[Congressional Record Volume 145, Number 30 (Thursday, February 25, 1999)]
[Senate]
[Pages S2008-S2033]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. JEFFORDS:
  S. 466. A bill to provide that ``Know Your Customer'' regulations 
proposed by the Federal banking agencies may not take effect unless 
such regulations are specifically authorized by a subsequent Act of 
Congress, to require a comprehensive study and report to the Congress 
on various economic and privacy issues raised by the proposed 
regulations, and for other purposes; to the Committee on Banking, 
Housing, and Urban Affairs.


             the financial institutions privacy act of 1999

  Mr. JEFFORDS. Mr. President, I rise today to introduce the ``American 
Financial Institutions Privacy Act of 1999.'' This legislation will 
delay the implementation of the ``Know Your Customer'' regulations 
proposed by the federal banking agencies. Additionally, this 
legislation would require these agencies to perform a comprehensive 
study, to be submitted to Congress in 180 days, on the privacy, freedom 
of association and economic issues implicated by these regulations. 
Only with Congressional authorization will these regulations be allowed 
to take effect.
  These regulations mandate that banks identify each customer, find out 
the normal source and use of his or her funds and then watch 
transactions in the account to see if they deviate from ``normal'' and 
``expected'' patterns. If the unexpected transactions seem 
``suspicious'' banks are required under current law to report them to 
the Suspicious Activity Reporting System, a federal database that can 
be searched by the Internal Revenue Service, bank regulators, the FBI 
and other federal agencies.
  Mr. President, I have heard from my constituents expressing great 
concern over the privacy implications of these regulations, and I think 
a resolution recently adopted by the Vermont House best expresses the 
concerns of Vermonters. The resolution states,

[[Page S2009]]

``. . .the regulation will result in a substantial invasion of privacy 
and an illegal search in violation of innocent customers' rights. . . 
.'' I will include a complete copy of this resolution in the Record.
  The stated purpose behind these rules is to guard the banking system 
against harm from those who would launder money from drugs and other 
criminal activities. This is an admirable goal and one that is 
important in our continuing battle against crime. However, these 
regulations have moved beyond just a tool used to combat crime and into 
the realm where the government needs to know all of your personal, 
financial information. This is an unacceptable change.
  Mr. President, the study is a necessary part of this legislation and 
will give Congress the factual basis to evaluate the effects of this 
regulation on people's privacy and freedom of association, as well as 
its economic implications. These facts will allow Congress to properly 
evaluate the regulations and reach a final determination on the 
regulation's ultimate fate. The study will also give the federal 
banking agencies time to consider clarifications to the regulations, or 
rescind them.
  I would encourage all of my colleagues to join me as cosponsors of 
the American Financial Institutions Privacy Act of 1999 and help stop 
this privacy infringement on all Americans.
  Mr. President, I ask unanimous consent that the text of the 
resolution be printed in the Record.
  There being no objection, the resolution was ordered to be printed in 
the Record, as follows:

                      State of Vermont--J.R.H. 35

       Whereas, the Federal Deposit Insurance Corporation (FDIC), 
     the Office of the Comptroller of the Currency (OCC), the 
     Office of Thrift Supervision (OTS) and the Federal Reserve 
     have proposed to issue a new regulation requiring banks to 
     develop and maintain ``Know Your Customer'' programs, and
       Whereas, as proposed, the regulation would require each 
     bank to develop a program designed to determine the identity 
     of its customers, determine its customers' sources of funds, 
     determine the normal and expected transactions of its 
     customers, monitor account activity for transactions that are 
     inconsistent with those normal and expected transactions, and 
     report any transactions of its customers that are suspicious, 
     and
       Whereas, in order to carry out the proposed regulation, 
     banks will be forced to probe into the legitimate activities 
     of its customers and into the sensitive private affairs of 
     its customers, and
       Whereas, the proposed ``Know Your Customer'' program would 
     substantially change the relationship between banks and their 
     customers, and
       Whereas, the regulation will result in a substantial 
     invasion of privacy and an illegal search in violation of 
     innocent customers' rights under the constitutions of both 
     the United States and Vermont, and
       Whereas, the proposed regulation is clearly beyond the 
     scope of authority granted the agencies by Congress, now 
     therefore be it
       Resolved by the Senate and the House of Representatives:
       That the FDIC should not be allowed to issue this ``Know 
     Your Customer'' regulation, and be it further
       Resolved: That the Secretary of State be directed to send a 
     copy of this resolution to the Federal Deposit Insurance 
     Corporation, the Office of the Comptroller of Currency, the 
     Office of Thrift Supervision, the Federal Reserve, the 
     banking committee of the United States House of 
     Representatives, the banking committee of the United States 
     Senate and Vermont's congressional delegation.
       Which was read and, in the Speaker's discretion, placed on 
     the Calendar for action tomorrow under Rule 52.
                                 ______
                                 
      By Mr. VOINOVICH (for himself, Mr. Thompson, Mr. Lieberman, and 
        Mr. Durbin):
  S. 468. A bill to improve the effectiveness and performance of 
Federal financial assistance programs, simplify Federal financial 
assistance application and reporting requirements, and improve the 
delivery of services to the public; to the Committee on Governmental 
Affairs.
  Mr. VOINOVICH. Mr. President, today I am pleased to introduce the 
``Federal Financial Assistance Management Improvement Act of 1999'', 
legislation that was championed in the previous Congress by my friend 
and predecessor, Senator John Glenn. As a Governor, I supported this 
bill as an important step toward detangling the web of duplicative 
federal grants available to States, localities and community 
organizations. As a Senator, I am pleased to pick it up where Senator 
Glenn left off. I would also like to thank Senator Thompson, Senator 
Lieberman and Senator Durbin for joining me as original cosponsors of 
this bill.
  Scores of programs, often administered by the same federal agency, 
have similar purposes but are subject to different application and 
reporting requirements. This unnecessary duplication of effort wastes 
time, paper, and does nothing to improve program performance for the 
benefit of our constituents. The Federal Financial Assistance 
Management Improvement Act is intended to streamline the grant 
application process, allowing those who serve their communities to 
focus on the job at hand--not on page after page of paperwork. The 
legislation directs federal agencies to simplify and coordinate the 
application requirements of related programs. The result, I hope, will 
be service to the public which is better, faster and more effective 
than before.
  In other words, today in this country, if you want to apply for 
Federal assistance, every agency has a different form. If you have to 
report on what you are doing with that Federal assistance, every agency 
has a different form. We want to make those forms uniform across the 
board, which we know will relieve a lot of pressure and paperwork on 
the folks who are involved in these programs.
  Another important component of this bill is the requirement that 
agencies develop a process to allow State and local governments and 
non-profit organizations to apply for and report on the use of funds 
electronically. Using the Internet as a substitute for cumbersome 
paperwork is a welcome innovation in the way the federal government 
does business, and I am pleased that the Federal Financial Assistance 
Management Improvement Act is leading the effort.
  We need to bring technology into the Federal Government and allow 
people to do the same thing that they do when they are dealing with the 
private sector.
  This bill was crafted in the last Congress by Senator Glenn after 
bipartisan, bicameral negotiations with the Administration, and while I 
was sorry that it was not enacted before the end of the 105th Congress, 
I am pleased to be able to introduce it today. The legislation is 
supported by the National Governors' Association and others in the 
State and local government and non-profit community because of the real 
potential it has to reduce red tape and improve services to our 
communities. I urge all my colleagues to support this important 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill and 
a letter of support from State and local government organizations be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 468

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Federal Financial Assistance 
     Management Improvement Act of 1999''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) there are over 600 different Federal financial 
     assistance programs to implement domestic policy;
       (2) while the assistance described in paragraph (1) has 
     been directed at critical problems, some Federal 
     administrative requirements may be duplicative, burdensome or 
     conflicting, thus impeding cost-effective delivery of 
     services at the local level;
       (3) the Nation's State, local, and tribal governments and 
     private, nonprofit organizations are dealing with 
     increasingly complex problems which require the delivery and 
     coordination of many kinds of services; and
       (4) streamlining and simplification of Federal financial 
     assistance administrative procedures and reporting 
     requirements will improve the delivery of services to the 
     public.

     SEC. 3. PURPOSES.

       The purposes of this Act are to--
       (1) improve the effectiveness and performance of Federal 
     financial assistance programs;
       (2) simplify Federal financial assistance application and 
     reporting requirements;
       (3) improve the delivery of services to the public; and
       (4) facilitate greater coordination among those responsible 
     for delivering such services.

     SEC. 4. DEFINITIONS.

       In this Act:
       (1) Director.--The term ``Director'' means the Director of 
     the Office of Management and Budget.
       (2) Federal agency.--The term ``Federal agency'' means any 
     agency as defined under section 551(1) of title 5, United 
     States Code.

[[Page S2010]]

       (3) Federal financial assistance.--The term ``Federal 
     financial assistance'' has the same meaning as defined in 
     section 7501(a)(5) of title 31, United States Code, under 
     which Federal financial assistance is provided, directly or 
     indirectly, to a non-Federal entity.
       (4) Local government.--The term ``local government'' means 
     a political subdivision of a State that is a unit of general 
     local government (as defined under section 7501(a)(11) of 
     title 31, United States Code);
       (5) Non-federal entity.--The term ``non-Federal entity'' 
     means a State, local government, or nonprofit organization.
       (6) Nonprofit organization.--The term ``nonprofit 
     organization'' means any corporation, trust, association, 
     cooperative, or other organization that--
       (A) is operated primarily for scientific, educational, 
     service, charitable, or similar purposes in the public 
     interest;
       (B) is not organized primarily for profit; and
       (C) uses net proceeds to maintain, improve, or expand the 
     operations of the organization.
       (7) State.--The term ``State'' means any State of the 
     United States, the District of Columbia, the Commonwealth of 
     Puerto Rico, the Virgin Islands, Guam, American Samoa, the 
     Commonwealth of the Northern Mariana Islands, and the Trust 
     Territory of the Pacific Islands, and any instrumentality 
     thereof, any multi-State, regional, or interstate entity 
     which has governmental functions, and any Indian Tribal 
     Government.
       (8) Tribal government.--The term ``tribal government'' 
     means an Indian tribe, as that term is defined in section 
     7501(a)(9) of title 31, United States Code.
       (9) Uniform administrative rule.--The term ``uniform 
     administrative rule'' means a Government-wide uniform rule 
     for any generally applicable requirement established to 
     achieve national policy objectives that applies to multiple 
     Federal financial assistance programs across Federal 
     agencies.

     SEC. 5. DUTIES OF FEDERAL AGENCIES.

       (a) In General.--Not later than 18 months after the date of 
     enactment of this Act, each Federal agency shall develop and 
     implement a plan that--
       (1) streamlines and simplifies the application, 
     administrative, and reporting procedures for Federal 
     financial assistance programs administered by the agency;
       (2) demonstrates active participation in the interagency 
     process under section 6(a)(2);
       (3) demonstrates appropriate agency use, or plans for use, 
     of the common application and reporting system developed 
     under section 6(a)(1);
       (4) designates a lead agency official for carrying out the 
     responsibilities of the agency under this Act;
       (5) allows applicants to electronically apply for, and 
     report on the use of, funds from the Federal financial 
     assistance program administered by the agency;
       (6) ensures recipients of Federal financial assistance 
     provide timely, complete, and high quality information in 
     response to Federal reporting requirements; and
       (7) establishes specific annual goals and objectives to 
     further the purposes of this Act and measure annual 
     performance in achieving those goals and objectives, which 
     may be done as part of the agency's annual planning 
     responsibilities under the Government Performance and Results 
     Act of 1993 (Public Law 103-62; 107 Stat. 285).
       (b) Extension.--If one or more agencies are unable to 
     comply with the requirements of subsection (a), the Director 
     shall report to the Committee on Governmental Affairs of the 
     Senate and the Committee on Government Reform of the House of 
     Representatives the reasons for noncompliance. After 
     consultation with such committees, the Director may extend 
     the period for plan development and implementation for each 
     noncompliant agency for up to 12 months.
       (c) Comment and Consultation on Agency Plans.--
       (1) Comment.--Each agency shall publish the plan developed 
     under subsection (a) in the Federal Register and shall 
     receive public comment of the plan through the Federal 
     Register and other means (including electronic means). To the 
     maximum extent practicable, each Federal agency shall hold 
     public forums on the plan.
       (2) Consultation.--The lead official designated under 
     subsection (a)(4) shall consult with representatives of non-
     Federal entities during development and implementation of the 
     plan. Consultation with representatives of State, local, and 
     tribal governments shall be in accordance with section 204 of 
     the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1534).
       (d) Submission of Plan.--Each Federal agency shall submit 
     the plan developed under subsection (a) to the Director and 
     Congress and report annually thereafter on the implementation 
     of the plan and performance of the agency in meeting the 
     goals and objectives specified under subsection (a)(7). Such 
     report may be included as part of any of the general 
     management reports required under law.

     SEC. 6. DUTIES OF THE DIRECTOR.

       (a) In General.--The Director, in consultation with agency 
     heads, and representatives of non-Federal entities, shall 
     direct, coordinate, and assist Federal agencies in 
     establishing--
       (1) a common application and reporting system, including--
       (A) a common application or set of common applications, 
     wherein a non-Federal entity can apply for Federal financial 
     assistance from multiple Federal financial assistance 
     programs that serve similar purposes and are administered by 
     different Federal agencies;
       (B) a common system, including electronic processes, 
     wherein a non-Federal entity can apply for, manage, and 
     report on the use of funding from multiple Federal financial 
     assistance programs that serve similar purposes and are 
     administered by different Federal agencies; and
       (C) uniform administrative rules for Federal financial 
     assistance programs across different Federal agencies; and
       (2) an interagency process for addressing--
       (A) ways to streamline and simplify Federal financial 
     assistance administrative procedures and reporting 
     requirements for non-Federal entities;
       (B) improved interagency and intergovernmental coordination 
     of information collection and sharing of data pertaining to 
     Federal financial assistance programs, including appropriate 
     information sharing consistent with section 552a of title 5, 
     United States Code; and
       (C) improvements in the timeliness, completeness, and 
     quality of information received by Federal agencies from 
     recipients of Federal financial assistance.
       (b) Lead Agency and Working Groups.--The Director may 
     designate a lead agency to assist the Director in carrying 
     out the responsibilities under this section. The Director may 
     use interagency working groups to assist in carrying out such 
     responsibilities.
       (c) Review of Plans and Reports.--Upon the request of the 
     Director, agencies shall submit to the Director, for the 
     Director's review, information and other reporting regarding 
     agency implementation of this Act.
       (d) Exemptions.--The Director may exempt any Federal agency 
     or Federal financial assistance program from the requirements 
     of this Act if the Director determines that the Federal 
     agency does not have a significant number of Federal 
     financial assistance programs. The Director shall maintain a 
     list of exempted agencies which shall be available to the 
     public through the Office of Management and Budget's Internet 
     site.

     SEC. 7. EVALUATION.

       (a) In General.--The Director (or the lead agency 
     designated under section 6(b)) shall contract with the 
     National Academy of Public Administration to evaluate the 
     effectiveness of this Act. Not later than 4 years after the 
     date of enactment of this Act, the evaluation shall be 
     submitted to the lead agency, the Director, and Congress. The 
     evaluation shall be performed with input from State, local, 
     and tribal governments, and nonprofit organizations.
       (b) Contents.--The evaluation under subsection (a) shall--
       (1) assess the effectiveness of this Act in meeting the 
     purposes of this Act and make specific recommendations to 
     further the implementation of this Act;
       (2) evaluate actual performance of each agency in achieving 
     the goals and objectives stated in agency plans; and
       (3) assess the level of coordination among the Director, 
     Federal agencies, State, local, and tribal governments, and 
     nonprofit organizations in implementing this Act.

     SEC. 8. COLLECTION OF INFORMATION.

       Nothing in this Act shall be construed to prevent the 
     Director or any Federal agency from gathering, or to exempt 
     any recipient of Federal financial assistance from providing, 
     information that is required for review of the financial 
     integrity or quality of services of an activity assisted by a 
     Federal financial assistance program.

     SEC. 9. JUDICIAL REVIEW.

       There shall be no judicial review of compliance or 
     noncompliance with any of the provisions of this Act. No 
     provision of this Act shall be construed to create any right 
     or benefit, substantive or procedural, enforceable by any 
     administrative or judicial action.

     SEC. 10. STATUTORY REQUIREMENTS.

       Nothing in this Act shall be construed as a means to 
     deviate from the statutory requirements relating to 
     applicable Federal financial assistance programs.

     SEC. 11. EFFECTIVE DATE AND SUNSET.

       This Act shall take effect on the date of enactment of this 
     Act and shall cease to be effective 5 years after such date 
     of enactment.
                                  ____

  Mr. THOMPSON. Mr. President, I am pleased to support the Federal 
Financial Assistance Management Improvement Act of 1999. As a strong 
believer in our federalist system of government, I am pleased to be an 
original cosponsor of this legislation, which will cut red tape and 
waste in Federal grant and other assistance programs that impact State 
and local government, as well as nonprofit organizations. It is fitting 
that my good friend from Ohio, George Voinovich, is now providing 
leadership on this effort in the Senate. As a governor and Chairman of 
the National Governors' Association, George Voinovich strongly 
supported this bill from outside Congress. While we reported the bill 
out of the Governmental Affairs Committee and passed it through the 
Senate last year, unfortunately it did not become law. It's time to get 
the job done.
  This legislation will improve the performance of Federal grant and 
other

[[Page S2011]]

assistance programs by streamlining their application, administration, 
and reporting requirements for grant recipients--including State, local 
and tribal governments and nonprofit organizations. The Federal 
agencies, with guidance from the Office of Management and Budget, would 
develop plans within 18 months to streamline application, 
administrative and reporting requirements, develop uniform applications 
for related programs, develop and expand the use of electronic 
applications and reporting via the Internet, demonstrate interagency 
coordination in simplifying requirements for cross-cutting programs, 
and set annual goals to further the purposes of the Act.
  Agencies would then consult with outside parties in developing their 
plans. The agencies would submit their plans and annual reports to the 
Director of OMB and to Congress, and they could be made a part of other 
management reports required under law. In addition to overseeing and 
coordinating agency activities, OMB would develop more common rules to 
cut across programs and would develop a release form to allow grant 
information to be shared across programs.
  This legislation has been endorsed by many organizations representing 
our State and local government partners, including the National 
Governors' Association, the National Conference of State Legislatures, 
the National League of Cities, the Council of State Governments, and 
the National Association of Counties. It is a good government, common 
sense initiative. Let's pull together and pass this bill into law.
                                 ______
                                 
      By Mr. BREAUX (for himself, Mr. Conrad, Mr. Burns, and Mr. 
        Baucus):
  S. 469. A bill to encourage the timely development of a more cost 
effective United States commercial space transportation industry, and 
for other purposes; to the Committee on Commerce, Science, and 
Transportation.


           commercial space transportation cost reduction act

         Council of State Governments, International City/County 
           Management Association, National Association of 
           Counties, National Conference of State Legislatures, 
           National Governors' Association, National League of 
           Cities, U.S. Conference of Mayors,
                                                February 24, 1999.
     Hon. Fred Thompson,
     Hon. George V. Voinovich,
     Hon. Joseph I. Lieberman,
     Hon. Richard J. Durbin,
     U.S. Senate,
     Washington, DC
       Dear Senators Thompson, Lieberman, Voinovich, and Durbin: 
     On behalf of the elected leaders of the respective 
     organizations of Governors, legislators, mayors, county 
     officials, and city managers, we are pleased that you will be 
     introducing the Federal Financial Assistance Management 
     Improvement Act. This bill was passed by the Senate last year 
     and has the strong support of all our organizations.
       The bill would require the Office of Management and Budget 
     (OMB) to reevaluate its array of over 75 crosscutting 
     regulations that govern all funds going to state and local 
     governments. We support a requirement that OMB establish lead 
     agencies to develop uniform common rules for crosscutting 
     regulations, base data information for multiple grants to the 
     same state or local government, and electronic filing of most 
     intergovernmental paperwork.
       We greatly appreciate your leadership for these reforms and 
     urge all Senators to support passage of your bill.
           Sincerely,
         Governor Thomas R. Carper, State of Delaware, Chairman, 
           National Governors' Association; Representative Dan 
           Blue, North Carolina State House of Representatives and 
           President, National Conference of State Legislatures; 
           Commissioner Betty Lou Ward, Wake County, North 
           Carolina, President, National Association of Counties; 
           Mayor Deedee Corradini, Salt Lake City, Utah, 
           President, The U.S. Conference of Mayors; Bryce (Bill) 
           Stuart, City Manager, Winston-Salem, North Carolina, 
           President, International City/County Management 
           Association; Mayor Clarence Anthony, South Bay, 
           Florida, President, National League of Cities; Senator 
           Kenneth McClintock, Puerto Rico Senate, Chairman, 
           Council of State Governments.
  Mr. BREAUX. I take the time today, Mr. President and my colleagues, 
to introduce a bill which I happen to think addresses a very important 
issue that this Nation is facing; and that is the question of trying to 
devise a system where the United States can continue to be the world's 
leader in the space launch business.
  Every day, every month, more and more satellites around the world are 
being put into service. I daresay that most people really do not follow 
the details of how this is accomplished, but I do know that over the 
last several months people in this country have heard a great deal 
about Chinese rockets, Ukrainian rockets, Russian rockets and all the 
problems that they have been involved with related to the U.S. 
aerospace industry.
  One may wonder, why would a U.S. company have to use a Ukraine launch 
vehicle or a Chinese launch vehicle or a Russian launch vehicle or a 
European launch vehicle in order to launch a U.S. satellite to serve 
the technological and communications needs of the world. The reason is 
not that hard to figure out when you look at the fact that these 
countries that I just mentioned are not countries that are under the 
same economic obligations that we are. Many of those are not free 
market economies. Many are still government-run economies. Many of 
those countries have governments that have put a great deal of money in 
their launch industries and are now able to provide those launch 
vehicles for use at a cutrate or subsidized price.
  I do not think that is particularly good for our country to have to 
buy space transportation on a Ukraine rocket to launch a U.S. 
satellite. When those rockets malfunction, then we are in a problem 
area trying to tell them based on our technological expertise why the 
failure happened. Our companies could get into trouble because of the 
risk that they are sharing with them technology that could be used for 
military purposes.
  So I, for one, do not think I would want to drive a Ukrainian car let 
alone ride in a Ukrainian rocket. But that is what is happening because 
of a situation where we do not have enough access in the private 
industry to U.S.-built space transportation vehicles that can launch 
U.S.-built satellites for communications purposes.
  We have learned that one of the reasons is the fact that there is 
inadequate private sector funding for U.S. companies to engage in 
building space transportation vehicles for this purpose. It is, of 
course, a high-risk business. This is much more risky than building a 
ship or building a car or building just about anything else. A lot can 
go wrong. So it is a high risk. And there is inadequate funding in the 
private sector.
  To solve this problem, what do you do? Do you make the Government 
take it over? Do you make the Government own the launch vehicles and 
make the Government pay for the building of the launch vehicles? In our 
society the answer is no. But I think that the legislation that I am 
introducing today, along with Senator Conrad Burns of Montana, sets up 
a program which would be a loan guarantee program where the U.S. 
Government can pattern in the space transportation industry what we 
have done very successfully in the shipbuilding industry under what is 
known as a Title XI shipbuilding loan guarantee program, where the 
Federal Government comes to a qualified builder who is having a 
difficult time getting adequate financing because of the nature of the 
industry, and that the Federal Government will be in a position to 
guarantee the loan to a company which company would go out into the 
private market and borrow the money but have the loan guaranteed by the 
Federal Government. Under that scenario, we have built literally 
hundreds and hundreds of vessels, probably thousands, through the Title 
XI loan guarantee program.
  What I am proposing in the ``Commercial Space Transportation Cost 
Reduction Act of 1999'' is to set up a loan guarantee program which 
would be patterned after the Title XI Shipyard Loan Guarantee Program. 
We would vest the Secretary of Transportation in our Government with 
the administrative responsibilities for the program operations. The 
legislation would initially provide up to $500 million of funding for 
the loan guarantee program. That would represent the possibility of 
generating up to $5 billion in loans for U.S. space transportation 
companies to engage other U.S. companies and U.S. workers in building 
space transportation vehicles for use in our society.
  I ask unanimous consent for 2 additional minutes.

