[Congressional Record Volume 146, Number 26 (Thursday, March 9, 2000)]
[Senate]
[Pages S1397-S1421]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Ms. MIKULSKI (for herself, Mr. Kennedy, Mr. Bingaman, Mr. Levin,
Mr. Sarbanes, Mrs. Murray, Mrs. Lincoln, Mr. Johnson, Mr. Kerry, Mr.
Durbin, Mr. Hollings, Mr. Reid, Mr. Rockefeller, Mr. Breaux, Mr.
Dorgan, Mr. Torricelli, Mr. Baucus, Mr. Dodd, Mr. Cleland, and Mrs.
Feinstein):
S. 2229. A bill to provide for digital empowerment, and for other
purposes; to the Committee on Finance.
digital empowerment act
Ms. MIKULSKI. Today, I introduce the Digital Empowerment Act. The
goal of this legislation is to ensure that every child is computer
literate by the eighth grade regardless of race, ethnicity, income,
gender, geography, or disability.
Yesterday, the Senate's Education Committee voted for my amendment to
establish this as our national goal. This vote was taken on a
bipartisan basis and was unanimous. Today, I am introducing this
legislation to make this goal a reality. This bill has been a team
effort. I reached out to the Congressional Hispanic Caucus, the
Congressional Black Caucus, to my colleagues, the people throughout
Maryland, ministers in Baltimore, business leaders, educators, and
political leadership. Why? It is because a digital divide exists in
America. Those who have access to technology and know how to use it
will be ready for the new digital economy. Those who don't will be left
out and left behind.
Low-income urban and rural families are less likely to have access to
the Internet and computers. Black and Hispanic families are only two-
fifths as likely to have Internet access as their white counterparts.
Some schools have 10 computers in every classroom. In other schools,
there are 200 students who share one computer. The private sector is
doing important and exciting work, such as Power Up from AOL, but
technology empowerment can't be limited to a few zip codes. What we
need is a national policy and national programs.
Mr. President, I believe the best antipoverty program is an
education. If we practice the ABCs, we will ensure that our children
have a good education and will cross this digital divide. Crossing the
digital divide is about technology and about children having access to
technology. It is about teachers knowing how to teach children the
tools of technology so they can cross this digital divide.
The ABCs are simply this: Access--each child must have universal
access to computers, whether it is in a school, a library, or a
community center. Many families cannot afford to buy computers for
their homes, but children in America should have access to them through
public institutions.
We also need to practice the B--best-trained teachers and, I might
add, better-paid teachers.
But C would be computer literacy for all students by the time they
finish eighth grade.
My Digital Empowerment Act will, first of all, create a one-stop shop
for Federal education technology programs at the Department of
Education. Why do we need this? Well, right now, our programs are
scattered throughout the Department. School superintendents have to
forage to be able to find that information, and when they do, they find
the funding is absolutely spartan or skimpy. That is why my legislation
also improves our schools in terms of access to technology and teacher
training.
Teachers want to help their students cross the digital divide, but
they are facing three major problems. One, they need technology. They
need hardware and software. They need training to use the technology
because without training of the teachers or librarians, it is a hollow
opportunity.
In my own home State of Maryland, over 600 teachers from across the
State volunteered to participate in a tech-prep academy so they could
be ready. But hundreds were turned away. For every one teacher who can
sign up for tech-prep training, four or five are standing in line to do
so.
My bill addresses these concerns. We are going to double funding for
school technology and for teacher training. We now spend less than half
a billion dollars on training and technology for our schools. We would
double that to $850 million. But we also have to make sure we go where
children learn, and that is in the community. Right now, what we find
is that the only reliable source of revenue for wiring schools and
libraries is the E-rate. But, the E-rate does not go to community
centers.
Whether it is an African-American church or a community center in an
Appalachian region or rural parts of the South or the upper regions of
Alaska, what my legislation would do is help community centers. My
legislation would create an E-corps within the AmeriCorps national
service program. It would bring AmeriCorps volunteers with special
technology training into our schools and into our communities.
I recently had a town hall meeting in an elementary school in
Riverdale, MD. The teachers and students told me they need extra pairs
of hands to help out in the computer lab to be able to teach the
children. Also, we want to create 1,000 community tech centers.
Community leaders have told me we need to bring technology to where
kids learn, not just where we want them to learn. Our legislation would
create 1,000 community-based centers that would be run by community
organizations such as the YMCA and YWCA, Urban League, or a faith-based
organization, where children could be there for structured afterschool
activities, and also adults could be there earlier in the day to
develop their job skills.
Government cannot do this alone. We want public-private partnerships.
I want to use our Tax Code to encourage public-private partnerships.
This bill uses our Tax Code to encourage the donations of technology,
technology training, and technology maintenance for schools, libraries
and community centers.
Mr. President, that is the core of our program. We are living in
exciting times. The opportunities are tremendous to use technology to
improve our lives, to use technology to remove the barriers caused by
income, race, or ethnicity. Technology could mean the death of distance
as a barrier for bringing jobs into the rural areas of our country. We
want technology to be the death of discrimination where children have
been left out or left aside. Bringing this technology into schools and
libraries would enable children to leapfrog into the future.
Technology is the tool, but empowerment is the outcome. We want to be
sure each child in the United States of America, by being computer
literate by the time they are in the eighth grade, will be ready for
the new economy. We hope that by setting that as a national goal we
will get children to stay in school and know that the future lies in
working in this new economy.
I thank everybody who worked on this bill with me. I thank everyone
on my staff who helped me, including Julia Frifield, Jill Shapiro, and
Andrea Vernot. This has truly been a team effort. I am pleased that I
have 25 cosponsors from the U.S. Senate on this legislation. I hope
that kind of bipartisan support will move this legislation forward.
I will conclude by saying this is a tremendous opportunity. This is
not about a laundry list of new Government programs. We are here to
make the highest and best use of the programs that exist, a wise and
prudent use of taxpayer funds, and also to say to each child in America
if you want to learn and get ready for the new economy, your Federal
Government is on your side.
I give all praise and thanks to the Dear Lord who has inspired me to
do this and gives me the opportunity to serve in the Senate. I truly
believe one person can make a difference. I am trying to do that with
this legislation. If we can work together, I know we will be able to
bring about change--change for our children and change for the better.
Mr. LEVIN. Mr. President, it is my pleasure to join Senator Mikulski
in introducing the National Digital Empowerment Act, which seeks to
close the gap between those who have technology available to them and
those who do not. I commend Senator Mikulski for her commitment to
connect every school and community to the Information Superhighway. The
legislation we are introducing will help to achieve this goal. It will
enable students and teachers in all communities to have access to
computers, as well as the training that is necessary to use this
technology effectively.
[[Page S1398]]
The widening digital divide falls heaviest on those who can least
afford to be left behind. Recent studies show that the Digital divide
for the poorest Americans has grown by 29 percent since 1997, and that
over 50 percent of schools lack the infrastructure needed to support
new technology. In addition, approximately 4 out of 10 teachers report
that they have had no training in using the Internet; and a mere 10
percent of new teachers reported that they felt prepared to use
technology in their classrooms, while only 13 percent of all public
schools reported that technology-related training for teachers was
mandated by the school, district, or teacher certification agencies.
This legislation will provide the necessary tools to reverse this
trend.
It will substantially increase funding for teacher training in
technology, including the creation of Teacher Technology Preparation
Academies--teachers who are trained by the Academies would be
encouraged to return to their schools and act as technology instructors
for other teachers; increase funding for school technology; extend the
current enhanced deduction for computer technology which is currently
due to expire in 2001; require HUD to establish e-Villages in all HUD
housing programs; authorize and increase funding for the creation of
Community Technology Centers and e-corps within the AmeriCorps; create
a one stop shop clearinghouse of public and private technology efforts
within the U.S. Department of Education to be headed by an Assistant
Secretary for Technology Education. In addition, the legislation
directs the Secretary to implement an Internet-based, one-to-one pilot
project that specifically targets the educational needs of K-12
students in low-income school districts, including hardware, software
and ongoing support and professional development; and improve the e-
Rate program.
After two funding cycles the total e-Rate funding that went to our
nation's schools and libraries was $3.6 billion nationally, including
$137.15 million for Michigan. That is a good investment to help prepare
our children and citizens for the information age of the 21st century.
But it is still not sufficient to provide all qualified schools and
libraries with the e-Rate discounts they have requested. This
legislation would improve the Universal Service Fund by making the e-
Rate application process simpler, and would increase the current cap of
$2.25 billion and expand eligibility to include structured after school
programs, Head Start centers and programs receiving federal job
training funds. The e-Rate has proven itself to be a successful and
popular program and its time to make it available to everyone who needs
it.
I am especially pleased to be a part of this legislative effort
because it supports some model initiatives that I have established in
my home state of Michigan, to create ways in which teachers can become
more computer literate and able to integrate technology into the
curriculum and to bring technology into every classroom.
About 2 years ago, I convened an education technology summit that
brought together over 400 business leaders, school administrators,
school board members, foundation representatives, deans of Michigan's
colleges of education and others to identify ways in which Michigan
could excel in the area of Education technology. What I learned was
that one of the biggest obstacles to technologically up-do-date
classrooms is the lack of training of our teachers in the use of
technology. If teachers don't understand how to integrate computers,
the Internet, and other technology into the instructional program,
students won't get full advantage of these innovations, no matter how
much hardware and wiring have been installed.
Despite impressive achievements in the utilization of education
technology in a few localities, Michigan as a whole was below the
national average in every measure of the use of technology in our
schools. It ranked 44 in teacher training in the use of technology; and
10 percent of teachers reported that they had less than 9 hours of
technology training. In addition, Michigan ranked 32 among the states
in the ratio of students per computer. I have subsequently hosted a
number of working sessions which have resulted in a specific plan of
action to advance education technology in Michigan.
Some key elements of the plan of action include the formation of a
consortium that will establish the nation's highest standards for
training new teachers to use technology in the classroom. Beginning
with the 1999-2000 academic year, the Consortium for Outstanding
Achievement in Teaching with Technology {COATT} will award certificates
of recognition to new teachers who have demonstrated an exceptional
ability to use information technology as a teaching tool.
COATT membership includes an impressive slate of higher educational
institutions from Michigan: Albion College, Andrews University, Eastern
Michigan University, Ferris State University, Lake Superior State
University, Michigan State University, Oakland University, University
of Detroit-Mercy, University of Michigan, University of Michigan-
Dearborn, Wayne State University and Western Michigan University.
Neither the education nor the certificate is mandatory. However, new
teachers with certificates will have an advantage in the job market and
school districts will benefit by knowing which applicants are qualified
in using technology effectively in their instruction. The letter of
agreement signed by each COATT member in committing their institution
to provide the resources to achieve the success of the COATT initiative
which is included at the end of my remarks.
Michigan is already recognized as a leader in producing new teachers
and if we set our minds to it, I'm convinced we can be the best in the
nation when it comes to teaching teachers how to integrate technology
in the classroom.
Another key element of my plan of action to advance Michigan's
standing in education technology is the establishment of the Teach for
Tomorrow Project, TFT, an online delivery system for educational
technology training and credentialing of in-service teachers. By using
technology to teach the technology, lessons can be accessed statewide
and at time and location which are convenient to the learners. An added
bonus, which results in an expansion of the use of technology in the
classroom, is that teachers who complete TFT teach other teachers what
they have learned. Central Michigan University has approved the use of
TFT materials as a professional development course eligible for 3
graduate credit hours when done in conjunction with local onsite
training.
The legislation before us, the National Digital Empowerment Act, will
speed the closing of the digital divide not only in my state of
Michigan, but nationwide. Time is of the essence. We must act
responsibly and we must act now!
Mr. President, I ask unanimous consent to print in the Record the
COATT member agreement signed by higher education institutions in
Michigan.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Consortium for Outstanding Achievement in Teaching With Technology
Letter of Agreement
We, the undersigned, commit our institutions to be members
of the Consortium for Outstanding Achievement in Teaching
with Technology (COATT). In doing so our institutions accept
the following requirements:
(1) Each institution shall designate a facility liaison to
COATT. This person will participate in an annual review of
the COATT standards and participate in periodic meetings with
other core members of the COATT organization.
(2) Each institution shall designate a person to act as a
point of contact within the institution for potential COATT
candidates.
(3) Each institution shall promote COATT to potential
candidates. This might occur through flyers, regular
newsletters, publications, placement files, etc.
(4) Each institution shall provide adequate and relevant
learning opportunities in the application of educational
technology for students who wish to acquire COATT
certification.
(5) Each institution shall provide adequate resources for
COATT applicants to produce, maintain, and gain access to
their COATT digital portfolios.
(6) Each institution shall be responsible for recommending
and pre-certifying COATT applicants.
(7) Each institution shall involve its faculty and other
qualified personnel in COATT evaluation teams.
By signing below, we understand that we are committing our
institutions to provide the personnel, resources, and
opportunities described in the above seven points. We
recognize that this level of commitment is crucial to the
success of the COATT initiative.
Reuben Rubio, Director of the Ferguson Center for
Technology-Aided Teaching,
[[Page S1399]]
Albion College; Dr. Niels-Erik Andreasen, President,
Andrews University; Dr. Jerry Robbins, Dean of the
School of Education, Eastern Michigan University; Dr.
Nancy Cooley, Dean of the College of Education, Ferris
State University; Dr. David L. Toppen, Executive Vice
President and Provost, Lake Superior State University;
Dr. Carole Ames, Dean of the College of Education,
Michigan State University; Dr. James Clatworthy,
Associate Dean of the School of Education and Human
Resources, Oakland University; Aloha Van Camp, Acting
Dean of the College of Education and Human Services,
University of Detroit-Mercy; Dr. Karen Wixson, Dean of
the School of Education, University of Michigan; Dr.
Robert Simpson, Provost, University of Michigan-
Dearborn; Dr. Paula Wood, Dean of the College of
Education, Wayne State University; and Dr. Alonzo
Hannaford, Associate Dean of the College of Education,
Western Michigan University.
______
By Mr. GRAMS:
S. 2230. A bill to provide tax relief in relation to, and modify the
treatment of, members of a reserve component of the Armed Forces, and
for other purposes; to the Committee on Finance.
THE MILITARY GUARD AND RESERVE FAIRNESS ACT OF 2000
Mr. GRAMS. Mr. President, I rise today to introduce legislation
addressing a very important issue-fairness for the Guard and Reserve
members in our armed forces.
Le me begin with a February 3rd report from the Washington Post
titled ``A Tough Goodbye: Guard Members Leave for Nine Months in
Bosnia.'' It reads ``Sgt. Deedra Lavoie was alone, after leaving her
two young children with her ex-husband. Sgt. Bill Wozniak, hugging his
3-year-old daughter, was worried about not having the same job when he
returns in nine months. Staff Sgt. Stephen Smith won't have a home to
come back to: Movers have cleared out his Annapolis apartment, which he
can't afford to keep while overseas.''
This brings home, Mr. President, the real hardship that thousands of
Guards and Reservists, and their families, are facing today.
The traditional duty of the National Guards and reservists was to
keep domestic peace or fight in wars. But as the number of our Armed
Forces has fallen by more than 1 million personnel since 1988,
increasing numbers of our Guards and Reserve members are being pulled
out of the private sector and into what amounts to at times to be full-
time military service.
They are often called on to carry out overseas peacekeeping,
humanitarian and other missions. Their deployment time is longer than
ever before in peacetime. Today we rely heavily on our Guardsmen and
Reservists to support overseas contingency operations. Since 1990, they
have been called to service in Operation RESTORE HOPE in Somalia,
Operation UPHOLD DEMOCRACY in Haiti, Operation JOINT ENDEAVOR/JOINT
GUARD in Bosnia, Operation STABILIZE in Southeast Asia and Operation
TASK FORCE FALCON in Kosovo.
Mr. President, the statistics speak for themselves:
Work days contributed by Guardsmen and Reservists have risen from 1
million days in 1992, to over 13 million days last year. Without the
service of these citizen soldiers, we would need an additional force of
35,000 soldiers to do the job.
43,000 Guardsmen and Reservists have served in Bosnia and Kosovo from
December 1995 through March 1, 2000. This is 33 percent of the total
Armed Forces personnel participating in that region during that period.
Mr. President, Guardsmen and Reservists are willing to do their duty
and serve when they are called, but increasingly frequent overseas
deployments create tremendous hardship for them, and their families, as
well their employers. We need to give our reserve forces fair treatment
by improving the quality of life both for them and their dependents. We
must help their employers adjust as well.
That's why I am introducing the Military Guard and Reserve Fairness
Act of 2000. This bill would do the following:
First, my legislation would exempt federal tax on the base pay for
enlisted Guardsmen and Reservists and exempt federal tax on the base
pay of Guard and Reserve officers up to the highest level of that if
enlisted Guardsmen and Reservists' base pay during their overseas
deployment.
The majority of Guardsmen and Reservists take pay cuts when called up
for involuntary overseas deployment, and sustain a huge financial loss.
Our active duty military personnel enjoy federal tax exemption on their
base pay, why not our Guardsmen and Reservists who perform the same
duty as full-time military personnel?
Secondly, my legislation would provide a tax credit to employers who
employ Guardsmen and Reservists. The tax credit would be equal to 50
percent of the amount of compensation that would have been paid to an
employee during the time that the employee participates in contingency
operations. However, the credit is capped at $2000 for each individual
Reservist employee and a maximum of $30,000 for all employees. This
provision would apply to the self-employed as well.
Despite the fact that most businesses are fully supportive of the
military obligations of their employees, studies show that the
increasingly long overseas deployments have created a new strain on
Guard/Reserve-employer relations. One of the reasons is that the
unplanned absence of Guard/Reservist-employees creates a variety of
problems for employers. Employers have to hire and train temporary
employees, budget for overtime, or reschedule work and deadlines. As a
result, it increases employer costs, reducing revenue and profits. This
is particularly problematic for small business and the self-employed.
The Defense Department acknowledges the increased use of the Guard
and Reserve and that unplanned contingency operations do create
problems for employers. DOD suggests that a financial incentive may
help to correct some of the problems.
The tax credit included in my bill would offset at least some of the
expense that Guard and Reserve employers face, and help reduce tension
with employees.
Third, the Military Guard and Reserve Fairness Act would provide
federal income tax deductions for transportation, meals and lodging
expenses incurred in performance of Guard and Reserve military duty.
Mr. President, many Guardsmen and Reservists have to travel to a
Reserve center, such as a National Guard Armory, far away from their
home areas for drills or training.
Often Guardsmen and Reservists incur expenses for transportation,
meals, lodging and other necessities. Before 1986, members of the Guard
and Reserve could deduct these costs as business expenses. But the Tax
Reform Act of 1986 eliminated this deduction.
This is not fair. This nation requires our Guard and Reserve members
to perform their duty but also expects them to bear the expense.
Restoring the deductibility would help restore fairness for Reservists.
The Military Guard and Reserve Fairness Act would also include a
number of provisions that would give our Guard and Reserve members fair
treatment by improving their quality of life.
It would extend space-available travel (``Space-A'') to Reservists
and the National Guard, to travel outside of the United States--the
same level as retired military, and gives the Guardsmen and Reservists
the same priority status as active duty personnel when traveling for
their monthly drills.
It would grant so-called ``gray area retirees'' the right to travel
Space-A under the same conditions as the retired military receiving
retired pay as well.
In addition, my legislation would provide Guardsmen and Reservists,
when traveling to attend monthly military drills, the same billeting
privileges as active duty personnel.
The bill would also remove the annual Guard and Reserve retirement
point maximum--upon which retirement pensions are based--and allow
retirement pensions to be based upon the actual number of points earned
annually.
Finally, my legislation would extend free legal services to Guardsmen
and Reservists by Judge Advocate General officers for a time equal to
twice the length of their last period of active duty service.
Mr. President, our Guard and Reserve members are being called upon to
perform more overseas active duty assignments to keep pace with the
rising
[[Page S1400]]
number of U.S. peacekeeping and humanitarian missions. I believe that
this increase in overseas active-duty assignments for Guard and Reserve
component members merits the extension of military benefits for our
Nation's citizen soldiers. It is only fair to close these disparities.
The passage of my Military Guard and Reserve Fairness Act would
restore fairness to our Guard and Reserve members, and it would greatly
increase morale and the quality of life for our National Guard and
Reserves and prevent problems of recruitment and retention in the
future. Hence, it would strengthen our national defense and increase
our military readiness. I urge my colleagues to join me in support of
our military Guard and Reserves.
______
By Mr. GRAHAM (for himself, Mr. Jeffords, Mr. Bingaman, Mr.
Bryan, Mr. L. Chafee, Mr. Kerry, Mr. Rockefeller, Mr. Moynihan,
Mrs. Murray, Mr. Lugar, and Ms. Snowe):
S. 2232. A bill to promote primary and secondary health promotion and
disease prevention services and activities among the elderly, to amend
title XVIII of the Social Security Act to add preventive benefits, and
for other purpose; to the Committee on Finance.
medicare wellness act of 2000
Mr. GRAHAM. Mr. President, today, along with my colleagues,
Senator Jeffords, Senator Bingaman, Senator Chafee, Senator Bryan,
Senator Rockefeller, Senator Kerry, Senator Murray, Senator Moynihan,
Senator Lugar, and Senator Snowe, I introduce the Medicare Wellness Act
of 2000.
