[Congressional Record Volume 145, Number 22 (Monday, February 8, 1999)]
[Senate]
[Pages S1368-S1378]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. McCONNELL (for himself, Mr. Graham, Mr. Bunning, Mr. Mack, 
        Mr. Breaux, Mr. DeWine, Mr. Smith of Oregon, Mr. Robb, Mr. 
        Lugar, Mr. Cochran, Ms. Landrieu, Mr. Murkowski, Mr. Stevens, 
        Mr. Coverdell, Mr. Warner, Mr. Smith of New Hampshire, Mr. 
        Bayh, Mr. Byrd, Mr. Specter, and Mr. Kerrey):
  S. 387. A bill to amend the Internal Revenue Code of 1986 to provide 
an exclusion from gross income for distributions from qualified State 
tuition programs which are used to pay education expenses; to the 
Committee on Finance.


                    educational savings legislation

 Mr. McCONNELL.  Mr. President, I come to the floor today to 
introduce legislation that addresses an important issue facing American 
families today--the education of their children. It is my long-held 
belief that we need to make a college education more affordable, and 
the legislation I am introducing today, the College Savings Act, will 
do just that by providing tax incentives to families who save for 
college.

  This legislation is a serious effort to reward long-term saving by 
making savings for education tax-free. It is important that we not 
forget that compounded interest cuts both ways. By saving, participants 
can keep pace, or even ahead of, tuition increases while putting a 
little away at a time. By borrowing, students bear added interest costs 
that add thousands to the total cost of tuition. Savings will have a 
positive impact, by reducing the need for students to borrow tens of 
thousands of dollars in student loans. This will help make need-based 
grants, which target low-income families, go much further.
  Mr. President, anyone with a child in college knows first-hand the 
expense of higher education. Throughout the 1990's, education costs 
have continually outstripped the gains in income. Tuition rates have 
now become the greatest obstacle students face in attending college. In 
fact, the astronomical increase in college costs has been well 
documented. According to a study conducted by the College Board, 
tuition and fees for a four-year public university rose 107 percent 
from 1980-1997, while median household income rose only 12 percent.
  Due to the high cost of education, more and more families have come 
to rely on financial aid to meet tuition costs. In fact, a majority of 
all college students utilize some amount of financial assistance. In 
1997-98, $60 billion in financial aid was available to students and 
their families from federal, state, and institutional sources. This was 
$3 billion higher than the previous year. A majority of this increase 
in aid was in the form of loans, which now make up the largest portion 
of the total federal-aid package at 57 percent. Grants, which a decade 
ago made up 49 percent of assistance, have been reduced to 42 percent. 
This shift toward loans further burdens students and families with 
additional interest costs.
  We must reverse the dependence on federal assistance and encourage 
families to save. My legislation would reward savings and allow 
students and families that are participating in these state-sponsored 
plans to be exempt from federal income tax when the funds are used for 
qualified educational purposes. This legislation also recognizes the 
leadership that states have provided in helping families save for 
college. In the mid-1980s, states identified the difficulty families 
had in keeping pace with the rising cost of education. States like 
Kentucky, Florida, Ohio, and Michigan were the first to start programs 
in order to help families save for college. Nationwide more than 30 
states have established savings programs, and over a dozen states are 
preparing to implement plans in the near future. Today, there are 
nearly one million savers who have contributed over $3 billion in 
education savings. The provision which I authored, which allows tax-
free education savings in state-sponsored savings plans for education 
purposes, provides nearly a $1.5 billion tax break for middle-class 
savers nationwide. In Kentucky, over 3,720 families have established 
accounts, which amount to about $7.5 million in savings.
  Mr. President, I have worked closely with the state plan 
administrators over the years seeking both their advice and support. 
Again this year, I am pleased to have the National Association of State 
Treasurers and the College Savings Plans Network endorse this 
legislation. They have worked tirelessly in support of this legislation 
because they know it is in the best interest of plan participants--the 
families who care about their children's education.
  Mr. President, many Kentuckians are drawn to this program because it 
offers a low-cost, disciplined approach to savings. In fact, the 
average monthly contribution in Kentucky is just $52. It is also 
important to note that 60 percent of the participants earn under 
$60,000 per year. By exempting all interest earnings from state taxes, 
my legislation rewards parents who are serious about their children's 
future and who are committed over the long-term to the education of 
their children by providing a significant tax break for middle-class 
savers nationwide. Clearly, this benefits middle-class families.
  In 1994, I introduced the first bill to make education savings exempt 
from taxation. Since then I have won a couple of battles, but still 
haven't won the war. To win the war, Congress needs to make education 
savings tax free--from start to finish. The bill I am introducing today 
will achieve that goal.
  In 1996, Congress took the first step in providing tax relief to 
families investing in these programs. In the Small Business Job 
Protection Act of 1996, I was able to include a provision that 
clarified the tax treatment of state-sponsored savings plans and the 
participants' investment. This measure put an end to the tax 
uncertainty that has hampered the effectiveness of these state-
sponsored programs and helped families who are trying to save for their 
children's education. Also in 1996, Virginia started its plan and was 
overwhelmed by the positive response. In its first year, the plan sold 
16,111 contracts raising $260 million. This success exceeded all goals 
for this program.
  In 1997, the Taxpayer Relief Act made revisions to provide maximized 
flexibility to families saving for their children's college education. 
The most significant reform was to expand the definition of ``qualified 
education costs'' to include room and board, thus doubling the amount 
families could save tax-free. In Kentucky, room and board at a public 
institution make up half of all college costs. This important 
legislation also expanded the definition of eligible institutions to 
include all schools, including certain proprietary schools, and defined 
the term ``member of family'' to allow rollover eligibility for cousins 
and step-siblings in the event that the original beneficiary does not 
attend college.
  Last year, the Senate passed legislation, sponsored by Senator 
Coverdell and Senator Torricelli, which would have allowed parents to 
place as much as $2,000 per year, per child, in an education savings 
account for kindergarten through high school education. Included in 
this legislation was my proposal to make savings in state-sponsored 
tuition plans tax-free. Unfortunately, the bill was vetoed by President 
Clinton.
  As a result of our actions over the last several years, more and more 
state plans have implemented tuition savings and prepaid plans for 
their residents. It is projected that there will be 43 states with 
tuition savings plans by the year 2000. I believe that we have a real 
opportunity to go even further toward making college affordable to 
American families. It is in our best interest as a nation to maintain a 
quality and affordable education system for everyone. By passing this 
legislation, we can help families help themselves by rewarding savings. 
This will reduce the cost of education and will not unnecessarily 
burden future generations with thousands of dollars in loans.
  Mr. President, I ask unanimous consent that a copy of the bill and 
letters endorsing my legislation from the Kentucky Higher Education 
Assistance Authority and the National Association of State Treasurers 
be printed in the

[[Page S1369]]

Record, along with an article from Time magazine that discusses the 
popularity of state tuition saving programs.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 387

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

     SECTION 1. EXCLUSION FROM GROSS INCOME OF EDUCATION 
                   DISTRIBUTIONS FROM QUALIFIED STATE TUITION 
                   PROGRAMS.

       (a) In General.--Section 529(c)(3)(B) of the Internal 
     Revenue Code of 1986 (relating to distributions) is amended 
     to read as follows:
       ``(B) Distributions for qualified higher education 
     expenses.--
       ``(i) In general.--No amount shall be includible in gross 
     income under subparagraph (A) if the qualified higher 
     education expenses of the designated beneficiary during the 
     taxable year are not less than the aggregate distributions 
     during the taxable year.
       ``(ii) Distributions in excess of expenses.--If such 
     aggregate distributions exceed such expenses during the 
     taxable year, the amount otherwise includible in gross income 
     under subparagraph (A) shall be reduced by the amount which 
     bears the same ratio to the amount so includible (without 
     regard to this subparagraph) as such expenses bear to such 
     aggregate distributions.
       ``(iii) Election to waive exclusion.--A taxpayer may elect 
     to waive the application of this subparagraph for any taxable 
     year.
       ``(iv) In-kind distributions.--Any benefit furnished to a 
     designated beneficiary under a qualified State tuition 
     program shall be treated as a distribution to the beneficiary 
     for purposes of this paragraph.
       ``(v) Disallowance of excluded amounts as credit or 
     deduction.--No deduction or credit shall be allowed to the 
     taxpayer under any other section of this chapter for any 
     qualified higher education expenses to the extent taken into 
     account in determining the amount of the exclusion under this 
     paragraph.''.
       (b) Coordination With Education Credits.--Section 25A(e)(2) 
     of the Internal Revenue Code of 1986 (relating to 
     coordination with exclusions) is amended--
       (1) by inserting ``a qualified State tuition program or'' 
     before ``an education individual retirement account''; and
       (2) by striking ``section 530(d)(2)'' and inserting 
     ``section 529(c)(3)(B) or 530(d)(2)''.
       (c) Coordination With Education Savings Bonds.--
     Subparagraph (B) of section 135(d)(2) of the Internal Revenue 
     Code of 1986 (relating to coordination with other higher 
     education benefits) is amended by striking ``section 
     530(d)(2)'' and inserting ``section 529(c)(3)(B) or 
     530(d)(2)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1998.
                                  ____

                                         Kentucky Higher Education


                                         Assistance Authority,

                                  Frankfort, KY, January 14, 1999.
     Hon. Mitch McConnell,
     U.S. Senate, Russell Office Building,
     Washington, DC.
       Dear Senator McConnell: Your tremendous support of the 
     Kentucky Educational Savings Plan Trust (Trust) has led to 
     more favorable federal tax treatment of this program and 
     other qualified state tuition programs (QSTPs) around the 
     country. The success achieved through your work provides 
     Kentucky families a greater opportunity to save for the 
     higher education costs of their children.
       I am writing to ask for your continued leadership on this 
     issue by pushing forward to obtain tax-free treatment for 
     amounts distributed from QSTPs to cover qualified higher 
     education expenses. Significant progress has been made in 
     this area during the past three years, and we believe your 
     continued efforts will achieve the final goal of tax-free 
     treatment.
       Currently, over 2,800 Kentucky families have saved over 
     $7.5 million dollars through the Trust for their children's 
     higher education. We greatly appreciate your efforts to help 
     Kentucky families save for higher education and look forward 
     to continuing to work with you and your staff on this 
     important initiative.
           Sincerely,
                                                   Paul P. Borden,
     Executive Director.
                                  ____



                                College Savings Plans Network,

                                                 February 4, 1999.
     Re college savings legislation.

