Congressional Record, Volume 152 Issue 124 (Thursday, September 28, 2006)

[Congressional Record Volume 152, Number 124 (Thursday, September 28, 2006)]
[Senate]
[Pages S10459-S10489]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENT ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. THOMAS (for himself and Mr. Specter):
S. 3963. A bill to amend title XVIII of the Social Security Act to
provide for improved access to cost-effective, quality physical
medicine and rehabilitation service under part B of the Medicare
program, and for other purposes; to the Committee on Finance.
Mr. THOMAS. Mr. President, I am pleased to rise today to introduce
the ``Access to Physical Medicine and Rehabilitation Services
Improvement Act of 2006.'' This bill would improve patient access to
physical medicine and rehabilitation services while also reducing
Medicare costs.
As medicine has become increasingly specialized, the types of health
professionals physicians employ to assist them in delivering high
quality, cost-

[[Page S10460]]

effective healthcare has changed dramatically. While States have
typically kept up with these developments by creating regulatory
mechanisms to ensure that these health professionals are properly
educated and trained, the Medicare program has not kept pace. In fact,
a recent Medicare policy has actually turned back the clock on these
innovative ways of delivering care and this is having a negative affect
on not only the availability of services, but what Medicare pays for
these services.
We are all well aware of the struggles the Medicare program has had
trying to control spending for therapy services. In fact, we have had
to impose a cap on beneficiary spending because it has gotten so out of
control. Unfortunately, in the midst of our efforts to control
aggregate spending on therapy services, the Centers for Medicare and
Medicaid Services, CMS, has adopted policies that will lead to higher
per beneficiary expenditures and make it even more difficult for
seniors to get the care they need.
Since late in 2005, CMS has been enforcing a policy, sometimes
referred to as the ``therapy incident-to'' rule, that prevents doctors
from employing anyone other than a physical therapist to provide
physical medicine and rehabilitation services in their offices.
Frankly, this policy ignores the fact that there are many State
licensed or certified health professionals who are qualified to offer
identical services at a lower cost to Medicare.
Many of us are familiar with the devastating affects breast cancer
has on millions of women and men each year. One of the consequences of
breast cancer treatment is a condition called lymphedema. This is a
debilitating and disfiguring swelling of the extremities that occurs
from damage to the lymph nodes located in the arm pit. The only
effective treatment for this condition is a specialized type of massage
that should only be delivered by a certified lymphedema therapist. Due
to CMS' policy, over \1/3\ of the nationally certified lymphedema
therapists can no longer provide this service to Medicare
beneficiaries. Failure to treat lymphedema often results in long
hospitals stays due to infection and can lead to amputation in the most
extreme cases.
Prior to the adoption of the CMS rule, physicians had the freedom to
choose the State licensed or authorized health professional they
thought most appropriate to help their Medicare patients recover from
injuries or debilitating conditions. I believe we should allow
physicians, not government bureaucrats, to decide which State licensed
healthcare professionals have the necessary education and training to
provide the most high quality, cost-effective physical medicine and
rehabilitation services to their patients. Additionally, the health
professionals often approved to perform services are not readily
available in many rural communities. This means patients must go
without care or have to travel long distances to get services that were
previously available in their home towns. As Republican Co-Chair of the
Senate Rural Health Caucus, I have consistently supported policies and
initiatives that help rural Medicare beneficiaries get and maintain
access to services in their own communities in a more effective and
efficient way.
Finally, it is important to note that access to state licensed,
certified professionals will save the Medicare program money--not
increase costs. The CMS rule implemented last year will result in
higher Medicare expenditures than if the old policy had remained in
place. In fact, a recent Medicare Payment Advisory Commission, MedPAC,
report based on 2002 data showed that the most cost-effective place for
Medicare beneficiaries to obtain physical therapy was in the
physician's office. After reviewing the legislation, I hope that my
colleagues will consider joining me in this important effort to restore
physician judgment, patient choice, and common sense to the Medicare
program.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 3963

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 ``Access to Physical Medicine
and Rehabilitation Services Improvement Act of 2006''.

SEC. 2. ACCESS TO PHYSICAL MEDICINE AND REHABILITATION
SERVICES PROVIDED INCIDENT TO A PHYSICIAN.

Section 1862(a)(20) of the Social Security Act (42 U.S.C.
1395y(a)(20)) is amended by striking ``(other than any
licensing requirement specified by the Secretary)'' and
inserting ``(other than any licensing, education, or
credentialing requirements specified by the Secretary)''.

SEC. 3. COVERAGE OF CERTIFIED ATHLETIC TRAINER SERVICES AND
CERTIFIED LYMPHEDEMA THERAPIST SERVICES UNDER
PART B OF THE MEDICARE PROGRAM.

(a) Coverage of Services.--Section 1861 of the Social
Security Act (42 U.S.C. 1395x) is amended--
(1) in subsection (s)(2)--
(A) in subparagraph (Z), by striking ``and'' at the end;
(B) in subparagraph (AA), by adding ``and'' at the end; and
(C) by adding at the end the following new subparagraph:
``(BB) certified athletic trainer services (as defined in
subsection (ccc)(1)) and lymphedema therapist services (as
defined in subsection (ccc)(3)).''; and
(2) by adding at the end the following new subsection:

``Athletic Trainer Services and Lymphedema Therapist Services

``(ccc)(1) The term `athletic trainer services' means
services performed by a certified athletic trainer (as
defined in paragraph (2)) under the supervision of a
physician (as defined in section 1861(r)), which the athletic
trainer is legally authorized to perform under State law (or
the State regulatory mechanism provided by State law) of the
State in which such services are performed, as would
otherwise be covered if furnished by a physician (as so
defined) or as an incident to a physician's professional
service, to an individual--
``(A) who is under the care of a physician (as so defined);
and
``(B) with respect to whom a plan prescribing the type,
amount, and duration of services that are to be furnished to
such individual has been established by a physician (as so
defined).

Such term does not include any services for which a facility
or other provider charges or is paid any amounts with respect
to the furnishing of such services.
``(2) The term `certified athletic trainer' means an
individual who--
``(A) possesses a bachelor's, master's, or doctoral degree
which qualifies for licensure or certification as an athletic
trainer; and
``(B) in the case of an individual performing services in a
State that provides for licensure or certification of
athletic trainers, is licensed or certified as an athletic
trainer in such State.
``(3) The term `certified lymphedema therapist services'
means services performed by a certified lymphedema therapist
(as defined in paragraph (4)) under the supervision of a
physician (as defined by paragraph (1) or (3) of section
1861(r)) which the lymphedema therapist is legally authorized
to perform under State law (or the State regulatory mechanism
provided by the State law) of the State in which such
services are performed, as would otherwise be covered if
furnished by a physician (as so defined) or as incident to a
physicians professional service, to an individual--
``(A) who is under the care of a physician (as so defined);
and
``(B) with respect to whom a plan prescribing the type,
amount, and duration of services that are to be furnished to
such individual has been established by a physician (as so
defined).

Such term does not include any services for which a facility
or other provider charges or is paid any amounts with respect
to the furnishing of such services
``(4) The term `certified lymphedema therapist' means an
individual who--
``(A) possesses a current unrestricted license as a health
professional in the State in which he or she practices;
``(B) after obtaining such a license, has successfully
completed 135 hours of Complete Decongestive Therapy
coursework which consists of theoretical instruction and
practical laboratory work utilizing teaching methods directly
aimed at the treatment of lymphatic and vascular disease from
a lymphedema training program recognized by the Secretary for
purposes of certifying lymphedema therapists; and
``(C) in the case of an individual performing services in a
State that provides for licensure or certification of
lymphedema therapists, is licensed or certified as a
lymphedema therapist in such State.''.
(b) Payment.--
(1) In general.--Section 1832(a)(2)(B) of the Social
Security Act (42 U.S.C. 1395k(a)(2)(B)) is amended by adding
at the end the following new clause:
``(v) athletic trainer services and lymphedema therapist
services; and''.
(2) Amount.--Section 1833(a)(1) of the Social Security Act
(42 U.S.C. 1395l(a)(1)) is amended--
(A) by striking ``and (V)'' and inserting ``(V)''; and

[[Page S10461]]

(B) by inserting before the semicolon at the end the
following: ``, and (W) with respect to athletic trainer
services and lymphedema therapist services under section
1861(s)(2)(BB), the amounts paid shall be 80 percent of the
lesser of the actual charge for the service or the fee
schedule amount under section 1848 for the same service
performed by a physician''.
(c) Inclusion of Services in the Therapy Cap.--Services
provided by a certified athletic trainer or a certified
lymphedema therapist (as those terms are defined in section
1861(ccc) of the Social Security Act, as added by subsection
(a)) shall be subject to the limitation on payments described
in section 1833(g) of such Act (42 U.S.C. 1395l(g)) in the
same manner those services would be subject to limitation if
the service had been provided by a physician personally.
(d) Inclusion of Athletic Trainers and Lymphedema
Therapists as Practitioners for Assignment of Claims.--
Section 1842(b)(18)(C) of the Social Security Act (42
U.S.C.1395u(b)(18)(C)) is amended by adding at the end the
following new clauses:
``(vii) A certified athletic trainer (as defined in section
1861(ccc)(1)).
``(viii) A certified lymphedema therapist (as defined in
section 1861(ccc)(2)).''.
(e) Coverage of Certain Physical Medicine and
Rehabilitation Services Provided in Rural Health Clinics and
Federally Qualified Health Centers.--Section 1861(aa)(1)(B)
of the Social Security Act (42 U.S.C. 1395x(aa)(1)(B)) is
amended by striking ``or by a clinical social worker (as
defined in subsection (hh)(1))'' and inserting ``, by a
clinical social worker (as defined in subsection (hh)(1)), by
a certified athletic trainer (as defined in subsection
(ccc)(2)), or by a certified lymphedema therapist (as defined
in subsection (ccc)(4))''.
(f) Effective Date.--The amendments made by this section
shall apply with respect to services furnished on or after
January 1, 2007.
______