[[Page S2012]]

  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BREAUX. And by having that type of a system, I think that we 
would give our private companies the ability to compete with all of 
these other companies in countries which have their governments 
supporting them in these areas.
  We have had a number of Senators who have expressed an interest in 
participating with us in this legislation. Let me just mention Senator 
Lott, Senator Bacchus, Senator Bingaman, Senator Graham of Florida and 
Senator Landrieu of Louisiana. I hope--and now that the bill has been 
introduced, that the Commerce Committee can have some hearings on it--
that we can continue to improve it and move forward with establishing 
something that will allow the private sector of the United States to 
continue to be, and even increase the ability to be, the world leader 
in space transportion. In particular, the ability to launch our 
satellites with our vehicles and not have to rent space from the 
Russians or from the Chinese or from the Ukrainians or from any other 
part of the world. This is a vitally important industry, and the United 
States should be the technological leader now and for 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. 469

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Commercial 
     Space Transportation Cost Reduction Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purposes.
Sec. 4. Definitions.

 TITLE 1--INCREASING THE AVAILABILITY OF PRIVATE SECTOR FINANCING FOR 
 THE UNITED STATES COMMERCIAL SPACE TRANSPORTATION INDUSTRY THROUGH A 
                         LOAN GUARANTEE PROGRAM

Sec. 101. United States Commercial Space Transportation Vehicle 
              Industry Program.
Sec. 102. Functions of the Secretary of the Department of 
              Transportation.
Sec. 103. Space Transportation Loan Guarantee Fund.
Sec. 104. Authorization of Secretary to Guarantee Obligations.
Sec. 105. Eligibility for Guarantee.
Sec. 106. Defaults.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The United States commercial space transportation 
     vehicle industry is an essential part of the national economy 
     and opportunities for U.S. commercial providers are growing 
     as international markets expand.
       (2) The development of the U.S. commercial space 
     transportation vehicle industry is consistent with the 
     national security interests and foreign policy interests of 
     the United States.
       (3) United States trading partners have been able to lower 
     their commercial space transportation prices aggressively 
     either through direct cash payments for commercially targeted 
     product development or with indirect benefits derived from 
     nonmarket economy status.
       (4) Because United States incentives for space 
     transportation vehicle development have historically focused 
     on civil and military rather than commercial use, U.S. launch 
     costs have remained comparatively high, and U.S. launch 
     technology has not been commercially focused.
       (5) As a result, the U.S. share of the world commercial 
     market has decreased from nearly 100% twenty years ago to 
     approximately 47% in 1998.
       (6) In order to avoid undue reliance on foreign space 
     transportation services, the U.S. must strive to have 
     sufficient domestic capacity as well as the highest quality 
     and the lowest cost per service provided.
       (7) A successful high quality, lower cost U.S. commercial 
     space transportation industry should also lead to substantial 
     U.S. taxpayer savings through collateral lower U.S. 
     government costs for its space access requirements.
       (8) The key to maintaining United States leadership in the 
     world market is not another massive government program, but 
     rather provision of just enough government support on an 
     incremental and timely basis to enable the more cost 
     effective U.S. private sector to build lower-cost space 
     transportation vehicles.
       (9) Private sector companies across the United States are 
     already attempting to develop a variety of lower-cost space 
     transportation vehicles, but lack of sufficient private 
     financing, particularly in the early stages of 
     development, has proven to be a major obstacle, an 
     obstacle our trading partners have removed by providing 
     direct access to government funding.
       (10) Given the strengths and creativity of private industry 
     in the United States, a more effective alternative to the 
     approach of our trading partners is for the U.S. government 
     to provide limited incentives, including loan guarantees 
     which would help qualifying U.S. private-sector companies 
     secure otherwise unavailable private ``bridge'' financing for 
     the critical developmental stages of the project, while at 
     the same time keeping government involvement at a minimum.

     SEC. 3. PURPOSES.

       Therefore the purposes of this Act are--
       (1) to ensure availability of otherwise unavailable private 
     sector ``bridge'' financing for U.S. private sector 
     development of commercial space transportation vehicles with 
     launch costs significantly below current levels;
       (2) and, as a result--
       (A) to avoid undue reliance on foreign space transportation 
     services;
       (B) to reduce substantially United States Government space 
     transportation expenditures;
       (C) to increase the international competitiveness of the 
     United States space industry;
       (D) to encourage the growth of space-related commerce in 
     the United States and internationally; and
       (E) to increase the number of high-value jobs in the United 
     States space-related industries.

     SEC. 4. DEFINITIONS.

       In this Act:
       (1) Total capital requirement.--The term ``total capital 
     requirement'' of a United States commercial space 
     transportation provider means the aggregate, as determined by 
     the Secretary, of all Cash Requirements paid or to be paid by 
     or on the account of the Obligor prior to the achievement by 
     the Obligor of positive cash flow generation. For the 
     purposes of this definition, the term ``Cash Requirements'' 
     shall include all cash expended or invested by the Obligor 
     (including but not limited to design, development, testing 
     and evaluation (DDT&E)), construction, reconstruction, 
     reconditioning, placing into operation, working capital, 
     interest expense and initial operating and marketing expenses 
     in connection with space transportation prior to the 
     achievement of positive cash flow generation from ongoing 
     operations.
       (2) Loan.--The term ``loan'' means an obligation.
       (3) Obligee.--The term ``obligee'' means the holder of an 
     obligation.
       (4) Obligor.--The term ``obligor'' means any party 
     primarily liable for payment of the principal of or interest 
     on any obligation.
       (5) Obligation.--The term ``obligation'' means any note, 
     bond, debenture, or other evidence of indebtedness issued for 
     one of the purposes specified in section 105(a) of this Act.
       (6) Secretary.--The term ``Secretary'' means the Secretary 
     of the United States Department of Transportation.
       (7) Space launch site.--The term ``space launch site'' 
     means a location from which a launch or landing takes place 
     and includes all facilities located on, or components of, a 
     launch or landing site which are necessary to conduct a 
     launch, whether on land, sea, in the earth's atmosphere, or 
     beyond the earth's atmosphere.
       (8) Space transportation vehicle.--The term ``space 
     transportation vehicle'' includes all types of vehicles, 
     whether in existence or under design, development, 
     construction, reconstruction or reconditioning; constructed 
     in the United States by United States commercial space 
     transportation vehicle providers as defined below and owned 
     by those commercial providers, for the purpose of operating 
     in, or transporting a payload to, from, or within, outer 
     space, or in suborbital trajectory, and includes any 
     component of such vehicle not specifically designed or 
     adapted for a payload.
       (9) State.--The term ``State'' means each of the several 
     States of the Union, the District of Columbia, the 
     Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
     American Samoa, the Commonwealth of the Northern Mariana 
     Islands, and any other commonwealth, territory, or 
     possession of the United States.
       (10) United states commercial provider.--The term ``United 
     States commercial provider'' means a commercial provider, 
     organized under the laws of the United States or of a State, 
     which is--
       (A) more than 50 percent owned by United States nationals; 
     or
       (B) a subsidiary of a foreign company and the Secretary of 
     Transportation finds that--
       (i) such subsidiary has in the past evidenced a substantial 
     commitment to the United States market through--
       (I) investments in the United States in long-term research, 
     development, and manufacturing (including the manufacture of 
     major components and subassemblies); and
       (II) significant contributions to employment in the United 
     States; and
       (ii) the country or countries in which such foreign company 
     is incorporated or organized, and, if appropriate, in which 
     it principally conducts its business, affords reciprocal 
     treatment to companies described in subparagraph (A) 
     comparable to that afforded to such foreign company's 
     subsidiary in the United States, as evidenced by--

[[Page S2013]]

       (I) providing comparable opportunities for companies 
     described in subparagraph (A) to participate in Government 
     sponsored research and development similar to that authorized 
     under this Act;
       (II) providing no barriers, to companies described in 
     subparagraph (A) with respect to local investment 
     opportunities, that are not provided to foreign companies in 
     the United States; and
       (III) providing adequate and effective protection for the 
     intellectual property rights of companies described in 
     subparagraph (A).
       (II) Small business.--For the purposes of this Act, a 
     ``small business'' is a commercial provider as defined by the 
     Secretary according to criteria established in consultation 
     with the commercial space transportation vehicle industry and 
     professional associations.
       (12) United states commercial space transportation vehicle 
     provider.--The term ``United States commercial space 
     transportation vehicle provider'' means a United States 
     commercial provider engaged in designing, developing, 
     producing, or operating commercial space transportation 
     vehicles.
       (13) United states commercial space transportation vehicle 
     industry.--The term ``United States commercial space 
     transportation vehicle industry'' means the collection of 
     United States commercial providers of space transportation 
     vehicles.
       (14) Cost to the government.--``Cost to the Government'' 
     means the Risk Rate multiplied by the amount of the guarantee 
     issued by the Secretary. The Cost to the Government reduces 
     the amount of the Fund until such time as part or all of the 
     guarantee has been retired as described in Section 103 of the 
     Act.
       (15) Risk rate.--``Risk Rate'' means the percentage applies 
     to a guarantee of an entity assigned to a specific Risk 
     Category by the Secretary and used in calculating the Cost to 
     the Government of the guarantee.
       (16) Risk category.--``Risk Category'' means the category 
     into which the Secretary assigns an entity applying for a 
     guarantee based on the risk factors identified in Section 
     104(f). The Risk Category is assigned for the purpose of 
     arriving at a Risk Rate in the calculation of the Cost to the 
     Government.
       (17) Fund.--The ``Fund'' means the amount appropriated 
     under the Act as described under Section 103 of the Act.

 TITLE 1--INCREASING THE AVAILABILITY OF PRIVATE SECTOR FINANCING FOR 
  THE UNITED STATES COMMERCIAL SPACE TRANSPORTATION VEHICLE INDUSTRY 
                    THROUGH A LOAN GUARANTEE PROGRAM

     SEC. 101. UNITED STATES COMMERCIAL SPACE TRANSPORTATION 
                   VEHICLE INDUSTRY LOAN GUARANTEE PROGRAM.

       (a) Establishment of Program.--There shall be a United 
     States Commercial Space Transportation Vehicle Industry Loan 
     Guarantee program to provide loan guarantees to support the 
     private development of multiple qualified United States 
     commercial space transportation vehicle providers with launch 
     costs significantly below current levels.
       (b) Administration of Program.--The program shall be 
     carried out by the Secretary of Transportation under a 
     streamlined application process pursuant to the terms of this 
     Section and any regulations that may be promulgated 
     hereunder, in consultation with other U.S. Government 
     officials, and private sector representatives, as necessary, 
     to ensure fair, effective and timely program administration.
       (c) Scope of Program.--
       (1) Temporary Government Support.--The United States 
     Commercial Space Transportation Vehicle Industry Loan 
     Guarantee program is intended to provide loan guarantees to 
     support financing of qualified commercial space 
     transportation vehicle development ventures during their 
     startup phases and is not intended as a permanent source of 
     financing for such ventures. Applications for guarantees 
     under this program must include specific plans for the timely 
     transition from guaranteed financing to standalone private 
     sector financing as soon as the venture becomes commercially 
     viable.
       (2) Exclusion of space launch sites.--The program does not 
     provide for loan guarantees pertaining to the construction, 
     reconstruction, or reconditioning of space launch sites.
       (3) Exclusion of evolved expendable launch vehicle 
     program.--The United States Commercial Space Transportation 
     Vehicle Industry Loan Guarantee program shall not remove, 
     restrict, or replace funding provided by the Department of 
     Defense to commercial providers participating in the Evolved 
     Expendable Launch Vehicle (EELV) program. Commercial 
     providers already receiving Department of Defense funding for 
     the development of specific expendable launch vehicles under 
     the Evolved Expendable Launch Vehicle program shall not be 
     eligible to apply for loan guarantees pertaining to this same 
     program, under the United States Commercial Space 
     Transportation Vehicle Industry Loan Guarantee program.
       (4) Small business set aside.--Depending upon the number of 
     applications, not less than ten percent and up to 20 percent 
     of the loan guarantee fund shall be set aside for small 
     businesses as defined by the Secretary. In no event shall a 
     single commercial provider be the sole beneficiary of loan 
     guarantees available under this Act.
       (5) Competition encouraged on initiatives attempting to 
     meet unique u.s. government specifications.--When possible 
     and economically feasible, in order to allow U.S. taxpayers 
     to receive the benefits and disciplines of private sector 
     competition, the Secretary shall administer the loan 
     guarantee program to permit the participation of multiple 
     United States space transportation vehicle commercial 
     providers that are targeting unique U.S. government 
     specifications.
       (6) Nondisclosure of confidential materials.--Materials 
     that are submitted by a United States commercial space 
     transportation vehicle provider to the Secretary in 
     connection with an application submitted under the United 
     States Commercial Space Transportation Vehicle Industry Loan 
     Guarantee program and deemed by the commercial provider to be 
     confidential, and that contain trade secrets or proprietary 
     commercial, financial, or technical information of a kind not 
     customarily disclosed to the public, shall not be disclosed 
     by the Secretary to persons other than Government officers, 
     employees or contractors notwithstanding any other provision 
     of law.
       (d) Sunset.--This Act shall sunset 10 years from date of 
     enactment.

     SEC. 102. FUNCTIONS OF THE SECRETARY OF TRANSPORTATION.

       The Secretary shall carry out the following functions--
       (a) Consultation.--Consultation, to the extent deemed 
     necessary for effective implementation of the Act with 
     appropriate federal agencies, Congressional, and space 
     transportation industry representatives, and members of the 
     risk management industry concerning--
       (1) assessments of international competition, potential 
     markets for space transportation vehicles, and availability 
     of private investment captial;
       (2) recommendations of commercial entities, partnerships, 
     joint ventures, or consortia regarding effective 
     implementation of the loan guarantee program; and,
       (3) recommendations on how to make U.S. government space 
     access requirements more compatible with U.S. commercial 
     space transportation assets.
       (b) Program Management.--Management of the loan guarantee 
     program consistent with the purposes of this Act.

     SEC. 103. AUTHORIZATION OF APPROPRIATION OF FUNDS.

       (a) The Act authorizes an annual appropriation of the sum 
     of $400,000,000 to be deposited in a Fund to be used by the 
     Secretary for the purpose of carrying out the provisions of 
     the Act. The Fund will be reduced by the Cost to the 
     Government (as defined) of each loan guarantee extended by 
     the Secretary as further described in Section 104(f). As an 
     Obligor releases its government guarantees on the schedule 
     agreed to up front with the Secretary, this Cost to the 
     Government shall be reduced or eliminated, thus replenishing 
     the Fund for new guarantees.

     SEC. 104. AUTHORIZATION OF SECRETARY TO GUARANTEE OBLIGATIONS

       (a) Principal and Interest.--The Secretary is authorized to 
     guarantee, and to enter into commitments to guarantee, the 
     payment of the interest on, and the unpaid balance of the 
     principal of, any obligation which is eligible to be 
     guaranteed under this Act. A guarantee, or commitment to 
     guarantee, made by the Secretary under this Act shall cover 
     100 percent of the amount of the principal and interest of 
     the obligation.
       (b) Security Interest.--No obligation shall be guaranteed 
     under this Act unless the obligor conveys or agrees to convey 
     to the Secretary a security interest such as the Secretary 
     may reasonably require to protect the interests of the United 
     States.
       (c) Private Insurance.--If the Secretary determines that 
     other potential measures, as described in this Act, are not 
     sufficient to provide adequate security, the Secretary, as a 
     condition of processing or approving an application for 
     guarantee of an obligation, may require that the obligor 
     obtain private insurance with respect to a portion of the 
     government's risk of default by the obligor on the 
     obligation, including both the amount of the obligation still 
     outstanding and the accrued interest. Such private insurance 
     may be funded from the proceeds of any obligation guaranteed 
     under this Act. If the obligor fails to renew such private 
     insurance on a timely basis, the Secretary may take such 
     action as deemed necessary, with regard to seizure of 
     security interest conveyed by the obligor or the assessment 
     of additional fees to the obligor, to ensure that the 
     appropriate insurance renewal is obtained without delay.
       (d) Pledge of United States.--The full faith and credit of 
     the United States is pledged to the payment of all guarantees 
     made under this Act with respect to both principal and 
     interest, including interest, as may be provided for in the 
     guarantee, accruing between the date of default under a 
     guaranteed obligation and the payment in full of the 
     guarantee.
       (e) Proof of Obligations.--Any guarantee, or commitment to 
     guarantee, made by the Secretary under this Act shall be 
     conclusive evidence of the eligibility of the obligations for 
     such guarantee, and the validity of any guarntee, or 
     commitment to guarantee, so made shall be incontestable. 
     Notwithstanding an assumption of an obligation by the 
     Secretary under section 106 (a) or (b) of this Act, the 
     validity of the guarantee of an obligation made by the 
     Secretary under this Act is unaffected and the guarntee 
     remains in full force and effect.
       (f) Determination of Estimated Benefit and Cost to 
     Government for Loan Guarantee Program.--

[[Page S2014]]

       (1) The Secretary shall in consultation with the private 
     risk management industry and consistent with the Federal 
     Credit Reform Act of 1990 (2 U.S.C. 661a et seq.)--
       (A) establish in accordance with this subsection a system 
     of risk categories for obligations guaranteed under this Act, 
     that categoriezes the relative risk of guarantees made under 
     this Act with respect to the risk factors set forth in 
     paragraph (3); and
       (B) determine for each of the risk categories a risk rate 
     equivalent to the cost of obligations in the category, 
     expressed as a percentage of the amount guaranteed under this 
     Act for obligations in the category.
       (2) Before making a guarantee under this section for an 
     obligation, the Secretary shall apply the risk factors set 
     forth in paragraph (3) to place the obligation in a risk 
     category established under paragraph (1)(A).
       (3) The risk factors referred to in paragraphs (1) and (2) 
     are the following:
       (A) The technological feasibility of the proposed venture 
     and the magnitude of its projected overall space launch cost 
     reduction;
       (B) The period for which an obligation is to be guaranteed, 
     such period not exceeding 12 years;
       (C) The amount of obligations which are guaranteed or to be 
     guaranteed, in relation to the Total Capital Requirement of 
     the proposed venture;
       (D) The financial condition of the applicant;
       (E) The availability of private financing, including 
     guarantees (other than the guarantees issued pursuant to this 
     Act) and private insurance, for the proposed venture;
       (F) The projected commercial and government utilization of 
     each space transportation vehicle or other article to be 
     financed by debt guaranteed pursuant to this Act (including 
     any contracts, letters of intent, or other expressions of 
     agreement under which the applicant will provide launch 
     services using a space transportation vehicle or other 
     article financed by debt guaranteed pursuant to this Act);
       (G) The adequacy of collateral provided in exchange for a 
     guarantee issued pursuant to this act;
       (H) The management and operating experience of the 
     applicant;
       (I) Commercial viability of the business plan for the 
     venture of the Obligor;
       (J) The extent of private equity capital in the project;
       (K) The applicant's plans for achieving a transition from 
     Government-guaranteed financing to private financing;
       (L) The likelihood that the venture would serve an 
     identifiable national interest;
       (M) The likelihood that the successful completion of the 
     project would result in savings that would offset anticipated 
     Government expenditures for space-related activities;
       (N) The likelihood that the project will open new markets 
     or result in the development of significant new technologies;
       (O) other relevant criteria; and
       (4) The amount of appropriated funds required by the 
     Federal Credit Reform Act of 1990 in advance of the 
     Secretary's issuance of a guarantee of an obligation, or a 
     commitment to guarantee an obligation, may be provided, in 
     whole or in part, by a non-Federal source and deposited by 
     the Secretary in the financing account established under the 
     Federal Credit Reform Act of 1990 for obligation guarantees 
     issued by the Secretary. These non-Federal source funds may 
     be in lieu of or combined with Federal funds appropriated for 
     the purpose of satisfying the requirements of the Federal 
     Credit Reform Act of 1990. The non-Federal source funds 
     deposited into that financing account shall be held and 
     applied by the Secretary in accordance with the provisions of 
     the Federal Credit Reform Act of 1990, in the same manner as 
     that legislation controls the use and disposition of 
     Federally appropriated funds. Non-Federal source funds must 
     be paid to the Secretary in cash prior to the issuance of any 
     guarantee or commitment to guarantee an obligation. The 
     payment of said non-Federal source funds shall not, in any 
     way, relive any entity from its responsibility to meet any 
     other provision of this Act or its implementing regulations 
     relating to the application for, issuance of, or 
     administration of a guarantee of an obligation.
       (5) In this subsection, the term ``cost'' has the meaning 
     given that term in the Federal Credit Reform Act of 1990 (2 
     U.S.C. 661a).

     SEC. 105. ELIGIBILITY FOR GUARANTEE

       (a) Purpose of Obligations.--Pursuant to the authority 
     granted under section 104(a) of this Act, the Secretary, upon 
     such terms as he shall prescribe, consistent with the 
     provisions and purpose of the Act, may guarantee or make a 
     commitment to guarantee, payment of the principal of and 
     interest on an obligation for the purpose of--
       (1) Financing the Total Capital Requirement, as defined, of 
     the DDT&E, construction, reconstruction, reconditioning, 
     placing into operation, working capital, interest expense, 
     and initial operating and marketing expenses in connection 
     with space transportation vehicles with launch costs 
     significantly below current levels.
       (2) Financing the purchase, reconstruction, or 
     reconditioning of space transportation vehicles to achieve 
     launch costs significantly below current levels for which 
     obligations were guaranteed under this Act that, under the 
     provisions of section 106 of this Act are space 
     transportation vehicles for which obligations were 
     accelerated and paid and that have been repossessed by the 
     Secretary or sold at foreclosure instituted by the Secretary.
       (b) Contents of Obligations.--
       Obligations guaranteed under this Act--
       (1) shall have an obligor approved by the Secretary as 
     responsible and possessing or having the ability to obtain 
     the technical capability, experience, financial resources, 
     and other qualifications necessary to the adequate 
     development, operation and maintenance of the space 
     transportation vehicle or space transportation vehicles which 
     serve as security for the guarantee of the Secretary;
       (2) subject to the provisions of subsection (c)(1) of this 
     section, shall be in an aggregate principal amount which does 
     not exceed 80 per centum of the total Capital Requirement, as 
     determined by the Secretary, of the space transportation 
     vehicle which is used as security for the guarantee of the 
     Secretary;
       (3) shall have maturity dates satisfactory to the Secretary 
     but, subject to the provisions of paragraph (2) of subsection 
     (c) of this section, not to exceed twelve years from the date 
     of the issuance of the guarantee.
       (4) shall provide for payments by the obligor satisfactory 
     to the Secretary;
       (5) shall provide, or a related agreement shall provide 
     that the space transportation vehicle shall meet such safety, 
     reliability, and performance standards as are necessary for 
     U.S. commercial licensing; and
       (6) shall provide that the space transportation vehicle 
     provider guarantee to the United States Government, launch 
     services at the targeted significantly reduced launch cost or 
     the prevailing commercial launch cost, which ever is lower.
       (c) Security.--
       (1) The security for the guarantee of an obligation by the 
     Secretary under this Act may relate to more than one space 
     transportation vehicle and may consist of any combination of 
     types of security. The aggregate principal amount of 
     obligations which have more than one space transportation 
     vehicle as security for the guarantee of the Secretary under 
     this Act may equal, but not exceed, the sum of the principal 
     amount of obligations permissible with respect to each space 
     transportation vehicle.
       (2) If the security for the guarantee of an obligation by 
     the Secretary under this Act relates to more than one space 
     transportation vehicle, such obligation may have the latest 
     maturity date permissible under subsection (b) of this 
     section with respect to any of such space transportation 
     vehicles: Provided, that the Secretary may require such 
     payments of principal, prior to maturity, with respect to all 
     related obligations as he deems necessary in order to 
     maintain adequate security for the guarantee.
       (d) Restrictions.--
       (1) Restriction on used space transportation vehicles.--No 
     commitment to guarantee, or guarantee of an obligation may be 
     made by the Secretary under this Act for the purchase of a 
     used space transportation vehicle unless--
       (A) the used space transportation vehicle will be 
     reconstructed or reconditioned in the United States and will 
     contribute to the development of the United States commercial 
     space transportation vehicle industry; and
       (B) the reconstruction or reconditioning of the used space 
     transportation vehicle will result in a magnitude of 
     projected space transportation cost reduction comparable to 
     that which development of new space transportation vehicles 
     would be required to project, in order to be eligible for 
     guarantee of obligations.
       (e) Application and Administrative Fees.--
       (1) The Secretary may assess a fee for applications for 
     loan guarantees submitted under this Act and/or a fee for 
     administration of an obligation under this Act.
       (2) Application fees under this subsection shall be 
     assessed and collected at the time a U.S. commercial space 
     transportation vehicle provider submits an application for 
     loan guarantees under this Act. Administrative fees under 
     this section shall be assessed and collected not later than 
     the date of issuance of the debt guaranteed pursuant to this 
     Act.
       (3) Administrative fees collected under this subsection 
     shall not exceed one-eighth of one percent of the guaranteed 
     amount of the face value of the debt covered by the 
     guarantee.
       (4) A fee paid under this subsection is generally not 
     refundable. However, an obligor shall receive credit for the 
     amount paid for the remaining term of the guaranteed 
     obligation if the obligation is refinanced and guaranteed 
     under this Act after such refinancing.
       (5) A fee paid under this subsection shall be included in 
     the amount of the actual cost of the obligation guaranteed 
     under this Act and is eligible to be financed under this Act.
       (6) There are authorized to be appropriated such sums as 
     may be necessary for salaries and expenses to carry out the 
     responsibilities under this title.
       (f) Additional Requirements.--Obligations guaranteed under 
     this Act and agreements relating thereto shall contain such 
     other provisions with respect to the protection of the 
     financial security interests of the United States as the 
     Secretary may, in his or her discretion, prescribe.

