Congressional Record, Volume 145 Issue 35 (Friday, March 5, 1999)

[Congressional Record Volume 145, Number 35 (Friday, March 5, 1999)]
[Senate]
[Pages S2359-S2365]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

EDUCATION FLEXIBILITY PARTNERSHIP ACT OF 1999

The Senate resumed consideration of the bill.
Mr. DASCHLE. Mr. President, this is an important bill. Ed-Flex is a
bill that, in my view, as I have said before, warrants a 100-to-nothing
vote. We ought to give States more flexibility. But we also ought to
recognize that if we are going to begin debate on education policy in
the U.S. Senate, there are other issues that also merit consideration
and opportunity for an up-or-down vote: Whether or not we have an
afterschool program, whether or not we have an effort in this country
to prevent dropouts, whether or not we consider 100,000 teachers and
class size, whether or not we have school construction. All of those
are legitimate education issues.
So I will offer to my distinguished majority leader another effort at
compromise. I will attempt to see if we might come down to five or six
amendments and say: Look. We will agree to those five or six
amendments; we will agree to time limits and up-or-down votes on those
five or six amendments; and then let's move on. The majority leader was
very generous, I thought, with what he said earlier to the Governors.
As I understand it, the majority leader said, Let's go to the Senate;
let's take a week; let's take 2 weeks, if necessary, but let's talk
about education. Let's take 2 weeks if necessary. We haven't even taken
a week yet.
So I really appreciate the majority leader's interest in trying to
find some way with which to resolve this impasse. I think he is
understandably desirous of moving on to other things. We want to do
that. We want to pass the Ed-Flex bill. We want to pass good education
amendments. We want to resolve this matter. We want to find a way to do
it in a bipartisan manner. And I am confident that if we continue to
work at it that we will.
So I will offer, again, to see if we might limit our amendments to
maybe five or six with time limits and have up-or-down votes. I believe
that is the best way to break through this. I am hopeful that we can
get broad bipartisan agreement.
I yield the floor.
Several Senators addressed the Chair.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. Thank you, Mr. President.
Mr. President, I would like to follow up briefly on this Ed-Flex
issue, first to thank the minority leader, who is clearly making a very
strong effort to work this out and be conciliatory.
I would also like to thank the majority leader, Senator Lott, who is
making such an effort as well.
I want to advise our colleagues that we are going to work through the
weekend to try to come up with a way that is fair for all concerned.

I think Senator Daschle made it clear these Democratic amendments are
critical, it is important there is an opportunity they be discussed,
and--conciliatory on the part of the leader--that there would be time
agreements. I think the majority leader has made a very sensible
statement of why this bill is a priority.
It is critically important that the more than $11 billion that go out
in programs covered by Ed-Flex is spent wisely. What we have found in
the 12 States that are now using Ed-Flex is that a few miles from here,
just a few miles from here, existing dollars now allocated under title
I are being used to cut class size in half to make sure that kids can
get the education they need.
For those of you who think that the Senator from Washington, Senator
Murray, is making an important contribution in terms of the extra
teachers, I want it clear that I support that. It is needed. But I
support just as strongly--and I would say this especially to my
Democratic friends--the proposition that we use money that is now
allocated wisely. And we are not doing that today.
Under current law, for example, poor kids who want to get access to
advanced computing aren't able to do it in a lot of instances because
these programs put them into a regulatory straitjacket. In a lot of
instances, we could boost the test scores up for poor kids. We haven't
been able to do that because of some of the bureaucracy associated with
these programs.
Last night we had a discussion about what these programs mean to
parents. I happen to agree with the distinguished Senator from
Massachusetts, the parents don't focus on Ed-Flex in bureaucratic
terms. They do focus on results. I can assure you, the parents of those
youngsters a few miles from here who have had their class size cut in
half as a result of Ed-Flex are very appreciative of that. Because of
Senator Kennedy and Senator Hatfield, in 1994 we began this effort to
pass Ed-Flex. It is time to expand it.
Around this country there has not been one example of an abuse
associated with Ed-Flex--not one. But there are plenty of examples of
why Ed-Flex is working for poor kids from coast to coast. Go see those
kids in the State of Maryland--our friend, Senator Sarbanes, is here--
where they have used those dollars to cut class size. Or come to my
home State of Oregon where, because of bureaucratic rules, it was not
possible for poor kids to get advanced computing at their schools.
I know a number of my colleagues would like to speak, and I want to
let them have that opportunity. But just know--because of the very
conciliatory offer that has been made by the minority leader, Senator
Daschle, this morning, and the majority leader, Senator Lott, I believe
is also trying to accommodate both sides--those of us who are
sponsoring this legislation are going to work throughout the weekend to
see if we can get a sensible time agreement that is fair to both sides.
As the Democratic sponsor of Ed-Flex, I want to again state to my
colleagues, I think the contribution of our friend from Washington,
Senator Murray, is important and the Boxer amendment on afterschool
programs is critically important--but it is just as important to show
that those $11-plus billion that are now allocated in title I and other
programs are being spent wisely. In fact, for those colleagues who
share my view that we need more financial assistance in these key
areas, I submit the best way to make the case for getting additional
funds is to show taxpayers you are spending more wisely the dollars
that are allocated at this time.
I look forward to some long hours over this weekend, working with our
colleagues on both sides of the aisle. Education, in my view, is the
premier issue of our time. I think that is why the Members of the
Senate feel so strongly about it.
I yield the floor.
The PRESIDING OFFICER (Mr. Gorton). The Senator from Washington.
Mrs. MURRAY. Mr. President, I commend my colleague for his work on
the

