[Congressional Record Volume 144, Number 135 (Thursday, October 1, 1998)]
[Senate]
[Pages S11211-S11235]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   STROM THURMOND NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 
                        1999--CONFERENCE REPORT

  The PRESIDENT pro tempore. The clerk will report the conference 
report.
  The assistant legislative clerk read as follows:

       Conference report to accompany H.R. 3616 to authorize 
     appropriations for fiscal year 1999 for military activities 
     of the Department of Defense, for military construction, and 
     for defense activities of the Department of Energy, to 
     prescribe personnel strengths for such fiscal year for the 
     Armed Forces, and for other purposes.

  The Senate resumed consideration of the conference report.
  Mr. GORTON. Mr. President, I suggest the absence of a quorum.
  The PRESIDENT pro tempore. The clerk will call the roll.

[[Page S11212]]

  The legislative clerk proceeded to call the roll.
  Mr. THURMOND. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Gorton). Without objection, it is so 
ordered.
  Mr. THURMOND. Mr. President, today the Senate considers the 
conference report to accompany the Strom Thurmond National Defense 
Authorization Act for Fiscal Year 1999. I want to thank all the members 
of the conference committee for their hard work and cooperation. To 
give the Members of the Senate some insight into the complexity and 
magnitude of the work involved in the conference process, we had to 
reconcile nearly 1,000 funding differences and craft compromises for 
over 570 legislative issues in disagreement between the House and 
Senate bills. The conferees succeeded in settling the many difficult 
issues in this complex process only by putting the national interest 
above all others. I particularly want to thank Senator Levin, the 
ranking member of our committee, for his continued leadership and 
support.
  I also want to acknowledge the contributions of Senator Coats, 
Senator Kempthorne, and Senator Glenn. This is their last defense 
authorization bill. On behalf of the committee and the Senate, I wish 
to thank them again for their dedication to the national security of 
our country and their support for the young men and women who serve in 
our armed services. We will miss their valuable counsel next year.
  Mr. President, I also want to acknowledge the contribution of the 
staff of the Senate Armed Services Committee in bringing our conference 
process to closure. We on the committee are very proud of our staff. 
They are a model of bipartisan competence and everyone in this body is 
indebted to them for their dedication to excellence. I ask unanimous 
consent that a list of the members of the staff be printed in the 
Record following my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. THURMOND. Mr. President, I also wish to recognize the members and 
staff of the Senate Defense Appropriations Subcommittee. We have worked 
more closely together this year than ever before. I want to express on 
behalf of the Armed Services Committee our appreciation to Chairman 
Stevens and to the members and staff of the Defense Subcommittee for 
their cooperation and support.
  Working together, we have produced a bill which keeps the Department 
of Defense on a steady course and is consistent with the balanced 
budget agreement. It is a sound bipartisan approach to some very 
difficult policy issues. This is reflected in the fact that for the 
first time in memory, all of the conferees in both committees have 
signed the conference report. This bill sends a strong signal to our 
men and women in uniform and their families that we are fully committed 
to supporting them as they perform their dangerous missions around the 
world.
  The conference report addresses three challenges to maintaining a 
strong national defense in the 21st century: the training and readiness 
of our military forces, the modernization of weapon systems and other 
defense equipment, and the preservation of quality of life programs for 
our military personnel and their families. The conference report, for 
example, authorizes funding of increases to a number of readiness 
accounts totaling nearly $1 billion above the administration request.
  We have also authorized the construction of six new ships, increased 
the procurement of new tactical aircraft, and provided an increase of 
approximately $90 million for advanced space systems and technologies 
as well as an increase of about $132 million for strategic force 
upgrades.
  In the conference, we have authorized a 3.6-percent pay raise and a 
comprehensive series of accession and retention bonuses and special pay 
to reduce the financial sacrifices involved with military service. In 
order to enhance the quality of life for our service personnel and 
their families, we have authorized increases totaling $666 million 
above the request for military construction and family housing.
  The conferees have also crafted a number of management initiatives to 
ensure that limited budgets are managed more efficiently and that the 
burdens of service for our men and women in uniform are kept to a 
reasonable level. The bill includes provisions to ensure that 
commercial sole-source spare parts are procured in a cost-effective 
manner. The conference report authorizes a series of initiatives to 
test new health care benefits for Medicare-eligible military retirees. 
The bill also requires the Department of Defense to address the Year 
2000 information technology issues in a more comprehensive fashion.
  Mr. President, this conference report is a sound and balanced 
approach to meeting our national security needs with constrained 
resources. It is my hope that the Senate will vote to adopt the report 
overwhelmingly.
  This is the 40th defense authorization conference report on which I 
have worked since joining the Armed Services Committee in 1959. It is 
the fourth and last as chairman of the committee as I have announced my 
intention to step down as chairman at the end of this year while 
retaining my seat on the committee. I regard my work on the committee 
to ensure a strong national defense as among the most important 
accompishments of my public service. My tenure as chairman over the 
last 4 years has been the culmination of that service. Words cannot 
express the pride and appreciation I feel for the honor my colleagues 
have bestowed by designating this authorization bill as the Strom 
Thurmond National Defense Authorization Act for Fiscal Year 1999.
  Looking back over the national security issues that have challenged 
the United States over the past 40 years and turning forward to the 
21st century, I am very concerned about maintaining our ability to meet 
foreign policy ambitions with declining defense resources. If we do not 
change course soon, present and projected defense investment levels 
will expose the people of the United States to unacceptable levels of 
risk. We will have abdicated our fundamental responsibility to provide 
for a strong common defense.
  We are in the midst of a period of unprecedented commitment of U.S. 
military forces in peacetime. The United States is using military 
forces to respond to a growing spectrum of international aggression, 
ethnic unrest, and domestic conflict. The operational tempo of each of 
our services is at an all time high as we respond in a sustained manner 
to crises in Africa, the Persian Gulf, and the Balkans. As we struggle 
with supporting these operational deployments, the backlog of 
modernization and real property upgrades continues to climb. Moreover, 
the imperative of maintaining our defense technological superiority 
over the next 10 to 15 years will soon generate a further requirement 
for substantial new investment.
  Yet our defense spending is declining. The authorization for new 
budget authority in this conference report is $270.5 billion, which is 
$2.6 billion below the inflation-adjusted level for fiscal year 1998. 
We are currently spending barely more than 3 percent of our gross 
domestic product on defense. This level is consistent with defense 
spending during the Depression-ridden 1930's. That level is projected 
to decline even further to 2.6 percent by 2002. We cannot hope to meet 
increasing foreign policy commitments with such declining resources.
  We are already seeing the effects of this mismatch of resources and 
commitments. The Chiefs of the military services indicate that they 
have now hit rock bottom in readiness and modernization. We are seeing 
increasing spare parts shortages, increased cannibalization, declining 
unit operational readiness rates, cross-decking of critical weapons, 
equipment and personnel. Personnel retention rates--especially for 
skilled personnel such as pilots--are in a steep decline.
  These trends have been evident for the last several years. The 
leadership in the military services, distinguished observers in the 
defense community, such as former Secretary of Defense Schlesinger, and 
even the political leaders in the Department of Defense have been 
sounding warnings of increasing peril for our national security. Now 
even the President has been forced by the mounting evidence to 
recognize

[[Page S11213]]

the impact of underfunded administration requests and to call for an 
immediate increase in defense spending. In a letter to me last week, 
the President called for a series of steps to redress defense 
underfunding, including an increase of $1 billion in fiscal year 1999 
and a process for revising the programmed spending in the future years 
defense plan. I commend the President for this proposal and look 
forward to working with the administration to make it a reality. I ask 
that the full text of the President's letter be printed in the Record 
at the end of my statement.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 2.)
  Mr. THURMOND. The extent of current and future readiness problems 
were laid out in stark detail Tuesday morning by the Joint Chiefs of 
Staff at a hearing before the Senate Armed Services Committee. The 
service Chiefs all testified on the manner in which our current 
readiness is fraying and the long-term health of the Total Force is in 
jeopardy. While additional funding in fiscal year 1999 will help 
address the most pressing short-term concerns, it is imperative that we 
provide significant continuing increases in funds for modernization 
above that for additional pay and benefits. The Marine Corps estimates 
a shortfall of $1.8 billion per year in modernization over the Future 
Years Defense Program under the current administration projections. The 
Army estimates an annual $3 to $5 billion per year shortfall during the 
same period. We must embark on a course of sustained increases in 
defense investment over the next several years.
  Mr. President, at the beginning of this Congress, I called for 
developing a clearer strategic context within which to design an 
effective, affordable national defense to meet our foreign policy 
commitments. The need for this clarity has never been greater. With the 
belated recognition by the President of the need for increased defense 
resources, we have an opportunity to free the determination of U.S. 
strategy from being a by-product of the budget process. As I said in 
February 1997, let us seize the day. We must work in a cooperative, 
bipartisan fashion to avert a certain military decline. The first step 
in that process is the rapid and overwhelming approval of this 
conference report.

                               Exhibit 1

                 Staff of the Armed Services Committee

       Charlie Abell, John Barnes, June Borawski, Philip Bridwell, 
     Les Brownlee, Stuart Cain, Monica Chavez, Chris Cowart, Dan 
     Cox, Madelyn Creedon, Rick DeBobes, Marie Fabrizio Dickinson, 
     Katy Donovan, and Shawn Edwards.
       Jon Etherton, Pamela Farrell, Richard Fieldhouse, Maria 
     Finley, Jan Gordon, Creighton Greene, Gary Hall, Larry Hoag, 
     Melinda Koutsoumpas, Larry Lanzillotta, George Lauffer, Henry 
     Leventis, Peter Levine, and Paul Longsworth.
       David Lyles, Steve Madey, Mike McCord, Reaves McLeod, John 
     Miller, Ann Mittermeyer, Bert Mizusawa, Cindy Pearson, Sharen 
     Reaves, Cord Sterling, Scott Stucky, Eric Thoemmes, Roslyne 
     Turner, and Banks Willis.

                               Exhibit 2


                                              The White House,

                                   Washington, September 22, 1998.
     Hon. Strom Thurmond,
     Chairman, Committee on Armed Services,
     U.S. Senate, Washington, DC.
       Dear Mr. Chairman: Preserving our military's readiness has 
     been the top priority of my national security program. Since 
     I first took office, increasingly greater shares of our 
     Defense budget have been allocated to ensuring that our armed 
     forces are ready to respond and have the tools to accomplish 
     their mission. Although we have done much to support 
     readiness, more needs to be done.
       This year alone, important steps have been taken to protect 
     military readiness. For FY 1998, we worked with the Congress 
     to secure both an additional $1 billion in military readiness 
     funds through a budget reprogramming and a $1.85 billion 
     emergency funding package to cover the costs of unanticipated 
     operations in Bosnia and Iraq. For FY 1999, my Administration 
     proposed a Defense budget request that increased funding for 
     personnel and operations programs over the 1998 appropriated 
     levels and a $1.9 billion emergency budget amendment to fund 
     the ongoing peacekeeping operations in Bosnia. Passage of 
     this emergency funding is critical to avoid a readiness 
     crisis in the fiscal year that begins on October 1. I 
     strongly urge the Congress to approve these requests.
       We also have done a lot on our own to address the burden on 
     our men and women who have been deployed at higher than 
     anticipated rates. We established standards for deploying 
     units and intensively manage the force to minimize the 
     possibility that units exceed these standards. We cut Air 
     Force temporary duty assignments in half. And we are cutting 
     back, by 25 percent over the course of five years, the total 
     number of exercise days. Additionally, we reduced or replaced 
     some overseas deployments with units on stand-by in the 
     United States.
       My Administration has sought ways to get a greater 
     readiness return from each dollar spent implementing better 
     management practices, cutting overhead, and reducing base 
     infrastructure. Working together, we can identify methods for 
     eliminating wasteful spending. I need your help in addressing 
     these objectives if we are to ensure that our men and women 
     in uniform receive the best training and equipment possible 
     in the most cost effective manner. They deserve no less.
       I recently met with Secretary Cohen and the Commanders-in-
     Chief of our U.S.-based and overseas forces to receive a 
     status report of the units under their command. As always, 
     the dedication of our civilian and military leaders to the 
     troops' well being was clearly evident in their reports. I 
     was particularly satisfied to hear that our forces are 
     capable of carrying out our national military strategy and 
     meeting America's defense commitments around the globe. They 
     are, in the words of the Chiefs, the best-trained and best-
     equipped forces in the world.
       Notwithstanding this assessment of our overall posture, the 
     Secretary and the Chiefs identified several concerns that 
     must be addressed to sustain high military readiness levels. 
     To address our readiness needs, I believe several steps are 
     in order:
       1. We must act now to provide additional resources in FY 
     1999 for operations and personnel programs important to 
     military readiness. This includes resources to minimize 
     shortfalls in certain critical spare parts, Navy manpower, 
     and Army unit training activities. I have asked key officials 
     of my Administration to work together over the coming days to 
     develop a fully offset $1 billion funding package for these 
     readiness programs.
       2. I have instructed the Office of Management and Budget 
     and the National Security Council to establish with Secretary 
     Cohen and General Shelton a separate process within the 
     context of the FY 2000 joint budget review that will examine 
     the longer-term military readiness issues raised at my 
     meeting with the CINCs. Meeting this challenge will require a 
     multi-year plan with the necessary resources to preserve 
     military readiness, support our troops, and modernize the 
     equipment needed for the next century. I anticipate this 
     examination will result in a series of budget and policy 
     proposals for the FY 2000 Defense budget and the Future Years 
     Defense Program. Our challenge is to strike a balance between 
     providing sufficient resources for military readiness while 
     maintaining fiscal discipline and appropriate funding levels 
     for other investments necessary to sustain a growing economy.
       The security of the nation depends on our military forces' 
     ability to quickly, effectively, and successfully prosecute 
     their mission. Ensuring that these forces are trained and 
     ready is a priority upon which we all can agree.
           Sincerely,
                                                     Bill Clinton.

  Mr. LEVIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. LEVIN. First, Mr. President, it is a pleasure for me to join with 
the chairman of the Armed Services Committee in bringing to the floor 
the Strom Thurmond National Defense Authorization Act for fiscal year 
1999. It is truly a fitting honor for our chairman that this conference 
report which is named in his honor has been signed by not only all the 
Senate conferees on both sides of the aisle, but also by all conferees 
from the House National Security Committee on both sides of the aisle.
  I am sure that I speak for all of our colleagues in saying just how 
much we appreciate the leadership that Senator Thurmond has provided on 
this bill, the fair and even-handed manner in which he has managed the 
committee not just on this bill, but as long as he has been a chairman 
of this committee, as well as how much we appreciate the lifelong 
dedication that he has brought to the national defense. We look forward 
to many, many more years of working with him. He has expressed his 
appreciation for having the bill named after him. I just want to tell 
him that it is my very strong personal feeling that it has been a 
pleasure for me to work with him to bring forward measures such as this 
that are so critical to the national defense. We will miss him as 
chairman, but we will not miss him as a member of the committee, 
because he will continue to be an active member of the committee.

  Mr. President, this is also the last defense authorization act for 
several of our colleagues on the committee, as Senator Thurmond has 
noted. Senator Glenn, Senator Coats and Senator Kempthorne will all be 
leaving us at the end of this year. All three have

[[Page S11214]]

made great contributions to the work of the committee and to the 
national security of our country. They will be greatly missed, and I 
know many of us will have more to say about that during the next few 
days.
  The conference report that we bring to the Senate today is the 
product of more than 6 months of work, including a full 2 months in 
conference with the House. Overall, we have reached a bipartisan 
conference report that advances the security of our country in the best 
interests of the men and women in uniform. I am particularly pleased 
that on a series of issues that were important to the Department of 
Defense and the Department of Energy and to the administration, we have 
been able to eliminate or modify positions that would have led to a 
veto.
  First, we eliminated a series of House provisions that would have 
barred any exports of satellite or related technology for launch in 
China, and also the provision which we eliminated also would have 
prohibited participation in launch failure investigations. So we have 
eliminated a number of provisions. However, the conference report does 
provide that the licensing of applications to launch satellites in 
China will be returned to the State Department. However, that return 
will be delayed until March 15, 1999. In the interim, there is a 
requirement for the Secretary of State to plan for a more timely and 
orderly licensing process.
  The only effective difference since January of 1996 between the 
licensing being done by State or Commerce has been the long delays that 
exist in the State Department's processing of license applications. The 
delay in the effective date of the transfer from Commerce to State will 
give the administration time to take steps to speed up the State 
Department's licensing process and provide the new Congress with an 
opportunity to review the transfer in a less politically heated 
atmosphere after the elections.
  It is critical for American security that American satellites 
continue to be launched in large numbers, both because, as Senator Bob 
Kerrey has pointed out, most of our intelligence information comes from 
open sources, such as satellites, and because the satellite 
transmission of programming is critically important to forcing open 
closed societies whose dictatorships threaten American interests. The 
compromise embodied in the bill before us should protect our national 
security interests by helping to ensure that American satellites will 
continue to be launched in appropriate numbers and in a timely and 
secure manner.
  Second, we have eliminated a House provision that would have 
prohibited the Secretary of Energy from even considering the less 
costly of the two options for renewed tritium production. It would have 
achieved this result by prohibiting the production of tritium in a 
commercial facility, even though tritium is widely used in commercial 
products and is not a special nuclear material like uranium or 
plutonium.
  The provision in the bill will provide a level playing field for the 
selection of an option for future tritium production by delaying the 
implementation of the decision made by the Secretary of Energy to 
select either option until October 1, 1999, the beginning of the next 
fiscal year. This approach will provide Congress an opportunity to 
review the Secretary's decision--whatever it may be--before it is 
implemented. It will have no adverse impact on our national security 
because we will not need a new source of tritium for several years. The 
Secretary's decision could not be implemented in any case until funding 
is approved by Congress, and Secretary Richardson has indicated that 
delaying implementation of his decision until October 1 of next year 
will have ``minimal impact'' on future tritium production.
  Third, we eliminated a House provision that would have prohibited 
gender-integrated training at the basic training level in all three 
military services. This prohibition was opposed by the uniformed 
military, opposed by a majority of the Senate, and it would have led to 
a veto by the President. The bill does contain provisions that, (a), 
direct the Secretaries of the military departments to provide for 
separate and secure housing for male and female recruits with sleeping 
areas separated by permanent walls and served by separate entrances; 
and, (b), prohibit afterhours access to sleeping areas by unescorted 
members of the opposite gender. These provisions are consistent with, 
and would in fact codify, the current policies of the Department of 
Defense.
  Fourth, a Senate provision was dropped that would have made it harder 
for the Secretary of Defense to downsize and close unneeded military 
facilities. I recognize that many Members on both sides of the aisle 
supported this provision. However, the provision was strongly opposed 
by the civilian and uniformed leadership of the Department of Defense 
and would have led to a veto. I am personally hopeful that in the next 
session of Congress we will at least authorize one additional round of 
base closings.

  Mr. President, I am also pleased with the outcome on several issues 
that have been important to the Department of Defense, including the 
adoption of a Senate provision authorizing Bosnia funding on an 
emergency basis; the decision to fund cooperative threat reduction 
programs at a level close to the one proposed by the administration; 
and, most importantly, the decision to fund a 3.6-percent pay raise for 
our men and women in uniform. Nothing is more important to our national 
security than their well-being and high morale.
  Mr. President, this conference report is the product of hard-fought 
compromise, and I cannot say, of course, that I support every provision 
in it.
  I would have preferred that we not fund seven C-130s and one F-16 
that the Department of Defense says it doesn't want and doesn't need.
  I would have preferred that we not cut into the readiness of our 
Armed Forces by reducing the Department's operations and maintenance 
accounts below the administration's budget request.
  I would have preferred that we not include a House provision that 
unfairly singles out a single facility by prohibiting the China Ocean 
Shipping Company from leasing a facility at the Long Beach Shipyard 
that was closed in the last base closure round.
  I would have preferred that we not reach outside of our jurisdiction 
to resolve a complicated tax dispute between two States.
  On balance, I think we have succeeded in reaching a fair resolution 
on the issues in the conference. I am convinced that we have a very 
solid compromise of the major issues, and I hope the President will 
sign the bill.
  Again, I will conclude by thanking our chairman, Senator Thurmond, 
for the open and the bipartisan manner in which he conducted the 
conference on this bill. Senator Thurmond and his staff have made every 
effort to include the minority at every stage of the deliberations. I 
also thank the chairman and ranking minority member of the House 
National Security Committee, Congressman Spence and Congressman 
Skelton, for their cooperation in bringing the conference to a 
successful conclusion.
  Of course, none of this could have been accomplished without our 
staffs. I want to express the appreciation we all feel on the committee 
to the staffs of the Armed Services Committee--both the majority and 
minority staffs--for the extraordinary effort they put into this bill 
and this conference. It was a long, long conference. It just simply 
would not have been possible to achieve the result we did without the 
outstanding work of David Lyles, Les Brownlee, and their dedicated 
supporting cast. I also extend my thanks to the staff of the House 
National Security Committee and the House and Senate legislative 
counsels for their help in preparing this large bill.
  Mr. President, it is a good conference report. It strengthens our 
national security. I know our colleagues will be pleased to join me in 
supporting the Strom Thurmond National Defense Authorization Act for 
Fiscal Year 1999.
  Mr. THURMOND addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina is recognized.
  Mr. THURMOND. Mr. President, I wish to express my appreciation to 
Senator Levin for the kind words he said about me. He has done a fine 
job. We could not have done this work without him.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.

