[Congressional Record Volume 145, Number 8 (Tuesday, January 19, 1999)]
[Senate]
[Pages S467-S476]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      FEDERAL EMPLOYEES GROUP LONG-TERM CARE INSURANCE ACT OF 1999

  Ms. MIKULSKI. Mr. President, I rise today to introduce the ``Federal 
Employees Group Long-Term Care Insurance Act of 1999''. This important 
legislation will provide long-term care insurance to federal employees 
and retirees. It will also create a model for other employers to use in 
providing long-term care insurance for their

[[Page S471]]

workers. I am proud that this legislation is part of the Democratic 
agenda for long term care--which includes the $1,000 tax credit for 
families who are paying the costs of long-term care.
  Since my first days in Congress, I have been fighting to help people 
afford the burdens of long-term care. Ten years ago, I introduced 
legislation to change the cruel rules that forced elderly couples to go 
bankrupt before they could get any help in paying for nursing home 
care. Because of my legislation, AARP tells me that we've kept over six 
hundred thousand people out of poverty and stopped liens on family 
farms.
  I also fought for higher quality standards for nursing homes. Through 
the Older American Act funded senior centers, I've made it easier for 
seniors to get the information and referrals they need to make good 
choices about long-term care. Those same centers offer case managers to 
help families navigate the dizzying array of choices when faced with 
choosing long term care for a family member.
  These are important steps. But unfortunately, we haven't made much 
progress in the last few years. We've been stymied by bipartisan 
bickering, shutdowns and inaction.
  Meanwhile, the costs of long-term care have exploded. Nursing home 
costs are projected to increase from $40,000 today to $97,000 by 2030. 
This will only get worse since the number of senior citizens will 
double over the next thirty years. Families are being forced to chose 
between sending a child to college or paying for a nursing home for a 
parent.
  Families desperately need help to help themselves and meet their 
family responsibilities.
  This bill is a down payment on making long term care available for 
all Americans. Let me tell you what my legislation will do:
  It will enable federal workers and retirees to purchase long-term 
care insurance.
  It will provide help to those who practice self-help by offering 
employees the option to better prepare for their retirement and the 
potential need for long-term care.
  It will enable federal employees to pay at group discounted rates. 
The purchasing power of the federal workforce will empower them to get 
the best deal.
  Federal employees would pay the entire premium for their long-term 
care insurance, but that premium will be 15% to 20% less than they 
would pay individually on the open market. This is a good deal for 
federal workers--and for taxpayers.
  I'm starting with federal employees for two reasons. First, as our 
nation's largest employer, the federal government can be a model for 
employers around the country. By offering long-term care insurance to 
its employees, the federal government can set the example for other 
employers whose workforce will be facing the same long-term care needs. 
We can use the lessons learned to help other employers to offer this 
option to their workers.
  I have a second reason for starting with our federal employees. I am 
a strong supporter of our federal employees. I am proud that so many of 
them live, work, and retire in Maryland. They work hard in the service 
of our country. And I work hard for them. Whether it's fighting for 
fair COLAs, against disruptive and harmful shutdowns of the federal 
government, or to prevent unwise schemes to privatize important 
services our federal workforce provide, they can count on me.
  Promise made should be promises kept. Federal retirees made a 
commitment to devote their careers to public service. In return, our 
government made certain promises to them.
  One important promise made was the promise of health insurance. We 
promised our federal workers and their families that they would have 
health insurance while they were working and during their retirement. 
The lack of long-term care for federal workers has been a big gap in 
this important promise to our federal workers. My legislation will 
close that gap and provide our federal workers and retirees with 
comprehensive health insurance.
  I am proud that Senator Sarbanes and Senator Robb join me in 
introducing this bill, and that our colleague Congressman Cummings has 
introduced this legislation in the House. I hope that we will soon be 
joined by a bipartisan group of Senators who care about helping 
American families to cope with the costs of long term care.
  Mr. President, long term care requires long term solutions. My 
legislation is part of the solution. It is an important step forward in 
helping all Americans to prepare for the challenges of aging.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 57

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Federal Employees Group 
     Long-Term Care Insurance Act of 1999''.

     SEC. 2. LONG-TERM CARE INSURANCE.

       Subpart G of part III of title 5, United States Code, is 
     amended by adding at the end the following new chapter:

                 ``Chapter 90--Long-Term Care Insurance

``Sec.
``9001. Definitions
``9002. Contracting authority.
``9003. Minimum standards for contractors.
``9004. Long-term care benefits.
``9005. Financing.
``9006. Preemption.
``9007. Studies, reports, and audits.
``9008. Claims for benefits.
``9009. Jurisdiction of courts.
``9010. Regulations.
``9011. Authorization of appropriations.

     ``Sec. 9001. Definitions

       ``For the purpose of this chapter, the term--
       ``(1) `annuitant' means an individual referred to in 
     section 8901(3);
       ``(2) `employee' means an individual referred to in 
     subparagraphs (A) through (D), and (F) through (I) of section 
     8901(1); but does not include an employee excluded by 
     regulation of the Office under section 9011;
       ``(3) `Office' means the Office of Personnel Management;
       ``(4) `other eligible individual' means the spouse, former 
     spouse, parent or parent-in-law of an employee or annuitant, 
     or other individual specified by the Office;
       ``(5) `qualified carrier' means an insurer licensed to do 
     business in each of the States and meeting the requirements 
     of a qualified insurer in each of the States;
       ``(6) `qualified contract' means a contract meeting the 
     conditions prescribed in section 9002; and
       ``(7) `State' means a State or territory or possession of 
     the United States, and includes the District of Columbia.

