[Congressional Record Volume 145, Number 147 (Tuesday, October 26, 1999)]
[Senate]
[Pages S13151-S13156]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  THE MILLENNIUM DIGITAL COMMERCE ACT

  Mr. ABRAHAM. Mr. President, we originally introduced this 
legislation, which is entitled ``The Millennium Digital Commerce Act'' 
on March 25. I introduced it with Senators Wyden, McCain, and Burns.
  The Senate Commerce Committee held a hearing on the legislation May 
27. Subsequently, the legislation passed unanimously by the Senate 
Commerce Committee on June 23.
  President Clinton's administration indicated a statement of support. 
That was issued on August 4.
  I think that sequence of events suggest that there is a strong degree 
of support for this type of legislation.
  The same week the President expressed his support, we attempted to 
pass the bill in the Senate by unanimous consent. That was just before 
the August recess.
  Concerns were raised by two Members of the Senate about the possible 
impact of this bill on consumer protection.
  Since that time, we have worked to try to incorporate some of the 
changes and some of those considerations into the legislation to 
address consumer protection concerns while still providing the 
tremendous benefit of electronic signatures to the public which was 
intended by the legislation. I believe the substitute which we would 
propose to offer does just that.

  As was the case with the legislation which passed the Senate Commerce 
Committee, the substitute will promote electronic commerce by providing 
a consistent framework for electronic signatures in transactions across 
all 50 States.
  That framework is simply a guarantee of legal standing in each of 
those States. Such a guarantee will provide the certainty which today 
is lacking and will encourage the development and the use of electronic 
signature technology by both businesses and consumers.
  The legislation addresses the concerns raised by the use of 
electronic records and electronic transactions. It will allow people to 
secure loans on line for the purchase of a car, home repair, or even a 
new mortgage by giving both companies and consumers the legal certainty 
they need.
  However, the bill now includes safeguards to guarantee that 
electronic records will be provided in a form that accurately reflects 
the original transaction and which can be reproduced later. These 
safeguards are taken directly from the completed version of the 
Electronic Transactions Act, the ETA.
  This legislation also recognizes that there are some areas of State 
law which should not be preempted. These are specifically spelled out 
and excluded in this bill. They include but are not limited to wills, 
codicils, matters of family law, and documents of title.
  As almost anyone in this country knows who has paid the slightest 
degree of attention to developments in the areas of sales, or economy, 
or the markets, or watches their television and follows the commercials 
to the slightest degree, we are entering an age in which electronic 
commerce is rapidly serving as a substitute for traditional means of 
commercial activity.

[[Page S13152]]

  Many individuals and companies, as well as others who wish to engage 
in electronic commerce and other electronic exchanges, are suffering 
because there is no uniform supporting legal infrastructure in the 
United States which could provide legal certainty for electronic 
agreements.
  The problem is simple. We have about 42 States that have adopted 
their own basic version of how to authenticate documents that are 
entered into through electronic transmission. They are all different. 
Because of those differences, the potential exists for transactions and 
contracts entered into online through electronic commerce to be 
challenged in court because the laws of one State might be different 
from the laws in another. We wish to end that problem.
  The States are moving as fast as they can to address it through a 
uniform act which has been developed by the States. And slowly but 
surely we believe that act will be adopted by State legislatures and 
signed into law by Governors. But until the States get to that point, 
we need an interim solution so that electronic commerce can continue to 
expand and people can continue to engage in electronic commercial 
activity.
  The current and prospective patchwork of law and regulation cannot 
support, and in some cases is incompatible with, the e-commerce 
market's demanding requirements that are flowing from the interstate 
and international nature of Internet commerce.
  The uncertainty and certainly the existence of all these different 
State laws provides a lot of uncertainty, and the resulting risks that 
stem from that harm America's businesses and consumers because it puts 
a limit on the amount of commercial activity that is capable of being 
handled in this fashion.
  I think it further hinders the broad deployment of many innovative 
products and services by American companies, and, of course, in turn 
limits the choices for those who are prospective consumers, whether it 
is in business-to-business transactions, or business-to-consumer 
transactions.
  The point is this legislation cannot continue to wait. We have tried 
on several occasions already to bring it to the floor. We tried to pass 
it through unanimous consent agreements. We have tried to negotiate. So 
far we have been unsuccessful.
  The concepts and the goals behind this move toward electronic 
commerce and authentication are not a subject of controversy. Obsolete 
statutes that exist in State law should not be permitted to bar 
innovation and economic growth.
  This is no longer a States rights issue because we are dealing with 
otherwise enforceable contracts involving interstate commerce. Thus, 
passing legislation that contains crucial provisions providing 
interstate commerce certainty for electronic agreements, in my 
judgment, and I believe in the judgment of a lot of others, should be a 
top priority for the Congress before leaving this year.
  The legislation which we are talking about has been endorsed by 
numerous organizations and companies who are trying to expand e-
commerce in our country.
  They are: America Online, American Bankers Association, American 
Council of Life Insurance, American Electronics Association, American 
Financial Services Association, American Insurance Association, 
Business Software Alliance, Charles Schwab, Chase Manhattan Bank, 
Citicorp, Coalition of Service Industries, Consumer Bankers 
Association, Consumer Mortgage Coalition, Digital Signature Trust Co., 
DLJ Direct, Electronic Check Clearing House, Electronic Industries 
Alliance, Equifax, Fidelity, and Ford Motor.

