea with abdominal pain during the 2 
     weeks preceeding interview. To validate the relationship 
     between Cu and GI, we conducted a nested case-control study, 
     resampling drinking water in the homes of 22 case-subjects 
     and 27 age-matched control-subjects.
       Interim Results: The risk of GI was greater for persons in 
     households with drinking

[[Page S8356]]

     water >3 mg/L (RR=1.65; 95% CI 0.63, 4.31) but not for 
     persons in households with copper levels from 2 to 3 mg/L 
     (RR=0.73; 95% CI: 0.24 to 2.17) when compared to individuals 
     with copper levels less than 1.3 mg/L. The relationship was 
     not confirmed in the nested case-control study 
     (OR>3 mg/L, <1.3 mg/L=0.44, 95% CI 0.8 and 
     OR2 to 3 mg/L, <1.3 mg/L=0.11, 95% CI 0.02 to 
     0.62) because 1993 sampling results differed substantially 
     from sampling results in 1994. The occurrence of GI was 
     explained by weight loss (OR=8.30; 95% CI 1.56 to 44.11) and 
     self-reported flue-like illness (OR=4.18; 95% CI 0.77, 
     22.78).
       Interim Conclusions: These preliminary data indicate that 
     at the time of the survey, people were not experiencing GI 
     related to the level of Cu in their drinking water, even 
     though 51 of the selected homes had Cu drinking water levels 
     that were greater than two times the EPA action level the 
     year prior to the study. We also noted that Cu concentrations 
     in drinking water at the time of the study were far less than 
     the levels measured one year earlier. We encourage further 
     investigations of the health effects of copper in drinking 
     water. We also encourage further work to evaluate the 
     reproducibility of the sampling method recommended by the EPA 
     to establish compliance with the drinking water standard for 
     Cu and Pb.

  Mr. KERREY. Mr. President, copper is a substance that at certain 
levels will cause gastrointestinal problems. That is the issue here. 
Unlike lead, it is a different sort of public health problem. Again, it 
is an essential element. Understand, that the estimated content in 
mother's milk in some cases will exceed 1.35--will exceed 1.3 
milligrams per liter. You can imagine what the EPA would say if we gave 
them the authority to regulate mother's milk. Perhaps they would 
require some sort of contraption to be applied in order to make certain 
that babies are not getting a dose in excess of 1.3 milligrams, even 
though no scientific study, Mr. President, has concluded that there is 
a problem.
  The EPA will say, remarkably, ``Well, the World Health Organization 
has a standard of 2.0 milligrams per liter, and 1.3 milligrams per 
liter is close.'' Two is almost twice of 1.3. It may look close if you 
are calculating the size of the deficit, but it is not very close as a 
multiple of 1.3.
  They set a level, Mr. President, an arbitrary level, that cannot be 
supported by science. All we are asking for is delay. I would be 
willing to accept some change in the law, some report language that 
would enable Nebraska to say, ``We will, with our public health effort, 
make certain that no one in Nebraska is going to get sick. But, for 
gosh sakes, don't make these Nebraska communities invest millions of 
dollars in water treatment efforts.''
  Some of these communities have very, very small budgets. You are 
asking them to invest substantial amounts of money even though there 
isn't a single person in their communities getting sick--no one. There 
is no public health problem. And what we are being told--we tried to 
get this amendment accepted. We tried to get EPA to change their rule. 
They said to us, ``We don't care. We don't care, Senator, that science 
demonstrates that 1.3 milligrams is not really supportable. We don't 
care that nobody in Nebraska is getting sick. We are not concerned.'' 
``Please, do not offer this because of the political problems of 
another rider on this bill.''
  Mr. President, this is one of the reasons that people like myself--
that have supported the Clean Water Act and the Safe Drinking Water Act 
and the Clean Air Act--we struggle to sustain our support for this kind 
of effort because time and time again we find ourselves faced with a 
situation where common sense and science combine to say the EPA should 
not be given authority to require local communities to make these kinds 
of investments because there is no public health case that can be made 
to require them to do it.
  This amendment, Mr. President, is propublic health and pro-
environment. I, too, seek public health protections, and I seek 
environmental protections as well. Senator Hagel and I see this as an 
amendment that says that money spent on threats that do not exist is 
money that cannot be spent to prevent actual hazards to health or the 
environment.
  I am not seeking to overturn EPA regulations, and I am not seeking to 
instruct EPA on scientific issues on which myself and the legislative 
branch are not qualified to provide instructions. I am seeking, Mr. 
President, to have the EPA give adequate consideration, evidence from 
another Federal agency that is amply qualified in this respect, an 
agency, Mr. President, that is charged with ensuring public health and 
safety, and that is the Centers for Disease Control and Prevention.
  Mr. President, whatever you think on this issue, we should all agree 
that the people of this country who are drinking the water and who are 
paying the bills should at least have a say in this matter. And they 
should have a say through their elected officials. The argument that 
comes from the EPA that Congress does not have the right or the 
responsibility to question regulations or to weigh in on regulatory 
debates is an argument that government should not be held accountable 
to the people.
  Mr. President, that is an argument that I do not support. And it is 
an argument I hope we would all dismiss outright. But, Mr. President, 
beyond this argument--and there is a truly valid argument against that 
scientific basis for this EPA rule which I, tonight on this floor, 
challenge with this amendment. I challenge any of my colleagues to come 
to the floor and dispute the evidence that I offer.
  The rule pertains to copper levels in drinking water, and the 
requirement that communities treat their water supplies to remove 
copper when it is present at levels higher than EPA's `action level' of 
1.3 milligrams per liter (mg/l). There are currently 60 communities in 
Nebraska that are being required by EPA to begin treating their water 
to remove copper. I have here in my hand two studies conducted by the 
federal Centers for Disease Control and Prevention that indicate the 
drinking water in these communities is safe, and is not causing any 
illness or adverse health effects. One of the studies was conducted in 
my state of Nebraska. However, the EPA will not consider these studies 
until they are peer reviewed and published. Fair enough, I say--they 
are scheduled to be published before the end of the calendar year, and 
likely sooner than that. So my amendment simply states that EPA wait 
until these studies are published, and that they review these studies, 
and any additional peer-reviewed data pertinent to this issue, to 
determine whether the CDC is correct, and perhaps this copper action 
level is not set at the appropriate level.
  There is also a savings clause in my amendment that will allow any 
state that so chooses to continue to implement and enforce, if they 
desire, the copper treatment aspect of this rule. If a community or a 
state is currently treating its water supplies to reduce copper, or 
chooses to implement treatments based on copper levels, nothing in my 
amendment precludes them from doing so.
  Mr. President, I support fully the efforts and the importance of the 
mission and the work of the Environmental Protection Agency. I support 
fully the Safe Drinking Water Act, the Clean Water Act, the Clean Air 
Act, and all the other acts under whose auspices the authorities of the 
EPA lie. However, I support these Acts based on the assumption that all 
the rules and regulations that are promulgated by the agency are based 
on sound science. But in this case--in the case of a copper action 
level in drinking water supplies--we do not have sound science at work. 
What we are seeing here is a level that has been set that cannot be 
supported by science--a level that even the federal Centers for Disease 
Control and Prevention, EPA's sister agency, says in at least two 
different studies causes neither illness nor adverse health effects. 
The CDC has indicated that in my home state of Nebraska, and in 
Delaware, copper in drinking water supplies that is in excess of EPA's 
action level does not cause any illness or adverse health effects.
  But 60 small- and medium-sized communities in Nebraska are being 
forced to implement expensive water treatment activities to remove the 
copper from their drinking water. One community alone, Hastings, 
Nebraska, with a population of 23,000, has estimated the costs of this 
treatment at $1 million to start, and $250,000 annually thereafter. 
That is for one community alone. In the Village of Snyder, which has a 
population of 280, and an annual water budget of $31,000, the estimated 
cost to treat two wells is $30,000 for building modifications and 
equipment purchases, plus an additional annual cost

[[Page S8357]]

of $12,000 for chemicals, training, administrative, and repair and 
maintenance costs. For the first year, then, this figure represents 
$11,000 more than the Village of Snyder's annual water budget--or a 
total first year cost of $42,000. Multiply these figures and these 
hardships by 60 communities, we are talking about an inordinate amount 
of money to remove an essential mineral, a naturally occurring element, 
from drinking water when there are no known or associated adverse 
health effects at the levels that it is present at.
  But that's not the most unreasonable aspect of this issue, Mr. 
President--because there is more. Here's the rub. The ground water that 
these public water supplies rely on for drinking water in these 64 
Nebraska communities does NOT contain copper in excess of EPA's action 
level. As a matter of fact, none of the natural groundwater supplies in 
Nebraska exceed the copper action level as established by EPA. Not one.
  The problem is the method EPA requires that States use when testing 
for copper. EPA requires that the water be tested only after being 
undisturbed for at least 6 hours--that is, the water must be sitting in 
the pipes and plumbing of a home for at least 6 hours, or overnight, 
before being tested. And while the water sits in these pipes, copper 
leaches out of the pipes, and the ``action level'' is exceeded. Why 
does this happen? It so happens that the acidity of the ground water in 
my state of Nebraska causes the copper to corrode, or to leach out when 
it sits in pipes for a long period of time, such as overnight. However, 
if you run this water for a few minutes before testing it, or before 
drinking it, the copper action level set by EPA are not exceeded.
  But even the CDC has questioned this testing method. In one of its 
studies, the CDC states:

       We encourage further investigations of the health effects 
     of copper in drinking water. We also encourage further work 
     to evaluate the reproducibility of the sampling method 
     recommended by EPA to establish compliance with the drinking 
     water standard for Cu (copper) and Pb (lead).

  But even beyond that, even at the levels that are coming out of these 
pipes now, and that the people of these Nebraska communities are 
drinking now, there is no incidence of illness or other deleterious 
effects from this water. My amendment will simply delay some costly 
requirements to remove copper from water that is not causing illness.
  So the issue immediately at hand, at best I or anyone else can 
discern, is really an issue of testing. Despite the fact that none of 
the groundwater in Nebraska exceeds EPA's copper action level, the 
manner of testing required by EPA results in some communities actually 
exceeding the action level. Flushing for a few minutes prior to 
testing, or to drinking, would result in copper levels in the water 
that are below EPA's action level. And it is likely that an improved 
testing methodology will result in none of these water systems 
exceeding the copper rule. But until this is reviewed, we have no way 
of knowing.
  Beyond the testing issue is the greater issue of the validity of the 
rule. No, I am not a scientist qualified to decide this issue, but some 
of the scientists that I have talked to about the issue agree that the 
science is insufficient to support EPA's action level for copper. Even 
government scientists who have studied copper their entire careers 
agree that the evidence just isn't there--and I'm talking about human 
nutrition scientists, not just the scientists who conducted the studies 
at the CDC. Scientists have told me that there is little evidence of 
chronic health effects caused by ingestion of copper at the levels we 
are talking about in our communities. There is even preliminary 
evidence that seems to suggest that elevated copper plays a role in 
reducing or preventing the incidence of osteoporosis, a disease which 
causes significant suffering, discomfort and associated medical 
problems, primarily in the elderly. What this underscores is the lack 
of definitive knowledge about this substance.

  My colleagues in the State of Nebraska have tried to work with the 
EPA on this, and have tried to offer reasonable alternatives and 
solutions that will prevent costly and needless treatments from being 
required. My colleagues in Nebraska asked the EPA if it would be 
acceptable to implement an educational program to get folks in these 
communities to run the water for a time, to flush out the water that 
may have absorbed some copper, before drinking it. EPA said no.
  My colleagues asked the federal Centers for Disease Control to study 
the issue in the state, and determine if the copper was causing any 
illness or adverse health effects. The CDC did this, and found no 
adverse health effects. EPA's response is that they cannot consider 
this data because it is not yet peer-reviewed and published. That is 
what bring me here now.
  What frustrates me most about this is that I am a staunch proponent 
of the role of the federal government in protecting the safety and 
health of the people. This role is perhaps one of the greatest issues 
separating our country from many other industrialized and non-
industrialized countries--we protect our nation from potential hazards 
in our food and drink, and from many other hazards that may befall us. 
But I am also a proponent of a government that is of, by, and for the 
people--of a government that serves to protect when protection is 
needed, but that does not intervene needlessly when intervention is not 
needed. Yet here we have evidence that a regulation promulgated by a 
federal agency will cost Nebraska communities millions of dollars, and 
will have no apparent impact on the health or safety of the people. So 
I am here to ask for a delay before costly treatment is required in 
these communities, a delay to allow these studies to be published, 
which they imminently will be, and a review of the data, to include 
these studies.
  To help my colleagues understand how deeply flawed this action level 
may be, and thus, how inappropriate is the insistence of the EPA that 
these small Nebraska communities spend millions of dollars to correct a 
ghost problem, let me share with you some additional information on how 
copper in drinking water is treated elsewhere.
  On an international scale, the World Health Organization, or WHO, 
which is recognized worldwide as the preeminent public health and 
welfare agency in both developed and underdeveloped nations, has 
declared that:

       In view of uncertainties regarding copper toxicity in 
     humans, a provisional guideline value for copper of 2 mg/
     litre was established in the 1993 WHO guidelines for drinking 
     water quality.

  The WHO further states that:

       A copper action level of 2 mg/litre in drinking water will 
     be protective of adverse effects of copper and provides an 
     adequate margin of safety. It is also noteworthy that copper 
     is an essential element.

  This provisional, international action level for copper of 2 mg/l is 
set at a level that approaches twice EPA's action level of 1.3 mg/l. 
Yet EPA cites this level as evidence that their level is ``not far 
off'' from the WHO level, and thus is supportive of their 1.3 mg/l 
level.
  Mr. President, there are two last, astounding pieces of information. 
The National Research Council of the National Academy of Sciences has 
established a recommended daily allowance for copper of 3 mg, with an 
adult toxic dose of 100 mg. These recommendations are for adults. But 
more astounding is the following information, published in peer 
reviewed literature: ``Copper levels of human milk range from 0.15 to 
1.34 mg./litre.'' Human breast milk, Mr. President, contains up to 1.34 
mg/litre of copper, which is in exceedance of the EPA copper action 
level.
  There is much more evidence to support my contention, Mr. President, 
that there is cause to review the data and perhaps revise EPA's action 
level for copper, and I am more than willing to share it with my 
colleagues. At the moment, however, there is great urgency in offering 
this amendment and approving it to prevent needless costly treatments 
from being implemented in many small American communities that will be 
more harmed from the economic impacts of this rule than from the 
potential adverse health effects from copper.
  The EPA says, ``We don't care''--the EPA says, ``We don't care. This 
is a political issue.''
  I say wait a minute, what is the purpose here? ``We don't care.'' 
Reject it out of hand, ignore the scientific evidence, and say we are 
concerned that this is one of these riders. They are not

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willing to come and debate each rider on its merit. They say ``rider''; 
we rule out of hand.
  I would love to have Administrator Browning come to Hastings, NB, and 
explain that to my citizens in Nebraska. She would not be able to do 
it. That is what I have to do. I have to go home and explain these 
rules. When I go home and explain these rule to these 60 communities 
where nobody is getting sick, why they have to spend millions of 
dollars to invest in their water systems, they say this doesn't make 
any sense at all.
  So I invite any Senator who opposes--I would love, if they take the 
EPA position--come out to Hastings, NB. Come out to my State and talk 
to the community and explain to them why, if nobody is getting sick, I 
have two CDC studies saying there is no health problem and yet the rule 
still is going to be enforced.
  As I said earlier, I am not looking to overturn the EPA regulation. 
Indeed, in this amendment there is a savings clause that allows any 
State that so chooses to continue to implement and enforce the copper 
treatment aspect of the rule. If the communities--or State, is 
currently treating its water supplies to reduce copper, or chooses to 
implement treatments based on copper levels, nothing in my amendment 
precludes them from doing so.
  I see both the Senator from Montana and the Senator from Alabama. It 
looks like they have an amendment. I would like to talk longer, and I 
apologize to the Senator from Missouri and the Senator from Maryland. I 
know both they and I would like to go to sleep. I would prefer a 
healthier debate. Unfortunately, what will happen is, we will talk 
tomorrow, we will have 2 minutes equally divided, the opponents will 
offer some reason to oppose this amendment, and everybody is likely to 
walk down and oppose it.
  What will happen is, I will have millions of dollars' worth of 
investments that will have to occur and there will be a deterioration 
of support for any regulation of this kind.
  I am willing to stop and allow the Senators from Montana and Alabama 
to offer their amendment. I don't know how long they will take.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Mr. President, I will tell you briefly why this amendment 
is going to have to be opposed and why I think it will be defeated and 
move to table it, because we do have other amendments to go on to 
tonight.
  Obviously, the Senator can seek the floor later on if he has not 
finished.
  If he has finished with his argument, I am happy to respond briefly.
  The chairman and/or ranking member of the Environment and Public 
Works Committee will be here tomorrow to express their opposition, and 
I will print in the Record tonight the letter from the Environmental 
Protection Agency which says the EPA is strongly opposed to this 
amendment.
  Unfortunately, Mr. President, the Senator has some compelling 
arguments. I sympathize with his frustration, but the EPA said, ``We 
believe it is unnecessary, inconsistent with the policy requirements of 
the 1996 amendments to the Safe Drinking Water Act and harmful to the 
protection of the public health.'' He goes on to cite articles. He does 
state that, ``The State of Nebraska has yet to avail itself of several 
opportunities for substantial flexibility and assistance described 
herein,'' and the EPA Assistant Administrator, Robert Perciasepe, has 
offered to go to Nebraska and show up in Hastings. I think my colleague 
from Maryland and I will urge him in the strongest possible terms to 
coordinate his schedule with yours and go to Hastings and other towns 
to answer.
  But the fact of the matter is that there is a strong objection by the 
EPA to this. That objection is supported by the members of the 
authorizing committee. In our appropriations measures, we have not, we 
do not, and we will not take authorizing measures or legislative 
matters which are strongly opposed by the authorizing committee. We 
believe as a courtesy to the committees of jurisdiction that we should 
not do it. We have not done it and we don't intend to do it.
  Mr. KERREY. Mr. President, I guess--as I said, I am willing--I don't 
know how long the Senator from Montana and Alabama want to talk. I 
intend to talk further. I appreciate what will happen tomorrow is, 
there will be 2 minutes equally divided and Senator Chafee and Senator 
Baucus will come down here and they will say, ``We don't necessarily 
disagree with you but we have a letter from the EPA and they are saying 
for rules''--blah, blah, blah--``we don't care that there is no public 
health problem. We don't care that nobody is getting sick, and we are 
willing to be flexible.''