     ``Sec. 9002. Contracting authority

       ``(a) The Office may, without regard to section 3709 of the 
     Revised Statutes (41 U.S.C. 5) or any other statute requiring 
     competitive bidding, purchase from 1 or more qualified 
     carriers a policy or policies of group long-term care 
     insurance to provide benefits as specified by this chapter. 
     The Office shall ensure that each resulting contract is 
     awarded on the basis of contractor qualifications, price, and 
     reasonable competition to the maximum extent practicable.
       ``(b) The Office may design a benefits package or packages 
     and negotiate final offerings with qualified carriers.
       ``(c) Each contract shall be for a uniform term of 5 years, 
     unless terminated earlier by the Office.
       ``(d) Premium rates charged under a contract entered into 
     under this section shall reasonably reflect the cost of the 
     benefits provided under that contract as determined by the 
     Office.
       ``(e) The coverage and benefits made available to 
     individuals under a contract entered into under this section 
     are guaranteed to be renewable and may not be canceled by the 
     carrier except for nonpayment of premium.
       ``(f) The Office may withdraw an offering under this 
     section based on open season participation rates, the 
     composition of the risk pool, or both.

     ``Sec. 9003. Minimum standards for contractors

       ``At the minimum, to be a qualified carrier under this 
     chapter, a company shall--
       ``(1) be licensed as an insurance company and approved to 
     issue group long-term care insurance in all States and to do 
     business in each of the States; and
       ``(2) be in compliance with the requirements imposed on 
     issuers of qualified long-term care contracts by section 
     4980C of the Internal Revenue Code of 1986.

     ``Sec. 9004. Long-term care benefits

       ``The benefits provided under this chapter shall be long-
     term care benefits which, at a minimum, shall be compliant 
     with the most recent standards recommended by the National 
     Association of Insurance Commissioners.

     ``Sec. 9005. Financing

       ``(a) The amount necessary to pay the premium for 
     enrollment of an enrolled employee shall be withheld from the 
     pay of each enrolled employee.
       ``(b) Except as provided under subsection (d), the amount 
     necessary to pay the premium for enrollment of an enrolled 
     annuitant shall be withheld from the annuity of each enrolled 
     annuitant.

[[Page S472]]

       ``(c) The amount necessary to pay the premium for 
     enrollment of a spouse may be withheld from pay or annuity, 
     as appropriate.
       ``(d) An employee, annuitant, or other eligible individual, 
     whose pay or annuity is insufficient to cover the withholding 
     required for enrollment, shall, at the discretion of the 
     Office, pay the premium for enrollment directly to the 
     carrier.
       ``(e) Each carrier participating in the program established 
     under chapter shall maintain the funds related to this 
     program separate and apart from funds related to other 
     contracts and other lines of business.
       ``(f) The costs of the Office in adjudicating a claims 
     dispute under section 9008, including costs related to an 
     inquiry not culminating in a dispute, shall be reimbursed by 
     the carrier involved in the dispute or inquiry. Such funds 
     shall be available to the Office for the administration of 
     this chapter.

     ``Sec. 9006. Preemption

       ``This chapter shall supersede and preempt any State or 
     local law which is determined by the Office to be 
     inconsistent with--
       ``(1) the provisions of this chapter; or
       ``(2) after consultation with the National Association of 
     Insurance Commissioners, the efficient provision of a 
     nationwide long-term care insurance program for Federal 
     employees.

     ``Sec. 9007. Studies, reports, and audits

       ``(a) Each qualified carrier entering into a contract under 
     this chapter shall--
       ``(1) furnish such reasonable reports as the Office 
     determines to be necessary to enable the carrier to carry out 
     the functions under this chapter; and
       ``(2) permit the Office and representatives of the General 
     Accounting Office to examine such records of the carrier as 
     may be necessary to carry out the purposes of this chapter.
       ``(b) Each Federal agency shall keep such records, make 
     such certifications, and furnish the Office, the carrier, or 
     both, with such information and reports as the Office may 
     require.

     ``Sec. 9008. Claims for benefits

       ``(a) A claim for benefits under this chapter shall be 
     filed within 4 years after the date on which the reimbursable 
     cost was incurred or the service was provided.
       ``(b) The Office shall adjudicate a claims dispute arising 
     under this chapter and shall require the contractor to pay 
     for any benefit or provide any service the Office determines 
     appropriate under the applicable contract.
       ``(c)(1) Except as provided under paragraph (2), benefits 
     payable under this chapter for any reimbursable cost incurred 
     or service provided are secondary to any other benefit 
     payable for such cost or service. No payment may be made 
     where there is no legal obligation for such payment.
       ``(2)(A) Benefits payable under the programs described 
     under subparagraph (B) shall be secondary to benefits payable 
     under this chapter.
       ``(B) The programs referred to under subparagraph (A) are--
       ``(i) the program of medical assistance under title XIX of 
     the Social Security Act (42 U.S.C. 1396); and
       ``(ii) any other Federal or State programs that the Office 
     may specify in regulations that provide health benefit 
     coverage designed to be secondary to other insurance 
     coverage.

     ``Sec. 9009. Jurisdiction of courts

       ``A claimant under this chapter may file suit against the 
     carrier of the long-term care insurance policy covering such 
     claimant in the district courts of the United States, after 
     exhausting all available administrative remedies.