By Mr. LOTT:
S. 3964. A bill to provide for the issuance of a commemorative
postage stamp in honor of Senator Blanche Kelso Bruce; to the Committee
on Homeland Security and Governmental Affairs.
Mr. LOTT. Mr. President, the first African American to serve a full
term in the United States Senate represented my great State of
Mississippi.
Blanche Kelso Bruce was elected to the Senate in 1874 by the
Mississippi State Legislature where he served from 1875 until 1881.
On February 14, 1879, he broke a second barrier by becoming the first
African American to preside over a Senate session. He was a leader in
the nationwide fight for African American rights, fighting for
desegregation of the Army and protection of voting rights.
Blanche Kelso Bruce was born into slavery near Farmville, VA, on
March 1, 1841, and spent his early years in Virginia and Missouri. He
was 20 years old when the Civil War broke out. He tried to enlist in
the Union Army but was rejected because of his race.
He then turned his attention to teaching and while in Missouri
organized that State's first school for African Americans.
In 1869 he moved to Mississippi to become a planter on a cotton
plantation, and the Magnolia State is where he became active in
Republican politics. He rose in Mississippi politics from membership on
the Mississippi Levee Board, as the sheriff and tax collector for
Bolivar County surrounding Cleveland, Mississippi, and as the Sergeant-
at-Arms for the Mississippi State Senate. It was Blanche Kelso Bruce's
perseverance, selfless public service and commitment to Mississippi
that led to the Mississippi State Legislature's election of him to
serve in the U.S. Senate.
In the Senate, he served on the Pensions, Manufacturers, Education
and Labor committees. He chaired the Committee on River Improvements
and the Select Committee to Investigate the Freedman's Savings and
Trust Company.
Senator Bruce left the Senate in 1881 and was appointed Registrar of
the Treasury by President James Garfield, a position he also held in
1897. He subsequently received appointments from Presidents Chester
Arthur, Benjamin Harrison and William McKinley.
Senator Bruce joined the board of Howard University in Washington,
D.C. where he received an honorary degree. He died in Washington on
March 17, 1898, at the age of 57.
Four years ago, on September 17, 2002, in my position as Senate
Majority Leader, I joined with Senator Chris Dodd in honoring this
revered adopted son of Mississippi by unveiling the portrait of Blanche
Kelso Bruce in the U.S. Capitol.
Today I rise to further honor this great statesman and pioneer by
introducing legislation to issue the Senator Blanche Kelso Bruce
commemorative postage stamp. Mississippi takes great pride in our
leaders who often quietly, with little fanfare, blaze paths for the
rest of the Nation to follow. Senator Blanche Kelso Bruce is one such
great pioneer, and I call on my colleagues to join me in honoring him.
______

By Mrs. BOXER:
S. 3965. A bill to address the serious health care access barriers,
and consequently higher incidences of disease, for low-income,
uninsured populations; to the Committee on Health, Education, Labor,
and Pensions.
Mrs. BOXER. Mr. President, today I rise to introduce the Latina
Health Access Act. This important legislation addresses the serious
health care access barriers, and consequently higher incidences of
disease and poorer health outcomes, for the Latina population in the
United States.
The United States has witnessed a tremendous growth in the Latino
population across the Nation. There are now 35 million Latinos residing
in the U.S., and Latinas are more than half of the total Latino
population--for a total of 18 million Latinas in the United States. In
my home State of California, 29 percent of the female population is
Latina--this is approximately 5 million women. The number of Latinas is
expected to continue to grow, and it is estimated that by 2050, one out
of every four women in the U.S. will be a Latina. Despite their growing
numbers, Latinas continue to disproportionately face serious health
concerns, including sexually transmitted diseases, diabetes, and
cancer, which are otherwise preventable, or treatable, with adequate
health access.
Latinas are particularly at risk for being uninsured. It is estimated
that 37 percent of Latinas are uninsured, almost double the rate of the
national average. This lack of adequate health care results in health
problems that could otherwise be prevented. For example, 1 in 12
Latinas will develop breast cancer nationwide. White women have the
highest rates of breast cancer; however, Latinas have among the lowest
rates of breast cancer screening, diagnosis and treatment. As a result,
Latinas are more likely to die from breast cancer than white women.
Also, the prevalence of diabetes is at least two to four times higher
among Latinas than among white women. More than 25 percent of Latinas
aged 65 to 74 have Type II diabetes. All of these health problems would
be more effectively treated or prevented with adequate health care
coverage.
To address these health concerns, the Latina Health Access Act
provides a two-fold approach to dealing with this problem. First, the
bill would provide greater health access to Latinas. Second, the bill
would provide educational outreach programs targeted at Latinas in
regards to health care access.
The bill would create a program at the Department of Health and Human
Services (HHS) that provides funding for high-performing hospitals and
community health centers targeted at serving the growing Latina
population of the United States. Also, the bill would mandate that HHS
provide grants to various nonprofits, state or local governments that
serve Latino communities, and lastly to women of color who seek to
create diversity in the health care community. Finally, the bill would
direct HHS to provide $18 million for grants to fund research
institutions so that they may conduct research on the health status of
Latinas.
The Latina Health Access Act also focuses on educational outreach to
the Latina population. The bill would fund health education programs
targeted specifically to Latinas through community-centered
informational forums, public service announcements and media campaigns.
Adequate health access is the key to diagnosing and treating diseases
before they become deadly and rampant. We need to strengthen our
efforts to bring greater health access to the Latina population. I urge
my colleagues to join me in supporting this effort.
I ask unanimous consent that the text my bill be printed in the
Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

[[Page S10462]]

S. 3965

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 ``Latina Health Access Act''.

SEC. 2. FINDINGS.

Congress finds the following:
(1) As of 2006, there are 18,000,000 Latinas residing in
the United States. The number of Latinas is expected to grow
considerably. It is estimated that by the year 2050, 1 out of
every 4 women in the United States will be a Latina.
(2) Latinas are particularly at risk for being uninsured.
37 percent of Latinas are uninsured, almost double the
national average.
(3) With respect to sexually transmitted diseases--
(A) the HIV infection rate is 7 times more for Latinas than
their white counterparts, and Latinas represent 18 percent of
new HIV infections among women;
(B) the AIDS case rate for Latinas is more than 5 times
more than the rate for white women;
(C) the rate of chlamydia for Latinas is 4 times more than
the rate for white women; and
(D) among Latinas, the gonorrhea incidence is nearly double
that of white women.
(4) With respect to cancer--
(A) The national incidence rate for cervical cancer in
Latinas over the age of 30 is nearly double that of non-
Latinas;
(B) 1 in 12 Latinas nationwide will develop breast cancer;
and
(C) while white women have the highest rates of breast
cancer, Latinas have among the lowest rates of breast cancer
screening, diagnosis and treatment and, as a result, are more
likely to die from breast cancer compared to white women.
(5) The prevalence of diabetes is at least 2 to 4 times
more among Latinas than among white women. More than 25
percent of Latinas aged 65 to74 have Type II diabetes.
(6) Heart disease is the main cause of death for all women,
and heart disease risk and death rates are higher among
Latinas partly because of higher rates of obesity and
diabetes.
(7) Therefore, despite their growing numbers, Latinas
continue to face serious health concerns (including sexually
transmitted diseases, diabetes, and cancer) that are
otherwise preventable, or treatable, with adequate health
access.

SEC. 3. HEALTH ACCESS FOR UNINSURED AND LOW-INCOME
INDIVIDUALS.

The Public Health Service Act (42 U.S.C. 201 et seq.) is
amended by adding at the end the following:

``TITLE XXIX--HEALTH ACCESS FOR UNINSURED AND LOW-INCOME INDIVIDUALS

``SEC. 2901. HEALTH CARE ACCESS FOR PREVENTABLE HEALTH
PROBLEMS.

``(a) Definition of Eligible Entity.--In this section, the
term `eligible entity' means--
``(1) a high-performing hospital or community health center
that serves medically underserved areas with large numbers of
uninsured and low-income individuals, such as Latina
populations;
``(2) a State or local government; or
``(3) a private nonprofit entity.
``(b) In General.--The Secretary shall award grants to
eligible entities to enable the eligible entities to provide
programs and activities that provide health care services to
uninsured and low-income individuals in medically underserved
areas.
``(c) Application.--An eligible entity desiring a grant
under this section shall submit an application to the
Secretary at such time, in such manner, and containing such
information as the Secretary may require.
``(d) Authorized Activities.--An eligible entity receiving
a grant under this section shall use grant funds to carry out
programs and activities that provide access to care for a
full spectrum of preventable and treatable health care
problems in a culturally and linguistically appropriate
manner, including--
``(1) family planning services and information;
``(2) prenatal and postnatal care; and
``(3) assistance and services with respect to asthma,
cancer, HIV disease and AIDS, sexually transmitted diseases,
mental health, diabetes, and heart disease.
``(e) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section
$18,000,000 for fiscal year 2007 and each succeeding fiscal
year.

``SEC. 2902. FOCUS ON UNINSURED AND LOW-INCOME POPULATIONS.

``(a) Prioritizing Health Grants to Increase Funding
Equity.--In order to create a more diverse movement,
cultivate new leaders, and address health issues within
medically underserved areas, the Secretary shall, in awarding
grants and other assistance under this Act, reserve a portion
of the grants and assistance for entities that--
``(1) represent medically underserved areas or populations
with a large number of uninsured and low-income individuals;
and
``(2) otherwise meet all requirements for the grant or
assistance.
``(b) Research Benefitting Populations With a Lack of
Health Data.--
``(1) Grants authorized.--From amounts appropriated under
paragraph (3) for a fiscal year, the Secretary shall award
grants to research institutions in order to enable the
institutions--
``(A) to conduct research on the health status of
populations for which there is an absence of health data,
such as the Latina population; or
``(B) to work with organizations that focus on populations
for which there is an absence of health data, such as the
Latina population, on developing participatory community-
based research methods.
``(2) Application.--A research institution desiring a grant
under this subsection shall submit an application to the
Secretary at such time, in such manner, and containing such
information as the Secretary may require.
``(3) Authorization of appropriations.--There is authorized
to be appropriated to carry out this subsection $18,000,000
for fiscal year 2007 and each of the succeeding fiscal years.

``SEC. 2903. EDUCATION AND OUTREACH.