  Well, I appreciate you are willing to be flexible, but the problem 
is, we don't have a public health problem. What are you talking about, 
you want to be flexible? Thank you, Mr. Perciasepe. I appreciate you 
being willing to visit these communities, but I have 60 communities you 
are asking to spend millions of dollars. You have a rule that you are 
going to enforce it even though there is no public health problem.
  I know we have a dilemma here. It is 10:30 at night and the unanimous 
consent procedure requires me to talk for however long I am prepared to 
talk, and then we will have 2 minutes tomorrow. I will have 1 minute, 
Senators Chafee and Baucus will come down here and they will say 
whatever, and this thing will get knocked out.
  Mr. President, I appeal to my colleagues, this is not something that 
is a small item. Nobody is going to walk down here. I suspect the 
Senator from Missouri will not stand up and say that there is a 
compelling public health reason why Nebraska citizens and their 
communities should have to make these investments. EPA doesn't. They 
don't make a case that it is a public health problem. They don't come 
to Nebraska and say, gee, there is somebody getting sick that we 
haven't noticed.
  Copper is different from lead. We are not talking about something 
that has the dangerous properties of lead. This is an essential 
element. This is an element that is contained in mother's milk, for 
gosh sakes. And in some cases the mother's milk is at a level higher 
than what the EPA will allow in drinking water.
  Nebraska is being forced to sue the Environmental Protection Agency 
because the Environmental Protection Agency is unwilling to be 
flexible. I seek a remedy to this, Senators. You are saying you don't 
accept the amendment, fine. I am prepared to talk, then, further, 
because I want to make certain that Nebraskans understand what is at 
stake here--that even though nobody is getting sick, even though there 
is no public health problem, even though there is no safety issue at 
all in our State, it doesn't matter; the Federal Government is still 
going to require and this Senate is going to say, ``Well, it is a 
rider, we will accept the EPA's recommendation, regardless. We will 
vote to table or we will vote no on the amendment, we don't care. It 
doesn't matter.''
  It seems to me that what we have here is a reasonable request by a 
State that has an unusual situation that deserves to be remedied. It is 
not enough for the EPA to say,''We are willing to be flexible.'' It 
doesn't work. Their flexibility still, at the end of the day, will say, 
``You will have to get your copper levels down to 1.3 milligrams per 
liter in the first burst of water that comes out of the faucet,'' even 
though nobody in Nebraska is getting sick, even though no faucet is at 
1.3 milligrams per liter. Only the first burst has the problem.
  I go back to my statement here and continue.
  Mr. BOND. Mr. President, I might ask the Senator from Nebraska. He 
obviously has made some very compelling points. It is noted there are 
Senators who are waiting to offer amendments. If he would be willing to 
do so, I would like to finish up the work of the Senators who are 
waiting, and I will move to table the amendment, and then I will offer 
to go back in morning business and afford the Senator from Nebraska as 
much time as he wishes, because we have heard the compelling 
arguments--the situation is very clearly that with the authorizing 
committees opposing this, the agency opposing it, it is our policy not 
to accept these amendments on an appropriations bill. His arguments are 
made with a great deal of passion and common sense, but they are not 
going to be accepted, and he will have an opportunity to appeal to our 
colleagues in a colloquy or in discussions later this evening, or in 
the

[[Page S8359]]

1 minute tomorrow. Would that be acceptable to the Senator from 
Nebraska?

  Mr. KERREY. Mr. President, I appreciate what you are trying to do, 
but I am not sure I understand what it is you are trying to do.
  First of all, I ask the Senator from Montana, how long does he and 
the Senator from Alabama want to take?
  Mr. BURNS. Mr. President, responding to the Senator's question, it 
will take me less than 5 minutes. I can assure the Senator from 
Nebraska that I will support his amendment.
  Mr. BOND addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Will the Senator yield so that I may have a letter printed 
in the Record?
  Mr. KERREY. Mr. President, I will yield only for that purpose, 
without losing my right to the floor.
  Mr. BOND. Mr. President, I ask unanimous consent that this letter 
from the U.S. Environmental Protection Agency be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                         U.S. ENVIRONMENTAL PROTECTION AGENCY,

                                     Washington, DC, July 9, 1998.
     Hon. John Chafee,
     Chairman, Senate Committee on Environment and Public Works, 
         Washington, DC.
     Hon. Max Baucus,
     Ranking Member, Senate Committee on Environment and Public 
         Works, Washington, DC.
       Dear Senator Chafee and Senator Baucus: As you requested, 
     this letter presents the views of the Environmental 
     Protection Agency (EPA) regarding the draft amendment 
     proposed by Senators Hagel and Kerrey to the Fiscal Year 1999 
     Appropriation Bill for VA-HUD and Independent Agencies, which 
     amendment would prevent for an indefinite period of time the 
     implementation of the portions of the Lead and Copper Rule 
     providing protection from hazardous levels of copper in 
     public drinking water supplies. EPA strongly opposes this 
     amendment. We believe it is unnecessary, inconsistent with 
     the policy directions and requirements of the 1996 Amendments 
     to the Safe Drinking Water Act (SDWA), and harmful to the 
     protection of public health.
       The proposed amendment is based on the questions raised by 
     the State of Nebraska on the validity of the science 
     underlying the Copper Rule. These questions are said to be 
     based on interim reports on recent surveillance studies 
     performed in Nebraska by the Federal Centers for Disease 
     Control (CDC), and in Delaware by Delaware's Division of 
     Public Health. Neither of these studies has been peer 
     reviewed or published. The interim findings on the level of 
     adverse health effects reported for the CDC Nebraska study 
     actually are consistent with the scientific data EPA relied 
     upon to develop the action level for copper. That action 
     level incorporates a margin of safety below the lowest level 
     of adverse health effects, as required by SDWA. The interim 
     findings of the Delaware study are based on a very small 
     sample with low statistical ``power'' to identify health 
     effects.
       In the 1996 Amendments to SDWA, your Committee developed, 
     and Congress and the President enacted, a requirement that 
     standard setting under the SDWA must be ``based on the best 
     available, peer reviewed science.'' This requirement is 
     equally applicable to EPA's review and revision of existing 
     standards such as the Copper Rule, which was finalized in 
     1991, as it is to the setting of new standards. EPA does not 
     believe that the interim reports on these studies meet the 
     test of scientific rigor required by the 1996 Amendments for 
     the revision of any existing drinking water standard, or make 
     a compelling scientific case to change the action level for 
     copper. EPA is participating in planning further studies on 
     health effects of copper, and is prepared to reevaluate the 
     scientific basis of the present copper action level if 
     appropriate.
       In this regard, an article entitled ``Defining a Safe Level 
     for Copper in Drinking Water'' was published in the July 1998 
     issue of Journal AWWA by Frederick Pontius, a staff member of 
     the American Water Works Association. This article presents a 
     review of available scientific research on the health effects 
     of copper exposure, noted that ``USEPA's MCLG and action 
     level for copper have been criticized as being either too 
     low, or not low enough, depending on the health study 
     cited,'' and concluded that a ``change in the copper action 
     level would be difficult to justify based on feasibility of 
     corrosion control treatment unless a better measure is 
     developed for determining when optimal corrosion control for 
     copper is being applied.''
       The State of Nebraska has also expressed serious concerns 
     about excessive costs and implementation burdens on affected 
     communities from enforcement of the Copper Rule. However, the 
     copper standard is framed as an action level. When public 
     water systems exceed the level in 10 percent or more of the 
     required samples, the State primacy agency is supposed to 
     work with the systems to help them develop and implement a 
     treatment optimization plan. Such a plan is not a ``one size 
     fits all'' approach that seems to have generated exaggerated 
     estimates of compliance costs cited for some Nebraska towns. 
     Rather, treatment optimization is to address in the most cost 
     effective way possible the specific conditions in the system 
     that caused them to exceed the action level, and meet 
     effectiveness criteria set by the State.
       The 1996 SDWA Amendments give States additional flexibility 
     to use the exemption process to phase in whatever tailored 
     approach to treatment the State and water system agree to 
     implement. Also, the Amendments provided for a new source of 
     Federal funding, the Drinking Water States Revolving Loan 
     Fund, to offer subsidized financing to water systems facing 
     significant costs associated with implementing treatment. The 
     State of Nebraska has yet to avail itself of any of the 
     several opportunities for substantial flexibility and 
     assistance described here.
       I appreciate your request to present our understanding of 
     this issue and the several workable, potential solutions 
     available. EPA wants to continue working with the State of 
     Nebraska to resolve this matter, and stands ready to provide 
     hands-on technical assistance to demonstrate how the State 
     can identify practical, common sense ways to help towns 
     provide the important public health protections that 
     compliance with the Copper Rule will bring.
           Sincerely,
                                                Robert Perciasepe,
                                          Assistant Administrator.

  Mr. KERREY. Mr. President, do I have the floor?
  The PRESIDING OFFICER. Yes, the Senator from Nebraska has the floor.
  Mr. KERREY. Mr. President, in that case, I would like to continue 
with my statement. Again, I don't mean to tie up the Senator from 
Missouri and the Senator from Maryland here unreasonably, I appreciate 
that I am, but this is a very serious issue in my State. We have a UC 
here that gives me very limited options. The unanimous consent puts me 
in a position where I have 1 minute tomorrow, and the authorizers are 
going to come down here and they are going to merely say, ``we 
object.'' They are not going to offer any science, or refute the 
scientific evaluation, or argue what the CDC has said. They are not 
going to present a case that 1.3 milligrams is reasonable. They are not 
going to refute statements about nobody getting sick in Nebraska, or 
they are not going to say what EPA is doing is reasonable.
  We are left with a situation where the State of Nebraska is going to 
have to sue the EPA. That is what we are left with. Again, I am willing 
to step aside here and allow the Senator from Alabama and the Senator 
from Montana to do their work. I guess what you are seeking is an 
opportunity to go into morning business so you could all leave and I 
can stay here and talk. Is that basically what you are saying?
  Mr. BOND. The Senator is correct. You have made a very compelling 
case. We have expressed our views. I was suggesting that other Senators 
also have amendments to offer. Quite frankly, the people who wish to 
hear this can read this in the Record. They will be able to do so. But 
there are other people waiting.
  Mr. KERREY. I am perfectly willing to make an effort to accommodate. 
Unfortunately, I am in a situation where I don't feel like I am going 
to get much accommodation from the Senators in communities that are 
going to spend millions of dollars to invest in something that is going 
to produce no improvement in public health.
  Ms. MIKULSKI. If the Senator from Nebraska will yield, the suggestion 
by the Senator from Missouri is not to deny the Senator from Nebraska 
from presenting his arguments. What it does do is give us a framework 
for moving on these other two amendments and it relieves us of our 
responsibility to conduct our business. It doesn't preclude the Senator 
from Nebraska from talking.
  If the Senator will yield further, why would talking while we two are 
here accomplish what you want to accomplish, beyond what we have 
already discussed? I don't understand why you are objecting to morning 
business when we are not in any way asking you to give up your right to 
continue to speak.
  Mr. KERREY. Well, my hope is that by listening to these wonderful 
arguments, there is going to be persuasion. You are saying that you 
want to move to table my amendment and leave and go into morning 
business, and then I will have 2 minutes tomorrow to persuade a 
majority of my colleagues, which is not going to happen. There is going 
to be no persuasion. Senator Chafee and Senator Baucus will come

[[Page S8360]]

down with 30 seconds each and they are going to say no, and they are 
not going to offer any arguments at all. They are not going to read 
anything into the Record or consider any arguments given. I appreciate 
that things get scheduled and bumped up against a late hour.
  Ms. MIKULSKI. But why is it that speaking on the bill is different 
than speaking in morning business, if you want to continue to persuade?