The Medicare Wellness Act represents a concerted effort by myself and
my distinguished colleagues to change the fundamental focus of the
Medicare program.
it changes the program from one that simply treats illness and
disability, to one that is also proactive.
Enhancing the focus on health promotion and disease prevention for
Medicare beneficiaries.
Mr. President, despite common misperceptions, declines in health
status are not inevitable with age. A healthier lifestyle, even one
adopted later in life, can increase active life expectancy and decrease
disability.
This fact is a major reason why The Medicare Wellness Act has support
from a broad range of groups, including the National Council on Aging,
Partnership for Prevention, American Heart Association, and the
National Osteoporosis Foundation.
The most significant aspect of this bill is its addition of several
new preventative screening and counseling benefits to the Medicare
program.
The benefits being added focus on some of the most prominent,
underlying risk factors for illness that face all Medicare
beneficiaries, including: screening for hypertension, counseling for
tobacco cessation, screening for glaucoma, counseling for hormone
replacement therapy, screening for vision and hearing loss, nutrition
therapy, expanding screening and counseling for osteoporosis, and
screening for cholesterol.
The new benefits added by The Medicare Wellness Act represent the
highest recommendations for Medicare beneficiaries of the Institute of
Medicine and the U.S. Preventative Services Task Force--recognized as
the gold standard within the prevention community.
Attaching these prominent risk factors will reduce Medicare
beneficiaries' risk for health problems such as stroke, diabetes, and
osteoporosis, heart disease, and blindness.
The addition of these new benefits would accelerate the fundamental
shift, that began in 1997 under the Balanced Budget Act, in the
Medicare program from a sickness program to a wellness program.
Prior to 1997, only three preventive benefits were available to
beneficiaries, pneumococcal vaccines, pap smears, and mammography.
Other major components of our bill include the establishment of the
Healthy Seniors Promoting Program.
This program will be led by an interagency workgroup within the
Department of Health and Human Services.
It will being together all the agencies within HHS that address the
medical, social and behavioral issues affecting the elderly and
instructs them to undertake a series of studies which will increase
knowledge about the utilization of prevention services among the
elderly.
In addition, The Medicare Wellness Act incorporates an aggressive
applied and original research effort that will investigate ways to
improve the utilization of current and new preventive benefits and to
investigate new methods of improving the health of Medicare
beneficiaries.
Mr. President, this latter point is critical. The fact is that there
are a number of prevention-related services available to Medicare
beneficiaries today, including mammograms and colorectal cancer
screening. But those services are seriously underutilized.
In a study published by Dartmouth University this spring (The
Dartmouth Atlas of Health Care 1999), it was found that only 28 percent
of women age 65-69 receive mammograms and only 12 percent of the
beneficiaries were screened for colorectal cancer.
These are disturbing figures and they clearly demonstrate the need to
find new and better ways to increase the rates of utilization of
proven, demonstrated prevention services.
Our bill would get us the information we need to increase rates of
utilization for these services. Further, our bill would establish a
health risk appraisal and education program aimed at major behavioral
risk factors such as diet, exercise, alcohol and tobacco use, and
depression.
This program will target both pre-65 individuals and current Medicare
beneficiaries. The main goal of this program is to increase awareness
among individuals of major risk factors that impact on health, to
change personal health habits, improve health status, and save the
Medicare program money. Our bill would require the Medicare Payment
Advisory Commission, known as MedPAC, to report to Congress every two
years and assess how the program needs to change over time in order to
reflect modern benefits and treatment.
Shockingly, this is information that Congress currently does not
receive on a routine basis. And this is a contributing factor to why we
find ourselves today in a quandary over the outdated nature of the
Medicare program. Quite frankly, Medicare hasn't kept up with the rest
of the health care world. While a vintage wine from the 1960s may be
desirable, a health care system that is vintage 1965 is not. We need to
do better.
Our bill would also require the Institute of Medicine (IOM) to
conduct a study every five years to assess the scientific validity of
the entire preventive benefits package. The study will be presented to
Congress in a manner that mirrors The Trade Act of 1974. The IOM's
recommendations would be presented to Congress in legislative form.
Congress would then have 60 days to review and then either accept or
reject the IOM's recommendations for changes to the Medicare program.
But Congress could not change the IOM's recommendations.
This ``fast-track'' process is a deliberate effort to get Congress
out of the business of micro-managing the Medicare program. While
limited to preventive benefits, this will offer a litmus test on a new
approach to future Medicare decision making.
In the aggregate, The Medicare Wellness Act represents the most
comprehensive legislative proposal in the 106th Congress for the
Medicare program focused on health promotion and disease prevention for
beneficiaries. It provides new screening and counseling benefits for
beneficiaries, it provides critically needed research dollars, and it
tests new treatment concepts through demonstration programs.
The Medicare Wellness Act represents sound health policy based on
sound science.
Before I conclude, I have a few final thoughts.
There are many here in Congress who argue that at a time when
Medicare faces an uncertain financial future, this is the last time to
be adding new benefits to a program that can ill afford the benefits it
currently offers. Normally I would agree with this assertion. But the
issue of prevention is different. The old adage of ``an ounce of
prevention is worth a pound of cure'' is very relevant here. Does
making preventive benefits available to Medicare beneficiaries ``cost''
money? Sure it does.
But the return on the investment, the avoidance of the pound of cure
and
[[Page S1401]]
the related improvement in quality of life is unmistakable.
Along these lines, a longstanding problem facing lawmakers and
advocates of prevention has been the position taken by the
Congressional Budget Office, as it evaluates the budgetary impact of
all legislative proposals.
Only costs incurred by the Federal Government over the next 10 years
can be considered in weighing the ``cost'' of adding new benefits. From
a public health and quality of life standpoint, this premise is
unacceptable.
Among the problems with this practice is that ``savings'' incurred by
increasing the availability and utilization of preventive benefits
often occur over a period of time greater than 10 years.
This problem is best illustrated in an examination of the
``compression of morbidity'' theory developed by Dr. James Fries of
Stanford University over 20 years ago.
According to Dr. Fries, by delaying the onset of chronic illness
among seniors, there is a resulting decrease in the length of time
illness or disability is present in the latter stages of life. This
``compression'' improves quality of life and reduces the rate of growth
in health care costs.
But, these changes are gradual and occur over an extended period of
time--10, 20, even 30 years.
With the average life expectancy of individuals who reach 65 being
nearly 20 years--20 years for women and 18 years for men--it only makes
sense to look at services and benefits that improve quality of life and
reduce costs to the Federal Government for that 20 year lifespan.
In addition to increased lifespan, a 10 year budget scoring window
doesn't factor into consideration the impact of such services on the
private sector, such as increased productivity and reduced absenteeism,
for the many seniors that continue working beyond age 65.
The bottom line is, the most important reason to cover preventive
services is to improve health.
While prevention services in isolation won't reduce costs, they will
moderate increases in the utilization and spending on more expensive
acute and chronic treatment services.
As Congress considers different ways to reform Medicare, two basic
questions regarding preventive services and the elderly must be part of
the debate.
(1) Is the value of improved quality of life worth the expenditure?
And,
(2) How important is if for the Medicare population to be able to
maintain healthy, functional and productive lives?
These are just some of the questions we must answer in the coming
debate over Medicare reform.
While improving Medicare's financial outlook for future generations
is imperative, we must do it in a way that gives our seniors the
ability to live longer, healthier and valued lives.
I believe that by pursuing a prevention strategy that addresses some
of the most fundamental risk factors for chronic illness and disability
that face seniors, we will make an invaluable contribution to the
Medicare reform debate and, more importantly, to our children and
grandchildren.
Finally, Mr. President, I would be remiss in pointing out that the
Medicare Wellness Act represents the first time in this Congress that
Republicans and Democrats have gotten together in support of a major
piece of Medicare reform legislation.
This bill represents a health care philosophy that bridges political
boundaries. It just makes sense. And you see that common sense approach
today from myself and my esteemed colleagues who have joined me in the
introduction of this bill.
Mr. President, I encourage my colleagues to join us on this important
bill and to work with us to ensure that the provisions of this bill are
reflected in any Medicare reform legislation that is debated and voted
on this year in the Senate.
Mr. JEFFORDS. Mr. President, I am pleased to join Senator
Graham today in introducing the Medicare Wellness Act of 2000. Our
nation's rapidly growing senior population and the ongoing search for
cost-effective health care have led to the development of this
important bipartisan legislation. The goal of the Medicare Wellness Act
is to increase access to preventive health services, improve the
quality of life for America's seniors, and increase the cost-
effectiveness of the Medicare program.
Congress created the Medicare program in 1965 to provide health
insurance for Americans age 65 and over. From the outset, the program
has focused on coverage for hospital services needed for an unexpected
or intensive illness. In recent years, however, a great escalation in
program expenditures and an increase in knowledge about the value of
preventive care have forced policy makers to re-evaluate the current
Medicare benefit package.
The Medicare Wellness Act adds to the Medicare program those benefits
recommended by the Institute of Medicine and the U.S. Preventive
Services Task Force. These include: screening for hypertension,
counseling for tobacco cessation, screening for glaucoma, counseling
for hormone replacement therapy, screening for vision and hearing loss,
cholesterol screening, expanded screening and counseling for
osteoporosis, and nutrition therapy counseling. These services address
the most prominent risk facing Medicare beneficiaries.
In 1997, Congress added several new preventive benefits to the
Medicare program through the Balanced Budget Act. These benefits
included annual mammography, diabetes self-management, prostate cancer
screening, pelvic examinations, and colorectal cancer screening.
Congress's next logical step is to incorporate the nine new screening
and counseling benefits in the Medicare Wellness Act. If these symptoms
are addressed regularly, beneficiaries will have a head start on
fighting the conditions they lead to, such as diabetes, lung cancer,
heart disease, blindness, osteoporosis, and many others.
Research suggests that insurance coverage encourages the use of
preventive and other health care services. The Medicare Wellness Act
also eliminates the cost-sharing requirement for new and current
preventive benefits in the program. Because screening services are
directed at people without symptoms, this will further encourage the
use of services by reducing the cost barrier to care. Increased use of
screening services will mean that problems will be caught earlier,
which will permit more successful treatment. This will save the
Medicare program money because it is cheaper to screen for an illness
and treat its early diagnosis than to pay for drastic hospital
procedures at a later date.
However, financial access is not the only barrier to the use of
preventive care services. Other barriers include low levels of
education of information for beneficiaries. That is why the Medicare
Wellness Act instructs the Secretary of Health and Human Services to
coordinate with the Centers for Disease Control and Prevention and the
Health Care Financing Administration to establish a Risk Appraisal and
Education Program within Medicare. This program will target both
current beneficiaries and individuals with high risk factors below the
age of 65. Outreach to these groups will offer questions regarding
major behaviorial risk factors, including the lack of proper nutrition,
the use of alcohol, the lack of regular exercise, the use of tobacco,
and depression. State of the art software, case managers, and nurse
hotlines will then identify what conditions beneficiaries are at risk
for, based on their individual responses to the questions, then refer
them to preventive screening services in their area and inform them of
actions they can take to lead a healthier life.
The Medicare Wellness Act also establishes the Healthy Seniors
Promotion Program. This program will bring together all the agencies
within the Department of Health and Human Services that address the
medical, social and behavorial issues affecting the elderly to increase
knowledge about and utilization of prevention services among the
elderly, and develop better ways to prevent or delay the onset of age-
related disease or disability.
Mr. President, now is the time for Medicare to catch up with current
health science. We need a Medicare program that will serve the health
care needs of America's seniors by utilizing up-to-date knowledge of
healthy aging. Effective health care must address the whole health of
an individual. A lifestyle that includes proper exercise and
[[Page S1402]]
nutrition, and access to regular disease screening ensures attention to
the whole individual, not just a solitary body part. It is time we
reaffirm our commitment to provide our nation's seniors with quality
health care.
It is my hope that my colleagues in Congress will examine this
legislation and realize the inadequately of the current package of
preventive benefits in the Medicare program. We have the opportunity to
transform Medicare from an out-dated sickness program to a modern
wellness program. I want to thank Senator Bob Graham and all the other
cosponsors of the Medicare Wellness Act who are supporting this bold
step towards successful Medicare reform.
Mr. BINGAMAN. Mr. President, I rise today to join my colleagues,
Senator Graham of Florida and Senator Jeffords of Vermont, in the
introduction of the ``Medicare Wellness Act of 2000.''
This bipartisan, bicameral measure represents a recognition of the
role that health promotion and disease prevention should play in the
care available to Medicare beneficiaries. The bill adds several new
preventative screening and counseling benefits to the Medicare program.
Specifically, the act adds screening for hypertension, counseling for
tobacco cessation, screening for glaucoma, counseling for hormone
replacement therapy, and expanded screening and counseling for
osteoporosis.
My colleagues have addressed most of these aspects of the bill so I
will focus my remarks on one additional provision that is pivotal in
achieving improved health outcomes of beneficiaries with several
chronic diseases. Specifically, the Medicare Wellness Act of 2000
provides for coverage under Part B of the Medicare program for medical
nutrition therapy services for beneficiaries who have diabetes,
cardiovascular disease, or renal disease.
Medical nutrition therapy refers to the comprehensive nutrition
services provided by registered dietitians as part of the health care
team. Medical nutrition therapy has proven to be a medically necessary
and cost effective way of treating and controlling heart disease,
stroke, diabetes, high cholesterol, and various renal diseases.
Patients who receive this therapy require fewer hospitalizations and
medications and have fewer complications.
The treatment of patients with diabetes and cardiovascular disease
accounts for a full 60 percent of Medicare expenditures. In my home
state of New Mexico, Native Americans are experiencing an epidemic of
Type II diabetes. Medical nutrition therapy is integral to their
diabetes care and to the prevention of progression of the disease.
Information from the Indian Health Service shows that medical nutrition
therapy provided by professional dietitians results in significant
improvements in medical outcomes in Type II diabetics.
Mr. President, while medical nutrition therapy services are currently
covered under Medicare Part A for inpatient services, there is no
consistent Part B coverage policy for medical nutrition.
Nutrition counseling is best conducted outside the hospital setting.
Today, coverage for nutrition therapy in ambulatory settings is at best
inconsistent, but most often, non existent.
Because of the comparatively low treatment costs and the benefits
associated with nutrition therapy, expanded coverage will improve the
quality of care, outcomes and quality of life for Medicare
beneficiaries.
Two years ago, my colleague from Idaho, Senator Craig and I requested
that the National Academy of Sciences' Institute of Medicine study the
issue of medical nutrition therapy as a benefit for Medicare
beneficiaries. The Institute of Medicine released this study last
December entitled: ``The Role of Nutrition in Maintaining Health in the
Nation's Elderly: Evaluating Coverage of Nutrition Services for the
Medicare Populations.'' This IOM study reaffirms what I have been
working toward the past few years. Namely, it recommended that medical
nutrition therapy, ``upon referral by a physician, be a reimbursable
benefit for Medicare beneficiaries.'' The study substantiates evidence
of improved patient outcomes associated with nutrition care provided by
registered dietitians.
Mr. President, I again want to thank my colleagues for including
medical nutrition therapy as a key component of the Medicare Wellness
Act. I look forward to working with them toward passage of the act this
Congress.
______
By Mr. FITZGERALD (for himself, Mr. Bayh, Mr. Abraham, Mr. Kohl,
Mr. Grassley, Mr. Durbin, Mr. Brownback, and Mr. Grams):
S. 2233. A bill to prohibit the use of, and provide for remediation
of water contaminated by, methyl tertiary butyl ether; to the Committee
on Environment and Public Works.
MTBE ELIMINATION ACT
Mr. FITZGERALD. Mr. President, I rise to introduce legislation called
the ``MTBE Elimination Act of 2000.'' As I so rise, I thank my
colleagues who have cosponsored this legislation. They are Senators
Bayh, Abraham, Kohl, Grassley, Durbin, Brownback, and Grams. I
appreciate their support and I look forward to talking to each of my
colleagues about this very important piece of legislation we are
introducing today.
Mr. President, the MTBE Elimination Act would ban all across the
country, the chemical compound which is termed MTBE for short. Its
longer chemical name is methyl tertiary butyl ether.
MTBE is one of the world's most widely used chemicals, and is found
anywhere in the United States. In fact, it is added to approximately 30
percent of our Nation's gasoline supplies. Its use in this country
dates back at least to about 1979 and was originally added to gasoline
to boost the octane. For many years, oil companies had added lead to
fuel in order to improve its performance and to boost octane. The
Federal Government banned lead in the 1970s, and ultimately it was
replaced in many cases by MTBE.
Later on, in 1990, Congress amended the Clean Air Act and President
Bush at the time signed those amendments. Those amendments required all
the smog filled large cities in this country to have an additive in
their gasoline that would make the gasoline approximately 2.7 percent
oxygen by weight. This is commonly referred to as the oxygenate
requirement in our Nation's Clean Air Act.
The purpose of that oxygenate requirement was to make the oil
companies produce, and our cars use, a cleaner burning fuel. The idea
was to clean up the smog in some of our Nation's largest and most
congested cities. That program has worked very well over the last 10
years in cleaning up the smog all across the country, in cities like
New York, Los Angeles, and San Francisco. My home State of Illinois, of
course, has a large metropolitan area in Chicago. The reformulated fuel
requirements that were implemented by the 1990 amendments to the Clean
Air Act have helped greatly in reducing the emissions from our
automobiles, in providing cleaner burning fuels, at least as far as our
air quality is concerned.
As I said earlier, about 30 percent of the gasoline used in this
country is reformulated and has an additive in it, most of which is
MTBE. In the parts of this country that are required to use
reformulated fuel, over 80 percent of them are using MTBE as their
oxygenate. The other areas are using another oxygenate known as ethanol
to meet the requirements of the Clean Air Act. In fact, Chicago and
Milwaukee both use ethanol as opposed to MTBE.
It turns out now that we have mounting evidence that MTBE, while it
works well in cleaning up smog, has a problem we had not anticipated,
and one which very regrettably had not been fully investigated before
we started down the path that encouraged a dramatic increase in the
usage of MTBE. MTBE has, in recent years, been detected in the nation's
drinking water all across the country, from the east coast to the west
coast. In fact, right now the U.S. Geological Survey is performing an
ongoing evaluation of our nation's drinking water, groundwater supplies
all across the country. They have not yet completed this survey. If you
look at this chart, in the States that are in white, the U.S.
Geological Survey analysis has not yet been performed.
But in the States that are in red, those are the States where they
have found MTBE in the groundwater. Incidentally, I believe it is
somewhere in the neighborhood of 22 States where
[[Page S1403]]
they have found methyl tertiary butyl ether in the groundwater.
In my home State of Illinois, we do not use much MTBE; ethanol is the
oxygenate of choice. But nonetheless, the Illinois Environmental
Protection Agency has been finding MTBE in our groundwater. So far,
they have found MTBE in at least 25 different cities all across the
State, and many Illinois municipalities have not tested the
groundwater. Three of these cities have had to switch their source of
drinking water and go to other wells because there was a sufficient
amount of MTBE in that water to make it undrinkable.
About a month ago, CBS News, in their program ``60 Minutes,'' did a
report on how MTBE has been turning up with greater and greater
frequency in our Nation's drinking water supplies. During that report,
which seemed to me to be very well researched, it was noticed that this
chemical, MTBE, has some very interesting properties.
Unlike most of the other components of gasoline which, when it leaks
out accidentally from underground storage tanks or out of pipes which
carry fuel--there are leaks now and then; we try to prevent them, but
they do occur--most of the components of gasoline are absorbed in the
soil and do not make it down to the ground water.
MTBE is a pesky substance, however, that resists microbial degrading
in the ground and rapidly seeks out the ground water. It resists
degrading as it finds its way to the water. Then once it gets into the
water, it rapidly spreads. It has properties that, when it is in
drinking water in very minute quantities, between 20 to 40 parts per
billion, make the drinking water undrinkable. I say undrinkable because
it makes the water smell and taste like turpentine.
There have been studies that have shown that a single cup of MTBE
renders 5 million gallons of water undrinkable. I say it makes the
water undrinkable. The fact is, we do not know exactly what health
effects it has on humans who ingest the water. Very few studies have
been done on what happens to humans who consume MTBE. There have been
studies of laboratory rats that suggest it is a possible carcinogen,
and the EPA has recognized MTBE as a possible cause of cancer.
We need to do more research on MTBE's effects on human health. We
simply do not know all that much about this chemical. However, we do
know that most people, when they smell the turpentine-like smell or
taste of it, it inspires an instant revulsion and they do not want to
drink the water. It is almost a moot point as to whether it has ill
health effects because it makes the water undrinkable. Most humans will
recoil at the thought of drinking that type of water.
In the ``60 Minutes'' segment I referred to earlier, they went to a
town in California where literally most of the town has left because
their water has this MTBE in it. Many of the businesses have closed up,
many of the people have left, and for those remaining in that
community, the State of California is trucking in fresh water for them
to drink. It is a very serious problem.