``(a) Joint Effort for Health Outcomes.--In order to
improve health outcomes for uninsured and low-income
individuals, the Secretary shall, through a joint effort with
health care professionals, health advocates, and community-
based organizations in medically underserved areas, provide
outreach, education, and delivery of comprehensive health
services to uninsured and low-income individuals in a
culturally competent manner.
``(b) Targeted Health Education Programs.--The Secretary
shall carry out a health education program targeted
specifically to populations of uninsured and low-income
individuals, including the Latina population, through
community centered informational forums, public service
announcements, and media campaigns.
``(c) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section
$18,000,000 for fiscal year 2007 and each succeeding fiscal
year.''.
______

By Mrs. BOXER:
S. 3966. A bill to provide assistance to State and nongovernmental
entities to initiate public awareness and outreach campaigns to reduce
teenage pregnancies; to the Committee on Health, Education, and
Pensions.
Mrs. BOXER. Mr. President, today I rise to reintroduce the HOPE
(Hispanas Organized for Political Equality) Youth Pregnancy Prevention
Act.
The United States has the highest rate of teen pregnancy in the
Western industrialized world, and the U.S. teen-pregnancy rate is
nearly twice that of Canada and Great Britain. Although overall teen
pregnancy rates have decreased in recent years, the teen pregnancy
rates for Hispanics and other ethnic and racial minority teens in the
United States are significantly higher than the national average. For
example, 51 percent of Latina girls in the U.S. will become pregnant
once before the age 20.
The Latina population in the United States has grown tremendously.
Currently, there are approximately 18 million Latinas that reside in
the U.S. In my home State of California, 29 percent of all women are
Latinas, this is approximately five million women. The number of
Latinas is expected to continue to grow. It is estimated that by 2050,
one out of every four women in the U.S. will be a Latina. Despite their
growing numbers, Latinas continue to face serious health care access
barriers and consequently higher incidences of teenage pregnancy.
To address the growing risk for many reproductive and other health
concerns that are otherwise preventable, the HOPE Youth Pregnancy
Prevention Act would provide a comprehensive solution and the resources
to help prevent teen pregnancy among at-risk and minority youth.
Specifically, the bill would provide grants to States, localities,
and non-governmental organizations for teenage pregnancy prevention
activities targeted to areas with large ethnic minorities and other at-
risk youth. These grants could be used for a number of activities,
including youth development, work-related interventions and other
educational activities, parental involvement, teenage outreach and
clinical services. The bill would authorize $30 million a year for five
years for these grants.
The bill would also provide grants to States and non-governmental
organizations to establish multimedia public awareness campaigns to
combat teenage pregnancy. These campaigns would aim to prevent teen
pregnancy through TV, radio and print ads, billboards, posters, and the
Internet. Priority would be given to those activities that target
ethnic minorities and other at-risk youth.
Over the past 10 years, we have made progress in reducing teen
pregnancy, but our work is not done. We need to strengthen our efforts,
especially among Latinas and other minority

[[Page S10463]]

youth. I urge my colleagues to join me in supporting this effort.
I ask unanimous consent that the text of my bill be printed in the
Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 3966

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 ``HOPE Youth Pregnancy
Prevention Act''.

SEC. 2. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT.

Part P of title III of the Public Health Service Act (42
U.S.C. 280g et seq.) is amended by adding at the end the
following:

``SEC. 399Q. YOUTH PREGNANCY PREVENTION.

``(a) At-Risk Teen Pregnancy Prevention Grants.--
``(1) In general.--The Secretary shall award grants to
eligible entities to enable such entities to carry out
teenage pregnancy prevention activities that are targeted at
areas with large ethnic minorities and other youth at-risk of
becoming pregnant.
``(2) Eligibility.--To be eligible to receive a grant under
paragraph (1), an entity shall--
``(A) be a State or local government or a private nonprofit
entity; and
``(B) prepare and submit to the Secretary an application at
such time, in such manner, and containing such information as
the Secretary may require.
``(3) Eligible activities.--Activities carried out under a
grant under this subsection may include--
``(A) youth development for adolescents;
``(B) work-related interventions and other educational
activities;
``(C) parental involvement;
``(D) teenage outreach; and
``(E) clinical services.
``(b) Multimedia Public Awareness and Outreach Grants.--
``(1) In general.--The Secretary shall award grants to
eligible entities to enable such entities to establish
multimedia public awareness campaigns to combat teenage
pregnancy.
``(2) Eligibility.--To be eligible to receive a grant under
paragraph (1), an entity shall--
``(A) be a State government or a private nonprofit entity;
and
``(B) prepare and submit to the Secretary an application at
such time, in such manner, and containing such information as
the Secretary may require.
``(3) Activities.--The purpose of the campaigns established
under a grant under paragraph (1) shall be to prevent teenage
pregnancy through the use of advertising using television,
radio, print media, billboards, posters, the Internet, and
other methods determined appropriate by the Secretary.
``(4) Priority.--In awarding grants under this subsection,
the Secretary shall give priority to applicants that express
an intention to carry out activities that target ethnic
minorities and other at-risk youth.
``(c) Authorization of Appropriations.--There are
authorized to be appropriated--
``(1) to carry out subsection (a), $30,000,000 for each of
fiscal years 2007 through 2011; and
``(2) to carry out subsection (b), $20,000,000 for each of
fiscal years 2007 through 2011.''.
______

By Mrs. CLINTON:
S. 3967. A bill to require the International Trade Commission to
report on the specific impact of each free trade agreement in force
with respect to the United States on a sector-by-sector basis, and for
other purposes; to the Committee on Finance.
Mrs. CLINTON. Mr. President, I am pleased today to introduce a bill
that will help inform the Congress and the American people about our
Nation's trade agreements.
The trade policy debate here in Washington is heated and polarized.
Supporters of ``free trade'' often view trade agreements uncritically
and without question while others are suspicious of any agreement that
makes it easier to trade with other countries. I believe that trade
policy decisions should be based on an understanding of the concrete
results of these agreements and the impact that they have on our
economy and the American people, rather than on preconceived notions.
My bill, the Trade Agreement Accountability Act, will inject factual
analysis in to this debate. The bill requires the International Trade
Commission to report on the effects of every trade agreement we sign.
These reports will examine the good and the bad of every trade
agreement after two years, after five years and then every five years
after it goes into effect. They will study the effect of each trade
agreement on a sector-by-sector basis, and conduct an assessment and
quantitative analysis of how each agreement is fostering economic
growth, improving living standards and helping to create jobs.
In short, this bill will help educate policymakers and the American
people about this important debate. I hope that by evaluating the
results of past agreements, we will be able to better understand the
consequences of future ones.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 3967

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 `` Trade Agreement Assessment
Act''.

SEC. 2. ITC REPORT.

(a) In General.--Not later than 2 years after the date of
the enactment of this Act, 5 years after the date of the
enactment of this Act, and every 5 years thereafter, the
International Trade Commission shall submit a report to
Congress on each free trade agreement in force with respect
to the United States. The report shall, with respect to each
free trade agreement, contain an analysis and assessment of
the analysis and predictions made by the International Trade
Commission, the United States Trade Representative, and other
Federal agencies, before implementation of the agreement and
actual results of the agreement on the United States economy.
(b) Contents of Report.--Each report required by subsection
(a) shall contain the following:
(1) With respect to the United States and each country that
is a party to a free trade agreement, an assessment and
quantitative analysis of how each agreement--
(A) is fostering economic growth;
(B) is improving living standards;
(C) is helping create jobs; and
(D) is reducing or eliminating barriers to trade and
investment.
(2) An assessment and quantitative analysis of how each
agreement is meeting the specific objectives and goals set
out in connection with the implementation of that agreement,
the impact of the agreement on the United States economy as a
whole, and on specific industry sectors, including the impact
the agreement is having on--
(A) the gross domestic product;
(B) exports and imports;
(C) aggregate employment, and competitive positions of
industries;
(D) United States consumers; and
(E) the overall competitiveness of the United States.
(3) An assessment and quantitative analysis of how each
agreement is meeting the goals and objectives for the
agreement on a sector-by-sector basis, including--
(A) trade in goods;
(B) customs matters, rules or origin, and enforcement
cooperation;
(C) sanitary and phytosanitary measures;
(D) intellectual property rights;
(E) trade in services;
(F) electronic commerce;
(G) government procurement;
(H) transparency, anti-corruption; and regulatory reform;
and
(I) any other issues with respect to which the
International Trade Commission submitted a report under
section 2104(f) of the Bipartisan Trade Promotion Authority
Act of 2002.
(4) A summary of how each country that is a party to an
agreement has changed its labor and environmental laws since
entry into force of the agreement.
(5) An analysis of whether the agreement is making progress
in achieving the applicable purposes, policies, priorities,
and objectives of the Bipartisan Trade Promotion Authority
Act of 2002.
______

By Mr. AKAKA (for himself and Mr. Lautenberg):
S. 3968. A bill to affirm the authority of the Comptroller General to
audit and evaluate the programs, activities, and financial transactions
of the intelligence community, and for other purposes; to the Select
Committee on Intelligence.
Mr. AKAKA. Mr. President, I rise to introduce ``The Intelligence
Community Audit Act of 2006,'' with Senator Lautenberg which would
reaffirm the Comptroller General of the United States and head of the
Government Accountability Office's, GAO, authority to audit the
financial transactions and evaluate the programs and activities of the
intelligence community (IC). Representative Bennie Thompson, ranking
member of the House Homeland Security Committee, is introducing similar
legislation.
The bill Senator Lautenberg and I offer today is in keeping with
legislation introduced in 1987 by Senator John Glenn, the former
chairman of the Governmental Affairs Committee, to ensure more
effective oversight of the Central Intelligence Agency (CIA) in the
wake of the Iran-Contra scandal.