  Also, the Financial Services Roundtable, Gateway2000, General 
Electric Company, GTE, Hewlett-Packard, IBM, Information Technology 
Association of America, Information Technology Industry Council, Intel, 
International Biometric Industry Association, Internet Consumers 
Organization, Intuit, Investment Company Institute (ICI), Jackson 
National Life, Keybank, Microsoft, National Association of 
Manufacturers, National Association of Mutual Insurance Companies, 
National Retail Federation, NCR Corporation, New York Clearing House 
Association L.L.C., PenOp Inc., Securities Industry Association, 
Telecommunications Industry Association, U.S. Bancorp, U.S. Chamber of 
Commerce, Wachovia Corporation, Zions First National Bank, and Zurich 
Financial Services Group.
  The fact that the legislation passed the Commerce Committee 
unanimously, the fact the President has endorsed it, should be a signal 
to everybody that this is legislation that does have the kind of 
bipartisan backing that should allow it to move fairly quickly through 
the Senate. Yet it is not. It has been since June that we have tried to 
do this. We have yet to have a successful completion of our efforts.
  There are many issues involved in electronic authentication that can 
wait for the market to mature for resolution. Contractual certainty 
cannot. The absence of certainty with respect to electronic 
authentication contracts creates a huge impediment to the development 
of e-commerce both here and internationally.
  Before I finish on this issue, I am still very much interested in 
working with people who have objections. I hope we can work something 
out in the next day or two, but I do think we need action this year. If 
we can't work something out in the next day or two, it will certainly 
be my intention to ask the majority leader to see if we can't file a 
cloture motion on a motion to proceed to this legislation so we can 
work it out. It seems to me if people have substantive differences we 
ought to be able to enter into a consent agreement to afford the 
opportunity for a limited number of amendments on this legislation so 
those differences can be worked out on the floor. To hold the bill up 
and prevent proceeding to the bill jeopardizes our ability to get 
anything done this year. I appeal to those who raised objections to 
work with Members in the next day or two to find an amicable as well as 
hopefully a fairly quick process by which we can bring the legislation 
through the Senate.
  Mr. LEAHY. Mr. President, along with many of my colleagues on both 
sides of the aisle, I have long been an advocate of legislation to 
enable and encourage the expansion of electronic commerce, and to 
promote public confidence in its integrity and reliability. In that 
bipartisan spirit, many of us worked together in the last Congress to 
pass the Government Paperwork Elimination Act, which established a 
framework for the federal government's use of electronic forms and 
signatures. I believe that the same spirit, and the same process of 
listening to the people involved and the experts on the issue, and of 
reasoned deliberation, could yield an electronic signatures and 
electronic contracting bill that would benefit our entire national 
economy.
  Sadly, however, the bill before us today is not the product of such a 
process, and it is not such a bill. Where the Government Paperwork 
Elimination Act was an object lesson in bipartisanship, the bill before 
us today is an object lesson in special interest politics.
  This bill has a history. If we listen to that history, we may hear 
some of the voices that have been silenced in the rush to bring it to 
the floor. So let me recount it briefly.
  On May 27, the Commerce Committee held hearings on Senator Abraham's 
original S. 761. Remarkably, for a bill that proscribed rules for 
business-to-consumer transactions as well as business-to-business 
transactions, neither the Federal Trade Commission, nor state consumer 
protection authorities, nor any consumer advocates, were invited to 
testify at those hearings. Sometimes it seems that we forget that the 
purpose of commerce is to provide goods and services for consumers.
  In June, neglecting the concerns of silent consumers, the Commerce 
Committee reported a bill of quite unprecedentedly sweeping preemptive 
effect. The Commerce-passed bill would have overridden untold numbers 
of federal, state and local laws that require contracts, signatures and 
other documents to be in traditional written form.
  I was concerned that the Commerce-passed bill was federal preemption 
beyond need, to the detriment of American consumers. For example, the 
bill would have enabled businesses to use their superior bargaining 
power to compel or confuse consumers into waiving their rights to 
insist on paper disclosures and communications, even