     Hon. Mitch McConnell,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator McConnell: On behalf of the College Savings 
     Plans Network (``CSPN''), which represents the 44 states 
     currently offering and managing colleges savings programs, I 
     am writing to express our strong support for your legislation 
     to provide tax-free treatment for contributions to the 
     qualified state tuition programs. CSPN applauds your 
     leadership on legislation to encourage savings for college. 
     Currently, there are over 849,288 signed college tuition 
     contracts. The estimated fair market value of these contracts 
     if $4.2 billion. The families participating in the programs 
     appreciate your efforts on their behalf.
       The College Savings Plans Network embraces and fully 
     supports the intent of the College Savings Act of 1999. The 
     public policy intent of this proposal is to enable and 
     motivate families to save for college by providing clear and 
     easily understood tax treatment of the qualified state 
     tuition plans.
       CSPN greatly appreciates and fully supports the legislation 
     and your leadership on this proposal.
           Sincerely,
                                                 Marshall Bennett,
         Chairman, College Savings Plans Network, and Mississippi 
     State Treasurer.
                                  ____


                       [From Time, Dec. 7, 1998]

                      New Way to Save for College

         (Online advice from Time finance columnist Dan Kadlec)

       The best college-savings program you never heard about 
     keeps getting better. As you think about year-end tax moves, 
     consider dropping some cash into a state-sponsored plan where 
     money for college grows tax-deferred and may garner a fat 
     state income tax exemption as well. This plan is relatively 
     new and often gets confused with more common prepaid-tuition 
     plans, in which you pay today and attend later--removing 
     worries about higher tuition in the future. Savings plans are 
     vastly different and in most cases superior because they are 
     more flexible.
       Prepaid plans offer tax advantages, and some are portable, 
     but many still apply only to public colleges within the 
     taxpayer's state. What if Junior gets accepted to Harvard? 
     You can get your contributions back. But some states refund 
     only principal, beating you out of years' worth of investment 
     gains. And state prepaid plans make it tougher to get student 
     aid because the money is held in the student's name. With 
     savings plans the money is in a parent's name, where it 
     counts less heavily in student-aid formulas--and you can set 
     aside as much as $100,000 for expenses at any U.S. college.
       Both the prepaid and the college-savings plans vary from 
     state to state. Check out the website ``collegesaving.org'' 
     for details. It's a fast-moving area. In the next few months, 
     eight states will join the 15 that already have state 
     college-savings programs. Those are mostly in addition to the 
     19 that have prepaid-tuition plans. Only Massachusetts will 
     probably offer both.
       Most of the newer savings plans make contributions 
     deductible against state taxes. New York, for example, 
     launched its plan two months ago. It permits couples to set 
     aside up to $10,000 a year per student and lets New York 
     residents deduct the full amount from their income on their 
     state return. Missouri will approve a tax-deductible savings 
     plan in December. Minnesota is expected to adopt a plan in 
     which the state matches 5% of your contributions. These 
     college-savings plans are open to everyone, regardless of 
     income--in contract to the Roth IRA and other federal savings 
     plans, in which eligibility begins to phase out for couples 
     earning more than $100,000.
       If your state doesn't offer a college-savings plan, you can 
     still participate through an out-of-state plan. You won't get 
     the state tax deduction, but you will get tax-deferred 
     investment growth; and when the money is tapped, it will be 
     taxed at the student's rate (usually 15%). Fidelity 
     Investments (800-544-1722), which runs the New Hampshire 
     savings plan, and TIAA-CREF (877-697-2337; www.nysaves.org), 
     which runs the New York plan, make it easy. If your state 
     later offers a savings plan with a tax deduction, you can 
     transfer your account penalty free.
       Both plans invest mostly in stocks in the early years and 
     slowly shift into bonds and money markets as your student 
     nears college age. You get no say in this allocation. The 
     impact of tax deferral is big. TIAA-CREF estimates that 
     someone in the 28% tax bracket saving $5,000 a year and 
     mimicking its investments in a taxable account could expect 
     to accumulate $167,000 in 18 years.
       Deferring taxes and then paying them at 15% brings the 
     total to $190,000. The state deduction, for those who 
     qualify, pushes the nest egg to $202,000.
       Plan benefits:
       Taxes are deferred and then paid at the child's lower rate;
       Families are eligible regardless of income or state of 
     residence; and
       Tax deductions are increasingly available on state 
     returns.
 Mr. GRAHAM. Mr. President, I am proud to join Senator 
McConnell and other colleagues in launching an initiative to increase 
Americans' access to college education. Today we are introducing the 
College Savings Act of 1999. This bill would allow states to offer 
prepaid college tuition and savings programs on a tax exempt basis.
  These programs have flourished in the face of spiraling college 
costs. According to the College Board, between 1980 and 1997, tuition 
at public colleges increased 107 percent, while the median income 
increased just 12 percent. The cause of this dramatic increase in 
tuition is the subject of significant debate. But whether these 
increases are attributable to increased costs to the universities, 
reductions in state funding for public universities, or the increased 
value of a college degree, the fact remains that financing a college 
education has become increasingly difficult.

[[Page S1370]]

  Although the federal government has increased its aid to college 
students over the years, it is the states who have engineered 
innovative ways to help its families afford college. Michigan 
implemented the first prepaid tuition plan in 1986. Florida followed in 
1988. Today 43 states have either implemented or are in the process of 
implementing prepaid tuition plans or state savings plans.
  Mr. President, prepaid college tuition plans allow parents to pay 
prospectively for their children's higher education at participating 
universities. States pool these funds and invest them in a manner that 
will match or exceed the pace of educational inflation. This ``locks 
in'' current tuition prices and guarantees financial access to a future 
college education.
  Prior to 1996, the IRS had indicated that it would treat the state 
entity that held and invested the funds as a taxable corporation. In 
addition, the IRS stated its intent to tax families annually on 
earnings on amounts transferred to a state program. In the Small 
Business Jobs protection Act, The 104th Congress did two things: (1) it 
said that provided the program met certain standards, the state program 
would be tax exempt. (2) Congress also said that families could not be 
taxed on earnings on an account until a distribution is made from the 
state plan to the family or the applicable college. At that point, 
student beneficiary could be taxed on the earnings.
  The following year, in the Taxpayer Relief Act, The 105th Congress 
clarified that this deferral of taxation applied not only to prepaid 
tuition but also to prospective payments for room and board.
  Senator McConnell and I believe that The 106th Congress must go one 
step further. Distributions from these accounts should be 100 percent 
tax free. Students should be able to enroll in college without fear of 
them having to pay taxes on the money accrued.
  We believe that these programs should be tax free for numerous 
reasons. First, for most families, they have in essence purchased a 
service to be provided in the future. The accounts are not liquid. The 
funds are transferred from the state directly to the college or 
university. Under current policy, the student is required to find other 
means of generating the funds to pay the tax. Second, Congress should 
make these programs tax free in order to encourage savings and college 
attendance. No longer is a student's question ``Will I be able to go to 
college?'' but instead ``Where will I go to college?'' Third, making 
these accounts tax free is good education fiscal policy. For states 
that do set up programs where they guarantee a tuition price by selling 
contracts, the existence of these programs puts downward pressure on 
education inflation.
  Perhaps most importantly, prepaid tuition and savings programs help 
middle income families afford a college education. Florida's experience 
shows that it is not higher income families who take most advantage of 
these plans. It is middle income families who want the discipline of 
monthly payments. They know that they would have a difficult time 
coming up with the funds necessary to pay for college if they waited 
until their child enrolled. In Florida, more than 70 percent of 
participants in the state tuition program have family incomes of less 
than $50,000.
  I am pleased to have this opportunity to join my colleagues in 
support of good tax policies which enhance our higher education goals. 
Prepaid tuition plans deserve our support through enactment of 
legislation that would make them tax-free for American families and 
students.
                                 ______
                                 
      By Mr. CLELAND (for himself, Mr. Kerry, Mr. Hollings, Mr. Conrad, 
        Mrs. Boxer, Mr. Daschle, and Mr. Harkin):
  S. 388. A bill to authorize the establishment of a disaster 
mitigation pilot program in the Small Business Administration; to the 
Committee on Small Business.


             disaster mitigation pilot program legislation

 Mr. CLELAND. Mr. President, on behalf of my fellow original 
cosponsors, I am proud to introduce legislation which will provide a 
valuable protection for America's small businesses.
  This initiative would permit the Small Business Administration to use 
up to $15 million of existing disaster funds to establish a pilot 
program to provide small businesses with low-interest, long-term 
disaster loans to finance preventive measures before a disaster hits.
  Across the nation, increasing costs and personal devastation 
associated with disasters continually plague communities. While it may 
be impossible to prevent disasters, we believe that this legislation 
makes it possible to limit the number of disaster victims.
  In response to the financial and human toll caused by disasters, the 
administration launched an approach to emergency management that moves 
away from the current reliance on response and recovery to one that 
emphasizes preparedness and prevention. The Federal Emergency 
Management Agency established its Project Impact Program to assist 
disaster-prone communities in developing strategies to avoid the 
crippling effects of natural disasters.
  Our legislation supports this approach by allowing the SBA to begin a 
pilot program that would be limited to small businesses within those 
communities that are eligible to receive disaster loans after a 
disaster has been declared.
  Currently, SBA disaster loans may only be used to repair or replace 
existing protective devices that are destroyed or damaged by a 
disaster. The pilot program authorized by our proposal would allow 
funds to also be used to install new mitigation devices that will 
prevent future damage. We believe that such a program would address two 
areas of need for small business--reducing the costs of recovery from a 
disaster and reducing the costs of future disasters. Furthermore, by 
cutting those future costs, the program presents an excellent 
investment for taxpayers by decreasing the Federal and State funding 
required to meet future disaster relief needs. The ability of a small 
business to borrow money through the Disaster Loan Program to help make 
their facility disaster resistant could mean the difference as to 
whether that small business owner is able to reopen or forced to go out 
of business altogether after a disaster hits.
  On behalf of my fellow cosponsors, I urge my colleagues to support 
this effort to facilitate disaster prevention measures. Upon passage of 
this legislation, the costs in terms of property, taxpayer dollars, and 
lives will be reduced when nature strikes in the future.
  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. 388

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

     SECTION 1. DISASTER MITIGATION PILOT PROGRAM.