[[Page S10464]]

The need for greater oversight and availability of information to
appropriate congressional committees is not new. What is new is that
Congress does not have the luxury of failure in this era of terrorism.
Failure brings terrible consequence.
Since 9/11, effective oversight is needed now more than ever for two
very basic reasons: First, intelligence reforms have spawned new
agencies with new intelligence functions demanding even more inter-
agency cooperation. The Congress needs to ensure that these agencies
have the assets, resources, and capability to do their job in
protecting our national security. However, now the Congress cannot do
its job properly, in part, because its key investigative arm, the
Government Accountability Office, is not given adequate access to the
intelligence community, led by the Director of National Intelligence
(DNI).
Moreover, intelligence oversight is no longer the sole purview of the
Senate and House intelligence committees. Other committees have
jurisdiction over such departments as Homeland Security, State,
Defense, Justice, Energy, and even Treasury and Commerce, which, in
this war on terrorism, have intelligence collection and sharing
responsibilities. Nor is the information necessary for these committees
to exercise their oversight responsibilities restricted to the two
intelligence committees as their organizing resolutions make clear.
Unfortunately, the intelligence community stonewalls the GAO when
committees of jurisdiction request that GAO investigate problems
despite the clear responsibility of Congress to ensure that these
agencies are operating effectively to protect America.
This is not always the case. Some agencies recognize the valuable
contribution that GAO makes in improving the quality of our
intelligence. As Lieutenant General Lew Allen, Jr., then Director of
the National Security Agency (NSA), observed in testimony before the
Senate Select Committee To Study Governmental Operations With Respect
To Intelligence Activities, on October 29, 1975: ``Another feature of
congressional review is that since 1955 resident auditors of the
General Accounting Office have been assigned at the Agency to perform
on-site audits. Additional GAO auditors were cleared for access in
1973, and GAO, in addition to this audit, is initiating a classified
review of our automatic data processing functions.'' Not surprisingly,
this outpost of the GAO still exists at the NSA.
Second, and equally important, is the inability of Congress to ensure
that unfettered intelligence collection does not trample civil
liberties. New technologies and new personal information data bases
threaten our individual right to a secure private life, free from
unlawful government invasion. The Congress must ensure that private
information being collected by the intelligence community is not
misused and is secure.
Over 30 years ago, Senator Charles Percy urged Congress to ``act now
to gain control over the Government's dangerously proliferating police,
investigative, and intelligence activities.'' He noted that ``we find
ourselves threatened by the specter of a `watchdog' Government,
breeding a nation of snoopers.''
The privacy concerns expressed by our former colleague have become
vastly more complicated. As I have noted, the institutional landscape
has become littered with new intelligence agencies with ever-increasing
demands and responsibilities on law enforcement at every level of
government since the establishment of the Department of Homeland
Security and the passage of the Intelligence Reform and Terrorism
Prevention Act of 2004. They have the legitimate mission to protect the
country against potential threats. Congress' role is to ensure that
their mission remains legitimate.
The intelligence community today consists of 19 different agencies or
components: the Office of the Director of National Intelligence;
Central Intelligence Agency; Department of Defense; Defense
Intelligence Agency; National Security Agency; Departments of the Army,
Navy, Marine Corps, and Air Force; Department of State; Department of
Treasury; Department of Energy; Department of Justice; Federal Bureau
of Investigation; National Reconnaissance Office; National Geospatial-
Intelligence Agency; Coast Guard; Department of Homeland Security, and
the Drug Enforcement Administration.
I ask unanimous consent that a memorandum prepared by the
Congressional Research Service, entitled ``Congressional Intelligence
Oversight,'' be included in the Record.
As both House Rule 48 and Senate Resolution 400 establishing the
intelligence oversight committees state, ``Nothing in this [charter]
shall be construed as amending, limiting, or otherwise changing the
authority of any standing committee of the [House/Senate] to obtain
full and prompt access to the product of the intelligence activities of
any department or agency of the Government relevant to a matter
otherwise within the jurisdiction of such committee.''
Despite this clear and unambiguous statement, the ability of non-
intelligence committees to obtain information, no matter how vital to
improving the security of our Nation, has been restricted by the
various elements of the intelligence community.
Two recent incidents have made this situation disturbingly clear. At
a hearing entitled ``Access Delayed: Fixing the Security Clearance
Process, Part II,'' before the Subcommittee on Oversight of Government
Management, the Federal Workforce, and the District of Columbia on
which I serve as Ranking Member, on November 9, 2005, GAO was asked
about steps it would take to ensure that the Office of Personnel
Management (OPM), the Office of Management and Budget, and the
intelligence community met the goals and objectives outlined in the OPM
security clearance strategic plan. Fixing the security clearance
process, which is on GAO's high-risk list, is essential to our national
security. But as GAO observed in a written response to a question
raised by Senator Voinovich, ``while we have the authority to do such
work, we lack the cooperation we need to get our job done in that
area.'' The intelligence community is blocking GAO's work in this
essential area.

A similar case arose in response to a GAO investigation for the
Senate Homeland Security Committee and the House Government Reform
Committee on how agencies are sharing terrorism-related and sensitive
but unclassified information. The report, entitled ``Information
Sharing, the Federal Government Needs to Establish Policies and
Processes for Sharing Terrorism-Related and Sensitive but Unclassified
Information'' (GAO-06-385), was released in March 2006.
At a time when Congress is criticized by members of the 9-11
Commission for failing to implement its recommendations, we should
remember that improving terrorism information sharing among agencies
was one of the critical recommendations of the 9-11 Commission.
Moreover, the Intelligence Reform and Terrorism Prevention Act of 2004
mandated the sharing of terrorism information through the creation of
an Information Sharing Environment. Yet, when asked by GAO for comments
on the GAO report, the Office of the Director of National Intelligence
refused, stating that ``the review of intelligence activities is beyond
GAO's purview.''
However, as a Congressional Research Service memorandum entitled
``Overview of `Classified' and `Sensitive but Unclassified'
Information,'' concludes, ``it appears that pseudo-classification
markings have, in some instances, had the effect of deterring
information sharing for homeland security.'' I ask unanimous consent
that the memo be printed in the Record following my remarks.
Unfortunately I have more examples, that predate the post 9-11
reforms. Indeed, in July 2001, in testimony entitled ``Central
Intelligence Agency, Observations on GAO Access to Information on CIA
Programs and Activities'' (GAO-01-975T) before the House Committee on
Government Reform, the GAO noted, as a practical matter, ``our access
is generally limited to obtaining information on threat assessments
when the CIA does not perceives [sic] our audits as oversight of its
activities.'' I ask consent that this testimony also be printed
following my remarks.
It is inconceivable that the GAO--the audit arm of the U.S.
Congress--has been unable to conduct evaluations of the CIA for over 40
years.

[[Page S10465]]

If the GAO had been able to conduct basic auditing functions of the
CIA, perhaps some of the problems that were so clearly exposed
following the terrorist attacks in September 2001 would have been
resolved. And yet, it is extraordinary that five years after 9-11 the
same problems persist.
Once more I refer to Senator Glenn's bill S. 1458, the ``General
Accounting Office-Central Intelligence Agency Audit Act of 1987.'' On
its introduction he said, ``in the long run, I believe carefully
controlled GAO audits of CIA will lower the probability of future
abuses of power, boost the credibility of CIA management, increase the
essential public support the Agency's mission deserves, assist the
Congress in conducting meaningful oversight, and in no way compromise
the CIA mission.'' Unfortunately, S. 1458 did not become law, and
nearly 20 years later, the CIA's apparent management challenges led to
the creation of the Director of National Intelligence with the
Intelligence Reform Act of 2004. If Senator Glenn's proposal made in
1987 had been accepted, perhaps, again, some of the problems that
became apparent with our intelligence agencies following 9-11 might
never have occurred.
I want to be clear that my legislation does not detract from the
authority of the intelligence committees. In fact, the language makes
explicit that the Comptroller General may conduct an audit or
evaluation of intelligence sources and methods or covert actions only
upon the request of the intelligence committees or at the request of
the congressional majority or minority leaders. The measure also
prescribes for the security of the information collected by the
Comptroller General.
However, my bill reaffirms the authority of the Comptroller General
to conduct audits and evaluations--other than those relating to sources
and methods, or covert actions--relating to the management and
administration of elements of the intelligence community in areas such
as strategic planning, financial management, information technology,
human capital, knowledge management, information sharing, and change
management for other relevant committees of the Congress.
Attached is a detailed description of the legislation. I urge my
colleagues to join me in supporting this legislation.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection the materials were ordered to be printed in
the Record, as follows:

Congressional Research Service,

Washington, DC, September 14, 2006.
Subject: Congressional Oversight of Intelligence.
From: Alfred Cumming, Specialist in Intelligence and National
Security Foreign Affairs, Defense, and Trade Division.

This memorandum examines the intelligence oversight
structure established by Congress in the 1970s, including the
creation of the congressional select intelligence committees
by the U.S. House of Representatives and the Senate,
respectively. It also looks at the intelligence oversight
role that Congress reserved for congressional committees
other than the intelligence committees; examines certain
existing statutory procedures that govern how the executive
branch is to keep the congressional intelligence committees
informed of U.S. intelligence activities; and looks at the
circumstances under which the two intelligence committees are
expected to keep congressional standing committees, as well
as both chambers, informed of intelligence activities.
If I can be of further assistance, please call at 707-7739.

Background

In the wake of congressional investigations into
Intelligence Community activities in the mid-1970s, the U.S.
Senate in 1976 created a select committee on intelligence to
conduct more effective oversight on a continuing basis. The
U.S. House of Representatives established its own
intelligence oversight committee the following year.
Until the two intelligence committees were created, other
congressional standing committees--principally the Senate and
House Armed Services and Appropriations committees--shared
responsibility for overseeing the intelligence community.
Although willing to cede primary jurisdiction over the
Central Intelligence Agency (CIA) to the two new select
intelligence committees, these congressional standing
committees wanted to retain jurisdiction over the
intelligence activities of the other departments and agencies
they oversaw. According to one observer, the standing
committees asserted their jurisdictional prerogatives for two
reasons--to protect ``turf,'' but also to provide ``a hedge
against the possibility that the newly launched experiment in
oversight might go badly.''

Intelligence Committees' Statutory Obligations

Under current statute, the President is required to ensure
that the congressional intelligence committees are kept
``fully and currently informed'' of U.S. intelligence
activities, including any ``significant anticipated
intelligence activity, and the President and the intelligence
committees are to establish any procedures as may be
necessary to carry out these provisions.
The statute, however, stipulates that the intelligence
committees in turn are responsible for alerting the
respective chambers or congressional standing committees of
any intelligence activities requiring further attention. The
intelligence committees are to carry out this responsibility
in accordance with procedures established by the House of
Representatives and the Senate, in consultation with the
Director of National Intelligence, in order to protect
against unauthorized disclosure of classified information,
and all information relating to sources and methods.
The statute stipulates that: ``each of the congressional
intelligence committees shall promptly call to the attention
of its respective House, or to any appropriate committee or
committees of its respective House, any matter relating to
intelligence activities requiring the attention of such House
or such committee or committees.''
This provision was included in statute after being
specifically requested in a letter from then Senate Foreign
Relations Chairman Frank Church and Ranking Minority Member
Jacob Javits in an Apr. 30, 1980 letter to then-intelligence
committee Chairman Birch Bayh and Vice Chairman Barry
Goldwater.