     ``Sec. 9010. Regulations

       ``(a) The Office shall prescribe regulations necessary to 
     carry out this chapter.
       ``(b) The regulations of the Office may prescribe the time 
     at which and the conditions under which an eligible 
     individual may enroll in the program established under this 
     chapter.
       ``(c) The Office may not exclude--
       ``(1) an employee or group of employees solely on the basis 
     of the hazardous nature of employment; or
       ``(2) an employee who is occupying a position on a part-
     time career employment basis, as defined in section 3401(2).
       ``(d) The regulations of the Office shall provide for the 
     beginning and ending dates of coverage of employees, 
     annuitants, former spouses, and other eligible individuals 
     under this chapter, and any requirements for continuation or 
     conversion of coverage.

     ``Sec. 9011. Authorization of appropriations

       ``There are authorized to be appropriated such sums as may 
     be necessary for the purposes of carrying out sections 9002 
     and 9010.''.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by this Act shall take effect on the 
     date of enactment of this Act, except that no coverage may be 
     effective until the first day of the first applicable pay 
     period in October, which occurs more than 1 year after the 
     date of enactment of this Act.
                                 ______
                                 
      By Ms. COLLINS (for herself, Mr. Durbin, and Mr. Jeffords):
  S. 58. A bill to amend the Communications Act of 1934 to improve 
protections against telephone service ``slamming'' and provide 
protections against telephone billing ``cramming'', to provide the 
Federal Trade Commission jurisdiction over unfair and deceptive trade 
practices of telecommunications carriers, and for other purposes; to 
the Committee on Commerce, Science, and Transportation.


     telephone service fraud prevention and enforcement act of 1999

  Ms. COLLINS. Mr. President, I rise today to introduce the ``Telephone 
Services Fraud Prevention and Enforcement Act of 1999.'' I am pleased 
to have Senators Dick Durbin and Jim Jeffords as cosponsors of this 
legislation. This bill is designed to curtail two telephone-related 
fraudulent practices: slamming--the unauthorized change of a consumer's 
long distance telephone service provider--and cramming--the billing of 
unauthorized charges on a consumer's telephone bill. This comprehensive 
bill is needed to ensure that consumers are adequately protected 
against these unfair practices.
  Mr. President, telephone slamming and cramming are widespread 
problems, affecting consumers across the country. Nationwide, slamming 
is the number one telephone-related complaint to the Federal 
Communications Commission, and the number of such complaints has grown 
steadily over the past few years. In 1998, in fact, the FCC received 
more than 20,000 slamming complaints, a 900 percent increase over the 
number of complaints received in 1993. For fiscal year 1998 (from 
October 1, 1997 through September 1, 1998), telephone slamming was the 
number one complaint made by Maine consumers to the FCC's National Call 
Center. Since there is still no central repository for slamming 
complaints, the actual incidents of slamming are undoubtedly far more 
numerous. Estimates from phone companies indicated that perhaps as many 
as one million Americans were slammed last year alone.
  Cramming complaints also remain at unacceptably high levels. In 1998, 
the FCC's National Call Center received over 15,000 cramming complaints 
from consumers, making it the 12th most common complaint received by 
the FCC. In addition, the Federal Trade Commission received over 6,000 
cramming complaints from consumers in 1998, making it the FTC's 5th 
most common complaint. As with slamming, there is no central repository 
for cramming complaints, so the actual number of such complaints is 
probably much higher than those documented by the federal government.
  In late 1997, the Senate Permanent Subcommittee on Investigations, 
which I chair, began an extensive investigation into telephone-related 
fraud against consumers. The story of telephone services fraud, I soon 
discovered, is a great deal more than just an aggregate number of 
complaints. On February 18, 1998, I chaired a field hearing on slamming 
in Portland, Maine, where I heard first-hand from consumers about the 
problems they experienced when their long distance service was changed 
without their permission. Their sense of violation was evident. 
Witnesses used words such as ``stealing,'' ``criminal,'' and ``break-
in'' to describe the practices used by unscrupulous telephone companies 
to boost profits by bouncing unsuspecting customers from carrier to 
carrier without their permission or even their knowledge.
  One witness, for example, Pamela Corrigan from West Farmington, 
Maine, testified that she was sent an unsolicited mailing, which looked 
like any other letter in the stacks of junk mail that we all receive 
every day. This ``junk mail,'' however, was not what it appeared to be. 
This so-called ``welcome package'' automatically signed her up for a 
new long distance service unless she returned a card rejecting the 
change. She was amazed and appalled that it was possible for a company 
to take over her long distance service simply because she did not 
respond that she did not want their service.

  Building on this record, my Subcommittee held a second slamming 
hearing on April 23, 1998, in Washington, DC. This hearing exposed how 
certain fraudulent long distance switchless resellers (companies with 
no telephone equipment of their own that buy access to larger telephone 
companies' long distance lines and then ``resell'' that access to 
consumers) are responsible for a large proportion of the intentional 
slamming incidents. These