[[Page S13153]]

when they do not have the technological capacity to receive, retain, 
and print electronic records.
  On August 10, I asked the FTC whether S. 761 as reported by the 
Commerce Committee could undermine consumer protections in state and 
federal law, and how the bill might be improved. The FTC responded by 
letter dated September 3 that, while it shared the broad goals of S. 
761, the bill's potential application to consumer transactions raised 
questions that needed to be addressed:

       For instance, would the bill preempt numerous state 
     consumer protection laws? Would borrowers be bound by a 
     contract requiring that they receive delinquency or 
     foreclosure notices by electronic mail, even if they did not 
     own a computer? Would consumers who had agreed to receive 
     electronic communications be entitled to revert to paper 
     communications if their computer breaks or becomes obsolete? 
     Would consumers disputing an electronic signature have to 
     hire an encryption expert to rebut a claim that they had 
     `signed' an agreement when, in fact, they had not? What 
     evidentiary value would an electronic agreement have if it 
     could easily be altered electronically?

  The FTC concluded that further clarification was needed to provide 
protection for consumers while allowing business-to-business commerce 
to proceed unimpeded.
  Consumer and privacy advocates, consumer lawyers and law professors 
echoed the FTC's views. Among the many national organizations opposed 
to the bill: Consumer Union, Consumer Action, Consumer Federation of 
America, National Consumer Law Center, National Association of Consumer 
Agency Administrators, National Consumers League, National Center on 
Poverty Law, National Legal Aid and Defenders Association, National 
Senior Citizens Law Center, Privacy Rights Clearinghouse, United Auto 
Workers, U.S. Public Interest Research Group, and Utility Consumers 
Action Network. They wrote to the Senate on September 9, that, while 
consumers can potentially benefit from receiving information 
electronically, ``the broad-brush approach of S. 761 . . . would 
eviscerate important consumer protections in state and federal law, as 
well as interfere with a state's rights to protect its own consumers 
without imposing any protections against misuse, mistake, or fraud.''
  The Commerce Department also came to oppose S. 761 as reported by the 
Commerce Committee, because of its spillover effect on existing 
consumer protection and regulatory standards. In a letter this month to 
the Chairman of the House Judiciary Committee, the Commerce Department 
noted its concern that enactment of S. 761 was desired by some 
precisely because of this spillover effect.
  Faced with a bill that proclaimed an objective that I agreed with, 
but also presented serious dangers for consumers, I committed to 
working with Senator Abraham and others to rewrite S. 761 in a manner 
that would benefit businesses and consumers alike. For many weeks, we 
strove to do the work that the Commerce Committee had failed to do, 
meeting with business and consumer representatives in order to make 
sure that we understood and fully addressed their concerns.
  I was and still am proud of what this consultative process produced. 
The Leahy-Abraham compromise bill satisfied the primary and valid goal 
of the business community, which was to ensure that contracts could not 
be invalidated solely because they were in electronic form or because 
they were signed electronically. The bill also promoted competition and 
innovation by proscribing that regulations would not discriminate 
between reasonable authentication technologies. At the same time, the 
bill left in place essential safeguards protecting the nation's 
consumers.
  As of September 28, then, the prospects looked good for a bipartisan 
compromise that furthered the interests of industry and consumers 
alike. The prospects looked even better two weeks later, when a 
bipartisan majority of the House Judiciary Committee adopted the Leahy-
Abraham compromise bill as a substitute to the radically preemptive 
H.R. 1714.
  That was the history of S. 761, until today. Senator Abraham is now 
seeking unanimous consent to pass a totally different bill, a bill that 