[[Page S2360]]

Ed-Flex bill as well as the other cosponsors of this initiative. I know
he feels passionately about bureaucratic paperwork and has worked very
hard to try to reduce some of that, as well as Education Secretary
Riley, who has made a major effort in his tenure at the Department to
reduce paperwork. We have heard some really good stories in the last
year back from him.
We agree with you on Ed-Flex and want to move that forward. I think
the Democratic leader this morning, offering to come up with limited
amendments and limited time agreements, made a very generous offer,
because there are a number of Senators, I think on both sides of the
aisle, who want to spend some time talking about education, talking
about what is happening in our schools, talking about our
responsibility as Senators to be in partnership with those local
schools and teachers and school board members; making sure that our
kids, no matter who they are or where they come from or how much money
they have, have the best education possible. That is the debate we want
to have on the floor of the Senate.

I am extremely disappointed because I came over here this morning,
hoping to offer my class size amendment. I have been precluded from
doing that by the actions of the majority leader. I am ready to offer
my amendment so we can send a message to those school board members who
are meeting right now, today, trying to figure out their budgets, who
last October listened to us tell them in a bipartisan way, Republicans
and Democrats, Senate and House Members, that we are committed to
helping them reduce class size so our kids can get the adequate
learning they need to compete in today's global economy.
But we are here today, once again precluded from being able to offer
that amendment, to have a debate, to have an up-or-down vote, so those
school board members can put their budgets together and begin to hire
those teachers, as they must shortly do, so they can have a commitment
that is real.
Let's tell them this was not a political promise before the election
by Republicans and Democrats. This was a real commitment on our part to
make a difference, to reduce class size in grades 1 through 3. We began
that process last year. We have an obligation, and this is our
opportunity to make a real difference.
Mr. KENNEDY. Will the Senator be good enough to yield for a question?
Mrs. MURRAY. I am delighted to yield to the Senator from
Massachusetts.
Mr. KENNEDY. The Senator reminds us that in the final days of the
last Congress, we passed legislation that would provide local
communities the opportunity to hire additional teachers so we could
have smaller class sizes for the first three grades. That was worked
out in a bipartisan way. As I understand, from what the Senator says,
the school boards are meeting now to find out whether this was just
going to be something that would be for 1 year or whether it is going
to be continual? The President has indicated strong support to continue
it, recognizing that we need some 2 million new teachers over the
period of 10 years. He wanted to really jump-start that whole process,
and do it particularly in the early grades, which all the research
indicates has such enormous potential for enhancing student
achievement.
I was wondering whether the Senator realized that last October, when
we made this agreement for the 1 year--the 1-year agreement--
Congressman Goodling, who is chairman of the House Education and the
Workforce Committee, a Republican, declared:

The class size reduction was a real victory for the
Republican Congress. But more importantly, it is a huge win
for local educators, parents who were fed up with Washington
mandates, redtape and regulation. We agree with the
President's desire to help classroom teachers, but our
proposal does not create the big new Federal education
programs.