[[Page S473]]

electronic bandits use deceptive marketing practices and often outright 
fraud to switch consumers' long distance service. The Subcommittee also 
learned how under current industry practices, many companies reap huge 
profits by taking advantage of consumers in such a fashion.
  At my Subcommittee's April 1998 hearing, we examined a case study of 
telephone services fraud. A man named Daniel Fletcher fraudulently 
operated as a long distance reseller, using at least eight different 
company names. In these various guises, Fletcher slammed thousands of 
consumers, billing them for a total of at least $20 million in long 
distance charges. The impunity with which Mr. Fletcher deliberately 
slammed consumers for so long demonstrates the need to establish strong 
consumer protections to deter intentional slamming.
  On July 23, 1998, I convened a hearing in Washington to explore the 
emerging problem of telephone cramming. At that hearing, we learned how 
cramming is a growing consumer fraud and how companies are using 
telephone bills to rip-off consumers by slipping unauthorized charges 
onto their statements without their consent and without proper notice. 
The National Consumers League testified that cramming has skyrocketed 
to first place among the more than 50 categories of telemarketing scams 
reported to its hotline. The FCC testified that it is relying on the 
telephone industry to voluntarily implement procedures to stop 
cramming. However, it was evident from the testimony that unless we 
establish a clear statutory and regulatory scheme and insist upon 
rigorous enforcement of these rules, cramming will continue to be a 
problem for consumers.
  In May 1998, the Senate passed a strong anti-slamming bill by a 
unanimous vote. This bill contained strong consumer protection 
provisions and mandated aggressive enforcement by the FCC and other 
federal agencies. Unfortunately, the House retreated significantly from 
this strong anti-slamming legislation and sent us, at the very end of 
the legislative session, a bill significantly weaker than the one which 
passed the Senate--indeed, a bill so weak that it would provide 
consumers with less protection than they enjoy today, by preempting the 
important role states play in enforcing consumer anti-fraud 
protections. Last fall, in the final days of the session, the Congress 
was unable to agree to an acceptable compromise bill in the limited 
amount of time available to it.
  I was pleased to see, however, that the FCC finally took action in 
December of last year to curb slamming. Among other measures, the FCC 
eliminated the ``welcome package'' as a verification method. This 
method was abused by many long distance carriers, facilitating 
widespread slamming. I urged the FCC last year to prohibit this 
practice, and I am glad to see that the Commission promulgated 
regulations banning the welcome package.
  The FCC also made positive changes to the consumer liability rules, 
absolving consumers in certain circumstances from paying companies that 
slammed them. This provision is designed to take the profit out of 
slamming, to prevent this scam in the first place. I am pleased to see 
that the Commission adopted this principle which was a major finding of 
the Subcommittee's investigation of telephone slamming.
  The FCC anti-slamming regulations are a step in the right direction, 
but we need to do more to protect consumers from these fraudulent 
activities. Today, to increase consumers protections, I am introducing 
a comprehensive telephone-related anti-fraud bill that will address 
both the slamming and cramming problems. I want to take this 
opportunity to explain several provisions in my bill, which is designed 
to increase consumer protections and to strengthen the enforcement 
tools available to federal and state regulators.
  First, the bill enhances the states' ability to enact regulations and 
take enforcement actions against slamming and cramming. As the 
Subcommittee's investigation has revealed, the states have been 
admirably aggressive in taking enforcement action against companies 
that engage in telephone-related fraud. For example, in February 1998, 
the Florida Public Service Commission proposed a $500,000 fine against 
a company called Minimum Rate Pricing for slamming subscribers. The 
FCC, in contrast, fined the same company only $80,000. In the Fletcher 
case mentioned previously, the State of Florida fined one 
Fletcher company $860,000, while the FCC originally fined one of them 
only $80,000. I am glad to say that since my subcommittee's 
investigation, the FCC has significantly increased its enforcement 
efforts, particularly against Mr. Fletcher.

  For the most part, however, the states have been, and remain, the 
first line of defense against companies that repeatedly slam or cram 
consumers. This bill protects the states' ability to continue to fight 
those illegal practices. Specifically, this bill allows the states to 
impose tough requirements to protect consumers from those companies who 
continue to slam or cram American consumers. Moreover, states will be 
able to continue to obtain refunds for consumers who have been harmed 
by such fraudulent practices.
  Second, this bill makes it clear that telephone companies that 
continue to slam or cram consumers will be subject to tough civil 
penalties. The bill will create new civil penalties for cramming, and 
authorize the imposition of stiff penalties by the FCC on those 
companies who violate FCC regulations against slamming or cramming. The 
FCC is currently authorized to assess forfeiture penalties of no more 
than $110,000 for each violation, for a total forfeiture not to exceed 
$1.1 million for a continuing violation. This bill sends a clear 
message to the FCC, however, that forfeiture penalties against 
companies that engage in telephone-related fraud should be large enough 
to deter such practices. These and other penalties the FCC will be 
authorized to impose ought to ensure that telephone companies follow 
proper procedures and refrain from slamming and cramming. If they break 
the rules by trying to cheat consumers, they will pay a steep price.
  But prevention is better than punishment, and any effective 
enforcement program designed to reduce or eliminate telephone-related 
fraud must take the financial incentive for fraud away from companies 
who engage in these practices. The new FCC regulations go a long way to 
protecting consumers by absolving them from paying any charges for 30 
days after they are slammed and by allowing consumers to pay their 
previously authorized carrier for telephone calls made in the period 
during which the slamming company fraudulently seized their long 
distance telephone service. Unfortunately, this FCC regulation does not 
apply to consumers who did not notice that they were slammed and 
consequently paid this long distance bill to the unauthorized carrier. 
The Commission apparently does not have the authority to mandate this 
requirement. My bill would change the law to allow all consumers to get 
refunds from unauthorized carriers. Under this plan, all consumers will 
be treated equally. The bill will also require telephone billing agents 
to make it clear to consumers that their telephone service will not be 
terminated when consumers dispute unauthorized charges that are crammed 
onto their telephone bills.
  Finally, the bill will protect a consumer's right to a ``freeze 
option.'' This provision makes it clear that consumers have the right 
to stop slammers from changing their long distance service without 
their authorization. By invoking the freeze option, consumers can 
retain control over their telephone service by prohibiting any change 
in a consumers choice of telephone service provider, unless that change 
is expressly authorized by the consumer. This provision, I should also 
note, does not in any way prevent the FCC from regulating the marketing 
practices of telephone companies that use the freeze option in an 
unfair or deceptive manner. The Commission will be fully empowered to 
guarantee that consumers' right to protect their choice of local or 
long distance telephone service is not abridged or diminished. In sum, 
this language should increase consumers' right to prevent unauthorized 
changes in their telephone service.
  This bill will go a long way to provide strong consumer protection 
against telephone-related fraud. It preserves the important role states 
play in protecting consumers and enforcing tough sanctions against 
unscrupulous