     SEC. 106. DEFAULTS.

       (a) Rights of Obligee.--In the event of a default, which 
     has continued for thirty days, in any payment by the obligor 
     of principal or interest due under an obligation guaranteed 
     under this Act, the obligee or his agent shall have the right 
     to demand (unless the Secretary shall, upon such terms as may 
     be provided in the obligation or related agreements, prior to 
     that demand, have assumed

[[Page S2015]]

     the obligor's rights and duties under the obligation and 
     agreements and shall have made any payments in default), at 
     or before the expiration of such period as may be specified 
     in the guarantee or related agreements, but not later than 
     ninety days from the date of such default, payment by the 
     Secretary of the unpaid principal amount of such obligation 
     and of the unpaid interest thereon to the date of payment. 
     Within such period as may be specified in the guarantee or 
     related agreements, but not later than thirty days from the 
     date of such demand, the Secretary shall promptly pay to the 
     obligee or his agent the unpaid principal amount of said 
     obligation and unpaid interest thereon to the date of 
     payment: Provided, That the Secretary shall not be required 
     to make such payment if prior to the expiration of said 
     period he shall find that there was no default by the 
     obligor in the payment of principal or interest or that 
     such default has been remedied prior to any such demand.
       (b) Notice of Default.--In the event of a default under a 
     mortgage, loan agreement, or other security agreement between 
     the obligor and the Secretary, the Secretary may upon such 
     terms as may be provided in the obligation or related 
     agreement, either:
       (1) assume the obligor's rights and duties under the 
     agreement, make any payment in default, and notify the 
     obligee or the obligee's agent of the default and the 
     assumption by the Secretary; or
       (2) notify the obligee or the obligee's agent of the 
     default, and the obligee or the obligee's agent shall have 
     the right to demand at or before the expiration of such 
     period as may be specified in the guarantee or related 
     agreements, but not later than 60 days from the date of such 
     notice, payment by the Secretary of the unpaid principal 
     amount of said obligation and of the unpaid interest thereon. 
     Within such period as may be specified in the guarantee or 
     related agreements, but not later than 30 days from the date 
     of such demand, the Secretary shall promptly pay to the 
     obligee or the obligee's agent the unpaid principal amount of 
     said obligation and unpaid interest thereon to the date of 
     payment.
       (c) To Complete, Sell or Operate Property.--In the event of 
     any payment or assumption by the Secretary under subsection 
     (a) or (b) of this section, the Secretary shall have all 
     rights in any security held by him relating to his guarantee 
     of such obligations as are conferred upon him under any 
     security agreement with the obligor. Notwithstanding any 
     other provision of law relating to the acquisition, handling, 
     or disposal of property by the United States, the Secretary 
     shall have the right, in his discretion, to complete, 
     recondition, reconstruct, renovate, repair, maintain, 
     operate, charter, or sell any property acquired by him 
     pursuant to a security agreement with the obligor. The terms 
     of the sale shall be as approved by the Secretary.
       (d) Actions Against Obligor.--In the event of a default 
     under any guaranteed obligation or any related agreement, the 
     Secretary shall take such action against the obligor or any 
     other parties liable thereunder that, in his discretion, may 
     be required to protect the interests of the United States. 
     Any suit may be brought in the name of the United States or 
     in the name of the obligee and the obligee shall make 
     available to the United States all records and evidence 
     necessary to prosecute any such suit. The Secretary shall 
     have the right, in his discretion, to accept a conveyance of 
     Act to and possession of property from the obligor or other 
     parties liable to the Secretary, and may purchase the 
     property for an amount not greater than the unpaid principal 
     amount of such obligation and interest thereon. In the event 
     that the Secretary shall receive through the sale of property 
     an amount of cash in excess of the unpaid principal amount of 
     the obligation and unpaid interest on the obligation and the 
     expenses of collection of those amounts, the Secretary shall 
     pay the excess to the obligor.
                                 ______
                                 
      By Mr. CHAFEE (for himself, Mr. Moynihan, Mr. Warner, Mr. Bond, 
        Mr. Graham, and Mr. Gorton):
  S. 470. A bill to amend the Internal Revenue Code of 1986 to allow 
tax-exempt private activity bonds to be issued for highway 
infrastructure construction; to the Committee on Finance.


              the highway innovation and cost savings act

  Mr. CHAFEE. Mr. President today, I am introducing legislation which 
will allow the private sector to take a more active role in building 
and operating our nation's highway infrastructure. The Highway 
innovation and Cost Savings Act will allow the private sector to gain 
access to tax-exempt bond financing for a limited number of highway 
projects. I am pleased that my distinguished colleagues, Senators 
Moynihan, Warner, Bond, Graham, and Gorton have agreed to join me in 
this effort.
  In the United States, highway and bridge infrastructure is the 
responsibility of the government. Governments build, own, and operate 
public highways, roads and bridges. In many other countries, however, 
the private sector, and private capital, construct and operate 
important facilities. These countries have found that increasing the 
private sector's role in major highway transportation projects offers 
opportunities for construction cost savings and more efficient 
operation. They also open the door for new construction techniques and 
technologies.
  It is incumbent upon us to look at new and innovative ways to make 
the most of limited resources to address significant needs. To help 
meet the nation's infrastructure needs, we must take advantage of 
private sector resources by opening up avenues for the private sector 
to take the lead in designing, constructing, financing and operating 
highway facilities.
  A substantial barrier to private sector participation in the 
provision of highway infrastructure is the cost of capital. Under 
current Federal tax law, highways built and operated by the government 
can be financed using tax exempt debt, but those built and operated by 
the private sector, or those with substantial private sector 
participation, cannot. As a result, public/private partnerships in the 
provision of highway facilities are unlikely to materialize, despite 
the potential efficiencies in design, construction, and operation 
offered by such arrangements.
  To increase the amount of private sector participation in the 
provision of highway infrastructure, the tax code's bias against 
private sector participation must be addressed.
  The Highway Innovation and Cost Savings Act creates a pilot program 
aimed at encouraging the private sector to help meet the transportation 
infrastructure needs for the 21st Century. It makes tax exempt 
financing available for a total of 15 highway privatization projects. 
The total face value of bonds that can be issued under this program is 
limited to 15 billion dollars.
  The fifteen projects authorized under the program will be selected by 
the Secretary of Transportation, in consultation with the Secretary of 
Treasury. To qualify under this program, projects selected must: serve 
the general public; assist in evaluating the potential of the private 
sector's participation in the provision, maintenance, and operation of 
the highway infrastructure of the United States; be on publicly-owned 
rights-of-way; revert to public ownership; and, come from a state's 20-
year transportation plan. These criteria ensure that the projects 
selected meet a state or locality's broad transportation goals.
  This proposal was included in the Senate's version of last year's 
transportation reauthorization bill. Unfortunately, it was dropped 
during the conference with the House.
  The bonds issued under this pilot program will be subject to the 
rules and regulations governing private activity bonds. Moreover, the 
bonds issued under the program will not count against a state's tax 
exempt volume cap.
  This legislation has been endorsed by Project America, a coalition 
dedicated to improving our nation's infrastructure, the American 
Consulting Engineers Council, the Bond Market Association, the American 
Road and Transportation Builders Association, the Institute of 
Transportation Engineers, and the ITS America.
  I hope that this bill can be one in a series of new approaches to 
meeting our substantial transportation infrastructure needs and will be 
one of the approaches that will help us find more efficient methods to 
design and to build the nation's transportation infrastructure.
  I encourage my colleagues to join me as cosponsors of this important 
initiative.
  Mr. President, I ask unanimous consent that the text and a 
description of the bill be printed into the Record.
  There being no objection, the items were ordered to be printed in the 
Record, as follows:

                                 S. 470

       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 ``Highway Innovation and Cost 
     Savings Act''.

     SEC. 2. TAX-EXEMPT FINANCING OF QUALIFIED HIGHWAY 
                   INFRASTRUCTURE CONSTRUCTION.

       (a) Treatment as Exempt Facility Bond.--A bond described in 
     subsection (b) shall be treated as described in section 
     141(e)(1)(A) of the Internal Revenue Code of

[[Page S2016]]

     1986, except that section 146 of such Code shall not apply to 
     such bond.
       (b) Bond Described.--
       (1) In general.--A bond is described in this subsection if 
     such bond is issued after the date of enactment of this Act 
     as part of an issue--
       (A) 95 percent or more of the net proceeds of which are to 
     be used to provide a qualified highway infrastructure 
     project, and
       (B) to which there has been allocated a portion of the 
     allocation to the project under paragraph (2)(C)(ii) which is 
     equal to the aggregate face amount of bonds to be issued as 
     part of such issue.
       (2) Qualified highway infrastructure projects.--
       (A) In general.--For purposes of paragraph (1), the term 
     ``qualified highway infrastructure project'' means a 
     project--
       (i) for the construction or reconstruction of a highway, 
     and
       (ii) designated under subparagraph (B) as an eligible pilot 
     project.
       (B) Eligible pilot project.--
       (i) In general.--The Secretary of Transportation, in 
     consultation with the Secretary of the Treasury, shall select 
     not more than 15 highway infrastructure projects to be pilot 
     projects eligible for tax-exempt financing.
       (ii) Eligibility criteria.--In determining the criteria 
     necessary for the eligibility of pilot projects, the 
     Secretary of Transportation shall include the following:

       (I) The project must serve the general public.
       (II) The project is necessary to evaluate the potential of 
     the private sector's participation in the provision, 
     maintenance, and operation of the highway infrastructure of 
     the United States.
       (III) The project must be located on publicly-owned rights-
     of-way.
       (IV) The project must be publicly owned or the ownership of 
     the highway constructed or reconstructed under the project 
     must revert to the public.
       (V) The project must be consistent with a transportation 
     plan developed pursuant to section 134(g) or 135(e) of title 
     23, United States Code.

       (C) Aggregate face amount of tax-exempt financing.--
       (i) In general.--The aggregate face amount of bonds issued 
     pursuant to this section shall not exceed $15,000,000,000, 
     determined without regard to any bond the proceeds of which 
     are used exclusively to refund (other than to advance refund) 
     a bond issued pursuant to this section (or a bond which is a 
     part of a series of refundings of a bond so issued) if the 
     amount of the refunding bond does not exceed the outstanding 
     amount of the refunded bond.
       (ii) Allocation.--The Secretary of Transportation, in 
     consultation with the Secretary of the Treasury, shall 
     allocate the amount described in clause (i) among the 
     eligible pilot projects designated under subparagraph (B), 
     based on the extent to which--

       (I) the projects use new technologies, construction 
     techniques, or innovative cost controls that result in 
     savings in building or operating the projects, and
       (II) the projects address local, regional, or national 
     transportation needs.

       (iii) Reallocation.--If any portion of an allocation under 
     clause (ii) is unused on the date which is 3 years after such 
     allocation, the Secretary of Transportation, in consultation 
     with the Secretary of the Treasury, may reallocate such 
     portion among the remaining eligible pilot projects.
                                  ____


           Summary of Highway Innovation and Cost Savings Act

       The U.S. Department of Transportation estimates a 
     substantial shortfall in funding for meeting our highway and 
     bridge infrastructure needs, even with the increased 
     investment levels under TEA 21. Closing the gap will require 
     full access to private capital as well as government 
     resources.
       Existing tax laws discourage private investment in highway 
     infrastructure by making lower cost tax-exempt financing 
     unavailable for projects involving private equity investment 
     and private sector management and operating contracts.
       Today, U.S. companies, which have invested billions of 
     dollars in foreign infrastructure projects, have participated 
     in only a few such projects in the United States. This pilot 
     program will demonstrate the benefits of bringing the full 
     resources of the private sector to bear on solving our own 
     nation's transportation needs for the 21st century.
       Increasing the private-sector's role in major highway 
     transportation projects offers opportunities for construction 
     cost savings and more efficient operation, as well as opening 
     the door for new construction techniques and technologies.
       A substantial barrier to private-sector participation in 
     the provision of highway infrastructure is the cost of 
     capital. Under current Federal tax law, highways built and 
     operated by government can be financed using tax exempt 
     financing but those built and operated by the private sector 
     cannot. As a result, public/private partnerships in the 
     provision of highway facilities are unlikely to materialize, 
     despite the potential efficiencies in design, construction, 
     and operation offered by such arrangements.
       To increase the amount of private-sector participation in 
     the provision of highway infrastructure, the tax code's bias 
     against private-sector participation must be addressed, or 
     the benefits that the private-sector can bring to 
     infrastructure development will never be fully realized.
       Highways, bridges, and tunnels are the only major category 
     of public infrastructure investment where projects involving 
     private participation (commonly referred to as private-
     activity bonds) are denied access to tax-exempt debt 
     financing. See Attachment.


                       pilot program under hicsa

       Tax-exempt financing for up to 15 projects is made 
     available under this pilot program. The aggregate amount of 
     bonds issued under this program is limited to $15 billion.
       Pilot projects are to be selected by the Secretary of 
     Transportation, in consultation with the Secretary of the 
     Treasury, based on the following criteria: the project must 
     serve the general public; the project must be necessary to 
     evaluate the potential of the private sector's participation 
     in the provision of highway transportation infrastructure; 
     the project must be located on a publicly-owned right-of-way; 
     the project must be publicly owned or the ownership of the 
     project must revert to the public; and the project must be 
     consistent with transportation plans developed under Title 23 
     U.S.C.
       Benefits resulting from the private sector participation 
     include those resulting from using alternative procurement 
     methodologies (including design-build and design and design-
     built-operate-maintain contracting), shortening construction 
     schedules, reducing carrying costs, transferring greater 
     construction and operating risk to the private sector, and 
     obtaining from contractors long-term warranties and operating 
     guaranties.
       Private investors and operators are encouraged under this 
     program to achieve efficiencies in design, construction, and 
     operation by affording them a share in the project's net 
     returns.
       Projects will be subject to applicable environmental 
     requirements, prevailing state design and construction 
     standards and applicable state and local labor laws similar 
     to any other transportation facility financed with tax-exempt 
     bonds.
       In the absence of this program, state and local governments 
     could still build these projects with conventional tax-exempt 
     financing, but at greater cost, on delayed time schedules, 
     without contribution of private equity capital and without 
     transferring to the private sector long term operating and 
     maintenance risk.

                   TAX-EXEMPT BONDS FOR INFRASTRUCTURE
------------------------------------------------------------------------
                                                               Private
                                              Governmental    activity
                                                  only          bonds
------------------------------------------------------------------------
Facility:
  Airport...................................          Yes           Yes
  Docks, Ports..............................          Yes           Yes
  Highways & Bridges........................          Yes            No
  Mass Transit..............................          Yes           Yes
  High Speed Rail...........................          Yes           Yes
  Water Facilities..........................          Yes           Yes
  Sewage Facilities.........................          Yes           Yes
  Solid Waste Facilities....................          Yes           Yes
  Hazardous Waste...........................          Yes           Yes
------------------------------------------------------------------------

  Mr. GRAHAM. Mr. President, I am pleased to join my colleagues to 
introduce the Highway Innovation and Cost Savings Act of 1999. As you 
know, last year on June 9, President Clinton signed into law, the 
Transportation Equity Act of 1998. TEA 21 established many new 
programs, and a new budget treatment for highways. Throughout the 
debate on TEA 21, I always focused on one goal: to be able to promise 
my constituents that by 2003, the last year of TEA 21, our roads and 
bridges would be in better shape than they are today. In 1991, when 
ISTEA passed, I was not able to make that pledge, because I knew that 
the United States Department of Transportation had already estimated 
that the level of funding in the ISTEA bill would not close the gap 
between highway needs and money to meet those needs.
  TEA 21 was a landmark piece of legislation. TEA 21 established a new 
budget category for funding the highway program which calls for funding 
levels each year to match the intake of gas taxes the year prior. This 
will be the first year we test the philosophy that we can commit to 
spending user fees exclusively to keep up the system. Unfortunately, 
this amount of funding is still not enough to maintain the quality of 
roads in Florida or any other state. Traditional grant programs will 
not be able to ever meet the infrastructure needs of the nation. We 
must look at innovative solutions to our congestion problems. We need 
to use innovative methods to finance construction projects. We need to 
get the private sector involved in transportation improvements.
  The distinguished Chairman of the Environment and Public Works 
Committee and I worked very hard to develop and implement an innovative 
financing program called transportation Infrastructure Finance and 
Innovation Act (TIFIA). TIFIA was incorporated into TEA 21 and is now 
being implemented by the United States Department of Transportation. 
The program

[[Page S2017]]

will extend federal credit to major, high cost transportation projects 
so as to enhance the project's ability to acquire private credit. The 
TIFIA program authorizes $530 million to be extended in federal credit 
over six years. The $530 million can be used to leverage up to $10.6 
billion in private loans and lines of credit. The TIFIA program offers 
the sponsors of major transportation projects a means to amplify 
federal resources up to twenty times. The objectives of the program are 
to stimulate additional nonfederal investment in our Nation's 
infrastructure, and encourage private sector participation in 
transportation projects.
  Mr. President, I am very excited about the prospects for the TIFIA 
program. I believe that Congress must continue to look for new and 
innovative ways to meet our nation's infrastructure needs. I believe 
the bill we are introducing today, the Highway Innovation and Cost 
Savings Act of 1999 (HICSA), will be another tool in the financing 
toolbox. HICSA creates a pilot program which allows tax-exempt 
financing for up to 15 transportation projects. The amount of bonds 
issued under the pilot will be limited to $15 billion. The projects for 
the pilot will be selected by the Secretary on Transportation based on 
numerous criteria.
  HICSA will encourage more private sector investment in highway and 
bridge construction by making lower cost, tax-exempt financing 
available. Under current law, other forms of public infrastructure, 
such as airports and seaports, are eligible for tax-exempt debt 
financing for projects with private capital. Highway, bridge, and 
tunnel projects are not eligible for this type of financing. Increasing 
the private sector's role in major highway projects will not only help 
to close the needs gap, but will also open the door for new cost saving 
techniques in construction and the use of new technologies.
  U.S. companies continually invest billions of dollars in foreign 
infrastructure projects, but have only participated in only a few 
projects in the United States. Why should American companies feel the 
need to invest their money overseas, when the United States is in such 
desperate need of funds for roads. American companies want to invest in 
American infrastructure. HICSA will demonstrate the benefits of private 
sector involvement in infrastructure projects, and will finally 
establish the private sector as an honored partner in building the road 
to the 21st century.
  Mr. President, I want to be able to travel to Florida and tell my 
constituents that in 2003, their roads and bridges will be in better 
shape than they are today. I believe with the combination of TEA 21 
traditional grant funding, new programs like TIFIA, and clearing 
hurdles in the tax code with HICSA, we will be well on our way. I look 
forward to working with my colleagues on the Senate Finance Committee 
to pass this much needed legislation.
                                 ______
                                 
      By Mr. GRASSLEY (for himself, Mr. Baucus, Mr. Jeffords, Ms. 
        Collins, Mr. Cochran, and Mr. Abraham):
  S. 471. A bill to amend the Internal Revenue Code of 1986 to 
eliminate the 60-month limit on student loan interest deductions; to 
the Committee on Finance.


   LEGISLATION TO EXPAND THE TAX DEDUCTION FOR STUDENT LOAN INTEREST

  Mr. GRASSLEY. Mr. President, today I am introducing legislation to 
expand the tax deduction for student loan interest. Senators Baucus, 
Jeffords, Collins, Cochran and Abraham are joining me in introducing 
this legislation.
  Under the Tax Reform Act of 1986, the tax deduction for student loan 
interest was eliminated. This action, done in the name of fiscal 
responsibility, blatantly disregarded the duty we have to the education 
of our nation's students. This struck me and many of my colleagues as 
wrong. Since 1987, I have spearheaded the bipartisan effort to 
reinstate the tax deduction for student loan interest. In 1992, we 
succeeded in passing the legislation to reinstate the deduction, only 
to have it vetoed as part of a larger bill with tax increases. Finally, 
after ten long years, our determination and perseverance paid off. 
Under the Taxpayer Relief Act of 1997, we succeeded in reinstating the 
deduction. In our success, we sent a clear message to students and 
their families across the country that the Congress of the United 
States understands the financial hardships they face, and that we are 
willing to assist them in easing those hardships so they can receive 
the education they need.
  In 1997 we took steps in the right direction, and did what had to be 
done. Regrettably, due to fiscal constraints, we were not able to go as 
far as we wanted to go. The nation was still in a fiscal crisis at that 
time. In order to control costs, we were forced to limit the 
deductibility of student loan interest to only sixty loan payments, 
which is equivalent to five years plus time spent in forbearance or 
deferment.
  This restriction hurts some of the most needy borrowers. Many of 
these borrowers are students who, due to limited means, have borrowed 
most heavily. The restriction discriminates against those who have the 
highest debt loads and lowest incomes. It makes the American dream 
harder to achieve for those struggling to pull themselves up--for those 
who started with less. It is unjust.
  Today, our situation is vastly different. In these times of economic 
vitality and budget surplus, we have a responsibility to do what we 
were unable to do before. Student debt is rising to alarming levels, 
and additional relief must be provided. We must eliminate the sixty 
month restriction on the deductibility of student loan interest and 
show that the United States Congress stands behind all of our nation's 
students in their endeavors to better themselves.
  Eliminating the sixty payment restriction will bring needed relief to 
some of the most deserving borrowers. The restriction weighs heavily on 
those who, despite lower pay, have decided to dedicate themselves to a 
career in public service. We will be rewarding civic virtue as we 
provide relief to these admirable citizens.
  Additionally, eliminating this restriction will eliminate difficult 
and costly reporting requirements that are currently required for both 
borrowers and lenders. In supporting our nation's students, we will 
also be cutting costly bureaucracy.
  Currently, to claim the deduction, the taxpayer must have an adjusted 
gross income of $40,000 or less, or $60,000 for married couples. The 
amount of the deduction is gradually phased out for those with incomes 
between $40,000 and $55,000, or $60,000 and $75,000 for married 
couples. Additionally, the deduction itself was phased in at $1000, and 
will cap out at $2500 in 2002.
  Many in our country are suffering from excessive student debt. More 
can and must be done to help them. In this time of economic plenty, it 
is our duty to invest in our students' education. Doing so is an 
investment in America's future. To maintain competitiveness in the 
global marketplace, America must have a well-educated workforce. By 
eliminating the sixty payment restriction on the deductibility of 
student loan interest we recommit ourselves to education and to 
maintaining the position of this country at the pinnacle of the free 
world.
  The administration supports this direction as well. In his 2000 
budget, President Clinton has proposed to eliminate the sixty payment 
restriction on the deductibility of student loan interest, starting 
after 1999. Our legislation takes a more fair and inclusive approach by 
including payments between 1997 and 1999, which the administration 
leaves out.
  I urge members to join us in this effort to relieve the excessive 
burdens on those trying to better themselves and their families through 
education by expanding the tax deduction for student loan interest 
payments.
                                 ______
                                 
      By Mr. GRASSLEY (for himself, Mr. Reid, Mr. Conrad, Mr. Hollings, 
        Mr. Johnson, Mr. Durbin, Ms. Collins, Mr. Daschle, and Mr. 
        Dorgan):
  S. 472. A bill to amend title XVIII of the Social Security Act to 
provide certain Medicare beneficiaries with an exemption to the 
financial limitations imposed on physical, speech-language pathology, 
and occupational therapy services under part B of the Medicare program, 
and for other purposes; to the Committee on Finance.