[[Page S11215]]

  The assistant legislative clerk proceeded to call the roll.
  Mr. THURMOND. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. THURMOND. Mr. President, I ask unanimous consent that the time 
for the quorum call be charged equally to both sides.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. THURMOND. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. FORD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FORD. Mr. President, I believe I have 90 minutes.
  The PRESIDING OFFICER. That is correct.
  Mr. FORD. Mr. President, I regret that I am here this morning making 
my remarks, because in this piece of legislation we have preempted the 
States and their ability to tax. Under the Buck Act, it gave that 
responsibility to the States. But in here we are preempting the States.
  The Presiding Officer understands the problem between Oregon and 
Washington. But Oregon has passed a law that exempts residents of 
Washington. So, therefore, the States have worked out their problem. 
Here, the Federal Government, Big Brother, has to tell the States what 
they can do. I think it is highly unfair. I think it is unprecedented 
where the Armed Services Committee has gone around the Finance 
Committee.
  Senators can't come to this floor and say that the chairman of the 
Finance Committee says this section is all right. It has to go before 
the Finance Committee. The Finance Committee is the committee of 
jurisdiction here--not the Armed Services Committee.
  The occupant of the Chair is one of the finest jurists in the Senate, 
having been, I believe, Attorney General of his State.
  The law says:

       No person shall be relieved from his liability for any 
     income tax levied by any State, or by any duly constitutional 
     taxing authority therein having jurisdiction to levy such a 
     tax by reason of his residing within a Federal area, or 
     receiving income from transactions occurring or services 
     performed in such areas, and such State, or taxing authority, 
     shall have full jurisdiction and power to levy and collect 
     such tax in any Federal area within such State to the same 
     extent and with the same effect as though such area was not a 
     Federal area.

  That is the Buck Act.
  The Armed Services Committee has altered or broken that statutory 
provision. They preempted the States. They went around the Finance 
Committee. Now they are altering the Buck Act.
  As I said, Mr. President, this is regrettable, for me to think that 
my colleagues would have such a sweetheart deal that when the State of 
Kentucky and the State of Tennessee were in the process of negotiation 
and working out their problems, they were told it would be worked out 
in Washington and not to worry about it; therefore, the negotiations 
were cut off, and the sweetheart deal was started.
  I want to call the attention of my colleagues to the provision in the 
defense authorization bill which I consider to be one of the most 
misplaced, misguided, and unfair proposals I have seen in my 24 years 
in the Senate. I am referring to a tax proposal in this defense 
authorization bill which preempts the State of Kentucky from 
administering its own tax laws.
  Let me repeat that.
  I am referring to a tax provision in the defense authorization bill. 
We are now establishing, Mr. President, the precedent that defense 
authorization bills can become vehicles for State tax provisions.
  The Finance Committee has jurisdiction over tax issues in the Senate. 
But the Finance Committee did not report this legislation. The Finance 
Committee did not report any other legislation with this tax proposal 
contained in this defense authorization bill. It is not even a Federal 
tax issue. This is not a Federal tax issue. This is a tax provision in 
this bill which dictates to States how they administer State income tax 
laws.
  The Republican Party has always been States rights. That is one of 
their long suits. I have heard in campaigns all my life, ``States 
rights.'' And now in this bill you are preempting States rights. We are 
preempting my State, the Commonwealth of Kentucky, from deciding for 
itself how to administer its own income tax laws on work performed 
within the State of Kentucky by private sector employees. It is an 
outrage that my colleagues who are conferees from the other side of the 
aisle agreed to include this provision in the final bill.

  Mr. President, Fort Campbell is a military facility which straddles 
the Kentucky-Tennessee border. It is located partially in Trigg County 
and Christian County in my State and partially in Tennessee. There are 
Federal employees working at Fort Campbell who reside in both Kentucky 
and Tennessee, and there are private sector employees working at Fort 
Campbell, some on a full-time basis, some on a contractual or part-time 
basis.
  How would you like to be sitting at the table having lunch, and the 
worker across the table from you, working for the same company, doing 
the same job as you, pays no tax, but you have to pay yours?
  For Kentucky employees, there is no exemption from the sales tax in 
Tennessee. That will be the next bill that will be in the Chamber, and 
I am going to encourage my colleagues to do that so all you have to do 
is show your driver's license and where your residence is and you are 
exempt from Tennessee sales tax, which is one of the highest in the 
Nation.
  According to groups such as the Federation of Tax Administrators, 
which is an organization comprised of the top revenue officials from 
all 50 States and the District of Columbia, it is a fundamental 
principle of taxation that workers are taxed where the work is 
performed. Workers are taxed where the work is performed. That is the 
basic rule. There are exceptions to the rule, of course, but the 
exceptions come from agreements negotiated between States--negotiated 
between States. States can agree to a variety of ways to treat income 
tax earned within one State's borders by out-of-State residents--States 
rights. And we recognized that a long time ago even in the Buck Act.
  But this is for the States to decide. Congress should keep its nose 
out of their business. But not this Congress, not this majority, and 
not this defense authorization bill. Do I want to be against the Strom 
Thurmond defense authorization bill? Of course, I do not. I do not want 
to be against the Wendell H. Ford aviation bill either. But what is in 
this bill is not right.
  That is my responsibility as a Senator, and I am surprised that my 
colleague on the other side, who is a major player with the Republican 
Party, did not defend his constituents rather than his party. We are 
losing $4 million a year. Not even the Congressman from the First 
District raised a peep about it. Who are you supposed to be 
representing up here in this body or in the other body? You are 
supposed to be representing your State and your constituency.
  A dispute arose when some Tennessee workers objected to paying income 
taxes on work performed within the borders of Kentucky. Legislation was 
introduced in the House to impose a Federal solution on the States. 
Hearings were held. The House Judiciary Committee held a hearing on 
April 17th of last year on this issue. The Senate Governmental Affairs 
Committee held hearings on October 24 of last year. To my knowledge, 
the Senate Armed Services Committee held no hearings. The Senate Armed 
Services Committee held no hearings on this issue during either session 
of this Congress. The reason is obvious. Because the Armed Services 
Committee has absolutely no jurisdiction over this issue--none. The 
conferees for this defense authorization bill have no business 
attaching language which preempts State tax laws as part of this 
defense authorization bill. It has no place in this piece of 
legislation.
  Let's go back now to the House hearing of last April. What kind of 
testimony did that committee hear? It heard that the Kentucky tax 
structure met all appropriate constitutional standards for fairness and 
nondiscrimination. The committee was

[[Page S11216]]

told that the ability of States to define their own tax structure 
within the bounds of the Constitution was ``one of the core elements of 
sovereignty preserved to the States under the Constitution.''
  That committee was told that if Congress jumped in and preempted 
State laws in this case, ``It will by definition create a preferred 
class of taxpayers that benefits at the expense of all other taxpayers. 
Currently, all workers, public and private, in Kentucky are subject to 
the same rules. This should not be disrupted by the Congress without a 
strong policy rationale.''
  The House committee was also told that the proposal to grant special 
status to Tennessee residents violated the spirit of the Unfunded 
Mandate Act of 1995. I wonder how many colleagues on the other side in 
1995 voted for the unfunded mandate bill. Are you going to fund this 
unfunded mandate? No. It breaks that law. You are taking away by 
mandate funds that belong to my State. It is under the unfunded mandate 
law of 1995.
  Do you think this bill is not going to go to court? You can bet your 
sweet bippy that once the President signs it, if he does, this portion 
of the bill will be in court. It is wrong. It is wrong from the start; 
it is wrong from the middle; it is wrong from the end.
  The House committee was also told that if Congress believes that the 
impact of Federal workers employed on installations crossing the 
borders of two States should be offset, it should provide the funding 
necessary to offset the cost imposed on the States affected and not 
just preempt legitimate taxing authorities. This is what the committee 
was told, but the committee didn't pay any attention to that--it is our 
way or nothing. What Kentucky is getting is nothing. I am not going to 
allow this bill to go forward without having an opportunity, which I am 
doing now, to express to my colleagues my outrage and what their 
outrage should be. Pretty soon, I will tell you, 240 installations that 
are subject to the same law--subject to the same law, 240 in this 
country--will want the same. So what are you going to look forward to 
next year? Are you going to preempt all these States? Be fair. Be fair.

  So, let me repeat one section of that sentence that the committee in 
the House was told:

       . . . if Congress feels the impact of federal workers 
     employed on installations crossing the border of two states . 
     . . should be offset, it should provide the funding necessary 
     to offset the costs imposed on the states affected and not 
     just preempt legitimate taxing authority.

  Mr. President, the Senate Governmental Affairs Committee heard 
similar testimony during its hearing last August. The Senate Armed 
Services Committee, however, heard no such testimony because it held no 
such hearings and has no jurisdiction over this issue. Nevertheless, 
without any floor debate, a provision was snuck into the House version 
of the defense authorization bill on the House floor. Where was my 
Congressman from the First District when that happened to his employees 
and to his State? I do not know where my House colleagues from Kentucky 
were on this issue when this issue arose. Maybe they did not notice. 
Maybe they were just asleep at the switch. But either way, not a finger 
was lifted by my colleagues on the other side of the aisle to stop it.
  Let me explain to my colleagues why this provision is so offensive. 
The provision preempts the State of Kentucky from applying its own tax 
laws to Federal workers at Fort Campbell. But it does not stop there, 
it is broader. It also exempts private sector employees, such as 
contractors, who perform work at Fort Campbell. Private contractors are 
exempt. This goes well beyond any precedent which exists anywhere else 
in Federal law.
  What it means is that when two contractors bid on work to be 
performed on the Kentucky side of Fort Campbell, a Tennessee contractor 
is going to have a built-in advantage over a Kentucky contractor 
because of the special exemption written into this defense 
authorization bill. Can you imagine what other Senators would be doing 
this morning if this had happened to them? Maybe, with this precedent, 
it will. Why don't we try to prevent it?
  The House language is overly broad and, in my opinion, extremely 
unfair. No such language is included in the Senate version of the bill. 
However, I was very concerned about the attempt to sneak this in. I 
informed my colleagues on the committee of my strong concerns with this 
tax proposal on June 25th, when the bill was debated on the floor.
  I should say at this point that the ranking member of the committee, 
the Senator from Michigan, acknowledged that tax issues had no place in 
a defense authorization bill, he shared my concern about the broad and 
misguided precedent set by this proposal to preempt State tax laws, and 
he fought to keep it out of the final bill. However, apparently among 
my colleagues on the other side of the aisle, this was a done deal. I 
do not believe the issue was even a matter of serious discussion by the 
Republican conferees. So here we are on the Senate floor with a 
sweetheart deal being cut on a tax provision which preempts State law. 
I thought I had seen it all.
  Mr. President, this tax provision raises serious constitutional 
questions. This provision raises serious constitutional questions. Back 
in June I inserted in the Record a legal memorandum from the Office of 
the Attorney General of Kentucky which raised serious constitutional 
questions about this tax preemption proposal. I am sure the issue of 
whether to challenge the constitutionality of this tax preemption 
proposal will be studied carefully, should this bill become law--and it 
will be.
  Let me also inform my colleagues that revenue officials in my State 
have had contact with those in the State of Tennessee. This is the 
right way to solve this problem. The States of Washington and Oregon 
did. But once the word was out that Congress will attempt to impose a 
Federal solution regarding this matter, the discussions between the two 
States became a moot point. Why should they spend the time and 
resources necessary to reach a compromise agreement when Congress was 
considering preempting State law and imposing a solution which favors 
just one side? What incentive was there to negotiate? Big Brother in 
Washington was acting to impose a solution on a matter which is 
normally left to the States to work out on their own.
  Mr. President, a sweetheart deal cut by the Republican conferees is 
going to cost my State about $4 million per year. Let there be no 
mistake about my Governor's opposition to this tax preemption 
provision. Let me read from his letter of June 25, 1998, from Governor 
Paul Patton of Kentucky.

       I am writing to express Kentucky's opposition to the 
     Thompson amendment currently under consideration by the 
     United States Senate. The issue addressed by this legislation 
     is the tax imposed by the Commonwealth on income earned 
     within Kentucky by non-resident federal workers.

  He went on to lay out why.

       We are attempting to resolve this issue through a joint 
     effort with Tennessee Governor Sundquist's office. This 
     matter is one to be settled at the State level, and not an 
     issue for Congress to resolve.

                           *   *   *   *   *

       In closing, I would like to reiterate the Kentucky taxation 
     of non-residents working in Kentucky is fair in concept and 
     in practice. To exempt all non-residents or a special group 
     of non-residents who work in Kentucky would be unfair. If I 
     may provide you with any other information on this issue, 
     please feel free to contact me.

  Mr. President, I ask unanimous consent the letter from the Governor 
of Kentucky be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                         Commonwealth of Kentucky,


                                       Office of the Governor,

                                     Frankfurt, KY, June 25, 1998.
     Hon. Wendell Ford,
     U.S. Senate, Washington, DC.
       Dear Senator Ford: I am writing to express Kentucky's 
     opposition to the Thompson amendment currently under 
     consideration by the United States Senate. The issue 
     addressed by this legislation is the tax imposed by the 
     Commonwealth on income earned within Kentucky by non-resident 
     federal workers.
       The protest by federal workers employed at the Fort 
     Campbell military base against the imposition of the Kentucky 
     income tax has centered on their contention that the tax is 
     unfair to them. All income in question is taxed the same 
     whether earned by a resident or non-resident of Kentucky. 
     Only the income earned within the Commonwealth of Kentucky is 
     taxed. It would be unfair to tax the income of residents but 
     not the income of non-residents doing the same job in the 
     same place. Indeed, if this were the case, it would make 
     sense for Kentucky residents

[[Page S11217]]

     working on the Fort Campbell base to move to Tennessee to 
     avoid the Kentucky income tax.
       On June 23, 1998, Kentucky's Attorney General sent to me a 
     memorandum which offers a compelling and reasonable argument 
     against the constitutionality of the Thompson amendment under 
     the Commerce Clause. A consequence of this amendment would be 
     its detrimental impact on the Kentucky communities which 
     surround Fort Campbell. The legislation would exceed 
     Congressional authority and would likely be proven as 
     unconstitutional. Congress granted the states the power to 
     tax income, and on several occasions, courts have held that 
     states can assess an income tax to nonresidents who earn 
     their income in that state. Congress can reduce the states' 
     power of taxation, but only through an amendment within the 
     confines of the Commerce Clause.
       We are attempting to resolve this issue through a joint 
     effort with Tennessee Governor Sundquist's office. This 
     matter is one to be settled at the state level, and not an 
     issue for Congress to resolve. The impacts of the Thompson 
     amendment would far surpass Fort Campbell. These impacts 
     would extend to the employees of every federal institution 
     within close proximity with state borders.
       In closing, I would like to reiterate that Kentucky's 
     taxation of non-residents working in Kentucky is fair in 
     concept and in practice. To exempt all non-residents or a 
     special group of non-residents who work in Kentucky would be 
     unfair. If I may provide you with any other information on 
     this issue, please feel free to contact me.
           Sincerely,
                                                   Paul E. Patton,
                                                         Governor.

  Mr. FORD. The State preemption provision in this bill is also 
strongly opposed by the Federation of Tax Administrators. Let me read 
from a June 24, 1998 letter from Mr. Harley T. Duncan, the executive 
director of the Federation of Tax Administrators:

       I am writing concerning amendments to the defense 
     appropriations bills (S. 2057) which would preempt Oregon, 
     Kentucky and Nebraska from applying their income tax to 
     certain federal employees (and in some cases, contractors) 
     who work in those states, but reside in bordering states with 
     no income taxes. . . .
       These amendments have been separately considered earlier in 
     the 105th Congress as H.R. 1953. The Federation of Tax 
     Administrators is an association of the principal tax 
     administration agencies in the 50 States, the District of 
     Columbia, and New York City. The Federation has adopted a 
     policy which urges that the Senate reject H.R. 1953 and any 
     similar language which may be offered as an amendment to 
     other bills.
       We ask the Senate to recognize that, throughout the history 
     of income taxation, both federal and state, workers are taxed 
     by the jurisdiction where the work is performed. This system 
     represents the keystone of taxation. State lawmakers make 
     exceptions to this system to address individual circumstances 
     where strict adherence to the principle leads to undesirable 
     results. In particular, in those instances where sound fiscal 
     and government policy permit, a State may enter into a 
     reciprocal agreement with a bordering State to permit 
     taxpayers to file a single return in the state of 
     residency. Kentucky is at the forefront of such policy 
     refinements.

  They are complimenting my State for being in the forefront of these 
policy refinements.

     --it has a reciprocal agreement with every border state that 
     has a broad-based individual income tax.
       The U.S. Constitution imposes substantive constraints on 
     the manner in which such states may structure their tax 
     systems. These constraints ensure that the tax imposed meets 
     fundamental tests of fairness in dealing with all citizens. 
     The Constitution further ensures that state taxes do not 
     impose undue burdens on interstate commerce or the federal 
     government. The taxes imposed by these states meet these 
     requirements and should not be preempted. There is no 
     question that states have the legal authority to tax the 
     income of nonresidents working in Oregon, Kentucky or 
     Nebraska.

  It goes on, Mr. President:

       Further, the language exempts from taxation wages paid to 
     Federal workers . . . but it exempts from tax income paid to 
     all individuals who work in Fort Campbell in Kentucky.

  A special group is set out here.

       This encompasses not only contract employees who work 
     directly for the military . . . but also includes employees 
     of private companies who run businesses or perform services 
     on the bases, including such businesses as restaurants and 
     road maintenance firms. These are clearly private business 
     people, not federal workers.

  But they are exempt. They are exempt under this particular bill.

       Finally, and most importantly, if change is necessary, it 
     is within the power of the states involved to do so. This is 
     an issue for state lawmakers, not federal lawmakers. 
     Lawmakers in Kentucky and Tennessee are seeking an equitable 
     solution that would not impose an unfair burden on either 
     state. . .
       The Senate is faced with an opportunity to demonstrate good 
     faith to the principles contained in the Unfunded Mandates 
     Act of 1995.

  And we are not doing that.

       If Congress feels that the impact of federal workers 
     employed on installations crossing the borders of two 
     states--one of which imposes an income tax and another which 
     does not--should be offset, it should provide the funding 
     necessary to offset the costs imposed on the states affected.