There have been a few cities around the country--I believe there is
one in the Carolinas, and also Santa Barbara, CA--where they had sued
oil companies and won judgments to clean up the ground water in which
they detected MTBE.
In order to address this alarming trend of finding this pesky,
horrible chemical in our drinking water all across the country with
increasing frequency, I, with my colleagues, am introducing the MTBE
Elimination Act. This act will do four things: First, it will phase
MTBE out gradually over 3 years. The way the bill accomplishes that is
it amends the Toxic Substances Control Act to add methyl tertiary butyl
ether to the list of proscribed toxic substances in this country.
It will eliminate the MTBE over 3 years because it will be hard to
simply switch our Nation's gasoline supply overnight. To be realistic,
it will take a period of time. The bill allows discretion for the EPA
to establish a timetable and a framework for this MTBE phase-out.
Secondly, the bill will require that gasoline which is dispensed at
the pump containing MTBE be labeled so people know when they are
filling up their car with gasoline that it contains this additive, and
this chemical is being used in their community. In many cases, of
course, people are not even aware of this chemical. They have never
heard of it. We were very surprised in Illinois. We did not think much
MTBE was even used in Illinois. Then we found it in our ground water.
Third, the bill authorizes grants for research on MTBE ground water
contamination and remediation. It directs resources to do more research
on the health effects of this chemical too. We need to know more about
this chemical in order to combat it. Right now we do not fully
understand the health risks. Most of the studies that have been done,
of which I am aware, are on laboratory mice, and there have been very
few studies, if any, on the effects to humans who ingest or inhale this
chemical.
We also need research on how we remediate the chemical, how we clean
it up because, in addition to all of its other properties, it turns out
it is very difficult to eliminate. Our normal processes for eliminating
hazardous chemicals from ground water, in many cases, according to the
literature, do not seem to work on MTBE. EPA needs to research this
issue and help the rest of the country have a body of knowledge, so
when they find MTBE contamination, they know how to clean it up or
remediate it.
The bill contains a section which expresses the sense of the Senate
that the EPA, our national Environmental Protection Agency, should
provide technical assistance, information, and matching funds to our
local communities that are testing their underground water supplies and
also trying to remediate and clean up MTBE that has been detected in
those water supplies.
Finally, as an afterthought, some of my colleagues may be asking:
What will we do about that portion of the Clean Air Act that requires
our fuel in this country, at least in the smog-filled large cities, to
have an oxygenate in it to reduce smog emissions? There is an answer.
We do have an alternative--a renewable source produced from corn or
other biomass products. It is called ethanol.
In my judgment, ethanol will allow us to meet the requirements of the
Clean Air Act all across the country, and it will not require us to
make that terrible choice between clean air and clean water. I want our
country to have clean air and clean water and never one at the expense
of the other. Ethanol, in my judgment, provides the answer to that
problem.
The USDA recently did a study using ethanol to replace MTBE all
across the country. It would mean, on average, about $1 billion in
added income to our farmers every year.
Mr. DURBIN. Would my colleague yield for a question?
Mr. FITZGERALD. Yes.
Mr. DURBIN. First, I congratulate my colleague for the introduction
of this legislation. I am happy to cosponsor it. It is truly bipartisan
legislation which is of benefit not only to the farmers in our State of
Illinois but to our Nation.
We understand, as most people do in Washington, the benefits of
ethanol when it comes to reducing air pollution. We also understand the
dangers of MTBE. Where it is used in other States, it has contaminated
water supplies.
We are in the process of working with the Environmental Protection
Agency to discuss the future of ethanol and hope it will remain strong.
I ask my colleague from Illinois--and I again congratulate him for
his leadership in this area--if he can tell me whether his legislation
on the elimination of MTBE is done on a phaseout basis or whether it is
done to a date certain?
Mr. FITZGERALD. Yes. I thank the Senator and appreciate his support.
I appreciate his cosponsorship of this legislation.
My bill would ban MTBE within 3 years after the enactment of this
law. It would leave the exact timetable up to the EPA. They could set
parameters within that 3 years. But within 3 years after the bill is
signed into law, we would expect MTBE to be gone.
Following up on that, as Senator Durbin said, we have been working
very hard, particularly with Senator Grassley, Senator Harkin, and
Senators from all over the country, in trying to clean up MTBE, and
also trying
[[Page S1404]]
to promote renewable sources of fuels, such as ethanol. That discussion
about the importance of renewable fuels is made much more important now
as we see our dependence on foreign oil and the high prices of oil in
recent weeks.
But this is an issue that has bipartisan support. Senator Durbin is a
Democrat; I am a Republican. But the ethanol issue has always been
bipartisan. I look forward to working with my friends and colleagues on
both sides of the aisle so that we can continue to work on improving
our Nation's clean air and water and also our farm economy.
Mr. President, I ask unanimous consent to print the bill in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2233
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``MTBE Elimination Act''.
SEC. 2. FINDINGS; SENSE OF THE SENATE.
(a) Findings.--Congress finds that--
(1) a single cup of MTBE, equal to the quantity found in 1
gallon of gasoline oxygenated with MTBE, renders all of the
water in a 5,000,000-gallon well undrinkable;
(2) the physical properties of MTBE allow MTBE to pass
easily from gasoline to air to water, or from gasoline
directly to water, but MTBE does not--
(A) readily attach to soil particles; or
(B) naturally degrade;
(3) the development of tumors and nervous system disorders
in mice and rats has been linked to exposure to MTBE and
tertiary butyl alcohol and formaldehyde, which are 2
metabolic byproducts of MTBE;
(4) reproductive and developmental studies of MTBE indicate
that exposure of a pregnant female to MTBE through inhalation
can--
(A) result in maternal toxicity; and
(B) have possible adverse effects on a developing fetus;
(5) the Health Effects Institute reported in February 1996
that the studies of MTBE support its classification as a
neurotoxicant and suggest that its primary effect is likely
to be in the form of acute impairment;
(6) people with higher levels of MTBE in the bloodstream
are significantly more likely to report more headaches, eye
irritation, nausea, dizziness, burning of the nose and
throat, coughing, disorientation, and vomiting as compared
with those who have lower levels of MTBE in the bloodstream;
(7) available information has shown that MTBE significantly
reduces the efficiency of technologies used to remediate
water contaminated by petroleum hydrocarbons;
(8) the costs of remediation of MTBE water contamination
throughout the United States could run into the billions of
dollars;
(9) although several studies are being conducted to assess
possible methods to remediate drinking water contaminated by
MTBE, there have been no engineering solutions to make such
remediation cost-efficient and practicable;
(10) the remediation of drinking water contaminated by
MTBE, involving the stripping of millions of gallons of
contaminated ground water, can cost millions of dollars per
municipality;
(11) the average cost of a single industrial cleanup
involving MTBE contamination is approximately $150,000;
(12) the average cost of a single cleanup involving MTBE
contamination that is conducted by a small business or a
homeowner is approximately $37,000;
(13) the reformulated gasoline program under section 211(k)
of the Clean Air Act (42 U.S.C. 7545(k)) has resulted in
substantial reductions in the emissions of a number of air
pollutants from motor vehicles, including volatile organic
compounds, carbon monoxide, and mobile-source toxic air
pollutants, including benzene;
(14) in assessing oxygenate alternatives, the Blue Ribbon
Panel of the Environmental Protection Agency determined that
ethanol, made from domestic grain and potentially from
recycled biomass, is an effective fuel-blending component
that--
(A) provides carbon monoxide emission benefits and high
octane; and
(B) appears to contribute to the reduction of the use of
aromatics, providing reductions in emissions of toxic air
pollutants and other air quality benefits;
(15) the Department of Agriculture concluded that ethanol
production and distribution could be expanded to meet the
needs of the reformulated gasoline program in 4 years, with
negligible price impacts and no interruptions in supply; and
(16) because the reformulated gasoline program is a source
of clean air benefits, and ethanol is a viable alternative
that provides air quality and economic benefits, research and
development efforts should be directed to assess
infrastructure and meet other challenges necessary to allow
ethanol use to expand sufficiently to meet the requirements
of the reformulated gasoline program as the use of MTBE is
phased out.
(b) Sense of the Senate.--It is the sense of the Senate
that the Administrator of the Environmental Protection Agency
should provide technical assistance, information, and
matching funds to help local communities--
(1) test drinking water supplies; and
(2) remediate drinking water contaminated with methyl
tertiary butyl ether.
SEC. 3. DEFINITIONS.
In this Act:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Eligible grantee.--The term ``eligible grantee''
means--
(A) a Federal research agency;
(B) a national laboratory;
(C) a college or university or a research foundation
maintained by a college or university;
(D) a private research organization with an established and
demonstrated capacity to perform research or technology
transfer; or
(E) a State environmental research facility.
(3) MTBE.--The term ``MTBE'' means methyl tertiary butyl
ether.
SEC. 4. USE AND LABELING OF MTBE AS A FUEL ADDITIVE.
Section 6 of the Toxic Substances Control Act (15 U.S.C.
2605) is amended by adding at the end the following:
``(f) Use of Methyl Tertiary Butyl Ether.--
``(1) Prohibition on use.--Effective beginning on the date
that is 3 years after the date of enactment of this
subsection, a person shall not use methyl tertiary butyl
ether as a fuel additive.
``(2) Labeling of fuel dispensing systems for mtbe.--Any
person selling oxygenated gasoline containing methyl tertiary
butyl ether at retail shall be required under regulations
promulgated by the Administrator to label the fuel dispensing
system with a notice that--
``(A) specifies that the gasoline contains methyl tertiary
butyl ether; and
``(B) provides such other information concerning methyl
tertiary butyl ether as the Administrator determines to be
appropriate.
``(3) Regulations.--As soon as practicable after the date
of enactment of this subsection, the Administrator shall
establish a schedule that provides for an annual phased
reduction in the quantity of methyl tertiary butyl ether that
may be used as a fuel additive during the 3-year period
beginning on the date of enactment of this subsection.''.
SEC. 5. GRANTS FOR RESEARCH ON MTBE GROUND WATER
CONTAMINATION AND REMEDIATION.
(a) In General.--
(1) Establishment.--There is established a MTBE research
grants program within the Environmental Protection Agency.
(2) Purpose of grants.--The Administrator may make a grant
under this section to an eligible grantee to pay the Federal
share of the costs of research on--
(A) the development of more cost-effective and accurate
MTBE ground water testing methods;
(B) the development of more efficient and cost-effective
remediation procedures for water sources contaminated with
MTBE; or
(C) the potential effects of MTBE on human health.
(b) Administration.--
(1) In general.--In making grants under this section, the
Administrator shall--
(A) seek and accept proposals for grants;
(B) determine the relevance and merit of proposals;
(C) award grants on the basis of merit, quality, and
relevance to advancing the purposes for which a grant may be
awarded under subsection (a); and
(D) give priority to those proposals the applicants for
which demonstrate the availability of matching funds.
(2) Competitive basis.--A grant under this section shall be
awarded on a competitive basis.
(3) Term.--A grant under this section shall have a term
that does not exceed 4 years.
(c) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $10,000,000 for
each of fiscal years 2001 through 2004.
Mr. GRASSLEY. Mr. President, I am pleased to join my Illinois
colleague, Senator Fitzgerald, as a cosponsor of his legislation
banning MTBE. MTBE contaminates water, and it has been found in water
throughout the United States.
With every day that passes, more water is being contaminated. Oddly
enough, we have passed a clean air bill to clean up the air, and the
oil companies have used a product to meet the requirements of the clean
air bill that contaminates the water.
But there is an additive to the gasoline that will clean up the air
as well as not contaminate the water. I will talk about that in just a
minute.
It is simple: With every day that passes, more water is being
contaminated.
Last August, the Senate soundly passed a resolution that I
cosponsored with Senator Boxer of California calling for an MTBE ban.
In the face of damaging, irresponsible action by the Clinton
administration, it is time we put some force to our Senate position.
How long must Americans suffer this dilatory charade by President
Clinton's administration, also by
[[Page S1405]]
the petroleum industry, and particularly by California officials? I say
California officials because they have asked that the Clean Air Act of
1990 be gutted.
I have intentionally held my fire until after the California primary
because I would not want anyone to misconstrue my motives in an attempt
to undermine Vice President Gore's political ambitions. But today I
think it is time to say it as it really is: President Clinton, Vice
President Gore, and the Environmental Protection Agency's
Administrator, Carol Browner, have been dragging their feet--and
dragging their feet too long.
They gave the oil and the MTBE industry everything they wanted. At
the request of big oil, they threw out regulations proposed by
President Bush which would have, by some estimates, tripled and even
quadrupled ethanol production. This was done on the first day of the
Clinton administration.
Instead, when they finally got around to putting some rules out, the
administration approved regulations that guaranteed a virtual MTBE
monopoly in the reformulated gasoline market.
This decision by the Clinton administration, way back then in the
early part of the administration, opened wide the door for petroleum
companies to use MTBE and thus contaminate our water.
With egg on its face, with an environmental disaster on its hands,
the Clinton administration continues to delay and also duck its
leadership responsibilities.
A replacement for MTBE exists today, but most oil companies refuse to
use it. The Environmental Protection Agency's Director, Carol Browner,
has been told time and time again, in every imaginable way possible,
how MTBE can be replaced, and in California totally replaced this very
day.
But she, as other Clinton-Gore officials, always seems to come up
with some sort of excuse, a reason for delay, some other hurdle.
Last week, as the congressional delegation met with our Governor from
Iowa, we were told that Carol Browner asked for more information on
this subject about the supply of an alternative to MTBE--which is
ethanol--that she needed more information. It happens to be information
that the Environmental Protection Agency already has.
The new hurdle she is creating is the question: Is there enough of
this alternative, ethanol? You might ask: Enough for what? To replace
all MTBE today or tomorrow? That is kind of insulting. It is also
incredible.
I want to illustrate how it is insulting and incredible with this
point. Imagine the following: You have a brush fire sweeping to the
city's edge, devouring home after home. Panicked citizens call 911, but
the fire engines remain silent. The home owners scream to the fire
department: Why won't you come to our rescue? The fire chief says: We
don't have enough water to save the whole city, and until we can save
all, we will save none.
It is absurd. Of course it is. Yet an equally absurd and dangerous
line has been drawn by most California big oil companies and their
political apologists. In the face of the largest environmental crisis
of this generation--which is the contamination of water by the
petroleum companies' controlled product, MTBE--Californians are being
held hostage, forced to buy water-contaminating, MTBE-laced gasoline,
even though a superior MTBE replacement is available, and available
this very day--not tomorrow, not next year, but today.
California Governor Davis' so-called ``ban'' allows MTBE to be sold
``full bore, business-as-usual'' until the end of the year 2002.
Worse yet, California legislators dropped the deadline altogether.
But why the wait? Well, we are told there is not enough of this MTBE
alternative and thus the illogical decree imposed: No MTBE will be
removed until all MTBE is removed. And with every day that passes, more
of our water is contaminated. Think of this: A mere teacup of MTBE
renders undrinkable 5 million gallons of water. CBS's ``60 Minutes,''
referred to by my colleague from Illinois, reported California has
already identified 10,000 ground water sites contaminated by MTBE and
that ``one internal study conducted by Chevron found that MTBE has
contaminated ground water at 80 percent of the 400 sites that the
company tested.''
Yet big oil holds you hostage, forcing you to buy MTBE-laced gasoline
until either the Clinton-Gore administration or Congress guts one of
the most successful Clean Air Act programs, the reformulated gasoline
oxygenate requirement. So big oil is hoping that gullible bureaucrats
and politicians conclude that MTBE is not the real problem but,
instead, the real problem happens to be the oxygenate provisions of the
1990 Clean Air Act. Get rid of the oxygenate requirement and, presto,
MTBE disappears.
People in my State are not buying that line. Iowa has no oxygenate
requirement. Yet MTBE has been found in 29 percent of our water
supplies tested. Let it be clear, let there be absolutely no
misunderstanding: Iowa's water and the water in every Senator's State
was contaminated by a product that big oil added to their gasoline, and
it was not contaminated by the Clear Air Act. Big oil did everything it
could to persuade Clinton-Gore appointees and judges in our courts to
guarantee that MTBE monopolized the Clean Air Act's oxygenate market.
Our colleagues need to understand that nearly 500 million gallons of
MTBE are sold every year throughout the United States, not to meet the
oxygenate requirements of the Clean Air Act that I have been talking
about up to this point, but as an octane enhancer in markets all over
the United States where the oxygenate requirements under the Clean Air
Act to clean up the smog don't even apply.
So your water is in danger whether you live in a city that has to
meet the oxygenate requirements of the 1990 Clean Air Act or not
because big oil uses the poison MTBE as an octane enhancer lots of
places. So that gets us to a point where they want us to believe that
changing the 1990 Clean Air Act is the solution to all the problems. I
ask, how will gutting the Clean Air Act's oxygenate requirements
protect the rest of America's water, if most gallons of gasoline have
MTBE in them for octane enhancement outside the Clean Air Act? Well,
that answer is pretty simple. It is not going to clean it up until we
get rid of all MTBE. We need to, then, ban MTBE, which this bill we are
introducing today does, not ban the Clean Air Act, or at least not gut
it by eliminating the oxygenate requirements of it, which big oil says
is the solution to our problem.
Then we get to what is the superior MTBE replacement that is
available today. My colleagues don't have to wait for me to tell them
what my answer is to that, but I will. It is ethanol, which is nothing
more than grain alcohol. Let's get that clear. We are talking about
MTBE, a poisonous product, poisoning the water in California, where the
oxygenate requirements are, but also in the rest of the country where
it is used as an octane enhancer, and grain alcohol on the other hand
that you can drink. Ethanol can be made from other things as well. It
can be made from California rice straw. It can be made from Idaho
potato waste. It can be made from Florida sugarcane, North Dakota sugar
beets, New York municipal waste, Washington wood and paper waste, and a
host of other biodegradable waste products. Ethanol is not only good
for your air, but if it did get into your water, your only big decision
would be whether to add some ice and tonic before you drink it.
As my colleagues know, I am a teetotaler, so I am not going to
pretend to advise you on the proper cocktail mixes. Today there is
enough ethanol in storage and from what can be produced from idle
ethanol facilities to displace all of the MTBE California uses in a
whole year. It is available today not tomorrow, not the year 2002. And
more facilities to produce it are in the works.
But big oil proclaims there is not enough ethanol. Translation, as
far as I can tell: We, as big oil, don't control ethanol; farmers
control it. So we don't want to use it.
They argue that ethanol is too difficult to transport. Translation:
We would rather import Middle East MTBE from halfway across the world
than transport ethanol from the Midwest of our great country. Big oil
whines: Keeping the oxygenate requirement will give ethanol a monopoly.
This is a whale of a tale, and it is kind
[[Page S1406]]
of hard to translate into sensible English. Since it takes half as much
ethanol as MTBE to produce a gallon of reformulated gasoline, big oil
will reap a 6.2-percent increase in the amount of plain gasoline used
in reformulated gasoline. So how in the world does boosting by a
whopping 6.2 percent gasoline's share of the reformulated gasoline
market constitute a monopoly for ethanol? That issue has been raised
with Senators on the environmental committee.
Currently, MTBE constitutes 3 percent of our total transportation
fuel market. Ethanol, if it replaces all MTBE, would, therefore, gain a
1.5-percent share. Think about that. A 1.5-percent market share, if it
is ethanol, is defined as a monopoly share. But a 3-percent market
share, if it is MTBE, is not a monopoly.
I think it is pretty simple to get it because the translation of this
big oil babble is this: Market share, as small as 1.5 percent, if not
controlled by big oil, shall henceforth be legally defined as a
monopoly. Market share at any level, 3 percent to 100 percent, if it is
controlled by big oil, shall never be defined as a monopoly. It is such
a bizarre proposition that a mere 1.5 percent of market equals a
monopoly.
Big oil claims ethanol is too expensive. Let me translate that for
you: We prefer--meaning oil--our cozy relationship with OPEC that
allows us to price gouge Americans rather than sell at half the price
an oxygenate controlled by American farmers and ethanol producers.
I hope you caught that. If not, you ought to brace yourself, sit down
with your cup of coffee, get anything dangerous out of your hands. The
March 7, 2000, west coast spot wholesale price for gasoline was $1.27
per gallon. MTBE sold for just over $1.17 per gallon, 10 cents less.
But ethanol came right in at the same price, $1.17 a gallon. Now,
remember, it takes twice as much MTBE as it does ethanol to meet the
Clean Air Act's oxygenate requirement. In other words, at the March 7
prices, oxygenates made from ethanol cost petroleum marketers half as
much as the oxygenate made from their product, MTBE.
So even though big oil has at its disposal an oxygenated alternate to
MTBE, which costs half as much, and that will protect our water
supplies, big oil, with the help of the Clinton administration,
continues to hold hostage the people of California and other Americans
who are forced to use MTBE.
Last summer, I asked President Clinton to announce that he would deny
California's request to waive the oxygenate requirement. I asked him to
announce that he would veto any legislation that would provide for such
a waiver. I have heard nothing on this subject. No answer to my letter
has come from the President. His silence, and that of Vice President
Gore and the rest of the administration, is very deafening.