So Congressman Goodling, the Republican chairman of the Committee at
the time, was taking credit for a Republican victory. We considered it
a victory as well. It was supported by Democrats and Republicans, and
the people who were going to benefit were the children, so all of those
who were involved at that particular time claimed it as a victory.
Now, the good Senator's amendment takes that concept, which the
Senator had championed all last year, and extends it so the local
families, school boards, principals, schoolteachers, and children will
know there will be a continuation in the employment of those teachers
over the period of the next 5 years, so that we can make some
meaningful progress in reducing the class size.
Is that correct?
Mrs. MURRAY. The Senator from Massachusetts is absolutely correct.
When we passed this last October, Republicans and Democrats stood up,
stood together, and said: This is a commitment from the Federal
Government. No additional redtape, no bureaucracy, the money is going
to go out there to those local schools to hire teachers to reduce class
size. We stood together, shoulder to shoulder.
I am having a difficult time going home now, talking to school board
members and my friends who are teachers--many of whom are Republicans--
and saying, well, gee, now maybe they might not support us.
They don't understand that because they are putting together a budget
right now. They need to hire those teachers. They need to make a
commitment to that teacher, to that class, to those parents who are
enrolling their kids, that they are going to continue to do this. They
need us in that partnership. They don't want political maneuvers. They
don't understand why Ed-Flex is a bill we can't do this on. We are
talking about education. The time is right. It was bipartisan before.
They want us to give that commitment now, and that is why I came to the
floor today to offer this amendment.
Mr. KENNEDY. If the Senator will yield, then, for a final question?
The Senator is the principal sponsor of this legislation and the one
who was instrumental in achieving its outcome in the fall of last year,
with bipartisan support and the support of the chairman of the House
committee, Congressman Goodling. As I understand it, therefore, the
Senator is prepared to at least urge others to withhold further
education amendments and support what Senator Daschle has said? There
may be just a few amendments, but that the Senator's would certainly be
one of the important ones because of the importance of the timing for
local school districts, and that my colleague would agree to a
reasonable time period?
Mrs. MURRAY. I was saying that.
Mr. KENNEDY. If the leaders came to you and said, We are prepared to
enter into a time of a couple of hours to discuss this, you would be
willing, perhaps--I know there would be a number of people that want to
speak on it--but you are prepared to at least accommodate the
leadership and the schedule on that issue. You would certainly support
an initiative by the leaders, even from our side--maybe there are some
on the other side--to move towards a very few amendments--I think the
leader said five or six--and do it with a time limit so that we can
move along with the Senate schedule. Do I understand correctly?
Mrs. MURRAY. The Senator from Massachusetts is absolutely correct. I
am more than ready to do a time agreement, to do this quickly. The
reason it is so important to do it now is it is bipartisan. It is
absolutely timely in terms of school boards and school districts
putting their budgets together. I actually heard the chairman of the
committee this morning talk about the fact that the reason we should
move Ed-Flex forward is that it is bipartisan and it is timely, not to
wait for ESEA.
Mr. KENNEDY. If the Senator will yield further, we could have even
had the debate during the course of this morning.
Mrs. MURRAY. We could have.
Mr. KENNEDY. We could have moved ahead towards the vote on that next
week, and we could have accommodated the Senate schedule.
Mrs. MURRAY. I would have been delighted.
Mr. KENNEDY. I want to thank the Senator, first of all, for her
passion and common sense and experience, as a former school board
member and a former teacher and a mother. She has given a good deal of
time and attention to this issue. We all have enormous respect for all
the work she does when she is back home visiting with these communities
and talking to parents and teachers about this proposal. She had an
extensive inquiry as to the importance of this proposal, to bring this

[[Page S2361]]

matter to the Senate, and has been willing to follow a very reasonable
time period for consideration of it. I just want to thank her and hope
that she will be successful. I certainly will do everything I can to
make sure that she is.
Mrs. MURRAY. I thank the Senator from Massachusetts.
Let me just finish my remarks. I know there are a number of other
Senators present.
Mrs. BOXER. If the Senator will yield, because I am leaving in 30
seconds, I want to thank her and ask her a question. Does the Senator
not agree with me that we owe a real debt to Senator Wyden of Oregon,
because the force of his desire to make education better resulted in a
bipartisan agreement to bring an education bill to the floor? In doing
so, I want to make it clear, because he and I have spoken, while we all
agree with him that this is a good program, there have been many
waivers passed on by Secretary Riley because he, too, agrees that Ed-
Flex is working. This is a golden opportunity that he has given us to
flesh out this bill, to make it even better.
I say to the Senator from Washington, she worked so hard to get
100,000 teachers into the classroom and reduce class sizes. We worked
together on these issues to get afterschool funds to the school
districts who wanted so much. Last year, there were $540 million worth
of requests for afterschool programs. We only had $40 million. This
year, the President wants to have the money to accommodate all those
local districts.
I say to her, as a former school board member, the kinds of
amendments that we hope to add to this bill, does she agree those kinds
of amendments will give resources to the local districts so they will
be able to make up their own minds as to whether they want those
resources, that they will be able to design the programs themselves,
and that what we are doing here, what the majority leader has done to
us today, by not allowing these amendments, is simply to hold back
these important bills from being voted upon so that those children will
right now be denied the kinds of help they need?
The last point I want to make, and the last question I have to the
Senator from Washington is this: Does she not agree that education is
the No. 1 issue on the minds of the people and that when we see
filibusters and stalls and hours of just chitchat and no work on
education, that we are not meeting our responsibilities? Would she not
agree with that? Again, I want to thank her for her leadership.
Mrs. MURRAY. I thank my colleague from California for her tremendous
work on education, her passion, and in particular, her afterschool
programs and appreciate her remarks this morning and agree with her.
Education is absolutely the No. 1 priority for families across this
country, but it is not just families. We go and talk to businesses, and
business people tell us we need to be able to hire students out of our
schools with math and science and reading and English skills. Studies
show--and I will be delighted, when we get to the debate on this, to go
through the studies again--that reducing class size makes a difference
in a child's ability to learn to write and to read, to do math and to
do science, just the skills our businesses are looking for. They are
looking to us to make a commitment on this.
I commend my colleague from Oregon, as well, for his work on this. I
know he is committed to this issue and has pledged his support as well.
He knows, too, how important class size is.
Let me end by reminding my colleagues this is a bipartisan effort. It
was passed in a bipartisan way last October. There is no reason not to
do this now. In fact, a former Republican House Member said, on
education, We should champion communities and parents, reduce class
size, and increase accountability.
I ask unanimous consent to have the letter printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:

Republican Main

Street Partnership,

Arlington, VA.