  This is signed Harley T. Duncan, executive director, Federation of 
Tax Administrators.
  Mr. President, I ask unanimous consent that the letter from Mr. 
Duncan be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                             Federation of Tax Administrators,

                                    Washington, DC, June 24, 1998.
     Hon. Wendell H. Ford,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Ford: I am writing concerning amendments to 
     the defense appropriations bills (S. 2057) which would 
     preempt Oregon, Kentucky and Nebraska from applying their 
     income taxes to certain federal employees (and in some cases 
     contractors) who work in those states, but reside in 
     bordering states with no income taxes (Washington, Tennessee 
     and South Dakota).
       These amendments have been separately considered earlier in 
     the 105th Congress as H.R. 1953. The Federation of Tax 
     Administrators is an association of the principal tax 
     administration agencies in the 50 states, the District of 
     Columbia and New York City. The Federation has adopted a 
     policy which urges that the Senate reject H.R. 1953 and any 
     similar language which may be offered as an amendment to 
     other bills.
       We ask the Senate to recognize that, throughout the history 
     of income taxation, both federal and state, workers are taxed 
     by the jurisdiction where the work is performed. This system 
     represents the keystone of taxation. State lawmakers make 
     exceptions to this system to address individual circumstances 
     where strict adherence to the principle leads to undesirable 
     results. In particular, in those instances where sound fiscal 
     and government policy permit, a state may enter into a 
     reciprocal agreement with a bordering state to permit 
     taxpayers to file a single return in the state of residency. 
     Kentucky is at the forefront of such policy refinements--it 
     has a reciprocal agreement with every border state that has a 
     broad-based individual income tax. (The agreements do not 
     function with non-income-tax states such as Tennessee, and 
     thus they are not applicable in this case.)
       The U.S. Constitution imposes substantive constraints on 
     the manner in which states may structure their tax systems. 
     These constraint ensure that the tax imposed meets 
     fundamental tests of fairness in dealing with all citizens. 
     The Constitution further ensures that state taxes do not 
     impose undue burdens on interstate commerce or the federal 
     government. The taxes imposed by these states meet these 
     requirements and should not be preempted. There is no 
     question that states have the legal authority to tax the 
     income of nonresidents working in Oregon, Kentucky or 
     Nebraska.
       What this amendment would do is carve out a special tax 
     benefit for workers who choose to live (or move) out of state 
     that would not be available to any other employees working at 
     the same location. Further, the language exempts from 
     taxation wages paid to federal workers in Oregon and 
     Nebraska--but it exempts from tax income paid to all 
     individuals who work in Fort Campbell in Kentucky. This 
     encompasses not only contract employees who work directly for 
     the military (for instance, school teachers), but also 
     includes the employees of private companies who run 
     businesses or perform services on the base, including such 
     businesses as restaurants and road maintenance firms. These 
     are clearly private businesspeople, not federal workers. If 
     Kentucky is to be preempted from taxing individuals who work 
     for the federal government, we particularly urge the Senate 
     to adopt language that more precisely defines the matter. 
     (More precise definitions have been offered by the Pentagon.)
       Finally, and most importantly, if change is necessary, it 
     is within the power of the states involved to do so. This is 
     an issue for state lawmakers, not federal lawmakers. 
     Lawmakers in Kentucky and Tennessee are seeking an equitable 
     solution that would not impose an unfair burden on either 
     state. Oregon has already passed a law that exempts from 
     taxation those federal employees who work on the dam in 
     Oregon. (We would emphasize that to continue to include 
     Oregon in this bill is unnecessary and an insult to the 
     elected officials of that state.)
       The ability to define their tax systems within the bounds 
     of the Constitution is one of the core elements of 
     sovereignty preserved to the states under the Constitution. A 
     central feature of this sovereignty is the ability to tax 
     economic activity and income earned within the borders of the 
     state, and it is vital to the continued strong role of the 
     states in the federal system. State taxing authority should 
     be preempted by the federal government only where there is a 
     compelling policy rationale. There is no such rationale 
     present here.
       The Senate is faced with an opportunity to demonstrate good 
     faith to the principles contained in The Unfunded Mandates 
     Act of

[[Page S11218]]

     1995. If Congress feels that the impact of federal workers on 
     installations crossing the borders of two states--one of 
     which imposes an income tax and the other of which does not--
     should be offset, it should provide the funding necessary to 
     offset the costs imposed on the states affected.
           Sincerely,
                                                 Harley T. Duncan,
                                               Executive Director.

  Mr. FORD. Mr. President, the National Conference of State 
Legislatures also strongly oppose the State tax preemption provided in 
the defense authorization bill. Let me read from an August 7, 1998, 
letter to the conferees. This was written to the chairman of the Senate 
Armed Services Committee, the Senator from South Carolina, Senator 
Thurmond. ``Federal preemption of legitimate State taxing authority.'' 
The National Conference of State Legislatures wrote to the chairman and 
said this is wrong:

       On behalf of the National Conference of State Legislatures, 
     I am writing in opposition to Section 1045 of the House 
     version of the National Defense Authorization bill (H.R. 
     3616). NCSL opposes federal action that preempts the states' 
     constitutional authority to tax income earned within their 
     borders . . . We urge you to preserve the States' 
     sovereignty--

  Preserve the States' sovereignty.
  I ask unanimous consent that the letter from the National Conference 
of State Legislatures be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                               National Conference


                                        of State Legislatures,

                                   Washington, DC, August 7, 1998.
     Re Federal preemption of legitimate State taxing authority.

     Hon. Strom Thurmond,
     Chairman, Senate Armed Services Committee, U.S. Senate, 
         Senate Russell Office Building, Washington, DC.
       Dear Senator Thurmond: On behalf of the National Conference 
     of State Legislatures, I am writing in opposition to Section 
     1045 of the House version of the National Defense 
     Authorization bill (HR 3616). NCSL opposes federal action 
     that preempts the states' constitutional authority to tax 
     income earned within their borders. Such federal legislation 
     leads to inequitable, unfair and unlevel state tax policies 
     and establishes a precedent for increased restrictions on 
     source taxation.
       Section 1045 of the House bill would preempt state taxation 
     of federal workers in three locations. NCSL believes that the 
     states in question should be allowed to determine how to tax 
     workers who reside in one state and work in another, free 
     from federal intrusion.
       We urge you to preserve the states' sovereignty right to 
     define their own tax systems by removing. Section 1045 from 
     the conference report on the bill. Finally, should the 
     conferees include the provision in the final bill, we urge 
     you to find an offset for the cost. Burdening the states with 
     an unfunded mandate violates the Unfunded Mandates Reform Act 
     of 1994. The cost associated with the loss of states tax 
     revenue, due to change in federal policy, should be borne 
     exclusively by the federal government.
       We look forward to working with you on this issue. Should 
     you have additional questions, please contact our committee 
     staff, Gerri Madrid, at (202) 624-8670.
           Sincerely,
     Tom Johnson,
       Chair, Federal Budget and Taxation Committee, Ohio House of 
     Representatives.

  Mr. FORD. Mr. President, apparently all of these requests to the 
Republican conferees to keep this State preemption provision out of the 
defense bill fell on deaf ears. The conferees either did not listen or 
did not care. One way or another, this was a done deal, a sweetheart 
deal, a special tax provision which favors one set of workers over 
another for the same work performed, at the same location, despite 
State law.
  We are sitting at the same table. We are both working for the same 
employer. We are both doing the same job. We are both drawing the same 
pay, but you do not pay any taxes because you are a resident of 
Tennessee. I am a resident of Kentucky, and I pay my taxes.
  Mr. President, all of the requests to the Republican conferees to 
keep this State tax provision out of the defense bill fell on deaf 
ears. I wanted to repeat that. It is a special tax provision which 
favors one set of workers over another. It also gives the employers, or 
the companies, an advantage when they bid, because they don't have to 
pay the tax under this.
  As I said earlier, the next bill ought to be exempting Kentucky 
residents from the sales tax in Tennessee. Just show your driver's 
license and your address and place of employment, and you don't pay the 
taxes, one of the highest sales tax States in the Nation because their 
income comes from the sales tax.
  I hope my colleagues understand the precedent that is being set here. 
We are preempting State law--preempting State law--and establishing a 
special tax status for a group of not just Federal employees, but 
private sector workers who perform their work entirely within one 
State's borders. It is a very broad precedent. There is no stated 
policy rationale for this special preemption and special tax status we 
are granting. It is a precedent that will haunt my colleagues.
  I want my colleagues to understand how many other Federal facilities 
are in similar situations. When the workers at these facilities, not 
just the Federal workers, but the private sector workers as well, when 
these workers find out about the sweetheart deal at Fort Campbell, they 
are going to be asking their Senators, ``Why can't we get a good deal 
as well?''
  I have asked the Federal Tax Administrators just how many other 
Federal facilities are similarly situated. We have a preliminary list, 
but it is only preliminary. It probably does not include everything. 
The partial list we have shows there are 240 Federal facilities around 
the country that are on or near the borders of two or more States with 
significantly different income tax structures.
  We talk about how hard it was to work out this bill, how many issues 
came before the committee. In the future, if this is the precedent that 
is being set, the Armed Services Committee will be in the tax business; 
they will be in the finance business; they will be preempting State 
laws and will not be looking after the right thing they should be 
doing, and that is the defense of this great country of ours.

  I want to share this with my colleagues because more than 20 other 
States are affected. I think about 20 other States. That is 40 
Senators--pretty good bunch of Senators. In other words, Senators from 
at least 20 other States are in jeopardy of having to face this same 
issue.
  What have you done to the future of the military bill, the defense 
authorization bill? What have you done to it? You have turned it into a 
finance bill, not a defense bill. And I say to my colleagues, if they 
are from one of these States, you might be standing up here next year. 
Once the private sector employees find out about the special tax 
preemption, they may be lobbying their Senators next year to exempt 
them from the State tax laws in your State.
  Let me read a list, and this is only a partial list: Arkansas has 7 
installations. Arizona has 7. California has 50--50 installations 
similar to the one in Kentucky. Think about that when the two Senators 
from California will have to say--it goes all the way from military 
facilities, such as Fort Irwin Naval Weapons Center, Sierra Army Depot, 
the Grand Mesa National Forest.
  Connecticut has 2. Georgia has 1. Maine has 1. Oh, I remember the 
argument here between Maine and New Hampshire. They are left out of 
this bill. They are left out of this bill because both of them 
apparently are on the other side. I was for Maine.
  Massachusetts has 1. Mississippi has 8. Mississippi is probably the 
most vulnerable State of all of them because of their border situation. 
Can you imagine what would happen if all of these employees went to the 
two Senators in Mississippi and said, ``Right across the line here in 
Tennessee they receive tax exemptions. What about us? What about us? 
What's fair for the goose is fair for the gander.''
  Missouri has 6. Montana has 10. They are not in this bill. Nebraska 
has 1. New Jersey has 20--New Jersey has 20. New Mexico has 6. New York 
has only 1. I was surprised at that. But North Carolina has 13--North 
Carolina has 13. Oregon has 20. Pennsylvania has 1. I heard a lot about 
the Philadelphia Naval Yard last year.
  South Carolina has 1. South Dakota has 3. Tennessee has 3. Utah has 
37. Think about that. Utah has 37 installations similar to the 
situation in this bill.
  What about those employees--Federal employees, private sector 
employees--who were not exempt? Can you

[[Page S11219]]

imagine what the two Senators from Utah are going to face when they 
understand that other States were preempted and created a special tax 
group?
  Vermont has 2. The State of Washington has 37.
  What about the Indian reservations? Oh, we get into a good one 
there--Indian reservations. What about State workers at Indian casinos 
located on tribal lands? I do not understand. Why, the little leak in 
the dike here is beginning to take away the whole dike; and it could.
  Mr. President, I ask unanimous consent that the list of these 
locations in the various States be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

 240 Federal Facilities Potentially Affected by the Precedent (Located 
                       on or Near State Borders)


                              arizona (7)

       Hoover Dam.
       Davis Dam.
       Glen Canyon Dam.
       Parker Dam.
       Imperial Dam.
       Several National Forests.
       Military Installations near Yuma.


                              arkansas (9)

       Federal prison in Forrest City.
       Corps of Engineers projects at Beaver Lake.
       Corps of Engineers projects at Bull Shoals Lake.
       Corps of Engineers projects at Norfolk Lake.
       Corps of Engineers projects at the Arkansas River.
       Fort Chaffee Army base.
       Felsenthal National Wildlife Refuge.
       White River National Refuge.
       VA Hospital in Fayetteville.


                            california (50)

       Military Facilities--Fort Irwin, Naval Weapons Center, 
     Sierra Army Depot.
       National Forests--Eldorado, Inyo, Klamath, Modoc, Plumas, 
     Rogue River, Shasta-Trinity, Sierra, Siskiyou, Six Rivers, 
     Stanislaus, Tahoe, Toiyabe.
       National Parks and Monuments--Clear Lake National Wildlife 
     Refuge, Death Valley National Park, Joshua Tree National 
     Park, Kings Canyon National Park, Lava Beds National 
     Monuments, Lower Klamath National Wildlife Refuge, Modoc 
     National Wildlife Refuge, Mojave National Preserve, Mt. 
     Shasta Recreation Center, Redwood National Park, Tule Lake 
     National Wildlife Refuge, Yosemite National Park.
       U.S. Bureau of Reclamation--Boca Dam, Imperial Diversion, 
     Laguana Diversion, Lake Tahoe Dam, Prosser Creek Dam, Senator 
     Wash, Sly Park, Stampede Dam, Colorado Dinosaur National 
     Monument.
       Routt National Forest.
       Arapaho National Forest.
       Roosevelt National Forest.
       Rocky Mountain National Park.
       Pawnee National Grassland.
       Comanche National Grassland.
       Great Sand Dunes National Monument.
       Rio Grande National Forest.
       San Juan National Forest.
       Mesa Verde National Park.
       Uncompahgre National Forest.
       Colorado National Monument.
       Grand Mesa National Forest.


                            connecticut (2)

       U.S. Naval Submarine Base, Groton.
       U.S. Coast Guard Academy, New London.


                                Georgia

       Kings Bay Naval Submarine Base.


                                 maine

       Portsmouth Naval Shipyard.


                             massachusetts

       Hanscom Air Force Base.


                            mississippi (8)

       Holly Springs National Forest.
       NASA Test Site, Bay St. Louis.
       Vicksburg National Military Park.
       U.S. Corps of Engineers District Office, Vicksburg.
       Natchez Trace Parkway.
       Meridian Naval Air Station.
       Columbus Air Force Base.
       TVA, Tupelo.


                              missouri (6)

     Federal Locks and Dams:
       No. 20 near Canton.
       No. 21 near West Quincy.
       No. 22 near Saverton.
       No. 24 near Clarksville.
       No. 25 near West Alton.
       No. 27 near St. Louis.


                              montana (10)

       Kootenai National Forest.
       Lolo National Forest.
       Bitteroot National Forest.
       Beaverhead National Forest.
       Custer National Forest.
       Bighorn Canyon National Recreation Area.
       Yellowstone National Park.
       Glacier National Park.
       Crow Reservation.
       Blackfeet Reservation.


                                nebraska

       Gavins Point Dam.


                            new jersey (20)

       McGuire Air Force Base.
       Fort Dix Army Installation.
       U.S. Naval Air Station, Lakehurst.
       Pomona Naval Training Airport.
       U.S. Naval Recreation Target Area, Ocean City.
       Ft. Monmouth, Monmouth.
       Ft. Hancock, Sandy Hook.
       U.S. Coast Guard Bases (Cape May, Fort Dix, Highland, Pt. 
     Pleasant, Ocean City).
       Sandy Hook Gateway National Recreation Area.
       Delaware Water Gap National Recreation Area.
       Morristown National Historic Park.
       Killcohock National Wildlife Refuge.
       Red Bank National Battlefield Park.
       Great Swamp National Wildlife Refuge.
       Edwin B. Forsythe National Wildlife Refuge.
       Brigantine National Wildlife Refuge.


                             new mexico (6)

       White Sands Missile Range.
       Cannon Air Force Base.
       Carlsbad Caverns National Park.
       Kiowa National Grassland.
       Carson National Forest.
       Santa Fe National Forest.


                                new york

       Ellis Island.


                             north carolina

       Great Smoky Mountains National Park.
       Cherokee Indian Reservation.
       Pisgah National Forest.
       Blue Ridge Parkway.
       Uwharrie National Forest.
       Fort Bragg Military Reservation.
       Pope Air Force Base.
       Camp Butner Federal Prison.
       Sunny Point Army Terminal.
       U.S. Coast Guard Air Station, Elizabeth City.
       Veterans Hospital--Swannanoa.
       Veterans Hospital--Oteen.
       Veterans Hospital--Durham.


                              oregon (20)

       Bonneville Power Administration.
       U.S. Army Corps of Engineers, North Pacific Division.
       FAA Facilities.
       Portland Air Force Base.
       Kingsley Air Force Base in Klamath Falls.
       U.S. Coast Guard, Captain of the Port.
       Fremont National Forest.
       Winema National Forest.
       Rogue River National Forest.
       Siskiyou National Forest.
       Lower Klamath National Wildlife Refuge.
       Hart Mt. National Wildlife Refuge.
       Wallawa-Whitman National Forest.
       Hells Canyon National Recreation Area.
       Umatilla Army Depot.
       Mt. Hood National Forest.
       Umatilla National Forest.
       Cold Springs National Wildlife Refuge.
       McCay Creek National Wildlife Refuge.
       Warm Springs Indian Reservation.


                              pennsylvania

       Philadelphia Naval Yard.


                             south carolina

       Savannah River Site.


                            south dakota (3)

       Black Hills National Forest.
       Mt. Rushmore.
       Lake Wahee.


                             tennessee (3)

       Fort Campbell.
       Millington Naval Base.
       Arnold Engineering Research Facility.


                               Utah (37)

       Flaming Gorge National Recreation Area.
       Manti La-Sal National Forest.
       Canyonlands National Park.
       Arches National Park.
       Ashley National Forest.
       Dinosaur National Monument.
       Brown's Park National Waterfowl Management Area.
       Bryce Canyon National Park.
       Caribou National Forest.
       Cottonwood Canyon, BLM.
       Dart Canyon Primitive Area.
       Dart Canyon Wilderness Area.
       Desert Range Experimental Station.
       Deseret Test Center, USAF.
       Dixie National Forest.
       Dugway Proving Grounds.
       Escalante Staircase National Monument.
       Glen Canyon Dam.
       Glen Canyon National Park.
       Golden Spike National Historic Site.
       Governor Arch, BLM.
       Grand Gulch Primitive Area.
       High Uintas Wilderness Area.
       Hill Air Force Range.
       Hovenweep National Monument.
       Processing Center, Ogden.
       Jones Hole Federal Hatchery.
       Joshua Tree Forest, BLM.
       Mount Naomi Wilderness Area.
       Mt. Honeyville Wilderness Area.
       Paria Canyon Cliffs Wilderness Area.
       Piute Wilderness Area.
       Rainbow Bridge National Monument.
       Sawtooth National Forest.
       Wasatch National Forest.
       Wendover Range, USAF.
       Zion National Park.


                              Vermont (2)

       Green Mountain National Forest.
       Border Patrol Station, Highgate.


                            Washington (37)

       Federal Dams on the Columbia River.
       Federal Dams on the Snake River.
       Fairchild Air Force Base.
       Mt. Spokane Air Force Facility.
       U.S. DOT/U.S. Coast Guard Station Ilwaco and Westport.

[[Page S11220]]

       Veterans Offices/Hospitals--Vancouver and Walla Walla.
       U.S. Department of Energy--Hanford Site.
       Indian Reservations--Spokane, Kalispel, Colville, Yakima, 
     Shoalwater.
       National Forests--Gifford Pinchot, Umatilla, Colville, 
     Kaniksu, Pend Oreille, Okanogan.
       National Historic Sites--Whitman Mission, Ft. Vancouver.
       Mt. St. Helens National Volcanic Monument.
       USGS Cascade Volcano Observatory.
       National Wildlife Refuges--Julia Butler Hanson, Willapa, 
     Ridgefield, Conboy Lake, Umatilla, Toppenish, Turnbull, 
     Little Pend Oreille.
       Bonneville Power Administration--Vancouver facility.
       Bureau of Reclamation Offices and Sites--Franklin County.
       FAA Offices--Pasco, Walla Walla, Spokane.


                        other general categories

       1. National Forests which straddle State borders.
       2. Indian Reservations--What about state workers at Indian 
     casinos located on tribal lands?
       3. National Refuges which straddle State borders.

  Mr. FORD. Mr. President, I also want to make clear to my colleagues 
that this special tax preemption provision in the bill is a clear 
violation of the spirit of the Unfunded Mandates Act. I have said that 
before, but I want to make it clear. This provision will cost my State 
$4 million in lost revenue. What are we doing to offset the loss from 
the special tax preemption provision in this bill? Nothing. Absolutely 
nothing. Not a thing.
  Mr. President, if this special provision had been offered on the 
Senate floor, I would have offered a second-degree amendment requiring 
us to at least study the broad scope of the precedent we were setting 
here before we acted. I am not sure a great deal of thought has been 
given to the far-reaching effect of this one little amendment in the 
defense authorization bill. It was a special political decision, and 
that special political decision will have ripples that will turn into 
waves in the future.
  Mr. President, had this special provision been offered on the Senate 
floor, I would have asked for a study. Let's think through this one. We 
are preempting the States; we are telling the States how they can tax 
and how they cannot tax. This is not a Federal tax. This is a State 
tax.
  I think my colleagues would have been shocked at how broad this 
precedent is by applying this sweetheart deal at Federal facilities 
across the country. They would be embarrassed to find out the extent to 
which we are meddling in State tax law matters on a defense 
authorization bill--all to create a special State tax status for a 
select group of Federal and private sector workers. I think my 
colleagues would want to know this information.
  Mr. President, I ask unanimous consent that a copy of the amendment I 
would have offered be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       In lieu of the matter proposed to be inserted, insert the 
     following:

     SEC.   . STUDY ON NON-RESIDENT WAGE EARNERS AT FEDERAL 
                   FACILITIES.

       (a) The Secretary of the Treasury shall conduct a study 
     which--
       (1) identifies all federal facilities located within 50 
     miles of the border of an adjacent State;
       (2) estimates the number of non-resident wage earners 
     employed at such federal facilities; and
       (3) compiles and describes all agreements or compacts 
     between States regarding the taxation of non-resident wage 
     earners employed at such facilities.
       (b) The Secretary shall transmit the results of such study 
     to the Congress not later than 180 days after the enactment 
     of this Act.