American farmers are suffering the worst prices in about 23 to 25
years. If farmers are allowed to replace MTBE with ethanol, farm income
will jump $1 billion per year. But, no, increasing farm income through
the marketplace, both domestic and foreign, seems to be of no interest
to the Clinton-Gore administration, considering their unwillingness to
act and make these public statements that would send a clear signal, as
far as this consideration is concerned, that MTBE's days of poisoning
the water are over, replacing that with something that is safe,
something that will help the farmers, and something that will send a
clear signal to OPEC that we are done with our days being dependent
upon them for our oil supplies and our energy.
In the process of doing that, they would help clean up our
environment as well. But that doesn't seem to be of any concern to this
administration either when it comes to MTBE. It seems, unfortunately,
that the only thing on the collective mind of this administration is
the Vice President running for President, his legacy, his partisan
politics; everybody's eyes are on the next election.
So I repeat, MTBE is the problem, not the Clean Air Act, as the big
oil companies want us to believe. The answer to all this is so simple
and clear:
As our bill does, ban MTBE, but don't gut the Clean Air Act's
oxygenate requirement.
Let America's farmers fill this void with ethanol, and let them fill
it today.
It will boost farm income by $1 billion per year and help lessen our
reliance upon foreign oil, and it will not keep us at the whims of OPEC
quite so much.
It will keep our air clean, and it will protect our water supplies.
So all of those things sound good, don't they? Ethanol. It is that
simple. It is good, good, good. I might be wasting my breath, but I
will make this plea one more time. It is the same plea I made in a
letter to the President last June or July, which was: President
Clinton, reject the waiver request today and declare that you will veto
any legislation that would allow a waiver of the oxygenate requirements
of the 1990 Clean Air Act. I assure you, Mr. President, if you do that,
the water-polluting MTBE will be replaced as fast as our farmers can
deliver the ethanol, and that is pretty darned swift. Do it today,
President Clinton. Please do it today.
I yield the floor.
Mr. BAYH. Mr. President, I am pleased to join with my colleagues
today in introducing this timely and important legislation to help the
nation respond to growing concerns about the threats to public health
and the environment caused by methyl tertiary butyl ether, or MTBE.
There is gathering evidence that MTBE, which is added to gasoline to
reduce its impact on air quality, poses a threat to human health and
the environment. Preliminary testing indicates groundwater has been
contaminated in many areas of the country. The MTBE Elimination Act
provides for a three-year phase out of the use MTBE. The legislation
also provides resources for research, local testing programs, and
labeling so that we can identify the size of the problem and move
forward with meaningful solutions.
Addressing the health and environmental threats posed by MTBE is only
half of the answer. While we move to phase out MTBE, we also need to be
making decisions about the future of the reformulated fuels program and
the oxygenate requirement in the Clean Air Act. The Reformulated
Gasoline Program has significantly reduced emissions of air pollutants
from motor vehicles, including volatile organic compounds, carbon
monoxide, and mobile-source air toxics, such as benzene. It is
important that we evaluate the options available for maintaining and
enhancing these benefits.
The first step is evaluating the obvious options, ethanol. In its
assessment of oxygenate alternatives, the EPA's Blue Ribbon Panel found
that ethanol is ``an effective fuel-bending component, made from
domestic grain and potentially from recycled biomass, that provides
high octane, carbon monoxide emission benefits, and appears to
contribute to the reduction of the use of aromatics with related toxics
and other air quality benefits.'
The U.S. Department of Agriculture, in its report ``Economic Analysis
of Replacing MTBE with Ethanol in the United States, ``concluded that
ethanol production and distribution could be expanded to meet the needs
of the Reformulated Gasoline Program by 2004 with no supply
interruptions or significant price impacts.
We do not have to choose between clean air and clean water. Evidence
that MTBE presents a risk to water quality does not mean that we have
to end our efforts for cleaner fuels. Ethanol is a clean, safe
alternative that has the potential to serve a larger national market.
As a country, we are beginning to recognize the benefits that biofuels
can provide to the environment. Recent oil price increases also remind
us of how important domestic sources of energy are to our national
security. This bill is a necessary step in minimizing the public health
and environment damage attributable to MTBE. I believe it can also be
the start of a serious discussion on the opportunities that ethanol and
other biofuels provide to maximize clean, safe and economically viable
energy options for America.
______
By Mr. WARNER:
S. 2234. A bill to designate certain facilities of the United States
Postal Service; to the Committee on Governmental Affairs.
[[Page S1407]]
joel t. broyhill postal building and the joseph l. fisher post office
Mr. WARNER. Mr. President, I join my colleague in the House of
Representatives, Congressman Wolf, in introducing legislation to honor
two former Representatives from Virginia's 10th district which
designates two postal buildings in Northern Virginia after Joel T.
Broyhill and Joseph L. Fisher.
The Honorable Joel Broyhill, was the first member elected to
Virginia's newly created 10th district. He served in the House of
Representatives for twenty-two years. A native of Hopewell, Virginia,
Congressman Broyhill is also a decorated veteran and served as captain
in the 106th Infantry Division in WWII. During the war, he was taken
prisoner by the Germans and held in a POW camp after fighting in the
infamous and costly ``Battle of Bulge.''
Congressman Broyhill currently resides in Arlington, Virginia. I
believe renaming the postal building at 8409 Lee Highway in Merrifield,
Virginia would be appropriate in recognition of his honorable and
extensive political and military careers.
I would also like to honor another former Representative from the
10th District, the late Honorable Joseph L. Fisher. Congressman Fisher
had a notable political career in the local, state and federal
government.
Congressman Fisher, who held a Ph.D. in Economics from Harvard
University, began his career in public service as an economist with the
U.S. Department of State. After his service in World War II, he became
a member of the Arlington County Board. He began a three-term service
in the House of Representatives when he was elected in 1974, defeating
the incumbent Republican Joel Broyhill.
Subsequent to his service in the House, among other positions,
Congressman Fisher served as secretary of the Virginia Department of
Human Resources and was a professor of political economy at George
Mason University.
Congressman Fisher's commitment to public service should be
recognized with the designation of the post office located at 3118
Washington Boulevard in Arlington, Virginia as the Joseph L. Fisher
Post Office.
Joseph Fisher passed away in 1992 at his home in Arlington, Virginia.
He is survived by his wife, Margaret, their seven children, sixteen
grandchildren, and two great grandchildren.
I seek my colleagues to support legislation to honor these two former
members in recognition of their distinguished public service.
______
By Ms. COLLINS:
S. 2235. A bill to amend the Public Health Act to revise the
performance standards and certification process for organ procurement
organizations; to the Committee on Health, Education, Labor, and
Pensions.
organ procurement organization certification act of 2000
Ms. COLLINS. Mr. President, I rise today on behalf of myself
and my colleagues, Senators Murkowski, Dodd, Torricelli, and Hutchinson
to introduce the Organ Procurement Organization Certification Act to
improve the performance evaluation and certification process that the
Health Care Financing Administration currently uses for organ
procurement organizations (OPOs).
Recent advantages in technology have dramatically increased the
number of patients who could benefit from organ transplants.
Unfortunately, however, while there has been some interest in the
number of organ donors, the supply of organs in the United States has
not kept pace with the growing number of transplant candidates, and the
gap between transplant demand and organ supply continues to widen.
According to the United Network for Organ Sharing (UNOS), there are now
68,220 patients in the United States on the waiting list for a
transplant.
Our nation's 60 organ procurement organizations (OPOs) play a
critical role in procuring and placing organs and are therefore key to
our efforts to increase the number and quality of organs available for
transplant. They provide all of the services necessary in a particular
geographic region for coordinating the identification of potential
donors, requests for donation, and recovery and transport of organs.
The professionals in the OPOs evaluate potential donors, discuss
donation with family members, and arrange for the surgical removal of
donated organs. They are also responsible for preserving the organs and
making arrangements for their distribution according to national organ
sharing policies. Finally, the OPOs provide information and education
to medical professionals and the general public to encourage organ and
tissue donation to increase the availability of organs for
transplantation.
According to a 1999 report of the Institute of Medicine (IOM)
entitled ``Organ Procurement and Transplantation: Assessing Current
Policies and the Potential Impact of the DHHS Final Rule'', a major
impediment to greater accountability and improved performance on the
part of OPOs is the current lack of a reliable and valid method for
assessing donor potential and OPO performance.
The HCFA's current certification process for OPOs sets an arbitrary,
population-based performance standard for certifying OPOs based on
donors per million of population in their service areas. It sets a
standard for acceptable performance based on five criteria: donors
recovered per million, kidneys recovered per million, kidneys
transplanted per million, extrarenal organs (heart, liver, pancreas and
lungs) recovered per million, and extrarenal organs transplanted per
million. The HCFA assesses the OPOs' adherence to these standards every
two years. Each OPO must meet at least 75 percent of the national mean
for four of these five categories to be recertified as the OPO for a
particular area and to receive Medicare and Medicaid payments. Without
HCFA certification, an OPO cannot continue to operate.
The GAO, the IOM, the Harvard School of Public Health and others all
have criticized HCFA's use of this population-based standard to measure
OPO performance. According to the GAO, ``HCFA's current performance
standard does not accurately assess OPOs' ability to meet the goal of
acquiring all usable organs because it is based on the total
population, not the number of potential donors, within the OPOs'
service areas.''
OPO service areas vary widely in the distribution of deaths by cause,
underlying health conditions, age, and race. These variations can pose
significant advantages or disadvantages to an OPO's ability to procure
organs, and a major problem with HCFA's current performance assessment
is that it does not account for these variations. An extremely
effective OPO that is getting a high yield of organs from the potential
donors in its service area may appear to be performing poorly because
it has a disproportionate share of elderly people or a high rate of
people infected with HIV or AIDS, which eliminates them for
consideration as an organ donor. At the same time, an ineffective OPO
may appear to be performing well because it is operating in a service
area with a high proportion of potential donors.
For example, organ donors typically die from head trauma and
accidental injuries, and these rates can vary dramatically from region
to region. According to the Centers for Disease Control and Prevention
(CDC), in 1991, the number of drivers fatally injured in traffic
accidents in Maine was 15.54 per 100,000 population. In Alabama,
however, it was 29.56, giving the OPO serving that state a tremendous
advantage over the New England Organ Bank, which serves Maine, but not
for a very good reason!
Use of this population-based method to evaluate OPO performance may
well result in the decertification of OPOs that are actually excellent
performers. Under HCFA's current regulatory practice, OPOs are
decertified if they fail to meet the 75th percentile of the national
means on 4 of the 5 performance areas. In this process, which resembles
a game of musical chairs, it is a mathematical certainty that some OPOs
will fail in each cycle, no matter how much they might individually
improve.
Moreover, unlike other HCFA certification programs, the certification
process for OPOs lacks any provision for corrective action plans to
remedy deficient performance and also lacks a clearly defined due
process component for resolving conflicts. The current system therefore
forces OPOs to compete on the basis of an imperfect grading system,
with no guarantee of an opportunity for fair hearing based on their
actual performance. This situation pressures many OPOs to focus on the
[[Page S1408]]
certification process itself rather than on activities and methods to
increase donation, undermining what should be the overriding goal of
the program. Moreover, the current two-year cycle--which is shorter
than other certification programs administered by HCFA--provides little
opportunity to examine trends and even less incentive for OPOs to mount
long-term interventions.
The legislation we are introducing today has three major objectives.
First, it imposes a moratorium on the current recertification process
for OPOs and the use of population-based performance measurements.
Under our bill, the certification of qualified OPOs will remain in
place through January 1, 2002, for those OPOs that have been certified
as a January 1, 2000, and that meet other qualification requirements
apart from the current performance standards. Second, the bill requires
the Secretary of Health and Human Services to promulgate new rules
governing OPO recertification by January 1, 2002. These new rules are
to rely on outcome and process performance measures based on evidence
of organ donor potential and other relevant factors, and
recertification for OPOs shall not be required until they are
promulgated. Finally, the bill provides for the filing and approval of
a corrective action plan by an OPO that fails to meet the standards, a
grace period to permit corrective action, an opportunity to appeal a
decertification to the Secretary on substantive and procedural grounds
and a four-year certification cycle.
Mr. President, the bill we are introducing today makes much needed
improvements in the flawed process that HCFA currently uses to certify
and assess OPO performance, and I urge all of my colleagues to join us
as cosponsors.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2235
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Organ Procurement
Organization Certification Act of 2000''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Organ procurement organizations play an important role
in the effort to increase organ donation in the United
States.
(2) The current process for the certification and
recertification of organ procurement organizations conducted
by the Department of Health and Human Services has created a
level of uncertainty that is interfering with the
effectiveness of organ procurement organizations in raising
the level of organ donation.
(3) The General Accounting Office, the Institute of
Medicine, and the Harvard School of Public Health have
identified substantial limitations in the organ procurement
organization certification and recertification process and
have recommended changes in that process.
(4) The limitations in the recertification process include:
(A) An exclusive reliance on population-based measures of
performance that do not account for the potential in the
population for organ donation and do not permit consideration
of other outcome and process standards that would more
accurately reflect the relative capability and performance of
each organ procurement organization.
(B) An immediate decertification of organ procurement
organizations solely on the basis of the performance
measures, without an appropriate opportunity to file and a
grace period to pursue a corrective action plan.
(C) A lack of due process to appeal to the Secretary of
Health and Human Services for recertification on either
substantive or procedural grounds.
(5) The Secretary of Health and Human Services has the
authority under section 1138(b)(1)(A)(i) of the Social
Security Act (42 U.S.C. 1320b-8(b)(1)(A)(i)) to extend the
period for recertification of an organ procurement
organization from 2 to 4 years on the basis of its past
practices in order to avoid the inappropriate disruption of
the nation's organ system.
(6) The Secretary of Health and Human Services can use the
extended period described in paragraph (5) for
recertification of all organ procurement organizations to--
(A) develop improved performance measures that would
reflect organ donor potential and interim outcomes, and to
test these measures to ensure that they accurately measure
performance differences among the organ procurement
organizations; and
(B) improve the overall certification process by
incorporating process as well as outcome performance
measures, and developing equitable processes for corrective
action plans and appeals.
SEC. 3. CERTIFICATION AND RECERTIFICATION OF ORGAN
PROCUREMENT ORGANIZATIONS.
Section 371(b)(1) of the Public Health Service Act (42
U.S.C. 273(b)(1)) is amended:
(1) by redesignating subparagraphs (D) through (G) as
subparagraphs (E) through (H), respectively;
(2) by realigning the margin of subparagraph (F) (as so
redesignated) so as to align with subparagraph (E) (as so
redesignated); and
(3) by inserting after subparagraph (C) the following:
``(D) notwithstanding any other provision of law, has met
the other requirements of this section and has been certified
or recertified by the Secretary within the previous 4-year
period as meeting the performance standards to be a qualified
organ procurement organization through a process that
either--
``(i) granted certification or recertification within such
4-year period with such certification or recertification in
effect as of January 1, 2000, and remaining in effect through
the earlier of--
``(I) January 1, 2002; or
``(II) the completion of recertification under the
requirements of clause (ii); or
``(ii) is defined through regulations that are promulgated
by the Secretary by not later than January 1, 2002, that--
``(I) require recertifications of qualified organ
procurement organizations not more frequently than once every
4 years;
``(II) rely on outcome and process performance measures
that are based on empirical evidence of organ donor potential
and other related factors in each service area of qualified
organ procurement organizations;
``(III) use multiple outcome measures as part of the
certification process;
``(IV) provide for the filing and approval of a corrective
action plan by a qualified organ procurement organization
that fails to meet the performance standards and a grace
period of not less than 3 years during which such
organization can implement the corrective action plan without
risk of decertification; and
``(V) provide for a qualified organ procurement
organization to appeal a decertification to the Secretary on
substantive and procedural grounds;''.
______
By Mr. FRIST (for himself and Mr. Dodd):
S. 2236. A bill to establish programs to improve the health and
safety of children receiving child care outside the home, and for other
purposes; to the Committee on Health, Education, Labor, and Pensions.
day care health and safety improvement act of 2000
Mr. FRIST. Mr. President, each day, more than 13 million children
under the age of 6 spend some part of their day in child care. In my
home state of Tennessee 264,000 children will attend day care, and half
of all children younger than three will spend some or all of their day
being cared for by someone other than their parents. With these large
number of children receiving child care services, there has been some
evidence to suggest that we need to work to make these settings safer
while improving the health of children in child care settings.
The potential danger in child care settings has been evident in my
home state of Tennessee. Tragically, within the span of 2 years, there
have been 4 deaths in child care settings in Memphis, Tennessee.
Overall, reports of abandoned, mistreated, and unnecessarily endangered
children have been reported in the Tennessee press over the last few
years. I salute the Memphis Commercial Appeal, for their in-depth
reporting on day care health and safety issues which has helped bring
this serious matter to public attention.
However, I would caution that this is not just a concern in Memphis
or Tennessee; it is nationwide and it needs to be addressed. There is
alarming evidence to suggest that more must be done to improve the
health and safety of children in child care settings.
For example, a 1998 Consumer Product Safety Commission Study revealed
that two-thirds of the 200 licensed child care settings investigated
exhibited safety hazards, such as insufficient child safety gates,
cribs with soft bedding, and unsafe playgrounds.
In 1997 alone, 31,000 children ages 4 and younger were treated in
hospital emergency rooms for injuries sustained in child care or school
settings. And, quite tragically, since 1990, more than 56 children have
died in child care settings nationwide.
Child care health and safety issues are regulated at the state and
local levels, which work diligently to ensure that child care settings
are as safe as possible. I have worked closely with the Tennessee
Department of Human
[[Page S1409]]
Services on how best to address the issue and quickly realized one of
the main problems was the lack of resources that the state could draw
upon to improve health and safety.
To help address this issue and protect our children, I have joined
with Senator Dodd, the recognized leader in Congress on child care
issues, to introduce the ``Children's Day Care Health and Safety
Improvement Act,'' which will establish a state block grant program,
authorizing $200 million for states to carry out activities related to
the improvement of the health and safety of children in child care
settings.
These grants may be used for the following activities:
To train and educate child care providers to prevent injuries and
illnesses and to promote health-related practices;
To improve and enforce child care provider licensing, regulation, and
registration, by conducting more inspections of day care providers to
ensure that they are carrying out state and local guidelines to ensure
that our children are safe;
To rehabilitate child care facilities to meet health and safety
standards, like the proper placement of fire exits and smoke detectors,
the proper disposal of sewage and garbage, and ensuring that play
ground equipment is safe;
To employ health consultants to give health and safety advice to
child care providers, such as CPR training, first aid training,
prevention of sudden infant death syndrome, and how to recognize the
signs of child abuse and neglect;
To provide assistance to enhance child care providers' ability to
serve children with disabilities;
To conduct criminal background checks on child care providers, to
ensure that day care providers are credible and reliable as they care
for our children;
To provide information to parents on what factors to consider in
choosing a safe and healthy day care setting for their children.
Parents must know that the setting they are choosing have a proven
safety record; and
To improve the safety of transportation of children in child care.
I am pleased that Tennessee is carrying out many of the activities
authorized under the ``Children's Day Care Health and Safety Act.''
Under this bill, Tennessee would receive an estimated $4.2 million to
help expand health and safety activities.
Mr. President, as a father, I understand the parental bond. A
parent's number one concern is the safety, protection and health of
their children. Parents need to be reassured their children are safe
when they rely on others to care for their children. I am hopeful that
this legislation will give Tennessee, and all states, the needed
resources to implement necessary reforms and activities which they
determine will improve the health and safety conditions of child care
providers as they care for our children.
I want to thank Senator Dodd for joining me in this effort and for
the work of his staff, Jeanne Ireland. I would also like to thank the
American Academy of Pediatrics, the Children's Defense Fund and the
National Association for the Education of Young children for their
input and letters of support for this bill. I would also like to thank
Governor Sundquist and members of the Tennessee Department of Human
Services, especially, Ms. Deborah Neill, the Director of Child Care,
Adult and Community Programs, for their input on this important and
needed legislation. And finally, I would like to thank and acknowledge
the assistance of the Mayor of Memphis, the Honorable W. W. Herenton
and his staff, who have been of great help in developing this
legislation.
Mr. President, I ask unanimous consent that the text of the bill and
letters of support be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 2236
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Children's Day Care Health
and Safety Improvement Act''.
SEC. 2. FINDINGS.
Congress finds that--
(1) of the 21,000,000 children under age 6 in the United
States, almost 13,000,000 spend some part of their day in
child care;
(2) a review of State child care regulations in 47 States
found that more than half of the States had inadequate
standards or no standards for \2/3\ of the safety topics
reviewed;
(3) a research study conducted by the Consumer Product
Safety Commission in 1998 found that \2/3\ of the 200
licensed child care settings investigated in the study
exhibited at least 1 of 8 safety hazards investigated,
including insufficient child safety gates, cribs with soft
bedding, and unsafe playground surfacing;
(4) compliance with recently published voluntary national
safety standards developed by public health and pediatric
experts was found to vary considerably by State, and the
States ranged from a 20 percent to a 99 percent compliance
rate;
(5) in 1997, approximately 31,000 children ages 4 and
younger were treated in hospital emergency rooms for injuries
in child care or school settings;
(6) the Consumer Product Safety Commission reports that at
least 56 children have died in child care settings since
1990;
(7) the American Academy of Pediatrics identifies safe
facilities, equipment, and transportation as elements of
quality child care; and
(8) a research study of 133 child care centers revealed
that 85 percent of the child care center directors believe
that health consultation is important or very important for
child care centers.