An Open Letter to Republicans in Congress

Dear Colleagues & Friends: The Republican Main Street
Partnership was founded in 1998. Our goal is to demonstrate
that the Republican Party can govern and achieve our goals of
bipartisan cooperation in enacting centrist policies. We are
focused on speaking out, setting the agenda and demonstrating
a new discipline for reaching consensus on difficult issues;
without that, we believe that we will not be a Majority Party
by the close of the Year 2000.
Immediately, the rhetoric of partisan hostility must stop.
Our language too often has been heard as mean, judgmental and
partisan. That ``the other side does it'' is no excuse. We
need Republican unity to replace division or our statistical
majority will never become a governing majority. We must
restore dignity to our debate, civility to our conversations
and compassion to our perspective. We need a new language and
a new voice.
Our agenda must be positive; it must be an agenda for
governance. On education, we should champion communities and
parents, reducing class size and increasing accountability.
On Social Security, we should press for personal choice, not
100% governmental custody of our retirement funds. On health
care, Medicaid and Medicare we must legislate with compassion
as well as prudence. On taxes, we must work to reduce the
burden on hardworking middle-class American families. And
when we discuss our agenda, we must do it in terms that
dispel the fears and inspire the hopes of American families
and businesses.
Both governance and civility will demand discipline.
Challenges will rise from partisan and ideological quarters.
That is when we must stay the course with unity, courage--and
discipline.
If we can stand tall within our own tradition--if we can
bring to the 106th Congress Lincoln's urgency for justice,
Roosevelt's commitment to the environment, Eisenhower's
vision of public education--then the finest elements of our
party's legacy, the tone of our speeches, the content of our
legislation and the discipline of our behavior will make this
a season of triumph for the Republican Party, and for the
nation!
Sincerely,
The Republican Main Street Partnership Board of Directors
Gov. John McKernan, Hon. Mike Castle, Hon. Amo Houghton,
Hon. Rick Lazio, Hon. Fred Upton, Mr. Allan Cors.

Mrs. MURRAY. Let me just conclude, because I know the Senator from
Maryland would also like to speak, education is an issue that is
important to all of us. Education is an issue that is important to
everyone at home as well. I will again plead with the chairman from the
committee to allow us to offer our amendments, to get an up-or-down
vote, to limit the number of amendments, but to let us move forward on
issues like this, like class size, that are bipartisan, that have been
agreed to before, that the American public wants and that makes a
difference for all of our children.
Thank you, Mr. President. I yield the floor.
Mr. JEFFORDS. Mr. President, I see the Senator from Maryland. Does
the Senator desire to speak on the bill?
Mr. SARBANES. I desire to speak about the extremes to which the other
side will go to frustrate the opportunity to consider significant
educational initiatives on this bill by now bringing into consideration
subject matter completely extraneous to education and the jurisdiction
of the committee; namely, the amendment that is now pending dealing
with a banking issue. I want to speak on that subject for a few
minutes. I think it is highly relevant to the situation in which we
find ourselves.
Mr. JEFFORDS. I see no other Senators. I desire to speak at some
point. I would be happy to let the Senator speak now, even though it
does not appear to be totally relevant to this bill. I would like an
understanding of how much time he might like.
Mr. SARBANES. Ten minutes at the most.
Mr. JEFFORDS. All right. That is fine.
The PRESIDING OFFICER. The Senator from Maryland is recognized.
Mr. SARBANES. I thank the Chair. I say to the chairman of the
committee, I am not the one who is introducing what he describes as an
extraneous issue into this debate. I am simply addressing the fact that
it was introduced into this debate by others. I do not think it should
be here, frankly.
Mr. JEFFORDS. I think that is relevant to the bill so I do not have a
problem with you proceeding as you desire.
Mr. SARBANES. Mr. President, I think the extremes to which the other
side will go to try to frustrate considering bona fide educational
issues on this education bill was demonstrated by the fact that the
vote we just had

[[Page S2362]]