[[Page S474]]

carriers; it authorizes tough federal civil penalties against those 
companies that continue to slam and cram consumers; and it protects 
consumers' right to a freeze option so that they--and not the telephone 
companies--have control over their long distance services.
  Mr. President, this bill will provide the federal government and the 
states with the statutory tools to fight the practices of slamming and 
cramming and to end the systematic defrauding of countless thousands of 
consumers every year. I urge my colleagues to join me in the fight 
against telephone-related fraud by supporting this bill.
                                 ______
                                 
      By Mr. THOMPSON (for himself, Mr. Breaux,  and Mr. Lott):
  S. 59. A bill to provide Government wide accounting of regulatory 
costs and benefits, and for other purposes; to the Committee on 
Governmental Affairs..6


                  REGULATORY RIGHT TO KNOW ACT OF 1999

  Mr. THOMPSON. Mr. President, today I am introducing the ``Regulatory 
Right-to-Know Act of 1999.'' I am pleased that Senator Breaux and 
Majority Leader Lott have joined me in this effort. Our goals are to 
promote the public's right to know about the benefits and costs of 
regulatory programs; to increase the accountability of government to 
the people it serves; and ultimately, to improve the quality of our 
regulatory programs. This legislation will help us assess what benefits 
our regulatory programs are delivering, at what cost, and help us 
understand what we need to do to improve them.
  By any measure, the burdens of Federal regulation are enormous. By 
some estimates, Federal regulation costs about $700 billion per year, 
or $7,000 for the average American household. I hear concerns about 
unnecessary regulatory burdens and red tape from people all across the 
country and from all walks of life--small business owners, governors 
and local officials, farmers, corporate leaders, government reformers, 
school board members and parents.
  There is strong public support for sensible regulations that can help 
ensure cleaner water, quality products, safer workplaces, reliable 
economic markets, and the like. But there is substantial evidence that 
the current regulatory system is missing important opportunities to 
deliver greater benefits at less cost. The depth of this problem is not 
appreciated fully because the costs of regulation are not as apparent 
as other costs of government, such as taxes, and the benefits of 
regulation often are diffuse. The bottom line is that the American 
people deserve better results from the vast resources and time spent on 
regulation. We've got to be smarter.
  We often spend a lot of time debating on-budget programs, but we are 
just breaking ground on creating a system to scrutinize Federal 
regulation. This legislation does not change any regulatory standards; 
it simply will provide better information to help us answer some 
important questions: How much do regulatory programs cost each year? 
Are we spending the right amount, particularly compared to on-budget 
spending and private initiatives? Are we setting sensible priorities 
among different regulatory programs? As the Office of Management and 
Budget stated in its first ``Report to Congress on the Costs and 
Benefits of Federal Regulations'':

       [R]egulations (like other instruments of government policy) 
     have enormous potential for both good and harm. . . . The 
     only way we know how to distinguish between the regulations 
     that do good and those that cause harm is through careful 
     assessment and evaluation of their benefits and costs. Such 
     analysis can also often be used to redesign harmful 
     regulations so they produce more good than harm and redesign 
     good regulations so they produce even more net benefits.

  There is broad support for making our government more open, 
efficient, and accountable. This legislation continues the efforts of 
my precedessors. Regulatory accounting was a part of a regulatory 
reform bill that unanimously passed out of the Governmental Affairs 
Committee in 1995 when Bill Roth was our chairman. In 1996, when Ted 
Stevens became our chairman, he passed a one-time regulatory accounting 
amendment on the Omnibus Appropriations Act. I supported Senator 
Stevens' effort when it passed again in 1997, and I sponsored a similar 
measure last year, with the support of Senators Lott, Breaux, Robb and 
Shelby. There also is a broad bipartisan coalition in the House that 
supports regulatory accounting.
  This legislation will continue the requirement that OMB report to 
Congress on the costs and benefits of regulatory programs, which began 
with the Stevens amendment. This legislation also adds to previous 
initiatives in several respects. First, it will finally make regulatory 
accounting a permanent statutory requirement. Regulatory accounting 
will become a regular exercise to help ensure that regulatory programs 
are cost-effective, sensible, and fair. Second, this legislation will 
require OMB to provide a more complete picture of the regulatory 
system, including the incremental costs and benefits of particular 
programs and regulations, as well as an analysis of regulatory impacts 
on small business, governments, the private sector, wages and economic 
growth. OMB also will look back at the annual regulatory costs and 
benefits for the preceding 4 fiscal years, building on information 
generated under the Stevens amendment. Finally, this legislation will 
help ensure that OMB provides better information as time goes on. 
Requirements for OMB guidelines and independent peer review should 
improve future regulatory accounting reports.
  Government has an obligation to think carefully and be accountable 
for requirements that impose costs on people and limit their freedom. 
We should pull together to contribute to the success of responsible 
government programs the public values, while enhancing the economic 
security and well-being of our families and communities.
  Mr. President, I ask unanimous consent that a copy of the Regulatory 
Right-to-Know Act of 1999 be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 59

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Regulatory Right-to-Know Act 
     of 1999''.