  Mr. FORD. Mr. President, the proponents of this special deal suggest 
that Tennessee employees receive no services from the State of Kentucky 
and, therefore, should be entitled to their special exemption. Mr. 
President, this is simply not the case. Let me read from a July 11, 
1997, letter from the Kentucky Revenue Cabinet outlining the services 
the State of Kentucky provides to those workers.
  Again, I remind my colleagues that these are Federal and private 
sector workers who perform their work within the borders of the State 
of Kentucky.

       Roads--Fort Campbell is accessible from both the Kentucky 
     side and the Tennessee side. Most workers enter the base at 
     the gate nearest their work station. This means, for example, 
     that most hospital workers enter on the Tennessee side . . . 
     and most school workers enter on the Kentucky side using 
     Kentucky maintained roads (the school is in Kentucky).
       Water and sewer services-- . . .
       Electrical service--Most is supplied directly to the base 
     by the Tennessee Valley Authority. One housing area, however, 
     is supplied by the Pennyrile Electric Cooperative, a 
     Kentucky-based electric company.
       Cooperative Fire Protection [is there]. . . .
       Schools--The school system on the Fort Campbell base is 
     fully self-contained and federally funded. It is limited 
     [however] to the children of active duty military personnel . 
     . .
       Police Protection--. . . .
       Unemployment Benefits--. . . .

  Mr. President, we talk about exempting the Tennessee employees from 
paying Kentucky tax, but the Federal civilian workers who become 
unemployed can apply for benefits from the State where they work or the 
State where they live. If a Tennessee resident working in Kentucky 
becomes unemployed and applies in Tennessee, a transfer is made from 
the Kentucky fund to the Tennessee fund to pay that worker's 
unemployment claim.
  What is wrong with that agreement? I don't think anything. The result 
is that wherever the claim is filed, Kentucky funds pay the claim.
  Mr. President, I ask unanimous consent a letter from Alex W. Rose, 
commissioner, Department of Law, Kentucky Revenue Cabinet, be printed 
in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                  Revenue Cabinet,


                                    Office of General Counsel,

                                     Frankfort, KY, July 11, 1997.
     Re H.R. 1953--Fort Campbell.
     Mr. Harley Duncan,
     Federation of Tax Administrators,
     Washington, DC.
       Dear Harley: The Revenue Cabinet has gathered some 
     information on the Fort Campbell issues of whether employees 
     who live in Tennessee and work on the Kentucky side of the 
     Fort Campbell installation receive any benefits from the 
     state of Kentucky.
       The question of what services Kentucky provides is quite 
     broad. I will attempt to itemize below what we have 
     investigated and the results.
       Roads--Fort Campbell is accessible from both the Kentucky 
     side and the Tennessee side. Most workers enter the base at 
     the gate nearest their work station. This means, for example, 
     that most hospital workers enter on the Tennessee side (the 
     hospital is in Tennessee), and most school workers enter on 
     the Kentucky side using Kentucky maintained roads (the school 
     is in Kentucky).
       Water and Sewer Service--Self contained on the base.
       Electric Service--Most is supplied directly to the base by 
     the Tennessee Valley Authority. One housing area, however, is 
     supplied by the Pennyrile Electric Cooperative, a Kentucky 
     based electric company.
       Cooperative Fire Protection--Local communities in both 
     Kentucky and Tennessee have agreements with Fort Campbell to 
     assist in the event of a major fire or other emergency.
       Schools--The school system on the Fort Campbell base is 
     fully self-contained and federally funded. It is limited to 
     the children of active duty military personnel stationed at 
     the military base.
       Police Protection--All police protection is self-contained. 
     Responsibility for Fort Campbell and all federal military 
     bases rests with the federal/military police.
       Unemployment Benefits--Federal civilian workers who become 
     unemployed can apply for benefits from the state where they 
     work or the state where they live. If a Tennessee resident 
     working in Kentucky becomes unemployed and applies in 
     Tennessee, a transfer is made from the Kentucky fund to the 
     Tennessee fund to pay that worker's unemployment claim. The 
     result is that wherever the claim is filed, Kentucky funds 
     pay the claim.
       I hope this information is helpful to you in your efforts 
     concerning H.R. 1953. It is our belief that the civilian 
     employees who work on the Kentucky side of Fort Campbell 
     definitely receive some benefits from the state of Kentucky.
       The Kentucky Revenue Cabinet greatly appreciates the work 
     FTA is doing on H.R. 1953. Harley, we can't thank you and 
     your staff enough. If I can be of further assistance, please 
     let me know.
           Sincerely,

                                                 Alex W. Rose,

                                  Commissioner, Department of Law,
                                         Kentucky Revenue Cabinet.

  Mr. FORD. Mr. President, had this conference report been on a Senate 
bill, I would have offered a motion to recommit the bill to conference 
to strip this special State tax preemption provision from the bill. It 
is quite unfair, and I think everybody understands that.
  They are doing a political favor, because the Senators who represent 
that

[[Page S11221]]

State are from another party. I do not understand why my colleague, who 
is a member of that party, would allow this to happen to his State. I 
thought we were here representing our constituents, not our party. I 
think it is disappointing that both my colleagues here in the Senate 
and the Congressman from the First District in my State allowed this to 
happen without at least raising their voice in objection.
  However, I understand the option is no longer mine to offer any kind 
of amendment or any kind of motion to recommit. Since this is a House 
bill and it has already been approved by the House, thereby dissolving 
the conference, I understand the rules. I think I know the rules 
reasonably well here--not quite as well as Senator Byrd or, hopefully, 
the Parliamentarian, but I have no illusions about what the outcome of 
that vote might have been. After all, a sweetheart deal is a sweetheart 
deal.
  I did want to draw attention to this provision. It is patently 
unfair. It has no place in this bill. The committees that put this bill 
together have no jurisdiction over the issue whatever. I think it is a 
dark mark on this piece of legislation as it relates to States rights, 
going outside the jurisdiction of the committee. I think it leaves a 
black mark and a black cloud over this piece of legislation. This 
special tax preemption provision is terrible policy. We should not be 
dictating to States how to administer their own tax laws. We should not 
be imposing our will on the States in matters that have nothing to do 
with the Federal law and are traditionally and constitutionally left to 
the States to resolve.
  We hear a lot of rhetoric from the other side of the aisle that is 
never matched by the actions we see around this place. They say ``lower 
taxes,'' but fail to say how they will offset them without causing more 
deficits. They say ``less government,'' without saying where they will 
cut. They say ``no more unfunded mandates,'' but continue to impose 
unfunded mandates on the States. And this is, in the strictest 
interpretation, an unfunded mandate. They say ``States rights,'' but 
continue to pass special proposals like this one, which preempt State 
law, even in the areas that have been left to the States for the last 
200 years.
  Once again, Mr. President, we see that the rhetoric does not match 
the reality. When my friends on the other side see that expanding the 
role of Federal law fits their purposes, the rhetoric about States 
rights goes out the window. When they create a special tax exemption by 
imposing a $4 million cost onto another State, the unfunded mandates 
rhetoric goes out the window.
  Mr. President, I am very disappointed we have seen this issue, the 
preemption of State tax law, legislated this way on a defense 
authorization bill. It is bitterly opposed by my State and it ought to 
be bitterly opposed by every other Senator on this floor.
  I say to my colleagues, you have created a broad precedent here that 
I believe will come back to haunt you. I will not be here on the floor 
to see it play out but I can see it coming. The next time, it won't be 
Kentucky that will be hit. It very well may be the State of one of the 
Members who sat on the conference.
  How much time remains?
  The PRESIDING OFFICER (Mr. Brownback). The Senator has 40 minutes 
remaining.
  Mr. FORD. I reserve the remainder of my time and I yield the floor.
  Mr. THURMOND. Mr. President, I suggest the absence of a quorum and I 
ask that the time be equally charged.
  Mr. FORD. I object, Mr. President.
  The PRESIDING OFFICER. The objection is heard.
  Mr. FORD. Since I objected, I will use some of my time.
  I was hoping that the proposer of this amendment would be here on the 
floor so we could discuss it a little bit more. I have been here, now, 
for about 30 minutes--I guess, a little better--trying to discuss my 
side, and I don't want to lose my time on the basis that the opposition 
or the proponent is not here. I am more than willing to let the time 
come off of the time of the managers of the bill but I prefer the time 
not come off of mine. If the chairman of the committee and the manager 
of the bill would like to do that, I would have no objection. If he 
prefers not to do that, I hope he will encourage the Senators from 
Tennessee to come to the floor.
  The only problem I have here before I suggest a quorum is, I would 
not want to be preempted from taking the quorum off--which I could--and 
then we would have to go through the process. Would the Senator give me 
the assurance he would not object if I want to take the quorum off?
  Mr. THURMOND. No objection.
  Mr. FORD. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. FORD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FORD. Mr. President, I ask unanimous consent that the time during 
the quorum be charged equally to the four entities that have time on 
this bill.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FORD. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. THOMPSON. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. THOMPSON. Mr. President, I rise to express my strong support for 
the conference report we are considering today. This report includes a 
provision that will provide relief to approximately 2,000 citizens of 
my State of Tennessee who are being unfairly taxed by the Commonwealth 
of Kentucky. These people are civilian employees at Fort Campbell who 
live in Tennessee and work on the Kentucky side of Fort Campbell.
  They are being required to pay income tax to Kentucky. But they 
receive no services from Kentucky.
  I understand that it has been stated on the floor this morning that 
Tennessee is taking unfair advantage of Kentucky, that perhaps we will 
bankrupt the State or do grievous harm to them--basically a conspiracy 
among Democrats and Republicans, apparently, Tennesseans and 
Kentuckians, to perpetrate somewhat of an outrage against the good 
folks of Kentucky.
  I am sorry that we can't debate it based strictly on the merits of 
the action being taken, because it is a very, very meritorious 
objective consideration of what we are doing here today. On any 
objective consideration in terms of sound policy, or in terms of 
fairness, this provision stands and survives.
  We are not taking unfair advantage of the Commonwealth of Kentucky, 
our good neighbors to the north. What we are doing, as attested to by a 
vote of 15-to-0 out of the Governmental Affairs Committee, is righting 
a wrong and correcting an inequity.
  The Commonwealth of Kentucky has gotten used to being able to tax 
Tennesseans--levy income tax on them--without providing any services to 
them. Weaning from a situation like that I guess perhaps can be 
somewhat painful, but I don't think it is going to do grievous harm to 
the Commonwealth of Kentucky, which I understand had a $306 million 
surplus last year, and is perhaps beside the point.
  But when we are talking about fairness and equity, and some of the 
other things we are discussing today, and the fact that we are 
discussing basic principles and so forth, and who looks out for the 
little guy, we are basically dealing with civilian employees working at 
Fort Campbell with average incomes of about $30,000 a year. So these 
Tennesseans are paying about $1,800 a year to Kentucky for nothing in 
return. So let's just put that in a little bit of perspective.
  Of course, it is not just the Tennessee-Kentucky situation, it is two 
other situations where the Federal facility straddles the State border. 
This provides relief for the State of Washington also. It also provides 
relief for the State of South Dakota. I don't see the Members of the 
State of Oregon, which is affected by it, or the State of Nebraska, 
which is affected by it, to seem to have any problems either with

[[Page S11222]]

the constitutionality or the fairness of their situations. The 
situations are basically the same.
  But we have an issue here today with regard to Tennessee and 
Kentucky. So be it.
  As I said, these are civilian Federal employees. They work in Fort 
Campbell, KY. As it is well known, 80 percent of Fort Campbell is in 
the State of Tennessee. The mailbox is Kentucky. It is referred to as 
Fort Campbell, KY. There are several Federal civilian employees who 
live in Tennessee and who work on the Kentucky side. Some of them have 
worked on the Tennessee side for a long time and are assigned on the 
Kentucky side. They have nothing to do with that. It is not within 
their power, if they want to remain employed. And thereby Tennessee 
does not have an income tax. Kentucky does. They pay the maximum sales 
tax and other taxes in Tennessee, plus the income tax of Kentucky. They 
enter the Federal facilities on the Kentucky side by a Federal route. 
They do not go on the property of the Commonwealth of Kentucky to enter 
the place where they are working.
  As I said, there are no services provided. I understand there was 
some reference made to some resident facilities being provided with 
water or some services. Of course, these people do not avail themselves 
of that. I can't imagine anything other than a most dire emergency 
where fire, water, sewer, and police protection, and all of that is 
provided by the Federal Government. If the problem gets so big, I 
imagine folks in Tennessee and Kentucky would come in and try to help 
out. But basically, in terms of basic services--fire, police, sewer, 
and water--none of those services is provided by the Commonwealth of 
Kentucky for the benefit of these employees. Basically what they are 
doing is paying income taxes for nothing received.
  As I said, these people are not in the military. There is already an 
exemption for the military employees. They can only be taxed in their 
State of residence.
  This is a situation where literally some people have been transferred 
and moved across the street, or even down the hall in their own 
building, and become subject, just because of that move, to Federal 
income tax or to income tax from the Commonwealth of Kentucky. When 
people in that situation--who live in Tennessee, work in Kentucky, only 
go on Federal property to get to their job, come right back, no 
services--if those individuals go on unemployment, they can't go to the 
Commonwealth of Kentucky and get unemployment benefits.
  We had a witness before the Governmental Affairs Committee, when this 
was taken up, who makes $15,000 a year--$15,000 a year, and three 
kids--is a Federal civilian employee, lives in Tennessee, and works on 
the Kentucky side. When she went on hard times and had to apply for 
food stamps, she applied to the State of Kentucky and was turned down.
  There was another witness who appeared before our committee who had 
been in the Air Force for 20 years, grew up in Kentucky, and paid 
Kentucky taxes far 20 years; then he moved to Tennessee; then he was 
assigned at Fort Campbell on the Kentucky side while he was living in 
Tennessee--the typical kind of a situation we are addressing. His 
daughter applied to the University of Kentucky. He sought instate 
tuition rates. He was denied that. He was treated as out-of-State for 
purposes of tuition when his daughter wanted to go to the University of 
Kentucky.
  In other words, he is a Tennessean under some circumstances, when it 
benefits the Commonwealth, and a Kentuckian in other circumstances, 
when it benefits the Commonwealth.
  As I said, it is not just Tennessee that is involved here. Employees 
at the Gavin's Point Hydroelectric Dam are in a similar situation. This 
dam is a Federal facility maintained by the Army Corps of Engineers and 
it straddles the Missouri River. The Missouri River is the border 
between South Dakota and Nebraska. The 35 South Dakotans who are 
employed at the dam are subject to Nebraska income tax on half their 
wages earned on the dam. Nebraska claims that because half of the 
Gavin's Point Dam is in the State of Nebraska, half the wages earned by 
South Dakotans on the dam are subject to Nebraska income tax. But these 
South Dakotans only travel into Nebraska while they are working on the 
Federal dam and they receive no benefits from Nebraska for the taxes 
that they are required to pay. They are ineligible for Nebraska 
unemployment benefits and accident insurance benefits.
  Likewise, Washingtonians employed at the Columbia River hydroelectric 
dams were subject to tax by the State of Oregon until just recently.
  These dams are Federal facilities maintained by the Army Corps of 
Engineers. They straddle the Columbia River. The Columbia River is the 
border between Washington and Oregon. One-hundred and forty 
Washingtonians working on these dams only cross into Oregon when their 
work takes them across the midpoint of the dams. Oregon had required 
these employees to keep detailed records regarding the exact amount of 
the time they spent on the Oregon side of the dam in order to obtain a 
tax refund from Oregon for time worked on the Washington side of the 
dam. Oregon also required Washington residents to pay income tax on a 
prorated amount of their vacation pay based upon the percentage of time 
during the year worked on the Oregon side of the dam. Because employees 
at the dam cross back and forth multiple times a day, Oregonians' 
recordkeeping requirements forced the Federal employees to waste a good 
portion of their workday documenting their movements across the dam.
  The Washington residents working on the Columbia River Dam receive no 
benefits from the State of Oregon. They are not eligible for instate 
tuition rates at Oregon schools. They are not eligible for Oregon 
unemployment compensation benefits. In fact, when a Washingtonian who 
was laid off from Washington at one of the dams applied for Oregon 
unemployment compensation, he was denied. But when he later received 
unemployment benefits from Washington, Oregon tried to tax those 
benefits.
  I recognize that the Oregon State Legislature enacted a bill last 
year to exempt Washingtonians employed at the Columbia River Dam from 
Oregon income tax. But it appears that the State was only reacting to 
the other body's swift movement of H.R. 1953. Oregon is continuing to 
require Washington residents to file W-2 forms in Oregon. Therefore, 
Washingtonians fear that Oregon may repeal the recently enacted 
exemption in the absence of Federal legislation.
  Now, there is no question that with the passage of the Buck Act in 
1940, States have the authority to tax Federal employees, but over a 
period of time, after due deliberation by Congress, there have been 
exceptions that have been made to this. There has been an exception for 
the military. There has been an exception for Members of Congress. 
There has been an exception for Amtrak employees, for example, 
employees who, of course, travel over several States. There was an 
exemption with regard to the ability to tax pension income from 
nonresidents. So these have been exemptions, and we can argue and 
debate the wisdom of each of these exemptions, but it has been long 
recognized.
  There is no question about the constitutionality, incidentally. The 
witnesses even before our committee who did not think that what we were 
doing was the best way to go, I don't think raised any questions 
concerning the constitutionality of what we were doing.
  Congress clearly has the right constitutionally to move in this 
regard. We can debate the merits of each of these exemptions, but there 
has been no question over the years after due deliberation there have 
been exemptions carved out on the basis of what is right and on the 
basis of fairness. This idea that we are opening up Pandora's box and 
it is going to affect anybody who works near a Federal facility or 
anything of that nature is certainly a misplaced concern. But that is 
not something that has been affected here--not employees who are near a 
border. We are talking about a specific situation where you have a 
Federal facility straddling two States. One State does not have a State 
income tax and the other State does. That is a very, very specific and 
narrow situation with which we are dealing.
  It does not affect national parks, for example, where local 
governments

[[Page S11223]]

have much more to do with providing emergency services and things of 
that nature than the Commonwealth of Kentucky or the other two States 
affected here, the State of Oregon and the State of Nebraska, provide 
in these situations.
  I agree that Congress should tread carefully when it acts to limit 
the taxing authorities of States, but these three situations addressed 
by the conference report are exceptional, and I believe they meet the 
elevated threshold which has been set by Congress for preempting a 
State's taxing authority.
  At this time I would like to thank my distinguished colleagues who 
have served as conferees on the Strom Thurmond National Defense 
Authorization Act for including this important provision in the final 
bill. I would also like to thank my friends from Tennessee, Congressman 
Bryant and Senator Frist, for their hard work on behalf of these 2,000 
Tennesseans. I am pleased they are finally getting the tax relief they 
deserve. I urge all of my colleagues to support this conference report.
  I thank the Chair. I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. FORD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. FORD. I am delighted that the distinguished Senator from 
Tennessee would come to the floor to explain his reasons for using the 
Armed Services legislation in an authorization bill for a tax 
provision.
  One of the things my distinguished friend said is that Kentucky 
provides no facilities. Well, if a person who is employed at Fort 
Campbell files for unemployment benefits in Tennessee, guess who pays 
for it. Guess who pays for it. Kentucky reimburses Tennessee. Isn't 
that a service?
  I heard talk about other States. Let's talk about our States--the 
roads that enter at the nearest gate. Sure, we have electrical service 
that is provided. That comes out of Kentucky into Fort Campbell. We 
have cooperative fire suppression. If they say it is serious, both 
Tennessee and Kentucky would be there.
  Unemployment benefits--I am surprised the Senator would say that we 
don't pay anything. We reimburse Tennessee for the unemployment. 
Kentucky pays. He raised the fact that the Governmental Affairs 
Committee held a hearing on this but the Finance Committee did not. 
When did the Governmental Affairs Committee take over for the Finance 
Committee?
  The Senator has talked about Oregon quite a bit. I have a copy of a 
letter to the Senator, written from the director of the Department of 
Revenue, saying that they settled their own problem, that Oregon passed 
their bill and the States worked it out. There is no need for them to 
be included in this legislation. Here is the letter, dated October 21, 
1997. The Senator had it almost a year, but yet they put Oregon and 
Washington in this legislation and they don't need it. The States have 
worked it out themselves.
  Mr. President, I ask unanimous consent that a letter to Senator 
Thompson from the director of the Oregon Department of Revenue be 
printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                 Oregon Department of Revenue,

                                      Salem, OR, October 21, 1997.
     Hon. Fred Thompson,
     U.S. Senate, Chair, Committee on Governmental Affairs, Senate 
         Dirksen, Washington, DC.
       Dear Mr. Chairman: I am writing to alert you to a piece of 
     proposed federal legislation that is scheduled for a hearing 
     this Friday. The proposal, contained in H.R. 1953, would 
     place a federal prohibition upon the state of Oregon that 
     would not allow Oregon to impose an income tax on Washington 
     residents whom are federal employees working on the dams that 
     span the Columbia River.
       We were alerted to this problem earlier this year and were 
     successful in obtaining legislation at the state level that 
     exempts these Washington residents from Oregon income tax 
     effective January 1, 1997. A copy of the bill, which has been 
     signed into law by our Governor, is enclosed (See Sections 6 
     and 7 of Enrolled Senate Bill 998). We have been in contact 
     with the Army Corps of Engineers and have jointly developed 
     procedures that will ensure that the affected workers will 
     not be taxed on this income and will receive a full refund of 
     any amounts withheld prior to the passage of the bill.
       I am concerned that the federal government is proceeding 
     with legislation to address a problem that Oregon has already 
     resolved. We take very seriously our responsibility to 
     establish and maintain a tax system that is fair to all 
     citizens regardless of their state of residency. As such, we 
     are generally opposed to external mandates believing that 
     they impinge on Oregon's sovereign right to define its own 
     tax system. Accordingly, any efforts on your part to remove 
     Oregon from this federal mandate would be greatly 
     appreciated.
       Thank you for the opportunity to express my concerns about 
     this proposed legislation. Please feel free to contact me if 
     you want to discuss the issue further.
           Sincerely,
                                              Elizabeth Harchenko,
                                                         Director.