Intelligence Committee Obligations Under Resolution

In an apparent effort to address various concerns relating
to committee jurisdiction, the House of Representatives and
the Senate, in the resolutions establishing each of the
intelligence committees, included language preserving
oversight roles for those standing committees with
jurisdiction over matters affected by intelligence
activities.
Specifically, each intelligence committee's resolution
states that: ``Nothing in this [Charter] shall be construed
as prohibiting or otherwise restricting the authority of any
other committee to study and review any intelligence activity
to the extent that such activity directly affects a matter
otherwise within the jurisdiction of such committee.''
Both resolutions also stipulate that:
Nothing in this [charter] shall be construed as amending,
limiting, or otherwise changing the authority of any standing
committee of the [House/Senate] to obtain full and prompt
access to the product of the intelligence activities of any
department or agency of the Government relevant to a matter
otherwise within the jurisdiction of such committee.
Finally, both charters direct that each intelligence
committee alert the appropriate standing committees, or the
respective chambers, of any matter requiring attention. The
charters state:
The select committee, for the purposes of accountability to
the [House/Senate] shall make regular and periodic reports to
the [House/Senate] on the nature and extent of the
intelligence activities of the various departments and
agencies of the United States. Such committee shall promptly
call to the attention of the [House/Senate] or to any other
appropriate committee or committees of the [House/Senate] any
matters requiring the attention of the [House/Senate] or such
other appropriate committee or committees.

Cross-over Membership

Both resolutions also direct that the membership of each
intelligence committee include members who serve on the four
standing committees that historically have been involved in
intelligence oversight. The respective resolutions designate
the following committees as falling in this category:
Appropriations, Armed Services, Judiciary, and the Senate
Foreign Relations Committee and the House International
Relations Committee.
Although each resolution directs that such cross-over
members be designated, neither specifies whether cross-over
members are to play any additional role beyond serving on the
intelligence committees. For example, neither resolution
outlines whether cross-over members are to inform colleagues
on standing committees they represent. Rather, each
resolution directs only that the ``intelligence committee''
shall promptly call such matters to the attention of standing
committees and the respective chambers if the committees
determine that they require further attention by those
entities.

Summary Conclusions

Although the President is statutorily obligated to keep the
congressional intelligence committees fully and currently
informed of intelligence activities, the statute obligates
the intelligence committees to inform the respective
chambers, or standing committees, of such activities, if
either of the two committees determine that further oversight
attention is required.
Further, resolutions establishing the two intelligence
committees make clear that the intelligence committees share
intelligence oversight responsibilities with other standing
committees, to the extent that certain intelligence
activities affect matters that fall under the jurisdiction of
a committee other than the intelligence committees.
Finally, the resolutions establishing the intelligence
committees provide for the designation of ``cross-over''
members representing certain standing committees that

[[Page S10466]]

played a role in intelligence oversight prior to the
establishment of the intelligence committees in the 1970s.
The resolutions, however, do not specify what role, if any,
these ``cross-over'' members play in keeping standing
committees on which they serve informed of certain
intelligence activities. Rather, each resolution states that
the respective intelligence committee shall make that
determination.
____

Congressional Research Service, July 18, 2006.

Memorandum

Subject: Overview of ``Classified'' and ``Sensitive but
Unclassified'' Information
From: Harold C. Relyea, Specialist in American National
Government, Government and Finance Division
Prescribed in various ways, federal policies may require
the protection of, or a privileged status for, particular
kinds of information. This memorandum provides a brief
introduction to, and overview of, two categories of such
information policy. The first category is demarcated largely
in a single policy instrument--a presidential executive
order--with a clear focus and in considerable detail: the
classification of national security information in terms of
three degrees of harm the disclosure of such information
could cause to the nation, resulting in Confidential, Secret,
and Top Secret designations. The second category is, by
contrast with the first, much broader in terms of the kinds
of information it covers, to the point of even being nebulous
in some instances, and is expressed in various instruments,
the majority of which are non-statutory: the marking of
sensitive but unclassified (SBU) information for protective
management, although its public disclosure may be permissible
pursuant to the Freedom of Information Act (FOIA). These two
categories are reviewed in the discussion set out below.

Security Classified Information

Current security classification arrangements, prescribed by
an executive order of the President, trace their origins to a
March 1940 directive issued by President Franklin D.
Roosevelt as E.O. 8381. This development was probably
prompted somewhat by desires to clarify the authority of
civilian personnel in the national defense community to
classify information, to establish a broader basis for
protecting military information in view of growing global
hostilities, and to manage better a discretionary power
seemingly of increasing importance to the entire executive
branch. Prior to this 1940 order, information had been
designated officially secret by armed forces personnel
pursuant to Army and Navy general orders and regulations. The
first systematic procedures for the protection of national
defense information, devoid of special markings, were
established by War Department General Orders No. 3 of
February 1912. Records determined to be ``confidential'' were
to be kept under lock, ``accessible only to the officer to
whom intrusted.'' Serial numbers were issued for all such
``confidential'' materials, with the numbers marked on the
documents, and lists of same kept at the offices from which
they emanated. With the enlargement of the armed forces after
the entry of the United States into World War I, the registry
system was abandoned and a tripartite system of
classification markings was inaugurated in November 1917 with
General Orders No. 64 of the General Headquarters of the
American Expeditionary Force.
The entry of the United States into World War II prompted
some additional arrangements for the protection of
information pertaining to the nation's security. Personnel
cleared to work on the Manhattan Project for the production
of the atomic bomb, for instance, in committing themselves
not to disclose protected information improperly, were
``required to read and sign either the Espionage Act or a
special secrecy agreement,'' establishing their awareness of
their secrecy obligations and a fiduciary trust which, if
breached, constituted a basis for their dismissal.
A few years after the conclusion of World War II, President
Harry S. Truman, in February 1950, issued E.O. 10104, which,
while superseding E.O. 8381, basically reiterated its text,
but added a fourth Top Secret classification designation to
existing Restricted, Confidential, and Secret markings,
making American information security categories consistent
with those of our allies. At the time of the promulgation of
this order, however, plans were underway for a complete
overhaul of the classification program, which would result in
a dramatic change in policy.
E.O. 10290, issued in September 1951, introduced three
sweeping innovations in security classification policy.
First, the order indicated the Chief Executive was relying
upon ``the authority vested in me by the Constitution and
statutes, and as President of the United States'' in issuing
the directive. This formula appeared to strengthen the
President's discretion to make official secrecy policy: it
intertwined his responsibility as Commander in Chief with the
constitutional obligation to ``take care that the laws be
faithfully executed.'' Second, information was now classified
in the interest of ``national security,'' a somewhat new, but
nebulous, concept, which, in the view of some, conveyed more
latitude for the creation of official secrets. It replaced
the heretofore relied upon ``national defense'' standard for
classification. Third, the order extended classification
authority to nonmilitary entities throughout the executive
branch, to be exercised by, presumably, but not explicitly
limited to, those having some role in ``national
security'' policy.
The broad discretion to create official secrets granted by
E.G. 10290 engendered widespread criticism from the public
and the press. In response, President Dwight D. Eisenhower,
shortly after his election to office, instructed Attorney
General Herbert Brownell to review the order with a view to
revising or rescinding it. The subsequent recommendation was
for a new directive, which was issued in November 1953 as
E.O. 10501. It withdrew classification authority from 28
entities, limited this discretion in 17 other units to the
agency head, returned to the ``national defense'' standard
for applying secrecy, eliminated the ``Restricted'' category,
which was the lowest level of protection, and explicitly
defined the remaining three classification areas to prevent
their indiscriminate use.
Thereafter, E.G. 10501, with slight amendment, prescribed
operative security classification policy and procedure for
the next two decades. Successor orders built on this reform.
These included E.O. 11652, issued by President Richard M.
Nixon in March 1972, followed by E.O. 12065, promulgated by
President Jimmy Carter in June 1978. For 30 years, these
classification directives narrowed the bases and discretion
for assigning official secrecy to executive branch documents
and materials. Then, in April 1982, this trend was reversed
with E.O. 12356, issued by President Ronald Reagan. This
order expanded the categories of classifiable information,
mandated that information falling within these categories be
classified, authorized the reclassification of previously
declassified documents, admonished classifiers to err on the
side of classification, and eliminated automatic
declassification arrangements.
President William Clinton returned security classification
policy and procedure to the reform trend of the Eisenhower,
Nixon, and Carter Administrations with E.O. 12958 in April
1995. Adding impetus to the development and issuance of the
new order were changing world conditions: the democratization
of many eastern European countries, the demise of the Soviet
Union, and the end of the Cold War. Accountability and cost
considerations were also significant influences. In 1985, the
temporary Department of Defense (DOD) Security Review
Commission, chaired by retired General Richard G. Stilwell,
declared that there were ``no verifiable figures as to the
amount of classified material produced in DOD and in defense
industry each year.'' Nonetheless, it concluded that ``too
much information appears to be classified and much at higher
levels than is warranted.'' In October 1993, the cost of the
security classification program became clearer when the
General Accounting Office (GAO) reported that it was ``able
to identify government-wide costs directly applicable to
national security information totaling over $350 million for
1992.'' After breaking this figure down--it included only $6
million for declassification work--the report added that
``the U.S. government also spends additional billions of
dollars annually to safeguard information, personnel, and
property.'' E.O. 12958 set limits for the duration of
classification, prohibited the reclassification of properly
declassified records, authorized government employees to
challenge the classification status of records, reestablished
the balancing test of E.O. 12065 weighing the need to protect
information vis-a-vis the public interest in its disclosure,
and created two review panels--one on classification and
declassification actions and one to advise on policy and
procedure.
Most recently, in March 2003, President George W. Bush
issued E.O. 13292, amending E.O. 12958. Among the changes
made by this order were adding infrastructure vulnerabilities
or capabilities, protection services relating to national
security, and weapons of mass destruction to the categories
of classifiable information; easing the reclassification of
declassified records; postponing the automatic
declassification of protected records 25 or more years old,
beginning in mid-April 2003 to the end of December 2006;
eliminating the requirement that agencies prepare plans for
declassifying records; and permitting the Director of Central
Intelligence to block declassification actions of the
Interagency Security Classification Appeals Panel, unless
overruled by the President.
The security classification program has evolved during the
past 66 years. One may not agree with all of its rules and
requirements, but attention to detail in its policy and
procedure result in a significant management regime. The
operative executive order, as amended, defines its principal
terms. Those who are authorized to exercise original
classification authority are identified. Exclusive categories
of classifiable information are specified, as are the terms
of the duration of classification, as well as classification
prohibitions and limitations. Classified information is
required to be marked appropriately along with the identity
of the original classifier, the agency or office of origin,
and a date or event for declassification. Authorized holders
of classified information who believe that its protected
status is improper are ``encouraged and expected'' to
challenge that status through prescribed arrangements.
Mandatory declassification reviews are also authorized to
determine if protected records merit continued classification
at their present level, a lower level, or at all.
Unsuccessful classification challenges