       (a) In General.--Section 7(b)(1) of the Small Business Act 
     (15 U.S.C. 636(b)(1)) is amended--
       (1) in subparagraph (B), by adding ``and'' at the end; and
       (2) by adding at the end the following:
       ``(C) during fiscal years 2000 through 2004, to establish a 
     predisaster mitigation program to make such loans (either 
     directly or in cooperation with banks or other lending 
     institutions through agreements to participate on an 
     immediate or deferred (guaranteed) basis), as the 
     Administrator may determine to be necessary or appropriate, 
     to enable small businesses to use mitigation techniques in 
     support of a formal mitigation program established by the 
     Federal Emergency Management Agency, except that no loan or 
     guarantee may be extended to a small business under this 
     subparagraph unless the Administration finds that the small 
     business is otherwise unable to obtain credit for the 
     purposes described in this subparagraph;''.
       (b) Authorization of Appropriations.--Section 20 of the 
     Small Business Act (15 U.S.C. 631 note) is amended by adding 
     at the end the following:
       ``(f) Disaster Mitigation Pilot Program.--The following 
     program levels are authorized for loans under section 
     7(b)(1)(C):
       ``(1) $15,000,000 for fiscal year 2000.
       ``(2) $15,000,000 for fiscal year 2001.
       ``(3) $15,000,000 for fiscal year 2002.
       ``(4) $15,000,000 for fiscal year 2003.
       ``(5) $15,000,000 for fiscal year 2004.''.
       (c) Evaluation.--On January 31, 2003, the Administrator of 
     the Small Business Administration shall submit to the 
     Committees on Small Business of the House of Representatives 
     and the Senate a report on the effectiveness of the pilot 
     program authorized by section 7(b)(1)(C) of the Small 
     Business Act

[[Page S1371]]

     (15 U.S.C. 636(b)(1)(C)), as added by subsection (a) of this 
     section, which report shall include--
       (1) information relating to--
       (A) the areas served under the pilot program;
       (B) the number and dollar value of loans made under the 
     pilot program; and
       (C) the estimated savings to the Federal Government 
     resulting from the pilot program; and
       (2) such other information as the Administrator determines 
     to be appropriate for evaluating the pilot program.

  Mr. KERRY. Mr. President, today I join my colleague, Senator Max 
Cleland, in introducing the Disaster Mitigation Coordination Act of 
1999, a bill that helps our nation's small businesses save money and 
prepare for natural disasters.
  We can't prevent disasters, but we can take measures to lessen and 
prevent the destruction that often hurts, and sometimes destroys, small 
businesses. Aside from avoiding inconveniences and disruptions, we know 
that there are cost-benefits to making meaningful improvements and 
changes to facilities before a disaster. According to the Federal 
Emergency Management Agency, which has a disaster mitigation program 
for communities, rather than businesses, we know that we save two 
dollars of disaster relief money for each dollar spent on disaster 
mitigation.
  I see a great need for this type of assistance in the small business 
community. This bill establishes a five-year pilot program that would 
make low-interest, long-term loans available to small business owners 
financing preventive measures to protect their businesses against, and 
lessen the extent of, future disaster damage. This pilot program is 
designed to help those small businesses that can't get credit elsewhere 
and that are located in disaster-prone areas.
  The small business pre-disaster mitigation loan pilot program would 
be run as part of the Small Business Administration's regular disaster 
loan program, testing the pros and cons of preparedness versus 
reaction. Up to $15 million will be set aside for this pilot if 
enacted.
  Only a portion of SBA's regular disaster loans, up to 20 percent, are 
available for mitigation after a recent natural disaster. In contrast, 
this legislation would allow 100 percent of an SBA disaster loan to be 
used for mitigation purposes within any area that the Federal Emergency 
Management Agency has designated as disaster-prone. In Massachusetts, 
that includes Marshfield and Quincy, two coastal communities that are 
prone to flooding, rainstorms and Nor'easters.
  Nationwide, whether you're a business in Missouri or Massachusetts, 
this pilot would allow you to take out a loan to make the improvements 
to your building or office to protect against disasters. For floods it 
can mean elevating the foundation or relocating. For tornados it can 
mean installing storm windows and building a stronger roof. For 
hurricanes it can mean reinforcing walls. And for fires it can mean 
adding sprinklers and flame-retardant building materials.
  The Administration supports this pilot program and included it in 
Clinton's budget request this fiscal year, and again for fiscal year 
2000. The President requests that up to $15 million of the total $358 
million proposed for disaster loans be used for disaster mitigation 
loans.
  Senator Cleland and I introduced this same legislation in the last 
Congress. And although it passed committee and the full Senate without 
opposition, the House did not have time to vote on its merits before 
the 105th Congress ended. I thank my colleagues, Senators Hollings, 
Conrad, Boxer, Daschle and Harkin for sharing our concern to meet the 
needs of our small business owners while also working to find solutions 
that are smarter, more pro-active and more cost-effective. Mr. 
President, I am pleased to cosponsor this legislation and am hopeful it 
will again receive the full support it deserves when it comes before 
the Senate this Congress.
                                 ______
                                 
      By Mr. McCAIN (for himself, Mr. Robb, Mr. Lieberman, Mr. DeWine, 
        Mr. Levin, Mr. Kennedy, Mr. Bingaman, Mr. Cleland, Mrs. 
        Feinstein, Mr. Hutchinson, Mr. Conrad, Mr. Allard, and Mr. 
        Smith of New Hampshire):
  S. 389. A bill to amend title 10, United States Code, to improve and 
transfer the jurisdiction over the troops-to-teachers program, and for 
other purposes; to the Committee on Health, Education, Labor, and 
Pensions.


               troops to teachers improvement act of 1999

 Mr. McCAIN. Mr. President, I rise today to introduce the 
Troops to Teachers Improvement Act of 1999. This legislation would help 
provide high-quality teachers to our nation's classrooms by assisting 
and counseling retired military personnel who are interested in 
beginning a new career as a teacher. I have worked hard with my 
colleagues, Senators Robb and Lieberman to develop a bill which 
strengthens, reforms and reauthorizes the current Troops to Teachers 
program in a manner which effectively addresses the educational needs 
of our nation's students.
  One of the most important issues facing our nation is the education 
of our children. Providing a solid, quality education for each and 
every child in our nation is a critical component in their quest for 
personal success and fulfillment. A solid education for our children 
also plays a pivotal role in the success of our nation, economically, 
intellectually, civically and morally.
  Unfortunately, our current education system is failing to provide 
many students with the academic skills they need. The Third 
International Math and Science Study (TIMSS) ranked U.S. high school 
seniors last among 16 countries in physics and next to last in math. 
These disappointing results underscore the challenge we face in 
improving our public schools and providing our children with a 
competitive, world-class education.
  A big part of that challenge will be funding, recruiting and 
retaining quality teachers to make America's children ready for 
tomorrow, particularly in the area of math and science. The Department 
of Education estimates that the nation's local school districts will 
need to hire more than two million teachers over the next decade to 
meet growing enrollment demands.
  It is essential that we work together to develop and support 
innovative programs which help address this growing need for school 
teachers. Fortunately, an effective and innovative program for 
addressing this shortfall already exists, the Troops to Teachers 
program.
  As many of my colleagues know, the Troops to Teachers program was 
initially created in 1993 to assist military personnel affected by 
defense downsizing but were interested in utilizing their knowledge, 
professional skills and expertise by becoming a teacher. Unfortunately, 
the authorization for this program is set to expire at the end of this 
fiscal year.
  Senators Robb, Lieberman and I were disconcerted to learn that this 
successful program would soon be terminated. We joined together to 
develop a bipartisan bill which not only reauthorizes this program but 
strengthens and reforms it so that it more effectively meets the 
academic needs of our students and schools.
  Our bill reforms this program so that it operates more efficiently 
and effectively targets the educational needs of our students. First, 
our bill transfers responsibility and funding for this program from the 
Department of Defense to the Department of Education. I and many other 
members of the Armed Services Committee believe that this is 
appropriate since it targets an educational need, rather than a 
military issue in our country and the Defense Department needs to use 
their limited resources to address a litany of problems impairing the 
readiness of our armed forces.
  Another important concern we address in our bill is eligibility. 
Under the current program, military personnel are eligible for 
participation after serving only six years in the military. This 
eligibility policy is outdated and no longer appropriate while our 
military is facing a personnel retention crisis. Therefore, we have 
limited eligibility to military personnel who retire after at least 
twenty years of service, physically disabled personnel or individuals 
who have served a minimum of six years and can provide documentation 
they were affected by military downsizing.
  Based on academic scores, particularly the TIMSS report it is evident