  Mr. FORD. The Senator says that this only applies to two States 
really, or very few. But the precedent here is the dangerous thing. We 
start under the Buck Act, and I am sure the Senator, being a legal 
expert, is fully familiar with the Buck Act and what it says about the 
State's ability to tax its own. Now, if he is not familiar with that, I 
can help him a little bit in trying to explain the Buck Act.
  But the two States were in the process of negotiating when they were 
informed, or at least the Tennessee side was informed, that it would be 
taken care of here. And it was being taken care of, so the negotiations 
were called off.
  I remember when Tennessee called a special session to prevent 
Kentucky contractors from doing business in Tennessee. This is a long-
term thing. It is just not the first one. I go back into the early 
1960s when this occurred.
  So, Mr. President, I understand what the Senator is trying to do, but 
I wonder how he voted on the unfunded mandates bill. You are 
eliminating $4 million a year--$4 million a year--from Kentucky's 
income. Are Kentuckians excused from the high Tennessee sales tax? Why 
not? Why wasn't that put in this bill? If you are going to be exempt 
from our income tax, why don't you exempt Kentuckians, who are 
identical employees with an identical employer? What about the 
restaurants and the canteens and the cleaners and such that are going 
to be exempt under this, the private sector? This is a broad, broad 
piece of legislation. Broad, broad.
  Let me read the Buck Act. Of course, we have the authority, I guess, 
to do that, but is it right? There are 240 known installations similar 
to this situation. And Mississippi is one of the most vulnerable States 
in the country as it relates to this type of legislation.
  The Buck Act says:

       No person shall be relieved from his liability for any 
     income tax levied by any State, or by any duly constitutional 
     taxing authority therein, having jurisdiction to levy such a 
     tax by reason of his residing within a Federal area or 
     receiving income from transactions occurring or services 
     performed in such area. And such State or taxing authority 
     shall have full jurisdiction and power to levy and collect 
     such tax in any Federal area within such State to the same 
     extent and with the same effect as though such area was not a 
     Federal area.
  That is the Buck Act.
  My colleague lays out exempting military employees. When I served in 
World War II, we got exempted then. You only paid taxes in the State 
where you resided. That is nothing new. That is 55 years old, I guess--
something near that. It has been here for 55 years.
  He talked about Amtrak employees. They are on a train, they are going 
across the country. Would they pay tax in every State? Of course not. 
That is common sense, to let them pay tax in the State where they 
reside.
  We have a lot of employees on the Interstate Highway System. They 
live in one State and they work in several States, as they construct 
interstate highways through various States. They are exempted. That is 
common sense.
  But, to take an exemption and cost a State $4 million--what kind of 
surplus does Tennessee have? He refers to the surplus of Kentucky. What 
kind of surplus does Tennessee have? That has nothing to do with the 
principle and the character of this provision under the armed services 
defense authorization bill.
  The Senator can argue all he wants to, but when he talks about in-
State and out-of-State college, that individual renounced his Kentucky 
citizenship and moved to Tennessee. You enjoyed him moving over there. 
You probably welcomed him with open arms. But then you come in here and 
say he cannot get exemption in another State? Why didn't he go to 
Tennessee, if he likes it so much? We have a few universities there 
that are pretty good. They

[[Page S11224]]

get State exemption, residential exemption. He just happened to want to 
go to a better school. So, you fuss about that. They moved to 
Tennessee. Anybody else from any other State would not be exempted. 
Tennessee would not exempt a Kentuckian residing in the State of 
Kentucky to go to a Tennessee school. That seems to me a pretty thin 
reason for having this section of the armed services bill.
  Mr. President, I go back to the point--I have heard many, many 
Senators in this body talk about States rights. There is a lot of 
rhetoric here. There is a difference between talk and action--talk and 
action. The talk is States rights. The action is taking it away.
  This bill is going to pass. There is no question about that. I have 
no illusions. I have counted votes around here longer than the Senator 
from Tennessee, and I understand what the vote will be. But you have 
something in the legislation that is not right, that is not fair, that 
the States were in the process of trying to work out and to negotiate. 
Then the word comes from Big Brother: ``Don't you worry about it, we'll 
take care of it. Big Brother is going to preempt the States. Big 
Brother is going to take care of a few residents in this legislation.'' 
There are other States that have already settled. The Senator from 
Tennessee has the letter setting it out and objecting to what he is 
trying to do here because they worked it out as a State. You preempt 
the States.
  What would happen if we were preempting Tennessee? Oh, it would be a 
bear in here. There would be growling and fighting and fuming and 
fussing over preempting Kentuckians in Tennessee. I hope my colleague 
from Kentucky, Senator McConnell, will offer an amendment or something 
next year so Kentuckians who are in the same position will not have to 
pay the outrageous Tennessee sales tax. Just have a drivers license, 
show it, so we can be exempt.
  Mr. President, I reserve the remainder of my time and yield the 
floor.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. THOMPSON. Mr. President, I forgot to inquire as to the time 
situation. I understand we had 30 minutes. May I ask if time was kept 
on me before, how much time I have remaining on that?
  The PRESIDING OFFICER. The Senator from Tennessee controls 14 minutes 
30 seconds.
  Mr. THOMPSON. Mr. President, just in response on some of the points 
that my friend from Kentucky made with regard to whether or not the 
other States need this and whether or not it is worked out permanently 
to their satisfaction, I think probably the Members of this body who 
represent those States would be the best witnesses. If the Oregon 
situation is worked out, then perhaps Senator Gorton and Senator Murray 
will oppose me on this. But I do not think they do. I think the two 
Senators from the State of Washington do not feel like it has been 
worked out.
  Just as the situation is with South Dakota. I think the distinguished 
minority leader of this body supports this provision in the 
legislation. So, regarding the Tennessee/Kentucky situation, the 
negotiations that my friend refers to, I think the result was a bit 
different than what has been alluded to. My understanding was there was 
one meeting in August and the suggestion was that Tennessee absorb the 
difference; that we give these Tennessee employees a credit and the 
State of Tennessee absorb the difference. That was not considered to be 
fair by the people in Tennessee, so those negotiations broke down.
  With regard to the college tuition situation, at issue here is not 
that this gentleman moved from Kentucky back to Tennessee; that is for 
sure. The issue is he was working on the Kentucky side and paying 
Kentucky income taxes and still not getting that benefit from Kentucky. 
That is the point. I believe, if my colleague will check--I suppose we 
cannot resolve it here this morning--but I think, if my colleague will 
check, he will see that when the situation is reversed, my 
understanding is when Kentuckians work on the Tennessee side, they get 
Tennessee instate tuition.
  I do not want to get into an extended battle between the States here. 
We enjoy a common border and friendly relationships and all that. But 
just on the basis of fairness, I believe we are doing a little bit 
better in that regard, in terms of comity, in terms of out-of-State 
tuition for workers who work at Fort Campbell. It is just simply based 
upon the proposition that a person should not have to go across the 
border, down the hall or down the street or across the street and so 
forth, when he is assigned new duties, not use any of the Kentucky 
facilities, and have to pay Kentucky income tax and not get any of the 
benefits, whether it be college instate tuition or not.
  I would also point out to my colleague with regard to Kentucky 
employees working at Fort Campbell who work on the Tennessee side, as 
far as ``on the post'' is concerned, they do not pay Tennessee sales 
tax. If they go off the post they will pay Tennessee sales tax, but 
then they are using Tennessee facilities. The point is just simply not 
well founded any way that you look at it.
  With regard to the States rights issue, that is something that, of 
course, is of concern to all of us. A lot of people strongly believe in 
federalism and that the proper role of the States should be preserved 
in the relationship between the State and the Federal Government. I 
would simply point out that with regard to most of these issues, it has 
to do with the relationship between the State governments and the 
Federal Government, and the Federal Government's relationship with the 
States and their policies vis a vis the Federal Government.
  This has to do with the way a State government is treating the 
citizens of another State. Ever since we have had the interstate 
commerce clause in the Constitution, that has been something that has 
been appropriately addressed by the Congress of the United States.
  So I do not want to beat a dead horse here either. I feel, as does my 
colleague from Kentucky, that we are not going to change very many 
votes on this debate. But, in closing, I hope our friends in Kentucky 
do not feel that this is some kind of a power grab, something that is 
unfair to them, something that we have them over the barrel on.
  This is something that is supported by Democrats and Republicans in 
this body. It is very narrowly tailored. My friend refers to 240 other 
situations. They are not similar. The only comparable or analogous 
situations would be those situations where Federal facilities straddle 
a State border, and there are only three of them, and those are the 
three that we deal with here.
  We are trying to do what we often do in this body, and that is finely 
tailor a remedy for something that doesn't affect many people. It 
doesn't affect many people at all. But with regard to those who are 
affected, it is important for those folks who on average are making 
$30,000 a year. It is something we have been trying to work out for 10 
years. We have not been able to. I would rather not have to come to the 
floor of the U.S. Senate and resolve this matter this way, either. 
After trying all other avenues, we were left with no choice.
  Mr. President, I thank my colleagues and extend my good wishes and 
respect to the senior Senator from the Commonwealth of Kentucky who has 
fought so long and hard for his State. I never look forward to having 
to come to the floor and take him on in any circumstance, especially 
when he is defending or representing and taking the side of the 
Commonwealth of Kentucky, because I know his heart and soul is in it. I 
respectfully disagree with him on this. I think it is the right thing 
to do. I think it is fair to these employees, and I urge its adoption. 
I yield the floor.
  Mr. FORD addressed the Chair.
  The PRESIDING OFFICER (Mr. Gorton). The Senator from the Commonwealth 
of Kentucky.
  Mr. FORD. Mr. President, I appreciate the Senator's flattery, but in 
this case, it won't get him anywhere.
  Let me correct one thing, if I can. The Senator said we were exempt 
from sales tax. That is not true. We checked this morning. You pay tax 
at restaurants, dry cleaners--all that--you pay the sales tax on the 
base. On the base, you pay it. We called down there this morning. Now, 
if you want to call again, that is fine. I know where it is. I have 
been there. They have trooped out the troops for me. They jumped with 
parachutes and all that. It is obvious my name won't be on any building

[[Page S11225]]

down there, however, but that is all right. I don't really worry about 
that.
  What I worry about is what is being done here and the precedent that 
is being set. They talk about they are all similar. The two other 
locations are dams. They are dams. They go across a river. They connect 
the States. That is a very small area. This is 105,000 acres that we 
are talking about here. This is a different facility, different 
situation, different problem altogether. One is a hydro; the other one 
is a dam. I say to my friend, in those two cases he is defending here, 
it is limited to Federal employees. In the Tennessee-Kentucky problem, 
it is not. You did not limit it to Federal employees. You went to 
private sector contractors and their employees. That is the reason the 
$4 million is there and there is no unfunded mandate help for my State.
  It is quite different. This is as broad as broad can be, with a 
capital B. It is not only Federal employees. The others are very 
small--35 employees. They are hydroelectric and dams, both of them. 
This is 105,000 acres.
  We pay sales tax, as Kentucky residents, on the base. You exempt 
private contractors and their employees, and it costs us plenty. People 
will say, ``Ford, this is fair.'' Fair to whom? I can bring the 
document--I don't have it here with me--but tuition was part of the 
negotiations. I wouldn't negotiate either if it was going to be settled 
here and you know what is going to happen. But the rights of the 
minority should be protected. I can't change the vote. Mine is the only 
one that I can handle, that I can guarantee, but we ought to be 
protected.
  I have seen a lot of debate here in a little over 24 years. The 
distinguished Senator from South Carolina has seen a lot more. But most 
of the time, almost without exception, both sides have wanted to 
protect the minority, and here there is no protection.
  Mr. President, as we are being stampeded here, I think it is highly 
unfair, it is uncalled for, and this is very one-sided. We pay the 
unemployment, reimburse Tennessee, we help with electricity, we help 
with roads--we do all those things. You act like we don't do anything. 
But if you have unemployment benefits and Kentucky pays a Tennessee 
resident and reimburses the State--Kentucky doesn't do anything.
  It is very difficult for me to understand when they start talking 
about precedents set here. That is for active duty military. They pay 
the tax, if any, in the State in which they are a resident. The Senator 
brought up Amtrak employees. You can get on a train in New York and 
wind up in California. Do you pay in each one of the States you go 
through? Of course not. That is just common sense.
  You can have a construction worker who is building interstate 
highways and can go through several States. You wouldn't expect him to 
pay tax in every State. So common sense says pay the tax in the State 
in which he is a resident.
  Here it is different. If you are a resident of Tennessee and work in 
Kentucky, you don't pay any tax. If you are a private sector employee 
and you are at a Federal facility, you don't pay any tax. The Tennessee 
contractor who would offer a bid at Fort Campbell has a sweetheart deal 
because a Kentucky contractor, or any other contractor, will have to 
pay the taxes, but Tennessee will not.
  Big Brother says we are going to settle State taxes, not Federal 
taxes, State taxes, and put it on the defense authorization bill. It 
has never been to the Finance Committee, which has jurisdiction. And 
the testimony that was received in the House was something that I think 
we should go back to.

  The Senate Governmental Affairs Committee held a hearing on October 
24th of last year. The House held a hearing on April 17th of last year. 
To my knowledge, the Senate Armed Services Committee held no hearings 
on this issue in either session of this Congress. The reason is 
obvious: because the Armed Services Committee had absolutely no 
jurisdiction over this issue--none.
  The conferees on the defense authorization bill, in my judgment, have 
no business attaching language which preempts State tax as part of the 
defense authorization bill.
  Let's go back to the House hearing of last April. What kind of 
testimony did that committee hear? It heard that Kentucky's tax 
structure met all appropriate constitutional standards for fairness and 
nondiscrimination. That is the testimony. That committee was told that 
the ability of States to define their own tax structures within the 
bounds of the Constitution was ``one of the core elements of 
sovereignty preserved to the States under the Constitution.'' It may be 
constitutional, but it is ``one of the core elements of sovereignty 
preserved to the States under the Constitution.''
  The committee was told that if Congress jumps in and preempts State 
laws in this case, ``it will by definition create a preferred class of 
taxpayer * * *. Currently all workers--public and private--in Kentucky 
* * * are subject to the same rules. This should not be disrupted by 
the Congress without a strong policy [mandate].''
  The House committee was also told that the proposal to grant special 
status to Tennessee residents violated the spirit of the Unfunded 
Mandates Act of 1995. The committee was told, ``if Congress feels that 
the impact of federal workers employed on installations crossing the 
borders of two states * * * should be offset, it should provide the 
funding necessary to offset the costs imposed on the states affected 
and not just preempt legitimate taxing authority.'' That is the 
testimony. That is what the committee was told.
  Mr. President, the Senate Governmental Affairs Committee I believe 
heard similar testimony during the hearing last August. The Senate 
Armed Services Committee, however, heard no testimony--the Senate Armed 
Services Committee, however, heard no such testimony--because it held 
no such hearing and had no such jurisdiction over this piece of 
legislation.
  Nonetheless, without any floor debate, a provision was snuck into the 
House version of the defense authorization. So I ask where my Kentucky 
colleagues were.
  Mr. THOMPSON. Will the Senator yield for a moment?
  Mr. FORD. Glad to.
  Mr. THOMPSON. Mr. President, I yield the remainder of my time to the 
floor manager, Senator Thurmond.
  The PRESIDING OFFICER. The Senator has that right.
  Mr. THOMPSON. I thank the Senator.
  Mr. FORD. I ask the Chair, how much time do I have left?
  The PRESIDING OFFICER. Five minutes 38 seconds.
  Mr. FORD. Well, I understand why the Senator from Tennessee does not 
want to debate this; because he is wrong. I like him. He is a nice 
fellow, friendly. Oh, you could not ask anybody to be any friendlier 
than the Senator from Tennessee. And I have always enjoyed his acting. 
In fact, I have seen some reruns. I have enjoyed watching those a 
second and third time. I look for him. But that does not mean he is 
wrong or right all the time. But in this case he is wrong.

  And I wish this would not happen because, I say to my colleagues, 
when we start telling the States how to tax, when we take that 
authority away from the States, then we have gone a long way in 
disrupting what the Founding Fathers said this country should be made 
up of.
  So I will not leave this Senate without having made this statement. I 
understand where the votes are. I understand what is going to happen to 
this bill. But at some point, I believe, sincerely, that it will be in 
court. And the constitutionality of this and the preemption of States' 
ability--not a Federal tax but a State tax--they give a preferred class 
of taxpayer here. You have two people sitting across the table, having 
lunch, and both are working for the same company; both do the same job; 
both make the same money; but the fellow from Tennessee pays no tax; 
the fellow from Kentucky pays it on a military installation.
  There are 240 of these, at least, out there. And as I said, 
Mississippi is going to be one of the most vulnerable States.
  Mr. President, I yield the remainder of my time to Senator Levin for 
his use, and I yield the floor.
  The PRESIDING OFFICER. Who yields the time?
  Mr. FORD. I suggest the absence of a quorum, and it be charged 
equally to both sides.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will call the roll.