is more preemptive and potentially more harmful to consumers than the 
bill reported by the Commerce Committee in June. How did this reversal 
happen? I as one of the architects of the compromise was not consulted. 
But that is not what troubles me.
  What troubles me is that, so far as I know, the FTC was not 
consulted; the Commerce Department was not consulted, and consumer 
groups were certainly not consulted. I do not know who was consulted, 
but I do know that, whatever process created this new bill, it was not 
a bipartisan process, it was not an open process, and it completely 
bypassed the Committee system.
  What is in this mystery bill, which was unveiled less than 24 hours 
ago, and which we are now asked to pass by unanimous consent? A very 
small part of this bill focuses, as did the Leahy-Abraham compromise, 
on validating electronic contracts. A much larger part of the bill is 
devoted to electronic records, which is broadly and vaguely defined in 
such a way as to encompass any text on any computer anywhere.
  The bill provides that if any law, federal or state, requires a 
record to be in writing, an electronic record satisfies the law. I 
frankly do not know what that means. My fear is it means that if a 
patient purchases medication from ``drugstore.com,'' the listing of 
dosage instructions and counter-indications on the ``drugstore.com'' 
web site could be deemed to satisfy the FDA's safety labeling 
requirements. To take another example, what happens if the homeowner 
cannot access an email from the bank threatening foreclosure because 
her computer is broken?
  The bill also sweeps unduly broadly in its provisions on electronic 
signatures. Under this bill, if any law, federal or state, requires a 
signature, an electronic signature is deemed to satisfy that law. The 
term ``electronic signature'' is defined to include any electronic 
sound, symbol or process used with intent to sign and associated with 
an electronic record. This captures everything from the most secure, 
encrypted, state-of-the-art authentication technology to my typing my 
initials at the end of an email.
  This one-size-fits-all legislative approach substitutes for the 
uniqueness and reliability of a human signature a wide range of 
unreliable and unauthenticable technologies, without providing any of 
the protections that, say, credit card owners have. To take an old-
fashioned example, where parents used to sign their children's 
homework, this approach would suggest that the teacher should be 
satisfied by the sight of the parent's initials attached to an email. 
The ramifications are much more serious when we consider the prospect 
of children using insecure technologies to bind their parents to 
electronic transactions that they cannot afford.
  There are other problems with this bill as well. It has a new and 
complex provision regarding what it calls ``transferable records,'' in 
effect, electronic negotiable instruments. This provision has never 
been considered by any Committee of the House or Senate, or to my 
knowledge by any banking regulators. Maybe the sponsors of the bill are 
prepared to take us through it in detail on the floor today. If not, we 
would be derelict in our duty if we brought into force a whole new 
legal regime that we have neither scrutinized nor understood.
  Then there is the issue of preemption. State laws include a large 
number--usually thousands--of references to signatures and writings. A 
recent review of the Massachusetts General Laws uncovered over 4,500 
sections dealing with or requiring a signature or writing, and I 
understand that this is typical among the states.
  In some cases, it may be appropriate to reform such requirements to 
allow electronic means rather than paper and pen. In other cases, it 
may be appropriate to maintain paper requirements or, if the law is to 
be changed to allow electronic means, to tailor the law to maintain the 
legislative intent, as for example in the case of consumer protection 
provisions requiring conspicuous terms. But aside from a handful of 
specific exclusions, the new S. 761 does not attempt to differentiate 
among state laws, nor does it concern itself with the reasons why state 
legislatures required a signature or writing in the first place; 
rather, S. 761 simply wipes these thousands of state laws off the 
books.