[[Page S1372]]

that a stronger emphasis needs to be placed on the academic preparation 
of our children in the areas of math and science. This is why we have 
made math, science, and special education teachers a priority for the 
Troops to Teachers program.
  We also recognize the difficulties which face many of our schools, 
particularly those with a large proportion of at-risk students who pose 
a greater challenge to educators. Many schools are confronted with the 
difficult task of educating children who face a litany of personal 
obstacles, including poverty, broken homes, language barriers, learning 
disabilities and physical disabilities. We have attempted to help 
schools conquer these challenges by providing incentives for 
individuals who commit to teaching for a minimum of four years at a 
school with a large proportion of at-risk students and a significant 
shortage of teachers.
  Finally, we have limited the cost of this program to the federal 
government by eliminating excessive, duplicative or unnecessary 
expenses. We have also limited administrative costs to operate this 
program to five percent, to ensure that federal funds being spent on 
this program are actually benefitting our children and education 
system, rather than being absorbed by Washington bureaucrats.
  ``A teacher affects eternity; they can never tell where their 
influence stops.'' I share this sentiment of Henry Adams, and hope that 
each of my colleagues will work with us to continue providing high 
quality, experienced and effective teachers to our children through the 
Troops to Teachers program. It is important for our children, for our 
nation and for our future.
 Mr. ROBB. Mr. President, I'm pleased to be joined today by 
several colleagues in introducing legislation that will help with one 
of the nation's most pressing challenges for the twenty first century--
recruiting teachers for our public schools.
  The deterioration of our schools is evident. The Third International 
Math and Science Study (TIMSS) ranked U.S. high school seniors last 
among 16 countries in physics and next to last in math. We are failing 
to provide the quality of education that will not only ensure each 
individual student the skills needed for personal success and 
fulfillment, but also that the nation can maintain its economic--and 
intellectual--leadership into the next century.
  Clearly there are many measures that must be taken to address this 
national dilemma. Our school infrastructure is literally crumbling. I 
was joined recently by Senator Lautenberg in introducing the Public 
School Modernization Act of 1999, which will support building new 
schools and repair and modernization of old schools to accommodate a 
growing school population and reduce class size.
  Many schools have been left out of the information revolution. I have 
worked hard to help Virginia schools get ``wired'' to the Internet--
indeed I've helped physically wire several schools across the 
Commonwealth.
  But ultimately, nothing matters more for the education of our youth 
than quality teachers. The Department of Education estimates that the 
nation's local school districts must hire more than two million 
teachers over the next decade to meet growing enrollment demands.
  This legislation builds on an existing program--the Troops-to-
Teachers program established originally in 1993--to help bring 
experienced, well-disciplined role models with proven leadership skills 
into the public school system. Since its authorization, the Troops-to-
Teachers program has assisted thousands of military personnel who leave 
the military to become public school teachers. Troops-to-Teachers 
offers counseling and assistance to help participants identify 
employment opportunities and receive teacher certification. It has been 
a great success, filling school vacancies in 48 states.
  These professionals are providing what educators say they need the 
most: mature role models, most of them male and many minorities, often 
trained in math and science, highly motivated, and comfortable in tough 
working environments. In fact, over three quarters are men, compared 
with about 25 percent in the overall public school system. About half 
elect to teach in inner city or rural schools. A disproportionate share 
have science, engineering or technical backgrounds. Retention is much 
higher than the national average.
  The authority for Troops-to-Teachers expires at the end of this 
fiscal year. The legislation we are introducing here today reauthorizes 
the program and makes many refinements to encourage even more of our 
soldiers, sailors, airmen and marines to enter the noble profession of 
teaching America's youth. The legislation focuses more resources toward 
direct financial assistance to cover teacher certification costs for 
applicants, and creates a bonus for those opting to teach in certain 
high need schools. Fewer resources are made available for 
administrative and other overhead costs. The bonus, I believe, will be 
particularly effective in attracting larger numbers of applicants. A 
recent offering of a sign-up bonus of $20,000 in Massachusetts public 
schools led to an explosion in applications from around the country.
  Mr. President, I urge other Senators to support this important 
legislation and I look forward to it being brought forward for final 
passage this year.
 Mr. LIEBERMAN. Mr. President, I am pleased to join with 
Senators McCain and Robb today in introducing legislation to extend and 
expand the Defense Department's successful Troops to Teachers 
initiative, which helps to steer former military personnel into 
classroom teaching jobs.
  To date Troops to Teachers has placed more than 3,000 retired or 
downsized service members in public schools in 48 different states, 
providing participants with assistance in obtaining the proper 
certification or licensing and matching them up with prospective 
employers. In return, these new teachers bring to the classroom what 
educators say our schools need most: mature and disciplined role 
models, most of them male and many of them minorities, well-trained in 
math and science and high tech fields, highly motivated, and highly 
capable of working in challenging environments.
  Our bill, the Troops to Teachers Improvement Act, aims to build on 
this success by encouraging more military retirees to move into 
teaching. It would do so by offering those departing troops new 
incentives to enter the teaching profession, particularly for those who 
are willing to serve in areas with large concentrations of at-risk 
children and severe shortages of qualified teaching candidates.
  The reality is, Mr. President, that the nation as a whole is facing a 
serious teacher shortage. The Department of Education is projecting 
that local school districts will have to hire more than two million new 
teachers over the next decade due to surging enrollments and the aging 
of America's teaching force. We were reminded again of this problem 
just this past Sunday by a front-page in the Washington Post, which 
described in some detail the challenge facing school systems across the 
country.
  As the Post article pointed out, this is a critical challenge for the 
nation, because our hopes of raising academic standards and student 
achievement will hinge in large part on the capabilities and talents of 
the men and women who fill those two million places in the classroom. 
Studies show conclusively, and not surprisingly, that teacher quality 
is one of the greatest determinants of student achievement, and that 
low-performing students make dramatic gains when they study with the 
most knowledgeable teachers. The American public is very aware of this 
crucial link, as evidenced in a survey done last November, in which 
nine out of 10 people listed raising teacher quality as one of our top 
educational priorities.
  The President began to address this critical challenge with his 
proposal to hire 100,000 new teachers, a plan I was proud to cosponsor. 
The Congress gave preliminary approval to this plan last fall through 
the Omnibus Appropriations bill we passed, which included funding for 
the first year of the program. I hope we will fully authorized this 
program this year to give local school districts full confidence that 
the funding for their efforts will be forthcoming.
  But the question remains who is going to fill those new positions, 
and it is this question that most concerns me. Over the last few years, 
we have seen some troubling indications about the quality of teaching 
candidates being

[[Page S1373]]

produced by the nation's education schools. Most Americans would 
probably be surprised to learn that college students who choose to go 
into teaching today tend to fall near the bottom of their peer group 
academically--a survey of students in 21 different fields of study 
found that education majors ranked 17th in their performance on the 
SAT.
  And most Americans would probably also be surprised to know that many 
of those would-be teachers are struggling to pass basic skills tests 
after graduating from their training programs. In Massachusetts, for 
example, 59 percent of the 1,800 candidates who took the state's first-
ever certification exam flunked a literacy exam that the state board of 
education chairman rated as at ``about the eight-grade level,'' In Long 
Island, to cite another example, only one in four teaching candidates 
in a pool of 758 could pass an English test normally given to 11th-
graders.

  These indicators are troubling in their own right, but they are even 
more so when we consider the pressures local school districts are under 
to fill holes in their teaching staffs. Many school systems around the 
country are already feeling the effects of the teacher shortage, and as 
a result administrators are being forced to grant large numbers of 
emergency waivers to certification or licensure rules. This is a 
troubling trend, because while certification is not a guarantee of 
quality, the fact that so many schools are lowering their standards to 
fill vacancies only heightens the chance that children in those schools 
will be struck with an unqualified instructor.
  In light of all of these developments, I think it is imperative that 
we search for new ways to attract more of the nation's best and 
brightest to the classroom, and we look beyond our education schools to 
tap new pools of talent. That is why I am so enthusiastic about the 
creative approach taken by the Troops to Teachers program. I can't 
think of a better source of teaching candidates than the smart, 
disciplined and dedicated men and women who leave the military every 
year, or a better return on the investment we as taxpayers have made in 
their training.
  A recent evaluation done by the non-partisan National Center for 
Education Information reveals that the troops who have participated so 
far have excelled in their new careers.

       Our research shows that military people transition 
     extremely well into teaching,'' said NCEI President Emily 
     Feistritzers. ``They are a rich source of teachers in all the 
     areas where we need teachers--geographically and by subject 
     area. There are more males among them than in normal 
     recruiting, and they are very committed; they are going into 
     teaching for all the right reasons.

  The NCEI study found that 90 percent of program participants were 
male, in comparison to the current teaching force, which is three-
quarters female; that more than 75 percent of the troops were teaching 
in inner cities or in small towns and rural areas, often where 
shortages are most acute and where strong male role models are most 
needed; and that 85 percent of the troops who started teaching over he 
last four years are still on the job, a retention rate far higher than 
for other new educators.
  One of the most important needs these troops are filling is in math 
and science classes. Several surveys have shown that a startling number 
of the men and women who are teaching math and science in middle and 
high schools today are not trained in these fields. This problem is 
especially severe in inner city school districts, where approximately 
half of all math and science teachers lack a major or minor in their 
field. The soldiers who are participating in Troops to Teachers often 
have advanced training in engineering and technology, and are well-
equipped to prepare our children for the demands of the Information Age 
economy.
  It there is one place where Troops to Teachers is falling short, it 
is in the number of participants. According to the Defense Department, 
less than 2 percent of the military personnel who have been eligible 
for the program have participated in the past five years. This is due 
in part, we believe, to the fact that Congress has not appropriated any 
money for the program in the last four years, and thereby stopped 
providing any financial support to troops who often incur thousands of 
dollars in costs for certification and relocations.
  The central goal of our legislation--beyond renewing the program's 
authorization, which expires at the end of this fiscal--is to boost 
that participation rate, to persuade more troops to embrace a new way 
to serve their nation. Our bill would authorize $25 million for each of 
the next five years, the bulk of which would go toward funding stipends 
of $5,000 to participants who commit to teach four years, and a special 
``bonus'' stipend of $10,000 to troops who commit to teach in high-
needs areas, which we hope will spur more former service members to 
consider teaching.