[[Page S11226]]

  The assistant legislative clerk proceeded to call the roll.
  Mr. THURMOND. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. THURMOND. I yield 5 minutes to the Senator from Arkansas.
  Mr. HUTCHINSON. I thank the Chair.
  Mr. President, I rise in strong support of the fiscal year 1999 Strom 
Thurmond defense authorization conference report. I congratulate the 
managers of this bill for their exemplary work. In particular, I would 
like to express my most sincere gratitude and appreciation to Chairman 
Thurmond for his service to the Senate and for his service to our 
country.
  Mr. President, I know that this was one of the most contentious 
conferences in the past decade, particularly because of the U.S. 
satellite licensing provisions. However, I am pleased that this 
conference report contains a provision shifting the jurisdiction for 
U.S. satellite licensing from the Commerce Department back to the State 
Department, where I believe the national security of this country can 
best be protected. This action is a step away from the controversial 
policy that President Clinton established in 1996 and it is a step 
toward enhanced national security. I hope the President, in signing 
this bill, will walk forward with us.
  In addition, I am very pleased by the addition of several China-
related provisions that I spoke in behalf of--sponsored some of those--
that I believe will limit the role of the oppressive Chinese regime and 
United States complicity in their actions.
  In particular, this conference report includes a provision requiring 
the Departments of Defense and Justice, FBI, and the CIA to compile a 
list of known PLA commercial fronts operating in the United States. 
This provision also authorizes the President to monitor, to restrict, 
and to seize, if necessary, the assets of, and ban the operation of, 
such PLA companies within these United States.
  Furthermore, the Senate adopted and included in the conference report 
a provision authorizing funding for additional customs agents to 
enforce the existing ban on slave labor products, an ongoing problem. 
These products are produced in slave-labor conditions in China and are 
sold to American consumers, unbeknownst to the consumer. These sections 
call upon the President to strengthen international agreements to 
improve monitoring of slave-labor imports.
  There is yet a further provision that I am heartened the conference 
has included regarding Radio Free Asia. This provision would fund 24-
hour-a-day Radio Free Asia broadcasts throughout China in each of the 
major dialects. This provision will allow the Voice of Freedom to 
penetrate through the oppressive veil now muting the Chinese people.
  I want to make one final observation. Last week, in declaring the 
success of his country in combating the floods raging throughout China, 
President Jiang Zemin compared that success to the success of stemming 
the tide of democracy and praising their crackdown at Tiananmen Square. 
I think I need say little more, Mr. President, as to the ongoing 
problems of an oppressive regime in China. I applaud the chairman and 
the conference for including these very important provisions in the 
conference report.
  I yield the floor.
  Mr. THURMOND. Mr. President, I yield 5 minutes to the distinguished 
Senator from Indiana, Mr. Coats.
  Again, I want to say, since the Senator is leaving this year, he has 
been one of the ablest men on the Armed Services Committee. The Armed 
Services Committee and the Senate will greatly miss this individual. 
Again, I commend him and wish him well in all of his undertakings.
  Mr. COATS. Mr. President, I thank the chairman for his kind words. I 
want to return that compliment, because it has been a distinct 
privilege and pleasure for me to serve under the able leadership of our 
chairman, Senator Thurmond. Senator Thurmond is, perhaps, not one of 
but perhaps the most remarkable individual I have ever known, someone 
who has committed a lifetime and more of political service to his 
fellow man and to his Nation, and who has served as a Rock of Gibraltar 
in support of a strong national defense. Serving on the committee with 
his leadership has been a great privilege for me, as well as it has 
been with all my colleagues who serve on the Armed Services Committee.
  This committee of the Congress is the least partisan of all the 
congressional committees. We put the national defense and national 
security above partisanship. We work together in a team fashion. While 
we don't always agree across the aisle on every issue, we do find 
consensus. Our purpose is to protect and support our men and women in 
uniform, and protect the citizens of the United States by giving them 
the very best defense that we can purchase for their investment of tax 
dollars.
  This particular bill is to be commended in many ways. It addresses 
some of the quality of life and readiness and modernization issues that 
we have been struggling with. As chairman of the Airland Committee, I 
have had the privilege of overseeing a very considerable amount of 
spending that goes into modernizing our forces. We haven't been able to 
do everything that has been asked, but we certainly have taken 
important steps in trying to make sure that our defense forces are 
capable of meeting the threat and are unparalleled in terms of their 
superiority.
  As a member of the Personnel Subcommittee, as former chairman of that 
committee, I am pleased that we have continued to address some of the 
important issues of pay and housing that are necessary to maintaining 
the spirit and moral of the people in our force. But, we have a great 
deal more to do in this area.
  The Joint Chiefs of Staff testified just a couple of days ago about 
the state of readiness for today and tomorrow. Readiness is a function 
of quality of life, of training, and of adequate infrastructure. Two of 
these three areas--the infrastructure, the housing, the equipment, the 
facilities, the tools which we provide our service members with, and 
the quality of life--are strained and in many cases inadequate. The pay 
is too low and military benefits are in question. We are losing good 
people, too many good people. A great deal needs to be done in this 
area.
  A great deal also needs to be done on the whole infrastructure front, 
not only in providing necessary facilities, but in terminating that 
infrastructure which is no longer needed. Too often we have perpetuated 
that infrastructure that is no longer required, and done so at great 
expense.
  I have also been engaged in the whole question of defense 
transformation. How can we transform our national defense from a cold-
war effort that has been unparalleled in the history of national 
defense--not only this country, but in this world. How can we transform 
that into a national security apparatus our defense structure to 
addresses the threats of the future, which will be different from the 
threats of the past. That is a monumental undertaking. I have suggested 
a number of ways in which this could be done. I have joined with my 
colleagues on the committee, particularly Senator Lieberman, to define 
a process by which we can make those decisions, utilizing both inside 
and outside experts.
  We have attempted, through this process, to ask the necessary 
questions and to make the necessary decisions about how we move 
forward. In that regard, in the future some very difficult but 
necessary decisions and tough choices are going to have to be made 
about how we spend our limited defense resources.
  While we all acknowledge and hopefully will provide some additional 
funds to address the readiness concerns addressed by the Joint Chiefs, 
we are a long way from successfully allocating the resources we have 
available to us in the very best way that will give us the national 
security apparatus we need to address future threats. Tough decisions 
have to be made because we have the tendency to continue to fund 
systems that we already have in the force. Decisions are often made, 
both in the Pentagon and in the Congress, about maintaining what I call 
``legacy'' systems--systems that have had a long shelf life, that are 
very near and dear to our heart, produced in our district, or systems 
we have related to over the

[[Page S11227]]

years. There is a great tendency to perpetuate these legacy systems and 
not give sufficient resources and weight to the new systems that are 
necessary to address the new threats of the future.
  My challenge to the Congress, and my challenge to the Department of 
Defense, is to step up and make the unpopular choices, make the very 
difficult choices to divest legacy systems and structures which are no 
longer required, or whose value will depreciate quickly in the future, 
so that we can free up the resources that we must to address the 
question of providing the right national security apparatus that 
embraces the potential for a revolution in military affairs and 
addresses the threats of the future.
  Mr. President, I congratulate the chairman, Senator Thurmond, and the 
ranking member, Senator Levin, for their leadership of a truly 
bipartison effort which achieves an effective balance across the 
quality of life of our servicemembers and their families, the readiness 
of the force, and the modernization of our systems as we enter the 21st 
century.
  This accomplishment is of particular note because this defense bill 
adheres to the budget agreement of approximately $270 billion, a 1.1 
percent decline in real terms over last year's defense budget, and it 
is approximately 35 percent below the cold war heights.
  This defense authorization includes numerous provisions that will 
enhance military quality of life. It includes a 3.6 percent pay raise 
for military personnel. It also provides an increase of $660 million in 
military construction projects, over $250 million of which will fund 
barracks, dining facilities, and military housing. And this bill 
directs three health care demonstrations for our military retirees who 
are Medicare eligible.
  This bill also adds over $800 million to the key readiness accounts 
of our active and reserve forces. We are all aware of the stress that 
current operations such as those in Bosnia or the Persian Gulf have on 
military readiness. The funds we have added will support infrastructure 
maintenance, training, and the availability of parts and supplies to 
sustain readiness levels.
  Despite the gains we have made in areas of quality of life and 
readiness, we are still well short of the $60 billion procurement goal 
stated by Secretary of Defense Cohen and his predecessor Secretary 
Perry which was to have been achieved in fiscal year 1998.
  Here we are again proposing a procurement level for fiscal year 1999 
that is below $50 billion. Correspondingly, service modernization 
accounts remain on the margin--well short of the level required to 
recapitalize our joint capabilities for the 21st century.
  And now I would like to comment on several modernization issues from 
my perspective as chairman of the Airland Subcommittee.
  The Army is moving to consolidate the gains from the Force XXI 
process and to investigate smaller, faster, more lethal, and more 
deployable forces. But the Army's modernization strategy to pursue this 
transformation is lacking in areas of aviation, armored vehicles, and 
trucks, and we have provisions addressing these issues.
  And I must say that we have made progress in addressing reserve 
component modernization thanks to the fine work of Senator Glenn, the 
ranking member of the Airland Subcommittee, to structure a coherent 
process for the consideration of Guard procurement. First, the budget 
request included nearly $1.4 billion in procurement for the guard and 
reserves--about a 50 percent increase over last year. And this bill 
provides another several hundred million. Clearly, the Senate's 
bipartisan efforts are having a positive affect on total force 
integration.
  This bill also supports TACAIR modernization programs of the services 
and we have taken additional prudent steps to ensure these programs 
stay on track.
  Last year, I spoke at length about my concerns with F-22 cost 
overruns and demonstrated performance. And I must acknowledge that I 
have these concerns as a supporter of F-22 development. But based on 
the testimony of the Air Force and the assessment of the General 
Accounting Office, there are many who share a deep concern over whether 
we can maintain support for the F-22, whose costs are approaching $200 
million per aircraft, if the program does not adequately demonstrate 
performance and cost control.
  This bill takes a very important further step to put key oversight 
provisions in place that fence the contract award for advance 
procurement of lot II F-22 until:
  10 percent of testing is complete (the minimum specified by the 
Defense Science Board); or, the Secretary of Defense certifies that a 
lesser amount of flight testing is sufficient, and provides his 
rationale and analysis for that certification; however, the funds are 
fenced until the F-22 flies at least 4 percent of flight tests--the 
amount now planned prior to contract award--have been completed.
  This provision holds the Department to its own plan at a minimum and 
places the emphasis squarely on the demonstrated performance of the F-
22 program. No performance, no money.
  This bill also contains a provision on a new joint experimentation 
initiative that is fundamental to defense transformation.
  The Congress has been keenly aware of the need to transform our 
military capabilities to address the potentially very different 
operational challenges of the future. The National Defense Panel Report 
argues that these challenges--which include among other things, 
asymmetric challenges in power projection, information operations, and 
weapons of mass destruction--may place this Nation's security at far 
greater risk than we face today.
  This provision includes a sense of Congress on the designation of a 
combatant commander with the mission for developing, preparing, 
conducting, and assessing a process of joint warfighting 
experimentation. Secretary Cohen has signed a charter assigning this 
mission to USACOM in Norfolk. And the provision lays out a set of 
reporting requirements from this CINC to keep Congress informed of the 
status of transformation.
  The process of joint experimentation is designed to investigate the 
co-evolution of advances in technology, with changes in the 
organizational structure of our forces, and the development of new 
operational concepts. Accordingly, the purpose of joint experimentation 
is to find those technologies, organizations, and concepts which 
provide true leap-aheads in joint warfighting capabilities.
  And just as important, it is the purpose of joint experimentation to 
identify those technologies and concepts which are failures. Some will 
consider the cost of these failures as wasteful. But quite the 
contrary. The true failure would be continuing to invest in systems 
before we really know what will or will not work on the battlefields of 
the 21st century. And given the level of defense budgets, we cannot 
afford to invest in systems which fail to contribute markedly to our 
future warfighting capabilities.
  Previously in our history we have found ourselves unprepared for 
threats we faced at the outset of war. Our Nation rallied to eventually 
overcome these threats, but at a cost--not only in fiscal terms, but in 
lives.
  In the very near future, technology will enable a different range of 
threats we must be prepared for. The process of joint experimentation 
supported in this bill will be central to ensuring our Armed Forces are 
prepared to successfully meet the national security challenges of the 
21st century.
  This bill makes great strides in improving the quality of life, 
readiness, and modernization of the force; and in laying the framework 
for the transformation of defense capabilities for the 21st century.
  Yet there is much more work that needs to be done. The Joint Chiefs 
testified on Tuesday that defense budgets are not adequate to sustain 
current readiness and to keep our defense forces on firm footing for 
the future.
  But defense budgets will likely not increase to the levels requested 
and this will leave the Pentagon, the administration, and the Congress 
with some tough decisions which must be made. And we need to know what 
these decisions are and when they need to be made. I proposed that 
another quadrennial defense review and national defense panel be 
established in the year 2000 to conduct another comprehensive 
assessment of defense strategy, policy, and programs. I trust that the 
defense committees will work to include those provisions in next year's 
bill.

[[Page S11228]]

  I would like to thank and acknowledge the distinguished service of 
the chairman of the Senate Armed Services Committee, Senator Thurmond 
and the distinguished ranking member of the Airland Subcommittee, 
Senator Glenn for their tremendous stewardship of defense issues in 
this Defense authorization bill.
  We often ask ourselves: ``Where have the heroes gone?''. Well I know 
where two of them have been, and that is working side-by-side with many 
of us deliberating defense issues. I commend them for their service and 
wish them the best in all future endeavors. In closing, this bill has 
my full support, and I strongly encourage all Members to support it.
  Mr. THURMOND. Mr. President, again, I wish to thank the Senator for 
his good work on the Armed Services Committee.
  Mr. KENNEDY. Mr. President, I support the conference report on the 
Fiscal Year 1999 Defense authorization bill. The House and Senate 
conferees have produced a worthwhile defense bill that deserves to be 
approved.
  Before the conference, the House version contained several provisions 
that the administration had threatened to veto. We worked effectively 
in our deliberations with the House to resolve these differences and 
find satisfactory solutions.
  Gender integration in basic military training is the first of these 
important issues. In the Fiscal Year 1998 Defense Authorization Act, 
Congress established a bipartisan panel to review gender integration in 
basic military training. That commission has started its work and will 
report to us next year. The conference compromise on this issue will 
enable the commission to finish its work, while requiring each of the 
services to provide separate, safe and secure housing for male and 
female recruits with the sleeping areas separated by permanent barriers 
and limited access.
  The second of these issues is production of tritium for the nation's 
strategic arsenal. The Secretary of Energy has already initiated a 
comprehensive analysis to determine the best way to produce this 
material. That study will be concluded by December 31, 1998. The 
conference report includes a provision to withhold funds for the 
implementation of the Secretary of Energy's recommendation until full 
and complete congressional review next year.
  The conference report provides needed support for our military forces 
while maintaining a realistic balance between readiness to take care of 
immediate needs, and investment in new systems for the future. The 
report also includes a fully funded and well-deserved 3.6 percent pay 
raise for military personnel.
  We also tried to deal with the important and complex issue of 
military retiree health care. The report includes a provision for the 
Department of Defense to initiate a comprehensive test plan to evaluate 
the best method to provide health care to retired military personnel 
and their families. The Department of Defense will establish two 
demonstration plans, which will be evaluated before any future 
implementation. The first plan will allow selected retirees to enroll 
in the Federal Employees Health Benefit Plan. The second plan will 
implement a redesigned pharmacy benefit for Medicare-eligible DOD 
beneficiaries at two sites. This plan will also provide needed 
information for reducing out-of-pocket costs for military retirees.
  Protecting the safety of our service men and women was also high on 
our priorities in the conference. The daily operations of our military 
forces have obvious risks and dangers. All branches of the Armed Forces 
have made progress in improving safety, but more remains to be done. I 
commend the Department of Defense for its accelerated installation of 
needed additional safety systems on military aircraft that carry 
passengers. The conference report includes additional funding for 
aircraft safety modifications.
  Our troops are at risk from high tech attacks as well. The growing 
frequency and sophistication of such attacks on the Pentagon's computer 
networks demonstrate the need for improved protection of critical 
networks. The conference report recognizes the importance of this 
effort and supports the Air Force cyber-security program.
  In the past 8 years, the Navy-Marine Corps team has responded to over 
90 contingencies--almost one per month. As the ranking Democrat on the 
Seapower Subcommittee of the Armed Services Committee, I am pleased 
that the conference report provides the support necessary for our naval 
forces as they modernize to meet the challenges of tomorrow.
  The report includes the necessary advance procurement funding for 
fiscal year 1999 for the Navy's next aircraft carrier, CVN-77. The 
Navy's procurement schedule for this carrier, revised from its budget 
submission of last year, will be under the cost cap mandated in last 
year's Defense Authorization Act. Also, much of the new technology 
being developed for the next generation aircraft carrier, the CVX, will 
be included in CVN-77.
  The budget request for the 30 Navy F/A-18E/F Super Hornet fighters is 
included in the report. The Super Hornet combines the outstanding 
characteristics of earlier F/A-18 models with cutting edge technology 
in an affordable aircraft with significantly improved performance and 
endurance.
  In addition, the Marine Corps' MV-22 Osprey tilt-rotor aircraft 
procurement for next year was increased to eight. The Osprey is a 
vertical take-off and landing aircraft designed to replace the Marine 
Corps' aging fleet of CH-46 and CH-53 helicopters.
  The constructive compromises we reached during the conference on 
critical issues have produced a comprehensive bill which provides 
effectively for our national security, and which contains no provisions 
that would draw a veto.
  I also join in commending the distinguished leadership of the 
chairman of the Senate Armed Services Committee, Senator Thurmond. He 
has worked effectively with all of us to see that our national security 
and the needs of our service men and women are met in this legislation. 
It has been a privilege to work with Senator Thurmond as chairman, and 
I look forward to continuing our work together on this important 
issues. It is especially fitting that this bill is named in his honor.
  I urge my colleagues to support the Strong Thurmond National Defense 
Authorization Act for Fiscal Year 1999.
  Mr. GLENN. Mr. President, I rise today as we consider the fiscal year 
1999 Defense authorization conference to draw the Senate's attention to 
what appears to be a brewing controversy over the state of our 
military's readiness. Yesterday, the Committee on Armed Services held a 
hearing with Joint Chiefs to discuss some readiness issues that 
recently have been brought to the committee's attention. I believe 
there are very legitimate concerns regarding recruiting and retention 
trends, increased Personnel Tempo, as well as pay and benefits 
comparability, spare parts availability, and growing depot and real 
property maintenance issues to be examined.
  I agree that we must pay very close attention to these issues because 
we are asking our men and women in uniform to do more today than we 
ever have during peacetime. We are asking them to do more, not so much 
with ``less,'' but with fewer and fewer people and that is placing a 
strain on our military. I believe we must proceed very, very carefully 
before any further reductions are considered.
  I am concerned that our problem may be more basic than these issues I 
have just mentioned. I have come to this Senate floor many times over 
the years and have spoken repeatedly in the Armed Services Committee to 
voice my concerns over the drawdown in our end strength. In my view, I 
don't believe we should have gone below 1.6 million in our active duty 
end strength.
  I am concerned that with fewer than 1.6 million in end strength our 
military strategy becomes a bit of a myth, Mr. President. I don't think 
we can fight two contingencies today with an end strength of 1.4 
million. I'm not confident we could repeat Desert Storm and embark on a 
second contingency if something broke out in Korea.
  1.6 million is not a number I pulled from thin air. Rather, it is 
based on a time-proven formula that requires a force that basically is 
divided in three. One third of the force is forward deployed and 
fighting, one third of the force is training for deployment or in 
transit and one third of the force is maintaining the other two-
thirds--

[[Page S11229]]

manning the Pentagon, plowing the runways, etc.
  In the Persian Gulf, we had about 575,000 Americans deployed. That's 
one major regional contingency or one major theater war (MTW) as we are 
now calling them. To repeat Operation Desert Storm, we need an end 
strength of at least 1.6 million. Today, we appear to be falling below 
the manning levels necessary to conduct our peacetime operations let 
alone credibly maintain a combat force capable of carrying out two 
nearly simultaneous major operations.
  Mr. President, let me add at this point that I believe those 
commitments are important. We have alliance deployments in Japan, 
Korea, and Europe. We are conducting peacekeeping operations on the 
Kuwait border and in the Western Sahara. Our so-called ``Operations 
Other Than War'' also require American service members to be deployed 
to the Sinai, to Bosnia, to the Persian Gulf in Kuwait and Saudi Arabia 
and on the border between Peru and Ecuador. We've had deployments to 
Rwanda, Angola, Somalia, Haiti and Cambodia to name a few other 
operations that have all contributed to the services' high OPTEMPO and 
PERSTEMPO. I support these operations.
  We literally have saved millions of lives through our presence in 
troubled areas of the world and I believe that that is an appropriate 
use of our military forces. The cold war may be over but the killing 
has not stopped. The United States has no territorial ambitions but we 
do need to remain engaged. The constant demands on our personnel around 
the world, however, are not without consequence. We are asking the men 
and women in our military services to be deployed for longer periods 
and more often than we have in the past. They have served well through 
a difficult and turbulent period.
  I understand, and I hope my colleagues understand, the rationale for 
continued reductions in our end strength. End strength cuts are being 
made in order to generate cash to pay for modernization programs. I 
agree that our service members deserve the best and most modern 
equipment available but I do not agree that reductions should be made 
simply to generate cash. Even if modernization programs can reduce 
manpower requirements in the long term, in the near term, we still need 
people to carry out our important worldwide commitments. The time has 
come to step back and consider how we are going to achieve our goals. 
We may need more funding for modernization. In my view, we also need 
funding for more people.
  We also need to impose more discipline before simply raising the 
topline. We should have given the Department base closure authority so 
we could get unneeded bases off the books. And we should impose more 
discipline on ourselves. This year we added about $2 billion in items 
that the Services didn't request in the procurement and research and 
development accounts. We added over $600 million in military 
construction add-ons. It is only in the past few years that the 
Congress has agreed that when adding military construction projects, 
those projects should at least be projects that the Defense Department 
wants. Even meeting that criteria, I am not sure that annually adding 
hundreds of millions of dollars for military construction projects just 
to ``bring home the bacon'' is necessarily the best approach to 
establishing and funding national security priorities.
  I am supporting this conference report because on balance I believe 
it is a good conference report but I do believe that the Congress needs 
to focus more carefully on true spending priorities particularly as we 
are learning that there may be some readiness funding problems.