     SEC. 2. PURPOSES.

       The purposes of this Act are to--
       (1) promote the public right-to-know about the costs and 
     benefits of Federal regulatory programs and rules;
       (2) increase Government accountability; and
       (3) improve the quality of Federal regulatory programs and 
     rules.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) In general.--Except as otherwise provided in this 
     section, the definitions under section 551 of title 5, United 
     States Code, shall apply to this Act.
       (2) Benefit.--The term ``benefit'' means the reasonably 
     identifiable significant favorable effects, quantifiable and 
     nonquantifiable, including social, health, safety, 
     environmental, economic, and distributional effects, that are 
     expected to result from implementation of, or compliance 
     with, a rule.
       (3) Cost.--The term ``cost'' means the reasonably 
     identifiable significant adverse effects, quantifiable and 
     nonquantifiable, including social, health, safety, 
     environmental, economic, and distributional effects, that are 
     expected to result from implementation of, or compliance 
     with, a rule.
       (4) Director.--The term ``Director'' means the Director of 
     the Office of Management and Budget, acting through the 
     Administrator of the Office of Information and Regulatory 
     Affairs.
       (5) Major rule.--The term ``major rule'' means any rule as 
     that term is defined under section 804(2) of title 5, United 
     States Code.
       (6) Program element.--The term ``program element'' means a 
     rule or related set of rules.

     SEC. 4. ACCOUNTING STATEMENT.

       (a) In General.--Not later than February 5, 2001, and each 
     year thereafter, the President, acting through the Director 
     of the Office of Management and Budget, shall prepare and 
     submit to Congress, with the budget of the United States 
     Government submitted under section 1105 of title 31, United 
     States Code, an accounting statement and associated report 
     containing--
       (1) an estimate of the total annual costs and benefits of 
     Federal regulatory programs, including rules and paperwork--
       (A) in the aggregate;
       (B) by agency, agency program, and program element; and
       (C) by major rule;
       (2) an analysis of direct and indirect impacts of Federal 
     rules on Federal, State, local, and tribal government, the 
     private sector, small business, wages, and economic growth; 
     and
       (3) recommendations to reform inefficient or ineffective 
     regulatory programs or program elements.
       (b) Benefits and Costs.--To the extent feasible, the 
     Director shall quantify the net benefits or net costs under 
     subsection (a)(1).

[[Page S475]]

       (c) Years Covered by Accounting Statement.--Each accounting 
     statement submitted under this Act shall cover, at a minimum, 
     the costs and corresponding benefits for each of the 4 fiscal 
     years preceding the year in which the report is submitted. 
     The statement may cover any year preceding such years for the 
     purpose of revising previous estimates.

     SEC. 5. NOTICE AND COMMENT.

       (a) In General.--Before submitting a statement and report 
     to Congress under section 4, the Director of the Office of 
     Management and Budget shall--
       (1) provide public notice and an opportunity to comment on 
     the statement and report; and
       (2) consult with the Comptroller General of the United 
     States on the statement and report.
       (b) Appendix.--After consideration of the comments, the 
     Director shall incorporate an appendix to the report 
     addressing the public comments and peer review comments under 
     section 7.

     SEC. 6. GUIDANCE FROM THE OFFICE OF MANAGEMENT AND BUDGET.

       (a) In General.--Not later than 180 days after the date of 
     enactment of this Act, the Director of the Office of 
     Management and Budget, in consultation with the Council of 
     Economic Advisors, shall issue guidelines to agencies to 
     standardize--
       (1) most plausible measures of costs and benefits; and
       (2) the format of information provided for accounting 
     statements.
       (b) Review.--The Director shall review submissions from the 
     agencies to ensure consistency with the guidelines under this 
     section.

     SEC. 7. PEER REVIEW.

       (a) In General.--The Director of the Office of Management 
     and Budget shall arrange for a nationally recognized public 
     policy research organization with expertise in regulatory 
     analysis and regulatory accounting to provide independent and 
     external peer review of the guidelines and each accounting 
     statement and associated report under this Act before such 
     guidelines, statements, and reports are made final.
       (b) Written Comments.--The peer review under this section 
     shall provide written comments to the Director in a timely 
     manner. The Director shall use the peer review comments in 
     preparing the final guidelines, statements, and associated 
     reports.
       (c) FACA.--Peer review under this section shall not be 
     subject to the Federal Advisory Committee Act (5 U.S.C. 
     App.).