[[Page S10467]]

and mandatory declassification reviews are subject to review
by the Interagency Security Classification Appeals Panel.
General restrictions on access to classified information are
prescribed, as are distribution controls for classified
information. The Information Security Oversight Office (ISOO)
within the National Archives and Records Administration
(NARA) is mandated to provide central management and
oversight of the security classification program. If the
director of this entity finds that a violation of the order
or its implementing directives has occurred, it must be
reported to the head of the agency or to the appropriate
senior agency official so that corrective steps, if
appropriate, may be taken.
While Congress, thus far, has elected not to create
statutorily mandated security classification policy and
procedures, the option to do so has been explored in the
past, and its legislative authority to do so has been
recognized by the Supreme Court. Congress, however, has
established protections for certain kinds of information--
such as Restricted Data in the Atomic Energy Acts of 1946 and
1954, and intelligence sources and methods in the National
Security Act of 1947--which have been realized through
security classification arrangements. It has acknowledged
properly applied security classification as a basis for
withholding records sought pursuant to the Freedom of
Information Act. Also, with a view to efficiency and economy,
as well as effective records management, committees of
Congress, on various occasions, have conducted oversight of
security classification policy and practice, and have been
assisted by GAO and CRS in this regard.

Sensitive but Unclassified Information

The widespread existence and use of information control
markings other than those prescribed for the security
classification of information came to congressional attention
in March 1972 when a subcommittee of what is now the House
Committee on Government Reform launched the first oversight
hearings on the administration and operation of the Freedom
of Information Act (FOIA). Enacted in 1966, FOIA had become
operative in July 1967. In the early months of 1972, the
Nixon Administration was developing new security
classification policy and procedure, which would be
prescribed in E.O. 11652, issued in early March. Preparatory
to this hearing, the panel had surveyed the departments and
agencies in August 1971, asking, among other questions,
``What legend is used by your agency to identify records
which are not classifiable under Executive Order 10501 [the
operative order at the time] but which are not to be made
available outside the government?'' Of 58 information control
markings identified in response to this question, the most
common were For Official Use Only (11 agencies); Limited
Official Use (nine agencies); Official Use Only (eight
agencies); Restricted Data (five agencies); Administratively
Restricted (four agencies); Formerly Restricted Data (four
agencies); and Nodis, or no dissemination (four agencies).
Seven other markings were used by two agencies in each case.
A CRS review of the agency responses to the control markings
question prompted the following observation.
Often no authority is cited for the establishment or origin
of these labels; even when some reference is provided it is a
handbook, manual, administrative order, or a circular but not
statutory authority. Exceptions to this are the Atomic Energy
Commission, the Defense Department and the Arms Control and
Disarmament Agency. These agencies cite the Atomic Energy
Act, N.A.T.O. related laws, and international agreements as a
basis for certain additional labels. The Arms Control and
Disarmament Agency acknowledged it honored and adopted State
and Defense Department labels.
Over three decades later, it appears that approximately the
same number of these information control markings are in use;
that the majority of them are administratively, not
statutorily, prescribed; and that many of them have an
inadequate management regime, particularly when compared with
the detailed arrangements which govern the management of
classified information. A recent press account illustrates
another problem. In late January 2005, GCN Update, the
online, electronic news service of Government Computer News,
reported that ``dozens of classified Homeland Security
Department documents'' had been accidently made available on
a public Internet site for several days due to an apparent
security glitch at the Department of Energy. Describing the
contents of the compromised materials and reactions to the
breach, the account stated the ``documents were marked `for
official use only,' the lowest secret-level classification.''
The documents, of course, were not security classified,
because the marking cited is not authorized by E.O. 12958.
Interestingly, however, in view of the fact that this
misinterpretation appeared in a story to which three
reporters contributed, perhaps it reflects, to some extent,
the current confusion of these information control markings
with security classification designations.
Broadly considering the contemporary situation regarding
information control markings, a recent information security
report by the JASON Program Office of the MITRE Corporation
proffered the following assessment.
The status of sensitive information outside of the present
classification system is murkier than ever. ``Sensitive but
unclassified'' data is increasingly defined by the eye of the
beholder. Lacking in definition, it is correspondingly
lacking in policies and procedures for protecting (or not
protecting) it, and regarding how and by whom it is generated
and used.
A contemporaneous Heritage Foundation report appeared to
agree with this appraisal, saying:
The process for classifying secret information in the
federal government is disciplined and explicit. The same
cannot be said for unclassified but security-related
information for which there is no usable definition, no
common understanding about how to control it, no agreement on
what significance it has for U.S. national security, and no
means for adjudicating concerns regarding appropriate levels
of protection.
Concerning the current Sensitive but Unclassified (SBU)
marking, a 2004 report by the Federal Research Division of
the Library of Congress commented that guidelines for its
use are needed, and noted that ``a uniform legal
definition or set of procedures applicable to all Federal
government agencies does not now exist.'' Indeed, the
report indicates that SBU has been utilized in different
contexts with little precision as to its scope or meaning,
and, to add a bit of chaos to an already confusing
situation, is ``often referred to as Sensitive Homeland
Security Information.
Assessments of the variety, management, and impact of
information control markings, other than those prescribed for
the classification of national security information, have
been conducted by CRS, GAO, and the National Security
Archive, a private sector research and resource center
located at The George Washington University. In March 2006,
GAO indicated that, in a recent survey, 26 federal agencies
reported using 56 different information control markings to
protect sensitive information other than classified national
security materia1. That same month, the National Security
Archive offered that, of 37 agencies surveyed, 24 used 28
control markings based on internal policies, procedures, or
practices, and eight used 10 markings based on statutory
authority. These numbers are important in terms of the
variety of such markings. GAO explained this dimension of the
management problem.
[T]here are at least 13 agencies that use the designation
For Official Use Only [FOUO], but there are at least five
different definitions of FOUO. At least seven agencies or
agency components use the term Law Enforcement Sensitive
(LES), including the U.S. Marshals Service, the Department of
Homeland Security (DHS), the Department of Commerce, and the
Office of Personnel Management (OPM). These agencies gave
differing definitions for the term. While DHS does not
formally define the designation, the Department of Commerce
defines it to include information pertaining to the
protection of senior government officials, and OPM defines it
as unclassified information used by law enforcement personnel
that requires protection against unauthorized disclosure to
protect the sources and methods of investigative activity,
evidence, and the integrity of pretrial investigative
reports.
Apart from the numbers, however, is another aspect of the
management problem, which GAO described in the following
terms.
There are no governmentwide policies or procedures that
describe the basis on which agencies should use most of these
sensitive but unclassified designations, explain what the
different designations mean across agencies, or ensure that
they will be used consistently from one agency to another. In
this absence, each agency determines what designations to
apply to the sensitive but unclassified information it
develops or shares.
These markings also have implications in another regard.
The importance of information sharing for combating terrorism
and realizing homeland security was emphasized by the
National Commission on Terrorist Attacks Upon the United
States. That the variously identified and marked forms of
sensitive but unclassified (SBU) information could be
problematic with regard to information sharing was recognized
by Congress when fashioning the Homeland Security Act of
2002. Section 892 of that statute specifically directed the
President to prescribe and implement procedures for the
sharing of information by relevant federal agencies,
including the accommodation of ``homeland security
information that is sensitive but unclassified.'' On July 29,
2003, the President assigned this responsibility largely to
the Secretary of Homeland Security. Nothing resulted. The
importance of information sharing was reinforced two years
later in the report of the Commission on the Intelligence
Capabilities of the United States Regarding Weapons of Mass
Destruction. Congress again responded by mandating the
creation of an Information Sharing Environment (ISE) when
legislating the Intelligence Reform and Terrorism Prevention
Act of 2004. Preparatory to implementing the ISE provisions,
the President issued a December 16, 2005, memorandum
recognizing the need for standardized procedures for SBU
information and directing department and agency officials to
take certain actions relative to that objective. In May 2006,
the newly appointed manager of the ISE agreed with a March
GAO assessment that, oftentimes, SBU information, designated
as such with some marking, was not being shared due to
concerns about the ability of recipients to adequately
protect it. In brief, it appears that pseudo-classification
markings have, in some instances, had the effect of deterring
information sharing for homeland security purposes.
Congressional overseers have probed executive use and
management of information