SEC. 3. DEFINITIONS.
In this Act:
(1) Child with a disability; infant or toddler with a
disability.--The terms ``child with a disability'' and
``infant or toddler with a disability'' have the meanings
given the terms in section 602 of the Individuals with
Disabilities Education Act (20 U.S.C. 1401).
(2) Eligible child care provider.--The term ``eligible
child care provider'' means a provider of child care services
for compensation, including a provider of care for a school-
age child during non-school hours, that--
(A) is licensed, regulated, registered, or otherwise
legally operating, under State and local law; and
(B) satisfies the State and local requirements,
applicable to the child care services the provider provides.
(3) Family child care provider.--The term ``family child
care provider'' means 1 individual who provides child care
services for fewer than 24 hours per day, as the sole
caregiver, and in a private residence.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(5) State.--The term ``State'' means any of the several
States of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, the United States Virgin
Islands, Guam, American Samoa, and the Commonwealth of the
Northern Mariana Islands.
SEC. 4. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this
Act $200,000,000 for fiscal year 2001 and such sums as may be
necessary for each subsequent fiscal year.
SEC. 5. PROGRAMS.
The Secretary shall make allotments to eligible States
under section 6. The Secretary shall make the allotments to
enable the States to establish programs to improve the health
and safety of children receiving child care outside the home,
by preventing illnesses and injuries associated with that
care and promoting the health and well-being of children
receiving that care.
SEC. 6. AMOUNTS RESERVED; ALLOTMENTS.
(a) Amounts Reserved.--The Secretary shall reserve not more
than \1/2\ of 1 percent of the amount appropriated under
section 4 for each fiscal year to make allotments to Guam,
American Samoa, the United States Virgin Islands, and the
Commonwealth of the Northern Mariana Islands to be allotted
in accordance with their respective needs.
(b) State Allotments.--
(1) General rule.--From the amounts appropriated under
section 4 for each fiscal year and remaining after
reservations are made under subsection (a), the Secretary
shall allot to each State an amount equal to the sum of--
(A) an amount that bears the same ratio to 50 percent of
such remainder as the product of the young child factor of
the State and the allotment percentage of the State bears to
the sum of the corresponding products for all States; and
(B) an amount that bears the same ratio to 50 percent of
such remainder as the product of the school lunch factor of
the State and the allotment percentage of the State bears to
the sum of the corresponding products for all States.
(2) Young child factor.--In this subsection, the term
``young child factor'' means the ratio of the number of
children under 5 years of age in a State to the number of
such children in all States, as provided by the most recent
annual estimates of population in the States by the Census
Bureau of the Department of Commerce.
(3) School lunch factor.--In this subsection, the term
``school lunch factor'' means the ratio of the number of
children who are receiving free or reduced price lunches
under the school lunch program established under the National
School Lunch
[[Page S1410]]
Act (42 U.S.C. 1751 et seq.) in the State to the number of
such children in all States, as determined annually by the
Department of Agriculture.
(4) Allotment percentage.--
(A) In general.--For purposes of this subsection, the
allotment percentage for a State shall be determined by
dividing the per capita income of all individuals in the
United States, by the per capita income of all individuals in
the State.
(B) Limitations.--If an allotment percentage determined
under subparagraph (A) for a State--
(i) is more than 1.2 percent, the allotment percentage of
the State shall be considered to be 1.2 percent; and
(ii) is less than 0.8 percent, the allotment percentage of
the State shall be considered to be 0.8 percent.
(C) Per capita income.--For purposes of subparagraph (A),
per capita income shall be--
(i) determined at 2-year intervals;
(ii) applied for the 2-year period beginning on October 1
of the first fiscal year beginning after the date such
determination is made; and
(iii) equal to the average of the annual per capita incomes
for the most recent period of 3 consecutive years for which
satisfactory data are available from the Department of
Commerce on the date such determination is made.
(c) Data and Information.--The Secretary shall obtain from
each appropriate Federal agency, the most recent data and
information necessary to determine the allotments provided
for in subsection (b).
(d) Definition.--In this section, the term ``State''
includes only the several States of the United States, the
District of Columbia, and the Commonwealth of Puerto Rico.
SEC. 7. STATE APPLICATIONS.
To be eligible to receive an allotment under section 6, a
State shall submit an application to the Secretary at such
time, in such manner, and containing such information as the
Secretary may require. The application shall contain
information assessing the needs of the State with regard to
child care health and safety, the goals to be achieved
through the program carried out by the State under this Act,
and the measures to be used to assess the progress made by
the State toward achieving the goals.
SEC. 8. USE OF FUNDS.
(a) In General.--A State that receives an allotment under
section 6 shall use the funds made available through the
allotment to carry out 2 or more activities consisting of--
(1) providing training and education to eligible child care
providers on preventing injuries and illnesses in children,
and promoting health-related practices;
(2) strengthening licensing, regulation, or registration
standards for eligible child care providers;
(3) assisting eligible child care providers in meeting
licensing, regulation, or registration standards, including
rehabilitating the facilities of the providers, in order to
bring the facilities into compliance with the standards;
(4) enforcing licensing, regulation, or registration
standards for eligible child care providers, including
holding increased unannounced inspections of the facilities
of those providers;
(5) providing health consultants to provide advice to
eligible child care providers;
(6) assisting eligible child care providers in enhancing
the ability of the providers to serve children with
disabilities and infants and toddlers with disabilities;
(7) conducting criminal background checks for eligible
child care providers and other individuals who have contact
with children in the facilities of the providers;
(8) providing information to parents on what factors to
consider in choosing a safe and healthy child care setting;
or
(9) assisting in improving the safety of transportation
practices for children enrolled in child care programs with
eligible child care providers.
(b) Supplement, not Supplant.--Funds appropriated pursuant
to the authority of this Act shall be used to supplement and
not supplant other Federal, State, and local public funds
expended to provide services for eligible individuals.
SEC. 9. REPORTS.
Each State that receives an allotment under section 6 shall
annually prepare and submit to the Secretary a report that
describes--
(1) the activities carried out with funds made available
through the allotment; and
(2) the progress made by the State toward achieving the
goals described in the application submitted by the State
under section 7.
____
American Academy of Pediatrics,
Washington, DC, March 8, 2000.
Hon. Christopher Dodd,
U.S. Senate, Washington, DC.
Hon. Bill Frist,
U.S. Senate, Washington, DC.
Dear Senators Dodd and Frist: On behalf of the 55,000
members of the American Academy of Pediatrics, I would like
to applaud you for introducing the ``Children's Day Care
Health and Safety Improvement Act.''
The Academy and its members, along with many others, have
been working for years attempting to ensure that all children
receive high-quality child care and early education. Yet, the
statistics about the health and safety of child care setting
are very disturbing. Multiple studies have found that many
child care arrangements not only fail to give children the
type of intellectual stimulation and emotional support they
need, but actually compromise the health and safety of the
youngsters in their care.
One review of state child care regulations in 47 states
found that more than half of the states' safety-related
regulations had inadequate or no standards for 24 out of the
36 safety topics examined. Most notable were the inattention
to playground safety, choking hazards, and firearms. Studies
of child care settings themselves have also been
disheartening. One four-state study found that only one in
seven child care centers (14%) were rated as good quality.
Another study found that 13 percent of regulated and 50
percent of nonregulated family child care providers offer
care that is inadequate. The Consumer Product Safety
Commission reports that about 31,000 children, 4 years old
and younger, were treated in U.S. hospital emergency rooms
for injuries at child care/school settings in 1997, and that
the agency knows of at least 56 children who have died in
child care setting since 1990.
By providing states with funds for activities specifically
aimed at improving the health and safety of child care, your
bill should help to reduce the incidence of preventable
illness, injury, disability, and even death, for the millions
of children who spend their days in out-of-home child care.
The ``Children's Day Care Health and Safety Improvement
Act'' is much-needed legislation, and we look forward to
working with you to support its enactment. Thank you for your
continued dedication to improving children's lives.
Sincerely,
Donald E. Cook,
President,
____
Children's Defense Fund,
Washington, DC, March 8, 2000.
Hon. Bill Frist,
U.S. Senate, Washington, DC.
Dear Senator Frist: Given the importance of high quality
child care to millions of young children and their families,
the Children's Defense Fund welcomes the introduction of the
Children's Day Care Health and Safety Improvement Act. The
bill recognizes the wide range of activities that must be
addressed in order to ensure the health and safety for
children in child care. New resources to states targeted on
these various activities will make a significant impact on
their efforts to move forward.
We look forward to working with you towards the passage of
this important bill. Thank you for standing up for children.
Sincerely yours,
Marian Wright Edelman.
____
Children's Defense Fund,
Washington, DC, March 8, 2000.
Hon. Christopher Dodd,
U.S. Senate, Washington, DC.
Dear Senator Dodd: Given the importance of high quality
child care to millions of young children and their families,
the Children's Defense Fund welcomes the introduction of the
Children's Day Care Health and Safety Improvement Act. The
bill recognizes the wide range of activities that must be
addressed in order to ensure the health and safety for
children in child care. New resources to states targeted on
these various activities will make a significant impact on
their efforts to move forward.
We look forward to working with you towards the passage of
this important bill. Thank you for standing up for children.
Sincerely yours,
Marian Wright Edelman.
____
National Association for the
Education of Young Children,
Washington, DC, March 9, 2000.
Hon. Christopher Dodd,
U.S. Senate, Washington, DC.
Hon. William Frist,
U.S. Senate, Washington, DC.
Dear Senators Dodd and Frist: The National Association for
the Education of Young Children (NAEYC) is committed to
ensuring excellence in early childhood education, and to
working with health and other providers to support families
and children's well being. We are pleased that you share our
concerns, about the need to improve the health and safety of
children in a variety of child care settings and support a
federal partnership with states, communities, and providers
in meeting that goal.
The Child Care Health and Safety Improvement Act that you
will be introducing today seeks to strengthen state licensing
and other regulatory standards and enforcement, linkages
between child care providers and health services providers,
and training to child care providers in injury prevention and
health promotion. This legislation addresses many of our
concerns and reflects NAEYC principles for ensuring that
child care settings are healthy and safe learning
environments.
As this bill moves forward, we would be happy to work to
make further improvements in the legislation.
Sincerely,
Adele Robinson,
Director of Policy Development.
Mr. DODD. Mr. President, I am pleased to join Senator Frist in
introducing The Children's Day Care Health and Safety Act, legislation
that I believe will have a significant impact on the well-being of the
13 million children who spend some part of every day in child care.
[[Page S1411]]
Each morning, millions of parents drop their children off at a child
care center, a neighbor's home, or their church's day care center,
assuming--or at least hoping--that their children will be safe and well
cared for. And, in the vast majority of circumstances that's the case.
But, unfortunately, there is alarming evidence to suggest that, far too
often, unsafe child care settings are compromising the health of our
children.
In 1997 alone, 31,000 children ages 4 and younger were treated in
hospital emergency rooms for injuries sustained in child care or school
settings. Since 1990, more than 55 children have died while in child
care settings.
Perhaps most tragically, many of these deaths and injuries were most
likely preventable--if providers were knowledgeable about basic health
and safety practices and if states did a better job of developing and
enforcing strong health and safety regulations.
Almost all child care providers want to give good care to the
children in their charge. Despite the fact that we pay child care
providers abysmally--typically below poverty wages with no paid sick
leave--individuals join this profession because they love children and
want to help them grow and thrive. But, we do far too little to support
providers in making sure that the environment they provide to our
children is a safe and healthy one.
Many child care providers are unaware of the importance of removing
soft bedding from cribs--which presents a suffocation hazard for
infants and increases the likelihood of child dying from SIDS. Many
child care providers are also unaware of the need to place window-blind
cords out of reach. Consequently, one child every month strangles in
the loop of a cord.
An investigation by the Consumer Product Safety Commission revealed
that two-thirds of licensed child care settings surveyed exhibited
these type of safety hazards, as well as other, such as insufficient
child safety gates and unsafe playgrounds.
Some states have taken action to improve health and safety practices.
For example, Connecticut requires child care centers to receive at
least monthly visits from a nurse or pediatrician, who can advise
providers on concerns ranging from the basics, like the importance of
handwashing after diaper-changing, to more complex issues, such as how
to accommodate the special needs of a child with a disability.
But, many states are hard-pressed simply to meet the enormous demand
for child care from working families and families transitioning off
welfare. With all the pressure to create child care slots and to help
families find any kind of care, unfortunately, child care health and
safety often becomes an afterthought.
A survey of state child care standards found that only one-third of
states had minimally acceptable child care quality regulations. Two-
thirds of states had regulations that didn't even address the basics--
provider training, safe environments and appropriate ratios. And in
many cases, even when there are good standards on the books,
enforcement is lax.
Too often we view finding safe, high quality child care as a problem
parents should struggle with on their own. It's time we recognize that
unsafe child care is a public health crisis, not a personal problem.
That's why I'm so pleased to join Senator Frist today in introducing
legislation that would provide grants to the states to reduce child
care health and safety hazards. Grants could be used for a broad range
of activities that we know have the greatest impact on health and
safety, such as training and educating providers on injury and illness
prevention; improving health and safety standards; improving
enforcement of standards, including increased surprise inspections;
renovating child care centers and family day care homes; helping
providers serve children with disabilities; and conducting criminal
background checks on child care providers.
I am also pleased that this legislation has been endorsed by the
American Academy of Pediatrics, the Children's Defense Fund, and the
National Association for the Education of Young Children.
Sadly just as our children grow--the number of child care abuses and
hazards has grown over the years, as well. This measure can help ensure
that critically important safeguards are provided so that day care is a
safe haven, not a hazard.
______
By Mr. CRAIG:
S. 2237. A bill to amend the Internal Revenue Code of 1986 to provide
for the deductibility of premiums for any medigap insurance policy of
Medicare+Choice plan which contains an outpatient prescription drug
benefit, and to amend title XVIII of the Social Security Act to provide
authority to expand existing medigap insurance policies; to the
Committee on Finance.
SENIORS' SECURITY ACT OF 2000
Mr. CRAIG. Mr. President, I rise today to introduce the
``Seniors' Security Act of 2000--a bill that will address the growing
problem of prescription drug coverage for senior citizens.
As we are all aware, seniors' access to prescription drugs is an
important issue. Currently, traditional fee-for service Medicare covers
few drugs for seniors. At the same time, however, prescription drugs
are an increasing component of seniors' health care. For these reasons,
I believe that it is time Congress worked to increase American seniors'
access to prescription drugs.
The Senior's Security Act of 2000 will increase seniors' access to
prescription drugs in two ways. First, it will extend tax equity to
seniors by allowing them to deduct the cost of health insurance that
contains a qualified prescription drug benefit. We already provide such
favorable tax treatment for employer-provided health insurance and are
moving toward doing so for the self-employed. If we are truly concerned
about seniors' access to prescription drugs, we should do the same for
them.
In addition, SSA 2000 will also allow both current and future seniors
to deduct the cost of long-term care insurance from their taxes and
make long-term care insurance available through employer-provided
flexible spending accounts (FSAs).
SSA 2000 also provides for the design by National Association of
Insurance Commissioners (NAIC) of additional Medigap policies in order
to make prescription drug coverage more accessible and affordable. This
process follows that which produced the existing Medigap policies. SSA
2000 also directs the Medicare Payment Advisory Commission (MedPAC) to
analyze and report on the salient issues in the design of prescription
drug benefit policies. MedPAC is directed to issue their findings in a
June 1, 2000 report to Congress and the NAIC in order to aid in
designing new Medigap policies.
I believe SSA 2000 will make prescription drug coverage cheaper, both
directly and indirectly. More than 18 million seniors have an income
tax liability that can be reduced by this reform; by increasing the
number of participants and making new Medigap policies a available, the
bill will indirectly reduce the cost of coverage, as well. Unlike some
other proposed reform measures in this area, it preserves and
strengthens the private insurance market--it contains no mandates, no
price controls, and preserve all existing Medigap policies--rather than
jeopardizing or eliminating it.
This bill does not attempt to address the issue of prescription drug
coverage for every senior; instead, it is the answer for a portion of
the senior population who have been paying at least part of the costs
for their health care and prescription drugs, but still need and
deserve to have a reduction in their out-of-pocket expenses. The
Seniors' Security Act of 2000 is the best way to provide relief to this
group of seniors, while at the same time continuing to work towards
solutions for those seniors who aren't as economically secure.
Mr. President, I ask unanimous consent that a copy of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2237
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Seniors'
Security Act of 2000''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
[[Page S1412]]
Sec. 2. Deduction for premiums for medigap insurance policies and
Medicare+Choice plans containing outpatient prescription
drug benefits and for long-term care insurance.
Sec. 3. Determination of annual actuarial value of drug benefits
covered under a Medicare+Choice plan and a medigap
policy.
Sec. 4. Inclusion of qualified long-term care insurance contracts in
cafeteria plans and flexible spending arrangements.
Sec. 5. Authority to provide for additional medigap insurance policies.
SEC. 2. DEDUCTION FOR PREMIUMS FOR MEDIGAP INSURANCE POLICIES
AND MEDICARE+CHOICE PLANS CONTAINING OUTPATIENT
PRESCRIPTION DRUG BENEFITS AND FOR LONG-TERM
CARE INSURANCE.
(a) In General.--Part VII of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 (relating to additional
itemized deductions) is amended by redesignating section 222
as section 223 and by inserting after section 221 the
following:
``SEC. 222. PREMIUMS FOR MEDIGAP INSURANCE POLICIES AND
MEDICARE+CHOICE PLANS CONTAINING OUTPATIENT
PRESCRIPTION DRUG BENEFITS AND FOR LONG-TERM
CARE INSURANCE.
``(a) Deduction.--
``(1) In general.--There shall be allowed as a deduction an
amount equal to 100 percent of the amount paid during the
taxable year for--
``(A) any medicare supplemental policy (as defined in
section 1882(g)(1) of the Social Security Act) which contains
an outpatient prescription drug benefit with an annual
actuarial value that is equal to or greater than $500,
``(B) any Medicare+Choice plan (as defined in section
1859(b)(1) of such Act) which contains an outpatient
prescription drug benefit with an annual actuarial value that
is equal to or greater than $500, and
``(C) any coverage limited to qualified long-term care
services (as defined in section 7702B(c)) or any qualified
long-term care insurance contract (as defined in section
7702B(b)).
``(2) Inflation adjustment.--
``(A) In general.--In the case of any calendar year
beginning after 2000, each of the dollar amounts in
subparagraphs (A) and (B) of paragraph (1) shall be increased
by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) an adjustment for changes in per capita expenditures
under title XVIII of the Social Security Act for prescription
drugs as determined under the most recent Health Care
Financing Administration National Health Expenditure
projection.
``(B) Rounding.--If any dollar amount after being increased
under subparagraph (A) is not a multiple of $10, such dollar
amount shall be rounded to the nearest multiple of $10.
``(b) Limitations.--
``(1) Deduction not available to individuals eligible for
employer-subsidized coverage.--
``(A) In general.--In any taxable year--
``(i) subsection (a) shall not apply with respect to any
policy or coverage described in paragraph (1)(A) or (1)(B) of
such subsection if in such taxable year the taxpayer is
eligible to participate in any employer-subsidized plan for
individuals age 65 or older which contains an outpatient
prescription drug benefit described in such subsection, and
``(ii) subsection (a) shall not apply with respect to any
policy or coverage described in paragraph (1)(C) of such
subsection if in such taxable year the taxpayer is eligible
to participate in any employer-subsidized plan which includes
coverage for qualified long-term care services (as so
defined) or any qualified long-term care insurance contract
(as so defined).
``(B) Employer-subsidized plan.--For purposes of
subparagraph (A)--
``(i) In general.--The term `employer-subsidized plan'
means any plan described in subparagraph (A)--
``(I) which is maintained by any employer (or former
employer) of the taxpayer or of the spouse of the taxpayer,
and
``(II) 50 percent or more of the cost of the premium of
which (determined under section 4980B) is paid or incurred by
the employer.
``(ii) Employer contributions to cafeteria plans, flexible
spending arrangements, and medical savings accounts.--
Employer contributions to a cafeteria plan, a flexible
spending or similar arrangement, or a medical savings account
which are excluded from gross income under section 106 shall
be treated for purposes of this subparagraph as paid by the
employer.
``(C) Aggregation of plans of employer.--A health plan
which is not otherwise described in subparagraph (A) shall be
treated as described in such subparagraph if such plan would
be so described if all health plans of persons treated as a
single employer under subsection (b), (c), (m), or (o) of
section 414 were treated as one health plan.