  I particularly hope our legislation will increase participation in my 
state of Connecticut. According to the Defense Department, only six 
troops have been placed in teaching jobs in Connecticut to date, which 
is disappointing given the significant number of military personnel 
located in the state. The Connecticut Department of Education believes 
local school districts could substantially benefit from this untapped 
resource, and for that reason the department has strongly voiced its 
support for our legislation.
  Even with the new incentives we are creating, which we hope will 
recruit as many as 3,000 new teachers each year, we recognize that 
Troops to Teachers will still only make a modest dent in solving the 
national shortage. But we will, with an extremely modest investment, 
make a substantial contribution to our common goals of raising teaching 
standards and helping our children realize their potential. And we may 
well galvanize support for a recruitment method that, as Education 
Secretary Richard Riley has suggested, could serve as a model for 
bringing many more bright, talented people from different professions 
to serve in our public schools and raise teaching standards there.
  The President has already expressed his strong support for our 
efforts to renew and revitalize Troops to Teachers, including new 
funding for it in his FY 2000 budget request. I hope my colleagues will 
join the impressive bipartisan coalition of cosponsors we have already 
assembled in supporting our legislation. We have a great opportunity 
here to harness a unique national resource to meet a pressing national 
need, and I hope we will seize it this year.
  Mr. President, I ask unanimous consent that an article from the 
Washington Post be printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                [From the Washington Post, Feb. 7, 1999]

          Teacher Shortage Stymies Efforts To Cut Class Sizes

                          (By Amy Argetsinger)

       In 1996, California enacted perhaps the most ambitious 
     education initiative of the decade--a $1 billion program to 
     reduce the size of elementary school classes by hiring 20,000 
     extra teachers.
       Parents cheered the plan, and other states--including 
     Maryland and Virginia--have rushed to imitate it. President 
     Clinton joined in, too, promising a national plan to help 
     hire 100,000 teachers in the next several years.
       But California's effort instantly posed a question that is 
     likely to be echoed across the country as many schools embark 
     on a historic hiring binge:
       Where are all these new teachers supposed to come from?
       California found enough teachers--but only by draining its 
     substitute pools, raiding private schools, recruiting from 
     other states and Mexico and hiring thousands without state 
     teaching licenses. Today, about 10 percent of the state's 
     teachers are working with ``emergency'' credentials.
       It's a problem that could appear in many other school 
     districts that are bracing for their worst teacher shortages 
     in years, at the same time they are trying to fulfill the 
     popular education reform goals of raising teacher standards 
     and reducing class sizes.
       Already, in Prince George's County, an early collision of 
     these goals suggests that sometimes something has to give. 
     When Gov. Parris N. Glendening (D) promised to hire 1,100 new 
     teachers, he also warned that school districts must have at 
     least 98 percent of their teachers with full state 
     certification by 2002 or risk losing the new funds. But in 
     counties such as Prince George's, which offers mid-range 
     salaries and where only 87 percent of teachers are fully 
     certified, officials complain they cannot possibly improve 
     their numbers that fast.
       This week, aides said the governor may consider giving some 
     districts more time to reach the goal.
       ``It's a very delicate balancing act,'' warned Lawrence E. 
     Leak, Maryland's assistant superintendent of schools. ``Each 
     one of those issues''--shortages, standards and class

[[Page S1374]]

     sizes--``are compelling with respect to wanting quality 
     teachers in the classroom.''
       Last fall, public school officials throughout the 
     Washington area and across the country found themselves 
     scrambling to fill last-minute teaching vacancies. Most were 
     in science and math classes, where instructors can command 
     much higher salaries in booming high-tech private industries. 
     Many districts also reported shortages of special education 
     teachers.
       Yet a more serious and widespread shortage is looming. In 
     the next decade, rising student enrollments and a wave of 
     baby-boomer retirements will require 2 million new teachers, 
     according to the U.S. Department of Education. Meanwhile, 
     teacher colleges in many parts of the country are turning out 
     fewer graduates--a phenomenon attributed to both the low 
     birth rates of the mid-1970s and that generation's reluctance 
     to enter such a demanding but low-paying field.
       School districts have responded by cranking up recruitment 
     efforts, setting off early across the country in search of 
     top teacher candidates, forging ties with education schools, 
     and piling on the incentives. Baltimore schools last year 
     started offering job prospects $5,000 toward closing costs on 
     a new home in the city. Some North Carolina districts promise 
     6.5 percent annual raises. Massachusetts caused a sensation 
     this month by offering top teaching-school graduates the 
     chance to apply for competitive $20,000 signing bonuses.
       At the University of Virginia last week, a record 210 
     recruiters showed up at a job fair to woo a graduating class 
     of only 150 teaching majors--20 of whom were already spoken 
     for.
       ``It's unheard of,'' said Gigi Davis-White, a career-
     planning director at the university's Curry School of 
     Education. ``I had recruiters complaining. . . . They'd never 
     really had to work that fast.''
       The demand is not limited to students with an education 
     degree, she said. ``If you have a math, science or foreign 
     language background, they'll provisionally certify you and 
     get you in the classroom.''
       Deeply concerned about the looming shortages, Maryland 
     legislators are weighing a passel of measures to lure more 
     people into teaching.
       Glendening is promoting full scholarships for students who 
     promise to teach in Maryland schools. And although a pitch by 
     state Superintendent of Schools Nancy S. Grasmick to give 
     teachers tax breaks found no sponsor, proposals now before 
     the state General Assembly include $3,000 signing bonuses for 
     top graduates, tax credits to reward graduate studies, 
     stipends for high-performing teachers, and pension 
     protections to encourage retired teachers to return to the 
     classroom. Sen. Gloria G. Lawlah (D-Prince George's) is 
     proposing scholarships for students who promise to teach in 
     Prince George's and property tax breaks for county teachers.
       Yet some say such efforts fall short. Karl Pence, president 
     of the Maryland State Teachers Association, said state 
     officials need to focus less on quick fixes and cash bonuses 
     than on making teaching a more desirable and respected 
     profession.
       ``There are lots of teachers who would accept challenges of 
     working in at-risk schools if they could have reasonable 
     class size, the materials they need, clean and safe 
     buildings, and technology right there in the classroom,'' 
     he said.
       But the best attempts to fight the teacher shortage may be 
     complicated by efforts to reduce class size--which require 
     hiring even more teachers.
       It's one of the most politically popular issues of the day: 
     Many parents and politicians insist that with fewer students 
     in a room, a teacher can provide more individual attention to 
     each and thus enrich the learning experience. Clinton's 
     proposal won funding for a first-stage hire of 30,000 
     teachers who will join the nation's classrooms this fall.
       Meanwhile, both Glendening and Virginia Gov. James S. 
     Gilmore III (R) are touting their own class-size reduction 
     plans, now under consideration in their state legislatures. 
     And individual school districts--including Montgomery and 
     Howard counties and Alexandria--are pouring money into 
     similar programs. (D.C. officials have no plan to reduce 
     their relatively small class sizes, although they agree that 
     teachers are always at a premium.)
       Most of the class-size reduction plans are aimed at 
     kindergarten through third grade, where researchers believe 
     children are best served by the extra attention. Some plans 
     also would add more teachers in seventh- or ninth-grade math, 
     another critical juncture for students.
       Some analysts argue that smaller classes--though increasing 
     the demand for teachers--may help solve the shortages by 
     making teaching more appealing. In California, schools had 
     little trouble finding teachers for the new first- and 
     second-grade slots, which promised no more than 20 students a 
     class.
       The catch, however, was that many of them deserted posts in 
     crowded middle school classrooms to take the new jobs--
     leaving a void in the upper-grade teaching ranks.
       At the same time, politicians have increasingly made an 
     issue about the quality of public school teachers. Virginia 
     last year set the highest cutoff score in the nation on the 
     standardized test for aspiring teachers. Maryland, meanwhile, 
     has set several new hurdles for teachers, requiring them to 
     take several more reading courses for certification and 
     linking their license renewal to regular evaluations.
       Lately in Maryland, state officials also have raised 
     concerns about the large number of teachers lacking full 
     certification, especially in Prince George's County and 
     Baltimore. Fully certified teachers generally must pass a set 
     of approved education courses, have some student teaching 
     experience and pass a national teacher's exam.
       Officials in these districts maintain that just because a 
     teacher is uncertified doesn't mean he or she is a bad 
     teacher--many of the ``provisionally'' certified teachers are 
     close to completing the requirements for licensure.
       But they also complain that their smaller budgets and 
     larger enrollments make it hard to vie for the dwindling pool 
     of qualified applicants. ``The competition is intense,'' said 
     Louise F. Waynant, Prince George's deputy superintendent of 
     schools. ``And we do find that school districts with 
     higher teacher salaries have a bit of an advantage.''
       Gordon Ambach, the executive director of the Council of 
     Chief State School Officers, argues that the teacher shortage 
     will have little effect on affluent suburbs but will hit hard 
     in school systems such as Prince George's and the District, 
     which have greater pockets of poor and immigrant students.
       But some education analysts--especially advocates for 
     teaching--see opportunity in the teacher crunch. Linda 
     Darling-Hammond, executive director of the National 
     Commission on Teaching and America's Future, notes that some 
     parts of the country produce more than enough teachers, but 
     that those instructors cannot easily get licensed in other 
     states. She said states should offer more reciprocity in 
     teacher licensing.
       She also said the real shortage problem stems from high 
     rates of attrition--almost 30 percent of teachers drop out 
     within five years. ``We waste a lot of money and time and 
     effort with the revolving door,'' Darling-Hammond said, 
     ``trying to recruit people, then treating them badly and 
     watching them leave.''
       David Haselkorn, president of Recruiting New Teachers Inc., 
     said school systems need to offer mentoring programs for 
     struggling new teachers--such a plan has been proposed in the 
     Maryland General Assembly. And he said he hopes the crunch 
     will inspire local officials to consider raising salaries and 
     otherwise improve teachers' working conditions.
       ``The opportunity is to use this moment in time--when we 
     are going to be doing a substantial amount of hiring--to 
     rethink significantly how we prepare and support teachers for 
     the 21st century.''
                                 ______
                                 
      By Mr. REID:
  S. 390. A bill to amend title II of the Social Security Act to allow 
workers who attain age 65 after 1981 and before 1992 to choose either 
lump sum payments over four years totaling $5,000 or an improved 
benefit computation formula under a new 10-year rule governing the 
transition to the changes in benefit computation rules enacted in the 
Social Security Amendments of 1977, and for other purposes; to the 
Committee on Finance.
 Mr. REID. Mr. President, I rise today to introduce legislation 
that would correct a problem that plagues a special group of older 
Americans. I am speaking on behalf of those affected by the Social 
Security notch.
  For my colleagues who may not be aware, the Social Security notch 
causes 11 million Americans born between the years 1917-1926 to receive 
less in Social Security benefits than Americans born outside the notch 
years due to changes made in the 1977 Social Security benefit formula.
  I have felt compelled over the years to speak out about this issue 
and the injustice it imposes on millions of Americans. The notch issue 
has been debated and debated, studied and studied, yet to date, no 
solution to it has been found. Because of this, many older Americans 
born during this period must scrimp to afford the most basic of 
necessities.
  Mr. President, I am the first to acknowledge that with any projected 
budget surplus we must save Social Security. In many ways, my 
legislation does just this. It restores confidence to the many notch 
victims around the country and will show them that we in Congress will 
accept responsibility for any error that was made. We should not ask 
them to accept less as a result of our mistake. While we must save 
Social Security for the future, we have an obligation to those, who 
through no fault of their own, receive less than those that were 
fortunate enough to be born just days before or after the notch period.
  I believe we owe a debt to notch babies. Like any American family, we 
must first pay the bills before we invest in the future. We have the 
resources to make good on our debt to notch babies. We should come 
forward and honor our commitment.