was on tabling a motion on an amendment involving the ``Know Your
Customer'' proposed regulations that were put out by the Federal
banking regulators.
I wrote to the regulators, pointing out the problems with these
proposed regulations and urging them to carefully consider these
problems before proceeding or implementing them. The regulators have
received a flood of comments highly critical of the proposed
regulations and, in fact, the comment period, which ends on March 8, is
not yet over. At least two regulators have already indicated, in
advance of the comment period ending, that they expect not to adopt the
proposed regulations as final regulations in view of the overwhelming
number of comments they have received and the complexity of the issue.
Many of my colleagues have, as I have done, written to them pointing
out the difficulties connected with these regulations and the possible
breaches of customers' personal financial privacy.
On the other hand, since there is a law enforcement issue involved
here with respect to money laundering, we need to be very careful what
we do. I am concerned because the amendment not only addresses the
proposed regulations but also precludes any other regulations being put
forward by the agencies that would be similar to these.
Conceivably, the agencies could develop more narrow regulations that
focus on the money laundering issue, in an effort to curb criminal
activity, that would not carry with it the heavy burdens of regulation
on the banks and the potential intrusion into the financial privacy of
ordinary, law-abiding citizens, which none of us wants to do.
In fact, I have introduced a bill on the financial privacy issue,
broader legislation than we are talking about here. I have been joined
in that by Senators Dodd, Bryan, Edwards, Leahy, and Hollings. That is
S. 187.
I invite other colleagues to join on that legislation, S. 187,
because I think financial privacy is an extremely important issue and
one that we need to address. We need to assure safeguards to our
consumers that their financial privacy is not to be intruded upon
without their knowledge and an opportunity to object.
But to reach out, as happened this morning, and try to drag in a
subject matter unrelated to education and not directly connected with
this bill, as part of a constant process that has been going on over
the last few days to block out important educational amendments that
would raise significant issues which need to be addressed, it seems to
me, is going too far.
Let me, on these regulations, quickly point out that the regulators
have received over 130,000 public comments about the regulations,
demonstrating a great deal of concern about the privacy of personal
financial information. The regulators have already indicated they
recognize the problems with the proposed regulations. Some have
testified or written to the Congress indicating they expect withdrawal
or substantial if not total revision.
We are addressing the problem in the normal course under which
proposed regulations are addressed, the problem which this amendment
addresses. In fact, of course, this amendment moves in and, in effect,
seeks to shortcut or terminate the regular process which would be to
let the comment period run and then the regulators take the comments
into account. We have already had an indication from the regulators
that they have seen enough now so that when they take the public
comments into account, the concerns that Members have expressed, myself
included, will be addressed.
The potential problem with the amendment is that it may foreclose any
possibility of addressing the legitimate concerns of the law
enforcement community directed towards money laundering. My very able
colleague from Michigan, Senator Levin, has been working on that issue.
I simply rise to point out some of the complexity of this issue with
which we are dealing, and to focus on the current situation in which we
find ourselves--I gather there is not the ingenuity or wit to devise
education-related amendments to try to block this process, as has been
going on. So now we are going to reach out, wherever we can, and find
non-education-related amendments, to bring them in to try to close out
the amendment tree.
I am prompted to speak on that because this question of privacy is an
issue to which we have addressed some attention. As I said, there is a
comprehensive bill which has been introduced by a number of us which I
am very hopeful we will be able to have hearings on and act on.
I think the ``Know Your Customer'' proposed regulations is a very
important issue to be addressed. But I find it interesting that here we
are on a Friday morning and, instead of dealing with education, we have
brought in this issue out of the jurisdiction of the Banking Committee.
I think the regulators were about to address this issue to everyone's
satisfaction, but the issue has been addressed in the amendment,
possibly in such a broad fashion that it will prevent the formulation
of regulations specifically designed to get at money laundering, which
the law enforcement community has indicated is a significant concern of
theirs. That is an issue to which Senator Levin has addressed
considerable attention.
I say to the distinguished chairman, to the extent he views these
comments as not relevant or germane to his legislation, they were
prompted by the fact that an amendment was proposed which itself is not
relevant or germane to the bill before us and has nothing to do with
education.
My own preference, obviously, is to get on with the education
amendments. I hope these discussions that are going to take place will
make it possible for significant and important education amendments to
be offered to this legislation. We are out here with an important piece
of education legislation whose basic concept I support. But I do not
think we should be precluded from offering other important initiatives
with respect to education which, I think, if brought before the body,
would command broad support in this institution. I think it would be
very important in helping to deal with the Nation's educational
challenges.
Mr. JEFFORDS. Will the Senator yield?
Mr. SARBANES. Certainly.
Mr. JEFFORDS. Let me explain the position I have taken. My concern is
getting amendments now which should be on the Elementary and Secondary
Education Act which is presently under consideration by the committee,
if we are to start passing programs out here that should be more
properly considered in committee as to how to allocate expenditure of
funds and matters like that.
I understand that the pending amendment--we all know in the
exigencies of time, and sometimes in order to get a message through, a
situation arises where it is necessary, in a sense, to add an amendment
that is really nongermane in order to send a message downtown. That is
the understanding, and I think clear from the vote, that the Members
want to send a message downtown that the process toward getting
involved in the privacy of individuals' banking is not one which is
acceptable to the Senate.
I suspect it will disappear into the great unknown at some point, but
my main concern is to make sure that the committee, which is addressing
the serious problems we have in education in this country, does it in
an orderly process. We do recognize that the funds which local
communities would like to have in order to meet the demands of some of
the restrictions and regulations put on them are needed to replace the
funds which should have been coming from the Federal Government with
respect to IDEA or with respect to what is more commonly referred to as
``special education.'' We were committed to 40 percent, and we are only
sending less than a quarter of what we are committed to.
So I will do all I can to make sure that anything which is possible
to enhance the local communities, as well as bring us closer to meeting
the commitment we have to 40 percent of the cost of special education,
is considered. But I am not going to allow amendments, or do my best
not to allow amendments, to this bill which was meant to be expedited
to assist the local communities to have an opportunity to be more
flexible in meeting the needs, as they see them, under the restricted
resources they have by virtue of the fact that we have not fully funded
our commitment under special