      The Medicare Rehabilitation benefit improvement act of 1999

  Mr. GRASSLEY. Mr. President, I rise today to introduce the Medicare 
Rehabilitation Benefit Improvement Act of

[[Page S2018]]

1999 with my colleague, Senator Reid. This legislation will enable 
seniors to receive medically necessary rehabilitative services based on 
their condition and health and not on arbitrary payment limits. We 
introduced similar legislation last Congress.
  The Balanced Budget Act (BBA) of 1997 is a very important 
accomplishment and one that I am proud to say I supported. However, in 
our rush to save the Medicare Trust Fund from bankruptcy, Congress 
neglected to thoroughly evaluate the impact the new payment limits on 
rehabilitative services would have on Medicare beneficiaries.
  The BBA included a $1500 cap on occupational, physical and speech-
language pathology therapy services received outside a hospital 
setting. This provision became effective January 1, 1999, and after 
just 31 days of implementation, an estimated one in four beneficiaries 
had exhausted half of their yearly benefit. According to a recent 
study, these limitations on services will harm almost 13 percent or 
750,000 of Medicare beneficiaries because these individuals will exceed 
the cap. While many seniors will not need services that would cause 
them to exceed the $1500 cap, others, like stroke victims and patients 
with Parkinson's disease, will likely need services beyond what the 
arbitrary caps will cover. Unfortunately, it is those beneficiaries who 
need rehabilitative care the most who will be penalized by being forced 
to pay the entire cost for these services outside of a hospital 
setting.
  The bill I am introducing would establish certain exceptions to the 
$1500 cap, for beneficiaries who have medical needs that require more 
intensive treatment than this benefit limit would allow. The Secretary 
of the Department of Health and Human Services would be required to 
implement the exceptions, and providers would be required to 
demonstrate medical necessity based on the criteria outlined in the 
bill. In essence, the bill attempts to accomplish the primary goal of 
the $1500 cap, budgetary savings, but without harming the Medicare 
beneficiary. Payment is based on the patient's condition and not on an 
arbitrary monetary amount. Help us provide access to services for those 
beneficiaries who will need these services or risk further 
complications, establish a system that makes sense, and still achieve 
the budget savings sought from the BBA without reducing Medicare 
benefits.
  Please join me and my colleagues in passing this legislation.
  Mr. President, I ask unanimous consent that the text of the bill and 
additional materials be printed in the Record.

                                 S. 472

       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 ``Medicare Rehabilitation 
     Benefit Improvement Act of 1999''.

     SEC. 2. PURPOSES.

       The purposes of this Act are as follows:
       (1) To provide certain medicare beneficiaries with an 
     exemption to the financial limitations imposed on physical, 
     speech-language pathology, and occupational therapy services 
     under section 1833(g) of the Social Security Act (42 U.S.C. 
     1395l(g)).
       (2) To direct the Secretary of Health and Human Services to 
     conduct a study on the implementation of such exemption and 
     to submit a report to Congress that includes recommendations 
     regarding alternatives to such financial limitations.

     SEC. 3. ESTABLISHMENT OF EXEMPTION TO CAP ON PHYSICAL, 
                   SPEECH-LANGUAGE PATHOLOGY, AND OCCUPATIONAL 
                   THERAPY SERVICES.

       (a) In General.--Section 1833(g) of the Social Security Act 
     (42 U.S.C. 1395l(g)) is amended by adding at the end the 
     following:
       ``(4)(A) The limitations in this subsection shall not apply 
     to an individual described in subparagraph (B).
       ``(B) An individual described in this subparagraph is an 
     individual that meets any of the following criteria:
       ``(i) The individual has received services described in 
     paragraph (1) or (3) in a calendar year and is subsequently 
     diagnosed with an illness, injury, or disability that 
     requires the provision in such year of additional such 
     services that are medically necessary.
       ``(ii) The individual has a diagnosis that requires the 
     provision of services described in paragraph (1) or (3) and 
     an additional diagnosis or incident that exacerbates the 
     individual's condition, thereby requiring the provision of 
     additional such services.
       ``(iii) The individual will require hospitalization if the 
     individual does not receive the services described in 
     paragraph (1) or (3).
       ``(iv) The individual meets other criteria that the 
     Secretary determines are appropriate.
       ``(C) Nothing in this paragraph shall be construed as 
     affecting any requirement for, or limitation on, payment 
     under this title (other than the financial limitation under 
     this subsection).
       ``(D) Any service that is covered under this title by 
     reason of this paragraph shall be subject to the same 
     reasonable and necessary requirement under section 1862(a)(1) 
     that is applicable to the services described in paragraph (1) 
     or (3) that are covered under this title without regard to 
     this paragraph.''.
       (b) Conforming Amendments.--Paragraphs (1) and (3) of 
     section 1833(g) of the Social Security Act (42 U.S.C. 
     1395l(g)) are each amended by striking ``In the case'' and 
     inserting ``Subject to paragraph (4), in the case''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to services provided on or after the date of 
     enactment of this Act.

     SEC. 4. STUDY AND REPORT TO CONGRESS.

       (a) Study.--The Secretary of Health and Human Services 
     shall conduct a study on the amendments to section 1833(g) of 
     the Social Security Act (42 U.S.C. 1395l(g)) made by section 
     3 of this Act, including a study of--
       (1) the number of medicare beneficiaries that receive 
     exemptions under paragraph (4) of such section (as added by 
     section 3);
       (2) the diagnoses of such beneficiaries;
       (3) the types of physical, speech-language pathology, and 
     occupational therapy services that are covered under the 
     medicare program because of such exemptions;
       (4) the settings in which such services are provided; and
       (5) the number of medicare beneficiaries that reach the 
     financial limitation under section 1833(g) of the Social 
     Security Act in a year (without regard to the amendments to 
     such section made by section 3 of this Act) and subsequently 
     receive physical, speech-language pathology, or occupational 
     therapy services in such year at an outpatient hospital 
     department.
       (b) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services shall submit a detailed report to Congress on the 
     study conducted pursuant to paragraph (1), and shall include 
     in the report recommendations regarding alternatives to the 
     financial limitations on physical, speech-language pathology, 
     and occupational therapy services under section 1833(g) of 
     the Social Security Act and any other recommendations 
     determined appropriate by the Secretary. Such report shall be 
     included in the report required to be submitted to Congress 
     pursuant to section 4541(d)(2) of the Balanced Budget Act of 
     1997 (42 U.S.C. 1395l note).
                                  ____


    Medicare Rehabilitation Benefit Improvement Act of 1999--Summary

       This bill will provide certain Medicare beneficiaries with 
     an exemption based on medical necessity to the financial 
     limitation imposed on physical, speech-language pathology, 
     and occupational therapy services under part B of the 
     Medicare program. It will also direct the Secretary of Health 
     and Human Services (HHS) to conduct a study on the 
     implementation of such an exemption, and then submit a report 
     to Congress that includes recommendations regarding 
     alternatives to such financial limitations.
       The Balanced Budget Act (BBA) of 1997 imposed a $1500 cap 
     on all therapy effective January 1, 1999. There is a combined 
     $1500 cap for physical and speech-language pathology and a 
     separate $1500 cap on occupational therapy services received 
     outside a hospital setting. An estimated 750,000 
     beneficiaries will reach the cap this year. These patients 
     may be victims of stroke, brain-injury, or other serious 
     conditions requiring additional services.
       This bill establishes certain criteria in order for 
     Medicare beneficiaries to be eligible for an exemption from 
     the $1500 cap and allows the Secretary of HHS to establish 
     additional criteria if necessary. The criteria include:
       (1) the beneficiary must be diagnosed with an illness, 
     injury, or disability that requires additional physical, 
     speech-language pathology, or occupational therapy services 
     that are medically necessary in a calender year, or
       (2) the beneficiary has a diagnosis that requires such 
     therapy services and has an additional diagnosis or incident 
     that exacerbates his/her condition (ie: diabetes), which 
     would require more services, or
       (3) the beneficiary will require hospitalization if he/she 
     does not receive the necessary therapy services, or
       (4) the beneficiary meets other requirements determined by 
     the Secretary of HHS.
       The bill also requires the Secretary of HHS to conduct a 
     study and to report to Congress two years after the date of 
     enactment of this Act. This study will include:
       (1) the number of Medicare beneficiaries that receive 
     exemptions to the cap;
       (2) the diagnoses of the beneficiaries;
       (3) the types of therapy services that are covered due to 
     such exemptions;
       (4) the settings in which services are provided; and
       (5) the number of beneficiaries that reach the $1500 cap.
                                  ____

                                         American Speech-Language-


                                          Hearing Association,

                                 Rockville, MD, February 19, 1999.
     Hon. Charles E. Grassley,
     Chairman, U.S. Senate Special Committee on Aging, Washington, 
         DC
       Dear Chairman Grassley: The American Speech-Language-
     Hearing Association

[[Page S2019]]

     (ASHA) is pleased to support the ``Medicare Rehabilitation 
     Benefit Improvement Act of 1999.'' ASHA is the professional 
     and scientific organization of more than 96,000 speech-
     language pathologists, audiologists, and speech, language, 
     hearing scientists. Our members provide services in a number 
     of practice settings, including hospitals, clinics, private 
     practice, and home health agencies.
       There is a clear need for exemptions from the Medicare 
     financial limitations for beneficiaries receiving outpatient 
     rehabilitation services. Since the provision went into effect 
     on January 1, 1999, ASHA has received numerous calls and 
     letters of concern from our members regarding the problems 
     created by the financial limitation. Patients are actually 
     refusing medically necessary treatment for fear that they may 
     have a more acute episode or injury later in the year and 
     want to keep their $1500 ``banked'' for such a possibility. 
     Essentially, the cap's arbitrary limit is indirectly forcing 
     patients to inappropriately ration needed care that we 
     believe will ultimately cost the Medicare program more.
       A patient who requires both speech-language pathology 
     services and physical therapy services is placed in a true 
     dilemma. If the patient who has suffered a stroke chooses to 
     receive speech-language pathology services, the patient may 
     not have sufficient funding for physical therapy at the 
     conclusion of the speech-language pathology treatment. 
     Conversely, the patient who selects physical therapy may not 
     have adequate funding for the speech-language pathology 
     services. A third situation arises when the patient receives 
     both rehabilitation services concurrently and the programs 
     for both are inadequate because the financial limitation is 
     not sufficient for receipt of both health care services.
       I am enclosing a copy of a letter addressed to Congress 
     that ASHA received early this year from a family member whose 
     mother is receiving speech-language pathology services for a 
     swallowing disorder. Ms. Carol Eller McCaffrey of Lawrence, 
     Kansas, begins her letter with:
       ``I am the daughter of an 87-year-old woman whose brain 
     stem stroke left her unable to swallow or speak well and 
     weakened her right side, and whose quality of life will 
     suffer greatly with $1500 Medicare cap.
       ``The new cap will all but completely discontinue . . . 
     treatment thus requiring increased hydration through an 
     alternative feeding tube which we have left intact for these 
     emergencies. Taking away the very important . . . therapy 
     causes the need for more nursing care. Also, her quality of 
     life is `down the tubes' when mother is unable to eat and 
     drink comfortably.''
       This is but one example of the problems that arise because 
     of the arbitrary Medicare financial limitation. As 1999 
     progresses, there will undoubtedly be more examples of 
     difficulties caused by the cap unless legislation such as 
     yours can restore reasonable benefits in the program.
       The members of the American Speech-Language-Hearing 
     Association are committed to improving the health and safety 
     of those who suffer communication and related disorders. Your 
     legislation will make it possible for more Americans to 
     receive the care they need. ASHA commends you for your 
     efforts to seek a remedy to the cap that ensures patient 
     access to medically-needed services through the ``Medicare 
     Rehabilitation Benefit Improvement Act of 1999.''
           Sincerely,
                                                    Donna Geffner,
     President.
                                  ____

                                                  January 1, 1999.
       Honorable Congressional Leaders: I am not a professional in 
     the medical world nor am I very knowledgeable about the 
     logistics of medicare. I am the daughter of an 87 year old 
     woman whose brain stem stroke left her unable to swallow or 
     speak well and weakened her right side and whose quality of 
     life will suffer greatly with the $1500.00 medicare gap.
       With them help of our speech and physical therapists, 
     Mother has come a long way. Although she still doesn't speak 
     well, she eats normal food in the dining room with fellow 
     residents. Mother has a problem with thin liquids that causes 
     choking and probable aspiration. A new treatment called Deep 
     Pharyngeal Neuromuscular Stimulation (DPNS) is being taught; 
     our speech therapist has treated Mom with DPNS, resulting in 
     a 90% improvement. In my mother's case, the problem is that 
     several months after treatment, the benefits wear off. 
     Periodically, Mother needs another round of DPNS.
       The new cap will all but completely discontinue this 
     treatment thus requiring increased hydration through an 
     alternative feeding tube which we have left intact for these 
     emergencies. Taking away the very important DPNS therapy 
     causes the need for more nursing care. Also, her life quality 
     of life is ``down the tubes'' when mother is unable to eat 
     and drink comfortably.
       Mom also needs continual assertive physical therapy to keep 
     her strength up but the guidelines, even before the medical 
     cap, require a decrease in her function to qualify for 
     treatment. So, periodically, as Mother weakens, therapists 
     have to start over. This seems backwards to me. I thought 
     that as a nation, we were making great strides in the care of 
     our elderly and disabled. In my opinion, the recent medicare 
     cap is a huge backslide. Does the left hand of the government 
     know what the right hand is doing? And look who's suffering? 
     Obviously those making the rules have not had personal 
     experiences in this area.
       The paperwork for all medical personnel is already 
     overwhelming. Our professionals are spending more time with 
     paper than with patients! All this, I presume, to try and 
     thwart cheaters. I feel the cheaters are the minority and it 
     all comes down to punishing the patients.
       You are smart people. Come up with a reasonable way to deal 
     with this situation without losing sight of what is truly 
     important--the patients.
       Private pay is exorbitant--Have you checked? There is no 
     way normal families can take up where medicare leaves off.
       Please, rethink this decision to cap medicare part B 
     benefits. It is, after all, this particular generation who 
     have supported the US Government through thick and thin. 
     Don't let them down, visit nursing home/ care facilities. 
     Speak with hard working, caring therapists and the red, 
     white, and blue Americans who need your help. It is in your 
     own best interests * * * you'll be there yourself one day.
           Sincerely,
     Carol Eller McCaffrey.
                                  ____

                                                 American Physical


                                          Therapy Association,

                                Alexandria, VA, February 22, 1999.
     Hon. Charles Grassley,
     Chairman, Senate Special Committee on Aging, Washington, DC.
       Chairman Grassley: On behalf of the more than 74,000 
     members of the American Physical Therapy Association (APTA) 
     and the patients our members serve, I am writing to express 
     our strong support and appreciation for your leadership in 
     introducing the ``Medicare Rehabilitation Benefit Improvement 
     Act of 1999.''
       As you know, section 4541(c) of the Balanced Budget Act of 
     1997 imposes annual caps of $1,500 per beneficiary on all 
     outpatient rehabilitation services except those furnished in 
     a hospital outpatient department. The new law has been 
     interpreted to establish two separate limits--$1,500 cap for 
     physical therapy and speech-language pathology services and a 
     separate $1,500 cap for occupational therapy services. These 
     limits are effective for services rendered on or after 
     January 1, 1999.
       APTA maintains concern with the impact this limitation on 
     services will have on Medicare beneficiaries who require 
     physical therapy treatment. Senior citizens and disabled 
     citizens eligible for Medicare benefits suffering from a 
     range of conditions including stroke, hip fracture, 
     Parkinson's Disease, cerebral palsy and other serious 
     conditions that require extensive rehabilitation may not be 
     able to access the care they require to resume normal 
     activities of daily living due to the present limitation on 
     coverage. Enactment of your legislation provides the 
     Secretary of the U.S. Department of Health and Human Services 
     the authority to establish exceptions to the present $1,500 
     cap for patients with conditions that would likely exceed 
     such a limitation on coverage. APTA applauds the inclusion of 
     this provision.
       APTA maintains concern that the $1,500 cap is completely 
     arbitrary and bears no relation to the medical condition of 
     the patient nor the health outcomes of the rehabilitation 
     services. There exists absolutely no medical or empirical 
     justification for such a cap. The caps are by definition 
     completely insensitive to patients with chronic injuries and 
     illness or who have multiple episodes of care in a given 
     calendar year. Enactment of your legislation would provide 
     relief from the $1,500 annual cap for Medicare beneficiaries 
     who experience multiple episodes of care in a given calendar 
     year for services that are deemed medically necessary. APTA 
     applauds the inclusion of this provision.
       APTA maintains concern that the $1,500 cap dramatically 
     reduces Medicare beneficiaries' choice of care giver. Under 
     the present statute, beneficiaries who have exceeded their 
     cap in need of additional rehabilitation services are 
     restricted from receiving care from facilities other than 
     outpatient hospital departments. This restriction is a 
     notable step backward in Congress' efforts to expand access 
     to care, especially in rural and urban underserved 
     communities. Enactment of your legislation would better 
     ensure access to a wide range of community settings in which 
     Medicare beneficiaries could receive care, to include 
     rehabilitation agencies, Comprehensive Outpatient 
     Rehabilitation Facilities, and physical therapy private 
     practices. APTA applauds the inclusion of this provision.
       Lastly, APTA continues to object to the inclusion of 
     physical therapy and speech-language pathology under the same 
     $1,500 cap. Confusion has surrounded the interpretation of 
     how the $1,500 cap is to be applied. As the Medicare Policy 
     Advisory Committee (MedPAC) reported to Congress in its July 
     1998 report, 70 percent of outpatient therapy expenditures 
     under the program are for physical therapy services, while 21 
     percent are for occupational therapy, and 9 percent for 
     speech therapy. The combination of physical therapy and 
     speech therapy has no rational basis. Speech therapy is a 
     distinct and separate benefit provided under the Medicare 
     program and should not be included as a part of the physical 
     therapy benefit. While your legislation does not clarify this 
     issue, APTA is hopeful that Congress will address this issue 
     with common sense clarifications as it considers Medicare 
     revisions this year. APTA will continue to work with you to 
     achieve this end.

[[Page S2020]]

       Physical therapists across Iowa and the nation applaud your 
     leadership on this important issue. Passage of the Medicare 
     Rehabilitation Benefit Improvement Act of 1999 can ensure 
     that patients in need of outpatient physical therapy services 
     receive appropriate care in the setting of their choice 
     without the fear of exceeding their coverage. APTA stands 
     ready to assist you in any way to ensure that swift enactment 
     of this important legislation.
           Sincerely,
                                              Nancy Garland, Esq.,
     Director of Government Affairs.
                                  ____



                             American Health Care Association,

                                Washington, DC, February 24, 1999.
     Hon. Charles Grassley,
     Dirksen Senate Office Building,
     Washington, DC.
       Dear Senator Grassley: On behalf of the American Health 
     Care Association, long term care providers, and those for 
     whom we provide care, I'm writing you to commend you on your 
     leadership in introducing legislation designed to protect 
     America's most frail and elderly from the adverse effects of 
     arbitrary caps on certain medical services.
       One of the provisions contained in the 1997 Balanced Budget 
     Act (BBA) has the potential to harm senior citizens who rely 
     on Medicare for their health care needs. Congress changed 
     Medicare by imposing arbitrary annual limits of $1500 for 
     outpatient rehabilitation services. This includes a $1500 cap 
     on occupational therapy and a $1500 cap on physical therapy 
     and speech-language-pathology combined. Arbitrary caps do not 
     reflect the real rehabilitation needs of Medicare 
     beneficiaries and target the sickest and most vulnerable.
       Your efforts will protect senior citizens suffering from 
     common medical conditions such as stroke and hip fractures. 
     These seniors may not be able to obtain the rehabilitative 
     care they require to resume normal activities of daily living 
     because the $1500 limits are too low to pay for the services 
     which responsible medical practice deem necessary.
       Once again, thank you for taking the lead to redress the 
     problem posed by these arbitrary caps. On behalf of the 
     American Health Care Association, we commend you and stand 
     eager to assist you in your efforts.
           Sinceerely,
                                                    Bruce Yarwood,
     Legislative Counsel.
                                  ____

                                         The American Occupational


                                    Therapy Association, Inc.,

                                  Bethesda, MD, February 23, 1999.
     Hon. Charles Grassley,
     Chairman, Special Committee on Aging, U.S. Senate, 
         Washington, DC.
       Dear Chairman Grassley: On behalf of the 60,000 members of 
     the American Occupational Therapy Assn., I would like to 
     commend and thank you for your leadership in introducing the 
     Medicare Rehabilitation Benefit Improvement Act of 1999.
       The financial limitation on outpatient rehabilitation, 
     including occupational therapy, imposed by the Balanced 
     Budget Act of 1997 was, in AOTA's view, a misguided attempt 
     to constrain Medicare costs which is having a harmful effect 
     on patient care. The payment limitation interposes government 
     between a patient and a health care provider; it restricts 
     patient choice, and could have the unintended consequence of 
     exacerbating patient conditions causing Medicare cost 
     increases.
       Your bill will allow for patients such as those with 
     multiple injuries, illnesses or disabilities; those with more 
     than one incident of need in a year and, through the 
     Secretary's authority to establish criteria, those whose 
     diagnosis or condition requires extensive therapy to receive 
     the treatment which the Medicare coverage criteria guarantees 
     them.
       AOTA has been very concerned that individuals with 
     condition such as severe strokes, spinal card injury, 
     traumatic brain injury, extensive fractures, severe burns, or 
     diseases such as Parkinson's or multiple sclerosis will be 
     restricted in their access to needed occupational therapy 
     before the rehabilitation process is completed. Your bill 
     will allow for these and other individuals to have access to 
     appropriate care.
       Your efforts will move policy forward and establish some 
     necessary protections for Medicare beneficiaries. AOTA 
     appreciates your efforts to ameliorate the impacts of this 
     unwise policy.
       We look forward to working with you as the bill moves 
     through the legislative process. Please contact me if I can 
     be of further assistance.
           Sincerely,
                                             Christina A. Metzler,
     Director, Federal Affairs Department.
                                  ____

                                           National Association of


                                      Rehabilitation Agencies,

                                    Reston, VA, February 23, 1999.
     Charles E. Grassley,
     Chairman, Senate Special Committee on Aging, U.S. Senate, 
         Washington, DC.
       Dear Chairman Grassley: The National Association of 
     Rehabilitation Agencies (``NARA'') strongly endorses the 
     Medicare Rehabilitation Benefit Improvement Act of 1999 and 
     applauds your initiative in introducing this important 
     legislation. NARA represents over 225 Medicare-certified 
     rehabilitation agencies which provide physicial therapy, 
     speech-language pathology, and occupational therapy services 
     to hundreds of thousands of Medicare beneficiaries annually.
       The $1500 financial limitation on outpatient rehabilitation 
     services, as established by the Balanced Budget Act of 1997, 
     constitutes an arbitrary limit on the amount of services 
     which a Medicare enrollee may receive. The caps bear no 
     relation to the patient's medical need for rehabilitation 
     services nor the beneficial health outcomes which would flow 
     from the provision of such services. The most pernicious 
     aspect of the limitations is that they will deprive Medicare 
     patients who are most in need of rehabilitation--e.g. stroke 
     victims and those suffering from traumatic brain injury--of 
     the very care they require.
       You legislation is a workable and realistic solution to 
     many of the patient care and access problems caused by the 
     $1500 limitations. NARA's members are deeply appreciative of 
     the time and effort which you and your staff have expended in 
     developing the Medicare Rehabilitation Benefit Improvement 
     Act of 1999. NARA pledges to work with you to ensure that 
     this critical proposal becomes law.
           Sincerely,
                                                 Larry Fronheiser,
     President.
                                  ____