``(D) Separate application to health insurance and long-
term care insurance.--Subparagraphs (A) and (C) shall be
applied separately with respect to--
``(i) plans which include coverage limited to qualified
long-term care services or are qualified long-term care
insurance contracts, and
``(ii) plans which do not include such coverage and are not
such contracts.
``(E) Deduction available with respect to policies and
plans containing outpatient prescription drug coverage if
disclosure requirements are met.--Subsection (a) shall apply
in any taxable year with respect to any policy or plan
described in paragraph (1)(A) or (1)(B) of such subsection
only if the issuer of such policy or the administrator of
such plan discloses to the taxpayer that such policy or plan
is intended to be a policy or plan so described.
``(2) Deduction not available for payment of part b
premiums.--Any amount paid as a premium under part B of title
XVIII of the Social Security Act shall not be taken into
account under subsection (a).
``(3) Limitation on long-term care premiums.--In the case
of a qualified long-term care insurance contract (as so
defined), only eligible long-term care premiums (as defined
in section 213(d)(10)) shall be taken into account under
subsection (a)(2).
``(c) Special Rules.--For purposes of this section--
``(1) Coordination with medical deduction, etc.--Any amount
paid by a taxpayer for insurance to which subsection (a)
applies shall not be taken into account in computing the
amount allowable to the taxpayer as a deduction under section
213(a).
``(2) Deduction not allowed for self-employment tax
purposes.--The deduction allowable by reason of this section
shall not be taken into account in determining an
individual's net earnings from self-employment (within the
meaning of section 1402(a)) for purposes of chapter 2.''
(b) Conforming Amendments.--
(1) Subsection (a) of section 62 of the Internal Revenue
Code of 1986 is amended by inserting after paragraph (17) the
following:
``(18) Medicare and long-term care insurance costs of
certain individuals.--The deduction allowed by section 222.''
(2) The table of sections for part VII of subchapter B of
chapter 1 of such Code is amended by striking the last item
and inserting the following:
``Sec. 222. Premiums for medigap insurance policies and Medicare+Choice
plans containing outpatient prescription drug benefits
and for long-term care insurance.
``Sec. 223. Cross reference.''
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1999.
SEC. 3. DETERMINATION OF ANNUAL ACTUARIAL VALUE OF DRUG
BENEFITS COVERED UNDER A MEDICARE+CHOICE PLAN
AND A MEDIGAP POLICY.
(a) In General.--For purposes of subparagraphs (A) and (B)
of section 222(a)(1) of the Internal Revenue Code of 1986 (as
added by section 2), the Secretary of Health and Human
Services shall establish procedures for a Medicare+Choice
organization offering a Medicare+Choice plan under part C of
title XVIII of the Social Security Act (42 U.S.C. 1395w-21 et
seq.) or an issuer of a medicare supplemental policy (as
defined in section 1882(g)(1) of such Act (42 U.S.C.
1395ss(g)(1))) to demonstrate that the annual actuarial value
of the outpatient prescription drug benefit offered under
such plan or policy is equal to or greater than the amount
described in section 222(a)(1) of the Internal Revenue Code
of 1986 that is applicable for the year involved.
(b) Requirements.--The procedures established pursuant to
subsection (a)--
(1) shall be based on--
(A) a standardized set of utilization and price factors;
and
(B) a standardized population that is representative of all
medicare enrollees and calculated based on projected
utilization if all enrollees have outpatient prescription
drug coverage;
(2) shall apply the same principles and factors in
comparing the value of the coverage of different outpatient
prescription drug benefit packages; and
(3) shall not take into account the method of delivery or
means of cost control or utilization used by the organization
offering the plan or the issuer of the policy.
(c) Consultation.--In establishing the procedures described
in subsection (a), the Secretary of Health and Human Services
shall consult with an independent actuary who is a member of
the American Academy of Actuaries.
(d) Update.--The Secretary shall periodically update the
procedures established under subsection (a).
(e) Demonstration of Actuarial Value.--The actuarial value
of the outpatient prescription drug benefit shall be set
forth by the Medicare+Choice organization offering the
Medicare+Choice plan or the issuer of the medicare
supplemental policy in an actuarial report that has been
prepared--
(1) by an individual who is a member of the American
Academy of Actuaries;
(2) using generally accepted actuarial principles; and
(3) in conformance with the requirements of subsection (b).
SEC. 4. INCLUSION OF QUALIFIED LONG-TERM CARE INSURANCE
CONTRACTS IN CAFETERIA PLANS AND FLEXIBLE
SPENDING ARRANGEMENTS.
(a) Cafeteria Plans.--Section 125(f) of the Internal
Revenue Code of 1986 (defining qualified benefits) is amended
by inserting before the period at the end ``; except that
such term shall include the payment of premiums for any
qualified long-term care insurance contract (as defined in
section 7702B)
[[Page S1413]]
to the extent the amount of such payment does not exceed the
eligible long-term care premiums (as defined in section
213(d)(10)) for such contract''.
(b) Flexible Spending Arrangements.--Section 106 of the
Internal Revenue Code of 1986 (relating to contributions by
employer to accident and health plans) is amended by striking
subsection (c).
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1999.
SEC. 5. AUTHORITY TO PROVIDE FOR ADDITIONAL MEDIGAP INSURANCE
POLICIES.
(a) In General.--
(1) Expansion of number of benefit packages.--Section
1882(p) of the Social Security Act (42 U.S.C. 1395ss(p)) is
amended--
(A) in paragraph (2)(B), by striking ``, and'' and
inserting ``other than the medicare supplemental policies
described in subsection (v); and''; and
(B) in paragraph (2)(C), by striking the period and
inserting ``and the policies described in subsection (v).''.
(2) Authority to provide for additional policies.--Section
1882 of the Social Security Act (42 U.S.C. 1395ss) is amended
by adding at the end the following:
``(v) Authority To Provide for Additional Policies.--
``(1) In general.--The standards under subsection (p) may
be modified (in the manner described in paragraph (1)(E) of
such subsection (applying paragraph (3)(A) of such subsection
as if the reference to `this subsection' were a reference to
`the Seniors' Security Act of 2000')) to establish additional
benefit packages consistent with the succeeding provisions of
this subsection.
``(2) Requirements for new packages that include
prescription drug coverage.--In the case of any benefit
package added under paragraph (1) that provides coverage for
outpatient prescription drugs, such benefit package--
``(A) shall not provide first-dollar coverage of outpatient
prescription drugs;
``(B) may provide a stop-loss coverage benefit for
outpatient prescription drugs that limits the application of
any beneficiary cost-sharing during a year after incurring a
certain amount of out-of-pocket covered expenditures;
``(C) shall not include benefits for prescription drugs
otherwise available under part A or B; and
``(D) shall be consistent with the requirements of this
section and applicable law.
``(3) Use of formularies.--In the case of any benefit
package added under paragraph (1) that provides coverage for
outpatient prescription drugs, the issuer of any policy
containing such a benefit package may use formularies.
``(4) Special open enrollment.--
``(A) Establishment.--If any benefit package is added under
paragraph (1), the Secretary shall establish an applicable
period in which any eligible beneficiary may enroll in any
medicare supplemental policy containing such benefit package
under the terms described in subparagraph (D).
``(B) Eligible beneficiary defined.--In this paragraph, the
term `eligible beneficiary' means a beneficiary under this
title who is enrolled in a medicare supplemental policy as of
the first day that any benefit package added under paragraph
(1) is available in the State in which such beneficiary
resides.
``(C) Applicable period defined.--In this paragraph, the
term `applicable period' means--
``(i) in the case of an eligible beneficiary who is
enrolled in a medicare supplemental policy which has a
benefit package classified as `H', `I', or `J' under the
standards established under subsection (p)(2), the 180-day
period that begins on the day described in subparagraph (B);
and
``(ii) in the case of an eligible beneficiary who is
enrolled in a medicare supplemental policy which has a
benefit package classified as `A' through `G' under the
standards established under subsection (p)(2), the 63-day
period that begins on the day described in subparagraph (B).
``(D) Terms described.--The terms described under this
subparagraph are terms which do not--
``(i) deny or condition the issuance or effectiveness of a
medicare supplemental policy described in subparagraph (A)
that is offered and is available for issuance to new
enrollees by such issuer;
``(ii) discriminate in the pricing of such policy, because
of health status, claims experience, receipt of health care,
or medical condition; or
``(iii) impose an exclusion of benefits based on a
preexisting condition under such policy.
``(5) Ability for issuer to cancel certain policies.--
Notwithstanding subsection (q)(2), an issuer of a policy
containing a benefit package added under paragraph (1) that
provides coverage for outpatient prescription drugs may
terminate such a policy in a market but only if--
``(A) the termination is--
``(i) done in accordance with State law in such market; and
``(ii) applied uniformly to individuals enrolled under such
policy;
``(B) the issuer provides notice to each individual
enrolled under such policy of such termination at least 90
days prior to the date of the termination of coverage under
such policy; and
``(C) the issuer offers to each individual enrolled under
such policy, for at least 180 days after providing the notice
pursuant to subparagraph (B), the option to purchase all
other medicare supplemental policies currently being offered
by the issuer under the terms described in paragraph
(4)(D).''.
(b) Sale of Non-Duplicative Medigap Insurance Policies
Authorized.--Section 1882(d)(3) of the Social Security Act
(42 U.S.C. 1395ss(d)(3)) is amended--
(1) in subparagraph (A), by adding at the end the
following:
``(ix) Nothing in this subparagraph shall be construed as
preventing the sale of more than 1 medicare supplemental
policy to an individual, provided that the sale is of a
medicare supplemental policy that does not duplicate any
health benefits under a medicare supplemental policy owned by
the individual.''; and
(2) in subparagraph (B)--
(A) in clause (ii)(I), by inserting ``, unless a second
policy is designed to compliment the coverage under the first
policy'' before the comma at the end; and
(B) in clause (iii)--
(i) in subclause (I), by striking ``(II) and (III)'' and
inserting ``(II), (III), and (IV)'';
(ii) by redesignating subclause (III) as subclause (IV);
and
(iii) by inserting after subclause (II) the following:
``(III) If the statement required by clause (i) is obtained
and indicates that the individual is enrolled in 1 or more
medicare supplemental policies, the sale of another policy is
not in violation of clause (i) if such other policy does not
duplicate health benefits under any policy in which the
individual is enrolled.''.
(c) NAIC to Consult With MedPAC in Revising Model
Standards.--
(1) In general.--In revising the model regulation under
section 1882(v) of the Social Security Act (42 U.S.C.
1395ss(v)) (as added by subsection (a)), the National
Association of Insurance Commissioners (in this section
referred to as the ``NAIC'') should--
(A) consult with the Medicare Payment Advisory Commission
established under section 1805 of such Act (42 U.S.C. 1395b-
6) (in this subsection referred to as ``MedPAC''); and
(B) consider the MedPAC report transmitted to NAIC in
accordance with paragraph (2)(B)(ii).
(2) MedPAC analysis and report.--
(A) Analysis.--MedPAC shall conduct an analysis of the
following issues:
(i) The conditions necessary to create a well-functioning,
voluntary medicare supplemental insurance market that
provides coverage for outpatient prescription drugs.
(ii) The scope of outpatient prescription drug coverage for
medicare beneficiaries, including individuals enrolled in
Medicare+Choice plans.
(iii) The implications of a medicare supplemental policy
that would require issuers of medicare supplemental policies
to provide outpatient prescription drug coverage and a stop-
loss benefit instead of providing coverage for other benefits
available through existing medicare supplemental policies.
(iv) The portion of out-of-pocket spending of medicare
beneficiaries on health care expenses attributable to
outpatient prescription drugs.
(v) The availability of private health insurance policies
that cover outpatient prescription drugs to beneficiaries
that are not entitled to benefits under the medicare program.
(vi) The scope of outpatient prescription drug coverage
provided by employers to medicare beneficiaries.
(vii) The impact of outpatient prescription drugs on the
overall health of medicare beneficiaries.
(viii) The effect of providing coverage for outpatient
prescription drugs on the amount of funds expended by the
medicare program.
(ix) Whether modifications of benefit packages of existing
medicare supplemental policies that provide coverage for
outpatient prescription drugs or the creation of new benefit
packages that provide coverage for outpatient prescription
drugs would allow payment for these policies to be integrated
with a Federal contribution.
(x) Such other issues relating to outpatient prescription
drugs that would assist Congress in improving the medicare
program.
(B) Report to congress.--
(i) In general.--Not later than June 1, 2000, MedPAC shall
submit to Congress a report containing a detailed analysis of
the issues described in subparagraph (A) together with
recommendations for such legislation and administrative
actions as MedPAC considers appropriate.
(ii) Transmission to naic.--At the same time MedPAC submits
the report to Congress under clause (i), MedPAC shall
transmit such report to the NAIC.
______
By Mr. BAUCUS:
S. 2238. A bill to designate 3 counties in the State of Montana as
High Intensity Drug Trafficking Areas and authorize funding for drug
control activities in those areas; to the Committee on the Judiciary.
Admitting Montana to the Rocky Mountain HIDTA
Mr. BAUCUS. Mr. President, I rise today to introduce critical
legislation in the fight against methamphetamine use in rural America.
Methamphetamine, also known as ``meth'' is a powerful and addictive
drug. Considered by many youths to be
[[Page S1414]]
a casual, soft-core drug with few lasting effects, meth can actually
cause more long-term damage to the body than cocaine or crack.
I recently invited General Barry McCaffrey, our drug czar, along with
Dr. Don Vereen, his deputy, to Montana to focus attention on the
problem of meth use. Their visit was well-received by residents of our
state, and much-needed. The fact is, there are a good many talented
Montanans working on the meth problem, but they have few resources with
which to wage the battle. Moreover, their efforts are often fragmented,
not coordinated to the extent they could be, particularly among the
treatment, prevention, and law enforcement communities.
To make their job easier, Montana has petitioned to be considered
part of the Rocky Mountain High Intensity Drug Trafficking Area
(HIDTA). Although the Rocky Mountain HIDTA authorities have stated
their willingness to include Montana in its organization, they lack the
resources to make that happen.
The bill I am introducing today would authorize funding to make
Montana's admission to the Rocky Mountain HIDTA a reality. Here's why
that's necessary.
In 1998, the number of juveniles charged with drug-related or violent
crimes in the Yellowstone County Youth Court rose by 30 percent. In
Lame Deer--the community of the Northern Cheyenne Indian Reservation--
kids as young as 8 years old have been seen for meth addiction. Last
November in our state, a meth lab blew up in Great Falls, leading to a
half dozen arrests. Meth use in Montana has doubled in the past few
years. Cases are growing and the states law enforcement can no longer
fight the problem.
Mr. President, the DEA reported an increase of meth lab seizures in
Montana of 900% from 1993 to 1998. And according to the Office of
National Drug Control Policy, based on methamphetamine admission rates
per 100,000 persons, Montana is one of eight states with a ``serious
methamphetamine problem.''
The meth problem is particularly severe on Montana's Indian
reservations, of which our state has seven. Life is hard there. In some
reservation towns, over half of the working age adults are unemployed.
Because meth is cheap and relatively easy to make, these lower-income
individuals are a natural target for meth peddlers. Without viable
employment options, too often these young people turn to drugs.
And that's the case throughout Montana, not just on the reservations.
In 1998, Montana ranked 47th in the nation in per-capita personal
income, 50th in personal income from wages and salaries, and second in
the nation for the number of people who work two or more jobs.
Since poverty and drug use often go hand in hand, it came as little
surprise to me when a recent report showed a dramatic uptick in the
incidence of drug abuse in rural America.
The report, commissioned by the Drug Enforcement Administration and
funded by the National Institute on Drug Abuse, focused primarily on
13- and 14-year-olds. It showed that eighth graders in rural America
are 83 percent more likely to use crack cocaine than their urban
counterparts. They are 50 percent more likely to use cocaine, 34
percent more likely to smoke marijuana, 29 percent more likely to drink
alcohol. Even more shocking, the report showed that rural eighth
graders were 104 percent more likely to use amphetamines, including
methamphetamine. Let me clarify, Mr. President. That is double the rate
of urban eighth graders.
The bill I am proposing today would provide Montana the resources to
put forth a coordinated effort in the fight against meth in Montana. By
admitting Yellowstone, Cascade and Missoula counties to the Rocky
Mountain HIDTA, Montana can focus its efforts on the three largest
problem areas for meth use. It would increase law enforcement and
forensic personnel in Montana; coordinate efforts to exchange
information among law enforcement agencies; and engage in a public
information campaign to educate the public about the dangers of meth
use.
Mr. President, the time has come to fight this scourge. Montana is
under seige by meth, and we must do all we can to stop it--for the good
of our state and those around us.
______
By Mr. ALLARD (for himself, Mr. Campbell, Mr. Hatch, Mr. Bennett,
and Mr. Bingaman):
S. 2239. A bill to authorize the Bureau of Reclamation to provide
cost sharing for the endangered fish recovery implementation programs
for the Upper Colorado River and San Juan River basins; to the
Committee on Energy and Natural Resources.
cost sharing for endangered fish recovery implementation programs
Mr. ALLARD. Mr. President, today I am introducing legislation to
authorize the Bureau of Reclamation to provide cost sharing for the
endangered fish recovery implementation programs for the Upper Colorado
River and San Juan River basins.
This legislation is the product of years of meetings between water
districts, power users, state and federal government and environmental
groups. It authorizes federal and non-federal funding of an Upper Basin
Recovery Program for endangered species in the Colorado River Basin and
the San Juan River Basin. The goal of the program is to recover the
Colorado pikeminnow, humpback chub, razorback sucker and bonytail chub
while continuing to meet future water supply needs in the Upper Basin
states of Colorado, Utah, Wyoming and New Mexico.
To date, more than $20 million has been spent for capital projects to
recover the endangered fish. Failure to recover the endangered species
could result in limitations on current and future water diversions and
use in the Upper Basin states. The legislation provides Congress and
the Upper Basin stakeholders a finite Recovery Program under an
authorized spending cap.
The legislation authorizes $100 million for capital construction,
operations and maintenance to implement other aspects of the program
that include fish ladders, hatchery facilities, removal of non-native
species and habitat restoration. The cost sharing program authorizes
$46 million of federal funds to the Bureau of Reclamation and the
remaining $54 million will be generated from state contributions not to
exceed $17 million; contributions from power revenues up to $17 million
and the remaining $20 million from replacement power credit and capital
cost of water.
The States of Colorado, New Mexico, Utah and Wyoming all support the
program. Other supporters include: the Colorado River Energy
Distributors Association, the Upper Colorado River Endangered Fish
Recovery Implementation Program, the Environmental Defense Fund, The
Nature Conservancy, Northern Colorado Water Conservancy District,
Colorado River Water Conservation District, Southern Ute Indian Tribe
and Colorado Water Congress.
It is critical to affirm the federal government's commitment to the
implementation of the Recovery Programs. The bill reflects compromise
on all sides of the issue and recognizes that protection of endangered
species can coincide with water development and water use. The
participants want to move ahead with this program and are willing to
help share in the costs. I urge my Senate colleagues to support this
important legislation.
______
By Mr. CRAPO:
S. 2241. A bill to amend title XVII of the Social Security Act to
adjust wages and wage-related costs for certain items and services
furnished in geographically reclassified hospitals; to the Committee on
Finance.
Mr. CRAPO. Mr. President, I rise today to introduce the
Medicare Wage-Index Reclassification Act of 2000. This bill will amend
the Social Security Act to redirect additional Medicare reimbursements
to rural hospitals. Currently, hospitals throughout the country are
losing Medicare reimbursements, which results in severe implications
for surrounding communities.
As you know, in an attempt to keep Medicare from consuming its
limited reserves, Congress enacted the Balanced Budget Act of 1997
(BBA), which made sweeping changes in the manner that health care
providers are reimbursed for services rendered to Medicare
beneficiaries. These were the most significant modifications in the
history of the program.
[[Page S1415]]
All of the problems with the BBA--whether hospitals, nursing
facilities, home health agencies, or skilled nursing facilities--are
especially acute in rural states, where Medicare payments are a bigger
percentage of hospital revenues and profit margins are generally much
lower. These facilities were already managed at a highly efficient
level and had ``cut the fat out of the system.'' Therefore, the cuts
implemented in the BBA hit the rural communities in Idaho and
throughout the United States in a very significant and serious way.
In the 1st session, the Senate Finance Committee did a tremendous job
of bringing forth legislation that adjusted Medicare payments to health
care providers hurt by cuts ordered in the BBA. While this was a
meaningful step, the Senate must continue to address the inequities in
the system.
My bill would expand wage-index reclassification by requiring the
Secretary of Health and Human Services to deem a hospital that has been
reclassified for purposes of its inpatient wage-index to also
reclassify for purposes of other services which are provider-based and
for which payments are adjusted using a wage-index. In other words,
this legislation would require the Secretary to use a hospital's
reclassification wage-index to adjust payments for hospital outpatient,
skilled nursing facility, home health, and other services, providing
those entities are provider-based. This change should have been made in
BBA when Congress required that prospective payment systems be
established for these other services. As such, this change would
address an issue that has been left unaddressed for several years.