  Mr. KERREY. Are you basically saying you want to move to table my 
amendment and then walk out? Is that it? You will leave and we will say 
we are in morning business; is that the offer?
  Ms. MIKULSKI. Is it the Senator's belief that the longer we stay, 
there will be a change in our position?
  Mr. KERREY. Well----
  Ms. MIKULSKI. Is that his hope?
  Mr. KERREY. That is my hope.
  Ms. MIKULSKI. Hope springs eternal, as does this evening.
  Mr. KERREY. Mr. President, I am sort of teetering on the edge of how 
reasonable I want to be. I am appealing to colleagues. I have 70 
communities in Nebraska that are facing substantial costs. There is no 
argument against this, other than that EPA opposes it. I don't hear any 
scientific argument against it or any public health argument against 
it. Earlier today, by a voice vote, the Senator from Arkansas and the 
Senator from Mississippi accepted a $500 million amendment to indemnify 
farmers in disaster aid--just like that--and it was accepted on a voice 
vote.
  Here we are being told, no, we can't accept this amendment. EPA isn't 
saying we disagree with the science, or we disagree that it is an 
unreasonable rule in the case of Nebraska, or we disagree with any 
argument you offer; we are just going to enforce it. I say to the 
Senator from Missouri--and as you know, I am preaching to the choir 
here. The Senator from Missouri has faced this sort of thing in the 
past in Missouri as a Governor and as a Senator.
  I am seeking some sort of remedy other than merely voting this 
amendment down. Had this occurred earlier in the day, my colleague, 
Senator Hagel, would be on the floor with me, arguing with much passion 
in favor of this amendment, that it is reasonable, and that science 
supports what we are trying to do.
  Again, I say to the Senator from Missouri and the Senator from 
Maryland, I know it is 10:45, and I would rather not be here either, 
but that is the hand I have been dealt. If it were earlier in the day, 
there would be more debate on this. I would love to have Senator Chafee 
and Senator Baucus come and tell me why this rule should be enforced, 
tell me why what I am offering, with a savings clause that enables any 
State that wants to, to continue to enforce 1.3 milligrams per liter--
allow them to continue to do that--is not a reasonable thing. Or some 
other alternative, or some language that would enable Nebraska to 
engage in a public health effort. Let us spend the money per year to 
engage in a public health effort to make certain that these communities 
are keeping their drinking water levels safe.
  I am just appealing to my colleagues to look for an alternative. You 
all have the votes and you have the way to knock this thing out. But 
there must be some way to give me some assistance with the EPA other 
than to say they are going to give me flexibility. You know what their 
idea of flexibility is at the end of the day.
  Ms. MIKULSKI. If the Senator will yield, what would he suggest?
  Mr. KERREY. I would accept report language that would say the State 
of Nebraska would be allowed to make a public health investment in 
those communities where there is in excess of 1.3 milligrams that first 
minute. I would allow Nebraska to be permitted to experiment with the 
different testing methodology--anything that would give me something 
that would say to the communities in Nebraska that the Federal 
Government is prepared to be reasonable, other than just surrendering 
me to the good wishes of the EPA, saying they are willing to come out 
and be flexible. We all know what that means. I would be willing, I say 
to my colleagues, to accept report language and not put this amendment 
up for a vote--accept report language that made an attempt to rectify 
this situation. You know what we are dealing with. I see heads shaking 
there. Are you saying no?
  Ms. MIKULSKI. It would have been useful if perhaps the Senator had 
suggested this earlier and we could have consulted with the 
authorizers. Our hands are shackled, really, because of the authorizers 
strongly opposing the amendment.
  Mr. KERREY. I appreciate that. I didn't know at 8 o'clock this 
morning that we were going to be taking this thing up.
  Ms. MIKULSKI. Could the Senator talk to the Senator from Montana, Mr. 
Baucus, and the Senator from Rhode Island, Mr. Chafee, to see if they 
would accept some report language, and come back and discuss the report 
language?
  Mr. KERREY. I would agree to in some sort of consent agreement. I 
don't want to surrender the floor and then end up with my amendment 
tabled with no capacity to appeal for some sort of flexibility in law 
or report language that would enable me to satisfy the concerns that I 
have. I think what you are asking for is reasonable. I would be willing 
to talk to Senator Chafee, Senator Baucus, and Administrative Browner, 
and see if they would accept some kind of report language that would do 
precisely what you are saying.
  I would say to the Senator from Missouri that I would be willing to 
go right this minute to the cloakroom and make those calls. But I would 
like to resolve it without having my amendment tabled, because I know I 
am going to have to bring a report back to you and say what they said 
and see if you would agree with it.
  Mr. BOND. If the Senator from Nebraska would yield, we are willing to 
try to be as helpful as we possibly can. I have outlined for him the 
position in which we find ourselves. We are not going to be able to 
accept the amendment that is proposed. We have gone through that. The 
EPA has filed a letter that is now on the record objecting to it. That 
is not going to change.
  The Senator can speak as long as he wishes. But he is not going to 
change that position from my standpoint.
  If the Senator is willing to work with us--we can't do report 
language here. We can do report language in the committee and attempt 
to work with him on getting report language and seeing what we can 
encourage the authorizing committee to do. I have said we would be 
willing to ask the EPA Administrator to go out there. We don't direct 
and we cannot control the EPA. I think that is clear. You know what the 
political situation is.
  Frankly, continuing to talk on the floor tonight when others are 
waiting to offer amendments is not going to encourage us to work with 
the Senator from Nebraska on the very compelling problem he has. But we 
would be willing to help him. But talking about it on the floor at 
greater length is not going to further the process of cooperation and 
assist us in working out report language or some alternative means by 
which we can encourage the EPA to come to an agreement with the State 
of Nebraska.
  Mr. KERREY. Mr. President, I appreciate that. The Senator from 
Missouri knows that a couple of years ago we did the very same thing 
with the radon rule the EPA had and the Senator from Missouri 
cooperated. We knew what the impact was going to be, and we delayed or 
withheld the money from EPA to enforce a radon rule that we all knew 
was unreasonable. We did that because they could not make a scientific 
case that the rule that they had was going to increase public health. 
We withheld their money. As I recall, the Senator from Missouri 
supported that.
  I appreciate what you are saying. I understand I am pushing here to a 
point where you are saying that if I continue doing this I am going to 
get less than I would likely get by trying to work cooperatively. I 
regret that at 11 o'clock at night that I am in that position. I am 
prepared to call Senator Chafee and Senator Baucus to ask them. I am 
prepared to talk to them to see if there is some flexibility to achieve 
it either in report language or in some fashion.
  But I appeal to my colleagues. The flexibility offered by the EPA, as 
you know, is not sufficient. They have the law on their side. They are 
going to enforce 1.3 milligrams per liter. They are

[[Page S8361]]

not going to give us any testing flexibility. They are going to force 
1.3 milligrams per liter even though nobody is getting sick. I have 
communities investing enormous amounts of money. Again, you are hearing 
this for the seventh or eighth time, this argument.
  Again, I would be willing to allow this thing to come to a painful 
close. The Senators are saying if I talk to Senator Chafee and Senator 
Baucus that they are willing to consider some sort of report language 
and this thing will move in committee if I can get some report 
language.
  Mr. BOND. In the conference.
  Mr. KERREY. But not on this bill.
  Mr. BOND. Mr. President, we don't have further report language we can 
offer.
  Mr. KERREY. In conference, you would be willing.
  Mr. BOND. I thought we tried to emphasize, we are willing to do 
anything we can the next opportunity we have. We have already stated on 
the floor that we would urge the assistant administrator to come out. 
He has talked in his letter about flexibility being available for the 
State of Nebraska. The EPA contends that there are a number of remedies 
available.
  I would certainly urge my colleagues on the Environment and Public 
Works Committee to work with you and the State of Nebraska to see if 
there are accommodations that can be made. We can work with you. And 
based on what we learned from the authorizing committee--the majority 
and minority--we might put language in the report directing or asking 
that steps be taken. But, frankly, that is not going to be bill 
language. But we are willing to work with you and with the ranking 
member and the chairman of the authorizing committee.

  Mr. KERREY. First of all, let me say that I appreciate the good-faith 
effort to try to accommodate this. I know that both the Senator from 
Missouri and the Senator from Maryland are in a bind. You were facing 
the situation in your State before. And I know it has been frustrating. 
I have spoken with both of you about these kinds of regulations and how 
they can decrease our citizen support for environmental regulations.
  I have all week long been approached by environmental organizations 
begging me not to offer this amendment, and not a single one of them, 
by the way, being able to offer a single shred of evidence as to why 
this rule ought to be enforced--not a one of them--just saying, ``for 
political reasons, we would rather the Senator not offer it.''
  Ms. MIKULSKI. Will the Senator yield for a question without in any 
way yielding the floor? The talented staff has come up with an idea 
that might help. We would like to discuss it with you by going into a 
quorum without you losing your right to the floor. This is no trick.
  Mr. KERREY. I would be willing to do a UC and let the Senators from 
Montana and Alabama go to theirs.
  Ms. MIKULSKI. I would like you to hear this proposal and see if it 
would be acceptable to get out of the logjam that we are in right this 
minute.
  Mr. KERREY. I don't object to that. I just want to make it clear that 
I have a sufficient amount of trust in both the Senator from Maryland 
and the Senator from Missouri that I would be willing to allow the 
Senators from Alabama and Montana to offer their amendments. I am not 
even that concerned about that. The problem is--I know I need to talk 
to both of you to try to get something and, when I talk to Senator 
Chafee and Senator Baucus, that I have instructions as to what it is I 
am trying to do.
  Do we need to go into a quorum call? I would be prepared to let them 
go ahead, just as long as I get back to this thing when they are 
finished.
  Ms. MIKULSKI. Mr. President, I ask unanimous consent that the pending 
Kerrey amendment be laid aside for not more than 5 minutes, and that 
the Senator from Montana offer his indemnification amendment, and that 
at the conclusion of that amendment we return to the amendment of 
Senator Kerrey.
  The PRESIDING OFFICER. Is there objection to that unanimous consent 
request?
  Without objection, it is so ordered.
  Mr. BURNS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Montana is recognized.


                           Amendment No. 3205

(Purpose: To provide for insurance and indemnification with respect to 
      the development of certain experimental aerospace vehicles)

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

       The Senator from Montana (Mr. Burns) proposes an amendment 
     numbered 3205.

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

       On page 93, between lines 18 and 19 insert the following:

     SEC. 4____. INSURANCE; INDEMNIFICATION; LIABILITY.

       (a) In General.--The Administrator may provide liability 
     insurance for, or indemnification to, the developer of an 
     experimental aerospace vehicle developed or used in execution 
     of an agreement between the Administration and the developer.
       (b) Terms and Conditions.--
       (1) In general.--Except as otherwise provided in this 
     section, the insurance and indemnification provided by the 
     Administration under subsection (a) to a developer shall be 
     provided on the same terms and conditions as insurance and 
     indemnification is provided by the Administration under 
     section 308 of the National Aeronautics and Space Act of 1958 
     (42 U.S.C. 2458b) to the user of a space vehicle.
       (2) Insurance.--
       (A) In general.--A developer shall obtain liability 
     insurance or demonstrate financial responsibility in amounts 
     to compensate for the maximum probable loss from claims by--
       (i) a third party for death, bodily injury, or property 
     damage, or loss resulting from an activity carried out in 
     connection with the development or use of an experimental 
     aerospace vehicle; and
       (ii) the United States Government for damage or loss to 
     Government property resulting from such an activity.
       (B) Maximum required.--The Administrator shall determine 
     the amount of insurance required, but, except as provided in 
     subparagraph (C), that amount shall not be greater than the 
     amount required under section 70112(a)(3) of title 49, United 
     States Code, for a launch. The Administrator shall publish 
     notice of the Administrator's determination and the 
     applicable amount or amounts in the Federal Register within 
     10 days after making the determination.
       (C) Increase in dollar amounts.--The Administrator may 
     increase the dollar amounts set forth in section 
     70112(a)(3)(A) of title 49, United States Code, for the 
     purpose of applying that section under this section to a 
     developer after consultation with the Comptroller General and 
     such experts and consultants as may be appropriate, and after 
     publishing notice of the increase in the Federal Register not 
     less than 180 days before the increase goes into effect. The 
     Administrator shall make available for public inspection, not 
     later than the date of publication of such notice, a complete 
     record of any correspondence received by the Administration, 
     and a transcript of any meetings in which the Administration 
     participated, regarding the proposed increase.
       (D) Safety review required before administrator provides 
     insurance.--The Administrator may not provide liability 
     insurance or indemnification under subsection (a) unless the 
     developer establishes to the satisfaction of the 
     Administrator that appropriate safety procedures and 
     practices are being followed in the development of the 
     experimental aerospace vehicle.
       (3) No indemnification without cross-waiver.--
     Notwithstanding subsection (a), the Administrator may not 
     indemnify a developer of an experimental aerospace vehicle 
     under this section unless there is an agreement between the 
     Administration and the developer described in subsection (c).
       (4) Application of certain procedures.--If the 
     Administrator requests additional appropriations to make 
     payments under this section, like the payments that may be 
     made under section 308(b) of the National Aeronautics and 
     Space Act of 1958 (42 U.S.C. 2458b(b)), then the request for 
     those appropriations shall be made in accordance with the 
     procedures established by subsections (d) and (e) of section 
     70113 of title 49, United States Code.
       (c) Cross-Waivers.--
       (1) Administrator authorized to waive.--The Administrator, 
     on behalf of the United States, and its departments, 
     agencies, and instrumentalities, may reciprocally waive 
     claims with a developer and with the related entities of that 
     developer under which each party to the waiver agrees to be 
     responsible, and agrees to ensure that its own related 
     entities are responsible, for damage or loss to its property 
     for which it is responsible, or for losses resulting from any 
     injury or death sustained by its own employees or agents, as 
     a result of activities connected to the agreement or use of 
     the experimental aerospace vehicle.
       (2) Limitations.--
       (A) Claims.--A reciprocal waiver under paragraph (1) may 
     not preclude a claim by any natural person (including, but 
     not limited to, a natural person who is an employee of the 
     United States, the developer, or the

[[Page S8362]]

     developer's subcontractors) or that natural person's estate, 
     survivors, or subrogees for injury or death, except with 
     respect to a subrogee that is a party to the waiver or has 
     otherwise agreed to be bound by the terms of the waiver.
       (B) Liability for negligence.--A reciprocal waiver under 
     paragraph (1) may not absolve any party of liability to any 
     natural person (including, but not limited to, a natural 
     person who is an employee of the United States, the 
     developer, or the developer's subcontractors) or such a 
     natural person's estate, survivors, or subrogees for 
     negligence, except with respect to a subrogee that is a party 
     to the waiver or has otherwise agreed to be bound by the 
     terms of the waiver.
       (C) Indemnification for damages.--A reciprocal waiver under 
     paragraph (1) may not be used as the basis of a claim by the 
     Administration or the developer for indemnification against 
     the other for damages paid to a natural person, or that 
     natural person's estate, survivors, or subrogees, for injury 
     or death sustained by that natural person as a result of 
     activities connected to the agreement or use of the 
     experimental aerospace vehicle.
       (d) Definitions.--In this section:
       (1) Administration.--The term ``Administration'' means the 
     National Aeronautics and Space Administration.
       (2) Administrator.--The term ``Administrator'' means the 
     Administrator of the National Aeronautics and Space 
     Administration.
       (3) Common terms.--Any term used in this section that is 
     defined in the National Aeronautics and Space Act of 1958 (42 
     U.S.C. 2451 et seq.) has the same meaning in this section as 
     when it is used in that Act.
       (4) Developer.--The term ``developer'' means a person 
     (other than a natural person) who--
       (A) is a party to an agreement that was in effect before 
     the date of enactment of this Act with the Administration for 
     the purpose of developing new technology for an experimental 
     aerospace vehicle;
       (B) owns or provides property to be flown or situated on 
     that vehicle; or
       (C) employs a natural person to be flown on that vehicle.
       (5) Experimental aerospace vehicle.--The term 
     ``experimental aerospace vehicle'' means an object intended 
     to be flown in, or launched into, suborbital flight for the 
     purpose of demonstrating technologies necessary for a 
     reusable launch vehicle, developed under an agreement between 
     the Administration and a developer that was in effect before 
     the date of enactment of this Act.
       (e) Relationship to Other Laws.--
       (1) Section 308 of national aeronautics and space act of 
     1958.--This section does not apply to any object, 
     transaction, or operation to which section 308 of the 
     National Aeronautics and Space Act of 1958 (42 U.S.C. 2458b) 
     applies.
       (2) Chapter 701 of title 49, united states code.--The 
     Administrator may not provide indemnification to a developer 
     under this section for launches subject to license under 
     section 70117(g)(1) of title 49, United States Code.
       (f) Termination.--
       (1) In general.--The provisions of this section shall 
     terminate on December 31, 2002, except that the Administrator 
     may extend the termination date to a date not later than 
     September 30, 2005, if the Administrator determines that such 
     an extension is necessary to cover the operation of an 
     experimental aerospace vehicle.
       (2) Effect of termination on agreements.--The termination 
     of this section does not terminate or otherwise affect a 
     cross-waiver agreement, insurance agreement, indemnification 
     agreement, or any other agreement entered into under this 
     section except as may be provided in that agreement.

  Mr. BURNS. Mr. President, this is a pretty straightforward amendment.
  This is an indemnification amendment that would be part of the 
reauthorization of the National Aeronautics and Space Administration. 
We have in process now the building of the X-33 and the X-34, which are 
unmanned space capsules, and it is probably key to our next step into 
space. Those tests are due to start next year, and no test has ever 
been conducted by this country that this clause was not included to 
cover the testing of those experimental aircraft. I have been told by 
the leadership that this will require a vote in the morning, and so I 
would just let the amendment remain at the desk and also call for the 
yeas and nays.