         Private Practice Section, American Physicial Therapy 
           Association,
                                Washington, DC, February 23, 1999.
     Charles E. Grassley,
     Chairman, Senate Special Committee on Aging, U.S. Senate, 
         Washington, DC.
       Dear Chairman Grassley: The Private Practice Section of the 
     American Physical Therapy Association has carefully reviewed 
     your proposed legislation, the Medicare Rehabilitation 
     Benefit Improvement Act of 1999, and is pleased to express 
     its support for this legislation.
       The membership of the Private Practice Section is comprised 
     of physical therapists in independent practice who, for many 
     years, have been subject to a financial limitation on the 
     amount which Medicare will pay for their services furnished 
     to any Medicare beneficiary. As a result, the Section's 
     members understand all too well the harmful effects which the 
     arbitrary $1500 caps will have on Medicare beneficiaries who 
     require outpatient rehabilitation services. Your proposal is 
     a sensible and practical approach to protecting those 
     patients.
       Your legislation is entirely consistent with the Private 
     Practice Section's goals and objectives for ensuring that 
     Medicare beneficiaries have access to all necessary 
     rehabilitation services. Accordingly, we are pleased to 
     proffer our commitment to help secure its enactment.
       That you for your leadership on this essential piece of 
     legislation.
           Sincerely,
                                                        Lisa Wade,
     Chief Executive Officer.
                                  ____

                                      National Association for the


                                    Support of Long Term Care,

                                Alexandria, VA, February 24, 1999.
     Hon. Charles E. Grassley,
     U.S. Senate,
     Washington, DC.
       Dear Mr. Chairman: On behalf of the National Association 
     for the Support of Long Term Care (NASL), we applaud your 
     leadership and your colleagues who have joined you in the 
     introduction of legislation entitled the ``Medicare 
     Rehabilitation Benefit Improvement Act of 1999.'' You have 
     developed a rational, good policy that will help 
     beneficiaries who would otherwise be limited in their 
     availability of rehabilitation services.
       The National Association for the Support of Long Term Care 
     (NASL) is an organization that represents over 150 providers 
     offering services in the long term care setting. We work 
     daily with patients who need rehabilitation services and this 
     limitation is hurting seniors access to services. There are 
     seniors in America who are already reaching the cap and they 
     need additional services that are medically necessary. These 
     are seniors who have had strokes. These are seniors who have 
     Parkinson's disease. These are seniors who have had hip 
     replacements and an additional illness. Senator Grassley, we 
     want to thank you for helping these patients get services 
     that are medically necessary.
       We are ready to help you share information about the 
     adverse effects of this cut in benefits that was enacted in 
     the BBA in 1997. We are certain that this was not the intent 
     of the law--and now that it is implemented, seniors will be 
     denied care. Your legislation will go a long way to ensure 
     that the most disadvantaged and ill seniors will get the care 
     that they need. The stroke patient that needs speech-language 
     pathology to learn how to swallow will get care. The 
     Parkinson's patient who is learning how to walk with an 
     exacerbating illness will get physical therapy in order to 
     improve.
       Again, we applaud your leadership and strongly support this 
     legislation. Please feel free to call on us for support and 
     help.
           Sincerely yours,
     Peter Clendenin.
                                  ____

                                                     Easter Seals,


                                     Office of Public Affairs,

                                Washington, DC, February 25, 1999.
     Hon. Charles E. Grassley,
     Chairman, Senate Special Committee on Aging, Washington, DC.
       Dear Mr. Chairman: Easter Seals is very pleased to support 
     the introduction of the ``Medicare Rehabilitation Benefit 
     Improvement Act of 1999.'' This legislation begins to 
     eliminate damaging limitations on needed

[[Page S2021]]

     therapy services for Medicare beneficiaries. Easter Seals is 
     committed to assisting you and your colleagues to improve and 
     enact this critical measure.
       Easter Seals is dedicated to assisting children and adults 
     with disabilities to live with equality, dignity, and 
     independence. Each year, Easter Seals 106-affiliate network 
     serves more than one million people nationally. Thousands of 
     Medicare beneficiaries and their families rely on Easter 
     Seals for community-based physical therapy, occupational 
     therapy, and speech-language pathology services. Without such 
     services, these beneficiaries would experience diminished 
     health, function, and quality of life.
       Current Medicare policy limiting payment for outpatient 
     medical rehabilitation services to $1,500 for occupational 
     therapy and $1,5000 for physical therapy and speech-language 
     pathology services combined is out-of-step with the real 
     medical needs of a significant share of Medicare 
     beneficiaries. It will cause beneficiaries with serious 
     medical needs resulting from illness, injury, and disability, 
     including stroke, traumatic brain injuries, total joint 
     replacement, and other serious conditions, to forfeit needed 
     care or seek such care in less cost-effective, often 
     inappropriate institutional settings.
       For many Easter Seals Medicare clients the impact of 
     current policy is devastating. One client's situation, if 
     constrained by a $1,500 cap, illustrates this point.
       Eighty-four-year old Richard H. lived independently with 
     his wife when, on February 27, 1997, he experienced a serious 
     stroke. Prior to the stroke he had high blood pressure, heart 
     disease, and diabetes. The stroke paralyzed his left side, 
     seriously impaired his vision, and left him very depressed.
       Physical therapy helped him learn to move independently and 
     to walk safely again. Occupational therapy retrained him in 
     the tasks of daily living, including preparing food, 
     toileting, and home safety. Speech and swallowing therapy 
     eliminated his choking on food, which presented a high risk 
     of aspiration pneumonia. This therapy, combined with much 
     determination and effort by Richard and his wife, has enabled 
     him to resume living independently at home.
       The doctors, therapists and family agree that without this 
     full course of medical rehabilitation, Richard would now be 
     helpless, severely depressed, and confined to a very 
     expensive nursing home for care. The current Medicare policy 
     limiting medical rehabilitation therapy services under the 
     $1,500 cap, with no exemptions, would have deprived Richard 
     of 62% of his needed rehabilitation treatment.
       Easter Seals believes that the ``Medicare Rehabilitation 
     Benefit Improvement Act of 1999'' is a necessary, timely, and 
     thoughtful approach to correcting serious problems for 
     Medicare beneficiaries requiring comprehensive services. 
     Easter Seals will work with you and your Senate colleagues to 
     refine this legislation, as appropriate, and promote its 
     enactment into law.
       Thank you very much for your commitment to assuring 
     Medicare beneficiaries the services that they need to live 
     healthy, productive lives.
           Sincerely,
                                                 Randall L. Rutta,
                             Vice President, Government Relations.

  Mr. REID. Mr. President, I rise in strong support of the ``Medicare 
Rehabilitation Benefit Improvement Act of 1999''. This legislation is 
designed to protect our sickest, most vulnerable seniors from the 
adverse effects of arbitrary limits on crucial rehabilitative services.
  The Balanced Budget Act of 1997 (BBA) created annual caps for two 
categories of therapy provided to beneficiaries under Medicare Part B: 
a $1500 annual cap on physical therapy and speech language combined; 
and a separate cap for occupational therapy. These arbitrary limits on 
rehabilitation therapy were hastily included in the BBA without the 
benefit of Congressional hearings or thorough review by the Health Care 
Financing Administration. As a result, the $1500 limits bear no 
relation to the medical condition of the patient, or the health 
outcomes of the rehabilitative services.
  The $1500 caps would create serious access and quality problems for 
Medicare's oldest and sickest beneficiaries. Senior citizens who suffer 
from common conditions such as stroke, hip fracture, and coronary 
artery disease, will not be able to obtain the rehabilitative services 
they need to resume normal activities of daily living. A stroke patient 
typically requires more than $3,000 in physical therapy alone. 
Rehabilitation therapy for a patient suffering from Multiple Sclerosis 
or ALS costs even more. Without access to outpatient therapy, patients 
must remain in institutional settings longer, be transferred to a 
higher cost hospital facility, or in some cases, just go without 
necessary services.
  Coverage for rehabilitative therapy should be based on medically 
necessary treatment, not arbitrary spending limits that ignore a 
patient's clinical needs. During the 105th Congress, I joined with 
Senator Grassley to introduce legislation that would correct this 
problem. The ``Medicare Rehabilitation Benefit Improvement Act of 
1999'' builds on our effort to ensure that all Medicare beneficiaries 
have access to the crucial therapy services they need.
  Our bill establishes criteria by which Medicare beneficiaries would 
be eligible for an exemption from the $1500 cap. According to our bill, 
any beneficiary who would require hospitalization if he did not receive 
the necessary therapy services would be allowed to exceed the cap. 
Beneficiaries suffering from a diagnosis that requires therapy services 
and has an additional diagnosis that exacerbates this condition would 
also be eligible for therapy services above the $1500 limit. In 
addition, any beneficiary that is diagnosed with an illness, injury, or 
disability that requires additional physical, speech-language 
pathology, or occupational therapy services that are medically 
necessary will receive the therapy services he or she requires. 
Finally, our bill gives the Department of Health and Human Services 
Secretary the flexibility to establish additional criteria if 
necessary.
  The $1500 therapy caps penalize our most frail and elderly citizens. 
Not only does allowing our seniors to have access to critical 
outpatient therapy services makes sense, it is the right thing to do. I 
urge you to join me in protecting Medicare's most vulnerable 
beneficiaries by supporting the ``Medicare Rehabilitation Benefit 
Improvement Act of 1999''.
                                 ______
                                 
      By Mr. SCHUMER (for himself and Mr. Moynihan):
  S. 473. A bill to amend the Internal Revenue Code of 1986 to make 
higher education more affordable by providing a full tax deduction for 
higher education expenses and interest on student loans; to the 
Committee on Finance.
                                 ______
                                 


                      make college affordable act

      By Mr. SCHUMER:
  S. 474. A bill to amend the Internal Revenue Code of 1986 to provide 
a deduction for contributions to education individual retirement 
accounts, and for other purposes; to the Committee on Finance.
                                 ______
                                 


                          save for college act

      By Mr. SCHUMER:
  S. 475. A bill to amend the Higher Education Act of 1965 to increase 
the amount of loan forgiveness for teachers; to the Committee on 
Health, Education, Labor, and Pensions.
                                 ______
                                 


                     teachers loan forgiveness act

      By Mr. SCHUMER:
  S. 476. A bill to enhance and protect retirement savings; to the 
Committee on Finance.
                                 ______
                                 


           comprehensive pension and security retirement act

      By Mr. SCHUMER:
  S. 477. A bill to enhance competition among airlines and reduce 
airfares, and for other purposes; to the Committee on Commerce, 
Science, and Transportation.
                                 ______
                                 


                    airline competition act of 1999

      By Mr. SCHUMER:
  S. 478. A bill to amend the Internal Revenue Code of 1986 to provide 
a credit for the purchase of a principal residence within an 
empowerment zone or enterprise community by a first-time homebuyer, to 
the Committee on Finance.
                                 ______
                                 


                   empowering communities legislation

      By Mr. SCHUMER:
  S. 479. A bill to amend title XXVII of the Public Health Service Act 
and other laws to assure the rights of enrollees under managed care 
plans; to the Committee on Health, Education, Labor, and Pensions.
                                 ______
                                 


                      equity in women's health act

      By Mr. SCHUMER:
  S. 480. A bill to amend the Truth in Lending Act to protect consumers 
from certain unreasonable practices of creditors which result in higher 
fees or rates of interest for credit card holders, and for other 
purposes; to the Committee on Banking, Housing, and Urban Affairs.
                                 ______
                                 


              credit card consumer protection act of 1999

      By Mr. SHUMER:

[[Page S2022]]

  S. 481. A bill to increase penalties and strengthen enforcement of 
environmental crimes, and for other purposes; to the Committee on the 
Judiciary.


                      the environmental crimes act

  Mr. SCHUMER. Mr. President, today I am introducing my first bills as 
a United States Senator. I said over the last year that the picture 
that I want to keep at the forefront of my mind is that of families 
sitting around their kitchen table paying their bills, planning for 
retirement, affording a home, paying for college for their children, 
and discussing the quality of their local schools.
  Today I am introducing my first bills for those families at the 
kitchen table. And let me tell you a little bit about these families. 
They are the same in Brooklyn and Buffalo, Mt. Vernon and Massapequa, 
Syracuse and Setauket.
  They are living in a time of both overwhelming promise and 
overwhelming challenge.
  The promise--the upside--is that America remains indisputably the 
preeminent economy in the world. The challenge--the downside--is that 
for most families there is a great deal of uncertainty about the 
future. They are concerned that forces beyond their control--rising 
college costs, inferior schools, struggling communities--put them 
behind the eight-ball.
  Their concern isn't so much that the U.S. economy will turn sour. 
It's that they, or their town, or their children may be washed aside in 
the economic tide. The families of Upstate New York have lived that 
reality for six years.
  The nine bills that I am introducing today are designed to help 
families deal and thrive with the changing times of a global, 
competitive economy.
  I am introducing two bills to make college affordable for working 
families. The Make College Affordable Act, which I am honored to 
introduce with Senator Moynihan, makes all college tuition tax 
deductible for families with less than $140,000 in income.
  The Save for College Act allows families to contribute up to $2,000 
per year in an education IRA that is tax-free when the money goes in 
and tax-free when it comes out so long as it is spent on college costs. 
Families earning up to $200,000 are eligible for the IRAs.
  Let me make two points about these bills. Since 1980, the cost of 
attending college has increased at more than twice the rate of 
inflation and has risen even faster than health care. At the same time, 
the necessity of a college education is greater now than at any time in 
our history.
  If our country is to remain economically strong and if we want 
families to be able to get ahead, then college--whether it's SUNY or 
NYU--must not put families in the poorhouse.
  The Teachers Loan Forgiveness Act will recruit new, high quality 
professionals to teaching by forgiving all student loans for public and 
private school teachers.
  It is expensive to become a teacher. The pay is low. And we wonder 
why there is a shortage of young, eager, qualified teachers to educate 
our children. We must make the teaching profession more financially 
attractive to put excellence in the classrooms.
  The Comprehensive Pension & Security Retirement Act makes all 
pensions portable. If you lose a job, if you take time off to raise a 
child, if you change jobs--your pension will stay with you and grow. 
Pension portability and reform is the most important retirement 
security issue next to Social Security.
  Specifically for Upstate New York, with Senator Moynihan I am 
introducing the Airline Competition Act of 1999 to end predatory 
pricing and to direct the Transportation Department to grant take-off 
and landing slots to underserved airports within a 500 mile radius of 
New York. Monopolistic airfares in Rochester, Syracuse and Buffalo are 
slowly strangling the economy of Upstate and the Southern Tier. I 
believe the days of sky-high airfares to these cites are numbered.
  To rebuild struggling neighborhoods through homeownership I am 
introducing legislation to offer a $2,000 tax credit to first time 
homebuyers in Enterprise Zones and Empowerment Communities. In New 
York, that includes the South Bronx, Harlem, and parts of Albany, 
Schenectady, Troy, Buffalo, Kingston, Newburgh, and Rochester.
  Because women pay more for health care than men, the Equity in 
Women's Health Act bars any health plan from discriminating on the 
basis of gender or sexual orientation through their coverage options. 
It also requires each health plan to include a short prospectus to 
describe exactly what they will and will not cover.
  To protect consumers, the Credit Card Consumer Protection Act of 1999 
closes loopholes in existing law that allows credit card companies to 
offer low teaser rates that increase dramatically unbeknownst to the 
cardholder.
  And last, the Environmental Crimes Act increases fines and penalties 
for criminally negligent polluters and it also trains new personnel to 
investigate environmental crimes.
  These are not all--but some of my priorities for the year. As I have 
said many times, my passion is legislating in ways that make people's 
lives better. With the impeachment over, I am anxious to get started on 
the issues that matter to New Yorkers and all Americans.
                                 ______
                                 
      By Mr. ABRAHAM (for himself, Mr. Lott, Mr. Ashcroft, Mr. Helms, 
        Mr. Inhofe, Mr. Bunning, Mr. DeWine, Mr. Cochran, and Mr. 
        Mack):
  S. 482. A bill to amend the Internal Revenue Code of 1986 to repeal 
the increase in the tax on the Social Security benefits; to the 
Committee on Finance.


            legislation to repeal the tax on social security

  Mr. ABRAHAM. Mr. President, I rise now in conjunction with the 
distinguished majority leader, Mr. Lott, and with the distinguished 
Senator from Missouri, Mr. Ashcroft, to introduce legislation which 
will repeal the 1993 increase in the tax on Social Security benefits.
  As my colleagues are aware, senior citizens pay Federal taxes on a 
portion of their Social Security benefits if they receive additional 
income from savings or from work. Before 1993, seniors paid taxes on 
half their Social Security benefits if their combined income, as it is 
described--which means their adjusted gross income and one-half the 
amount of the Social Security benefits they receive--exceeded $25,000 
for individuals or $32,000 for couples.
  Soon after coming into office, however, the new administration 
increased this tax on these middle-income retirees as part of the 1993 
tax bill. For individuals now, after that, with combined incomes 
exceeding $34,000, and couples with combined incomes exceeding $44,000, 
the tax increase on the percentage of their Social Security benefits 
subject to taxation went from 50 percent to 85 percent. This provision 
increased taxes for nearly one-quarter of Social Security recipients. 
It in large part produced an increase of 7.5 percent in the tax burden 
on America's seniors, a tax increase that was more than double the 3.5 
percent that the rest of that legislation imposed on other Americans.
  This tax increase is unfair. It penalizes senior citizens, and it 
penalizes them for exactly the wrong reason--for saving to achieve 
security in their retirement. It also unfairly punishes seniors who 
have the capacity and choose to continue to work.
  We are engaged, as you know, in an important debate here in Congress, 
the debate over the future of our Social Security system. Republicans 
have joined with Democrats in pledging to set aside the entire Social 
Security trust fund surplus over the next 15 years, to shore up that 
system, to make certain it is available for the senior citizens both of 
today and tomorrow.
  At such a time, with dire warnings of impending bankruptcies still 
ringing in our ears, it seems the last thing the Federal Government 
should be doing is to discourage people from work and saving for their 
retirement.
  Wise Americans have always saved for their retirement. They have 
sought to be independent in their old age by working hard and by 
putting aside a portion of their income. Yet the 1993 tax increase 
proposed by the President and ultimately passed into law by the 
Congress changed the rules for these wise savers. After plans and 
investment decisions had already been made, this proposal came in and 
declared that savings and hard work would be taxed significantly more 
heavily than they had been before.

[[Page S2023]]

  As we work to shore up Social Security, we must not allow the Federal 
Government to punish people for working and saving. We must not allow 
the Federal Government to tell people they might as well not save for 
retirement, that they must depend solely on Social Security benefits 
for their well-being once they retire.
  What is more, we should not forget that the projected Federal budget 
surplus over the next 10 years alone is slated to reach approximately 
$2.565 trillion. We have agreed, wisely in my view, to save the bulk of 
this surplus to shore up Social Security. But surely, at a time when we 
foresee at least $787 billion in surpluses in addition to those 
earmarked for Social Security, the Federal Government can afford, in my 
judgment, to give seniors and those planning for their retirement the 
kind of tax relief they need to prepare for their futures and to keep 
our economy strong.
  That means, in my view, that we must repeal this onerous tax hike for 
the sake of our seniors and for the sake of our economy as a whole. 
Discouraging savings has always been a recipe for economic disaster 
because it reduces the amount of money available for investment in new 
jobs and a growing economy.
  Now is the time to reduce the extent to which Washington discourages 
savings. It is time to repeal this tax hike so we may increase savings, 
investment, and the financial security of our senior citizens.
  Mr. President, this legislation has a simple purpose: It repeals the 
1993 ill-considered Social Security tax hike returning our seniors to 
the position they were in prior to 1993.
  It restores a modicum of fairness to our Byzantine tax structure and 
to our dealings with senior citizens. It is important legislation for 
our seniors, for our Social Security system and for the future of our 
Nation, and I urge my colleagues' strong support.
  In short, Mr. President, I think we should do everything possible to 
make it feasible for seniors, both today and especially in the future, 
to be able to live in retirement in a comfortable way and to not solely 
depend on the Social Security system. We know the burdens that system 
will take.
  By discouraging savings during people's working years, by 
discouraging people from continuing to work after they reach retirement 
age, we are actually, I think, undermining our chances of providing the 
kind of long-term income security that Americans deserve in their old 
age.
  For that reason, we should, in my judgment, repeal this tax hike. We 
should make that a priority this year, and we should then couple that 
action with other action aimed at shoring up the Social Security system 
so it not only works for today's seniors, but for the seniors of our 
future as well.
                                 ______
                                 
      By Ms. SNOWE (for herself, Mr. Graham, and Mr. Voinovich):
  S. 483. A bill to amend the Congressional Budget and Impoundment 
Control Act of 1974 to limit consideration of nonemergency matters in 
emergency legislation and permit matter that is extraneous to 
emergencies to be stricken as provided in the Byrd rule; to the 
Committee on the Budget and the Committee on Govermental Affairs, 
jointly, pursuant to the order of August 4, 1977, with instructions 
that if one committee reports, the other committee have thirty days to 
report or be discharged.


                     surplus protection act of 1999

  Ms. SNOWE. Mr. President, I rise today, along with my friend and 
colleague from Florida, Senator Graham, to introduce the ``Surplus 
Protection Act of 1999''--legislation that will reform the budget 
process by tightening the manner in which emergency spending 
legislation is considered in the Senate. Not only will these reforms 
ensure that there is greater accountability in the emergency spending 
process, but they will also ensure that the unified budget surplus we 
now enjoy will be protected from spending raids that are designed to 
circumvent the normal budget process--and that could undercut our 
ability to utilize the surplus for strengthening Social Security.
  Mr. President, as my colleagues are aware, last year the federal 
government enjoyed its first balanced budget since 1969. To be precise, 
the federal government actually achieved a unified budget surplus of 
$70 billion in fiscal year 1998. According to the Congressional Budget 
Office (CBO), this surplus will not be a one time occurrence; rather, 
unified budget surpluses will continue to accrue during the next 10 
years if CBO's projections for economic growth, federal revenues, and 
federal spending hold true.
  While the surplus is welcome news after decades of annual deficits 
and burgeoning debt, we must never forget how easily this valuable 
national asset can be squandered if we fail to be vigilant in 
protecting it. For too long, the federal government treated the budget 
like a credit card with an unlimited spending limit, and such bad 
habits--even if broken for a few years--can quickly return, especially 
when there is a surplus just burning a hole in the pocket of Congress 
and the President!
  Therefore, in an effort to ensure the surplus is protected from 
future spending raids, we are offering legislation today that will 
crack down on arguably the most insidious manner in which budgetary 
spending limits and protections can be circumvented: the emergency 
spending designation. In light of the $21.4 billion in emergency 
spending that was contained in last year's omnibus bill, the need to 
provide safeguards against the abuse of this provision--and the 
squandering of the surplus--could not be more clear.
  Mr. President, the emergency spending designation was created for a 
very important reason. If a sudden, urgent, unforeseen, and temporary 
event occurs, the strict spending limits imposed in the budget 
resolution can be exceeded through the designation of that event as an 
``emergency.'' This exception is understandable when considering that 
the hands of Congress and the Administration should not be tied when 
the pressing needs of our nation override the need for strict budget 
discipline.
  For instance, recent earthquakes in California, floods in the 
Midwest, hurricanes in the South, and ice storms in the Northeast--
which were devastating to my home state of Maine--are all examples of 
natural disasters that warranted the emergency designation because they 
were completely unexpected and unforseen, and could not have been 
addressed in a timely manner through the regular budget process. By the 
same token, the tragic bombing in Oklahoma City is an example of an 
unexpected and unforeseeable event that also warranted emergency 
treatment.
  Yet even as the emergency designation is necessary and warranted for 
these and other unexpected disasters, it can also be used as a major 
loophole by those who wish to circumvent the normal budget or 
legislative process. Rather than restricting the use of the emergency 
designation to only those bills or items that are truly unforseen and 
urgent, some may use this designation to either fund programs or 
projects that are debatable as to their emergency nature, while others 
may use emergency bills to push through unrelated legislation or 
spending programs without the normal level of scrutiny provided in the 
normal legislative process.
  For example, the omnibus bill adopted at the close of the 105th 
Congress contained $21.4 billion in emergency spending that came 
directly out of the surplus. While some of the provisions in that 
package undoubtedly deserved the emergency designation, several items 
were either debatably an ``emergency'' or were an outright effort to 
circumvent the regular budget process. Specifically, the $2 billion in 
emergency funding for our three-year-old mission in Bosnia was hardly 
unexpected and should have been included in the President's budget at 
the beginning of the year. It should not have be designated an 
``emergency'' simply to avoid the budget caps that ensure fiscal 
restraint.