[[Page S2363]]

education. I intend to do that, to try to see how we can ensure that
they get the resources to which they are entitled.
Mr. SARBANES addressed the Chair.
The PRESIDING OFFICER. The Senator from Maryland.
Mr. SARBANES. I appreciate that comment from the chairman of the
committee.
Let me just make two observations: First of all, on the need for this
banking amendment, to send a message. The message has certainly been
sent by many Members and by extensive public comment.
In that regard, Mr. President, I ask unanimous consent to have
printed at the end of my statement a letter which I sent to the
Chairman of the Federal Deposit Insurance Corporation on January 12 on
this very issue of the ``Know Your Customer'' programs, sharply
critical of the proposed regulations.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 1.)
Mr. SARBANES. Just briefly the other question, I have been watching
what has been going on. I am not on a committee with direct
jurisdiction here, but I was prompted to speak by the fact that in this
game of delay and blockage we are now dragging in outside amendments.
The chairman says he wants these other amendments considered in the
context of the Elementary and Secondary Education Act. Am I mistaken in
my impression that the Secretary of Education, who I think is
supportive of Ed-Flex measures, advanced the position that those Ed-
Flex measures should be considered in the context of the Elementary and
Secondary Education Act?
Mr. JEFFORDS. I do not believe he has spoken out on that. He is
supportive of our efforts to try to improve the Elementary and
Secondary Education Act. I would say that he would not be unduly
concerned if the President's program got attached to this amendment,
obviously. He is the Secretary, he supports the President's programs,
and they would like to get them implemented any way possible.
On the other hand, I doubt very seriously if he would take a position
adverse to knowing what we were doing when we put together the bill,
which is the one which will have more impact upon elementary and
secondary education in this country than any other Federal act--that it
is done well, that it proceeds with due care, and that we examine the
present situation to see how things can be improved.
Right now we are spending somewhere close to $15 billion on primary
and secondary education. And, as I stated earlier, there is no
demonstration that we have had any improvement since the 1983
acknowledgement that this country had a serious problem in education.
So I think it is incumbent upon us to try to look at why, after
spending all those billions of dollars over those years, things have
not improved since we understood we had a serious problem back in 1983.
To just continue spending the money we are spending the way we are now,
without looking at why it has had no measured improvement--which is an
important part of the process--and to go ahead and just pass new
programs without fully taking those matters into consideration, in my
mind, would be irresponsible.
Mr. SARBANES. It is my understanding that the amendment which the
Senator from Washington, Senator Murray, is offering for additional
teachers in effect is a follow-on to a decision that this Congress made
in the last session. Did we not authorize additional teachers in the
last session?

Mr. JEFFORDS. The Senator knows as well as I know that in the final
hours of any legislative session things happen in the exigencies of
trying to get something together where people are dealing with the
issues and probably are not fully aware of the implications of what
they do. And that is what happened here.
These matters, through the pressure of the administration wanting to
get something they had not been able to get through the normal
legislative process, were able to get on the bill, which was that bill
that was 40 inches high. Nobody knew what was in it until it got read.
And the reason we are here with Senator Murray is there were some
problems in the way that bill was thrown together that need to be
attended to. And I understand that. It may be helpful in the amendment
process that we get into next week with amendments. We might be able to
make that bill more meaningful.
So that is not off the table, as far as I am concerned, as long as
the changes that are made are constructive in making that bill that
passed to be more usable by the communities. But right now, obviously,
we are here with an amendment, because when it gets thrown together
like that at the end of a session, they end up doing something that
they do not know what they are doing.
Mr. SARBANES. It is my understanding that, first of all, that was
extensively discussed. And my understanding is that it is consistent
with recent educational studies, that small class size in the early
years has been shown to have significant benefits. You talk about, we
are spending a lot of money and we do not know whether it is producing
results. One thing we seem to know, on the basis of the study, is that
if we can lower these class sizes, particularly in the early years, we
are going to get beneficial results.
If you ask anyone about the difference between the situation in the
public schools and private schools, for which parents pay a lot of
money, the first thing that leaps out at you is small class size. If
you ask parents why they are laying out all of this money, one of the
first things they say is, to get a small class size. And these studies
that have been done, as I understand it, support the proposition that
the small class size will produce significant results, particularly
when directed toward the early years so we can get these young people
up to standard.
Mr. JEFFORDS. There is only one study which has been considered to
have been done in a way that would give you evidence, and that study
did come to that conclusion. The other studies were not really worth
discussing.
However, again, these decisions were made in a back room, in the wee
hours of the night; and obviously we would not be considering an
amendment if it had been done well. Furthermore, the great debate, in
my mind, of what is more important, reducing the class size from 20 to
18 or having a teacher teaching the class who knows the subject which
he or she is teaching--I will bet you 10 to 1 you get better results by
improving the quality of the teacher and the qualifications of the
teacher than you will by reducing the class size by 2 or 3 or 4 or 5. I
do not think anybody would debate that.
That is one thing we should consider, the flexibility under the
bill--and this may come up--as to whether those moneys could not better
be used and should not better be left to the discretion of the school
systems to use those moneys to improve the proficiency of the teachers
rather than just merely reducing the class size by 2 or 3 or 4.
Certainly if we get to her amendment next week, we will consider
other options as well. And it may prove to be a productive experience.
Hopefully it will. And I am very pleased to have listened to the
leaders on both sides, that we can agree to a small number of
amendments which we can consider next week, and move this bill on so
that the benefits of the flexibility can be given to the Governors to
help improve education overall; and the local communities will be able
to do what they feel is necessary to improve that flexibility.
I know the Presiding Officer has been very active in trying to make
sure that the local communities have more to say on how their schools
can improve. So I think we are moving on a path right now that leads us
through next week being a productive exercise, to have the kind of
flexibility that the Governors need to help the communities. At the
same time we may make some changes that will be beneficial but that do
not involve superseding the normal process of the Education Committee
to bring about some meaningful reform within the Federal structure.