  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. BURNS. That is all the time I need. I yield the floor.
  The PRESIDING OFFICER. The amendment will be laid aside and now the 
Kerrey amendment 3204 recurs.
  Mr. BOND. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. SESSIONS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  Mr. BOND. I object.
  The PRESIDING OFFICER. Objection is heard.
  The bill clerk continued with the call of the roll.
  Mr. KERREY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                     Amendment No. 3204, Withdrawn

  Mr. KERREY. Mr. President, I have spoken to the managers of this 
bill, the distinguished Senator from Missouri and the distinguished 
Senator from Maryland. I appreciate, very much, their cooperation. I 
understand why they have to oppose this amendment. I know that they 
have experienced very frustrating situations themselves with 
regulations that are being imposed with no benefit attached.
  What I would propose to do, and I would like to ask the Senator from 
Missouri and the Senator from Maryland just to engage me in a little 
bit of colloquy on this, I would be prepared to withdraw this amendment 
and to work with the Senator from Missouri and the Senator from 
Maryland as well as the Senator from Rhode Island and the Senator from 
Montana, the ranking members of the Environment and Public Works 
Committee, and with Administrator Browner of the EPA, to see if some 
kind of report language could be included in the conference that would 
allow us to apply some common sense to the implementation of this rule 
without sacrificing the public health objective, which is all that I 
want to accomplish.
  Ms. MIKULSKI. First of all, I appreciate the willingness of the 
Senator from Nebraska to actually withdraw the amendment. The Senator 
from Missouri has my absolute assurance to work for report language or 
another acceptable approach that would deal with the compelling issue 
that he raised about the State of Nebraska. This would mean working 
with the appropriate authorizers. It also means working with the 
Administrator. We are willing to work with the Senator.
  We understand that Nebraska comes under a rule where there are 
consequences with excessive copper--with nausea, diarrhea, and other 
things. They might not affect anybody in Nebraska, but there are 
consequences. We are not going to debate science tonight.
  What we want to let the Senator know is, first of all, we appreciate 
the Senator's withdrawing the amendment. The Senator has our assurance 
we will work with him to advance this so that Nebraska's small 
communities do not have to make these expensive expenditures to comply 
with a rule that might in that State have either no or limited utility. 
We all have examples in our States. And the consequences, particularly 
to small, rural areas, are quite severe.
  I have had to confront some of these issues in Maryland myself. I 
won't give the examples because of the time. But I know what it is like 
for a county not to have a lot of money, to maybe have to go into bonds 
to be able to do that and then, having to spend their bond money, they 
can't build another school, another library, buy another computer for a 
child. So we understand that and look forward to working with the 
Senator. The Senator has my assurance we will work with him in 
conference.
  Mr. BOND addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Mr. President, I, too, thank the Senator from Nebraska for 
his willingness to withdraw the amendment. This is not a productive 
road we are going down. But we are willing to work with both Senators 
from Nebraska because the points they make raise some very serious 
issues that need to be addressed by the EPA and by the authorizing 
committee with staff. I hope that we can bring them together and 
perhaps we can come out of the conference with report language that 
will outline a solution, or at least we can work with the authorizing 
committees and the other scientific entities to find out if the science 
on which the EPA is relying is adequate.
  Also, as I believe I mentioned, the EPA has said there are 
flexibility options under the existing programming in which Nebraska 
could take advantage. I cannot tell the Senator what

[[Page S8363]]

those are, but we can find out and present those to the Senators so 
that a determination can be made if the problem can be solved by 
flexibility that EPA will utilize. At this juncture, at this time of 
night, we can't say what it will be, but we certainly assure the 
Senator that we will work to find, to explore every avenue to bring the 
relief the Senator seeks.
  Mr. KERREY. I sincerely thank the Senator from Missouri and I thank 
the Senator from Maryland. I know the hour is late. I regret that I am 
in the Chamber dragging you beyond what is a reasonable hour.
  I appreciate very much your willingness to try to work with both 
Senator Hagel and I, and I will assure you that I will talk to the 
chairman and ranking member, Senator Chafee and Senator Baucus, to try 
to come up with some report language that will satisfy EPA.
  One of the reasons we are here today is the flexibility offering that 
the EPA made to the Department of Environmental Control in the State of 
Nebraska was so insufficient the State attorney general has filed a 
lawsuit against EPA as a consequence. So we have reached this extreme 
situation, and I am very grateful for the willingness of both Senators 
to cooperate.
  Mr. President, I ask unanimous consent that the amendment I sent to 
the desk earlier be withdrawn.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 3204) was withdrawn.


                           Amendment No. 3206

    (Purpose: An amendment increasing funding for activities of the 
 National Aeronautics and Space Administration concerning science and 
   technology, aeronautics, space transportation, and technology by 
              reducing funding for the AmeriCorps program)

  Mr. SESSIONS. Mr. President, I send to the desk an amendment and ask 
for its consideration.
  I also ask that Mr. Jim Frees, a member of my staff, be given the 
privilege of the floor throughout the debate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from Alabama [Mr. Sessions] proposes an 
     amendment numbered 3206.

  Mr. SESSIONS. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is printed in today's Record under ``Amendments 
Submitted.''
  Mr. SESSIONS. Mr. President, I wish to express my sincere 
appreciation to my good friend, Senator Bond, from Missouri, who is 
managing this bill in a magnificent fashion, and the ranking member, 
the distinguished Senator from Maryland, Senator Mikulski. She is a 
true friend of space and NASA. Under the leadership of these two 
distinguished Senators, the subcommittee has done an excellent job in 
crafting this important piece of legislation. But, this bill provides 
funding for a variety of important Federal agencies, and a number of 
areas in this bill are of special interest to me and my constituents. 
However, today I would like to confine my remarks to the issues 
involving NASA and its funding and budget.

  First, I congratulate this Senate for its strong support of the 
International Space Station. On July 7, a few days ago, this body voted 
by a 2 to 1 margin to continue this Nation's commitment to research in 
space. The first assembly flights of the space station are only a few 
months away. When it becomes operable, the space station will provide a 
unique microgravity laboratory that will far exceed any capability that 
has been previously available on the space shuttle or the Mir Space 
Station. Advances in medical and pharmaceutical science that result 
from space station research alone, may ultimately justify our national 
investment in the space station. Shuttle-based research is just 
beginning to demonstrate the enormous potential of using the 
microgravity environment for research into pharmaceutical products, and 
other aspects. Important developments in physics, materials science, 
life science and other fields through the space station research are 
not only possible, but probable in the future.
  Furthermore, perhaps more important, the space station represents a 
bridge to further human exploration in space. The willingness and 
foresight of this Congress to take a long-term view to keep the United 
States involved in manned exploration of the universe is important.
  Since its establishment in 1958, NASA has been a tremendous force for 
scientific and technological progress in this Nation. In addition, NASA 
has been a source of inspiration for literally millions of people, 
myself included, who were captivated by the dream of exploring the 
frontiers of space. Despite its great record and strong public support, 
however, NASA is laboring under the weight of several successive years 
of significant budget cuts.
  For fiscal year 1999, the President proposed giving NASA less than 
$13.5 billion, which is far less than 1 percent of the national budget. 
This would mark the fifth year in a row that NASA's budget has been 
cut, in terms of real dollars. If we consider the further reduction in 
buying power caused by inflation during this 5-year period, the 
significance of these cuts become apparent. To make matters worse, the 
administration's budget estimate for fiscal year 2000 contemplates 
almost $200 million in additional budget cuts to NASA. The cuts in the 
President's budget request are all the more disconcerting in that they 
come in a year in which the President is proposing increases for almost 
every other civilian research and development budget as part of what 
the administration calls the 21st Century Research Fund.
  Let me ask, can any agency symbolize to our people, and to the world, 
the discovering, adventuring spirit of America better than NASA? The 
administration, and this budget, appear to suggest differently. If the 
administration wants to build a bridge to the 21st century, then NASA 
must be one of its trusses. It simply does not make sense for our 
dynamic, high-tech Nation to keep cutting NASA's budget year after 
year.
  I share the concern expressed by the National Space Society. They 
wrote recently:

       NASA's potential to be a world leader as we move into the 
     next millennium will be compromised by a lack of 
     Administration interest in space exploration.

  That is a serious comment and we ought to think carefully about it. 
The low priority put on the space program is evident when you compare 
the President's budget submission with the budget projections for NASA 
from past administrations. This chart makes the comparison.
  In 1991, a very distinguished panel studied space, the Committee on 
the Future of the U.S. Space Program. They projected what we ought to 
be spending to keep NASA at the level at which they thought it should 
be. It went all the way up to almost $60 billion by the year 2003, and 
would be at $37 billion next year. Right now we are at $13 billion in 
this budget.
  In addition to that, according to the FY 1993 budget submission that 
was projected to carry out through this time period, we would have 
substantially more money in the NASA budget. Indeed, this year shows us 
$8 billion below the budget submission that was projected in 1993 for 
NASA. That is a significant reduction. During this whole time, the 
total reduction from the budgetary projections for NASA total $27 
billion. So they have had basically a flat and declining budget at a 
time they were projected to go up significantly. I think those are 
matters of great importance.
  Norm Augustine, the Chairman of Martin Marietta, saw the need for 
NASA budgets which would rise by 10 percent a year through the end of 
the decade. We have not kept up with his vision for America and the 
Commission's vision for America, and we must do better about that.
  Let me ask this: How has NASA coped with these large budget 
reductions that they sustained? In my view, they have done very well. 
Under the leadership of Administrator Dan Goldin, NASA has made ``Doing 
more with less'' not just a slogan, but a reality. Administrator Goldin 
has pushed his agency over and over again to do things better, faster 
and cheaper. The results at NASA, in my opinion, have been remarkable. 
They have done a good job. Mr. Goldin told me several weeks ago that 
``business as usual'' does not count anymore at NASA.
  I am sure all of my colleagues recall the fascinating Mars Pathfinder 
Mission. Just 1 year ago, Pathfinder, on

[[Page S8364]]

July 4, with its little Sojourner rover, was busy exploring the surface 
of the red planet.
  Most of my colleagues probably recall also the Viking mission in 
1976. The Viking spacecraft landed on Mars, took photos, and was the 
first mission to scoop up and analyze Martian soil. Viking was a 
remarkable success. It cost over $3 billion, however, in today's 
dollars, and took about a decade to develop. It was about the size of 
an average car. By contrast, the Mars Pathfinder of last year took a 
quarter of the time to develop, it cost less than one-tenth as much, 
and it was a fraction of the size, yet produced remarkable results, 
catching the attention of the world. I am told the Internet site, 
NASA's Internet site, received more hits during that period of time 
than any other site in history.
  So this chart summarizes what has been accomplished in terms of Mr. 
Goldin's goal of faster, better, and cheaper.
  As to cheaper, the average spacecraft development cost has gone from, 
in fiscal years 1990 to 1994, a cost of $600 million, down to $175 
million in the period fiscal years 1995 to 1999, and they expect it to 
be at $85 million. That is the kind of progress we like to see. It 
makes space exploration much more viable in today's world than it was.
  The average development time in terms of years: In fiscal year 1990 
to 1994, a new mission took 8.3 years; in 1995 to 1999, it is now at 
4.4. It will go to 3.5, and 3.1, under their efforts.
  With regard to flight rate, that is the number of launches they are 
able to conduct per year--in 1990 to 1994 there were just 2. In 1995 to 
1999 they have gone up to 9. In fiscal year 2000 they expect to have 
13; and, in 2004, they expect to have 16. That is good. They are doing 
what this Congress has asked; that is, to do more with less, to explore 
space and to make the kind of progress that makes America proud.
  Mr. President, during this time since 1993, NASA has cut its number 
of employees 25 percent. I recall a time 3 years ago when I became 
Attorney General of Alabama and I faced a budget crisis of enormous 
proportions. The first day I took office, we made a major decision. We 
had to terminate the employment of one-third of our people. We worked 
hard, we did a lot of different things, and we were able to continue 
the productivity of that office; and begin to build on that as time 
went by and have a better office.
  NASA has done what we have asked them to do. There is no other 
agency, I believe, in this kind of research and exploration that has 
had that kind of employment cut in the last 4 or 5 years. They have 
done well. They are doing more in less time at less cost and at the 
same time with less people. I think it is something we ought to be 
proud of and we ought to celebrate. But we ought not to keep taking 
advantage of them and always cutting their budget because they are 
performing as we encouraged them to do.
  With regard to space flight by humankind, they have continued to work 
on that, and it is difficult, but they have reduced the cost of space 
shuttle flights by 42 percent between 1992 and 1997. That is what we 
like to see. They are working to cut those costs even more.
  The conclusion we draw is that during a time of tight budgets, NASA 
has been doing better than could be expected, and they responded to 
this Congress' challenge. Certainly, up to a point, budget challenges 
can be healthy for an agency. They force some critical self-
examination, and they result in some positive changes.
  We have heard that the periodical giving of blood makes a person 
strong, but if you give more than a pint and more blood and more blood, 
it begins to weaken you. I believe NASA is lean and healthy and strong 
now. It is at a good point, and we need to strengthen it now and allow 
it to flower and grow and continue its great scientific exploration.
  The budget request for 1999 increases other civilian and research 
development agencies. Almost all of them, whether it is the NIH or 
National Science Foundation, received substantial budget increases, but 
not NASA. The administration proposes increases for all the major 
agencies in VA and HUD, but not for NASA. For fiscal year 1999, the 
administration has requested less than $13.5 billion, a reduction of 
$183 million from last year's budget.
  Fortunately, Senator Bond and Senator Mikulski restored $150 million 
of that cut, and that leaves NASA facing a $33 million cut for fiscal 
year 1999. That is just not acceptable for this Nation. This is not a 
huge amount, but it is an important principle.
  Our history, our heritage, our character as a nation is that we are 
explorers. We believe in discovery and reaching out beyond our homeland 
and exploring this universe. That character is at stake if year after 
year we keep cutting our exploration agency.
  That is why I am proposing this amendment. It would add $33 million 
in funds for NASA for fiscal year 1999. That would bring it up to level 
funding--that is all--but it would be a statement, an important message 
by this Congress, that the day of cutting their budget more and more 
will end.
  We are supposed to have offsets for that, and we have worked hard at 
that. There is no way you can have a pleasant experience when you talk 
about finding funds for an offset.
  I have noticed, and it is well known at this time by the Members of 
this body, that the House committee has terminated the AmeriCorps 
budget, zeroed it out. We have over $220 million in this bill's funding 
for AmeriCorps. The whole program is about $400 million.
  If we take $33 million from that, we are talking about less than a 
10-percent reduction in that budget. That will probably happen in 
conference committee because, as I said, the House committee has zeroed 
out the budget, and we expect it to be less. This may be and does 
appear to be a perfect place to find the funds we need to maintain the 
NASA spending at the level of last year. In the future, we need to work 
to increase that budget to identify the kind of programs that will be 
exciting and worthwhile in this Nation and in this world.
  Of the $33 million in additional funds provided by my amendment, $20 
million would go to NASA's aeronautics, space transportation, and 
technology line item, which includes the Reusable Launch Vehicle 
Program. It will also provide funds to accelerate research in advanced 
space transportation technologies.
  Additional funds will also be available for NASA's important 
aeronautics programs and many other projects. It will have $13 million 
for additional funding for NASA's science and technology programs. It 
will provide them the kind of affirmation and support they need.
  I thank our distinguished subcommittee chairman, the Senator from 
Missouri, and our ranking member, the Senator from Maryland, for their 
efforts in restoring much of the money that was cut from NASA's budget 
by the President's budget request. While the amount of money is not 
large in terms of this Senate's overall budgetary concerns, it is 
significant and it sends an important signal.
  Adoption of my amendment will send an important message, a message 
that says that NASA's programs are significant for the future of this 
country and its citizens and that this Congress is not going to be a 
party to continued reductions in support for space exploration. That is 
not what we ought to do. We ought not to worry about it when we have 
well below 1 percent of our budget going for this project.
  Next year's budget submission from the President will literally take 
this Government into the 21st century. I call on President Clinton to 
demonstrate true leadership by proposing an increase in NASA's budget. 
The President's plan to cut additional millions from NASA next year is 
not acceptable.
  Last year, on this floor, I made a speech proclaiming my conviction 
that we must continue to be a nation of explorers. At that time, I 
stated the following:

       Space is a key to the image and the future of this Nation 
     in the 21st century and beyond. We must have national 
     leadership, keen vision, clear-cut goals and a strong 
     commitment from this Congress and the Congresses to follow. 
     We must be willing to pay the price necessary to realize our 
     dreams and the dreams and goals of our children.