  Ultimately, regardless of the manner in which the emergency 
designation can be misused--whether it is to fund a military operation 
that has been ongoing for years, or to fast-track a piece of 
legislation that has no relationship to the emergency in question--it 
is a practice that we must stop.
  The legislation we are offering today will do just that. 
Specifically, the bill establishes three new rules to ensure that bills 
or individual provisions receiving the emergency designation are 
subject to careful--but reasonable--scrutiny.

[[Page S2024]]

  The first provision--which is patterned after the ``Byrd Rule'' that 
applies to reconciliation bills--will ensure that non-emergency items 
will not be attached to emergency spending bills by creating a point of 
order for striking these provisions. Simply put, because emergency 
spending bills are often put on a ``fast-track'' to ensure rapid 
consideration, we should not allow non-emergency spending or 
legislative riders to be attached to these bills in an effort to avoid 
the normal, deliberative legislative process. To waive this 
restriction, an affirmative vote by three-fifths of the members of the 
Senate would be required--a level that will be easily achieved for a 
true emergency.
  The second provision--which is also patterned after the Byrd Rule--
will ensure that the validity of any item that is designated as an 
emergency--in either an emergency spending bill or a non-emergency 
bill--can be challenged by the members of the Senate. The bottom line 
is that just because an item placed in a bill is given the emergency 
designation does not mean it deserves that designation--and this point 
of order will ensure that members agree that the designation is 
warranted.
  As outlined earlier, the omnibus bill adopted at the close of the 
105th Congress contained a variety of provisions that were debatable 
``emergencies''--in particular, the funding for troops in Bosnia, 
because this cost was hardly unforeseen, sudden, or temporary. This 
point of order will ensure that such provisions do not avoid budget 
scrutiny, and that the surplus is protected for Social Security 
accordingly.
  The final provision will ensure that any legislation that contains 
emergency spending will require a three-fifths vote for final passage. 
Because members may feel compelled to act quickly on bills that contain 
even a single item designated as an emergency, this provision will 
ensure that such bills do not slide through the regular legislative 
process without full consideration and without more than simple 
majority support. While the previous two points of order will prevent 
improper abuse of the emergency designation, this requirement will 
serve as a final safeguard in the process.
  Mr. President, the bottom line is that although the emergency 
designation is a vitally important means of ensuring the unexpected 
needs of our nation can be addressed, it can also become a loophole 
that subverts budget discipline, drains our new-found surplus, and 
potentially impacts our ability to strengthen the Social Security 
program. But with proper safeguards put in place, we can ensure that 
this potential loophole is closed while still ensuring legitimate 
emergencies are addressed.
  The legislation I am offering today along with Senator Graham 
provides such thoughtful and reasonable safeguards, so I urge that my 
colleagues support the ``Surplus Protection Act of 1999.''
  Mr. GRAHAM. Mr. President, earlier today our colleague, Senator Snowe 
of the State of Maine, introduced legislation, of which both I and 
Senator Voinovich of the State of Ohio are the cosponsors, relating to 
reforms in the emergency appropriations law. Mr. President, I would 
like to discuss the rationale for this legislation.
  Mr. President, we received some good news just a few months ago. We 
learned that after 5 years of fiscal austerity and economic growth, we 
had transformed a $290-billion annual deficit into the first budget 
surplus in more than a generation.
  I am dedicated to strengthening the Nation's long-term economic 
prospects through prudent fiscal policy. The discipline that helped us 
to create favorable economic, fiscal, demographic, and political 
conditions to address the long-term Social Security and Medicare 
deficits that will accompany the aging of our population will be fully 
required if we are to meet these challenges. These deficits threaten to 
undo the hard work and fiscal discipline of recent years, as well as to 
undermine our potential for future economic growth.
  But that success, the success that we had in converting a $290-
billion annual deficit into this year's surplus, did not give to 
Congress a license to return to the free-spending ways of the past. 
That absence of license is especially true since over 100 percent of 
the surplus was the result of surpluses in the Social Security trust 
fund.
  I say over 100 percent because the only surplus we had is Social 
Security, and a portion of that surplus is still being applied to the 
deficit that is being run in the general accounts, a deficit which will 
continue for the next 2 to 3 years. We owe it to our children and our 
grandchildren to save this Social Security-generated surplus until 
Social Security's long-term solvency is assured.
  As you know, what we have been doing for the last 30 years is asking 
our grandchildren to pay our credit card bill. Now what we are saying 
to our grandchildren is that we are going to give them a secure Social 
Security system that will last for our generation, for their parents' 
generation, and for their generation--to the year 2075.
  Unfortunately, both the last legislative action of the 105th Congress 
and the first legislative action passed by the Senate in the 106th 
Congress have made a mockery of our promise to our grandchildren. Last 
night the Senate passed a military pay bill without simultaneously 
approving a way to fund it, an action that, if not corrected in the 
conference committee, could subtract as much as $17 billion from our 
children's and grandchildren's chances of having a secure Social 
Security system.
  I wish I could say that last night's vote was an aberration, nothing 
more than a momentary lapse of judgment, an inadvertent mistake in the 
haste to turn from impeachment to legislation. Sadly, I cannot make 
that claim. It is the second time in less than 4 months that we have 
proven ourselves willing to sacrifice future generations' well-being on 
the altar of immediate expediency.
  In the waning hours of last fall's budget negotiations, mid-October 
1998, we passed a $532-billion omnibus appropriations bill. Included in 
that $532 billion was $21.4 billion in so-called emergency spending. 
Since that $21.4 billion could be approved without having to find an 
offsetting funding source, those $21.4 billion came directly out of the 
surplus.
  Some of you who might have been making speeches to the effect that we 
were going to have an $80-billion surplus at the end of the last fiscal 
year therefore had to strike out ``80'' and insert ``59'' as the amount 
of surplus we would have, because that was the figure that remained 
after we had paid out of the Social Security surplus for $21.4 billion 
in emergencies.
  That action would have been possibly more palatable had all of that 
$21.4 billion been allocated to true emergencies, to those kinds of 
incidents which in the past Congress has recognized as being 
appropriate to not require an offset in spending or increase in 
revenue. While some of the $21.4 billion was used to fund what have 
traditionally been accepted as emergencies, defined as necessary 
expenditures for sudden, urgent, or unforeseen temporary needs, much of 
the $21.4 billion was not. Let me give some examples.
  The Y2K computer problem, the problem that at the turn of the 
millennium our computers might be rendered inoperative because of the 
failure to account for the new century, received $3.35 billion of the 
$21.4 billion. It is hard to argue that it took us until October of 
1998, and then under urgent duress circumstances, to wake up to the 
fact that the millennium was coming and that there might be a problem 
with our computers. In fact, here in the Senate, our colleagues in the 
House of Representatives and in the executive branch, as well as in the 
private sector community and State and local governments, had been 
aware of and working on this problem long before October of 1998.
  Another smaller example of a nonemergency emergency was $100 million 
that was appropriated for a new visitors center here at the Capitol. A 
new visitors center has been under consideration for a decade or more--
hardly an emergency that just came to our attention in October of 1998.
  These expenditures might have been desirable, might have been 
appropriate, but to label them ``emergency,'' and therefore remove them 
from the fiscal discipline requiring offsetting spending or additional 
revenue to support them, threatens to undermine the safeguards that we 
have built in to protect our Social Security surplus.

[[Page S2025]]

  This budgetary sleight-of-hand was also used to increase funding for 
projects that had already been funded through the traditional 
appropriations process. For example, after previously allocating $270.5 
billion to the Department of Defense in the emergency appropriations 
provision without any offsetting spending reductions or revenue 
increases, Congress provided an additional $8.3 billion in 
``emergency'' defense spending in the omnibus appropriations bill.
  That is not all. Because these pseudoemergency spending provisions 
were included in an omnibus appropriations conference report--that is, 
a bill that was the result of reconciliation of differences between the 
Senate and the House--then, under the normal rules governing a 
conference report, that legislation was not subject to amendment. 
Therefore, there could be no motion made that would have removed, 
reduced, or otherwise modified the provisions that were labeled as 
``emergency appropriations.''
  Members of the Congress were left with an unpalatable choice: Shut 
down the Government in mid-October of 1998 by failure to pass this 
significant appropriations bill that covered approximately one-third of 
the Federal budget, or steal from our children's and grandchildren's 
Social Security surplus. Mr. President, that is not a choice; that is a 
national disgrace. It is vital that we institute an emergency spending 
process that responds expeditiously to true emergencies without 
maintaining this open door to abuse. We must establish procedural 
safeguards to deter future Congresses from misusing the emergency 
spending procedures. We should not attach, as an example, any emergency 
spending to nonemergency legislation.
  We should not designate emergency spending measures that do not meet 
our own definition of an emergency.
  Mr. President, as I indicated earlier, I am pleased to join with 
Senator Olympia Snowe of Maine in introducing legislation that will 
protect our newly won budget surplus from false emergency budgetary 
alarms. Senators Snowe, Voinovich and I are introducing the Surplus 
Protection Act to amend the Congressional Budget and Impoundment 
Control Act of 1974. This will limit consideration of nonemergency 
matters in emergency legislation.
  Specifically, we propose the following three reforms: First, to 
create a point of order, similar to the Byrd rule which currently 
exists, that prevents nonemergency items from being included in 
emergency spending. This will enable Members to challenge the validity 
of any individual item that is designated an emergency without 
defeating the entire emergency spending bill.
  Second, we would require a 60-vote supermajority in the Senate for 
passage of any bill that contains emergency spending, whether it is 
designated an emergency spending bill or not. This will encourage 
Congress to either pay for supplemental appropriations or make certain 
that they do, in fact, represent a true emergency, as that term has 
been defined.
  And third, to make all proposed emergency spending subject to a 60-
vote point of order in the Senate. This rule will help to prevent 
nonemergency items from ever being included in emergency legislation by 
providing a forum in which they can be appropriately challenged on the 
Senate floor.
  Even if passed, our legislation would not be the total cure for 
Congress' apparent addiction to emergency spending. In the short term, 
it is vital that we immediately replenish the surplus with the funds 
that were ``borrowed'' last fall.
  Let me repeat that, Mr. President. We have a challenge before us in 
the next few weeks to recoup to the Social Security surplus those funds 
that were improvidently labeled as emergency spending and thus became 
the means by which the Social Security surplus was raided last October. 
We will face that challenge when we deal with the budget resolution and 
subsequent appropriations bills.
  The day after the passage of the Omnibus Appropriations Act on 
October 21, 1998, I wrote the President and asked that the Federal 
Government commit itself to restoring funding for the nontraditional 
``emergency'' items which were included in that omnibus legislation. I 
must state with disappointment that I have not yet received a response. 
So, in January, I again wrote to the President and made the same 
request for a commitment to fiscal discipline. Once again, I have not 
received a response.
  On January 18, 1999, Roll Call published an opinion piece which I had 
written in which I asked the President to address this subject in his 
State of the Union Address. Mr. President, he did not.
  Fortunately, the U.S. Constitution says that the Congress need not 
wait for the President. We can and must take steps necessary to restore 
the budget surplus to its previous levels, and we must do that now, 
before the urge to spend the surplus becomes a full-fledged addiction.
  We must also realistically fund existing emergency accounts. While 
the Congress cannot anticipate the precise nature or cost of future 
emergencies, we do know that emergencies will occur. For instance, 
Congress prospectively budgets an annual amount not to exceed $320 
million in emergency funding for the Federal Emergency Management 
Agency disaster relief fund. That is the good news. Now the bad news.
  Over the past 12 years, the average emergency outlays from the 
Federal Emergency Management Agency disaster relief fund have exceeded 
by $1.7 billion per year. What we have consistently done is underfund 
the account based on 12 years of experience, so that we have mandated 
that we are going to have unfunded emergencies. It would be as if 
homeowners consistently underinsured their homes or the contents of 
their homes, knowing that when the disaster struck, they were not going 
to have sufficient funds to rebuild or to recoup their losses.
  If we are to save the surplus of Social Security, Congress should 
stop systematically underfunding the emergency accounts and, thus, 
shifting anticipated emergency spending off budget. We should require 
emergency accounts to be funded through the normal appropriations 
process based on our historical experience.
  Mr. President, I join Senator Snowe in the hopes that our colleagues 
will support this important legislation. It is vital that we assure 
that we do not misuse our emergency spending powers. The next Congress 
that leaves the door wide open to raids on the surplus will be the one 
that passes on more debt and a less secure future for our children and 
our grandchildren.
                                 ______
                                 
      By Mr. CAMPBELL:
  S. 484. A bill to provide for the granting of refugee status in the 
United States to nationals of certain foreign countries in which 
American Vietnam War POW/MIAs or American Korean War POW/MIAs may be 
present, if those nationals assist in the return to the United States 
of those POW/MIAs alive; to the Committee on the Judiciary.


                 the bring them home alive act of 1999

  Mr. CAMPBELL. Mr. President, I am pleased to introduce the Bring Them 
Home Alive Act of 1999. This bill would persuade foreign nationals to 
take the bold steps needed to return any possibly surviving American 
POW/MIAs home alive. I am pleased to be joined today by Senators Gregg 
and Helms as original cosponsors.
  With the passage of the Soldiers', Sailors', Airmen's, and Marines' 
Bill of Rights Act of 1999, the Senate this week has made great strides 
in providing for the men and women of our armed forces. I am continuing 
this effort today.
  This bill would grant asylum in the United States to foreign 
nationals who personally deliver a living American POW/MIA from either 
the Vietnam War or the Korean War to the United States. Citizens of 
Vietnam, Cambodia, Laos, China, or any of the states of the former 
Soviet Union who deliver living American POW/MIAs from the Vietnam War 
would be granted asylum here. Similarly, citizens of North Korea, 
China, or any of the states of the former Soviet Union who deliver 
living American POW/MIAs from the Korean War would also be granted 
asylum. Of course, that foreign national's immediate family, including 
their spouse and children, would also be granted asylum in the U.S. 
since their safety, and even their lives, would most likely

[[Page S2026]]

be imperiled by such a daring rescue of surviving American POW/MIAs.
  While some may doubt that any American POW/MIAs from these two wars 
remain alive, official U.S. policy distinctly recognizes the 
possibility that U.S. POW/MIAs from the Vietnam War could still be 
alive and held captive in Indochina. As the Defense Department's 
current position states:

       Although we have thus far been unable to prove that 
     Americans are still being held against their will, the 
     information available to us precludes ruling out that 
     possibility. Actions to investigate live-sighting reports 
     receive and will continue to receive necessary priority and 
     resources based on the assumption that at least some 
     Americans are still held captive. Should any report prove 
     true, we will take appropriate action to ensure the return of 
     those involved.

  The bill I am introducing today supports this official position and 
enables the possibility of bringing any surviving U.S. servicemen home 
alive.
  Since the fall of South Vietnam in 1975, there have been reports of 
live sightings of American POW/MIAs being held in Indochina. While the 
majority of these live-sightings have been resolved over the years, and 
have decreased in recent years, the possibility of Americans still 
being held remains. Two Russian translations of Vietnamese documents 
were discovered in Soviet archives in 1993 which contain detailed 
statistics indicating that approximately twice as many American POWs 
were being held by Vietnam in late 1972 than were actually ever 
returned to the United States.

  Furthermore, the Senate Select Committee on POW/MIA Affairs' final 
report in 1993 concluded that about 100 U.S. POWs that were expected to 
be returned by Vietnam were never returned and that at least some of 
them may still be alive and held captive in Indochina.
  It is also possible that American POW/MIAs are still being held in 
North Korea. A few years ago a 1996 Defense Department internal report 
was uncovered that concluded that between 10-15 POW/MIAs may still be 
alive and held against their will in North Korea.
  The Bring Them Home Alive Act includes the states of the former 
Soviet Union, for just cause. Longstanding rumors that American POW/
MIAs from both the Vietnam War and the Korean War were transferred to 
the Soviet Union were recently reinforced by the memoirs of recently 
deceased Soviet General Dmitri Volkogonov. As reported in a January 12, 
1999, Washington Times article, Gen. Volkogonov wrote of seeing a 
secret KGB document from the 1960s outlining a plan to transfer U.S. 
POWs being held in Vietnam to the Soviet Union. The goal of this secret 
KGB plan was ``to bring knowledgeable Americans to the Soviet Union for 
intelligence (gathering) purposes.'' During a Congressional Delegation 
visit to Russia late last year, Russian General Sergeyev tacitly 
confirmed the existence of this document. While some officials contend 
this plan was never carried out, this is far from certain. In addition, 
the cumulative weight of compelling circumstantial evidence supports 
the assertion that American POWs were also transferred to the Soviet 
Union during the Korean War.
  Finally, a key section of this bill would help spread news of the 
Bring Them Home Alive Act around the world. This is needed to help make 
sure that the key foreign nationals who need to hear about this act, do 
so. My bill calls on the International Broadcasting Bureau to use its 
assets, including Worldnet Television and its Internet sites, to spread 
the news. The bill also calls on Radio Free Europe and Radio Free Asia 
to participate.
  If this bill leads to even one long-held POW/MIA being returned home 
to America alive, this effort will be well worth it, 10,000 times over. 
Even though it has been many years since these two wars ended, they 
have not ended for any Americans who may have been left behind and are 
still alive. As long as there remains even the remotest possibility 
that there may be any surviving POWs, we owe it to our Soldiers, 
Sailors, Airmen and Marines, and their families, to do everything 
possible to bring them home alive. This is the least we can do after 
all they have sacrificed.
  Key groups involved in Veterans and POW/MIA issues have endorsed this 
legislation, including the National Vietnam & Gulf War Veterans 
Coalition, the VietNow National POW/MIA Committee, and the Coalition of 
Families of Korean and Cold War POW/MIAs. Naturally, I welcome any 
additional endorsements that any of the other important organizations 
involved in POW/MIA related issues may wish to provide.
  Mr. President, I ask unanimous consent that the text of the Bring 
Them Home Alive Act of 1999, the Washington Times article, and the 
letters of endorsement be included in the Record. I urge my colleagues 
to support passage of this important legislation.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 484

       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 ``Bring Them Home Alive Act of 
     1999''.

     SEC. 2. AMERICAN VIETNAM WAR POW/MIA ASYLUM PROGRAM.

       (a) Asylum for Eligible Aliens.--Notwithstanding any other 
     provision of law, the Attorney General shall grant refugee 
     status in the United States to any alien described in 
     subsection (b), upon the application of that alien.
       (b) Eligibility.--Refugee status shall be granted under 
     subsection (a) to--
       (1) any alien who--
       (A) is a national of Vietnam, Cambodia, Laos, China, or any 
     of the independent states of the former Soviet Union; and
       (B) personally delivers into the custody of the United 
     States Government a living American Vietnam War POW/MIA; and
       (2) any parent, spouse, or child of an alien described in 
     paragraph (1).
       (c) Definitions.--In this section:
       (1) American Vietnam War POW/MIA.--
       (A) In general.--Except as provided in subparagraph (B), 
     the term ``American Vietnam War POW/MIA'' means an 
     individual--
       (i) who is a member of a uniformed service (within the 
     meaning of section 101(3) of title 37, United States Code) in 
     a missing status (as defined in section 551(2) of such title 
     and this subsection) as a result of the Vietnam War; or
       (ii) who is an employee (as defined in section 5561(2) of 
     title 5, United States Code) in a missing status (as defined 
     in section 5561(5) of such title) as a result of the Vietnam 
     War.
       (B) Exclusion.--Such term does not include an individual 
     with respect to whom it is officially determined under 
     section 552(c) of title 37, United States Code, that such 
     individual is officially absent from such individual's post 
     of duty without authority.
       (2) Missing Status.--The term ``missing status'', with 
     respect to the Vietnam War, means the status of an individual 
     as a result of the Vietnam War if immediately before that 
     status began the individual--
       (A) was performing service in Vietnam; or
       (B) was performing service in Southeast Asia in direct 
     support of military operations in Vietnam.
       (3) Vietnam War.--The term ``Vietnam War'' means the 
     conflict in Southeast Asia during the period that began on 
     February 28, 1961, and ended on May 7, 1975.

     SEC. 3. AMERICAN KOREAN WAR POW/MIA ASYLUM PROGRAM.

       (a) Asylum for Eligible Aliens.--Notwithstanding any other 
     provision of law, the Attorney General shall grant refugee 
     status in the United States to any alien described in 
     subsection (b), upon the application of that alien.
       (b) Eligibility.--Refugee status shall be granted under 
     subsection (a) to--
       (1) any alien--
       (A) who is a national of North Korea, China, or any of the 
     independent states of the former Soviet Union; and
       (B) who personally delivers into the custody of the United 
     States Government a living American Korean War POW/MIA; and
       (2) any parent, spouse, or child of an alien described in 
     paragraph (1).
       (c) Definitions.--In this section:
       (1) American Korean War POW/MIA.--
       (A) In general.--Except as provided in subparagraph (B), 
     the term ``American Korean War POW/MIA'' means an 
     individual--
       (i) who is a member of a uniformed service (within the 
     meaning of section 101(3) of title 37, United States Code) in 
     a missing status (as defined in section 551(2) of such title 
     and this subsection) as a result of the Korean War; or
       (ii) who is an employee (as defined in section 5561(2) of 
     title 5, United States Code) in a missing status (as defined 
     in section 5561(5) of such title) as a result of the Korean 
     War.
       (B) Exclusion.--Such term does not include an individual 
     with respect to whom it is officially determined under 
     section 552(c) of title 37, United States Code, that such 
     individual is officially absent from such individual's post 
     of duty without authority.
       (2) Korean War.--The term ``Korean War'' means the conflict 
     on the Korean peninsula during the period that began on June 
     27, 1950, and ended January 31, 1955.
       (3) Missing Status.--The term ``missing status'', with 
     respect to the Korean War, means the status of an individual 
     as a result of the Korean War if immediately before that 
     status began the individual--
       (A) was performing service in the Korean peninsula; or

[[Page S2027]]

       (B) was performing service in Asia in direct support of 
     military operations in the Korean peninsula.

     SEC. 4. BROADCASTING INFORMATION ON THE ``BRING THEM HOME 
                   ALIVE'' PROGRAM.