[[Page S13154]]

  We have heard a lot of late about the integrity of state law. We have 
heard that providing federal protections for battered women would 
unduly intrude on the states' authority. We have heard that allowing 
federal authorities to prosecute hate crimes would violate state 
sovereignty. It is interesting to note that the principal sponsor of 
this bill is also a cosponsor of S. 1214, the Federalism Accountability 
Act, which aims to protect the reserved powers of the states by 
imposing accountability for federal preemption of state and local laws.
  I myself have always taken a more pragmatic line about the pros and 
cons of federal versus state law. But it is ironic to hear Members who 
speak the rhetoric of states' rights on a regular basis to turn around 
and advocate a bill that would preempt thousands of state laws ranging 
from the common-law statute of frauds to California's recent enactment 
of a modified version of the Uniform Electronic Transactions Act.
  Finally, one important provision that we included in the Leahy-
Abraham compromise is missing from this bill--a provision that asked 
the FTC to study the effectiveness of federal and state consumer 
protection laws with respect to electronic transactions involving 
consumers. That kind of scrutiny would be all the more valuable in the 
context of this new bill, which would radically change the legal 
landscape by stripping consumers of a host of current legal 
protections.
  It is a disturbing testament to the power of special interests that 
the reporting provision at the end of this bill one-sidedly demands a 
report on what it calls ``barriers to electronic commerce,'' while 
creating no provision for any investigation of the effects of its new 
regime on the nation's consumers.
  I do not consent to passage of S. 761 in its current form.
  The PRESIDING OFFICER (Mr. Allard). The Senator from Ohio.
  Mr. VOINOVICH. Mr. President, I take this opportunity to address in 
the Senate some matters that I believe are important as we approach the 
end of the fiscal year 2000 appropriations cycle.
  Foremost among my concerns is the increasing role the Federal 
Government plays in our everyday lives in the area of education, and 
the budgetary impact on our nation that results from assuming this and 
other roles more properly and constitutionally the responsibilities of 
State and local government.
  I have witnessed during my first year in the Senate a number of 
positively amazing and enlightening experiences that have made me feel 
proud to be able to serve in this body and at this level of government. 
Yet my pride is increasingly tempered by subjects which have caused me 
great concern.
  You needn't be an experienced member of the Senate, a Governor, or 
public official to appreciate the dire situation our nation faces with 
regard to the solvency of Social Security and Medicare. However, as 
public officials and stewards of our Nation's finances, I believe that 
we must be all the more vigilant of this reality since every decision 
we make at this level in some way will impact whether we as a nation 
will be able to honor the commitments we have made.
  I wish to highlight some recent examples as to how we in the Senate 
have, I believe, erroneously prioritized with respect to our federal 
responsibilities.
  For example: Mr. President without a doubt, improvement in the 
quality of education is a top concern for parents, teachers, and 
employers across the country--in fact, improvement in the quality of 
education ought to be our number one priority as a nation.
  As with all issues, when discussing education we must ask two key 
questions: 1. What level of government is responsible? 2. How are we 
going to pay for it?
  Since the introduction of the Elementary and Secondary Education Act 
of 1965 by President Johnson, the Federal Government has gradually been 
increasing it's involvement in education.
  Rather than the role of a very junior partner in education reform, 
the President has offered a number of initiatives throughout his term 
that would substitute the U.S. Department of Education for most local 
school boards.
  Mr. President, we recently spent hours and hours of debate on the 
subject of education in the context of the fiscal year 2000 Labor, HHS, 
and Education Appropriations Bill.
  We allocated $2.3 billion more on education in this year's Senate 
bill compared to fiscal year 99, a more than 6% increase at a time when 
we have a problem balancing the budget.
  Yet, the primary responsibility for our nation's education doesn't 
and shouldn't reside in Washington.
  The text of the Constitution and the Federalist Papers indicate that 
responsibility for our Nation's education resides with State and local 
government--not the Federal government.
  And indeed, States have upheld their constitutional responsibilities 
and have responded to our education needs by moving forward with 
appropriate reforms and spending.
  State spending in education has increased dramatically in the past 
decade.
  According to a recent report by the National Governors' Association 
and the National Association of State Budget Officers entitled The 
Fiscal Survey of States, elementary and secondary educational now 
accounts for slightly more than one-third of State general funds 
spending and about one-quarter of State spending from all funding 
sources.
  The report goes on to say that:

       . . . elementary and secondary educational has been the 
     largest state expenditure category, with almost $182 billion 
     in total expenditures in 1998. Its growth has outpaced the 
     growth in total state expenditures, with overall state 
     expenditures increasing by 6 percent between 1997 and 1998 
     and elementary and secondary education spending increasingly 
     by 7.2 percent.