  That was true last year, and it is true today, and it will continue 
to be true. We are a nation of explorers. This is how the world sees 
us. It is how we see ourselves. All over the world on July 4 last year, 
people watched Pathfinder

[[Page S8365]]

on Mars. The Internet lit up like it has never lit up before. There 
were record high levels of inquiries. Let's not allow this great 
achievement to slip away from us. Let's not give it away at this point 
in time. We have to make a decision as we stand on the threshold of the 
next millennium. It is no time to be timid; it is no time to fall back. 
We are on the verge of some of the world's greatest accomplishments in 
science and space and technology. NASA will play a key role in that.
  Mr. President, that is why I ask for support for this amendment. I 
ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  Mr. SESSIONS. I yield the floor.
  Ms. MIKULSKI addressed the Chair.
  The PRESIDING OFFICER. The Senator from Maryland.
  Ms. MIKULSKI. I rise in opposition to the Sessions amendment. I 
really respect the Senator from Alabama and his deep commitment to 
space and to the significant investments that must be made in science 
if America is to be a leader in the 21st century.
  I have been to the Huntsville NASA program where they are doing a 
significant amount of the space station work, along with so many other 
worthwhile projects, and can see why he would have such a passion both 
from a patriotic standpoint, a competitive standpoint, and in actually 
seeing it hands on. I do not dispute the need to increase NASA's 
budget. Both the chairman and I have really dealt with this issue as 
forcibly as we could.
  Given our parameters, we felt that we have come up with essentially a 
funding for NASA that keeps crucial and critical programs, that keeps 
us exploring, keeps the Shuttle safe, and continues our work in Earth 
observatory data. What I object to, though, in the amendment of the 
Senator from Alabama, is his offset. He takes the offset of $33 million 
from the Corporation for National and Community Service. That program, 
too, has been flatlined for more than 3 years.
  When we talk about national and community service, let me just say 
what it is. This corporation makes grants to States, institutions of 
higher education, and public and nonprofit organizations to create 
service opportunities. But most of all, one of its most significant 
programs is to have volunteers in communities. If you are an AmeriCorps 
volunteer, you get a voucher to reduce your student debt or to be able 
to use that voucher to either go to college, higher education, 
vocational education, or get yourself ready for the future.
  Essentially, it is an earned-learned service opportunity. I could ask 
the Senator from Alabama a series of questions but I will not. But if 
we are going to talk about $33 million, know that $5 million in this 
program is to continue the Points of Light Foundation established by 
President Bush which we have supported in a bipartisan way. It is also 
$18 million from the Civilian Conservation Corps. I cannot support 
cutting $18 million for the Civilian Conservation Corps. So $5 million, 
$18 million, and we are up to $23 million. I really do not want to cut 
Points of Light. I really do not want to cut the Civilian Conservation 
Corps.
  Then there is $43 million for school-based and community-based 
service learning. I think we do need to teach values. I do think we 
need to teach habits of the heart, and service learning is one of the 
most important ways we could do that.
  The benefits in my State, my State of Maryland, show that when 
students have participated in volunteer services as part of the 
requirement to graduate from high school, they have been forever 
changed by the fact that they worked in a library, visited senior 
citizens, helped in a soup kitchen and did a whole series of other 
things.
  Mr. President, tonight is not the night to extol the virtues of the 
Corporation for National and Community Service, but it has served the 
Nation very well. It, too, has been flatlined.
  I will just conclude by saying this. There is a program in Baltimore, 
it is an old convent called St. Stanislaus Convent right down the 
street from where I lived in a neighborhood called Fells Point. It has 
been recycled where Catholic nuns and AmeriCorps volunteers are working 
with children from very poor families--really out of the public housing 
projects. Because of what the AmeriCorps volunteers bring, they recruit 
other volunteers to help the sisters be able to educate these children.
  When we talk about exploring the future, we have to get behind our 
kids to make sure that our kids have the skills that they need to get 
ready for this future. And what AmeriCorps does in many ways is that 
the very volunteers work in public education, work to be able to 
recruit people for an American roots program, and gets them ready for 
the exciting opportunities that we have.
  So while we want to go into space to explore--I want to make sure we 
look for yet unidentified planets--I want to make sure we have those 
programs that make sure that we get our kids ready to be able to work 
in these science and technology programs. And I believe the AmeriCorps 
program helps do that. And, therefore, I urge rejection of the Sessions 
amendment.
  Mr. BOND. Mr. President, I listened with great interest to all of the 
wonderful and exciting things my colleague from Alabama said about the 
space program. He made very telling points about how this is the future 
and motivation of our children, this is a symbol for the next century. 
There are many, many, many good things about our space program. As a 
matter of fact, I agree with almost everything he said about how 
important the space program is, and I think my colleague from Maryland 
agrees. And, frankly, that is why in a very extremely tough budget, 
when the President recommended $13.465 billion for NASA, we recommended 
we appropriate $13.615 billion for NASA.
  Now, these are the people who are running NASA. They say all they 
want is $13.465 billion. And we said, ``No. You've got to do better. 
You are going to take another $150 million beyond what the folks who 
are running it--under the direction of the Director of OMB--have asked 
for. We are increasing it. And we think that is very important.''
  Unfortunately, we have had to make these choices in a budget where we 
had to restore an 83-percent cut in elderly housing, the section 202 
elderly and assisted housing, the supportive housing that was savaged 
by Secretary Cuomo and the administration. We have had to restore money 
for veterans' health care where that was cut.
  Frankly, we have reached the accommodation on a very difficult bill. 
And we have agreed to maintain the funding at the National Service and 
AmeriCorps. And as part of, I think, an overall responsible approach to 
the budget for all of these agencies we work on, and, in addition, to 
assure that the administration will be able to sign the bill--because 
without the administration signing the bill, it does not do us any good 
to go through the drill of coming up with a totally different set of 
priorities than they have--we have kept in funding for National Service 
and AmeriCorps.
  Therefore, I commend the Senator for his enthusiasm for NASA. I do 
not believe it is feasible to achieve it. Therefore, I move to table 
the amendment, and ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  Mr. BOND. I ask unanimous consent that the amendment be set aside.
  The PRESIDING OFFICER. The amendment will be set aside until 
tomorrow.


                           Amendment No. 3207

    (Purpose: To provide for the ineligibility for certain housing 
   assistance of individuals convicted of manufacturing or producing 
                            methamphetamine)

  Mr. BOND. Mr. President, I send to the desk an amendment for Mr. 
Ashcroft and myself.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from Missouri [Mr. Bond], for Mr. Ashcroft, for 
     himself and Mr. Bond, proposes an amendment numbered 3207.

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


[[Page S8366]]


       At the appropriate place in title IV, insert the following:

     SEC. 4____. INELIGIBILITY OF INDIVIDUALS CONVICTED OF 
                   MANUFACTURING OR PRODUCING METHAMPHETAMINE FOR 
                   CERTAIN HOUSING ASSISTANCE.

       Section 16 of the United States Housing Act of 1937 (42 
     U.S.C. 1437n) is amended by adding at the end the following:
       ``(f) Ineligibility of Individuals Convicted of 
     Manufacturing or Producing Methamphetamine on the Premises.--
     Notwithstanding any other provision of law, a public housing 
     agency shall establish standards for occupancy in public 
     housing dwelling units and assistance under section 8 that--
       ``(1) permanently prohibit occupancy in any public housing 
     dwelling unit by, and assistance under section 8 for, any 
     person who has been convicted of manufacturing or otherwise 
     producing methamphetamine on the premises in violation of any 
     Federal or State law; and
       ``(2) immediately and permanently terminate the tenancy in 
     any public housing unit of, and the assistance under section 
     8 for, any person who is convicted of manufacturing or 
     otherwise producing methamphetamine on the premises in 
     violation of any Federal or State law.''.

  Mr. BOND. Mr. President, quite simply, this has to do with getting 
and keeping methamphetamine production out of public housing. Many of 
my colleagues do not have the misfortune of understanding why the 
amendment is so important. Methamphetamine is a raging crisis in 
Missouri and many other States in the Midwest. And if it isn't in your 
State now, it may well be soon.
  For those of you unfamiliar with the drug, it is a highly addictive, 
artificial stimulant constituted of such unwholesome products as 
lighter fluid, antifreeze, and ether, among other things. It is highly 
addictive, some say more so than crack; but it is perhaps the most 
physically destructive of illegal drugs.
  In my State of Missouri, through the excellent work of local law 
enforcement, in cooperation with the State, and with the DEA, nearly 
800 clandestine methamphetamine labs were busted last year. Law 
enforcement reports that there may be even more this year.

  Meth started off as a rural drug, but labs have started to turn up in 
the major metropolitan areas of St. Louis and Kansas City. Urban drug 
users are starting to discover this drug as well. It is not likely that 
this trend will slow down, because the drug is cheaper than crack, it 
is more potent than crack or cocaine, it is more addictive than either 
of those drugs, and it can be made in the home or, in fact, almost 
anywhere else. In fact, it largely, in our State, is a home-made drug, 
which is the reason why this amendment is important.
  Most of the meth being consumed in Missouri is homemade in mom-and-
pop drug stores. Information necessary to make the drug is widely 
available and the ingredients can be purchased at your local 
convenience store or discount store.
  The drug, however, is very dangerous to produce. While some who make 
this drug may consider themselves to be amateur chemists, they are 
actually rather ignorant individuals who are not only endangering 
themselves but innocent others.
  Mr. President, I have seen pictures of children horribly burned 
because adults caring for them have them in the room where this junk is 
being produced, and when it goes off it can be highly dangerous. It is 
highly explosive. Producing meth in a kitchen or a basement produces 
toxins, and it produces highly explosive gas. Meth labs have been known 
to explode when drug officers go into a bust. They use low-velocity 
guns, they use low-intensity flashlights, because a flashlight, a hot 
flashlight, could set off the ether.
  If you don't believe it, there are buildings that have had the sides 
blown out of them--motel rooms, shacks, wherever they have done it. 
When one of the meth labs explodes, it doesn't just cause a little 
fire. It can burn people. It can kill people. It can blow the sides of 
buildings out. It is very, very dangerous. That is why this bill 
provides for training and more assistance to local law enforcement 
officers, the first responders in emergency personnel--fire officials, 
law enforcement officials--so they will know what to do when they go 
into a meth lab.
  We need to send a clear message that this activity is not welcome and 
it will not be tolerated in public housing. Not only do we want drug 
dealers out, but we especially want those out who are so cavalier with 
the safety of others that they would conduct a chemical operation, a 
chemistry operation that is highly dangerous, in the heart of a densely 
populated residential area. Should anyone doubt that this is taking 
place, law enforcement officers have told me about drug dealers 
performing the process in hotel rooms, moving cars, trailer parks, 
State parks, in the parking lot next to our official offices in one 
city, and in homes with children.
  This amendment adopts zero tolerance for drug dealers. I hope that it 
can be adopted.
  Ms. MIKULSKI. Mr. President, this side of the aisle accepts the 
amendment offered by Senators Bond and Ashcroft. I commend the Senators 
from Missouri for bringing this to our national attention.
  It obviously points out this despicable drug has two negative 
consequences. It is horrendous and devastating to anyone who takes it, 
but it is also dangerous in where it is made, and innocent people, 
innocent children nearby, are unwittingly exposed to and even in 
additional danger around its manufacturer.
  We want to support this amendment. I believe we need those steps to 
get crime out of public housing. Public housing should be an 
opportunity to lead a better life, not an incubator for small business 
drug trafficking.
  Mr. ASHCROFT. Mr. President, I rise in strong support of the 
amendment offered by my colleague, the senior Senator from Missouri. I 
am proud to be an original cosponsor of this amendment because it 
addresses the most pressing illegal drug problem facing our state and, 
perhaps, our country.
  As my colleague explained, our amendment provides for a lifetime ban 
for individuals who manufacture or produce methamphetamine on public 
housing premises. Specifically, the amendment requires public housing 
agencies to prohibit occupancy in any public housing unit by any person 
convicted of manufacturing methamphetamine in violation of federal or 
state law. Current tenants convicted of meth manufacturing will be 
evicted immediately and permanently.
  The need for this amendment could not be clearer. According to the 
Drug Czar's office, methamphetamine is by far the most prevalent 
synthetic controlled substance manufactured in the United States. This 
fact is not news to my constituents in Missouri. Last year alone, 
authorities seized 396 meth labs in Missouri, more than double the 
number of labs seized in California.
  Congress has taken some significant steps to address the growing meth 
problem. I was proud to have sponsored the Comprehensive 
Methamphetamine Control Act of 1996 and to have helped secure funding 
for the creation of a high-intensity drug trafficking area in the 
Midwest. We have tried to target meth production by giving it higher 
priority in the demand for limited federal resources.
  Unfortunately, the meth problem has become a crisis. Just this past 
weekend, the National Institute of Justice released a study showing 
that methamphetamine use among adult arrestees and detainees has risen 
to alarming levels. The problem is not confined to adults, however. 
Among 12th graders, the use of ice, which is a slang term for a very 
pure, smokeable form of meth, has risen 60 percent since 1992.
  The amendment we are offering today sends a clear signal to meth 
producers: We will not tolerate your behavior and we certainly will not 
subsidize it. If you want to turn your taxpayer-subsidized residence 
into a meth lab, the only public housing you will be eligible for in 
the future is the penitentiary.
  Our amendment attacks the problem of meth production and manufacture 
in federal housing projects in order to protect the safety and welfare 
of those law-abiding individuals who need subsidized housing. The 
sponsor of this amendment, my colleague from Missouri, deserves a great 
deal of credit for his lead role in cracking down on drug users and 
dealers in public housing. In 1996, he was instrumental in getting 
Congress to pass a provision requiring the eviction of any tenant from 
publicly or federally assisted housing if that tenant is determined to 
be involved in a drug-related criminal activity. As a result of his 
efforts, tenants

[[Page S8367]]

involved in drugs are prohibited from receiving federal housing 
assistance for three years or until the evicted tenant successfully 
meets certain rehabilitation requirements.
  These provisions were designed to ensure the safety and security of 
families living in public housing. In addition, the reforms sought to 
instill responsibility in families participating in the federally 
assisted housing programs and to emphasize that federal housing 
assistance is a privilege, not a right. The amendment we are offering 
today extends and strengthens these provisions to address the deadly 
consequences of meth production.
  Meth labs have been called toxic time bombs, containing highly 
flammable materials and deadly chemicals. As DEA Special Agent Michael 
Cashman has observed, ``The investigation of clandestine 
methamphetamine laboratories is one of the few instances where the 
evidence and crime scene can hurt or even kill the investigator.''
  Clandestine lab explosions are responsible for killing and injuring 
not only meth producers and law enforcement investigators, but innocent 
bystanders as well. Just last year, a four-year-old child was killed in 
Arizona when the meth lab his parents had erected in their apartment 
caught on fire. As horrifying as this case is, it is not an isolated 
incident. Within the last couple of years, other innocent young 
children of meth-producing addicts as well as heroic law enforcement 
agents have been victimized by the highly dangerous enterprise of meth 
manufacturing.
  As the epidemic of meth production has grown, so has its presence in 
public housing. When I asked local prosecutors if they knew of recent 
manufacturing activities in Missouri, it seemed everyone had a story or 
two to tell.
  In Dekalb County, two men recently pled guilty to attempted 
manufacturing of meth in a public housing unit. Sadly, when police made 
the arrest, they found not only gas cans, paint thinner, butane fuel, 
and other meth paraphernalia, but an infant girl.
  In Platte County, a man living in section 8 housing was recently 
convicted of meth production, possession, and endangering the welfare 
of a child.
  And, in Grundy County, two recipients of federal housing assistance 
were found guilty recently of attempting to manufacture meth in their 
apartment.
  Mr. President, these examples were obtained with just a few phone 
calls. I do not doubt that many of my colleagues have heard about 
similar crimes from police and prosecutors in their states.
  We need to get serious again about fighting the use of meth and all 
illegal drugs in this country. I say ``again'' because for the past 
five and one-half years, the Clinton-Gore Administration has failed to 
provide leadership on this critical threat to our nation. Since 
President Clinton took office, use of marijuana by 8th graders has 
increased 176 percent. Cocaine and heroin use among 10th graders have 
more than doubled. And, as I mentioned before, use of meth ice has 
risen 60 percent on this Administration's watch.
  Even if it is accepted, this amendment will not single-handedly 
reverse these frightening trends. It is, however, a step in the right 
direction. It sends the signal this Congress needs to send; namely, 
that the dangerous manufacture of illegal drugs in public housing is 
unacceptable.
  I want to thank my colleague again for his leadership on this issue. 
He understands the destruction meth has caused in our state and around 
the country, and his amendment is an appropriate response. I am glad to 
join him in this effort.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  The amendment (No. 3207) was agreed to.
  Mr. BOND. I move to reconsider the vote.
  Ms. MIKULSKI. I move to lay it on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 3208

 (Purpose: To state the sense of the Senate that it should be the goal 
 of the Department of Veterans Affairs to serve all veterans at health 
    care facilities within 250 miles of their homes, and for other 
                               purposes)

  Mr. BOND. Mr. President, on behalf of Senators Snowe and Collins, I 
send an amendment to the desk and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Missouri [Mr. Bond] for Ms. Snowe, for 
     herself, and Ms. Collins, proposes an amendment numbered 
     3208.

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

       Sec. 110. (a) It is the sense of the Senate that it should 
     be the goal of the Department of Veterans Affairs to serve 
     all veterans at health care facilities within 250 miles of 
     their homes, and to minimize travel distances if specialized 
     services are not available at a health care facility operated 
     by the Veterans Health Administration within 250 miles of a 
     veteran's home.
       (b) Not later than 6 months after the date of enactment of 
     this Act, the Secretary of Veterans Affairs shall submit to 
     the Committees on Veterans' Affairs of the House of 
     Representatives and the Senate a report on the estimated 
     costs to and impact on the health care system administered by 
     the Veterans Health Administration of making specialty care 
     available to all veterans within 250 miles of their homes.