       (a) Requirement.--
       (1) In general.--The International Broadcasting Bureau 
     shall broadcast, through WORLDNET Television and Film Service 
     and Radio or otherwise, information that promotes the ``Bring 
     Them Home Alive'' refugee program under this Act to foreign 
     countries covered by paragraph (2).
       (2) Covered countries.--The foreign countries covered by 
     paragraph (1) are--
       (A) Vietnam, Cambodia, Laos, China, and North Korea; and
       (B) Russia and the other independent states of the former 
     Soviet Union.
       (b) Level of Programming.--The International Broadcasting 
     Bureau shall broadcast--
       (1) at least 20 hours of the programming described in 
     subsection (a)(1) during the 10-day period that begins on the 
     date of enactment of this Act; and
       (2) at least 10 hours of the programming described in 
     subsection (a)(1) in each calendar quarter during the period 
     beginning with the first calendar quarter that begins after 
     the date of enactment of this Act and ending five years after 
     the date of enactment of this Act.
       (c) Availability of Information on the Internet.--
     International Broadcasting Bureau shall ensure that 
     information regarding the ``Bring Them Home Alive'' refugee 
     program under this Act is readily available on the World Wide 
     Web sites of the Bureau.
       (d) Sense of Congress.--It is the sense of Congress that 
     RFE/RL, Incorporated, Radio Free Asia, and any other 
     recipient of Federal grants that engages in international 
     broadcasting to the countries covered by subsection (a)(2) 
     should broadcast information similar to the information 
     required to be broadcast by subsection (a)(1).
       (e) Definition.--The term ``International Broadcasting 
     Bureau'' means the International Broadcasting Bureau of the 
     United States Information Agency or, on and after the 
     effective date of title XIII of the Foreign Affairs Reform 
     and Restructuring Act of 1998 (as contained in division G of 
     Public Law 105-277), the International Broadcasting Bureau of 
     the Broadcasting Board of Governors.

     SEC. 5. INDEPENDENT STATES OF THE FORMER SOVIET UNION 
                   DEFINED.

       In this Act, the term ``independent states of the former 
     Soviet Union'' has the meaning given the term in section 3 of 
     the FREEDOM Support Act (22 U.S.C. 5801).
                                  ____


               [From the Washington Times, Jan. 12, 1999]

State Department Accused of Stifling POW-MIA Probe--Weldon Says Russian 
                    Lawmaker Told Him of U.S. Effort

                            (By Bill Gertz)

       A Russian parliamentarian who worked on prisoner-of-war 
     issues claims the State Department discouraged Moscow from 
     pursuing the fate of missing Americans, according to a senior 
     member of Congress.
       Rep. Curt Weldon said he is upset by the claim of the Duma 
     member who told him about the State Department comments 
     during a meeting in Moscow last month.
       ``During a conversation, the official told me `I can tell 
     you, we were told by your government, your State Department, 
     not to pursue these issues,' '' Mr. Weldon, Pennsylvania 
     Republican, said in an interview.
       The statement bolsters private criticism by some Pentagon 
     officials that the State Department is refusing to press the 
     Russian government to investigate cases of missing Americans.
       Pentagon officials told The Washington Times last month 
     that Secretary of State Madeleine K. Albright delayed for 
     months contacting senior Russian officials about a secret KGB 
     plan to transport ``knowledgeable Americans'' to the Soviet 
     Union during the late 1960s for intelligence purposes.
       Mrs. Albright also failed to raise the issue directly with 
     Russian Foreign Minister Yevgeny Primakov, who is now prime 
     minister, during several meetings. Mr. Primakov would have 
     had direct knowledge of the secret plan while he was director 
     of Russian intelligence in the early 1990s.
       Mr. Weldon said he is investigating the claim and has 
     written to Mrs. Albright asking for an explanation.
       The Russian official was not identified by name, but Mr. 
     Weldon said the official had worked on the U.S.-Russian Joint 
     Commission on POWs headed by retired Russian Gen. Dmitri 
     Volkogonov. The Duma members told Mr. Weldon about the 
     problem in a private meeting.
       ``His accusation is quite disturbing in light of the 
     administration's initial reluctance to aggressively pursue 
     the matter with the Russian government,'' Mr. Weldon states 
     in a Jan. 6 letter to Mrs. Albright, ``I urge that you 
     investigate this charge and inform me of your findings.''
       Ann Johnson, a State Department spokeswoman, said the 
     matter was ``looked into,'' but no one in the State 
     Department relayed such a message to any Duma members.
       Asked if Mrs. Albright would raise the issue of the POW 
     document during her upcoming meetings with Russian officials 
     in Moscow, Miss Johnson said the agenda has not been set. 
     ``We do look forward to getting a look at the results of the 
     Russian investigation of this matter, as Prime Minister 
     Primakov promised Vice President [Al] Gore in Kuala Lumpur in 
     November,'' she said.
       Gen. Volkogonov, who died in December 1995, disclosed in a 
     memoir published in September that he had uncovered the 
     secret plan by the KGB intelligence service during the late 
     1960s ``to bring knowledgeable Americans to the Soviet Union 
     for intelligence purposes.''
       After the plan was disclosed by The Times in November, 
     White House spokesmen initially said President Clinton would 
     not raise the issue in meetings with Mr. Primakov set for 
     late November in Kuala Lumpur, Malaysia. Later, the White 
     House reversed its position and said the president would 
     bring up the issue if talks at the POW commission in Moscow 
     failed to resolve the matter.
       After Mr. Clinton canceled his trip to Malaysia because of 
     the crisis with Iraq, Mr. Gore raised the issue with Mr. 
     Primakov.
       Mr. Clinton said in a letter to a POW activist last month 
     that he is ``very concerned'' about the Russian plan ``given 
     that American personnel were held as POWs in Southeast Asia 
     during this same period.'' He promised to ``press'' the 
     Russians to provide answers.
       The president stated in a Dec. 18 letter to Delores Alfond, 
     chairman of the National Alliance of Families, that his 
     administration is trying to find out about the authors of the 
     KGB plan, whether it was carried out, and ``the names of any 
     Americans who were transferred.'' If the plan was not carried 
     out, ``we have requested documentation that convincingly 
     proves this point,'' he said.
       Mr. Weldon said in his letter to Mrs. Albright that he was 
     encouraged by the administration's discussions, ``but I 
     remain deeply disappointed that you deferred pursuit of this 
     matter for so long after it first came to your attention.''
       ``With hundreds of U.S. POW-MIAs still unaccounted for, we 
     must aggressively pursue all evidence which might help us 
     determine their fate,'' he said. ``The United States has no 
     basis on which to turn its back on information which may lead 
     us to closure on the POW issue. Nor should we fear 
     repercussions from the Russian government, as it will not 
     suffer the reputation of its predecessor's excesses, but may 
     actually enhance its own reputation by fully disclosing the 
     fact.''
       Mr. Weldon said that Mrs. Albright should investigate the 
     Duma official's charge and ``reaffirm the strong U.S. 
     commitment to leave no stone unturned in the effort to 
     determine the fate of all U.S. POWs.''
                                  ____



                                VietNow National Headquarters,

                                  Rockford, IL, February 18, 1999.
     Hon. Ben Nighthorse Campbell,
     Senate Russell Office Building,
     Washington, DC.
       Dear Senator Campbell: I wanted to write and thank you and 
     Larry Vigil for your efforts to bring our ``Live'' POWs home. 
     Sir, there is overwhelming evidence that living American POWs 
     were left behind and in enemy hands at the conclusion of the 
     U.S. involvement in both the Vietnam and Korean Wars. There 
     is reason to believe that some of these fellow Americans are 
     still alive. Your approach to gain their release, as outlined 
     in your bill titled ``The Bring Them Home Alive Act of 
     1999'', is viable and provides incentive for those who may be 
     able to secure our POWs release to do so.
       I have written my two senators, Boxer and Feinstein, with a 
     request that they join your effort and cosponsor your bill. A 
     copy of my letters to them is enclosed for your review and 
     file. In addition, I have sent information regarding your 
     bill to each VietNow chapter POW/MIA chairman and various 
     other POW/MIA organizations and individual activists. I have 
     encouraged these people to contact their respective U.S. 
     Senators and to urge them to also cosponsor this bill.
       Thank you for caring about our ``Live'' POWs and taking a 
     positive step to gain their release!
           Sincerely,
     Rich Teague, Chairman.
                                  ____

                                           National Vietnam & Gulf


                                       War Veterans Coalition,

                                Washington, DC, February 17, 1999.
     Re the Bring Them Home Alive Act of 1999.

     Hon. Ben Nighthorse Campbell,
     U.S. Senate, Washington, DC.

     (Attention of Larry Vigil).

       Dear Senator Campbell: The National Vietnam & Gulf War 
     Veteran's Coalition is a federation of 101 Vietnam and Gulf 
     War veteran support organizations that work together on ten 
     (10) goals. One of the most important goals of our Coalition 
     is the return of any living missing American servicemen in 
     Southeast Asia.
       Your legislative initiative of introducing the ``Bring Them 
     Home Alive Act of 1999'' is the right bill at the right time. 
     This bill will grant asylum or refugee status to any foreign 
     national that helps bring out a live American prisoner of war 
     (POW) from the Vietnam War. This applies to nationals of 
     Vietnam, Cambodia, Laos, North Korea, China and the former 
     states of the Soviet Union. It would also grant asylum or 
     refugee status to the rescuer's family.
       Passing this legislation is the least we can do for any 
     Soldier, Sailor, Airman or Marine that may still be held as a 
     POW. As long as there remains even the remotest possibility 
     that there may be surviving POWs we owe this to them to bring 
     them home.
       In conclusion, our National Vietnam & Gulf War Veterans 
     Coalition hereby endorses the ``Bring Them Home Alive Act of 
     1999''

[[Page S2028]]

     and will utilize our resources to secure passage of this 
     legislation as our promised legislative effort in this 
     session of Congress.
           Sincerely yours,
                                             J. Thomas Burch, Jr.,
                                                         Chairman.
                                 ______
                                 
      By Mr. McCAIN:
  S. 485. A bill to provide for the disposition of unoccupied and 
substandard multifamily housing projects owned by the Secretary of 
Housing and Urban Development; to the Committee on Banking, Housing, 
and Urban Affairs.


                          urban homestead act

  Mr. McCAIN. Mr. President, today I introduce the Urban Homestead act, 
a bill designed to reform the way in which the Department of Housing 
and Urban Development (HUD) disposes of unoccupied and substandard 
housing stock.
  In summary, the Urban Homestead Act would require HUD, every six 
months, to publish in the National Register a complete listing of all 
single, and multi-family housing stock that has been in the 
Department's inventory for at least six months. Further, HUD is 
required to publish a complete listing of all substandard housing stock 
in the same manner. Locally based community development corporations 
would then be allowed to petition HUD for possession of these 
properties. HUD would be required to transfer the properties to the CDC 
free of cost.
  There are few more obnoxious examples of government inefficiency and 
ineffectiveness than that of HUD's inability to address the housing 
needs of low-income families. HUD is notorious for its bloated 
bureaucracy and malfeasance in administering our nations public housing 
assistance programs. Nowhere is this ineptitude more glaringly obvious 
than in HUD's disposition of housing stock.
  In our nation's inner cities, there are thousands of quiet heroes, 
struggling against and conquering near-insurmountable obstacles in 
efforts to revitalize their communities. They are winning the battle 
one house, one street, one neighborhood at a time.
  These organizations are as unique as the communities and 
neighborhoods in which they work their magic. It is their ability to 
adapt to the local demands of their neighborhoods which is the key to 
their success. However, one challenge which is the same, regardless of 
what community they are operating in, is the vacant house. These 
abandoned houses play host to all types of criminal activity. They are 
crack houses, centers of gang activities, and prostitution. You name 
it. The abandoned house has become a symbol of urban blight.
  I ask my colleagues, who do you think is to blame for this outrage? A 
slum lord, or an absentee owner, perhaps a greedy land speculator? In 
some instances, this may be the case. But a principal culprit 
responsible for kneecapping the efforts of these neighborhood heroes is 
non-other-than the Department of Housing and Urban Development. Many of 
these homes are the product of FHA foreclosures. They are the product 
of lax lending habits and pathetic administration of the HUD property 
disposition program.
  Well, Mr. President, it is my intention to put HUD out of the 
slumlord business. The legislation I introduce today sends a very 
simple message to HUD. They have six months to get a property on the 
market and sold. If they fail to get the job done, they're going to 
have to turn the property over to a CDC and they'll get the job done 
for them.
  By channeling these properties into the hands of CDCs providing home 
ownership opportunities to low-income families, we will be 
accomplishing several important objectives. First, we will be placing a 
valuable resource into the hands of not-for-profits who may otherwise 
lack the capital resources to purchase the housing stock. Secondly, we 
get the property back in circulation. In doing so, it ceases to be a 
center for criminal activity and a symbol of blight. Finally, and most 
important, these organizations will use this housing stock to do what 
HUD has failed to accomplish. They will provide low-income families a 
piece of the American dream--a chance at home ownership.
  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. 485

       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 ``Urban Homestead Act of 
     1999''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Community development corporation.--The term 
     ``community development corporation'' means a nonprofit 
     organization whose primary purpose is to promote community 
     development by providing housing opportunities to low-income 
     families.
       (2) Low-income families.--The term ``low-income families'' 
     has the same meaning as in section 3(b) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437a(b)).
       (3) Multifamily housing project.--The term ``multifamily 
     housing project'' has the same meaning as in section 203 of 
     the Housing and Community Development Amendments of 1978 (12 
     U.S.C. 1701z-11).
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.
       (5) Severe physical problems.--A dwelling unit shall be 
     considered to have ``severe physical problems'' if such 
     unit--
       (A) lacks hot or cold piped water, a flush toilet, or both 
     a bathtub and a shower in the unit, for the exclusive use of 
     that unit;
       (B) on not less than 3 separate occasions, during the 
     preceding winter months was uncomfortably cold for a period 
     of more than 6 consecutive hours due to a malfunction of the 
     heating system for the unit;
       (C) has no functioning electrical service, exposed wiring, 
     any room in which there is not a functioning electrical 
     outlet, or has experienced not less than 3 blown fuses or 
     tripped circuit breakers during the preceding 90-day period;
       (D) is accessible through a public hallway in which there 
     are no working light fixtures, loose or missing steps or 
     railings, and no elevator; or
       (E) has severe maintenance problems, including water leaks 
     involving the roof, windows, doors, basement, or pipes or 
     plumbing fixtures, holes or open cracks in walls or ceilings, 
     severe paint peeling or broken plaster, and signs of rodent 
     infestation.
       (6) Single family residence.--The term ``single family 
     residence'' means a 1- to 4-family dwelling that is held by 
     the Secretary.
       (7) Substandard multifamily housing project.--A multifamily 
     housing project is ``substandard'' if not less than 25 
     percent of the dwelling units of the project have severe 
     physical problems.
       (8) Unit of general local government.--The term ``unit of 
     general local government'' has the same meaning as in section 
     102(a) of the Housing and Community Development Act of 1974 
     (42 U.S.C. 5302).
       (9) Unoccupied multifamily housing project.--The term 
     ``unoccupied multifamily housing project'' means a 
     multifamily housing project that the Secretary certifies in 
     writing is not inhabited.

     SEC. 3. DISPOSITION OF UNOCCUPIED AND SUBSTANDARD PUBLIC 
                   HOUSING.

       (a) Publication in Federal Register.--
       (1) In general.--Subject to paragraph (2), beginning 6 
     months after the date of enactment of this Act, and every 6 
     months thereafter, the Secretary shall publish in the Federal 
     Register a list of each unoccupied multifamily housing 
     project, substandard multifamily housing project, and other 
     residential property that is owned by the Secretary.
       (2) Exception for certain projects and properties.--
       (A) Projects.--A project described in paragraph (1) shall 
     not be included in a list published under paragraph (1) if 
     less than 6 months have elapsed since the later of--
       (i) the date on which the project was acquired by the 
     Secretary; or
       (ii) the date on which the project was determined to be 
     unoccupied or substandard.
       (B) Properties.--A property described in paragraph (1) 
     shall not be included in a list published under paragraph (1) 
     if less than 6 months have elapsed since the date on which 
     the property was acquired by the Secretary.
       (b) Transfer of Ownership to Community Development 
     Corporations.--Notwithstanding section 203 of the Housing and 
     Community Development Amendments of 1978 (12 U.S.C. 1701z-11) 
     or any other provision of Federal law pertaining to the 
     disposition of property, upon the written request of a 
     community development corporation, the Secretary shall 
     transfer to the community development corporation ownership 
     of any unoccupied multifamily housing project, substandard 
     multifamily housing project, or other residential property 
     owned by the Secretary, if the project or property is--
       (1) located in the same unit of general local government as 
     the community development corporation; and
       (2) included in the most recent list published by the 
     Secretary under subsection (a).
       (c) Satisfaction of indebtedness.--Prior to any transfer of 
     ownership under subsection (b), the Secretary shall satisfy 
     any indebtedness incurred in connection with the project or 
     residence at issue, either by--
       (1) cancellation of the indebtedness; or
       (2) reimbursing the community development corporation to 
     which the project or residence is transferred for the amount 
     of the indebtedness.

[[Page S2029]]

     SEC. 4. EXEMPTION FROM PROPERTY DISPOSITION REQUIREMENTS.

       No provision of the Multifamily Housing Property 
     Disposition Reform Act of 1994, or any amendment made by that 
     Act, shall apply to the disposition of property under this 
     Act.

     SEC. 5. TENANT LEASES.

       This Act shall not affect the terms or the enforceability 
     of any contract or lease entered into before the date of 
     enactment of this Act.

     SEC. 6. PROCEDURES.

       Not later than 6 months after the date of enactment of this 
     Act, the Secretary shall establish, by rule, regulation, or 
     order, such procedures as may be necessary to carry out this 
     Act.
                                 ______
                                 
      By Mr. ASHCROFT (for himself, Mr. DeWine, Mr. Bond, and Mr. 
        Enzi):
  S. 486. A bill to provide for the punishment of methamphetamine 
laboratory operators, provide additional resources to combat 
methamphetamine production, trafficking, and abuse in the United 
States, and for other purposes, to be Committee on the Judiciary.


  determined and full engagement against the threat of meth (``defeat 
                              meth'') act

  Mr. ASHCROFT. Mr. President, we live in a time of unparalleled 
prosperity. The stock market continually hits new highs, while 
unemployment and gasoline plunge to record lows. This prosperity brings 
many blessings, chief among them material comfort. But sometimes 
prosperity can mask problems as well as solve them. As Francis Bacon 
said, ``Prosperity is not without many fears and distastes; and 
adversity is not without comforts and hopes.'' Prosperity can breed 
apathy and complacency, weakening a society's ability to respond to the 
challenges facing it. And as for adversity, it is only when people 
realize the true extent of their challenges that they can overcome 
them.
  One of the greatest challenges we face is drugs, especially the 
recent rise in the production and use of methamphetamines. Despite the 
continued challenge drugs present, we have not heard enough about this 
problem recently. This administration has chosen not to make it a 
priority. A few years ago, Democrat Representative Charles Rangel 
lamented this administration's inaction on the drug war: ``I've been in 
Congress over two decades, and I have never, never, never found any 
administration that's been so silent on this great challenge to the 
American people.'' Former Drug Czar William Bennett agrees, having 
testified before our colleagues in the House of Representatives that: 
``The Clinton Administration has been AWOL in the war on drugs.'' We 
have gone from an era of ``just say no'' to an era of ``I didn't 
inhale,'' and the numbers concerning youth drug use show that these 
contrasting messages make a difference.
  While the financial numbers continue to move in the right direction, 
the numbers concerning youth direction have gone in the wrong 
direction. In 1998, the percentage of 12th graders who had tried 
illegal drugs was a shocking 54%--133% of the level in 1992. This 
figure, which had decreased during the 1980s, increased in the 1990s. 
Similarly, in 1998, the reported illicit drug use by 12th graders in 
the last 30 days was more than 177% of the level seven years earlier.
  What is particularly alarming is the drastic increase in the use of 
heavy drugs by teenagers. In 1998, the percentage of 12th graders who 
used cocaine in the last 30 days was 178% of the level in 1992. 
Moreover, the percentage of heroin use was 250% of the 1992 level. The 
plain facts are that drug use among our nation's youth is far too 
common and becoming more so. Our nation appears to be sliding backward 
from the strides we made in the 1980s.
  The increases in drug use among our children are alarming. Our 
children are our greatest asset and they are at great risk from drugs. 
They are the most vulnerable members of our society. And, more than any 
other group, young people face the highest risk of being lost to drugs 
forever.
  The more than half of the nation's high school seniors who have 
already tried drugs run much greater risks of future drug use than 
their peers. According to the National Household Survey on Drug Abuse, 
those who do not try drugs by their mid-twenties are unlikely ever to 
use drugs. Protecting our children from drugs is the best way to stop 
adults from using drugs.
  The challenge before us--protecting our children from drugs--becomes 
ever more difficult in a society plagued by divorce, single-parent 
households, diffuse communities, and the never-ending beat of ``live 
for today'' messages coming from our culture. Every one of these 
factors makes it harder to impart the right messages to the next 
generation and to keep our children off drugs.
  Protecting our children from drugs is more difficult than ever. In 
the last few years, a new enemy has emerged to join the other, more 
familiar, threats of cocaine, heroin, and marijuana. That new threat is 
methamphetamine or ``meth,'' a dangerous, addictive substance that is 
ruining lives and weakening communities across this great land. Meth is 
to the 1990s what cocaine was to the 1980s and heroin was to the 1970s. 
And the problem is growing exponentially, in both Missouri and the 
nation at large. In 1992, DEA agents seized 2 clandestine meth labs in 
the State of Missouri. By 1994, there were 14 seizures. That was 
serious enough. However, in 1997, they seized 421 labs.
  Meth ensnares our children, endangers us all, and causes users to 
commit other crimes. In 1998, the percentage of 12th graders who used 
meth was double the 1992 level. Meth-related emergency room incidents 
are up 63 percent over that same period. The National Institute of 
Justice released a report just a couple of months ago that showed meth 
use among adult arrestees and detainees has risen to alarming levels 
across the country.

  Meth is one of the most serious drug problems in our nation--and, in 
states like Missouri--it remains the most serious problem. Just ask the 
McClelland family in Kansas City. Their 11-year-old daughter was 
bludgeoned to death by a family friend who was high on meth. Her 
murderer admitted to beating her in the head repeatedly with a claw 
hammer after she resisted his sexual advances.
  This is not an isolated incident. Meth kills. Law enforcement 
officers in Missouri refer to it as a triple threat. It can kill the 
user; it can make the user kill and, in many cases, even its production 
can kill.
  Meth labs have been called toxic time bombs because volatile 
chemicals are mixed in the manufacturing process. There have been 
dozens of lab explosions. There are also numerous cases of meth abusers 
booby-trapping their abandoned labs, resulting in serious injuries to 
law enforcement agents. Even when not booby trapped, abandoned labs are 
like toxic waste dumps. Clean up is both dangerous and expensive.
  Meth production poses a unique challenge to law enforcement because 
of the difficulties in effective interdiction. Although some meth comes 
in the United States from Mexico, much of it is home produced from 
readily-available materials. It can be manufactured in clandestine labs 
and even in the kitchen of a moving RV--a literal moving target for law 
enforcement. Meth also can be manufactured in batches large or small. 
Law enforcement officials in Missouri have told me that as we have 
poured more resources into the fight against meth, some meth cooks have 
resorted to smaller and smaller batches to reduce the chances of 
detection. Other law enforcement officers report meth operations that 
contract out the various steps in the manufacturing process to 
different sites to reduce the chances of detection.
  Meth also has some unique attributes which appeal to users. Smoking 
meth produces a high that lasts 8 to 24 hours. Cocaine, in contrast, 
produces a high that lasts for 20 to 30 minutes. Meth appeals not only 
to those looking for an extended high. It appeals to vanity as well. 
Meth suppresses appetite and is enticing to young adults trying to lose 
weight.
  While meth is different from other drugs in some ways--more 
dangerous, more difficult to police--at its core, it is the same as 
other narcotics in that it imposes costs. According to Bill Bennett, 
the use of drugs ``makes every other social problem much worse.''
  Meth contributes to a host of societal ills--violence, unemployment, 
homelessness, family breakup. I have heard too many stories of 
neglected children all but abandoned in a home turned into a meth lab. 
There are enough threats to our children that we do not need meth 
adding to our burden.