           HELPING OUR MILITARY AND SUPPORTING OUR DIPLOMACY

  Mr. BIDEN. Mr. President, I support the Strom Thurmond National 
Defense Authorization Act for Fiscal Year 1999. Naming this bill after 
my good friend Strom Thurmond is a fitting tribute to one of the 
Senate's greatest defenders of America's military interests. I urge 
everyone to take a minute to read Section 1, which highlights Senator 
Thurmond's distinguished record of service and leadership.
  As always, finding the right compromises to protect our national 
security while still living within our budget caps has been hard. 
Recent events in Iraq and Kosovo, and the attack on our embassies in 
Tanzania and Kenya are stark reminders of why our diplomatic efforts 
must be supported by a robust military.
  I compliment the Committee on Armed Services, under the leadership of 
Chairman Thurmond and Senator Levin, for its dedicated effort to 
address some of our nation's critical national security needs. While I 
do not agree with everything in the conference report, on balance I 
believe this bill does a great deal of good.
  On the personnel front, I know that all of us are pleased with the 
3.6 percent pay raise. We know that our patriotic men and women in 
uniform do not serve in order to make money, but that doesn't change 
the needs of their families and themselves for adequate recompense. 
This is a solid step in the right direction.
  Along the same lines, I thank the conferees for joining me in 
supporting an increase in hazardous duty incentive pay for mid- and 
senior level enlisted aircrew personnel. This necessary increase 
reflects our commitment to the experienced aircrew personnel without 
whom our planes could not fly vital missions in Bosnia and Iraq.
  I was also pleased to see that this bill recognized the increasingly 
vital role of our Guard and Reserve personnel in the new Total Force. 
As that old Oldsmobile commercial said, ``this is not your father's'' 
military. Guard and Reserve personnel are absolutely vital to meeting 
America's leadership commitments around the world, to protecting 
communities here at home, and to defending national security. Among 
other things, this bill authorizes the payment of selective 
reenlistment bonuses, increased funding for Guard and Reserve training, 
the restoration of up to 800 military technicians (dual-status), and 
funds for the Guard's Youth ChalleNGe program and STARBASE program.
  The conference report continues Congress's effort to address the 
strains on our ability to provide high quality health care to our 
military retirees. Both houses of Congress are agreed that more work 
needs to be done in this area and the demonstration projects included 
in this year's bill are part of that process.
  In looking at some of the provisions in this bill that address 
foreign relations issues, I am less sanguine. As I said when the Senate 
dealt with this bill, I do not support the Sense of Congress provision 
that endorses NATO missions with ground forces that would not include 
any American troops. This is a dangerous precedent that encourages the 
erosion of American leadership in NATO.
  This bill also addressed satellite transfers. While we do not want to 
handicap America's satellite manufacturers and telecommunications 
firms, the most important consideration must always be to safeguard 
national security. The changes made in the licensing system appear to 
make sense, despite their being adopted on the basis of a very 
incomplete analysis of a complex issue. Transferring licensing 
authority back to the State Department--the same agency that licensed 
the controversial Loral satellite launch in February 1996--may help, so 
long as the State Department is given the resources to do the job 
right. This conference report permits the Department of State to keep 
all the fees it collects for registration by the Office of Defense 
Trade Controls--the office which administers licenses for military 
exports--a sensible approach that is also contained in the Department 
of State authorization bill. Now the Commerce, Justice, State 
appropriations conference must adopt a similar provision; otherwise we 
will be giving the State Department an unfunded mandate that it will be 
unable to fulfill. We run the risk of exacerbating the problem of 
perpetually under funding of our foreign policy tools.
  One provision addressing foreign policy that I was very pleased to 
see retained is the amendment that I authored calling for a report on 
the peaceful employment of former Soviet experts on weapons of mass 
destruction. The slightly revised provision is now found at section 
1309. Section 1309 requires detailed reporting on the

[[Page S11230]]

former Soviet experts who are at risk of recruitment by a rogue state 
or terrorist group. I am confident that this language will not require 
the Department of Defense to produce an impossibly detailed analysis. I 
am pleased to note that the revised provision will permit the Secretary 
of Defense to inform Congress of ways to increase the number of former 
Soviet arms experts whom we assist in their transitions into new 
occupations. That is a vital national security objective, and it will 
become even more vital in the coming years as Russia's nuclear 
establishment is substantially downsized and more of their nuclear 
weapons experts are left to find new ways to earn a living.
  In conclusion, Mr. President, the Strom Thurmond National Defense 
Authorization Act is a comprehensive bill that addresses many of our 
military needs. As I have said, there are some provisions that concern 
me. But, overall, I believe this bill provides some of the bricks that 
make up the foundation of our national security policy. It takes 
important steps to improve the quality of life for our most critical 
national security asset--our military personnel. My overall concern 
continues to be that it should not take terrorist attacks to realize 
that spending more on our first line of defense--our foreign policy--is 
an equally vital part of our national security policy.


                               sec. 1512

  Mr. LEVIN. Mr. President, I wish to enter into a colloquy with the 
distinguished senior Senator from South Carolina, the Chairman of the 
Armed Services Committee, after whom this defense authorization bill is 
named.
  Section 1512 of this bill requires the President to certify to 
Congress 15 days prior to any export to the People's Republic of China 
of missile equipment or technology, as defined in the Annex to the 
Missile Technology Control Regime, that such export is not detrimental 
to the U.S. space launch industry, and that such export will not 
measurably improve China's missile or space launch capabilities.
  The intent of this section is not to prevent the export of commercial 
communications satellites to the PRC, consistent with U.S. law and 
national security and foreign policy interests, nor to harm our 
domestic satellite industry. The purpose of this section is to ensure 
that exports of such satellites and related technology to China will 
not harm U.S. security. As long as sufficient export controls are in 
force and are being enforced, such exports are consistent with our 
national security.
  Furthermore, this certification requirement for exports to China is 
not intended to prevent the export of commercial technology for 
emergency repair of civilian equipment, such as navigation systems 
required for safe flight of passenger aircraft. If a U.S.-made aircraft 
requires emergency repair or replacement of its navigation system while 
in China, we would not want to delay such required repair unreasonably.
  I wish to ask the Chairman if he shares this view of Section 1512.
  Mr. THURMOND. Mr. President, I agree with the view expressed by my 
colleague, the Ranking Minority Member of the Armed Services Committee. 
He has stated correctly the views of the Senate and the House in 
agreeing to Section 1512 during the conference on the defense bill.
  With regard to concerns that the requirement for a 15-day advance 
certification concerning the export of items listed in the MTCR Annex 
to the PRC would delay the ability to provide spare parts for in-
service civilian commercial aircraft in an emergency while in the PRC, 
it is not the intent to delay the export of items for emergency repair 
of in-service civilian commercial aircraft while in the PRC.
  This view, however, should not be mistaken as a green light to 
stockpile technology and spare parts which are on the MTCR Annex above 
what is necessary to provide emergency service for in-service 
commercial aircraft.
  Mr. LEVIN. I thank the distinguished Chairman of the Armed Services 
Committee for helping to clarify the intent of this provision.


                             C-130 Tragedy

  Mr. WYDEN. Mr. President, in November 1996, there was a tragic 
accident off the coast of California that claimed the lives of 10 out 
of 11 airmen, the crew of an Air Force Reserve C-130 aircraft out of 
Portland. All of these crewmen were from my home state of Oregon.
  This was a devastating loss for all of us, but most of all for the 
families of those airmen who lost their lives. After any tragedy like 
this, the first question on everyone's minds is ``why?'' Why were my 
loved ones taken from me? This is what the families of these airmen 
wanted to know, but no one would give them a straight answer.
  After many, many months of frustration, these families came to me and 
my colleague from Oregon, Senator Smith, to get the Air Force to tell 
us exactly what happened.
  As a result of working with these families, with the Air Force, and 
with the committee staff, and with Senator Levin in particular, we were 
able to craft some language that is now included in the Defense 
Authorization Conference Report that we are considering today. This 
language takes a two pronged approach to dealing with the pressing 
issues the families have raised: improving crash investigations, and 
eliminating the secrecy in which these investigations are shrouded.
  Specifically, the language directs the Defense Department to review 
the way it conducts aviation accident investigations so that they are 
conducted in as thorough and objective a manner as possible, including 
making sure crash investigators receive the best training, and ensuring 
that the military department coordinate and share information on fleet 
safety. The bill also urges the Pentagon to seek the advice of the 
National Transportation Safety Board in improving investigation 
procedures, and I intend to make sure their valuable input is part of 
their review.
  Secrecy has long been the hallmark of these investigations and has 
kept loved ones in the dark about what happened and why. We have worked 
to reduce the secrecy involved in the investigations of tragedies, and 
this legislation takes a solid step forward in providing families and 
the public with better information.
  That's why this language also requires the Department of Defense to 
issue regulations to provide to family members periodic reports on the 
progress of investigations. I also spoke with Secretary Cohen about 
this recently, and he has pledged to make a solid effort to make sure 
families are kept informed of the progress of investigations.
  It's important that we eliminate secrecy from these proceedings. The 
last thing we should do is add to these terrible tragedies by keeping 
the families in the dark about the status of these investigations. From 
day to day, from week to week, from month to month, these families had 
to cope with not only the incredible pain of losing a loved one, but 
with the incredible frustration of not knowing the status of the 
investigation into their deaths. This new language seeks to put an end 
to this type of treatment. We owe it to the men and women who give 
their lives for their country.


                           tritium provision

  Mr. LOTT. Mr. President, yesterday the Chairman of the Armed Services 
Committee, Senator Thurmond, along with Senators Warner, Smith, and Kyl 
entered into a colloquy on the tritium provision in the pending 
National Defense Authorization Act Conference Committee Report.
  While I was not available to participate in that colloquy, I would 
like to make a few comments on this subject.
  First and foremost, the restoration of tritium production is 
absolutely critical. Without tritium, our entire nuclear deterrent 
would be left inoperable. Our nuclear warheads cannot function without 
replacement tritium. And time is wasting.
  For those who do not know, tritium is a radioactive gas that is an 
essential component of modern nuclear weapons. It decays at a rate of 
five-and-a-half percent per year, so it has to be continually replaced. 
We have not produced tritium in this country since 1988, when the 
reactors at the Savannah River Site in South Carolina were shut down. 
Since that time the Department of Energy has examined countless options 
and technologies, but has not yet selected a new source. We cannot 
afford to delay this program. The potential costs of delay are too 
great.
  The Chairman of the Armed Services Committee, Senator Thurmond, had a 
difficult Defense Authorization conference with the House this year.

[[Page S11231]]

Chairman Thurmond and the other members of the Committee negotiated 
over 570 legislative provisions and more than 1,000 funding differences 
with the House. The final result was a strong bipartisan bill. In fact, 
for the first time in many years, all the members of the conference, 
both Democrats and Republicans, signed the final conference report.
  Tritium was one of the most difficult issues that had to be 
addressed. The House and Senate bills had wildly differing provisions 
on this topic. In addition, there was a Presidential veto threat on one 
of the House tritium provisions. Chairman Thurmond, as always, put all 
other interests aside and delivered a compromise that put the national 
security interests of the U.S. ahead of all other interests. I am 
confident that his provision will keep the tritium program moving 
forward.
  However, there remain some disagreements as to the best method to 
produce tritium. It's not my place to comment on that today. I will say 
that under this conference agreement, Energy Secretary Richardson will 
be required to select his preferred technology in December of this 
year. I expect him to meet that requirement.
  I might also say to Secretary Richardson that the conference report 
requires him to submit along with the President's fiscal year 2000 
budget request, a plan to implement whichever technology he selects in 
December. I expect him to identify the funding requirements, schedule, 
and legislation necessary to restore tritium production in time to meet 
Defense Department requirements. In order to be credible, his 
implementation plan must include adequate funding in fiscal year 2000 
and beyond.
  This matter is too important to the national security of the United 
States to be undermined by deficient budget requests or lack of 
attention on the part of DOE.
  Furthermore, I put my colleagues on notice that I intend to be fully 
engaged in the debate when this matter comes before the Senate next 
year. Let me assure all interested parties that I intend to ensure that 
only one interest will dictate the outcome of that debate--the national 
security interests of the United States. The safety and security of the 
American people require all of us to ensure that there are no further 
unnecessary delays--for any reason.
  Mr. BINGAMAN. Mr. President, I'd like to join my colleagues in 
saluting the chairman of the Armed Services Committee, the 
distinguished Senator Strom Thurmond, whose leadership, together with 
the ranking member, Senator Levin, has produced the fiscal year 1999 
Defense authorization bill which is named in the chairman's honor. 
Thank you, Mr. Chairman, for your untiring efforts, both for putting 
together this bill and for your long and distinguished service to our 
nation. We are a grateful Senate and a grateful nation.
  Achieving this year's defense bill has been no easy task. Every 
defense budget represents the outcome of an annual debate concerning 
competing national security priorities. Everyone is familiar with the 
litany of our defense needs: procurement and modernization, quality of 
life for defense personnel, operations and maintenance, research and 
development, training, medical care, and so forth. This year is no 
different.
  Much has been said about the lack of funding for procurement and 
modernization of military equipment. Certainly, by historical standards 
we are far below cold war levels. But our defense needs have changed 
and will continue to do so. We need to look carefully at the 
capabilities and quantities of weapons that we will need in the 
future--particularly in areas where technology could provide lower cost 
alternatives of getting the job done.
  Nevertheless, in this year's conference report the Congress is taking 
a step towards meeting those procurement needs. Funding for procurement 
is up from $49.1 billion requested by the President to $49.9 billion 
authorized by the conference.
  The conference also took steps to increase funding for quality of 
life priorities. Funding for military construction and family housing 
was increased from $7.8 billion to about $8.5 billion.
  But those increases come at a cost. In balancing priorities while 
remaining within the budget agreement cap, this budget pays the bill by 
reducing funding in other categories. Funding for research and 
development, operations and maintenance, and Department of Energy 
defense activities, for example, were funded at lower levels than 
requested by the Administration.
  Are those tradeoffs the correct ones from the point of view of our 
national security? Or are they the outcome of partisan negotiations to 
meet parochial needs?
  I remain concerned that the teamwork that's needed between the 
Department of Defense, the Administration, and the Congress to produce 
a defense budget that meets our real military priorities is flawed. 
While the Congress took steps to increase procurement funding, many of 
those purchases do not reflect the priorities stated by the military 
services themselves. The cost of those purchases were bought by cuts to 
readiness accounts that must now be repaired through an emergency 
supplemental agreed to by the President.

  Similarly, we risk mortgaging our long term security future by 
cutting funding for research and development, particularly for basic 
research. I am pleased, however, that this bill includes a provision 
that sets successively higher goals for research and development 
funding during the next decade. I am hopeful that implementation of 
that provision can enable us to avoid having research and development 
remain the billpayer for future defense spending increases.
  I applaud this bill for its many specific provisions that serve the 
simultaneous interests of my New Mexico constituents and the nation's 
security.
  The bill contains $4.3 billion for weapons activities at the 
Department of Energy National Labs, approximately half of which will 
support work being done at Los Alamos and Sandia.
  That work will support the stockpile stewardship program that will 
enable us to ensure the safety and reliability of our nuclear weapons 
stockpile without building new ones and without testing old ones.
  I am hopeful that continued funding for the stockpile stewardship 
program will enable us to move forward in the Senate with ratification 
of the Comprehensive Test Ban Treaty next year.
  The bill also includes essential funding for the Cooperative Threat 
Reduction and the Initiatives for Proliferation Prevention programs 
intended to prevent the proliferation of nuclear weapons and materials 
through cooperative efforts with Russian nuclear laboratories and 
scientists. Our laboratories in New Mexico are working closely with 
their Russian colleagues to benefit the security of both nations 
against the threat of weapons of mass destruction in the hands of 
terrorists or rogue governments.
  The bill also provides essential funding to remedy the disrepair of 
the nation's finest weapons testing facility, White Sands Missile 
Range, in southern New Mexico. Without those funds, we won't be able to 
assure the technologies and military capabilities to have the effective 
fighting forces we will need for the nation's future defense.
  The bill also includes key quality of life improvements for our 
military personnel at Cannon, Kirtland, and Holloman Air Force bases. 
Units from those bases have served honorably and effectively in Bosnia 
and the Persian Gulf. The personnel and their families assigned to 
those bases appreciate the support they are given in this year's 
defense bill.
  Mr. President, I support this conference report and urge my collegues 
to vote in favor.
  Mr. MURKOWSKI. Mr. President, let me commend the senior Senator from 
South Carolina, Senator Thurmond, and Senator Levin for having 
completed work on this important conference report on the Strom 
Thurmond National Defense Authorization Act for Fiscal Year 1999. I 
particularly want to express my appreciation to Senator Thurmond and 
Senator Warner and their staff for working with me and my staff to 
address the provision that the House of Representatives had attempted 
to include (section 1216) which would have negatively impacted the 
export capabilities of U.S. vendors of civilian nuclear power 
equipment. I am pleased to say that the Senate conferees were able to 
replace the House language regarding nuclear exports with an acceptable 
notification requirement in Section 1523.

[[Page S11232]]

  Mr. President, as some of my colleagues are aware, the House of 
Representatives had added language that would have changed the 
reporting requirements for nuclear exports and added a congressional 
disapproval process. The change in the export law contemplated by the 
House of Representatives was unwise and unnecessary.
  A change in the reporting requirements was unnecessary because the 
Nuclear Regulatory Commission closely regulates the export activities 
of U.S. nuclear vendors. The nuclear export licensing process by law 
requires not only public notice of export license applications as soon 
as they are received by the N.R.C., but also the opportunity for public 
intervention with the N.R.C. prior to issuance of a license. Moreover, 
the N.R.C. is not allowed to issue an export license for any nuclear 
equipment and technology unless the government of the recipient nation 
has negotiated, signed and implemented a bilateral agreement for 
nuclear cooperation with the United States. Such agreements provide the 
United States with a broad array of inspection rights and control over 
the fuel cycle. I am unaware of any allegations that, under this 
regime, the United States has exported any nuclear material or 
technology which has been diverted for military or proliferation 
purposes. Since our export control system appears to be working, it is 
difficult to see why it should be altered or supplemented.
  A change in the reporting requirements was unwise because it would 
negatively impact U.S. exporters of civilian nuclear power equipment 
without advancing any national security goal. Although the author of 
the provision made clear that his proposal was designed to add 
restrictions to trade in civilian nuclear power equipment and 
technology with China, it would have impacted many other countries, 
including Brazil, Argentina, South Africa, Kazakhstan, Ukraine and 
Taiwan who purchase U.S. nuclear goods. I am convinced that, faced with 
new restrictions, all these countries would be extremely reluctant to 
deal with U.S. suppliers. Certainly, European and Canadian suppliers 
would use such new restrictions as part of their commercial armory to 
argue that, for these countries, dealing with U.S. suppliers is 
complex, time absorbing, and subject to political whims, while their 
procedures are simple and straightforward.
  Some members may want to block trade with China in civilian nuclear 
goods and technology. But, my colleagues should recall that President 
Clinton sent to Congress the certifications necessary to implement the 
Reagan Administration's 1985 Agreement for U.S.-China Peaceful Nuclear 
Cooperation on January 27, 1998. The Congress considered those 
certifications for 30 legislative days, as provided by law. Existing 
law provided the opponents of the certifications with every opportunity 
to challenge the Administration's determination. However, no attempt 
was made to pass a resolution of disapproval of those certifications, 
and consequently, the 1985 Agreement went into effect on March 19, 
1998. Any changes made after the fact would be seen as aimed at 
impeding or delaying such cooperation and, as such, could seriously 
undercut the non-proliferation assurances China provided as a condition 
of implementing the nuclear cooperation agreement. Moreover, as a 
matter of principle, moving the goalposts regarding certification after 
the fact is unfair.
  Mr. President, again, I want to thank the managers for their 
assistance on this important matter.
  Mr. FEINGOLD. Mr. President, I come to the floor today to register my 
opposition to the fiscal year 1999 Department of Defense Authorization 
conference report. Sadly, we continue to spend precious military 
resources on unneeded, unwanted, pork-barrel projects, all at the 
expense of our military's legitimate needs.
  Mr. President, our military needs to be lean and mean, not weighed 
down with unnecessary, unwanted, expensive pork. We don't need to spend 
more money, we need to spend money more wisely. Our military leaders 
have begun to recognize this and some of my colleagues in Congress have 
recognized it. I hope we can work together toward a more wisely funded 
military.
  I am not alone in my call for more efficient and accountable military 
spending. Lawrence J. Korb, President Reagan's Assistant Secretary of 
Defense, recently issued a rebuke of the state of the Pentagon's 
military spending. He said,

       The problem is not lack of money or aging equipment . . . 
     the Pentagon is buying the wrong weapons. The military 
     behaves as if it is still in an arms race with the Soviet 
     Union, buying $2 billion bombers, $3 billion submarines and 
     $5 billion aircraft carriers . . . Russia, China, Iran, Iraq, 
     North Korea--throw in Libya or whoever else you want--all of 
     them together don't spend as much on the military as we do.