  Governors' recommended budget for fiscal year 2000 include an average 
proposed increase for elementary and secondary education of 4.8 
percent, and an average proposed 4.3 percent increase for post-
secondary education.
  During my two terms as Governor of Ohio, we increased education 
spending from our General Revenue Fund by $2 billion, or 50.7 percent. 
The amount of Basic Aid per pupil rose during my term from $2,636 to 
$3,851, or 46 percent--and a 56 percent increase in per-pupil 
expenditures was measured for the poorest one-fourth of Ohio's schools.
  In addition, under my administration, State funding support for 
capital improvements for Ohio's primary and secondary school buildings 
totaled more than $1.56 billion. We have wired every classroom for 
voice, video, and data to the tune of $525 million.
  We have increased accountability and established higher classroom 
standards in Ohio and are implementing a more stringent set of academic 
requirements that students must meet to earn a high school diploma.
  In particular, State funding for Ohio's youngest children has grown 
tremendously. Child care spending alone increased by 681 percent under 
my administration!
  I am especially proud of what we have done in Ohio with the Head 
Start program. Ohio is now the national leader in State support for 
Head Start. When I began as Governor, State support for Head Start in 
fiscal year 1990 was $18.4 million. In fiscal year 1998, State spending 
for Head Start had increased to $181.3 million, making Ohio the first 
State in the nation to provide a slot for every eligible 3- or 4-year-
old child whose family desires quality early care and education 
services.
  The first question we should ask is: whose responsibility is 
education--and mostly it is a State and local responsibility. The 
second question is: how are we going to pay for it?
  A few weeks ago I spoke on the Senate floor in response to the 
President's announcement of a $115 billion surplus in fiscal year 1999, 
indicating that it would be wonderful if it were only true.
  The President, however, neglected to mention during his remarks in 
the Rose Garden that OMB also projected an on-budget deficit.
  The only way the President could claim an on-budget surplus was by 
using the employee payroll taxes coming into the Social Security trust 
fund.
  During the recent debate over the Labor, HHS, Education 
appropriations bill, I heard a lot of talk in the Senate with respect 
to funding for schools, funding for 100,000 new teachers, funding for 
teacher training.
  We spent a great deal of time discussing Federal class size 
initiatives.

[[Page S13155]]