[[Page S2030]]

  I want to fight the scourge of meth because of the violence it 
causes. I want to fight meth because of the costs it imposes, on 
society and on families, on taxpayers and on communities. But there is 
another factor that motivates my opposition to meth: I want to fight 
meth because its use and production is wrong. And too few people are 
willing to stand up these days and call drugs wrong.
  This laissez faire attitude leads to too much permissiveness on the 
subject of drugs. And permissiveness on drugs imposes terrible moral 
and psychic costs on America's youth.
  In fact, much of our current predicament stems for the permissive 
attitudes that emerged from the 1960s. The decay of enforcement that 
began in the 1960s helped to cause the problems of the succeeding 
decades.
  Make no mistake. Enforcement is an extremely effective tool in 
diminishing drug use. During the 1960s and 1970s, the period coinciding 
with the dawn of this country's second great drug crisis, incarceration 
rates plummeted from 90 per 1,000 arrests in 1960 to only 19 per 1,000 
arrests by 1980. Laws are what protects society from anarchy. And when 
we choose not to enforce our laws, our laws lose their effectiveness, 
and the bulwark against anarchy withers.
  While our society too often tends towards laxness, we also have a 
history of responding to challenges. America has never faced a problem 
that has proven too great for us to meet or too big for us to tackle. 
The meth challenge, while daunting, is no exception. If we make a 
determined and full engagement in our war against meth, we will win. We 
will defeat meth.
  In my four years in the United States Senate, I have fought the 
growth of meth trafficking. In the last Congress, I introduced the 
``Trafficking Penalties Enhancement Act'' to provide more severe 
penalties for manufacturing, trafficking, or importing meth. That 
legislation, which was signed into law last fall, increases prison 
terms for meth possession to a 10-year minimum for possession of 50 
grams of meth or more, and a 5-year minimum for 5 grams or more. That 
law also made more meth crimes eligible for the death penalty in 
situations in which a murder is committed in conjunction with the meth 
offense. In light of the triple threat nature of meth, the availability 
of the death penalty is particularly relevant and appropriate.
  In order to protect residents of public housing, I worked with my 
colleague from Missouri, Senator Bond, to place a ``one strike and your 
out,'' lifetime ban from public housing premises for individuals who 
manufacture or produce methamphetamine.
  I also worked to set up a regional High-Intensity Drug Trafficking 
Area (or HIDTA) that covers Missouri. More recently, I organized a 
bipartisan effort by the Missouri congressional delegation that led to 
increased funding for anti-meth initiatives, including resources for 
law enforcement and lab cleanup. These steps are all important. When I 
talked with representatives of Missouri law enforcement earlier this 
week, they underscored that these programs are having a positive effect 
in the fight against meth. But winning the battle against meth once and 
for all will take continued hard work and effort.

  Mr. President, today I rise to take the next step in the fight 
against meth, the Determined and Full Engagement Against the Threat of 
Meth Act, or the ``DeFEAT Meth Act'' for short.
  My anti-methamphetamine legislation will have five main components.
  First, the bill directs the U.S. Sentencing Commission to adjust its 
guidelines to increase penalties for meth crimes. In the last Congress 
we were able to raise the mandatory minimum sentences for meth 
trafficking crimes involving over 5 grams. This provision complements 
last year's legislation by increasing penalties for meth crimes that do 
not come under the mandatory minimums, and adding a special sentencing 
enhancement for meth crimes that endanger human life. This provision 
completes the process of imposing appropriate and severe penalties on 
those who wish to tear apart the very fabric of our society by 
distributing meth.
  Second, my legislation will provide law enforcement officers with 
more resources for combating meth. Specifically, it is time to 
authorize more funding for the Drug Enforcement Administration's meth 
initiative. This funding is essential. In order to stop the spread of 
meth, the DEA needs to hire more agents, and provide additional 
training for state and local law enforcement officers. These agents 
will participate in the DEA's comprehensive plan for targeting and 
investigating meth trafficking, production and abuse. The DEA also 
needs to provide additional support for local law enforcement. When law 
enforcement busts a meth lab, they are taking over the equivalent of a 
toxic waste dump. The serious and unique problems cleanup problems 
created by meth demand a serious and unique response.
  Third, we need to educate our children about the dangers of meth. 
While DEA interdiction is vital, we also need to educate parents, 
teachers, and children--who may not yet be familiar with the dangers of 
meth--about the size of the threat. We should authorize new funding for 
programs to educate parents and teachers of the dangers of 
methamphetamine. Missouri law enforcement officers estimate that as 
many as 10% of high-school students know the recipe for meth. We must 
make sure that 100% of them know that meth is a recipe for disaster.
  Fourth, we need to recognize that, more than any other narcotic, meth 
can be made all too easily, in home grown laboratories, with readily-
available chemicals. To counteract this problem, we must ensure that 
the list of banned precursor chemicals used to make meth is kept up to 
date. It seems that when a precursor chemical is added to the list, 
meth cooks figure out how to manufacture meth with a new unlisted 
chemical. We must remain vigilant in the battle against meth. After 
consulting with people on the front line--in the crime labs in 
Missouri--we have proposed adding two new precursor chemicals: red 
phosphorous and sodium dichromate.
  Finally, the bill amends the federal drug paraphernalia statute to 
cover meth. The current law covers paraphernalia used to ingest a 
number of specific drugs including marijuana and cocaine. It does not 
cover meth. There is no basis for this differential treatment, and the 
bill adds meth to the statute.
  This comprehensive plan is an essential step in the war against meth. 
While no plan will not stop the spread of meth overnight, we must 
continue the long process of stopping this onslaught. Defeating meth 
will be a struggle that takes place in schools, in communities, in 
churches, within families. We must teach the next generation the danger 
of drugs and give them alternatives to the easy short term answers that 
drugs provide.
  Meth presents us with a formidable challenge. We have overcome other 
challenges in the past and we can conquer this one as well. In fact, 
the history of America is one of meeting challenges and surpassing 
people's highest expectations. Meth is no exception. All we need to 
succeed is to marshal our will and channel the great indomitable 
American spirit. The experience of the past few years demonstrates that 
you cannot win the war on drugs with a half-hearted effort. However, 
experience also shows that we can win if we commit to a determined and 
full engagement against the threat of drugs. This bill provides full 
engagement. With it, we will meet the meth challenge and we will defeat 
it.
  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. 486

       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 ``Determined and Full 
     Engagement Against the Threat of Methamphetamine'' or 
     ``Defeat Meth'' Act of 1999.

     SEC. 2. ENHANCED PUNISHMENT OF METHAMPHETAMINE LABORATORY 
                   OPERATORS.

       (a) Federal Sentencing Guidelines.--
       (1) In general.--Pursuant to its authority under section 
     994(p) of title 28, United States Code, the United States 
     Sentencing Commission shall amend the Federal sentencing 
     guidelines in accordance with paragraph (2) with respect to 
     any offense relating to the manufacture, attempt to 
     manufacture, or conspiracy to manufacture amphetamine or 
     methamphetamine in violation of--

[[Page S2031]]

       (A) the Controlled Substances Act (21 U.S.C. 801 et seq.);
       (B) the Controlled Substances Import and Export Act (21 
     U.S.C. 951 et seq.); or
       (C) the Maritime Drug Law Enforcement Act (46 U.S.C. App. 
     1901 et seq.).
       (2) Requirements.--In carrying out this paragraph, the 
     United States Sentencing Commission shall, with respect to 
     each offense described in paragraph (1)--
       (A) increase the base offense level for the offense--
       (i) by not less than 3 offense levels above the applicable 
     level in effect on the date of enactment of this Act; or
       (ii) if the resulting base offense level after an increase 
     under clause (i) would be less than level 27, to not less 
     than level 27; or
       (B) if the offense created a substantial risk of danger to 
     the health and safety of another person (including any 
     Federal, State, or local law enforcement officer lawfully 
     present at the location of the offense), increase the base 
     offense level for the offense--
       (i) by not less than 6 offense levels above the applicable 
     level in effect on the date of enactment of this Act; or
       (ii) if the resulting base offense level after an increase 
     under clause (i) would be less than level 30, to not less 
     than level 30.
       (3) Emergency authority to sentencing commission.--The 
     United States Sentencing Commission shall promulgate 
     amendments pursuant to this subsection as soon as practicable 
     after the date of enactment of this Act in accordance with 
     the procedure set forth in section 21(a) of the Sentencing 
     Act of 1987 (Public Law 100-182), as though the authority 
     under that Act had not expired.
       (b) Effective Date.--The amendments made pursuant to this 
     section shall apply with respect to any offense occurring on 
     or after the date that is 60 days after the date of enactment 
     of this Act.

     SEC. 3. INCREASED RESOURCES FOR LAW ENFORCEMENT.

       (a) Authorization of DEA Funds To Combat 
     Methamphetamines.--
       (1) Purpose.--From amounts made available to carry out this 
     subsection, the Administrator of the Drug Enforcement 
     Administration shall implement a comprehensive approach for 
     targeting and investigating methamphetamine production, 
     trafficking, and abuse to combat the trafficking of 
     methamphetamine in areas designated by the Director of 
     National Drug Control Policy as high intensity drug 
     trafficking areas, which approach shall include--
       (A) training local law enforcement agents in the detection 
     and destruction of clandestine methamphetamine laboratories, 
     and the prosecution of any offense relating to the 
     manufacture, attempt to manufacture, or conspiracy to 
     manufacture methamphetamine in violation of the Controlled 
     Substances Act (21 U.S.C. 801 et seq.), the Controlled 
     Substances Import and Export Act (21 U.S.C. 951 et seq.), the 
     Maritime Drug Law Enforcement Act (46 U.S.C. App. 1901 et 
     seq.), or applicable State law;
       (B) investigating and assisting in the prosecution of 
     methamphetamine traffickers, establishing a national 
     clandestine laboratory computer database, reducing the 
     availability of precursor chemicals being diverted to 
     clandestine laboratories in the United States and abroad, and 
     cleaning up the hazardous waste generated by seized 
     clandestine laboratories; and
       (C) allocating agents to States with the highest rates of 
     clandestine laboratory closures during the most recent 5 
     fiscal years.
       (2) Authorization of appropriations.--There are authorized 
     to be appropriated to carry out this subsection--
       (A) $30,000,000 for fiscal year 2000; and
       (B) such sums as may be necessary for each of fiscal years 
     2001 through 2004.
       (b) High Intensity Drug Trafficking Areas.--
       (1) In general.--From amounts made available to carry out 
     this subsection, the Director of National Drug Control Policy 
     shall combat the trafficking of methamphetamine in areas 
     designated by the Director of National Drug Control Policy as 
     high intensity drug trafficking areas, including the hiring 
     of new laboratory technicians in rural communities.
       (2) Authorization of appropriations.--There are authorized 
     to be appropriated to carry out this subsection--
       (A) $25,000,000 for fiscal year 2000; and
       (B) such sums as may be necessary for each of fiscal years 
     2001 through 2004.
       (c) Expanding Methamphetamine Abuse Prevention Efforts.--
       (1) Prevention programs and activities.--
       (A) In general.--From amounts made available to carry out 
     this subsection, the Director of National Drug Control Policy 
     shall--
       (i) carry out community-based prevention programs that are 
     focused on those populations within the community that are 
     most at-risk for methamphetamine abuse and addiction;
       (ii) assist local government entities to conduct 
     appropriate methamphetamine prevention activities;
       (iii) train and educate State and local law enforcement 
     officials on the signs of methamphetamine abuse and addiction 
     and the options for treatment and prevention;
       (iv) carry out planning, administration, and educational 
     activities related to the prevention of methamphetamine abuse 
     and addiction;
       (v) monitor and evaluate methamphetamine prevention 
     activities, and report and disseminate resulting information 
     to the public; and
       (vi) carry out targeted pilot programs with evaluation 
     components to encourage innovation and experimentation with 
     new methodologies.
       (B) Priority.--In carrying out this paragraph, the Director 
     of National Drug Control Policy shall give priority to 
     assisting rural and urban areas that are experiencing a high 
     rate or rapid increases in methamphetamine abuse and 
     addiction.
       (C) Analyses and evaluation.--
       (i) In general.--Of the amount made available to carry out 
     this subsection in each fiscal year, not less than $500,000 
     shall be used by the Director of National Drug Control 
     Policy, in consultation with the heads of other departments 
     and agencies of the Federal Government--

       (I) to support and conduct periodic analyses and 
     evaluations of effective prevention programs for 
     methamphetamine abuse and addiction; and
       (II) for the development of appropriate strategies for 
     disseminating information about and implementing those 
     programs.

       (ii) Annual reports.--The Director shall annually submit to 
     Congress a report on results of the analyses and evaluations 
     under clause (i) during the preceding 12-month period.
       (2) Authorization of appropriations.--There are authorized 
     to be appropriated to carry out this subsection--
       (A) $25,000,000 for fiscal year 2000; and
       (B) such sums as may be necessary for each of fiscal years 
     2001 through 2004.

     SEC. 4. PRECURSOR CHEMICALS.

       Section 102(35) of the Controlled Substances Act (21 U.S.C. 
     802(35)) is amended--
       (1) by inserting ``, or immediate precursor,'' after 
     ``chemical)''; and
       (2) by adding at the end the following:
       ``(K) Red phosphorous.
       ``(L) Sodium dichromate.''.

     SEC. 5. METHAMPHETAMINE PARAPHERNALIA.

       Section 422(d) of the Controlled Substances Act (21 U.S.C. 
     863(d)) is amended by inserting ``methamphetamines,'' after 
     ``PCP,''.
                                 ______
                                 
      By Mr. GRAMS (for himself and Mr. Ashcroft):
  S. 487. A bill to amend the Internal Revenue Code of 1986 to provide 
additional retirement savings opportunities for small employers, 
including self-employed individual; to the Committee on Finance.


                        Smaller employer egg act

                                 ______
                                 
      By Mr. GRAMS:
  S. 488. A bill to amend the Internal Revenue Code of 1986 to repeal 
the taxation of social security benefits; to the Committee on Finance.


                     repeal of social security tax

                                 ______
                                 
      By Mr. GRAMS:
  S. 489. A bill to provide an automatic tax rebate when the Federal 
tax burden grows faster than the personal income of working Americans, 
and for other purposes; to the Committee on Finance.


                    national tax rebate act of 1999

                                 ______
                                 
      By Mr. GRAMS:
  S. 490. A bill to amend the Internal Revenue Code of 1986 to provide 
that the conducting of certain games of chance shall not be treated as 
an unrelated trade or business; to the Committee on Finance.


           Federal unrelated business income tax legislation

  Mr. GRAMS. Mr. President, at the beginning of this session, I, along 
with Senator Roth and others, introduced S. 3, the Tax Cuts for All 
Americans Act, which calls for a 10 percent across-the-board tax cut on 
the federal income taxes of hard-working Americans.
  If enacted, this will be the largest middle-class tax relief since 
President Ronald Reagan's 1981 tax cuts. I believe this legislation is 
imperative for our economic security and growth in the new millennium. 
I will address this issue more fully later this week.
  But today I also rise to introduce four bills representing some other 
tax relief priorities on which I hope we can also focus in this 
Congress. These bills will help reform our tax system and will help to 
terminate some unfair and unjust tax provisions in the Tax Code, again, 
with the aim and the goal of allowing working Americans to keep a 
little bit more of their own money rather than sending it to 
Washington.
  Mr. President, the first bill I am introducing today, the National 
Tax Rebate Act, requires the Government to refund taxes collected to 
taxpayers when Federal revenue grows faster than the income of working 
Americans.
  The rationale for this legislation is simple: and that is, the 
Federal Government's taxes should not grow faster than working 
Americans' income. Our

[[Page S2032]]

growing tax burden should not reduce the standard of living that we 
work hard to achieve. This legislation will ensure that it does not.
  Eighteen of the last 19 Democrat-controlled Congresses passed tax 
increases. President Clinton's whopping $241 billion tax increase in 
1993 was the largest tax hike we have had. We had only two Federal 
personal income tax rates at that time. They were 15 and 28 percent, 
those under President Ronald Reagan.
  Today, after President Clinton has been in office for 6 years, we 
have five Federal tax brackets. The top one has reached nearly 40 
percent. More hard-working, middle-income families have been pushed 
into higher tax brackets because of an unfair tax system. So we have 
gone from two brackets of 15 percent and 28 percent to now five tax 
brackets, the highest being nearly 40 percent. No wonder Washington's 
income is growing and growing much faster than the income of the 
taxpayers. That is one reason why we have a surplus in Washington 
today, because incomes have gone up for Americans, and Washington has 
taken a larger share of that in the form of taxes.
  Thanks to our exceptionally strong economy, more Americans are 
working today, and are earning more than ever before as a result. 
Government data show that real median family income is now at a near-
historic high and per capita income is at a record $19,241.
  We should not be here penalizing those who work long and hard to 
achieve the American dream of higher earnings and better jobs by 
slapping higher taxes on them.
  Unfortunately, a large share of the newly earned income of hard-
working Americans has not been spent on family priorities but siphoned 
off by Washington.
  The progressive Federal tax system created by Washington allows 
Federal Government income to grow faster by taking a larger bite from 
any newly earned income increases. That is because it pushes us into 
one of these higher tax brackets.
  According to Scott Hodge, a leading economist at Citizens for a Sound 
Economy, total personal income since 1993 has grown by an average of 
5.2 percent a year, while Federal taxes have grown by 7.9 percent a 
year--so taxes have grown 52 percent faster than personal income 
growth.
   In fiscal year 1998 alone, federal taxes grew 70 percent faster than 
personal income.
   Mr. President, this is not justifiable. Uncle Sam's income should by 
no means grow faster than the income of the people who earn it.
   While broad-based tax relief for every American, such as S.3, would 
certainly correct the unfairness of the tax system, we need a mechanism 
that ensures Washington's income will never grow faster than the income 
of taxpayers.
   This is all my legislation does. It limits federal taxes by 
prohibiting the growth rate of federal revenues collected for any 
fiscal year from exceeding the average growth rate of personal income 
of working Americans.
  Set a guidepost. Set a marker as to how fast Washington should grow 
in the money it collects and spends.
  It requires a two-thirds vote of both the House and the Senate to 
waive this limit. Whenever Washington's tax revenues grow faster than 
the personal income of working Americans, an automatic national tax 
rebate will be triggered as a result.
  The federal government must refund taxpayers the excessive taxes pro 
rata based on liability reported on federal income tax annual returns 
filed in the previous tax year.
  The national tax rebate is not a new idea. A number of states, such 
as Florida and Missouri, have either statutory laws or constitutional 
amendments requiring state governments to give back tax money if the 
revenue exceeds these limits.
  My own State of Minnesota is currently deciding how best to refund 
excess tax collection to Minnesota taxpayers.
  If it works at the state level, there is no excuse for the federal 
government not to adopt a similar mechanism.
  By passing this simple tax limitation and rebate legislation, 
taxpayers will be fully protected and better represented in Washington.
  Mr. President, this piece of legislation would repeal taxation of our 
senior citizens' Social Security benefits.
  As you know, Mr. President, Social Security benefits were exempt from 
the federal income tax since the creation of the program.
  They were never taxed by the Federal Government. Retirement benefits 
shouldn't be.
  But as Social Security encountered a financial crisis in early 1980s, 
Congress began taxing Social Security benefits, and thus causing 
financial hardship to many seniors.
  The amount of taxable benefits was the lesser of one-half of Social 
Security cash benefits or one-half of the excess of the taxpayer's 
provisional income over the thresholds of $25,000 per single person and 
$32,000 for couples.
  In 1993, when President Clinton needed more money to fund his new 
spending programs, he increased the taxable proportion of Social 
Security benefits from 50 to 85 percent for Social Security recipients 
whose threshold incomes exceed $34,000 for singles and $44,000 for 
couples.
  These two tax increases have seriously injured a significant number 
of senior citizens. In fact, a quarter of recipients are affected by 
this provision, creating enormous financial hardship for them as well.
  I believe taxation on Social Security benefits is wrong and unfair 
because Social Security benefits are earned benefits for many senior 
citizens. Federal income tax is paid when Social Security contributions 
are made to the program. Taxing Social Security benefits is clearly 
double taxation.
  In other words, those benefits are paid when the money is put into 
Social Security, and now the government wants to tax them again as it 
takes the money out.
  In addition, Congress never intended to tax Social Security benefits 
when it first established the program. In fact, for half a century 
Social Security benefits were exempted from federal taxes.
  Millions of senior citizens who planned for their retirement based on 
their understanding of the Social Security law were penalized. As the 
tax rate continues to grow, the incomes of more and more senior 
citizens are falling along with their standard of living.
  This tax hurts seniors who choose or must work after retirement to 
maintain their standard of living or to pay for costly health insurance 
premiums, medical care, prescriptions and many other expenses which 
increase in retirement years.
  It also discourages today's workers to save and invest for the 
future. It won't help protect Social Security for our children and 
grandchildren.
  I believe this is not acceptable.
  Repealing all taxation on Social Security benefits would reverse this 
trend, and help responsible senior citizens. The federal government has 
entered into a sacred covenant with the American people to provide 
retirement benefits once contribution commitments are made.
  It is the government's contractual duty to honor that commitment. The 
government cannot and should not change the covenant without consent of 
the people whom these changes would affect.
  Mr. GRAMS. Mr. President, this bill deals with a relatively smaller 
tax matter. This bill calls for exemption of additional charitable 
gambling activities from the Federal unrelated business income tax 
(UBIT).
  As you know, Mr. President, the fundamental difference between 
charitable gambling and regular gambling is where and how the profit is 
spent.
  Most of the income derived from charitable gambling games is spent in 
communities to fund charitable activities such as the Boy and Girl 
Scouts, Head Start, and many city and school programs that help local 
residents and students.
  In my State alone of Minnesota, more than 1,500 local charities 
conduct a variety of games such as bingo and pull tabs, and in doing so 
contribute some $75 million per year to their local communities.
  Beneficiaries include youth recreation and education, as well as 
organizations serving the sick and disabled, and many other community 
programs, as well.
  My state leads the nation in charitable non-profit gaming, but some 
35 other states are involved in similar activities.
  In 1978, President Carter signed into law a bill that classified 
bingo income as related business income.

[[Page S2033]]

  As a result, this charitable game is not subject to the Federal UBIT. 
But the law did not include other forms of charitable gambling. 
Consequently, the income of these charitable gambling games is taxed 
under the UBIT.
  Taxes take a big bite out of charitable gambling income and seriously 
undermine the ability of nonprofit organizations to provide charitable 
assistance.
  Now, while the IRS has not collected UBIT on these charities as they 
anticipate Congressional action, without my legislation, the IRS could 
begin collections in the near future. My legislation would remove this 
uncertainty as charities attempt to go on with their good works.
  This legislation is not controversial. It should have bipartisan 
support. In the last Congress I introduced a similar bill with Senator 
Wellstone which the Senate adopted. I hope we can pass it again in the 
106th Congress.
  The last bill I am introducing today would provide a tax incentive 
for small business employers to set up pension plans for their workers.
  Working Americans' retirement security is based on Social Security, 
private pensions, and personal savings. But even though Social Security 
is fast approaching a financial crisis, our national savings rate 
remains among the lowest, and many workers do not have company pension 
plans to help make up the Retirement Benefits.
  Despite recent congressional action to improve private pension plans, 
the complexity of qualification requirements under current law and the 
administrative expenses associated with setting up retirement plans, 
including the SIMPLE plan, remain significant impediments to widespread 
implementation of employer-based retirement systems, especially for 
small business.
  This is particularly true for small employers with less than I 00 
employees, for whom the resulting benefits do not outweigh the 
administrative costs.
  Consequently, only 42% of individuals employed by small businesses 
now participate in an employer-sponsored plan, as opposed to 78% of 
those who work for larger businesses.
  To address this problem, I am introducing the Small Employer Nest Egg 
Act of 1999. This legislation will create a new retirement option for 
small business owners with 100 or fewer employees.
  It would allow the same level of benefits both to employers and 
employees as larger employers who maintain traditional qualified plans. 
Upon retirement or separation of service, employees would receive I00% 
of their pension account value.
  To offset the high costs associated with starting a pension plan, my 
proposal calls for a tax cut equal to 50% of the administrative and 
retirement education expenses incurred for the first five years of a 
plan's operation.
  Mr. President, small businesses are the lifeblood of our communities, 
providing millions of jobs nationwide. Small business owners want to 
help their employees save for their retirement.
  Yet, because of the costs, many are unable to do so and, also, 
because of the rigid Government policies and, again, the administrative 
costs that go with it.
  This legislation, I believe, will help millions of workers begin 
building their retirement security. I urge the support of my colleagues 
for the four bills I have offered today.

                          ____________________