[[Page S10468]]

control markings other than those prescribed for the
classification of national security information, and the
extent to which they result in ``pseudo-classification'' or a
form of overclassification. Relevant remedial legislation
proposed during the 109th Congress includes two bills (H.R.
2331 and H.R. 5112) containing sections which would require
the Archivist of the United States to prepare a detailed
report regarding the number, use, and management of these
information control markings and submit it to specified
congressional committees, and to promulgate regulations
banning the use of these markings and otherwise establish
standards for information control designations established by
statute or an executive order relating to the classification
of national security information. A section in the Department
of Homeland Security appropriations legislation (H.R. 5441),
as approved by the House, would require the Secretary of
Homeland Security to revise DHS MD (Management Directive)
11056 to include (1) provision that information that is three
years old and not incorporated in a current, active
transportation security directive or security plan shall be
determined automatically to be releasable unless, for each
specific document, the Secretary makes a written
determination that identifies a compelling reason why the
information must remain Sensitive Security Information (SSI);
(2) common and extensive examples of the individual
categories of SSI cited in order to minimize and standardize
judgment in the application of SSI marking; and (3) provision
that, in all judicial proceedings where the judge overseeing
the proceedings has adjudicated that a party needs to have
access to SSI, the party shall be deemed a covered person for
purposes of access to the SSI at issue in the case unless TSA
or DHS demonstrates a compelling reason why the specific
individual presents a risk of harm to the nation. A May 25,
2006, statement of administration policy on the bill strongly
opposed the section, saying it ``would jeopardize an
important program that protects Sensitive Security
Information (SSI) from public release by deeming it
automatically releaseable in three years, potentially
conflict with requirements of the Privacy and Freedom of
Information Acts, and negate statutory provisions providing
original jurisdiction for lawsuits challenging the
designation of SSI materials in the U.S. Courts of Appeals.''
The statement further indicated that the section would create
a ``burdensome review process'' for the Secretary of Homeland
Security and ``would result in different statutory
requirements being applied to SSI programs administered by
the Departments of Homeland Security and Transportation.''
It is not anticipated that this memorandum will be updated
for reissuance.
____

Testimony Before the Subcommittee on Government Efficiency, Financial
Management and Intergovernmental Relations, and the Subcommittee on
National Security, Veterans Affairs, and International Relations,
Committee on Governmental Reform, House of Representatives

United States General Accounting Office

CENTRAL INTELLIGENCE AGENCY

Observations on GAO Access to Information on CIA Programs and
Activities

Statement of Henry L. Hinton, Jr., Managing Director Defense
Capabilities and Management

Messrs. Chairmen and Members of the Subcommittees:
We are pleased to be here to discuss the subject of access
by the General Accounting Office (GAO) to information from
the Central Intelligence Agency (CIA). Specifically, our
statement will provide some background on CIA and its
oversight mechanisms, our authority to review CIA programs,
and the history and status of GAO access to CIA information.
As requested, our remarks will focus on our relationship with
the CIA and not with other intelligence agencies. Our
comments are based upon our review of historic files, our
legal analysis, and our experiences dealing with the CIA over
the years.

Summary

Oversight of the CIA generally comes from two select
committees of Congress and the CIA's Inspector General. We
have broad authority to evaluate CIA programs. In reality,
however, we face both legal and practical limitations on our
ability to review these programs. For example, we have no
access to certain CIA ``unvouchered'' accounts and cannot
compel our access to foreign intelligence and
counterintelligence information. In addition, as a practical
matter, we are limited by the CIA's level of cooperation,
which has varied through the years. We have not actively
audited the CIA since the early 1960s, when we discontinued
such work because the CIA was not providing us with
sufficient access to information to perform our mission. The
issue has arisen since then from time to time as our work has
required some level of access to CIA programs and
information. However, given a lack of requests from the
Congress for us to do specific work at the CIA and our
limited resources, we have made a conscious decision not to
further pursue the issue.
Today, our dealings with the CIA are mostly limited to
requesting information that relates either to governmentwide
reviews or analyses of threats to U.S. national security on
which the CIA might have some information. The CIA either
provides us with the requested information, provides the
information with some restrictions, or does not provide the
information at all. In general, we are most successful at
getting access to CIA information when we request threat
assessments and the CIA does not perceive our audits as
oversight of its activities.

Background

As you know, the General Accounting Office is the
investigative arm of the Congress and is headed by the
Comptroller General of the United States--currently David M.
Walker. We support the Congress in meeting its constitutional
responsibilities and help improve the performance
and accountability of the federal government for the
American people. We examine the use of public funds,
evaluate federal programs and activities, and provide
analyses, options, recommendations, and other assistance
to help the Congress make effective oversight, policy, and
funding decisions. Almost 90 percent of our staff days are
in direct support of Congressional requestors, generally
on the behalf of committee chairmen or ranking members.
The U.S. Intelligence Community consists of those Executive
Branch agencies and organizations that work in concert to
carry out our nation's intelligence activities. The CIA is an
Intelligence Community agency established under the National
Security Act of 1947 to coordinate the intelligence
activities of several U.S. departments and agencies in the
interest of national security. Among other functions, the CIA
collects, produces, and disseminates foreign intelligence and
counterintelligence; conducts counterintelligence activities
abroad; collects, produces, and disseminates intelligence on
foreign aspects of narcotics production and trafficking;
conducts special activities approved by the President; and
conducts research, development, and procurement of technical
systems and devices.

Oversight of CIA Activities

Currently, two congressional select committees and the
CIA's Inspector General oversee the CIA's activities. The
Senate Select Committee on Intelligence was established on
May 19, 1976, to oversee the activities of the Intelligence
Community. Its counterpart in the House of Representatives is
the House Permanent Select Committee on Intelligence,
established on July 14, 1977. The CIA's Inspector General is
nominated by the President and confirmed by the Senate. The
Office of the Inspector General was established by statute in
1989 and conducts inspections, investigations, and audits at
headquarters and in the field. The Inspector General reports
directly to the CIA Director. In addition, the President's
Foreign Intelligence Advisory Board assesses the quality,
quantity, and adequacy of intelligence activities. Within the
Board, there is an intelligence oversight committee that
prepares reports on intelligence activities that may be
unlawful or otherwise inappropriate. Finally, the Congress
can charter commissions to evaluate intelligence agencies
such as CIA. One such commission was the Commission on the
Roles and Capabilities of the United States Intelligence
Community, which issued a report in 1996.

GAG's Authority to Review CIA Programs

Generally, we have broad authority to evaluate agency
programs and investigate matters related to the receipt,
disbursement, and use of public money. To carry out our audit
responsibilities, we have a statutory right of access to
agency records. Federal agencies are required to provide us
information about their duties, powers, activities,
organization, and financial transactions. This requirement
applies to all federal agencies, including the CIA. Our
access rights include the authority to file a civil action to
compel production of records, unless (a) the records relate
to activities the President has designated as foreign
intelligence or counterintelligence activities, (b) the
records are specifically exempt from disclosure by statute,
or (c) the records would be exempt from release under the
Freedom of Information Act because they are predecisional
memoranda or law enforcement records and the President or
Director of the Office of Management and Budget certifies
that disclosure of the record could be expected to impair
substantially the operations of the government.
The National Security Act of 1947 charges the CIA Director
with protecting intelligence sources and methods from
unauthorized disclosure. In terms of our statutory access
authority, however, the law creates only one specific
exemption: the so-called ``unvouchered'' accounts. The
exemption pertains to expenditures of a confidential,
extraordinary, or emergency nature that are accounted for
solely on the certification of the Director. These
transactions are subject to review by the intelligence
committees. Amendments to the law require the President to
keep the intelligence committees fully and currently informed
of the intelligence activities of the United States. The CIA
has maintained that the Congress intended the intelligence
committees to be the exclusive means of oversight of the CIA,
effectively precluding oversight by us.
While we understand the role of the intelligence committees
and the need to protect intelligence sources and methods, we
also believe that our authorities are broad enough to cover
the management and administrative functions that the CIA
shares with all federal agencies.
We have summarized the statutes relevant to our
relationship with the CIA in an appendix attached to this
testimony.

[[Page S10469]]

gao's access to the cia has been limited

We have not done audit work at the CIA for almost 40 years.
Currently, our access to the CIA is limited to requests for
information that relates either to governmentwide reviews or
programs for which the CIA might have relevant information.
In general, we have the most success obtaining access to CIA
information when we request threat assessments, and the CIA
does not perceive our audits as oversight of its activities.

gao access to cia has varied through the years

After the enactment of the National Security Act of 1947,
we began conducting financial transaction audits of vouchered
expenditures of the CIA. This effort continued into the early
1960s. In the late 1950s, we proposed to broaden its work at
the CIA to include an examination of the efficiency, economy,
and effectiveness of CIA programs. Although the CIA Director
agreed to our proposal to expand the scope of our work, he
placed a number of conditions on our access to information.
Nonetheless, in October 1959, we agreed to conduct program
review work with CIA-imposed restrictions on access.
Our attempt to conduct comprehensive program review work
continued until May 1961, when the Comptroller General
concluded that the CIA was not providing us with sufficient
access to the information necessary to conduct comprehensive
reviews of the CIA's programs and announced plans to
discontinue audit work there. After much discussion and
several exchanges of correspondence between GAO, the CIA, and
the cognizant congressional committees, the Chairman of the
House Armed Services Committee wrote to the Comptroller
General in July 1962 agreeing that, absent sufficient GAO
access to CIA information, GAO should withdraw from further
audit activities at the CIA. Thus, in 1962, we withdrew from
all audits of CIA activities.
The issue of our access has arisen periodically in the
intervening years as our work has required some level of
access to CIA programs and activities. In July 1975,
Comptroller General Elmer Staats testified on our
relationship with the intelligence community and cited
several cases where CIA had not provided us with the
requested information. In July 1987, Senator John Glenn
introduced a bill (S. 1458) in the 100th Congress to clarify
our audit authority to audit CIA programs and activities. In
1994, the CIA Director sought to further limit our audit work
of intelligence programs, including those at the Department
of Defense. We responded by writing to several key members of
the Congress, citing our concerns and seeking assistance. As
a result, we and the CIA began negotiations on a written
agreement to clarify our access and relationship.
Unfortunately, we were unable to reach any agreement with CIA
on this matter. Since then, GAO has limited its pursuit of
greater access because of limited demand for this work from
Congress, particularly from the intelligence committees.
Given a lack of Congressional requests and our limited
resources, we have made a conscious decision to deal with the
CIA on a case-by-case basis.