Additional debate on the role of the Federal Government in providing 
funding for school construction is likely to follow in future debates.
  The reality is, however, that many States already have class size 
initiatives in place--I know of at least 20 States that are doing this 
now. Additionally, it is also reported that at least 28 States have 
already proposed major initiatives in the area of school construction 
in their fiscal year 2000 budgets.
  Governors of at least 13 states have already recommended using a 
portion of their tobacco settlement funds for education. Ohio itself 
would commit $2.5 billion of their tobacco settlement funds for school 
facilities under Governor Taft's plan.
  You will recall that the States fought hard to keep the President 
from using any of the tobacco settlement funds recovered from State-
initiated lawsuits for his own priorities in his budget.
  Instead, many States are exercising responsible leadership by 
recommending these funds be used to honor a number of key state 
priorities and commitments such as education.
  My point is this: The Federal Government is not the school board of 
America. The Members of the U.S. Senate are not members of the school 
board of the United States. The responsibility for education is at the 
state and local level, where they are in much better financial shape 
than the Federal Government, as I've illustrated.
  We have a staggering $5.6 trillion national debt--a debt that has 
grown some 1,300 percent in the last 30 years. I remind my colleagues, 
with each passing day, we are spending $600 million a day just on 
interest on the national debt--$600 million a day!
  Most Americans do not realize that 14 percent of their tax dollar 
goes to pay off the interest on the debt, 15 percent goes to national 
defense, 17 percent goes for non-defense discretionary spending, and 54 
percent goes for entitlement spending.
  We are spending more on interest payments today than we spend on 
Medicare and Congress needs to spend more money on Medicare as we all 
know--now!
  When my wife and I got married in 1962, interest payments on the dept 
were at 6 cents on the dollar. If we would have only had to pay 6 cents 
on the dollar last year, Americans would have saved $131 billion 
dollars. We would have saved $229 billion if we didn't have to make any 
interest payments on the debt last year!
  Meanwhile, States have been both cutting taxes and running true 
surpluses--a reality that does not exist here in Washington.
  For fiscal year 1999, my last budget as Governor, Ohio had a budget 
surplus of $976 million, and operates a rainy day fund containing $953 
million--up from 14 cents in 1992. And because of good management and a 
strong economy, we provided an almost 10 percent across-the-board 
reduction this year for those filing their 1998 returns.
  As I said earlier, the States are in a much better position to spend 
money on education than we are, yet we continue to advocate more 
Federal spending--more than last year, more than the year before--
dipping into our nation's pension fund.
  As it is, the Federal Government does have responsibilities to the 
American people to uphold the promises we have given to them in 
Medicare, Social Security and national security--promises that we are 
desperately struggling to maintain.
  We need to begin establishing just what our priorities are as a 
legislative body, and where our responsibility lies.
  One instance in the context of the Labor, HHS, Education legislation 
we just completed where I believe the Federal Government has been 
particularly irresponsible is in the almost $1 billion decrease in 
funding for the Social Services Block Grant originally written into the 
bill.
  As you know, States rely on the Social Services Block Grant to 
provide crucial services to low-income individuals, including children, 
families, the elderly and the disabled.
  However, funding for this block grant has been cut repeatedly the 
last few years, despite the Federal commitment made in the 1996 welfare 
reform agreement with the States. Congress and the administration 
guaranteed that funding would be maintained at $2.38 billion each year 
from fiscal year 1997--fiscal year 2002.
  Instead, funding for the Social Services Block Grant for fiscal year 
2000 has only reached the level of $1.05 billion.
  Yet, in the appropriations bill we have somehow managed to increase 
funding in a number of other areas, including a $2 billion increase 
above the fiscal year 1999 funding level of $15.6 billion for the 
National Institutes of Health.
  In the process of providing for the 13 percent increase in funding 
for the National Institutes of Health, we have cut the Social Services 
Block Grant, which provides for the most vulnerable and underserved in 
our population, by 45 percent. How do we reconcile these kinds of 
decisions based on our responsibilities here in Washington and with 
previous commitments to the States?
  I should add I believe many of the services provided to young 
children under the Social Services Block Grant serve as preventive 
medicine for a number of ailments they may encounter later in life--
ailments the Federal Government funds the National Institutes of Health 
to research.
  In other words, if we do not take care of those kids during that 
prenatal period, they will develop many of the things that the National 
Institutes of Health are trying to take care of, like high blood 
pressure and diabetes. Why not take care of it earlier? That does not 
make sense to me--$2 billion more, and cutting the Social Service Title 
20 block grant. It does not make sense.
  Before we go off spending more money on new education initiatives, 
such as 100,000 new teachers and financing for new school construction, 
we should at the very least make it a top priority to honor the Federal 
Government's funding commitment to the Individuals with Disabilities 
Education Act--currently the largest unfunded mandate by the Federal 
Government on the states. IDEA currently contains a provision 
authorizing the Federal Government to fund up to 40 percent of the 
services provided under Part B of the act. Since its enactment, 
however, the Federal Government has only appropriated funds for 10 
percent of these services--only 10 percent.
  In the meantime, we must begin taking a serious look at the billions 
of dollars we spend on education programs to determine whether these 
programs are effective, and whether the Federal Government should have 
a role in these programs in the first place.
  According to GAO, there are 560 different education programs 
administered by 31 Federal Government agencies. I have asked GAO to 
formulate methodology that determines the overall effectiveness of 
Federal education programs. Currently, there is no methodology to do 
this.
  Wouldn't it be nice to sit down and look at what we are doing as a 
country in education, identify the programs definitively, look at those 
that are really making a difference, get rid of those that are not, and 
put the money in the programs that are successful?
  It all gets back to the fact that at each level--Federal, State and 
local--we all want value, which is getting the best product for the 
least amount of money, and we all want positive results.
  To this end, we must work with State governments as partners to come 
up with a system where we can maximize our dollars to make a difference 
in the lives of our children.
  Rather than enact more Federal mandates and raid Social Security to 
increase Federal spending on State and local responsibilities--we 
should be giving states greater flexibility to innovate and tailor 
their education programs to the unique needs of their children.
  Congress has been talking about drawing a line in the sand, 
committing not to raid any more from the Social Security trust fund to 
pay for increased spending for Federal programs. Yet we recently 
learned from CBO Director Dan Crippen that the FY2000 spending bills 
that we've been laboring over are already eating up billions of the 
Social Security surplus--even while our promises to maintain the 
integrity of the trust fund still hang in the air! I have not forgotten 
the lockbox I had on my desk, and many other Members of the Senate, 
putting a firewall between spending and the Social Security trust fund.