[[Page S1375]]

  Mr. President, the ``notch'' situation had its origins in 1972, when 
Congress decided to create automatic cost-of-living adjustments to help 
Social Security benefits keep pace with inflation. Previously, each 
adjustment had to await legislation, causing beneficiaries' monthly 
payments to lag behind inflation. When Congress took this action, it 
was acting under the best of intentions.
  Unfortuately, this new benefit adjustment method was flawed. To 
function properly, it required that the economy behave in much the same 
fashion that it had in the 1950s and 1960s, with annual wage increases 
outpacing prices, and inflation remaining relatively low. As we all 
know, that did not happen. The rapid inflation and high unemployment of 
the 1970s generated increases in benefits. In an effort to end this 
problem, in 1977 Congress revised the way that benefits were computed. 
In making its revisions, Congress decided that it was not proper to 
reduce benefits for persons already receiving them; it did, however, 
decide that benefits for all future retirees should be reduced. As a 
result, those born after January 1, 1917 would, by design, receive 
benefits that were, in many cases, far less. In an attempt to ease the 
transition to the new, lower benefit levels, Congress designed a 
special `transitional computation method' for use by beneficiaries born 
between 1917 and 1921.

  Mr. President, we have an obligation to convey to our constituents 
that Social Security is a fair system. In town hall meetings back home 
in Nevada, I have a hard time trying to tell that to a notch victim. 
They feel slighted by their government and if I were in their 
situation, I would too. Through no fault of their own, they receive 
less, sometimes as much as $200 less, than their neighbors.
  The legislation I am offering today is my proposal to right the 
wrong. I propose using any projected budget surplus to pay the lump sum 
benefit to notch babies. While we have a surplus, let's fix the notch 
problem once and for all and restore the confidence of the ten million 
notch babies across this land.
  Government has an obligation to be fair. I don't think we have been 
in the case of notch babies. My support of notch babies is 
longstanding. I introduced the only notch amendment in April 1991 that 
ever passed in Congress as part of the fiscal year 1992 Budget 
Resolution. Unfortunately, it did not become the law of the land as it 
was dropped in Conference with the House of Representatives. I have 
cosponsored numerous pieces of legislation over the years to address 
this issue. With this legislation, my effort continues.
  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. 390

       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 ``Notch Fairness Act of 
     1999''.

     SEC. 2. NEW GUARANTEED MINIMUM PRIMARY INSURANCE AMOUNT WHERE 
                   ELIGIBILITY ARISES DURING TRANSITIONAL PERIOD.

       (a) In General.--Section 215(a) of the Social Security Act 
     (42 U.S.C. 415(a)) is amended--
       (1) in paragraph (4)(B)--
       (A) by inserting ``(with or without the application of 
     paragraph (8))'' after ``would be made''; and
       (B) in clause (i), by striking ``1984'' and inserting 
     ``1989''; and
       (2) by adding at the end the following:
       ``(8)(A) In the case of an individual described in 
     paragraph (4)(B) (subject to subparagraphs (F) and (G) of 
     this paragraph), the amount of the individual's primary 
     insurance amount as computed or recomputed under paragraph 
     (1) shall be deemed equal to the sum of--
       ``(i) such amount, and
       ``(ii) the applicable transitional increase amount (if 
     any).
       ``(B) For purposes of subparagraph (A)(ii), the term 
     `applicable transitional increase amount' means, in the case 
     of any individual, the product derived by multiplying--
       ``(i) the excess under former law, by
       ``(ii) the applicable percentage in relation to the year in 
     which the individual becomes eligible for old-age insurance 
     benefits, as determined by the following table:

      ``If the individual                                              
    becomes eligible for                                 The applicable
    such benefits in:                                    percentage is:
      1979..................................................55 percent 
      1980..................................................45 percent 
      1981..................................................35 percent 
      1982..................................................32 percent 
      1983..................................................25 percent 
      1984..................................................20 percent 
      1985..................................................16 percent 
      1986..................................................10 percent 
      1987...................................................3 percent 
      1988...................................................5 percent.
       ``(C) For purposes of subparagraph (B), the term `excess 
     under former law' means, in the case of any individual, the 
     excess of--
       ``(i) the applicable former law primary insurance amount, 
     over
       ``(ii) the amount which would be such individual's primary 
     insurance amount if computed or recomputed under this section 
     without regard to this paragraph and paragraphs (4), (5), and 
     (6).
       ``(D) For purposes of subparagraph (C)(i), the term 
     `applicable former law primary insurance amount' means, in 
     the case of any individual, the amount which would be such 
     individual's primary insurance amount if it were--
       ``(i) computed or recomputed (pursuant to paragraph 
     (4)(B)(i)) under section 215(a) as in effect in December 
     1978, or
       ``(ii) computed or recomputed (pursuant to paragraph 
     (4)(B)(ii)) as provided by subsection (d),

     (as applicable) and modified as provided by subparagraph (E).
       ``(E) In determining the amount which would be an 
     individual's primary insurance amount as provided in 
     subparagraph (D)--
       ``(i) subsection (b)(4) shall not apply;
       ``(ii) section 215(b) as in effect in December 1978 shall 
     apply, except that section 215(b)(2)(C) (as then in effect) 
     shall be deemed to provide that an individual's `computation 
     base years' may include only calendar years in the period 
     after 1950 (or 1936 if applicable) and ending with the 
     calendar year in which such individual attains age 61, plus 
     the 3 calendar years after such period for which the total of 
     such individual's wages and self-employment income is the 
     largest; and
       ``(iii) subdivision (I) in the last sentence of paragraph 
     (4) shall be applied as though the words `without regard to 
     any increases in that table' in such subdivision read 
     `including any increases in that table'.
       ``(F) This paragraph shall apply in the case of any 
     individual only if such application results in a primary 
     insurance amount for such individual that is greater than it 
     would be if computed or recomputed under paragraph (4)(B) 
     without regard to this paragraph.
       ``(G)(i) This paragraph shall apply in the case of any 
     individual subject to any timely election to receive lump sum 
     payments under this subparagraph.
       ``(ii) A written election to receive lump sum payments 
     under this subparagraph, in lieu of the application of this 
     paragraph to the computation of the primary insurance amount 
     of an individual described in paragraph (4)(B), may be filed 
     with the Commissioner of Social Security in such form and 
     manner as shall be prescribed in regulations of the 
     Commissioner. Any such election may be filed by such 
     individual or, in the event of such individual's death before 
     any such election is filed by such individual, by any other 
     beneficiary entitled to benefits under section 202 on the 
     basis of such individual's wages and self-employment income. 
     Any such election filed after December 31, 1999, shall be 
     null and void and of no effect.
       ``(iii) Upon receipt by the Commissioner of a timely 
     election filed by the individual described in paragraph 
     (4)(B) in accordance with clause (ii)--
       ``(I) the Commissioner shall certify receipt of such 
     election to the Secretary of the Treasury, and the Secretary 
     of the Treasury, after receipt of such certification, shall 
     pay such individual, from amounts in the Federal Old-Age and 
     Survivors Insurance Trust Fund, a total amount equal to 
     $5,000, in 4 annual lump sum installments of $1,250, the 
     first of which shall be made during fiscal year 2000 not 
     later than July 1, 2000, and
       ``(II) subparagraph (A) shall not apply in determining such 
     individual's primary insurance amount.
       ``(iv) Upon receipt by the Commissioner as of December 31, 
     1999, of a timely election filed in accordance with clause 
     (ii) by at least one beneficiary entitled to benefits on the 
     basis of the wages and self-employment income of a deceased 
     individual described in paragraph (4)(B), if such deceased 
     individual has filed no timely election in accordance with 
     clause (ii)--
       ``(I) the Commissioner shall certify receipt of all such 
     elections received as of such date to the Secretary of the 
     Treasury, and the Secretary of the Treasury, after receipt of 
     such certification, shall pay each beneficiary filing such a 
     timely election, from amounts in the Federal Old-Age and 
     Survivors Insurance Trust Fund, a total amount equal to 
     $5,000 (or, in the case of 2 or more such beneficiaries, such 
     amount distributed evenly among such beneficiaries), in 4 
     equal annual lump sum installments, the first of which shall 
     be made during fiscal year 2000 not later than July 1, 2000, 
     and
       ``(II) solely for purposes of determining the amount of 
     such beneficiary's benefits, subparagraph (A) shall be deemed 
     not to apply in determining the deceased individual's primary 
     insurance amount.''.
       (b) Effective Date and Related Rules.--
       (1) Applicability of amendments.--
       (A) In general.--Except as provided in paragraph (2), the 
     amendments made by this Act shall be effective as though they 
     had

[[Page S1376]]

     been included or reflected in section 201 of the Social 
     Security Amendments of 1977.
       (B) Applicability.--No monthly benefit or primary insurance 
     amount under title II of the Social Security Act shall be 
     increased by reason of such amendments for any month before 
     July 2000. The amendments made this section shall apply with 
     respect to benefits payable in months in any fiscal year 
     after fiscal year 2003 only if the corresponding decrease in 
     adjusted discretionary spending limits for budget authority 
     and outlays under section 3 of this Act for fiscal years 
     prior to fiscal year 2004 is extended by Federal law to such 
     fiscal year after fiscal year 2003.
       (2) Recomputation to reflect benefit increases.--
     Notwithstanding section 215(f)(1) of the Social Security Act, 
     the Commissioner of Social Security shall recompute the 
     primary insurance amount so as to take into account the 
     amendments made by this Act in any case in which--
       (A) an individual is entitled to monthly insurance benefits 
     under title II of such Act for June 2000; and
       (B) such benefits are based on a primary insurance amount 
     computed--
       (i) under section 215 of such Act as in effect (by reason 
     of the Social Security Amendments of 1977) after December 
     1978, or
       (ii) under section 215 of such Act as in effect prior to 
     January 1979 by reason of subsection (a)(4)(B) of such 
     section (as amended by the Social Security Amendments of 
     1977).