  Ms. SNOWE. Mr. President, this amendment will help ensure that 
America's veterans get the health care and services they deserve as 
close to home as possible.
  My amendment does two things: It expresses the sense of the Senate 
that it should be the goal of the VA to serve all veterans at health 
care facilities within 250 miles of their homes, and minimize travel 
distances if specialized services are not available at a health care 
facility operated by the VA within 250 miles of a veteran's home.
  Second, it mandates that the VA submit a report to Congress on the 
estimated cost to and impact on the health care system administered by 
the VA of making specialty care available to all veterans within 250 
miles of their homes.
  Mr. President, I represent a rural state, Maine, which is served by 
one Department of Veterans Affairs facility, the Togus VA Medical 
Center outside the state's capital, Augusta. Many of Maine's veterans 
already must travel hundreds of miles just to reach Togus--and often, 
if specialized services are required, they must travel even further to 
facilities in Boston. This means long drives, frequently in terrible 
weather, and separation from the vital support that family and friends 
can provide.
  This is not a problem limited to Maine--far from it. It is a problem 
that exists anywhere where there are vast distances between cities--out 
west, in the heartland, and down south.
  The level of our commitment to this nation's veterans should not be 
contingent upon the whims of geography. I understand the financial 
constraints under which the VA must operate, however, the debt we owe 
our veterans will never be repaid until we do all we can to ensure that 
all our nation's veterans have appropriate access to services.
  Mr. President, this amendment does not all any additional funding to 
the VA/HUD bill. All it does is to recognize that there is a serious 
disparity in terms of veterans' access to the services which they 
earned and to which they are entitled, encourage the VA to make a 
priority of serving all veterans equally, and require the VA to explore 
the situation further.
  I think we can all agree that we owe our veterans that much. I know 
that the VA is facing challenging times, but my hope is that the VA 
will also recognize that our veterans are facing serious challenges in 
accessing the services they were promised. I urge my colleagues to join 
me in supporting this amendment.
  Mr. BOND. The amendment has been cleared on both sides. It is a 
sense-of-the-Senate resolution that it should be the goal of the 
Veterans' Administration to serve all veterans at health care 
facilities within 250 miles of their home. It sounds like a very 
reasonable proposal. I urge its adoption.
  Ms. MIKULSKI. I gladly accept the amendment offered by my colleague 
from Maine. Her commitment to health care and its accessibility is long 
standing. To ensure that veterans don't have to drive miles and miles 
and miles to get the health care that they need is a very modest 
amendment that we could agree to.

[[Page S8368]]

  Mr. BOND. I thank my colleague from Maryland.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  The amendment (No. 3208) was agreed to.
  Mr. BOND. I move to reconsider the vote.
  Ms. MIKULSKI. I move to lay it on the table.
  The motion to lay on the table was agreed to.
  Mr. CRAIG. Will the Senator from Missouri yield for purposes of a 
colloquy?
  Mr. BOND. I am happy to enter into a colloquy with the Senator from 
Idaho.
  Mr. CRAIG. As the Senator is aware, I have worked extensively on 
assuring the Waste Isolation Pilot Project, a site in New Mexico to 
store low-level, transuranic waste, is open to dispose of nuclear 
waste.
  Mr. BOND. I am aware of the extensive support the Senator has given 
to WIPP.
  Mr. CRAIG. Is the Senator aware that the New Mexico Environment 
Department is in the process of issuing a RCRA Part B Permit to have 
mixed waste shipped to and stored at the site?
  Mr. BOND. The Senator from Idaho has made me aware that the RCRA Part 
B permit is to be issued soon.
  Mr. CRAIG. Well, I would like to address that process and the actions 
of the New Mexico Environment Department for a moment. Mr. Chairman, it 
is my belief that the State of New Mexico is using an unprecedented 
process in issuing the RCRA Part B. If the current draft is finalized, 
the permit would require that each site which seeks to ship mixed waste 
to WIPP go through a modification of the Part B Permit. This could 
delay already stalled shipments from sites in New Mexico, Colorado and 
Idaho because of procedural impediments put in place by the State of 
New Mexico. This needless delay would likely cause the Department of 
Energy to violate their agreement regarding the disposal of nuclear 
waste from Idaho. Mr. Chairman, my point is this: The reason that the 
State of New Mexico is involved in this process is that the 
Environmental Protection Agency has delegated its authority over 
materials regulated by RCRA to the State of New Mexico. However, 
delegating authority does not, I believe, relieve EPA from its 
responsibility to ensure that the permitting of the WIPP facility is 
done within the intent of Congress in the WIPP Land Withdrawal Act and 
RCRA. As a matter of fact, it is tasked with ensuring that the State 
acts within the intent of federal law. Mr. Chairman, the Environmental 
Protection Agency has recently certified that WIPP can accept 
transuranic waste. However, it sits idly by as the State works to 
ensure that WIPP is not opened in a timely manner. The EPA should 
provide adequate oversight of the State of New Mexico to assure WIPP's 
timely opening.
  Mr. BOND. I thank the Senator for bringing this to the attention of 
the Committee. I would hope EPA would carefully evaluate the situation 
and keep the Committee informed of its progress.


                        senior citizens housing

  Mr. D'AMATO. Mr. President, I would like to enter into a colloquy 
with my friend Senator Kit Bond, the distinguished Chairman of the 
Veterans Affairs and Department of Housing and Urban Development (HUD) 
Appropriations Subcommittee. I applaud the strong efforts of the 
Chairman in protecting funding for housing programs for senior 
citizens. I am pleased to support the funding provided by this bill for 
elderly housing.
  I was pleased to cosponsor Senator Bond's amendment to the Senate 
Budget Resolution earlier this year, expressing the Sense of the Senate 
that funding for the HUD Section 202 Elderly Housing program should be 
protected. The amendment, which passed the Senate by a vote of 97-2 on 
April 2, 1998, expressed a policy that was not only met but exceeded by 
this bill. Specifically, I fully support this bill's inclusion of $676 
million for the Section 202 program in Fiscal Year 1999--a $31 million 
increase from the Fiscal Year 1998 funding level.
  The HUD Section 202 program is a critical component of our federal 
housing strategy. The program provides funding for the development of 
new affordable housing opportunities and services for seniors. This 
combination of affordable housing with services helps to promote and 
maintain the independence and dignity of our senior citizens. This 
critical program helps to protect seniors' quality of life by offering 
them an opportunity to remain active and respected members of the 
community.
  I was dismayed earlier this year by the Administration's proposal to 
reduce funding for this important program by over 83 percent, to a 
level of $109 million. This proposal to cut housing for the elderly was 
unacceptable. The funding increase provided by this bill sends a strong 
signal to the Administration that future proposals to cut the program 
will be met by fierce opposition by the Senate.
  Mr. President, I would also like to applaud Chairman Bond's inclusion 
of a requirement for HUD to conduct a formal study assessing the 
housing needs of elderly Americans. This much-needed study will examine 
the unmet housing needs of the elderly and assess the physical 
condition of the existing stock of affordable housing for the elderly.
  In connection with this study, I would like to bring to the attention 
of the Senate an important resource for elderly housing in my home 
state of New York. The Council of Senior Centers and Services of New 
York City (Council) can provide invaluable input to HUD during the 
development of this study. The Council represents 265 senior service 
organizations--ranging from individual community centers to large, 
multiservice, city-wide organizations.
  I would ask the distinguished Chairman of the Subcommittee if it is 
his intent that HUD should develop the required study with the input 
and assistance of local senior housing providers and nonprofit 
organizations such as the Council of Senior Centers and Services?
  Mr. BOND. Mr. President, I agree with the comments of my friend, 
Senator D'Amato, the Chairman of the Committee on Banking, Housing and 
Urban Affairs, which has jurisdiction over federal housing programs. In 
an effort to ensure that HUD's elderly housing programs are operating 
in an effective manner, the Subcommittee included a provision in the 
legislation to require a report on the unmet housing needs of the 
elderly and the condition of the existing elderly housing stock. In 
addition, HUD will report on new and innovative approaches to providing 
additional housing opportunities while reducing costs and increasing 
efficiency.
  It is the intent of the authors of this legislation that HUD's report 
on elderly housing shall be developed with meaningful input from a wide 
variety of interested parties, including government entities and 
housing organizations. In particular, the authors fully intend HUD to 
develop this study in partnership with housing and service providers. 
Furthermore, the Subcommittee is fully cognizant of the invaluable work 
of the Council of Senior Centers and Services in meeting the housing 
and service needs of the elderly in New York City. The Subcommittee 
strongly encourages HUD to solicit the input and advice of the Council 
in the development of this study.
  I thank Senator D'Amato for his clarifying remarks and I look forward 
to receiving this much-anticipated HUD report on elderly housing.


           Tornado Preparedness Pilot Program in South Dakota

  Mr. JOHNSON. Mr. President, on the night of May 30 a powerful tornado 
devastated the small community of Spencer, South Dakota. The tornado 
destroyed ninety percent of the town, injured 150 people, and, most 
tragically, killed six South Dakotans. I am pleased to say the positive 
determination of the residents of Spencer to rebuild their lives has 
been inspirational and all of the surviving victims are making progress 
toward returning their lives to some semblance of normality.
  Unfortunately tornadoes are all too common in my state, however one 
aspect of the Spencer tornado caught my attention right away--that is 
the fact the warning siren did not sound because the electricity had 
been blown out. I recognize that the tornado which hit Spencer was so 
powerful that sounding a warning siren may not have

[[Page S8369]]

spared the residents of Spencer the total destruction of their 
community. However, reports of the lack of a warning from the siren in 
Spencer prompted a statewide focus on the quality of the emergency 
alert capability around my state of South Dakota. Unfortunately, almost 
every county in my state has acknowledged that it urgently needs some 
sort of emergency alert upgrade.
  Mr. President, my guess is that South Dakota is not unique in that 
the emergency alert system for tornadoes is inadequate in virtually 
every part of the state. I suspect many states have never 
systematically examined their emergency alert systems and how needs 
have changed since the civil defense sirens were initially erected and 
technology advanced.
  I am hopeful that at least one positive development to come out of 
the devastation of the Spencer tornado can be legislative action to 
address the emergency alert needs across the state of South Dakota and 
this nation. Consequently, I have proposed the creation of Tornado 
Preparedness Pilot Program to be administered by Region VIII of the 
Federal Emergency Management Agency.
  Mr. President, this pilot program would provide $1 million from the 
Emergency Planning and Assistance appropriation for grants directly to 
local and county emergency management officials in South Dakota to 
provide 75% of the cost of purchasing emergency alert equipment. 
Examples of emergency alert equipment eligible for purchase under this 
Tornado Preparedness Pilot Program includes: new sirens with back-up 
capability, siren upgrade equipment, weather radio transmitters, 
weather radios and other emergency alert equipment.
  This pilot program would be an excellent first step in establishing a 
nationwide Tornado Preparedness Program much like the Hurricane 
Preparedness Grant Program and an Earthquake Hazards Reduction Grant 
Program which currently exist.
  Further, I think South Dakota is the appropriate state to conduct 
this pilot program because in the wake of the tragic Spencer tornado, 
awareness has been elevated all over the state of South Dakota about 
the critical importance of high quality, effective emergency alert 
capability. Our state is now ready to aggressively deal with this 
problem. Additionally a large, rural state like South Dakota has unique 
needs. For example, many South Dakotans need a different kind of alert 
system than sirens because they live in a remote area. Most small 
communities lack the tax base to fully fund a siren upgrade or the 
purchase of additional sirens. Also, the terrain of the Black Hills of 
South Dakota presents challenges for transmitter coverage and also for 
adequate siren coverage.
  Senator Mikulski, do you support my proposal to create a Tornado 
Preparedness Pilot Program in the State of South Dakota?
  Ms. MIKULSKI. I appreciate your bringing the situation in South 
Dakota to the Senate's attention. I encourage the Federal Emergency 
Management Agency to fund this important initiative.
  Mr. JOHNSON. I deeply appreciate the Senator's support. The number of 
tornados experienced each year throughout the '90s has remained 
consistently high. Data available from the National Climatic Data 
Center shows that in every year in the '90s our country has experienced 
close to or over 1,100 tornados each year. Mr. Chairman, do you agree 
that the pilot program I have proposed would be useful not only in 
terms of meeting the needs in South Dakota, but also in terms of 
providing this nation a model for the future to be used to increase 
emergency alert capabilities across the country?
  Mr. BOND. I urge the Federal Emergency Management Agency to consider 
funding the pilot program so that we can assess its success prior to 
the Fiscal Year 2000 appropriations process.
  Mr. JOHNSON. I thank the Chairman for this support, and I deeply 
appreciate your and the Senator from Maryland's willingness to work 
with me on this critically important issue.
  Mr. FEINGOLD. Responding to several constituent inquiries on this 
matter, I wanted to clarify with the Subcommittee Chairman and the 
Ranking Member of the purposes for which the funds contained in FY 1999 
Department of Veteran's Affairs and Housing and Urban Development 
Appropriations bill for Section 319 of the Clean Water Act can be used. 
Is this Senator correct in his understanding, Mr. Chairman, that Phase 
I, II, and III projects, and lake water quality assessments which were 
previously done under the Section 314 Clean Lakes Program may be funded 
with the funds provided for Section 319 grants?
  Mr. BOND. Yes, the Senator is correct. With the resources provided in 
this bill, states may use Section 319 funding for eligible activities 
that might have been funded in previous years under Section 314 of the 
Clean Water Act. It is the Committee's hope that Section 314 program 
activities can be well supported with the funding provided to the 319 
program.
  Mr. KOHL. I appreciate the clarification by the Senator from 
Missouri. There has been considerable concern in our home state of 
Wisconsin that since EPA has combined its budget request for the 319 
and 314 programs, Clean Lakes program grants to states have been 
reduced in the number of projects and dollars spent. I would ask the 
Senator from Maryland if she shares Senator from Missouri's 
understanding?
  Ms. MIKULSKI. Again, to be clear, the funds in this legislation can 
be used to support Section 314 program priorities. EPA Regional Clean 
Lakes Coordinators and EPA Regional Nonpoint Source Coordinators and 
their counterparts at the state and local level will need to work 
together to assure that critical Clean Lakes program needs, such as 
water quality assessment and diagnostic studies, are accomplished with 
319 dollars.
  Mr. FEINGOLD. I thank the Chairman and Ranking Members for their 
explanations.