It makes sense that, if a hospital has been granted reclassification
by the Medicare Geographic Classification Review Board for certain
inpatient services, it also be granted wage-index reclassification for
outpatient and other services. It is estimated that this provision
would help approximately 400 hospitals, 90 percent which are rural.
Furthermore, this provision would be budget neutral.
I know my colleagues in the Senate share my commitment of promoting
access to health care services in rural areas. Expanding wage-index
geographic reclassification will allow hospitals to recoup lost funds
and use those funds to address patients' needs in an appropriate,
effective, and meaningful way. I encourage my colleagues to co-sponsor
the Medicare Wage-Index Reclassification Act.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2241
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Medicare Wage-Index
Reclassification Act of 2000''.
SEC. 2. HOSPITAL GEOGRAPHIC RECLASSIFICATION FOR LABOR COSTS
FOR ALL ITEMS AND SERVICES REIMBURSED UNDER
PROSPECTIVE PAYMENT SYSTEMS.
(a) In General.--Section 1886(d)(10) of the Social Security
Act (42 U.S.C. 1395ww(d)(10)) is amended by adding at the end
the following new subparagraph:
``(G) Application of hospital geographic reclassification
for inpatient services to all hospital-furnished items and
services reimbursed under prospective payment system.--
``(i) In general.--In the case of a hospital with an
application approved by the Medicare Geographic
Classification Review Board under subparagraph (C)(i)(II) to
change the hospital's geographic classification for a fiscal
year for purposes of the factor used to adjust the DRG
prospective payment rate for area differences in hospital
wage levels that applies to such hospital under paragraph
(3)(E), the change in the hospital's geographic
classification for such purposes shall apply for purposes of
adjustments to payments for variations in costs which are
attributable to wages and wage-related costs for all PPS-
reimbursed items and services.
``(ii) PPS-reimbursed items and services defined.--For
purposes of clause (i), the term `PPS-reimbursed items and
services' means, for cost reporting periods beginning during
the fiscal year for which such change has been approved,
items and services furnished by the hospital, or by an entity
or department of the hospital which is provider-based (as
determined by the Secretary), for which payments--
``(I) are made under the prospective payment system for
hospital outpatient department services under section
1833(t); and
``(II) are adjusted for variations in costs which are
attributable to wages and wage-related costs.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to items and services furnished on or after
October 1, 2001.
______
By Mr. THOMAS:
S. 2242. A bill to amend the Federal Activities Inventory Reform Act
of 1998 to improve the process for identifying the functions of the
Federal Government that are not inherently governmental functions, for
determining the appropriate organizations for the performance of such
functions on the basis of competition, and for other purposes; to the
Committee on Governmental Affairs.
THE FAIR ACT AMENDMENTS OF 2000
Mr. THOMAS. Mr. President, I rise today to introduce legislation to
improve the implementation of legislation that Congress passed in 1998,
the Federal Activities Inventory Reform Act.
It has been 45 years, since President Dwight D. Eisenhower issued
Bureau of the Budget Bulletin 55-4, proclaiming, ``It is the policy of
the Government to rely on the private sector to supply the products and
services the Government needs.''
Why is it, then, the Federal government has identified some one
million positions on its payroll that are commercial in nature? As the
author of the FAIR Act, I had hoped that my legislation would have put
into place a process, albeit 45 years later, to substantively implement
Ike's policy.
Despite almost a half-century of policy that ``the Federal government
should not start or carry on any activity to provide a commercial
product or service if the product or service can be procured from the
private sector'' more than 100 agencies have released FAIR Act
inventories identifying some one million commercial Federal positions.
Of these, 440,000 are in civilian agencies and more than 65 percent
have been exempted from potential outsourcing. In the Department of
Defense, 504,000 non-uniformed positions are considered commercial, but
196,000 or 39 percent are exempt from outsourcing.
The first year experience with the FAIR Act raises fundamental
questions. If it has been the Federal Government's policy for 45 years
to rely on the private sector for commercially available goods and
services, how did we get to the point where despite claims of
``reinventing government,'' ``the smallest Federal workforce since the
Kennedy Administration'' and other political rhetoric, we have one
million Federal employees engaged in commercial activities? How is it
that of those one million positions, roughly half will not even be
studied to determine if government or private sector performance
provides the best value to the taxpayers?
The FAIR Act was intended to shed sunshine on the Federal
Government's commercial activities. Its purpose was to tell the
American people what its government does and put in place a process to
determine how to best get the job done. Unfortunately, implementation
of the law has fallen short of these expectations.
The law requires agencies to inventory activities and positions that
are not inherently governmental. Inventories are published so that
interested parties, both public and private, can challenge inclusions
or omissions from the list. However, the Office of Management and
Budget (OMB) has overstepped its authority by creating a series of
``reason codes'' that enable agencies to declare activities commercial
but exempt from potential outsourcing, and then declaring such reason
code designations outside the challenge process. As a result, 482,000
positions, roughly half the government's entire FAIR inventory, has
been declared commercial, but exempt from potential outsourcing,
public-private competition, or challenge. That is wrong, inconsistent
with the law and down right un-FAIR.
Manipulation of the process has also cast a long shadow on the
sunshine Congress was seeking. Take for example the Department of
Energy. Of 11,765 commercial positions on its inventory, just 618 are
``commercial competitive.'' Within the agency's Bonneville Power
Administration (BPA), 1,263 of the agency's 2,267 commercial positions
were classified as ``management'' and of these 1,259 were considered
``commercial, in-house core,'' exempt from
[[Page S1416]]
further review. Unfortunately, DoE is not alone in gaming the system.
The U.S. Army Corps of Engineers, which has 4,500 employees, has
inventoried all its positions in just two categories.
These practices, too, are un-FAIR, particularly for federal
employees. How can BPA or Corps of Engineers' employees tell if their
positions are slated for potential outsourcing? How is the private
sector to determine if the positions the Corps has on its inventory
involve management of campgrounds, integration of their computer
systems, designing a dam, mapping a flood plain, or painting the walls
of an office building if all these activities are aggregated into two
broad categories? These actions fail to shed sunshine and render the
FAIR Act challenge process moot.
The FAIR Act also requires a ``review'' of commercial activities that
survive the inventory and challenge process ``within a reasonable
time.'' The Act's legislative history clearly demonstrates Congress
intended for such a review to be either direct outsourcing or a public-
private competition similar to that envisioned in OMB Circular A-76. To
date, OMB has not issued guidance on how it will implement such
reviews, nor has it established a timetable.
Due to OMB's dismal performance thus far, it is clear that Congress
will have to pass a package of FAIR Act amendments to make sure the job
is done right. Today I introduce legislation to do just that.
This legislation is largely technical in nature but the major
provisions would improve the accuracy and usefulness of the
inventories, make sure Federal employees are notified when their jobs
appear on the inventories, fortify the review process, require a report
on the portability of federal employees' pension benefits, ban federal
agencies from performing any commercial activity for other federal
agencies or state and local governments unless a cost comparison is
conducted and prohibits the conversion of any activity on a FAIR Act
inventory to Federal Prison Industries.
I look forward to working with Chairman Thompson and Ranking Member
Lieberman of the Government Affairs Committee to see that this common
sense legislation is enacted into law this year.
______
By Ms. LANDRIEU (for herself, Ms. Snowe, Mr. Kerry, Mr. Cleland,
Mrs. Murray, Ms. Mikulski, Mr. Abraham, and Mr. Jeffords):
S. 2243. A bill to reauthorize certain programs of the Small Business
Administration, and for other purposes; to the Committee on Small
Business.
National Women's Business Council Re-Authorization Act of 2000
Ms. LANDRIEU. Mr. President, today I, along with Senators Snowe,
Kerry, Cleland, Murray, Mikulski, Abraham, and Jeffords, am introducing
the National Women's Business Council Re-authorization Act of 2000.
This legislation would ensure that one of our most valued resources may
continue its work in support of women's business ownership. The bi-
partisan National Women's Business Council has provided important
advice and counsel to the Congress since it was established in 1988. At
that time, there were 2.4 million women business owners documented;
today, there are over 9 million women who own and operate businesses in
every sector, from home based services to construction trades to high
tech giants. Women are changing the face of our economy at an
unprecedented rate, and the Council has been our eyes and ears as we
anticipate the needs of this burgeoning entrepreneurial sector. The 15
appointees to the Council, all prominent business women, have been hard
at work during the last three years. Some of their accomplishments
include: hosting Summit '98, a national economic forum that produced a
Master Plan of initiatives and recommendations to sustain and grow the
entrepreneurial economy; preparing a Best Practices Guide for
Contracting with Woman, and issuing a comprehensive statistical study
of 11 years of federal contracting with women owned businesses; co-
hosting a series of highly regarded policy forums with the Federal
Reserve in 10 cities, including New Orleans, Louisiana, on capital
access issues facing entrepreneurs and working to secure the collection
of data on women-owned businesses by the Bureau of the Census, and
funding new research on a range of issues concerning women's business
development.
Recently, the Council has stepped up efforts to increase access to
credit for women-owned businesses. This spring, the Council will
release a report in collaboration with the Milken Institute, which will
identify model programs that have been successful in increasing the
flow of credit to small, women owned businesses, especially those in
the retail, service or high tech sectors. The Council is also working
to increase investments in women-led firms by launching Springboard
2000, a national series of women's venture capital forums. Building on
the momentum of its highly successful Silicon Valley event in January,
the Council will host at least two more forums showcasing women-led
businesses before private, corporate and venture capital investors. As
my colleague Senator Kerry has said so often, the equity markets are
the last frontier for women entrepreneurs. The Council's venture
capital fairs provide women entrepreneurs with much needed access to
capital so that they can launch and grow their high tech businesses.
The Council is leading the effort to increase access to competitive
contracting opportunities by working with federal agencies and women's
business organizations. Later this year, the Council will release an
extensive report on the characteristics and experiences of the over
5,000 women business owners who have been successful in receiving
federal contracts. We eagerly look forward to reviewing their findings.
Under the chairmanship of Kay Koplovitz, the Council has indeed taken
a bold new approach in its advocacy of the fastest growing business
sector. As a result of the Council's work this year, we will know more
than ever about women's business enterprise, their economic trends, the
characteristics of their owners and their public and private sector
needs. The Council has been a powerful resource for policy makers by
providing valuable data, information and recommendations which are
essential if we are to assist our communities in sustaining the
unparalleled number of new businesses launched in the last 7 years.
It is for these reasons and more that I am introducing legislation to
re-authorize the Council for another three years. It is imperative that
the National Women's Business Council continues its great work and
expands its activities to support initiatives that are creating the
infrastructure for women's entrepreneurship at the state and local
level.
______
By Mr. WYDEN (for himself and Mr. Baucus):
S. 2244. A bill to increase participation in employee stock purchase
plans and individual retirement plans so that American workers may
share in the growth in the United States economy attributable to
international trade agreements; to the Committee on Finance.
working families trade bonus Act
Mr. WYDEN. Mr. President, many working Americans fell like they've
been left on the sidelines in the high-stakes game of international
trade. As U.S. companies expand overseas, corporate profits soar.
Workers standby watching for some tangible benefits for their own
pocketbooks. A May 1999 Los Angeles Times story captured Americans'
skepticism toward trade. The story found just over half the public in
March 1994 believed that treaties such as NAFTA would create U.S. jobs,
with only 32% fearing jobs loss. But by December 1998, the attitudes
had flip-flopped. A Wall Street Journal/NBC News poll found that 58% of
Americans believed that trade had reduced U.S. jobs and wages.
Nowhere has Americans' growing alienation from the world trading
system been more evident than at the November 1999 World Trade
Organization (WTO) Ministerial meeting. The nightly news was filled
with the pictures of workers protesting the WTO in the streets of
Seattle. This sense of alienation will continue to grow unless workers
themselves start to see more direct benefits from trade.
The legislation I am pleased to introduce today with Senator Baucus
is an effort to narrow America's dividend divide in world trade. Our
bill, The Working Families Trade Bonus Act, says
[[Page S1417]]
that when companies win from world trade, workers should win, too. The
bill would do this by encouraging companies to give their workers added
Trade Bonus stock options--which workers at Fortune magazine's top 100
U.S. companies identified as one of the key reasons they work for the
company. And for the millions of working Americans who don't have stock
plans--farmers, self-employed and small business people--the bill would
allow them to double the maximum allowable annual IRA contribution.
The bill specifically targets workers who are often excluded by
company stock option plans--those at the lower end of company pay
scales. The Trade Bonus program prohibits a company from discriminating
in favor of highly compensated employees and requires that all
employees be allowed to purchase the maximum amount of stock allowed by
law at the lowest price allowed by law. The program would not allow
companies to substitute stock options for regular compensation.
Together, these safeguards assure that all workers are included in the
trade winner's circle.
Proponents of free trade, like Senator Baucus and myself, have done a
lot of talking about its benefits. Manufactured goods are the
centerpiece of our nation's export--accounting for nearly two-thirds of
total U.S. exports of goods and services. Exports support about one in
every five American factory jobs. These jobs pay about 15 percent more
on average than non-export-related jobs, require more skills and are
less prone to economic downturns than those accounted for fully one-
third of our nation's economic growth, and since 1950, international
trade flows have grown twice as fast as the economy. Yet, most workers
have few good things to say about free trade because they've never seen
any direct benefits from it. It's time to turn the rhetoric about free
trade into real benefits for workers. It's time to widen the winner's
circle to make sure that American workers share directly in the rewards
of free trade.
Our legislation would require the Secretary of Commerce to determine
annually, beginning with 1998, whether international trade has
contributed to an increase in U.S. GDP. This determination would be
included in the President's budget for the subsequent fiscal year. For
every year in which the Secretary makes a determination that trade has
contributed to an increase in the U.S. GDP, employers would be
encouraged to contribute additional compensation up to $2,000 per
worker per year to employee stock purchase plans. These additional
contributions to an employee's stock purchase plan--the Trade Bonus--
would not be subject to capital gains tax. For workers who are not
eligible for an employee stock purchase plan Trade Bonus, the bill
allows them to double the allowable annual amount of their IRA
contribution--to a maximum of $4,000.
For employers with 100 or fewer employees that do not have employee
stock purchase plans, the bill would give them a significant incentive
to create them; the bill offers a one-time tax credit to help offset
all the administrative fees directly related to establishing an
employee stock purchase plan. It would also provide limited tax credits
for three subsequent years for costs directly related to IRS compliance
and employee education about the Trade Bonus program. The language of
this section is drawn from previous legislation and assures that the
tax credit applies only to the actual cost of creating the employee
stock purchase plan and not to services that may be related to
retirement planning, such as tax preparation, accounting, legal or
brokerage services.
The bill sets out guidelines for employers establishing or expanding
an employee stock purchase plan under the Trade Bonus program,
including that employees be eligible for the maximum amount of $2,000
at the lowest price allowed by law; that employers make the plan
available to the widest range of employees without discrimination in
favor of highly compensated employees; that employers ensure that the
trade bonus is in addition to compensation an employee would normally
receive (and that safeguards be in place to do so); and that it does
not result in lack of diversification of an employee's assets.
Here's how the Working Families Trade Bonus Act would work. As under
current law, employee stock purchase plans offer stock to participants
at a discount. The current minimum purchase price is the lesser of 85%
of the value of the stock on the date of the grant of the options
(usually the beginning of the purchase period) or 85% of the value of
the stock when the option is exercised--usually the end of the purchase
period. This means that, in the period during which the stock has
appreciated, the employee can get the benefit of the appreciation and,
in a period during which the stock has depreciated, the employee might
still be able to buy employer stock at a discounted price, or, if the
plan provides, could decline to purchase the stock.
For example, let's say the President announces in the budget for FY
2001 that international trade contributed to growth in US GDP in 1999.
Fleet of Foot Shoes, an athletic shoe manufacturer in Florence, Oregon,
decides to award its workers the full $2,000 trade bonus on February 1,
2000. If a share of Fleet of Foot stock is worth $100 on the date of
the grant of the option and $200 when the option is exercised, say
December 2001, the employees' purchase price can be as low as $85. This
means the employee can purchase stock worth $200 for only $85, so the
employee is able to purchase more than 40 shares of stock for the price
of only 20 shares. Alternatively, if the stock is worth $50 when the
option is exercised, the employee is able to purchase stock worth $50
for only $42.50.
Here is how the tax benefit would work. Under current law, employees
who hold qualified stock at least two years from the date of grant of
the option and one year from the purchase of the stock are entitled to
a capital gains tax break until the point they sell the stock. If an
employee chooses to sell stock purchased through the Trade Bonus and
the purchase price was less than the fair market value on the date the
option was granted, then the difference between the purchase price and
the fair market value will be taxed as ordinary income in the year the
stock is sold. Under my proposal, the remainder of the gain that would
otherwise be taxed as a capital gain in the same year would not be
taxed. So, using the Trade Bonus, if an employee pays $85 to buy a
share of stock whose fair market value is $100, holds onto the share
for more than the required two years and then sells it for $150, the
$15 discount on the original purchase price would be taxed as ordinary
income, but the employee would not pay capital gains tax on the $50
increase in the value of the share of stock.
About one-half of all American adults own stock today, and stocks are
now the largest asset families own, exceeding even home equity.
Fortune's January 2000 survey found 36 of the 58 publicly held
companies on the top 100 list offer options to all employees. According
to a 1998 survey of Oregon technology companies, almost two-thirds of
Oregon's technology companies offer stock options. In today's tight
employment market where companies compete to attract and retain the
best employees, stock purchase plans are becoming increasingly common.
The National Center for Employee Ownership estimates that seven and a
half million Americans work for companies that make stock options
available, and that employees own nine percent of total corporate
equity in the United States. A recent Federal Reserve study found that
one-third of the firms it surveyed offer stock options to employees
other than executives.
Our legislation will build upon this trend. The Working Families
Trade Bonus Opportunity Act will give workers the chance to share
directly in the benefits of free trade. This legislation will help put
real money into the pockets of working Americans, and help move stock
options out of the corner office and onto the shop floor. I ask
unanimous consent that a copy of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2244
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) Short Title.--This Act may be cited as the ``Working
Families Trade Bonus Act''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in
[[Page S1418]]
this Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or
other provision of the Internal Revenue Code of 1986.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--Congress finds that--
(1) exports represent a growing share of United States
production, and exports have accounted for more than 10
percent of the United States gross domestic product in recent
years,
(2) export growth represented more than 36 percent of
overall United States growth in gross domestic product
between 1987 and 1997,
(3) international trade flows in the United States have
grown twice as fast as the economy since 1950, and, in real
terms, the growth rate for international trade has averaged
about 6.5 percent a year,
(4) between 1987 and 1997, more than 5,500,000 United
States jobs have been created by international trade,
(5) the globalization of the United States economy demands
that appropriate domestic policy measures be undertaken to
assure American workers enjoy the benefits of globalization
rather than be undermined by it, and
(6) when the domestic economy and United States companies
achieve growth and profits from international trade, workers
ought to share in the benefits.
(b) Purpose.--It is the purpose of this Act to assist
American workers in benefiting directly when international
trade produces domestic economic growth.
TITLE I--TRADE BONUS
SEC. 101. DETERMINATION AND ANNOUNCEMENT OF TRADE BONUS.
(a) Determination.--
(1) In general.--The Secretary of Commerce or the
Secretary's delegate shall, for each calendar year after
1998, determine whether international trade of the United
States contributed to an increase in the gross domestic
product of the United States for such calendar year.
(2) Time for determination; submission.--The Secretary
shall make and submit to the President the determination
under paragraph (1) as soon as practicable after the close of
a calendar year, but in no event later than June 1 of the
next calendar year. Such determination shall be made on the
basis of the most recent available data as of the time of the
determination.
(b) Inclusion in Budget.--The President shall include the
determination under subsection (a) with the supplemental
summary of the budget for the fiscal year beginning in the
calendar year following the calendar year for which the
determination was made.
TITLE II--PROVISIONS TO ENSURE WORKERS SHARE IN TRADE BONUS
SEC. 201. UNITED STATES POLICY ON INTERNATIONAL TRADE BONUS.
(a) General Policy of the United States.--It is the policy
of the United States that if there is an increase in the
portion of the gross domestic product of the United States
for any calendar year which is attributable to international
trade of the United States--
(1) workers ought to share in the benefits of the increase
through--
(A) the establishment of employee stock purchase plans by
employers that have not already done so,
(B) the expansion of employee stock purchase plans of
employers that have already established such plans, and
(C) the opportunity to make additional contributions to
individual retirement plans if the workers are unable to
participate in employee stock purchase plans,
(2) employers should contribute additional compensation to
such employee stock purchase plans in an amount up to $2,000
per employee, and
(3) workers should contribute additional amounts up to
$2,000 to individual retirement plans.
(b) Guidelines.--It is the policy of the United States that
any employer establishing or expanding an employee stock
purchase plan under the policy stated under subsection (a)
should--
(1) provide that the amount of additional stock each
employee is able to purchase in any year there is a trade
bonus is the amount determined by the employer but not in
excess of $2,000,
(2) make the plan available to the widest range of
employees without discriminating in favor of highly
compensated employees,
(3) allow for the purchase of the maximum amount of stock
allowed by law at the lowest price allowed by law, and
(4) ensure that the establishment or expansion of such
plan--
(A) provides employees with compensation that is in
addition to the compensation they would normally receive, and
(B) does not result in a lack of diversification of an
employee's assets, particularly such employee's retirement
assets.