     SEC. 3. OFFSET PROVIDED BY PROJECTED FEDERAL BUDGET 
                   SURPLUSES.

       Amounts offset by this Act shall not be counted as direct 
     spending for purposes of the budgetary limits provided in the 
     Congressional Budget Act of 1974 and the Balanced Budget and 
     Emergency Deficit Control Act of 1985.
                                 ______
                                 
      By Mr. KERREY (for himself, Mr. Bond, Mr. Kennedy, Mr. Gorton, 
        Mr. Graham, Mr. DeWine, Mr. Moynihan, Mr. Durbin, Mr. Inouye, 
        Mr. Mack, and Mrs. Murray):
  S. 391. A bill to provide for payments to children's hospitals that 
operate graduate medical education programs; to the Committee on 
Finance.


        CHILDREN'S HOSPITALS EDUCATION AND RESEARCH ACT OF 1999

 Mr. KERREY. Mr. President, I am pleased to introduce this 
proposal to provide critical support to teaching programs at free-
standing children's hospitals. I am also honored to be joined by 
Senators Bond, Kennedy, Durbin, DeWine, Moynihan, Graham, Gorton, 
Inouye, Mack, and Murray as original cosponsors. And I am gratified to 
note that the President's budget submission for FY 2000 also includes 
funding for teaching programs at these hospitals.
  Children's hospitals play an important role in our nation's health 
care system. They combine high-quality clinical care, a vibrant 
teaching mission and leading pediatric biomedical research within their 
walls. They provide specialized regional services, including complex 
care to chronically ill children, and serve as safety-net providers to 
low-income children.
  Teaching is an inherent component of these hospitals' day-to-day 
operations. These hospitals train twenty-nine percent of the nation's 
pediatricians, and the majority of America's pediatric specialists. 
Pediatric residents develop the skills they need to care for our 
nation's children at these institutions.
  In addition, these hospitals effectively combine the joint missions 
of teaching and research. Scientific discovery depends on the strong 
academic focus of teaching hospitals. The teaching environment attracts 
academics devoted to research. It attracts the volume and spectrum of 
complex cases needed for clinical research. And the teaching mission 
creates the intellectual environment necessary to test the conventional 
wisdom of day-to-day health care and foster the questioning that leads 
to breakthroughs in research. Because these hospitals combine research 
and teaching in a clinical setting, these breakthroughs can be rapidly 
translated into patient care.
  Children's hospitals have contributed to advances in virtually every 
aspect of pediatric medicine. Thanks to research efforts at these 
hospitals, children can survive once-fatal diseases such as polio, grow 
and thrive with disabilities such as cerebral palsy, and overcome 
juvenile diabetes to become self-supporting adults.
  Through patient care, teaching and research, these hospitals 
contribute to our communities in many ways. However, their training 
programs--and their ability to fulfill their critical role in America's 
health care system--are being gradually undermined by dwindling 
financial support. Maintaining a vibrant teaching and research program 
is more expensive than simply providing patient care. The nation's 
teaching hospitals have historically relied on additional support--
support beyond the cost of clinical care itself--in order to finance 
their teaching programs. Today, competitive market pressures provide 
little incentive for private payers to contribute towards teaching 
costs. At the same time, the increased use of managed care plans within 
the Medicaid program has decreased the availability of teaching dollars 
through Medicaid. Therefore, Medicare's support for graduate medical 
education is more important than ever.
  Independent children's hospitals, however, serve an extremely small 
number of Medicare patients. Therefore, they do not receive Medicare 
graduate medical education payments to support their teaching 
activities. The most significant source of graduate medical education 
financing is, in large part, not available to these hospitals.
  This proposal will address, for the short-term, this unintended 
consequence of current public policy. It will provide time-limited 
support to help children's hospitals train tomorrow's pediatricians, 
investigate new treatments and pursue pediatric biomedical research. It 
will establish a four-year fund, which will provide children's 
hospitals with Federal teaching payments that are based on their per 
resident costs and the complexity of their patient population. Total 
spending over four years will be less than a billion dollars.
  This proposal does not solve the fundamental dilemma of how to cover 
the cost of training our nation's doctors. Congress has charged the 
Bipartisan Commission on the Future of Medicare with developing 
recommendations on this important question--and Congress has directed 
the Commission to examine teaching support for children's hospitals 
within these recommendations. I believe the Commission's recommendation 
will recognize the need to include children's hospitals within the 
framework of graduate medical education. But in the meantime, this 
proposal provides the support these hospitals need until these broader 
questions are answered and addressed.
  All American families have great dreams for their children. These 
hopes include healthy, active, happy childhoods, so they seek the best 
possible health care for their children. And when these dreams are 
threatened by a critical illness, they seek the expertise of highly-
trained pediatricians and pediatric specialists, and rely on the 
research discoveries fostered by children's hospitals. All families 
deserve a chance at the American dream. Through this legislation, we 
will help children's hospitals--hospitals such as Children's Hospital 
in Omaha, Boys' Town, St. Louis Children's Hospital, Children's 
Hospital in Boston, Children's Hospital in Seattle+ and others--train 
the doctors and do the research necessary to fulfill this dream. 
Through this legislation, Congress will be doing its part to help 
American families work towards a successful future.
  Mr. President, 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. 391

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Children's Hospitals 
     Education and Research Act of 1999''.

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

       (a) Payments.--
       (1) In general.--The Secretary shall make payments under 
     this section to each children's hospital for each hospital 
     cost reporting period under the medicare program beginning in 
     or after fiscal year 2000 and before fiscal year 2004 for 
     the--
       (A) direct expenses associated with operating approved 
     medical residency training programs; and
       (B) indirect expenses associated with the treatment of more 
     severely ill patients and the additional costs related to the 
     teaching of residents.
       (2) Payment amounts.--Subject to paragraph (3), the 
     following amounts shall be payable under this section to a 
     children's hospital for a cost reporting period described in 
     paragraph (1):

[[Page S1377]]