                           HOUSING ASSISTANCE

  Mr. WELLSTONE. Mr. President, I understand that in conference the 
issue of FHA property disposition reform may be raised. Without going 
into the details of any possible changes to the program, I would like 
to receive some indication from the bill managers as to how the funds 
that would be saved by such reforms might be used. I hope such savings 
would be used for housing assistance. It seems to me that this would be 
a unique opportunity to further address the 5.3 million American 
households with worst case housing needs. I know that my colleagues on 
the VA/HUD appropriations subcommittee worked hard to put as much money 
into housing as possible given the constraints that they were working 
under. I know housing is a priority for them. So I would simply ask my 
colleague if he agrees with the logic of putting HUD program reform 
savings into housing assistance.
  Mr. BOND. I appreciate the question from the Senator from Minnesota. 
I agree that there are greater housing needs in this country than can 
be met by this bill, though I believe the Committee has done a good job 
of trying to reconcile a lot of conflicting priorities. Naturally it 
would be the intent of this senator to maximize the number of Americans 
who are able to avail themselves of federal housing assistance.
  Ms. MIKULSKI. I concur with the observations of the Senator from 
Minnesota. There is a disturbingly large gap between the number of 
units of affordable housing and the number of families in need. Savings 
from HUD property disposition reform should go to federal housing 
assistance in some form. As a clarification, would it be correct to say 
that my Colleague from Missouri agrees with the Senator from Minnesota 
and myself that if savings could be found within the HUD accounts, that 
housing programs would be a primary target for such funds?
  Mr. BOND: That is correct. I also want to emphasize that the reform 
of FHA property disposition is critical, but needs to be designed to 
ensure that property disposition helps to protect distressed 
communities, where applicable.
  Ms. MIKULSKI. I concur with Chairman Bond and will work with him to 
ensure that the reform of the FHA property disposition program protects 
local communities.
  Mr. WELLSTONE. The Chairman and Ranking member's comments on property 
disposition reform are well taken. I thank my colleagues.
  Mr. BINGAMAN. Mr. President, I want to commend Senators Bond and 
Mikulski for their hard work in bringing this appropriations bill to 
floor. I

[[Page S8370]]

realize it is a difficult task to accommodate so many members' 
requests, and I appreciate their efforts. I do want to bring to their 
attention, however, a project I believe is very worthy of funding. It 
is a multi-purpose in Shiprock, New Mexico, which is on the Navajo 
Indian Reservation. The center would primarily be for Navajo youth. I 
know the Senator from Maryland is well aware that juvenile crime, drug 
abuse, alcohol abuse and unemployment are very serious problems on the 
Navajo reservation. There is a desperate need to get these problems 
under control and give youth a meaningful alternative. This multi-
purpose Center will do exactly that.
  Ms. MIKULSKI. I thank the Senator from New Mexico for bringing this 
worthy project to my attention. I am aware of the serious problems on 
the Navajo reservation, and I agree that this is a worthy project. The 
Senator from New Mexico has my commitment to work in conference to 
support this project should funding become available.
  Mr. BINGAMAN. I thank the Senator from Maryland for her commitment to 
help address the desperate situation facing many of these Navajo youth, 
and I look forward to working with her.
  Mr. NICKLES. I thank my friend from Missouri for allowing me to ask 
him a question regarding the Supreme Court's June 25th ruling that the 
line-item veto is unconstitutional. As Chairman of the VA/HUD 
Appropriations Subcommittee, I believe his opinion on this matter is 
important. Especially, in light of the fact that his Subcommittee has 
approved $900,000 in its FY 1998 Conference Report for the final 
planning and design stages of a new national veterans cemetery in 
Oklahoma which was line-item vetoed by the president.
  My question is this, now that the line-item veto has been declared 
unconstitutional, does the VA now have the authority to spend the 
$900,000 that was appropriated in the FY 1998 VA/HUD bill.
  Mr. BOND. It is my understanding, now that the Line-item veto has 
been declared unconstitutional, that the VA can go ahead and spend the 
$900,000 that was appropriated in the FY 1998 VA/HUD Appropriations 
bill, and I strongly encourage the VA to do so, as expeditiously as is 
possible.
  Mr. NICKLES. I thank the Chairman. I want to add that my staff asked 
the Congressional Research Service (CRS) this same question and in a 
memo to my staff CRS offered this opinion, ``The United States Supreme 
Court has held that a law that is repugnant to the Constitution is void 
and is as no law.'' Seeing as the line-item veto has been declared 
unconstitutional, it is void and is as no law. Therefore one can 
conclude that the $900,000 set aside for the cemetery in Oklahoma 
should be spent by the VA for that purpose.
  Mr. BOND. Again, I agree with my friend from Oklahoma. I am of the 
opinion that the VA can and should spend the $900,000 for the national 
veterans cemetery in Oklahoma. I do want to say to my friend and 
colleague from Oklahoma, that it is my understanding that the 
Administration is still debating how to move forward on this issue--the 
line item veto being declared unconstitutional. If for some reason, the 
Administration determines that the money is not available to be spent 
in FY 1998, or does not reach a decision regarding the final 
disposition of these funds by the time this bill goes to Conference I, 
as Chairman of this subcommittee will do everything I can to make sure 
that the $900,000 for the final planning and design stage of the new 
national veterans cemetery is included in the FY 99 Conference Report 
so that this important project can move forward in FY 1999.
  Mr. NICKLES. I thank the Chairman for his support of this project, 
and for the cooperative manner in which he has worked with me on this 
important matter for the veterans of Oklahoma.
  Mr. LEVIN. Mr. President, I would like to engage the distinguished 
majority manager of the bill in a brief colloquy regarding the Great 
Waters program.
  As the Senator from Missouri is aware, the Great Waters program is 
important to my state, the Great Lakes, the Chesapeake Bay, and Lake 
Champlain area and all states with coastal waters. The program is 
intended to monitor atmospheric deposition of toxic air pollutants, 
provide information on these pollutants sources and loadings in our 
surface waters, and recommend to Congress any necessary changes in the 
Clean Air Act to prevent serious adverse effects to public health and 
serious or widespread environmental effects. These are important multi-
media tasks that should receive Congress's full support. This program 
will help us identify and reduce toxic air pollution in an efficient 
way.
  The FY99 budget request for the Great Waters program, also known as 
section 112(m) of the Clean Air Act, is $1.484 million. In FY 98, the 
program received $2.612 million in appropriations. The House 
Appropriations Committee has included language in its report urging 
that the EPA ``--provide at least $3 million to carry out--the Great 
Waters program.'' I would hope that, at a minimum, the Senate would 
support this amount for this important program.
  Could the Senator indicate what the Senate's position would be in the 
conference on this matter?
  Mr. BOND. I thank the Senator from Michigan for his interest. As he 
knows, the Senate report and bill do not speak directly to the Great 
Waters program. But, barring action on any amendment specifically to 
reduce that program, I see no reason that the Senate conferees would 
not accept the House statement.
  Mr. LEVIN. I appreciate the Senator's assistance and attention to 
this issue.


               Sweetwater Branch Project, Gainesville, FL

  Mr. MACK. Mr. Chairman, I would like to engage in a colloquy with you 
concerning a very important project in the State of Florida, known as 
the Sweetwater Branch/Payne's Prairie Stormwater Protection Initiative.
  Mr. BOND. I would be pleased to engage in a colloquy with the Senator 
from Florida on what I do understand is a project that will have a 
positive impact on the drinking water supply or the residents of 
Central Florida.
  Mr. Mack. I thank the chairman. Through the Sweetwater Branch/Payne's 
Prairie Stormwater Protection Initiative, the City of Gainsville, 
Florida is attempting to tackle a very critical and complex problem 
that confronts not only Gainesville, but ultimately the drinking water 
supply of much of Central Florida.
  The Sweetwater Basin, which emanates above and beyond Gainesville, 
runs through some of the oldest sections of the City. The Sweetwater 
Basin discharges into a very critical natural resource in Florida, 
known as Payne's Prairie, a natural reserve park owned by the State of 
Florida. It is home to a number of plants and animal species that are 
unique to Florida. As these discharges move further through the system, 
they discharge into what is called the Alachua Sink, a major natural 
sink hole that drains directly into the Florida Aquifer.
  The City has taken the initiative to bring together the State, the 
County and a broad array of environmental resources and interests in 
order to tackle the problems that result from contaminated runoffs 
which seriously impact the health of Payne's Prairie and ultimately the 
Florida Aquifer. The City is trying to address the problem now, in 
order to prevent a more serious deterioration. Unfortunately, this is a 
problem and a project that is beyond the scope and reach of this one 
small city.
  Mr. BOND. Has Gainesville been working with other jurisdictions 
concerning this initiative?
  Mr. MACK. Yes, it has. The City has brought together and obtained the 
support of Alachua County, the St. Johns Water Management District, and 
the Florida Department of Environmental Protection for the purpose of 
providing a solution to this problem. The City of Gainesville is to be 
commended for bringing together so many various interests and impact 
parties to address this problem. This City needs help. They have 
devised a preliminary plan with a relatively low cost which could 
ameliorate and potentially resolve the situation, but because the 
project is beyond the scope of the City's jurisdiction, it seems to 
fall between the cracks of any one federal program at this time.
  Mr. BOND. I understand your concerns, and the reasons for you support 
of this project. This project would appear to warrant support as a 
special demonstration project through the Environmental Protection 
Agency.

[[Page S8371]]

  Do I understand that the City of Gainesville has been devoting its 
own resources towards the resolution of this problem and is fully 
committed to a financial partnership on this project?
  Mr. MACK. The Chairman is correct. The City of Gainesville has a long 
history of taking care of its own problems with local resources. In 
this case the City has already committed resources to the development 
of this plan and remain commits to a financial partnership.
  I am pleased, Mr. Chairman, that you agree with me on the importance 
of this project and are willing to work with Senator Graham and the 
City of Gainesville to explore a more specific source of funding for 
this project in the up coming Conference with the other body. It is my 
understanding that this is correct?
  Mr. BOND. Yes, Senator you are correct in your understanding. 
Further, I appreciate the position of the Senator from Florida and do 
commend the City of Gainesville for its initiative. I would like to 
work with you to further explore ways to assist Gainesville in moving 
this partnership forward, an to address this further in final FY'99 
legislation.
  Mr. MACK. Thank you, Mr. Chairman for your consideration. I am 
confidant that we can work together to provide funding for this project 
through the Environmental Protection Agency.


             drinking water state revolving loan fund money

  Mr. BROWNBACK. Mr. President, I ask Senator Chafee, as chairman of 
the committee with jurisdiction over the Safe Drinking Water Act if he 
could please explain the eligibility requirements to qualify for loans 
from the Drinking Water State Revolving Loan fund, or DWSRF as it is 
commonly known?
  Mr. CHAFEE. Yes, I would be happy to. The DWSRF is to be used to 
assist pubiic water systems to finance infrastructure projects needed 
to comply with federal drinking water regulations. Public water systems 
that regularly serve at least 25 year-round residents or have a least 
15 service connections qualify for assistance. The DWSRF may be used if 
it will significantly further the public health objectives of the Act. 
We recognize that there are a few communities that are currently 
serviced by wells that are contaminated, and the best way to solve the 
existing public health problems intended to be addressed by the Act may 
be to create a federally regulated public water system.
  Mr. BROWNBACK. A community in Kansas called Colwich receives their 
drinking water from private wells. When the county tested a sampling of 
the wells in this community they discovered that 81 percent of the 
wells are poorly constructed, 75 percent are improperly located, 29 
percent experience bacterial problems and 6 percent have levels of 
nitrates greater than the EPA recommended level. Senator Chafee, as a 
cosponsor to the Safe Drinking Water Act Amendments of 1996, is it your 
opinion that providing DWSRF money to the community of Colwich will 
enable the families of Colwich to have safe drinking water and will 
further the health objectives of this Act?
  Mr. CHAFEE. Yes, it is my opinion that providing Drinking Water State 
Revolving Loan fund money to the community of Colwich to create a 
public water system will further the health objectives of the Safe 
Drinking Water Act Amendments of 1996. Therefore, the State of Kansas 
has the authority to allocate DWSRF money to the community of Colwich.
  Mr. BOND. Although the Appropriations Subcommittee on VA, HUD, and 
Independent Agencies was able to increase the drinking water SRF for 
fiscal year 1999 to $800 million, it is impossible to expect the DWSRF 
to fund new projects where there is not a public health threat. The 
purpose of the DWSRF is to fund drinking water systems that are having 
difficulties complying with the Act, it is not intended to finance new 
drinking water systems for communities that are having difficulties 
distributing drinking water.


                     fort harrison vamc sewer line

  Mr. BURNS. Mr. President, I'd like to clarify the issue of funding 
for a new sewer line connecting Fort Harrison VA Medical Center to the 
City of Helena. The Senate Appropriations Committee Report directs the 
VA to work with interested parties on a cost-sharing plan for the sewer 
line. The Committee has received a commitment from the Department of 
Veterans Affairs to provide $1.4 million for the sewer line out of its 
minor construction account. This amount is slightly over half of the 
estimated total cost for the project. Does the Chairman concur that the 
Committee endorses this funding agreement and expects the VA to make 
the funds available in an expeditious manner?
  Mr. BOND. I concur with the Senator from Montana. The Committee 
expects the VA to provide $1.4 million for the Fort Harrison sewer line 
in an expeditious manner. I thank the Senator from Montana for the 
clarification.
  Mr. CRAIG. Mr. President, I rise to commend the Chairman on his 
leadership and hard work on his bill. He and the Subcommittee have had 
to make hard decisions about scarce resources and have labored to do so 
fairly. I also appreciate the Chairman's diligence in pursuing needed, 
aggressive oversight of some large agencies that, at times, have been 
sluggish in responding. He and the Subcommittee have made real efforts 
to make sure the taxpayer's hard-earned dollar is spent effectively and 
efficiently. I have seen first-hand, and appreciate, the Chairman's 
dedication to the integrity of this process.
  I request that the distinguished Chairman and I be permitted to 
engage in a colloquy.
  As the Chairman knows, the City of McCall, Idaho, is faced with the 
absolutely critical need to make significant improvements to its water 
system. McCall faces a potential cost of $6 million because of federal 
mandates for water purification.
  However, as much of 85 to 90 percent of these capital costs might be 
saved by installing a new, prototype, filtration technology. The City 
only recently received a proposal for a prototype filtration system. In 
what ought to be a prototype for voluntary private-public partnerships, 
the cost of research and development of the system would be borne by 
the contractor.
  That leaves the City with the need for $253,000 toward installation, 
start-up, and initial testing of the system. Through no fault on 
anyone's part, the proposal was not ready for the City to review, and 
could not be submitted to the Subcommittee, in time for consideration 
during the markup of this bill.
  I would ask the Chairman if he could work with us in conference to 
evaluate this request, with an eye toward inclusion in the conference 
report.
  This investment of $253,000 would not only save the community of 
McCall possibly more than $5 million, it would be a demonstration 
project that could help countless other communities, as well as the 
federal government, save millions of the taxpayers dollars in the 
future. I believe such a project would be consistent with the missions 
of either the EPA Science and Technology program or EPA State and 
Tribal Grants.
  Mr. BOND. I appreciate Senator Craig's concern for the City of 
McCall, its environment, the burdens imposed by federal requirements, 
and the very real need that this and other communities have to comply 
with federal mandates as economically as possible.
  I will be happy to work with the Senator to examine this proposal 
more thoroughy. If we can determine that this project does, indeed, 
qualify for existing EPA programs, we will see what can be done to 
address this need.


             epa grant programs for planning future growth

  Mr. BENNETT. Mr. President, I take the Senate floor to enter a 
colloquy with the distinguished Chairman of the VA, HUD and Independent 
Agencies Subcommittee, Senator Bond. The topic of which I speak is the 
tremendous growth that continues to take place in my home state of 
Utah. Presently, Utah is ranked by the U.S. Bureau of the Census as the 
third fastest growing state in the Union. While Utah is often thought 
of as a rural state, roughly 80 percent of our population resides in 
the narrow mountain valleys along 100 miles of the Wasatch Front. In 
reality, Utah is one of the most urban states in the country.
  With this in mind, I would like to thank the Chairman of the VA, HUD 
Committee for his assistance in including report language in the Fiscal 
Year 1999 bill, which encourages the Environmental Protection Agency 
(EPA) to work with Envision Utah, a private/

[[Page S8372]]

public organization tasked with planning for Utah's future. I would 
also like to ask Chairman Bond whether or not additional EPA programs 
might be of assistance to Envision Utah in fulfilling its mission?
  Mr. BOND. I am happy to respond to my colleague from Utah that EPA 
has a number of programs that can assist organizations like Envision 
Utah in preparing for future growth demands. Clearly, EPA's mission of 
protecting the environment includes management of resources such as 
open space by encouraging sound urban planning. I encourage the EPA to 
look at any grant program that might help Envision Utah meet its goal 
of preparing Utah for future growth.
  Mr. BENNETT. I thank my friend from Missouri for his assistance and 
support in addressing growth in Utah.


                  budget committee scoring of s. 2168

  Mr. DOMENICI. Mr. President, I rise in support of S. 2168, the 
Departments of Veterans Affairs and Housing and Urban Development and 
Independent Agencies Appropriations Bill for 1999.
  This bill provides new budget authority of $93.9 billion and new 
outlays of $54.5 billion to finance the programs of the Departments of 
Veterans Affairs and Housing and Urban Development, the Environmental 
Protection Agency, NASA, and other independent agencies.
  I congratulate the Chairman and Ranking Member for producing a bill 
that complies with the Subcommittee's 302(b) allocation. This is a one 
of the most difficult bills to manage with its varied programs and 
challenging allocation, but I think the bill meets most of the demands 
made of it while not exceeding its budget and is a strong candidate for 
enactment. So I commend my friend the chairman for his efforts and 
leadership.
  When outlays from prior-year BA and other adjustments are taken into 
account, the bill totals $91.9 billion in BA and $102.4 billion in 
outlays. The total bill is at the Senate subcommittee's 302(b) 
allocation for budget authority and outlays, for both defense and 
nondefense.
  I ask members of the Senate to refrain from offering amendments which 
would cause the subcommittee to exceed its budget allocation and urge 
the speedy adoption of this bill.
  Mr. President, I ask unanimous consent that a table displaying the 
Budget Committee scoring of the bill printed in the Record.
  There being no objection, the table was ordered to be printed in the 
Record, as follows:

                 S. 2168, VA-HUD APPROPRIATIONS, 1999 SPENDING COMPARISONS--SENATE-REPORTED BILL                
                                   [Fiscal year 1999, in millions of dollars]                                   
----------------------------------------------------------------------------------------------------------------
                                                   Defense     Nondefense     Crime      Mandatory      Total   
----------------------------------------------------------------------------------------------------------------
Seante-reported bill:                                                                                           
    Budget authority...........................         131       69,855   ...........       21,885      91,871 
    Outlays....................................         127       80,653   ...........       21,570     102,350 
Senate 302(b) allocation:                                                                                       
    Budget authority...........................         131       69,855   ...........       21,885      91,871 
    Outlays....................................         127       80,653   ...........       21,570     102,350 
1998 Enacted:                                                                                                   
    Budget authority...........................         131       69,286   ...........       21,332      90,749 
    Outlays....................................         139       80,250   ...........       20,061     100,450 
President's request:                                                                                            
    Budget authority...........................         131       70,607   ...........       21,885      92,623 
    Outlays....................................         127       81,163   ...........       21,570     102,860 
House-passed bill:                                                                                              
    Budget authority...........................  ...........  ...........  ...........  ...........  ...........
    Outlays....................................  ...........  ...........  ...........  ...........  ...........
Senate-reported bill compared to:                                                                               
    Senate 302(b) allocation:                                                                                   
        Budget authority.......................  ...........  ...........  ...........  ...........  ...........
        Outlays................................  ...........  ...........  ...........  ...........  ...........
    1998 Enacted:                                                                                               
        Budget authority.......................  ...........         569   ...........          553       1,122 
        Outlays................................         (12)         403   ...........        1,509       1,900 
    President's request:                                                                                        
        Budget authority.......................  ...........        (752)  ...........  ...........        (752)
        Outlays................................  ...........        (510)  ...........  ...........        (510)
    House-passed bill:                                                                                          
        Budget authority.......................         131       69,855   ...........       21,885      91,871 
        Outlays................................         127       80,653   ...........       21,570     102,350 
----------------------------------------------------------------------------------------------------------------
Note: Details may not add to totals due to rounding. Totals adjusted for consistency with current scorekeeping  
  conventions.                                                                                                  

                           Amendment No. 3209

  Mr. BOND. I have a managers' amendment to offer, and I offer it en 
bloc. It has been cleared on both sides.
  First, there are a number of technical amendments.
  Second, for Senators Campbell, Stevens, and Mack, there are several 
amendments to ensure Native American groups are eligible for HUD drug 
elimination grants and the HUD rural housing and economic development.
  Third, for Senator D'Amato, we are continuing the authority for the 
HUD G-4 auction program.
  Fourth, we are allowing HUD to use data on multifamily housing 
developed by the Multifamily Housing Institute.
  Fifth, this amendment would require all agencies under the bill to 
provide detailed salaries and expenses information.
  In addition, we are including Senator Frist's amendment which 
authorizes OSTP, the Office of Science and Technology Policy, to 
conduct a study on methods for evaluating federally funded research and 
development.
  We have also included an amendment for Senator Wellstone providing 
for a 12-month notice to tenants before prepaying the mortgage of a 
preservation project. Owners who have already filed notice would not be 
impacted. We appreciate Senator Wellstone's providing this amendment. 
We had been hoping we could have adopted this one a number of weeks 
ago.
  Finally, we included a number of reforms of the FHA which we believe 
are very sound and responsible provisions. They are from Senator 
Nickles, Senator Mack, and Senator Faircloth to direct HUD to improve 
the management of FHA.
  I send this amendment to the desk and ask for its consideration en 
bloc.
  The PRESIDING OFFICER. If there is no objection, the amendments will 
be considered en bloc.
  The clerk will report.
  The bill clerk read as follows:

       The Senator from Missouri [Mr. Bond], for himself and Ms. 
     Mikulski, proposes an amendment numbered 3209.

  Mr. BOND. I ask unanimous consent reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')


  NOTICE REQUIREMENTS FOR PREPAYMENT OF FEDERALLY SUBSIDIZED MORTGAGES

  Mr. WELLSTONE. Mr. President, I rise today to thank the Chairman and 
Ranking Member for including in the manager's amendment, my amendment 
to the VA/HUD appropriations bill. This amendment addresses the loss of 
Section 236 and Section 221 housing across the country. Prepayment of 
federally assisted mortgages is exacerbating an already static housing 
market and is wrenching for the tenants, who often barely receive 
adequate warning that their homes may soon become too expensive for 
them to afford. My amendment provides tenants and local officials with 
fair notice that a Section 236 or 221 building is leaving the federal 
subsidy program. This allows tenants the ability to try and find 
alternate housing, and non-profits and local governments the 
opportunity to preserve the housing by buying out the owner's interest.

[[Page S8373]]

  Section 236 and Section 221(d)(3) of the National Housing Act 
provided for the creation of federally assisted, privately owned 
affordable housing. Under the Section 221 program, the federal 
government insured the mortgages on certain rental housing, under the 
Section 236 program, the federally government subsidized the interest 
payments that owners of rental housing made on the mortgages. Both of 
the programs offered the security of a federal subsidy for building 
owners in return for their maintaining these buildings as affordable 
housing--the regulatory agreement signed between HUD and the building 
owner restricted the rents which could be charged on the units within 
the building so long as the mortgage was insured or subsidized by HUD. 
To be eligible for the program, an owner signed a 40 year mortgage, 
however, the deeds of trust for such properties that the owner could 
prepay the mortgage or terminate the insurance contract after 20 years 
and potentially remove that building from the pool of affordable 
housing.
  By the late 1980's, Congress realized that the loss of Section 236 
and Section 211 properties could be devastating to the supply of 
affordable housing. In many communities across the country, housing and 
real estate markets were tight enough that owners of such properties 
had a strong incentive to leave the programs and convert their units to 
market rate, or to find alternate uses for the property. In 1987, 
Congress enacted the Emergency Low Income Preservation Act, which 
created a two year moratorium on prepayment of Section 221 or Section 
236 mortgages. This was done to allow Congress some time to formulate a 
comprehensive solution to the prepayment problem. In 1990 as part of 
the National Affordable Housing Act, Congress enacted the Low Income 
Housing Preservation and Resident Homeownership Act of LIHPRHA (LIPRA). 
This law was intended to manage the prepayment process, to provide 
incentives for owners with critical properties to stay in the system 
and to create a mechanism for transfer of properties to nonprofit or 
resident ownership.
  Today this system is in tatters. Congress has not appropriated funds 
for the incentive program since fiscal year 1997 and it appears that 
HUD is no longer enforcing the provisions of LIHPRHA which call for 
fair notice to tenants and a plan of action to be submitted by owners.
  Mr. President, the loss of Section 236 and 221 properties has become 
a crisis in my state. The Minnesota Housing Finance Agency believes 
that 10% of Minnesota's Section 236 and 221 housing is at risk--Housing 
advocates believe that the long term losses will be far greater. But 
the loss of these apartment buildings does not occur in a vacuum, the 
Twin Cities metropolitan area has a vacancy rate of 1.9 percent--five 
percent vacancy is usually regarded as full. The loss of these 
buildings as affordable housing is absolutely devastating to these 
communities.
  Mr. President, I'd like to share some examples from my own state of 
illustrate the problem facing these tenants. These Minnesotans have had 
their lives completely disrupted by the prepayment of a Section 236 
mortgage and if you listen to their stories over and over again you 
hear the same thing: with more notice they could have organized an 
equitable buy out of the current owner's mortgage or have made a 
dignified search for other housing.
  Terry Truja moved into Oak Grove Towers in Minneapolis, MN, ten years 
ago when she became disabled; she now uses a wheel chair. She lived in 
the neighborhood around Oak Grove Towers for seven years prior to her 
disability and worked as a nurse. Her building's Section 236 mortgage 
was prepaid in July of 1997. Prior to the prepayment, Terry paid $250 a 
month for her apartment. After prepayment, her apartment now rents for 
$615. She has been able to stay in her apartment for one year thanks to 
en Enhanced Section 8 Voucher, but she will not be eligible for 
ordinary Section 8 after that period. Terry and the other tenants of 
Oak Grove Towers received 60 days notice that the mortgage was being 
prepaid. They are trying to work with a local non-profit who wishes to 
buy the building and keep it as low income housing, but now they are 
fighting against time. Extra notice could have made all the difference.
  Elza Glikina is a Russian immigrant who lives with her husband in Oak 
Grove Towers. She speaks fluent English and serves as a contact with 
the outside world for the many elderly Russian immigrants who live in 
the building, many of whom do not speak English. She says that these 
people ``lived through so much grief in their lives'' back in their 
home countries and that they ``thought they had found peace'' here in 
Oak Grove Towers where they have formed closed bonds with others of the 
same nationality. For them, Elza said, the prepayment was terrifying. 
It reminded them of arbitrariness and soullessness of life in the 
Soviet Union. 60 days was not enough time for these immigrants to get 
their affairs in order, to apply for supplemental assistance. Though 
Elza is more capable then most, she says that she ``feels sick at the 
thought of moving.''
  Jennifer Nguyen is a severely disabled Vietnamese immigrant who lives 
next to her brother and mother in Oak Grove Towers. She suffers from 
multiple medical problems, including tuberculosis and has only a 
portion of one lung remaining. Her doctor is located in the 
neighborhood, and her health might be seriously jeopardized if she is 
forced to move. She likes living at Oak Grove Towers, but if the 
building is not sold to a non-profit, she will likely have to relocate 
to the suburbs--away from her friends and her doctor.
  Ann Peterson is a mother with a nine year old son who lives in 
Boulevard Villa in Coon Rapids, MN. She works, but medical problems 
make employment difficult. The mortgage on their building was prepaid 
in April of this year. Tenants and local housing officials received 
three weeks notice of prepayment. Ann and others tried to find a non-
profit to take over the mortgage but three weeks was just not enough 
time--in fact it took 6 weeks after prepayment for the paperwork to 
provide Enhanced Vouchers to be approved. She has lived there 8 years 
and says that she still ``has faith that they will be able to stay.'' 
She continues to try and find a buyer for the building.
  Mr. President, these are a few stories from two buildings where the 
Section 236 mortgages have been repaid. Together they represent the 
potential loss of 281 units of affordable housing--in a market that 
already has a 1.9 percent vacancy. Again, I think there stories show 
why notice is important for two reasons: as a buffer to the tenant and 
to allow local governments and non-profits time to react to keep the 
housing affordable.
  Mr. President, I believe my amendment is a step in the right 
direction. It:
  1. Requires an owner of eligable low income housing, such as a 
Section 236 or Section 221(d)(3) building, who intends to prepay a 
federally subsidized mortgage or terminate the federal insurance 
contract to give a one year notice of such intent to the tenants of the 
affected property and to the appropriate state and local authorities.
  2. Waives this requirement in the event that the owner wishes to 
transfer the property to a non-profit or Residents Council which 
intends to maintain the units as affordable housing.
  3. This amendment does not apply to owners who have already given 
notice of prepayment or termination, as of July 7, 1998, in accordance 
with current law and regulation.
  Under current federal law, tenants of federally assisted rental 
housing receive only 30 or 60 days notice of an owner's attempt to pre-
pay an insured mortgage. This short time period makes it impossible for 
the tenants, their advocates, local or state government to devise any 
alternatives to prevent the permanent loss of affordable housing. 
Minnesota has enacted a one year prepayment notice requirement, but 
this been pre-empted by LIHPRHA, LIHPRHA specifically struck down state 
laws which put more restrictive requirements for Section 236 and 221 
than is provided for in federal law. This was justified by the funding 
mechanism also included in LIHPRHA, which was designed to preserve the 
housing should the owner decide to prepay. Now that this federal 
funding is gone, I believe Congress should act to require a firm, one 
year notice period. Again, however, my amendment is not intended to 
cover owners who have given legal notice of prepayment or termination 
under the prepayment process currently being implemented by HUD.

[[Page S8374]]

  Mr. President, the Congressional budget office has determined that my 
amendment would not add to the cost of this bill. I don't believe it 
will be a burden to owners either. It simply provides warning to 
tenants, warning that I believe out of simple dignity they should be 
provided, and gives local and state governments the tools they need to 
preserve the housing--after buying out the owner at a fair price--in 
the affordable housing pool.
  Mr. President, other speakers have talked about the crisis in 
affordable housing. We are at a point in our history where we are 
simultaneously experiencing some of the most tremendous economic growth 
while enduring an all time high of renters with worst case housing 
needs--5.3 million people across the country. My amendment is a small 
change, but if it is a change which provides low income tenants with 
increased security and allows for ample warning so that housing can be 
preserved then, I believe it will have a big impact.
  Mr. BOND. I ask unanimous consent that it be designated as a Bond and 
Mikulski amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The question is on agreeing to the amendment.
  The amendment (No. 3209) was agreed to en bloc.
  Mr. BOND. I move to reconsider the vote.
  Ms. MIKULSKI. I move to lay it on the table.
  The motion to lay on the table was agreed to.
  Mr. BOND. Again, my sincere thanks particularly to my colleague from 
Maryland for her fine staff. My thanks to our staff for staying with 
us. I think we have set a record for debate, for expeditious handling 
of VA/HUD bill. We are grateful, No. 1, to the leadership, Senator 
Daschle and Senator Lott, for giving us such a propitious time to 
expedite the consideration of this measure.
  Let me extend my special thanks to the occupant of the Chair and all 
of the floor personnel, including the pages, of the Senate for staying 
with us to quarter to 12, and perhaps a little later. We appreciate 
your willingness. This has helped us move forward.
  Ms. MIKULSKI. Mr. President, as we close the debate on the fiscal 
year 1999 VA/HUD bill, I thank Chairman Bond, first, for all the 
courtesies that he has extended both to myself and to my staff during 
the entire year that we have considered this legislation--many 
hearings, many discussions, many issues that we ironed out so we could 
come to the floor with the bill that really met compelling human need 
and investment in the future.
  And at the same time, avoid a lot of the wrangling that sometimes can 
surround appropriations bills. I also think he handled the bill tonight 
with great deftness. We want to thank him. I want to thank his staff, 
Carolyn Apostolou and Jon Kamarck for the outstanding job they did. Of 
course, I could not stand here and be able to articulate the position 
of both my party and my own beliefs without my very able staff. I thank 
Andy Givens, David Bowers and Bertha Lopez, who were with me throughout 
the entire year as we moved this bill.
  So I look forward to voting for the bill tomorrow and in conference. 
And really, for all of the pages who have worked so late, they should 
know that this bill has really helped. We have housing for the poor and 
have saved the environment, invested in the future. I could go on, but 
I am going to now yield the floor.
  Mr. BOND. Mr. President, I ask unanimous consent that the votes 
ordered with respect to the amendments offered to the VA-HUD 
appropriations bill occur in the order they were offered, beginning at 
9 a.m. tomorrow morning as under the previous order. I further ask that 
no second-degree amendments be in order to the amendments.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BOND. For the information of all Senators, the voting schedule 
for Friday morning is as follows:
  The Wellstone amendment regarding veterans compensation. I understand 
that the chairman of the budget committee will raise a point of order 
with respect to this amendment so the vote will be on a motion to waive 
the budget act with respect to the Wellstone amendment.
  Following the Wellstone vote the Senate will vote on or in relation 
to the Murkowski amendment regarding Alaska veterans, followed by a 
vote on or in relation to the Nickles FHA amendment, followed by a vote 
on or in relation to the Burns amendment regarding NASA 
indemnification, followed by a vote on or in relation to the Sessions 
amendment regarding NASA funding.
  It is hoped that following the preceding amendment votes the Senate 
will immediately move to final passage of the VA-HUD Appropriations 
Bill.


                      unanimous consent agreement

  Mr. President, I ask unanimous consent that when the Senate completes 
all action on S. 2168, that it not be engrossed and be held at the 
desk. I further ask that when the House of Representatives companion 
measure is received in the Senate, the Senate immediately proceed its 
consideration; that all after the enacting clause of the House bill be 
stricken and the text of S. 2168, as passed, be inserted in lieu 
thereof; that the House bill, as amended, be read for a third time and 
passed; that the Senate insist on its amendment, request a conference 
with the House on the disagreeing votes of the two Houses thereon, and 
the Chair be authorized to appoint the following conferees on the part 
of the Senate: Senators Bond, Burns, Stevens, Shelby, Campbell, Craig, 
Mikulski, Leahy, Lautenberg, Harkin, and Byrd; and that the foregoing 
occur without any intervening action or debate.
  I further ask unanimous consent that upon passage by the Senate of 
the House companion measure, as amended, the passage of S. 2168 be 
vitiated and the bill be indefinitely postponed.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________