[[Page S13156]]

  When faced with honest choices, the American people will not accept 
the Federal Government paying for programs that are primarily the 
responsibility of the States at the expense of sacrificing our 
commitment to Social Security and Medicare, as well as to numerous 
other commitments the Federal Government has made under law and under 
the Constitution of the United States of America. That is absolutely 
unacceptable, and the American people have a right to be upset. We need 
to be doing better.
  As the appropriations legislation is finalized in negotiations, I 
hope that we in the Senate can inject some common sense into the 
dialog, taking into account our priorities as a Federal legislative 
body, and weighing the extent to which we should or should not maintain 
our involvement in various programs that are more properly the 
responsibility of State and local government. Even now, however, I fear 
we are primarily driven to compete with the President for political 
oneupsmanship in the area of education which, while ranked first as a 
national priority according to polling data, is not the primary 
responsibility of State and local government.
  Medicare, Social Security, and national security--these are the 
primary challenges before us. As fiscal stewards of our Nation's 
economy, we cannot afford to continue maintaining our involvement in so 
many other areas, spending at such a pace as we have and it has been 
enormous. We must define our responsibilities. We must prioritize. We 
mut exercise fiscal discipline and restraint and insist that we work 
harder and smarter and do more with less.
  The current budgetary path that we are on is both dangerous and 
irresponsible and downright misleading.
  I am sad to say that many of the fiscal year 2000 appropriations 
bills with which we have invested so much of our time, despite our best 
intentions, are flawed by the use of budgetary gimmicks that I cannot 
help but say overshadow the labors of so many of my colleagues who are 
shouldered with the difficult task of constructing a budget that both 
meets all of the perceived demands placed on this body and keeps us out 
of the red. That is why we must prioritize.
  In the meantime, I cannot condone the sleight of hand that allows us 
to postpone making the kind of tough choices that are required to 
balance our books, and because of that I have voted against a number of 
these spending bills--bills that, to be sure, would benefit Ohio in a 
number of ways.
  We have committed over $17 billion in emergency spending in these 
bills, and that does not even count the billions of dollars of other 
spending that's being hidden. We are plastering--and I mean 
plastering--this spending over with something called directed scoring. 
Instead of using CBO numbers--that is, the Congressional Budget Office 
numbers--we have been selectively using numbers from the Office of 
Management and Budget, the agency for which the President is 
responsible, whenever they allow us to spend more.
  Incidentally, does anyone remember the last time we did not have an 
emergency for which we had to account? Let's end the charade and admit 
we use emergency spending to avoid the balanced budget spending caps 
and, while we are at it, admit we are spending every dime of the 
projected on-budget surplus in fiscal year 2000.
  When I go back to Ohio, people say to me: What about the tax 
reduction? You guys are having a tough time just balancing the budget.
  I want to say this: If we do not have substantially more revenues in 
fiscal year 2000 than what is currently projected, CBO will announce in 
January that we are using Social Security to balance the 2000 budget. 
We have to pray the dollars come in a lot more, but if the dollars do 
not come in more, then CBO is going to announce in January this budget 
uses Social Security.
  It is time to bite the bullet and make the hard choices. Nobody else 
but us can exercise the fiscal responsibility that is needed. If we 
cannot do it now, with the lowest unemployment we have had and a 
booming economy, the question I have is, When will we ever be able to 
do it? If we fail to make the tough choices now, we will soon be facing 
a train wreck that will make it impossible for us to respond to the 
needs specifically delegated in the Constitution to the Federal 
Government and fail to keep the sacred Social Security and Medicare 
covenant we have with the American people. Let's get back on track so 
when we return to Washington at the start of the new millennium, which 
is just around the corner, we can say with confidence we have, indeed, 
been the stewards of a government the American people deserve.
  I yield the floor.

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