       (A) Direct expenses.--The amount determined under 
     subsection (b) for direct expenses described in paragraph 
     (1)(A).
       (B) Indirect expenses.--The amount determined under 
     subsection (c) for indirect expenses described in paragraph 
     (1)(B)
       (3) Capped amount.--
       (A) In general.--The payments to children's hospitals 
     established in this subsection for cost reporting periods 
     ending in any fiscal year shall not exceed the funds 
     appropriated under subsection (e) for that fiscal year.
       (B) Pro rata reductions of payments for direct expenses.--
     If the Secretary determines that the amount of funds 
     appropriated under subsection (e)(1) for cost reporting 
     periods ending in any fiscal year is insufficient to provide 
     the total amount of payments otherwise due for such periods, 
     the Secretary shall reduce each of the amounts payable under 
     this section pursuant to paragraph (2)(A) for such period on 
     a pro rata basis to reflect such shortfall.
       (b) Amount of Payment for Direct Medical Education.--
       (1) In general.--The amount determined under this 
     subsection for payments to a children's hospital for direct 
     expenses relating to approved medical residency training 
     programs for a cost reporting period beginning in or after 
     fiscal year 2000 and before fiscal year 2004 is equal to the 
     product of--
       (A) the updated per resident amount for direct medical 
     education, as determined under paragraph (2), for the cost 
     reporting period; and
       (B) the number of full-time equivalent residents in the 
     hospital's approved medical residency training programs (as 
     determined under section 1886(h)(4) of the Social Security 
     Act (42 U.S.C. 1395ww(h)(4))) for the cost reporting period.
       (2) Updated per resident amount for direct medical 
     education.--The updated per resident amount for direct 
     medical education for a hospital for a cost reporting period 
     ending in a fiscal year is an amount equal to the per 
     resident amount for cost reporting periods ending during 
     fiscal year 1999 for the hospital involved (as determined by 
     the Secretary using the methodology described in section 
     1886(h)(2)(E)) of such Act (42 U.S.C. 1395ww(h)(2)(E))) 
     increased by the percentage increase in the Consumer Price 
     Index for All Urban Consumers (United States city average) 
     from fiscal year 1999 through the fiscal year involved.
       (c) Amount of Payment for Indirect Medical Education.--
       (1) In general.--The amount determined under this 
     subsection for payments to a children's hospital for indirect 
     expenses associated with the treatment of more severely ill 
     patients and the additional costs related to the teaching of 
     residents for a cost reporting period beginning in or after 
     fiscal year 2000 and before fiscal year 2004 is equal to an 
     amount determined appropriate by the Secretary.
       (2) Factors.--In determining the amount under paragraph 
     (1), the Secretary shall--
       (A) take into account variations in case mix among 
     children's hospitals and the number of full-time equivalent 
     residents in the hospitals' approved medical residency 
     training programs for the cost reporting period; and
       (B) assure that the aggregate of the payments for indirect 
     expenses associated with the treatment of more severely ill 
     patients and the additional costs related to the teaching of 
     residents under this section in a fiscal year are equal to 
     the amount appropriated for such expenses in such year under 
     subsection (e)(2).
       (d) Making of Payments.--
       (1) Interim payments.--The Secretary shall estimate, before 
     the beginning of each cost reporting period for a hospital 
     for which the payments may be made under this section, the 
     amounts of the payments for such period and shall (subject to 
     paragraph (2)) make the payments of such amounts in 26 equal 
     interim installments during such period.
       (2) Withholding.--The Secretary shall withhold up to 25 
     percent from each interim installment paid under paragraph 
     (1).
       (3) Reconciliation.--At the end of each such period, the 
     hospital shall submit to the Secretary such information as 
     the Secretary determines to be necessary to determine the 
     percent (if any) of the total amount withheld under paragraph 
     (2) that is due under this section for the hospital for the 
     period. Based on such determination, the Secretary shall 
     recoup any overpayments made, or pay any balance due. The 
     amount so determined shall be considered a final intermediary 
     determination for purposes of applying section 1878 of the 
     Social Security Act (42 U.S.C. 1395oo) and shall be subject 
     to review under that section in the same manner as the amount 
     of payment under section 1886(d) of such Act (42 U.S.C. 
     1395ww(d)) is subject to review under such section.
       (e) Limitation on Expenditures.--
       (1) Direct medical education.--
       (A) In general.--Subject to subparagraph (B), there are 
     hereby appropriated, out of any money in the Treasury not 
     otherwise appropriated, for payments under this section for 
     direct expenses relating to approved medical residency 
     training programs for cost reporting periods beginning in--
       (i) fiscal year 2000, $35,000,000;
       (ii) fiscal year 2001, $95,000,000;
       (iii) fiscal year 2002, $95,000,000; and
       (iv) fiscal year 2003, $95,000,000.
       (B) Carryover of excess.--If the amount of payments under 
     this section for cost reporting periods beginning in fiscal 
     year 2000, 2001, or 2002 is less than the amount provided 
     under this paragraph for such payments for such periods, then 
     the amount available under this paragraph for cost reporting 
     periods beginning in the following fiscal year shall be 
     increased by the amount of such difference.
       (2) Indirect medical education.--There are hereby 
     appropriated, out of any money in the Treasury not otherwise 
     appropriated, for payments under this section for indirect 
     expenses associated with the treatment of more severely ill 
     patients and the additional costs related to the teaching of 
     residents for cost reporting periods beginning in--
       (A) fiscal year 2000, $65,000,000;
       (B) fiscal year 2001, $190,000,000;
       (C) fiscal year 2002, $190,000,000; and
       (D) fiscal year 2003, $190,000,000.
       (f) Relation to Medicare and Medicaid Payments.--
     Notwithstanding any other provision of law, payments under 
     this section to a hospital for a cost reporting period--
       (1) are in lieu of any amounts otherwise payable to the 
     hospital under section 1886(h) or 1886(d)(5)(B) of the Social 
     Security Act (42 U.S.C. 1395ww(h); 1395ww(d)(5)B)) to the 
     hospital for such cost reporting period, but
       (2) shall not affect the amounts otherwise payable to such 
     hospitals under a State medicaid plan under title XIX of such 
     Act (42 U.S.C. 1396 et seq.).
       (g) Definitions.--In this section:
       (1) Approved medical residency training program.--The term 
     ``approved medical residency training program'' has the 
     meaning given such term in section 1886(h)(5)(A) of the 
     Social Security Act (42 U.S.C. 1395ww(h)(5)(A)).
       (2) Children's hospital.--The term ``children's hospital'' 
     means a hospital described in section 1886(d)(1)(B)(iii) of 
     the Social Security Act (42 U.S.C. 1395ww(d)(1)(B)(iii)).
       (3) Direct graduate medical education costs.--The term 
     ``direct graduate medical education costs'' has the meaning 
     given such term in section 1886(h)(5)(C) of the Social 
     Security Act (42 U.S.C. 1395ww(h)(5)(C)).
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
 Mr. KENNEDY. Mr. President, America's children--from the 
smallest premature baby to the tallest teenager--deserve access to 
doctors trained specifically in meeting their health needs. I commend 
Senator Kerrey's leadership in this bipartisan legislation introduced 
today to provide greater support to children's hospitals, so that they 
can continue to train the kinds of doctors that children need.
  In the United States, there are 53 freestanding pediatric hospitals--
less than 1% of all the hospitals in the country. Yet they train more 
than a quarter of all pediatricians and more than half of all pediatric 
specialists. These hospitals also help train other doctors who need 
experience in taking care of children--including family doctors, 
neurologists, and surgeons.
  Children's hospitals typically provide care for the sickest 
children--those whose medical needs are not easily met in the local and 
community hospitals. Patients in children's hospitals include a higher 
percentage of our nation's uninsured children and low-income children. 
These hospitals are the source of many new lifesaving strategies, such 
as treating childhood cancer and helping premature babies to breathe.
  But the ability of children's hospitals to train doctors is in 
increasing jeopardy. Funds for training residents are declining as 
changes take place in the ways we pay for our health care. For most 
hospitals, support for graduate medical education is funded through 
Medicare. But since freestanding children's hospitals treat almost no 
Medicare patients, they receive almost no federal support or other 
support for training their residents.
  Democrats and Republicans recognize that qualified children's 
physicians are needed as much as other types of physicians. Under this 
bill, the Department of Health and Human Services is authorized to 
provide support to freestanding children's hospitals for such training. 
It means that children's hospitals will receive the same level of 
support that this country gives to other teaching hospitals. Under this 
legislation funds will be distributed fairly, by using a formula that 
considers variations across the country in the cost of such training. 
Safeguards are included to guarantee that the dollars are spent only 
when residents are actually trained.
  President Clinton's budget recognizes this high priority. It includes 
a $40 million downpayment until this legislation is enacted.
  I look forward to working with my colleagues and the administration 
to assure early passage of this needed legislation. I commend both the 
President

[[Page S1378]]

and the First Lady for their strong commitment to children and for 
their indispensable leadership on this important issue. Action by 
Congress is needed now. We must work together to make a long-term 
commitment to enable children's hospitals to train the physicians of 
the future to care for children.
                                 ______
                                 
      By Mrs. MURRAY (for herself and Mr. Gorton):
  S. 392. A bill to designate the Federal building and United States 
courthouse located at West 920 Riverside Avenue in Spokane, Washington, 
as the ``Thomas S. Foley Federal Building and United States 
Courthouse,'' and the plaza at the south entrance of that building and 
courthouse as the ``Walter F. Horan Plaza''; to the Committee on 
Environment and Public Works.


     THOMAS S. FOLEY FEDERAL BUILDING AND UNITED STATES COURTHOUSE

  Mrs. MURRAY. Mr. President, today I have introduced legislation 
designating the federal building located at West 920 Riverside Avenue, 
Spokane, Washington, as the ``Thomas S. Foley Federal Building and 
United States Courthouse.'' The bill also designates the plaza located 
immediately in front of the building as the ``Walter F. Horan Plaza.''
  Speaker Tom Foley had a long and distinguished career in the United 
States House of Representatives. He served for 30 years, concluding his 
service as Speaker of the House in the 103rd Congress. He was also 
Speaker in the 102nd Congress, and held positions as Majority Leader, 
Majority Whip, and Chairman of the House Agriculture Committee. Speaker 
Foley now serves as our nation's Ambassador to Japan.
  Tom Foley is a native of Spokane, Washington, and earned his 
undergraduate and law degree from the University of Washington. His 
parents were highly respected citizens of Spokane.
  Mr. Foley personified the high ideal to which all of us aspire as 
public servants and Members of Congress. First and foremost he was a 
gentleman who sought consensus, recognizing the value of maintaining a 
good working relationship among colleagues. He loved Congress, and 
believed it to be the best forum for democracy in the world.
  Speaker Foley worked tirelessly to promote and strengthen the 
Northwest's economy. During my first two years as a Senator, I enjoyed 
working with him and I am proud of our joint efforts to help our 
constituents, especially in the successful promotion of Washington 
wheat and apples on both domestic and international markets. Without 
Mr. Foley, we would likely not be exporting our agricultural products 
to as many destinations across the globe as we do. Today, he continues 
to see that our goods are sold in places, such as Japan, that 
historically have had tightly controlled markets.
  Today I also honor another Washington native, Walter F. Horan. He 
served 22 years, from 1943 to 1965, as the Congressman from eastern 
Washington. Representative Horan was raised in Wenatchee, served in the 
Navy during the First World War, graduated from Washington State 
University in Pullman, and raised apples on his family farm.
  As a member of the Appropriations Committee, Representative Horan was 
an excellent advocate for western interests, especially those of his 
constituents in eastern Washington. As a farmer himself, he knew the 
needs of the people he served and urged the Congress to pass laws to 
ensure their economic prosperity. He died in 1966 and is buried in his 
beloved hometown of Wenatchee.
  It is my honor to sponsor legislation that permanently recognizes the 
contributions these two Washingtonians have made to my state and our 
nation.
  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. 392

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

     SECTION 1. DESIGNATION OF THOMAS S. FOLEY FEDERAL BUILDING 
                   AND UNITED STATES COURTHOUSE.

       (a) In General.--The Federal building and United States 
     courthouse located at West 920 Riverside Avenue in Spokane, 
     Washington, shall be known and designated as the ``Thomas S. 
     Foley Federal Building and United States Courthouse''.
       (b) References.--Any reference in a law, map, regulation, 
     document, paper, or other record of the United States to the 
     Federal building and United States courthouse referred to in 
     subsection (a) shall be deemed to be a reference to the 
     ``Thomas S. Foley Federal Building and United States 
     Courthouse''.

     SEC. 2. DESIGNATION OF WALTER F. HORAN PLAZA.

       (a) In General.--The plaza located at the south entrance of 
     the Federal building and United States courthouse referred to 
     in section 1(a) shall be known and designated as the ``Walter 
     F. Horan Plaza''.
       (b) References.--Any reference in a law, map, regulation, 
     document, paper, or other record of the United States to the 
     plaza referred to in subsection (a) shall be deemed to be a 
     reference to the ``Walter F. Horan Plaza''.

     SEC. 3. EFFECTIVE DATE.

       This Act takes effect on March 6, 1999.

                          ____________________