As I pointed out, there has been no evidence that the huge Federal
structure has made any improvement over the last 15 years in our
education. We are on our way this year to being the most education-
minded Congress that we have had in this century. I am hopeful that
when we finish this year we will all be proud of the accomplishments we
have made in this country to

[[Page S2364]]

get us on a path to making sure we will survive the strong competition
we are getting from overseas, unduly impaired by our present
educational system.
Mr. SARBANES. Mr. President, I say to the distinguished chairman, I
hope we are not going to leave any impression here that the growing
consensus on the benefit of small classes, particularly in the early
grades, is somehow suspect. It is my understanding that consistently
across the board students attending smaller classes in the early grades
have been found to make more rapid progress than students in larger
classes; that these benefits are the greatest for low-achieving
minority children and low-income children, because smaller classes
enable the teachers to identify and work effectively with students. In
many instances they are able to address the problem early on, which
prevents its worsening, perhaps to the extent of requiring special
education in later years--if you are talking about conserving your
resources.
I understand that Project STAR studied 7,000 students in 80 schools
in Tennessee. Students in small classes performed better than students
in large classes in each grade from kindergarten through the third
grade. Followup studies show that the gains lasted through at least the
eighth grade. The gains were larger for minority students.
In Wisconsin, the Student Achievement Guarantee in Education Program
is helping to reduce class size in grades K through 3 and in low-income
communities. Students in the smaller classes had significantly greater
improvements in reading, math and science tests than students in the
larger classes. The most significant achievement gains were among
African American males.
In Flint, MI, efforts over the last 3 years to reduce class size in
grades K through 3 have produced a 44-percent increase in reading
scores and an 18-percent increase in math scores.
So the issue which the Senator from Washington and others are trying
to address is an extremely important issue. It follows on the
initiative that was taken by the Congress last year, and I very much
hope that we will be able to address it in the course of considering
this legislation. We ought to put these educational issues before the
Senate and act upon them.
I yield the floor.
The PRESIDING OFFICER. The Senator from Colorado.
Mr. ALLARD. Mr. President, my colleague from Maryland made several
comments on the ``Know Your Customer'' amendment we had up for
consideration before the Senate.
I want to take just a couple of moments to respond. The reason that I
felt it was important to bring up the amendment this morning with my
colleagues on this side is that I serve on the Banking Committee with
my colleague from Maryland, and I made an attempt to bring this issue
forward in the Banking Committee. It was objected to by the minority
party at that time. We also brought up a bill here on the Senate floor
for consideration, but again it was objected to by his side. It seemed
that the only way we could get this issue considered by the Senate was
to bring it up at this particular time. It was well within the rules of
the Senate, and I thought it was very important that the Senate have an
opportunity to speak on these rules and regulations before a final
decision was made.
As to his second comment on the amendment being too broad, I admit
that the amendment I introduced in the committee was broad. We wanted
to do that because we were concerned that the regulators would just
make minute changes in the rules and regulations, and then the
regulations would be back before the American people. After further
consideration, the language that was considered here on the Senate
floor was narrowed and applied specifically to those rules and
regulations in the current ``Know Your Customer'' proposal.
I just wanted to make those two comments. I also would like to thank
the chairman and recognize the chairman's effort in trying to improve
education in this country. I want to compliment him on his confidence
in the States as well as local school boards. That is where a lot of
these decisions should be made. I think there is a tendency here in
Washington to think that we have all the answers, that one shoe size
should fit all, and that one regulation should fit all.
I am one who feels that local school boards and States really are the
ones that will come up with the innovative changes for education. We
just need to give them the flexibility to do so. We need to allow them
to work with parents who really do have a vested interest. We all want
to see our children get a better education.
Again, I want to thank the chairman for his hard work and diligent
efforts. We all appreciate that.
I yield the floor.
Mr. SARBANES. Mr. President, I want to follow up on the comments of
the Senator from Colorado.
First of all, I acknowledge that he is trying to address the problem,
and I indicated as much when we discussed it in the Banking Committee.
But the proposal there and the bill that was originally introduced
would, in effect, have eliminated existing regulations addressed to the
money laundering issue.
Mr. ALLARD. Will the Senator yield?
Mr. SARBANES. Certainly.
Mr. ALLARD. The amendment----
Mr. SARBANES. Not the amendment; I will address the amendment. I want
to talk about the bill and the proposal in the Banking Committee first.
I think both of those propositions, the proposal in the committee and
the bill, went too far, and I think the Senator is prepared to concede
they went too far because they would have wiped out existing
regulations--not just proposed regulations--existing regulations
addressed to significant cash transactions that we think are tied to
the money laundering issue.
I don't think the Senator disagrees with that.
Mr. ALLARD. If the Senator will yield, I recognize that the amendment
I introduced in the committee was broad. We made that adjustment on the
amendment that was voted on this morning.
Mr. SARBANES. I understand that and I indicated earlier that had been
done.
I only have two observations about that. Yesterday, the Comptroller
of the Currency in testimony on the House side stated that they
intended to withdraw the proposals ``promptly.''
Now, perhaps the Senator feels that through his communications with
the regulators heretofore and the letters he sent--and I have sent a
letter, and others have sent letters--we weren't able to get sufficient
credit for having brought about this change--so we need to come out
here and try to get this amendment passed so that we really show that
we are the ones who did it and not the regulators who were affected,
acting in a reasonable manner after reviewing all of the comments that
have been received not only from the public but from Members of the
Congress, as well.
Second, I do have some concern about your amendment because it
addresses not only the proposed regulations, but, as I understand, it
precludes them coming forward with any similar regulations that might
be greatly narrowed so they get at the money laundering issue.
I don't assert that I am an expert on the money laundering issue and
that is why the Senator from Michigan, Senator Levin, is putting a
statement in the Record addressing the money laundering question, and
the importance of that question and how we try to get at it.