  Mr. President, I couldn't agree more. There is no Cold War. It's 
over. We need to move toward a 21st century military force. This 
conference report fails to adequately modernize our armed forces and 
move toward that goal.
  As my friend from Arizona, Senator McCain, has so eloquently stated 
year after year, it's unconscionable that we spend billions of dollars 
on pork-barrel projects that the Pentagon doesn't need and doesn't 
want.
  Mr. President, we can't afford to pretend we're still dealing with 
the Cold War Soviet threat. Military leaders agree that we need 
lighter, faster and more agile forces. This strategy does not include 
wholesale purchase of cumbersome B-2 bombers, new attack submarines, or 
Cold War-era heavy tanks.
  One particular program epitomizes the worst of pork-barrel politics. 
The C-130 air cargo planes have sapped billions of dollars from vital 
military programs even though our military leaders are incessant in 
their pleas to end the harmful practice of forcing the Pentagon to buy 
more planes than it needs.
  Mr. President, since 1978, the Congress has added a whopping 263 C-
130s for which our Department of Defense has not asked. That's right--
the taxpayers have paid for 263 C-130s the Pentagon didn't need. If you 
lined them up wing to wing, that would be six and a half miles of 
unwanted airplanes, with the taxpayers on the hook for $22.4 billion. 
This assault on military planning hamstrings readiness, equipment, and 
compensation for our soldiers. As we all know, these are the precise 
areas which the Joint Chiefs of Staff testified this week were at 
greatest risk. Politicians who want to bring home the bacon at 
taxpayers' expense should not be second-guessing the judgment of our 
military leaders in this way.
  This conference report follows in the dubious footsteps of its 
ancestors by authorizing 7 C-130s, while the Pentagon asked for only 
one. Not only does it take from other procurement money, but DoD must 
divert operations and maintenance money to look after all these 
unneeded planes. This is the height of irresponsibility and 
shortsightedness.
  Finally, Mr. President, I would like to congratulate my distinguished 
colleague from Iowa, Senator Grassley. He held a hearing on Tuesday to 
discuss accounting fraud at the Pentagon. His continued efforts to rein 
in obvious and debilitating fraud at the Pentagon need to be applauded. 
Perhaps the Senator's most important finding is summed by his quote, 
``If we put adequate controls on the money we have, there should be no 
need for more defense spending.''
  That, Mr. President, sums up my point, as well. We don't need to 
throw good money after bad with pork-barrel spending in our military 
budget. What we need to do is spend our money more wisely. That is how 
we will move toward a lean, efficient, and effective military. This 
conference report does not move toward the new 21st century military 
force.
  I thank the chair and I yield the floor.
  Mr. McCONNELL. Mr. President I rise today to discuss the Defense 
Authorization bill. I support this bill and believe the Conferees have 
acted appropriately and supported the vital needs of our national 
security. However, I strenuously object to one provision that I believe 
is a grave mistake.
  Section 1075 of H.R. 3616 inserts language which would have the 
effect of changing the tax structure of the Commonwealth of Kentucky. 
Mr. President, this is a terrible and misguided assault on the rights 
of Kentucky to levy income tax. I believe this decision sets a 
dangerous precedent and will harm citizens of my state.

[[Page S11233]]

  Fort Campbell is a unique military post which straddles the Kentucky-
Tennessee state lines. As a result, many residents of Tennessee go to 
work every day across the border in the Commonwealth of Kentucky. 
Currently, those who work on the Kentucky side of Fort Campbell are 
subject to Kentucky's state income tax. Section 1075 takes away 
Kentucky's ability to legally enforce its state tax on these employees. 
As a result, Kentucky will lose millions of dollars a year in revenue. 
I am unable to come up with any justification for the Armed Services 
committee to impose its will on the Commonwealth of Kentucky in this 
manner.
  Mr. President, for the Armed Services committee to take this action 
astonishes me. This issue should be debated and resolved by the 
impacted states. By imposing this solution, the Armed Services 
committee has effectively foreclosed any opportunity for future 
negotiations.
  My colleague from Kentucky, Senator Ford, has made lengthy remarks on 
this issue, and I agree with much of what he said. However, I do take 
offense at the partisan barbs, as they are unwarranted and 
unproductive. Perhaps the diatribe was cathartic, but cheap shots get 
us no closer to the solution.
  That said Mr. President, like my colleague from Kentucky, I will vote 
for final passage of this bill. It contains a number of items that I 
encouraged the committee to adopt, and I thank them for their 
consideration.
  Ms. LANDRIEU. Mr. President, on Monday, the Senate adopted the 
conference report on H.R. 4103, the Department of Defense 
Appropriations bill. I wanted to take this opportunity to discuss a 
relatively small part of this budget which has a huge impact on my 
state.
  Outside of the City of New Orleans, we have one of the few remaining 
shipyards in the country that still builds ocean-going ships for the 
Navy. Avondale Shipyards is a key employer in the area. With over 5,000 
working men and women, it is the largest private employer in the 
region. Louisiana has a proud maritime tradition, and has a particular 
expertise in ship building. As a shipyard of tremendous capacity and 
infrastructure, and the host of the Maritime Excellence Center, 
Avondale has played an important part in the development of this 
industry.
  However, Avondale has also maintained a record of labor relations 
which Judge Evans of the National Labor Relations Board termed 
``outrageous and pervasive.'' This is not the image of Louisiana's 
growing maritime industry that I want projected. I believe that 
Louisiana should be the world leader in shipbuilding, but I also 
believe that we cannot attain that status through substandard wages and 
unsafe working conditions. Many manufacturing sectors in our country 
have been faced with international competition that created difficult 
times. The way these industries rebounded was not to turn back the 
clock on progress made in working conditions and wages. Instead, our 
industrial sector did just the opposite: they grew more hi-tech and 
more specialized; they invested in their workers, and they invested in 
new technologies. This is the only route to true success and 
leadership. Louisiana's shipyards will never be able to compete with 
countries like China and the Phillippines on the basis of wages--the 
key is to concentrate on American strengths: technology, craftsmanship 
and quality.
  That is my goal for Avondale. To help them become a world leader, and 
transition away from practices which threaten that objective. The 
seemingly endless dispute between management and labor at Avondale is a 
huge impediment to the process. I am ready to work with anyone who in 
good faith seeks to resolve the problem. In this spirit, I have talked 
to the Navy about Avondale and inquired about the significance of labor 
relations in Navy contracts. Let me be clear, I did not make these 
inquires to block contracts from being awarded to Avondale. It benefits 
no one to have workers loose their jobs and the state diminish its 
industrial base in order to make a point. This is especially true when 
we should have a Fifth Circuit Court of Appeals decision on the union 
election in the near future.
  I voted for the Defense Appropriations bill, because I believe in a 
strong defense. I also voted for the Defense Appropriations bill 
because I believe in a strong Avondale. The government provides over 
eighty percent of Avondale's contracts. The shipyard cannot function 
without them. I have no intention of jeopardizing Avondale's future. My 
sole objective is to facilitate my state's future success in the 
maritime field. Avondale must be part of that success. This long-
standing labor dispute should be resolved at the earliest possible time 
to achieve that end.
  Mr. DOMENICI. Mr. President, I rise today to offer strong support for 
the Strom Thurmond National Defense Authorization Act for Fiscal Year 
1999. As several of my colleagues in the Senate have also recognized, 
we owe a great deal of gratitude to Senator Thurmond. As a soldier and 
as a Senator, he has fought to defend our country and safeguard our 
national interest.
  I thank Senator Thurmond his unceasing commitment and untiring 
service to this country and its institutions.
  Mr. President, this legislation contains many positive things for the 
state of New Mexico--both in the programs funded and the changes made 
to enhance research and development efforts.
  The most significant contribution made by this legislation to R&D 
efforts in our state will be realized by eliminating several barriers 
to cooperation between national laboratories and the private sector. 
The partnerships among our federal laboratories, universities, and 
industry provide important benefits to our nation.
  A substantial amount of benefits are attainable in New Mexico, given 
the unique assets in this state. These partnerships help to create 
innovative new products and services that drive our economy and improve 
our quality of life.
  I am pleased that this year's conference ruled favorably on so many 
of the requests for increases that I put forward. Many of these 
increases will leverage unique assets and capabilities in New Mexico to 
ensure that our national interests are protected.
  The bill authorizes $4.5 billion for Department of Energy defense 
activities, much of which is done at Sandia National Laboratories and 
Los Alamos National Laboratory (LANL), in addition to DOE's Lawrence 
Livermore facility in California. Approximately $2.5 billion of this 
authorization will be spent in New Mexico.
  In addition, the Defense Environmental Restoration and Waste 
Management programs are authorized at $5.44 billion. Of that, 
approximately $415 million will be spent in New Mexico for waste 
management functions, environmental restoration activities, technology 
development efforts, nuclear materials and facilities stabilization 
functions, and a variety of cost-cutting and program support 
initiatives.
  Several other important items for defense efforts in New Mexico that 
are authorized in the bill.
  For example, this year's authorization for the High Energy Laser 
System Test Facility (HELSTF) at White Sands Missile Range is $23 
million, including $8 million for solid state laser research. An 
additional $10 million is authorized for further research in the 
Theater High Energy Laser (THEL), an effort jointly funded and 
supported by Israel.
  The Exploratory Development of Advanced Weapons technology at 
Kirtland's Air Force Research Laboratory is authorized at $129 million 
for the coming year.
  A total of $40.2 million is also authorized to support the Advanced 
Radiation Technology Program at Kirtland's Air Force Research 
Laboratory (AFRL). The lab is using its expertise in laser technologies 
to develop a new deep space imaging system, in addition to a special 
interactions development program.
  $24 million is authorized for Space and Missile Rocket Propulsion 
Program. The Air Force Laboratory at Kirkland is involved in this 
program.
  The Ballistic Missile Technology Program is authorized at $16. This 
funding was not included in the President's request. Kirkland AFRL and 
White Sands Missile Range are involved in this program.
  $75 million is authorized for the Advanced Spacecraft Technology 
Program, $32 million more than the budget

[[Page S11234]]

request. These funds will advance space plane development, the 
Clementine microsatellite program at Kirkland AFRL, and the Satellite 
Orbital Transfer Vehicle which is worked on at the New Mexico 
Engineering and Research Institute.
  In a related endeavor, a total of $10 million is authorized for the 
Scorpius Low-Cost Launch program. This program utilizes assets at New 
Mexico Tech in Socorro and will be tested at White Sands in the coming 
months.
  The Airborne Laser Program is authorized at $235 million. The Special 
Programs Office for this critical Air Force effort in theater missile 
defense is located at Kirkland, and this program relies heavily on 
basic research in directed energy and adaptive optics at the AFRL 
there.
  The Air Force Operational Test & Evaluation Center (AFOTEC) at 
Kirkland is authorized at $29.5 million. This is $5 million more than 
the President's budget request and will support the Initial Operational 
Test and Evaluation Center's independent operational tests to evaluate 
weapon systems operational effectiveness and suitability.
  The Defense Advanced Research Projects Agency's (DARPA) Flat Panel 
Display Program is authorized at $41. This includes an earmark of $7 
million for High Definitions Systems in integrated command and control 
technology.
  The Warfighter Information Network is authorized at $132.1 million 
for procurement of weapons communications equipment, including the 
Echelon Above Corps (EAC) communications program. This authorization 
level includes a $35 million increase to continue modernization of the 
Army's tactical voice and data communication system. Laguna Industries 
at the Pueblo of Laguna is involved in producing these shelters.
  $21.9 million is authorized for Ground Penetrating Radar Program & 
Landmine Warfare & Barrier Technology, including a $2 million increase 
for a ground radar and vehicle mounted mine detector.
  Also, this legislation authorizes military construction for several 
projects critical to the viability of New Mexico's military 
installations.
  This bill authorizes $6.8 million for the Nuclear Weapons Integration 
Facility and $1.8 million for the Fire Training Facility, as well as 
$6.4 million to improve family housing at Kirkland.
  Holloman is authorized $1.3 million for improvements to its War 
Readiness Materials Warehouse and $11.1 million to construct a state-
of-the-art physical fitness center.
  $3.6 million is authorized for improvements to family housing at 
White Sands Missile Range, and a $3.3 million authorization is included 
to allow New Mexico's National Guard to build the Taos Armory.
  An additional $8 million is authorized to support the Big Crow 
Program Office--DoD's only asset for testing high power stand-off 
jamming capability in electronic warfare scenarios.
  These are some of the major programs related to U.S. military 
capabilities and research and development efforts that reside in the 
state of New Mexico. I thank Chairman Thurmond and the Senate Armed 
Services Committee for recognizing and supporting the many 
contributions to our national security needs that are based in New 
Mexico.
  Unfortunately, however, I cannot pretend that the measures contained 
in the legislation will ensure U.S. security. I cannot in good 
conscience purport that this legislation--or any legislation--can solve 
the current crisis faced by the armed forces.
  The strength of the U.S. military cannot simply be measured in 
numbers of soldiers or the state-of-the-art weapons they possess. The 
fortitude of this country's military is not only based on advanced 
weaponry, but rather is also a reflection of the strength of its 
morale.
  Mr. President, the morale of our military is under siege. When 
retired colonels are heard commenting that in their half a century of 
hanging around soldiers they have seldom seen the cutting edge of our 
fighting forces so dull, nor morale lower, there is good reason for 
concern.  Rather than focusing on the hardware issues encapsulated in 
the term ``modernization,'' I would like today to emphasize the 
problems with readiness, morale and quality of life. Equipment is 
secondary to the well-being of the men and women in uniform. The best 
weapons cannot bring about victory without adequate training in their 
use and the firm loyalty of the soldier to buttress the military 
objectives fought for.

  We are now in our fourteenth year of decline in defense spending. 
What can no longer be ignored is that the increase in non-traditional 
deployments coupled with down-sizing is steadily eroding readiness and 
morale.
  Our reduced force structure is overextended. Overextension is eroding 
retention rates, quality of life, operational readiness, and, most 
importantly, morale. Whereas the U.S. military had 22 foreign missions 
during the 1980s, they have already been involved in 36 foreign 
missions since 1990.
  At the same time, our forces have been down-sized by 35 to 40%. In 
addition, forward basing has decreased by two-thirds--from 39 major 
installations to 13. This translates into more forces based in the U.S. 
while deployments are overseas.
  The result? More frequent and longer deployments, due to down-sized 
forces and up-sized involvement in foreign missions. The OPS TEMPO 
required under these constraints lead to grueling days even after 
returning home from prolonged overseas missions.
  Some soldiers are currently required to spend up to 150 days away 
from their families annually. Then, upon returning home, they still 
have too many additional duties to really spend quality time at home.
  Retention rates continue to plummet, especially in the Air Force. 
This is not happening because we are not offering generous pay bonuses 
to re-enlist. Last year, 800 pilots refused re-enlistment bonuses of 
$60,000. The Air Force is planning to increase these bonuses to 
$110,000, but the Air Force is also planning for this problem to get 
worse.
  Why? Although military planners contend that competition with a 
booming U.S. economy and the private sector is the cause for defection, 
the reality is more complex and points to the same problems already 
discussed. Heavy deployment schedules and no down-time between 
deployments cause stresses on service personnel, especially those with 
families.
  A related issue is that the men and women in our armed forces 
increasingly believe that their loyalty is a one-way street. In 
addition to demanding more for less from our soldiers, their quality of 
life is also eroding.
  The United States, the wealthiest and most powerful country in the 
world, currently has military men and women who require food stamps to 
provide for their families. The Defense Department says it would be 
``too expensive'' to solve this problem.
  Housing for our military families is also inadequate. According to a 
study from the Defense Science Board, 62 percent of our barracks and 64 
percent of our family housing are unsuitable. In the face of this, the 
President's request for military construction and family housing for 
1999 was $1.1 billion less than Congress provided in 1998.
  Some in Washington are saying this is a money problem. It is a money 
problem, but it is also more than that. It is also a leadership 
problem, and it is a question of how competently our defenses are being 
managed.
  Our pilots and other specialists are leaving the services in droves 
not just to get better paying jobs; they are also leaving because they 
are being worn out; and they are not getting the support they need from 
their own leadership. They are being worn out by repeated deployments. 
And they are not always convinced that what they are being asked to do 
makes sense.
  Back home their spouses resent the military for turning their 
families into single-parent households. And the quality of life offered 
to these military families can't begin to compensate.
  Is it any wonder that with a booming economy and plenty of good jobs 
available in the private sector that our soldiers are voting with their 
feet? Is it any surprise that given inadequate housing for the families 
back home that they rarely see due to deployments abroad for missions 
they don't understand that our soldiers are frustrated, ill-prepared 
and low on morale?
  Perhaps most disturbing, I am beginning to see too many reports that 
the

[[Page S11235]]

leadership is not addressing the real problems. There seems to be an 
emerging question of the confidence in our military's senior 
leadership. There is a growing concern that the top leadership is not 
willing to make the hard decisions to restrain our military missions to 
the available human and material resources or to expand those resources 
to meet the increasing demand.
  That brings us back to the question of money. There is simply not 
enough money in the defense budget as it is currently projected to do 
everything that needs to be done. There is an effort underway to 
provide emergency supplemental funding for military readiness. I 
support that effort. However, this will not solve the bigger problems.
  Our military leaders are beginning to agree. In a recent Armed 
Services Committee Hearing with the Joint Chiefs, U.S. military leaders 
finally conceded that they do, indeed, have a severe problem. The $1 
billion in supplemental funding will help, but according to the most 
recent Joint Chiefs' testimony, between $10 to $13.5 billion would be 
necessary in the coming year to meet U.S. defense needs.
  One thing is blatantly clear. We must strive to adequately feed, 
house, and train our most precious military resource--the men and women 
in our armed forces. To do this will mean more resources for our 
defense budget and it will mean better management of the resources--
human and material--that we already have.
  For next year, for the fiscal year 2000 budget, I believe, we need to 
start the new millennium by at least stopping the ebbing tide and end 
the 15 year decline.
  Each year the Armed Services Committee is given the difficult task of 
balancing between current and long-term readiness under current budget 
constraints. In recent years, they have had the impossible task of 
ensuring that personnel, quality of life, readiness, and modernization 
programs are adequately supported, while funding levels remain 
insufficient to achieve that objective.
  The Committee recognizes, as do most of us concerned about our 
national defense, that combat readiness of our armed forces is at risk. 
The risk is a function of older equipment resulting from inadequate 
modernization and a force structure too small to meet ongoing demands. 
Aging equipment and weary soldiers cannot possibly defend this country 
adequately. Nor can dominance result from this equation.
  I am gravely concerned about preparedness, modernization and 
procurement. However, I am most concerned about the human element of 
our armed forces. The best equipment and the most rigorous training 
cannot compensate for too lengthy, too frequent deployments and time 
away from loved ones.
  Mr. President, the solution is clear. We must stop the ebbing tide in 
our national defense budget. If we don't the hollowing out of our 
military forces will continue. Our national security will be at risk 
during a time of international uncertainty and growing threats. Our 
soldiers deserve better and U.S. citizens are counting on us.
  Mr. THURMOND. How much time do I have remaining?
  The PRESIDING OFFICER. Six minutes 10 seconds.
  Mr. THURMOND. Mr. President, I want to thank the leadership of the 
Senate for their cooperation and support in bringing this conference 
report to the floor for approval of the Senate. The bipartisan support 
of both the majority and the minority leaders is critical to successful 
passage of the conference report of such magnitude.
  The majority leader, Senator Lott, a former member of our committee, 
recognizes the importance of this bill and has always given his full 
support and assistance in passing a bill of this nature. I thank him 
for his time and support and all he has done in this respect.
  I extend my appreciation to the leadership staff and the floor staff 
for their assistance which is essential to passing this large, complex 
bill.
  In that connection, Mr. President, I wish to especially commend Les 
Brownlee, staff director of the Armed Services Committee. He has 
rendered yeoman service to this committee, and I can't say enough in 
support of all he has done. George Lauffer, the deputy staff director, 
has also been most faithful and has done an outstanding job. We 
appreciate that and thank him for what he has done in this connection. 
I also wish to thank David Lyles on the other side, and those who 
worked with him, for their fine cooperation and support. They have been 
most cooperative and have rendered a great service.
  Mr. President, we appreciate the work of two House Members. We thank 
Floyd Spence, who happens to be from my State, for handling the House 
bill. He is an outstanding gentleman of character and ability, and I 
thank him for all he has done in cooperating with us on the defense 
legislation. Ike Skelton, a Democrat, who works with Congressman 
Spence, has also been cooperative and helpful, and I express my 
appreciation to him, too.
  I yield the floor.
  The PRESIDING OFFICER. The Chair, in his capacity as a Senator from 
the State of Washington, suggests the absence of a quorum and, without 
objection, directs that the time be divided equally between the two 
sides.
  The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. THURMOND. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. THURMOND. Mr. President, how much time do I have left?
  The PRESIDING OFFICER. Two and one-half minutes.
  Mr. THURMOND. Mr. President, I yield that to the able Senator from 
Texas.
  Mrs. HUTCHISON. Parliamentary inquiry, Mr. President. Is it possible 
for me to ask unanimous consent to go into morning business rather than 
take from Senator Thurmond's time? I wanted to talk about the 40th 
anniversary of NASA.
  The PRESIDING OFFICER. There is an order that a vote occur on the 
defense authorization bill at noon. The request is in order and will 
probably be charged against both sides.
  Mrs. HUTCHISON. If that is acceptable, I ask unanimous consent to 
have 5 minutes to speak on the 40th anniversary of NASA.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.

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