  Mr. BREAUX. Mr. President, I am pleased to introduce the Regulatory 
Right to Know Act of 1999 with my colleague, Senator Thompson. This 
important piece of legislation will make the regulatory system more 
understandable and accountable to the American people.
  The Regulatory Right to Know Act of 1999 is similar to an amendment 
that was attached to the Fiscal Year 1999 Treasury, Postal 
Appropriations bill and which the Senate unanimously passed on July 29, 
1998. It is also similar to the two Stevens' Amendments passed with a 
large majority of support in the Senate in 1996 and 1997. All of these 
amendments required the Office of Management and Budget to prepare an 
accounting statement and report on the annual costs and benefits of 
federal regulatory programs. Obviously, Congress is on record in 
support of having more information about the federal regulatory system.
  The Regulatory Right to Know Act of 1999 simply makes this 
requirement permanent and requires OMB to submit a yearly report to 
Congress on the total costs and benefits of federal regulations. Costs 
and benefits include those that are both quantifiable and non-
quantifiable. OMB must present both an analysis of the impacts of 
regulations on Federal, State, local and tribal governments, the 
private sector, small businesses, wages and economic growth, as well as 
recommendations for reforming wasteful or outdated regulations. Lastly, 
our bill provides the public with an opportunity to comment on the 
draft report before it is submitted to Congress.
  Our bill does not do a number of things. It does not require that any 
regulations or programs be eliminated because the benefits do not 
outweigh the costs. It does not impose an unworkable burden on the OMB 
because much of the needed information is already available. And, our 
bill doesn't undermine the need for regulations protecting public 
health, worker safety, food quality or environmental preservation.
  Some studies have estimated the total cost of federal regulations to 
be almost $700 billion annually. On average, regulations cost every 
household in America approximately $7,000 per year. As the people who 
bear the cost of federal regulatory programs, America's citizens have a 
right to know what they are getting for their $7,000. Taxpayers are 
able to track how the government spends its tax dollars through the 
budget process. The same openness should apply to the federal 
regulatory system. Congress also needs the accounting statements 
provided by our bill in order to make better, more informed, and more 
efficient decisions. For these reasons. I urge all of my colleagues to 
support the Regulatory Right to Know Act of 1999.
                                 ______
                                 
      By Mr. GRASSLEY:
  S. 60. A bill to amend the Internal Revenue Code of 1986 to provide 
equitable treatment for contributions by employees to pension plans; to 
the Committee on Finance.


                   ENHANCED SAVINGS OPPORTUNITIES ACT

  Mr. GRASSLEY. Mr. President, I rise today to introduce legislation 
that lifts the unfair limits on how much people can save in their 
employer's pension plan. I have been an advocate of increasing the 
amount of public education we provide to people on the importance of 
saving for retirement. However, we also must take more tangible action 
that will help workers achieve a more secure retirement.
  The legislation I am introducing today amends two provisions in the 
Internal Revenue Code which discourage workers and employers from 
putting money into pension plans. One of the most burdensome provisions 
in the Internal Revenue Code is the 25 percent limitation contained 
within section 415(c). Under 415(c), total contributions by employer 
and employee into a defined contribution (DC) plan are limited to 25 
percent of compensation or $30,000 for each participant, whichever is 
less. That limitation applies to all employees. If the total additions 
into a DC plan exceed the lesser of 25 percent or $30,000, the excess 
money will be subject to income taxes and a penalty in some cases.
  The second tax code provision affected by this legislation is section 
404(a)(3). This section regulates the amount of retirement plan 
contributions an employer can deduct for tax purposes. We need this 
change because those deduction limits are impacted by how much the 
employee puts into the retirement plan. If we are successful in 
changing 415(c), we run the risk of more employers bumping into the 15% 
deduction limit--we don't want that to happen.
  To illustrate the need for elimination of the 25 percent limit let me 
use an example. Bill works for a medium size company in my home state 
of Iowa. His employer sponsors a 401(k) plan and a profit sharing plan 
to help employees save for retirement. Bill makes $25,000 a year and 
elects to put in 10 percent of his compensation into the 401(k) plan, 
which amounts to $2,500 per year. His employer will match the first 5 
percent of his compensation, which comes out to be $1,250, into the 
401(k) plan. Therefore, the total 401(k) contribution into Bill's 
account in this year is $3,750. In this same year Bill' s employer 
determines to set aside a sufficient amount of his profits to the 
profit sharing plan which results in an allocation to Bill's account in 
the profit sharing plan the sum of $3,205. This brings the total 
contribution into Bill's retirement plan this year up to $6,955.
  Unfortunately, because of the 25 percent of compensation limitation 
only $6,250 can be put into Bill's account for the year. The amount 
intended for Bill's account exceeds that limitation by $705. Hence, the 
profit sharing plan administrator must reduce the amount intended for 
allocation to Bill's account by $705 in order to avoid a penalty. Bill 
is unlikely to be able to save $705, a significant amount that would 
otherwise be yielding a tax deferred income which would increase the 
benefit Bill will receive at retirement. Bill's retirement saving is 
shortchanged by $705 plus the tax-deferred earnings it would have 
generated.
  Now let's look at Irene. Irene works for the same company, but she 
makes $45,000 a year. She also puts in 10 percent of her compensation 
into the 401(k) plan, and her employer matches five percent of her 
salary into the account. That brings the combined contribution of Irene 
and her employer up to $6,750. She would also receive a contribution of 
$3,205 from the profit sharing plan. This brings the total contribution 
into Irene's pension plan for that year to $9,955. She is also subject 
to the 25 percent limit, but for Irene, her limit would not be reached 
until

[[Page S476]]