I think this problem was well on its way to being solved. I
understand the other side is searching desperately for amendments to
offer in order to try to block this amendment process on educational
issues. It is my perception that is why this matter came before us
today, in an effort to keep out of the amendment process on the Ed-Flex
bill, important amendments, which a number of our colleagues wish to
offer. But the Senator and I share a common view that the regulations
went too far, and we have expressed that opinion.
I think the initial proposals the Senator from Colorado made went too
far in the other direction--and were overly broad. I think this
proposal has been narrowed down, but I think it still contains within
it one remaining problem, which I indicated, and that is whether it
precludes any opportunity to do something that would be more effective
on the money laundering issue,

[[Page S2365]]

without creating any of the privacy problems or the overregulation
problems that both of us and others have perceived as being contained
in the proposed regulations.
Mr. President, I yield the floor.

Exhibit No. 1

U.S. Senate,

Washington, DC, January 12, 1999.
Hon. Donna Tanoue,
Chairman, Federal Deposit Insurance Corporation, Washington,
DC.
Dear Chairman Tanoue: On Monday, December 7, 1998, the
Federal Deposit Insurance Corporation, Board of Governors of
the Federal Reserve, Office of the Comptroller of the
Currency and Office of Thrift Supervision, each published in
the Federal Register and solicited public comment on proposed
regulations requiring insured depository institutions to
develop ``Know Your Customer'' programs. The regulations are
intended to enable financial institutions to protect
themselves from engaging in transactions designed to
facilitate illicit activities and ensure compliance with
suspicious activity reporting.
The proposed regulations would require depository
institutions to amass a large amount of data about customers
and to monitor and analyze customers financial behavior.
Institutions would be required to determine: a customers'
sources of funds for transactions; ``the particular
customer's normal and expected transactions involving the
bank''; and transactions ``that are inconsistent with normal
and expected transaction for that particular customer or for
customers in the same or similar categories or classes;'' and
to report suspicious transactions.
I support implementing focused and effective methods to
prevent money laundering and to promote law enforcement
purposes, but am concerned that these proposed regulations
have unintended negative consequences.
The scope of the proposed regulations allows for intrusion
into the personal privacy of bank customers by profiling
details of customers' lives, activities beyond what may be
necessary for the stated regulatory purposes. The proposed
regulations also could subject many low- and middle-class
citizens who pose little threat of improper activities to
such surveillance because there are no threshold limits. The
proposed regulations have no minimum transaction size or
account size, below which surveillance is not required.
While the proposed regulations would required banks to
become huge repositories of personal financial data on their
customers, there are no Federal limitations on the bank's use
of the transaction data it collects. The bank can sell or
share such data without a customer's knowledge or consent.
This creates the very real possibility of large scale
unwanted breaches of customers' personal financial privacy.
Polls and newspaper articles have indicated that Americans
are very concerned about their personal privacy, particularly
their personal financial data. New business affiliations and
technology advances are fueling consumer concerns about the
mishandling of personal financial information.
It is evident that the proposed regulations have aroused
widespread public concern. I hope that you will take these
concerns into account as you proceed with the rulemaking
process and develop policies to satisfy current law
enforcement needs.
Sincerely,
Paul S. Sarbanes,
U.S. Senator.

Mr. KERREY addressed the Chair.
The PRESIDING OFFICER. The Senator from Nebraska is recognized.
(The remarks of Mr. Kerrey pertaining to the introduction of S. 553
are located in today's Record under ``Statements on Introduced Bills
and Joint Resolutions.'')
Mr. KERREY. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. JEFFORDS. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. JEFFORDS. Mr. President, I believe we are now in morning
business.

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