SEC. 202. ELIMINATION OF CAPITAL GAINS TAX ON GAIN FROM STOCK
ACQUIRED THROUGH EMPLOYEE STOCK PURCHASE PLAN.
(a) In General.--Part I of subchapter P of chapter 1
(relating to treatment of capital gains) is amended by adding
at the end the following new section:
``SEC. 1203. EXCLUSION FOR GAIN FROM STOCK ACQUIRED THROUGH
EMPLOYEE STOCK PURCHASE PLAN.
``(a) General Rule.--Gross income of an employee shall not
include gain from the sale or exchange of stock--
``(1) which was acquired by the employee pursuant to an
exercise of a trade bonus stock option granted under an
employee stock purchase plan (as defined in section 423(b)),
and
``(2) with respect to which the requirements of section
423(a) have been met before the sale or exchange.
``(b) Trade Bonus Stock Option.--For purposes of this
section--
``(1) In general.--The term `trade bonus stock option'
means an option which--
``(A) is granted under an employee stock purchase plan (as
defined in section 423(b)) for a plan year beginning in a
calendar year following a calendar year for which a trade
bonus percentage has been determined under section 101 of the
Working Families Trade Bonus Act, and
``(B) the employer designates, at such time and in such
manner as the Secretary may prescribe, as a trade bonus stock
option.
``(2) Annual limitation.--Options may not be designated as
trade bonus stock options with respect to an employee for any
plan year to the extent that the fair market value of the
stock which may be purchased with such options (determined as
of the time the options are granted) exceeds $2,000.''
(b) Conforming Amendments.--
(1) Paragraph (9) of section 1(h) (relating to maximum
capital gains rate) is amended by striking ``and section 1202
gain'' and inserting ``section 1202 gain, and gain excluded
from gross income under section 1203(a)''.
(2) Section 172(d)(2)(B) (relating to modifications with
respect to net operating loss deduction) is amended by
striking ``section 1202'' and inserting ``sections 1202 and
1203''.
(3) Section 642(c)(4) (relating to adjustments) is amended
by inserting ``or 1203(a)'' after ``section 1202(a)'' and by
inserting ``or 1203'' after ``section 1202''.
(4) Section 643(a)(3) (defining distributable net income)
is amended by striking ``section 1202'' and inserting
``sections 1202 and 1203''.
(5) Section 691(c)(4) (relating to coordination with
capital gain provisions) is amended by inserting ``1203,''
after ``1202,''.
(6) The second sentence of section 871(a)(2) (relating to
capital gains of aliens present in the United States 183 days
or more) is amended by inserting ``or 1203'' after ``section
1202''.
(7) The table of sections of part I of subchapter P of
chapter 1 is amended by adding at the end the following:
``Sec. 1203. Exclusion for gain from stock acquired through employee
stock purchase plan.''
(c) Effective Date.--The amendments made by this section
shall apply to stock acquired on and after the date of the
enactment of this Act.
SEC. 203. TRADE BONUS CONTRIBUTIONS TO INDIVIDUAL RETIREMENT
PLANS.
(a) In General.--Section 219(b) (relating to maximum amount
of deduction) is amended by adding at the end the following
new paragraph:
``(5) Additional contributions in trade bonus years.--
``(A) In general.--If there is a determination under
section 101 of the Working Families Trade Bonus Act that
there is a trade bonus for any calendar year, then, in the
case of an eligible individual, the dollar amount in effect
under paragraph (1)(A) for taxable years beginning in the
subsequent calendar year shall be increased by $2,000.
``(B) Eligible individual.--For purposes of subparagraph
(A), the term `eligible individual' means, with respect to
any taxable year, any individual other than an individual who
is eligible to receive a trade bonus stock option (as defined
in section 1203(b)) for a plan year beginning in the taxable
year.''
(b) Conforming Amendments.--
(1) Section 408(a)(1) is amended by striking ``in excess of
$2,000 on behalf of any individual'' and inserting ``on
behalf of any individual in excess of the amount in effect
for such taxable year under section 219(b)(1)(A)''.
(2) Section 408(b)(2)(B) is amended by striking ``$2,000''
and inserting ``the dollar amount in effect under section
219(b)(1)(A)''.
(3) Section 408(b) is amended by striking ``$2,000'' in the
matter following paragraph (4) and inserting ``the dollar
amount in effect under section 219(b)(1)(A)''.
(4) Section 408(j) is amended by striking ``$2,000''.
(5) Section 408(p)(8) is amended by striking ``$2,000'' and
inserting ``the dollar amount in effect under section
219(b)(1)(A)''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2000.
SEC. 204. CREDIT FOR SMALL EMPLOYER STOCK PURCHASE PLAN
START-UP COSTS.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 (relating to business related credits) is amended
by adding at the end the following new section:
``SEC. 45D. SMALL EMPLOYER STOCK PURCHASE PLAN CREDIT.
``(a) General Rule.--For purposes of section 38, in the
case of an eligible employer, the small employer stock
purchase plan credit determined under this section for any
taxable year is an amount equal to the qualified start-up
costs paid or incurred by the taxpayer during the taxable
year.
``(b) Limits on Start-Up Costs.--In the case of qualified
start-up costs not paid or incurred directly for the
establishment of a qualified stock purchase plan, the amount
of
[[Page S1419]]
the credit determined under subsection (a) for any taxable
year shall not exceed the lesser of 50 percent of such costs
or--
``(1) $2,000 for the first taxable year ending after the
date the employer established the qualified employer plan to
which such costs relate,
``(2) $1,000 for each of the second and third such taxable
years, and
``(3) zero for each taxable year thereafter.
``(c) Definitions.--For purposes of this section--
``(1) Eligible employer.--
``(A) In general.--The term `eligible employer' means, with
respect to any year, an employer which has 100 or fewer
employees who received at least $5,000 of compensation from
the employer for the preceding year.
``(B) Requirement for new qualified employer plans.--Such
term shall not include an employer if, during the 3-taxable
year period immediately preceding the 1st taxable year for
which the credit under this section is otherwise allowable
for a qualified stock purchase plan of the employer, the
employer and each member of any controlled group including
the employer (or any predecessor of either) established or
maintained an employee stock purchase plan with respect to
which contributions were made, or benefits were accrued, for
substantially the same employees as are in the qualified
stock purchase plan.
``(2) Qualified start-up costs.--The term `qualified start-
up costs' means any ordinary and necessary expenses of an
eligible employer which are paid or incurred in connection
with--
``(A) the establishment or maintenance of a qualified stock
purchase plan in which employees are eligible to participate,
and
``(B) providing educational information to employees
regarding participation in such plan and the benefits of
participating in the plan.
Such term does not include services related to retirement
planning, including tax preparation, accounting, legal, or
brokerage services.
``(3) Qualified stock purchase plan.--
``(A) In general.--The term `qualified stock purchase plan'
means an employee stock purchase plan which--
``(i) allows an employer to designate options as trade
bonus stock options for purposes of section 1203,
``(ii) limits the amount of options which may be so
designated for any employee to not more than $2,000 per year,
and
``(iii) does not discriminate in favor of highly
compensated employees (within the meaning of section 414(q)).
``(B) Employee stock purchase plan.--The term `employee
stock purchase plan' has the meaning given such term by
section 423(b).
``(d) Special Rules.--
``(1) Aggregation rules.--All persons treated as a single
employer under subsection (a) or (b) of section 52, or
subsection (n) or (o) of section 414, shall be treated as one
person. All qualified stock purchase plans of an employer
shall be treated as a single qualified stock purchase plan.
``(2) Disallowance of deduction.--No deduction shall be
allowable under this chapter for any qualified start-up costs
for which a credit is determined under subsection (a).
``(3) Election not to claim credit.--This section shall not
apply to a taxpayer for any taxable year if such taxpayer
elects to have this section not apply for such taxable
year.''
(b) Credit Allowed as Part of General Business Credit.--
Section 38(b) (defining current year business credit) is
amended by striking ``plus'' at the end of paragraph (11), by
striking the period at the end of paragraph (12) and
inserting ``, plus'', and by adding at the end the following
new paragraph:
``(13) in the case of an eligible employer (as defined in
section 45D(c)), the small employer stock purchase plan
credit determined under section 45D(a).''
(c) Portion of Credit Refundable.--Section 38(c) (relating
to limitation based on amount of tax) is amended by adding at
the end the following new paragraph:
``(4) Portion of small employer pension plan credit
refundable.--
``(A) In general.--In the case of the small employer stock
purchase plan credit under subsection (b)(13), the aggregate
credits allowed under subpart C shall be increased by the
lesser of--
``(i) the credit which would be allowed without regard to
this paragraph and the limitation under paragraph (1), or
``(ii) the amount by which the aggregate amount of credits
allowed by this section (without regard to this paragraph)
would increase if the limitation under paragraph (1) were
increased by the taxpayer's applicable payroll taxes for the
taxable year.
``(B) Treatment of credit.--The amount of the credit
allowed under this paragraph shall not be treated as a credit
allowed under this subpart and shall reduce the amount of the
credit allowed under this section for the taxable year.
``(C) Applicable payroll taxes.--For purposes of this
paragraph--
``(i) In general.--The term `applicable payroll taxes'
means, with respect to any taxpayer for any taxable year--
``(I) the amount of the taxes imposed by sections 3111 and
3221(a) on compensation paid by the taxpayer during the
taxable year,
``(II) 50 percent of the taxes imposed by section 1401 on
the self-employment income of the taxpayer during the taxable
year, and
``(III) 50 percent of the taxes imposed by section
3211(a)(1) on amounts received by the taxpayer during the
calendar year in which the taxable year begins.
``(ii) Agreements regarding foreign affiliates.--Section
24(d)(3)(C) shall apply for purposes of clause (i).''
(d) Conforming Amendment.--The table of sections for
subpart D of part IV of subchapter A of chapter 1 is amended
by adding at the end the following new item:
``Sec. 45D. Small employer stock purchase plan credit.''
(e) Effective Date.--The amendments made by this section
shall apply to costs paid or incurred in connection with
qualified stock purchase plans established after the date of
the enactment of this Act.
______
By Mr. GRASSLEY:
S. 2245. A bill to amend the Harmonized Tariff Schedule of the United
States to modify the article description with respect to certain hand-
woven fabrics; to the Committee on Finance.
harmonized tariff schedule legislation
Mr. GRASSLEY. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2245
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. CERTAIN HAND-WOVEN FABRICS.
(a) In General.--Subheadings 5111.11.30 and 5111.19.20 of
the Harmonized Tariff Schedule of the United States are
amended by striking ``, with a loom width of less than 76
cm'' each place it appears and inserting ``yarns of different
colors''.
(b) Effective Date.--The amendment made by subsection (a)
applies with respect to goods entered, or withdrawn from
warehouse for consumption, on or after the 30th day after the
date of enactment of this Act.
______
By Mr. BOND (for himself and Mr. Grassley):
S. 2246. A bill to amend the Internal Revenue Code of 1986 to clarify
that certain small businesses are permitted to use the cash method of
accounting even if they use merchandise or inventory; to the Committee
on Finance.
small business accounting method clarification act of 1999
Mr. BOND. Mr. President, I rise today to introduce a bill that
addresses an issue of growing concern to small businesses across the
nation--tax accounting methods. And I am pleased to be joined in this
effort by my colleague from Iowa, Senator Grassley.
While this topic may lack the notoriety of some other tax issues
currently in the spotlight like the estate tax or alternative minimum
tax, it goes to the heart of a business' daily operations--reflecting
its income and expenses. And because it is such a fundamental issue,
one may ask: ``What's the big deal?'' Hasn't this been settled long
ago?'' Regrettably, recent efforts by the Treasury Department and
Internal Revenue Service (IRS) have muddied what many small business
owners have long seen as a settled issue.
To many small business owners, tax accounting simply means that they
record cash receipts when they come in and the cash they pay when they
write a check for a business expense. The difference is income, which
is subject to taxes. In its simplest form, this is known as the ``cash
receipts and disbursements'' method of accounting--or the ``cash
method'' for short. It is easy to understand, it is simple to undertake
in daily business operations, and for the vast majority of small
enterprises, it matches their income with the related expenses in a
given year. Coincidentally, it's also the method of accounting used by
the Federal Government to keep track of the $1.7 trillion in tax
revenues it collects each year as well as all of its expenditures for
salaries and expenses, procurement, and the cost of various government
programs.
Unfortunately, the IRS has taken a different view in recent years
with respect to small businesses on the cash method. In too many cases,
the IRS contends that a small business should report its income when
all events have occurred to establish the business' right to receipt
and the amount can reasonably be determined. Similar principles are
applied to determine when a business may recognize an expense. This
method of accounting is known as ``accrual accounting.'' The reality of
accrual accounting for a small business is that it may be
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deemed to have income well before the cash is actually received and an
expense long after the cash is actually paid. As a result, accrual
accounting can create taxable income for a small business that has yet
to receive the cash necessary to pay the taxes.
While the IRS argues that the accrual method of accounting produces a
more accurate reflection of ``economic income,'' it also produces a
major headache for small enterprise. Few entrepreneurs have the time or
experience to undertake accrual accounting, which forces them to hire
costly accountants and tax preparers. By some estimates, accounting
fees can increase as much as 50% when accrual accounting is required,
excluding the cost of high-tech computerized accounting systems that
some businesses must install. For the brave few that try to handle the
accounting on their own, the accrual method often leads to major
mistakes, resulting in tax audits and additional costs for professional
help to sort the whole mess out--not to mention the interest and
penalties that the IRS may impose as a result of the mistake.
To make matters even worse, the IRS recently began focusing on small
service providers who use some merchandise in the performance of their
service. In an e-mail sent to practitioners in my State of Missouri and
in Kansas, the IRS' local district office took special aim at the
construction industry asserting that ``[t]axpayers in the construction
industry who are on the cash method of accounting may be using an
improper method. The cash method is permissible only if materials are
not an income producing factor.'' For these lucky service providers,
the IRS now asserts that the use of merchandise requires the business
to undertake an additional and even more onerous form of bookkeeping--
inventory accounting.
Let's be clear about the kind of taxpayer at issue here. It's the
home builder who by necessity must purchase wood, nails, dry wall, and
host of other items to provide the service of constructing a house.
Similarly, it's a painting contractor who will often purchase the paint
when she renders the service of painting the interior of a house. These
service providers generally purchase materials to undertake a specific
project and at its end, little or no merchandise remains. They may even
arrange for the products to be delivered directly to their client. In
either case, the IRS insists that inventory accounting is now required.
Mr. President, if we thought that accrual accounting is complicated
and burdensome, imagining in having to keep track of all the boards,
nails, and paint used in the home builder's and painter's jobs each
year. And the IRS doesn't stop at inventory accounting for these
service providers. Instead, they use it as the first step to imposing
overall accrual accounting--a one-two punch for the small service
provider when it comes to compliance burdens.
Even more troubling is the cost of an audit for these unsuspecting
service providers who have never known they were required to use
inventories or accrual accounting. According to a survey of
practitioners by the Padgett Business Services Foundation, audits of
businesses on the issue of merchandise used in the performance of
services resulted in tax deficiencies from $2,000 to $14,000, with an
average of $7,200. That's a pretty steep price to pay for an accounting
method error that the IRS has for years never enforced.
In many cases, like retailing, inventory accounting makes sense.
Purchasing or manufacturing products and subsequently selling them is
the heart of a retail business, and keeping track of those products is
a necessary reality. But for a service provider with incidental
merchandise, like a roofing contractor, inventory accounting is nothing
short of an unnecessary government-imposed compliance cost.
The bill I'm introducing today, the Small Business Tax Accounting
Simplification Act of 2000, addresses both of these issues. First, it
establishes a clear threshold for when small businesses may use the
cash method of accounting. Simply put, if a business has an average of
$5 million in annual gross receipts or less during the preceding three
years, it may use the cash method. Plain and simple--no complicated
formula; no guessing if you made the right assumptions and arrived at
the right answer. If the business exceeds the threshold, it may still
seek to establish, as under current law, that the cash method clearly
reflects its income.
Some may argue that this provision is unnecessary because section
448(b) and (c) already provide a $5 million gross receipts test with
respect to accrual accounting. That's a reasonable position since many
in Congress back in 1986 intended section 448 to provide relief for
small business taxpayers using the cash method. Unfortunately, the IRS
has twisted this section to support its quest to force as many small
businesses as possible into costly accrual accounting. The IRS
construes section 448 as merely a $5 million ceiling above which a
business can never use the cash method. My bill corrects this
misinterpretation once and for all--if a business has average gross
receipts of $5 million or less, it is free to use cash accounting.
Second, for small service providers, the Small Business Tax
Accounting Simplification Act, creates a straightforward threshold for
inventory accounting. If the amount paid for merchandise by a small
service provider is less than 50% of its gross receipts, based on its
prior year's figures, no inventory accounting would be required. Above
that level, the taxpayer would look more like a retail business and
inventory accounting may make sense.
These two thresholds set forth in my bill are common sense answers to
an increasing burden for small businesses in this country. In addition,
it sends a clear signal to the IRS: stop wasting scarce resources
forcing small businesses to adopt complex and costly accounting methods
when the benefit to the Treasury is simply a matter of timing. Whether
a small business uses the cash or accrual method or inventory
accounting or not, in the end, the government will still collect the
same amount of taxes--maybe not all this year, but very likely early in
the next year. What small business can go very long without collecting
what it is owed or paying its bills?
To date, the Treasury Department's answer has been to suggest a $1
million threshold under which a small business could escape accrual
accounting and presumably inventories. While it is a step in the right
direction, it simply doesn't go far enough. Even ignoring inflation, if
a million dollar threshold were sufficient, why would Congress have
tried to enact a $5 million threshold 14 years ago? My bill completes
the job that the Treasury Department has been unable or unwilling to
do.
Mr. President, the legislation I introduce today is substantially
similar to the bill introduced in the other body by my good friend and
fellow Missourian, Jim Talent (H.R. 2273). With the strong support he
has built among his colleagues in the other chamber and in the small
business community, I expect to continue the momentum in the Senate and
achieve some much needed relief from unnecessary compliance burdens and
costs for America's small businesses.
The call for tax simplification has been growing increasingly loud in
recent years, and the bill I offer today provides an excellent
opportunity for us to advance the ball well down the field. This is not
a partisan issue; it's a small business issue. And I urge my colleagues
on both sides of the aisle to join me in this common sense legislation
for the benefit of America's small enterprises, which contribute so
greatly to this country's economic engine.
Mr. President, I ask unanimous consent to print in the Record a copy
of the bill and a description of its provisions.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 2246
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Small Business Tax
Accounting Simplification Act of 2000''.
SEC. 2. CLARIFICATION OF CASH ACCOUNTING RULES FOR SMALL
BUSINESS.
Section 446 of the Internal Revenue Code of 1986 (relating
to general rule for methods of accounting) is amended by
adding at the end the following new subsection:
``(g) Small Business Taxpayers Permitted To Use Cash
Accounting Method Without Limitation.--Notwithstanding any
other provision of law, a taxpayer shall not
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be required to use an accrual method of accounting for any
taxable year, if the average annual gross receipts of such
taxpayer (or any predecessor) for the 3-year-period ending
with the preceding taxable year does not exceed $5,000,000.
The rules of paragraphs (2) and (3) of section 448(c) shall
apply for purposes of the preceding sentence. In the case of
a C corporation or a partnership which has a C corporation as
a partner, the first sentence of this subsection shall apply
only if such C corporation or partnership meets the
requirements of section 448(b)(3).''.
(b) Clarification of Inventory Rules for Small Business.--
Section 471 of the Internal Revenue Code of 1986 (relating to
general rule for inventories) is amended by redesignating
subsection (c) as subsection (d) and by inserting after
subsection (b) the following new subsection:
``(c) Small Business Service Providers Not Required To Use
Inventories.--A taxpayer shall not be required to use
inventories under this section for a taxable year if the
amounts paid for merchandise sold during the preceding
taxable year were less than 50 percent of the gross receipts
received during such preceding taxable year. For purposes of
this subsection, gross receipts for any taxable year shall be
reduced by returns and allowances made during such year.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.
____
Small Business Tax Accounting Simplification Act of 2000--Description
of Provisions
The bill amends section 446 of the Internal Revenue Code to
provide a clear threshold for small businesses to use the
cash receipts and disbursements method of accounting, instead
of accrual accounting. To qualify, the business must have $5
million or less in average annual gross receipts based on the
preceding three years.
The bill also amends section 471 of the Internal Revenue
Code to provide a small service provider exception to the
inventory accounting rules. Under this provision, if the
amount spent on merchandise by a service provider is less
than 50% of its gross receipts, inventory accounting under
section 471 would not be required. This 50% test is based on
the service provider's purchases and gross receipts in the
preceding taxable year.
Both provisions of the bill would be effective beginning on
the date of enactment.
____________________