$11,200. She is able to put in her 10 percent, receive the five percent 
match and receive the full amount from the profit share because her 
amount doesn't exceed the limit.
  Despite the fact that Bill and Irene have the same discipline to add 
to their pension plans and save for their retirements, Bill is 
penalized by the 25 percent limitation. By lifting the 25 percent 
limit, we can provide a higher threshold of savings for those who need 
it most.
  Permitting additional contributions to DC plans will help those 
working now, particularly women, to ``catch up'' on their retirement 
savings goals. Women are more likely to live out the last years of 
their retirement in poverty for a number of reasons. Women have longer 
lifespans, they are more likely to leave the workforce to raise 
children or care for elderly parents, are more likely to have to use 
assets to pay for long-term care for an ill spouse, and traditionally 
make less money than their male counterparts. Anyone who has delayed 
saving for retirement will get a much needed boost to their retirement 
savings strategy if the 25 percent limit is eliminated for employees.
  Not only does this proposal help individual employees save for 
retirement but it also helps the many businesses, both small and large 
which are affected by 415(c). First, the 25 percent limitation causes 
equity concerns within businesses. Low and mid-salary workers do not 
feel as if the Code treats them equitably, when their higher-paid 
supervisor is permitted to save more in dollar terms in a tax-qualified 
pension plan.
  Second, one of the primary reasons businesses offer pension plans is 
to reduce turnover and retain employees. Employers often supplement 
their 401(k) plans with generous matches or a profit-sharing plan to 
keep people on the job. The 415(c) limitation inhibits their ability to 
do that, particularly for the lower-paid workers who are unfairly 
affected.
  Third, this legislation will ease the administrative burdens 
connected with the 25 percent limitation. Dollar limits are easier to 
track than percentage limits.
  Finally, I want to placate any concerns that repealing the 25 percent 
limit will serve as a windfall for high-paid employees. The Code 
contains other limitations which provide protection against abuse. 
First, the Code limits the amount an employee can defer to a 401(k) 
plan. Under section 402(g) of the Code, workers can only defer up to 
$10,000 of compensation into a 401(k) plan in 1998. In addition, plans 
still must meet strict non-discrimination rules that ensure that 
benefits provided to highly-compensated employees are not overly 
generous.
  The value to society of this proposal, if enacted, is undeniable. 
Increased savings in qualified retirement plans can prevent leakage, 
meaning the money is less likely to be spent, or cashed out as might 
happen in a savings account or even an IRA.
  There will be those out there who recognize that this bill does not 
address the impact of the 415 limit for all of the plans that are 
subject to it. I have included language that would provide relief to 
401(k) plans and 403(b) plans, for example. Plans authorized by section 
457 of the Code--used by state and local governments and non-profit 
organizations have not been specifically addressed. I want to assure 
organizations who sponsor 457 plans that I support ultimate conformity 
for all plans affected by the 415(c) percentage limitation. Over the 
next couple of weeks, I hope to work with these organizations to 
identify the changes that are necessary to achieve equity and 
simplicity for their employees. In the mean time, this is a positive 
step toward enhancing the retirement savings opportunities of working 
Americans.
  We have begun to educate all Americans about the importance of saving 
for retirement, but if we educate and then do not give them the tools 
to allow people to practically apply that knowledge, we have failed in 
our ultimate goal to increase national savings. Let's help Americans 
succeed in saving for retirement. In helping them achieve their 
retirement goals, they help us to achieve our goal as policymakers of 
improving the quality of life for Americans.
  I want to thank an Iowa company, IPSCO, in Camanche, Iowa, and its 
many employees for bringing this issue to the forefront. I would also 
ask unanimous consent that a letter supporting this legislation from 
the Profit Sharing Council of America be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                             Profit Sharing/401(k)


                                           Council of America,

                                    Chicago, IL, January 19, 1999.
     Hon. Charles E. Grassley,
     U.S. Senate,
     Washington, DC.
       Dear Chairman Grassley: On behalf of the 1,200 Profit 
     Sharing/401(k) Council of America members who sponsor 
     employer-provided retirement plans, I am pleased to announce 
     our strong support of The Enhanced Savings Opportunity Act, 
     introduced today, that would repeal the IRC section 415(c) 25 
     percent of compensation limit currently imposed on employees 
     participating in defined contribution plans. That limitation 
     caps the combined employee and employer contribution into a 
     401(k) account to 25 percent of an employee's earnings. The 
     25 percent limitation has significantly reduced the ability 
     of lower-paid employees, specifically intermittent workers, 
     from taking full advantage of defined contribution retirement 
     programs. Most companies limit the percentage of pay that an 
     employee can contribute to their 401(k) plan to even less 
     than 25 percent in order to insure compliance with 415(c).
       The legislation will promote a conducive environment for 
     expanding the savings opportunities in employer-provided 
     retirement programs by removing one of the impediments that 
     prevents employees, especially lower-paid employees, from 
     taking full advantage of profit sharing, 401(k), and other 
     defined contribution programs.
       The Enhanced Savings Opportunity Act will permit employees 
     who leave and reenter the workforce, many of whom are women, 
     to make larger contributions when they are working, in effect 
     allowing them to ``catch up'' their contributions. All low-
     paid employees will now be allowed to defer up to $10,000 of 
     their wages into a 401(k) plan. Also, companies will be 
     permitted to make more generous matching and profit sharing 
     contributions to their employees, especially their lower-paid 
     employees.
       We continue to benefit from your strong leadership in 
     support of employer-provided retirement plans and again 
     commend you for this new proposed legislation.
           Sincerely,
                                                    David L. Wray,
                                                        President.

  


                     REGISTRATION OF MASS MAILINGS

  The filing date for 1998 fourth quarter mass mailings is January 25, 
1999. If your office did no mass mailings during this period, pleased 
submit a form that states ``none.''
  Mass mailing registrations, or negative reports, should be submitted 
to the Senate Office of Public Records, 232 Hart Building, Washington, 
D.C. 20510-7116.
  The Public Records office will be open from 8:00 to 6:00 p.m. on the 
filing date to accept these filings. For further information, please 
contact the Public Records office at (202) 224-0322.

                          ____________________