current access falls into three categories

Currently, the CIA responds to our requests for information
in three ways: it provides the information, it provides the
information or a part of it with some restriction, or it does
not provide the information at all. Examples of each of these
three situations, based on the experiences of our audit staff
in selected reviews in recent years, are listed below.
Sometimes the CIA straightforwardly fulfills our requests
for briefings or reports related to threat assessments. This
is especially true when we ask for threat briefings or the
CIA's assessments or opinions on an issue not involving CIA
operations.
For our review of the State Department's Anthrax
Vaccination Program for the Senate Foreign Relations and
House International Relations Committees, we requested a
meeting to discuss the CIA's perspective on a recent threat
assessment of chemical and biological threats to U.S.
interests overseas. The CIA agreed with our request, provided
a meeting within 2 weeks, and followed up with a written
statement.
While we were reviewing U.S. assistance to the Haitian
justice system and national police on behalf of the Senate
Foreign Relations and House International Relations
Committees, we requested a meeting to discuss the Haitian
justice system. The CIA agreed with our request and met with
our audit team within 3 weeks of our request.
For our review of chemical and biological terrorist threats
for the House Armed Services Committee, and subcommittees of
the House Government Reform Committee and the House Veterans
Affairs Committee, we requested meetings with CIA analysts on
their threat assessments on chemical and biological weapons.
The CIA cooperated and gave us access to documents and
analysts.
On several of our reviews of counterdrug programs for the
House Government Reform Committee and the Senate Foreign
Relations Committee we requested CIA assessments on the drug
threat and international activities. The CIA has provided us
with detailed briefings on drug cultivation, production, and
trafficking activities in advance of our field work overseas.
During our reviews of Balkan security issues and the Dayton
Peace Accords for the House Armed Services Committee and the
Senate Foreign Relations Committee, we asked the CIA for
threat assessments relevant to our review objectives. The CIA
provided us with appropriate briefings and agreed to provide
one of our staff members with access to regular intelligence
reports.
In some instances, the CIA provides information with
certain access restrictions or discusses an issue with us
without providing detailed data or documentation.
During our evaluation of equal employment opportunity and
disciplinary actions for a subcommittee of the House
Committee on the Post Office and Civil Service, the CIA
provided us with limited access to information. CIA officials
allowed us to review their personnel regulations and take
notes, but they did not allow us to review personnel folders
on individual disciplinary actions. This was in contrast to
the National Security Agency and Defense Intelligence Agency,
which gave us full access to personnel folders on individual
terminations and disciplinary actions.
For our review of the Department of Defense's efforts to
address the growing risk to U.S. electronic systems from
high-powered radio frequency weapons for the Joint Economic
Committee, the CIA limited our access to one meeting.
Although the technology associated with such systems was
discussed at the meeting, the CIA did not provide any
documentation on research being conducted by foreign nations.
On some of our audits related to national security issues,
the CIA provides us with limited access to its written threat
assessments and analyses, such as National Intelligence
Estimates. However, the CIA restricts our access to reading
the documents and taking notes at the CIA or other locations.
Examples include our readings of National Intelligence
Estimates related to our ongoing work evaluating federal
programs to combat terrorism.
In other cases, the CIA simply denies us access to the
information we requested. The CIA's refusals are not related
to the classification level of the material. Many of our
staff have the high-level security clearances and accesses
needed to review intelligence information. But the CIA
considers our requests as having some implication of
oversight and denies us access.
For our evaluation of national intelligence estimates
regarding missile threats for the House National Security
Committee, the CIA refused to meet with us to discuss the
general process and criteria for producing such estimates or
the specific estimates we were reviewing. In addition,
officials from the Departments of Defense, State, and Energy
told us that CIA had asked them not to cooperate with us.
During our examination of overseas arrests of terrorists
for the House Armed Services Committee and a subcommittee of
the House Government Reform Committee, the CIA refused to
meet with us to discuss intelligence issues related to such
arrests. The CIA's actions were in contrast to those of two
other departments that provided us full access to their staff
and files.
On our review of classified computer systems in the federal
government for a subcommittee of the House Government Reform
Committee, we requested basic information on the number and
nature of such systems. The CIA did not provide us with the
information, claiming that they would not be able to
participate in the review because the type of information is
under the purview of congressional entities charged with
overseeing the Intelligence Community.
For our review of the policies and procedures used by the
Executive Office of the President to acquire and safeguard
classified intelligence information, done for the House Rules
Committee, we asked to review CIA forms documenting that
personnel had been granted appropriate clearances. The CIA
declined our request, advising us that type of information we
were seeking came under the purview of congressional entities
charged with overseeing the intelligence community.

conclusion

Our access to CIA information and programs has been limited
by both legal and practical factors. Through the years our
access has varied and we have not done detailed audit work at
CIA since the early 1960s. Today, our access is generally
limited to obtaining information on threat assessments when
the CIA does not perceives our audits as oversight of its
activities. We foresee no major change in our current access
without substantial support from Congress--the requestor of
the vast majority of our work. Congressional impetus for
change would have to include the support of the intelligence
committees, who have generally not requested GAG reviews or
evaluations of CIA activities. With such support, we could
evaluate some of the basic management functions at CIA that
we now evaluate throughout the federal government.
This concludes our testimony. We would be happy to answer
any questions you may have.
GAO Contacts and Staff Acknowledgment
For future questions about this testimony, please contact
Henry L. Hinton, Jr., Managing Director, Defense Capabilities
and Management at (202) 512-4300. Individuals making key
contributions to this statement include Stephen L. Caldwell,
James Reid, and David Hancock.

Appendix I: Legal Framework for GAO and CIA

gao's audit authority

The following statutory provisions give GAO broad authority
to review agency programs and activities:

[[Page S10470]]

31 U.S.C. 712: GAO has the responsibility and authority for
investigating matters relating to the receipt, disbursement,
and use of public money, and for investigating and reporting
to either House of Congress or appropriate congressional
committees.
1 U.S.C. 717: GAO is authorized to evaluate the results of
programs and activities of federal agencies. Reviews are
based upon the initiative of the Comptroller General, an
order from either House of Congress, or a request from a
committee with jurisdiction.
31 U.S.C. 3523: This provision authorizes GAO to audit
financial transactions of each agency, except as specifically
provided by law.
31 U.S.C. 3524: This section authorizes GAO to audit
unvouchered accounts (i.e., those accounted for solely on the
certificate of an executive branch official). The President
may exempt sensitive foreign intelligence and
counterintelligence transactions. CIA expenditures on objects
of a confidential, extraordinary, or emergency nature under
50 U.S.C. 403j(b) are also exempt. Transactions in these
categories may be reviewed by the intelligence committees.

gao's access-to-records authority

31 U.S.C. 716: GAO has a broad right of access to agency
records. Subsection 716(a) requires agencies to give GAO
information it requires about the ``duties, powers,
activities, organization, and financial transactions of the
agency.'' This provision gives GAO a generally unrestricted
right of access to agency records. GAO in turn is required to
maintain the same level of confidentiality for the
information as is required of the head of the agency from
which it is obtained.
Section 716 also gives GAO the authority to enforce its
requests for records by filing a civil action in federal
district court. Under the enforcement provisions in 31 U.S.C.
716(d)(1), GAO is precluded from bringing a civil action to
compel the production of a record if:
1. the record relates to activities the President
designates as foreign intelligence or counterintelligence
(see Executive Order No. 12333, defining these terms);
2. the record is specifically exempted from disclosure to
GAO by statute; or
3. the President or the Director of the Office of
Management and Budget certifies to the Comptroller General
and Congress that a record could be withheld under the
Freedom of Information Act exemptions in 5 U.S.C. 552(b)(5)
or (7) (relating to deliberative process and law enforcement
information, respectively), and that disclosure of the
information reasonably could be expected to impair
substantially the operations of the government.
Although these exceptions do not restrict GAO's basic
rights of access under 31 U.S.C. 716(a), they do limit GAO's
ability to compel the production of particular records
through a court action.

relevant cia legislation

The CIA has broad authority to protect intelligence-related
information but must keep the intelligence committees fully
and currently informed of the intelligence activities of the
United States.
50 U.S.C. 403-3(c)(6) and 403g: Section 403-3 requires the
Director of the CIA to protect ``intelligence sources and
methods from unauthorized disclosure. . . .'' Section 403g
exempts the CIA from laws ``which require the publication or
disclosure of the organization, functions, names, official
titles, salaries, or numbers of personnel employed by the
Agency. With the exception of unvouchered expenditures, CIA's
disclosure of information to GAO would be an authorized and
proper disclosure under 31 U.S.C. 716(a).
50 U.S.C. 403j: The CIA has broad discretion to use
appropriated funds for various purposes (e.g., personal
services, transportation, printing and binding, and purchases
of firearms) without regard to laws and regulations relating
to the expenditure of government funds. The statute also
authorizes the Director to establish an unvouchered account
for objects of a confidential, extraordinary, or emergency
nature. We recognize that the CIA's unvouchered account
authority constitutes an exception to GAO's audit and access
authority, but this account deals with only a portion of
CIA's funding activities.
50 U.S.C. 413: This section provides a method for
maintaining congressional oversight over intelligence
activities within the executive branch. The statute requires
the President to ensure that the intelligence committees (the
Senate Select Committee on Intelligence and the House
Permanent Select Committee on Intelligence are kept fully and
currently informed of U.S. intelligence activities.
____

Report Language

Section 1 of the Act provides that the Act may be cited as
the ``Intelligence Community Audit Act of 2006''.
Section 2(a) of the Act adds a new Section (3523a) to title
31, United States Code, with respect to the Comptroller
General's authority to audit or evaluate activities of the
intelligence community. New Section 3523a(b)(1) reaffirms
that the Comptroller General possesses, under his existing
statutory authority, the authority to perform audits and
evaluations of financial transactions, programs, and
activities of elements of the intelligence community and to
obtain access to records for the purposes of such audits and
evaluations. Such work could be done at the request of the
congressional intelligence committees or any committee of
jurisdiction of the House of Representatives or Senate
(including the Committee on Homeland Security of the House of
Representatives and the Committee on Homeland Security and
Governmental Affairs of the Senate), or at the Comptroller
General's initiative, pursuant to the existing authorities
referenced in new Section 3523a(b)(1). New Section
3523a(b)(2) further provides that these audits and
evaluations under the Comptroller General's existing
authority may include, but are not limited to, matters
relating to the management and administration of elements of
the intelligence community in areas such as strategic
planning, financial management, information technology, human
capital, knowledge management, information sharing, and
change management. These audits and evaluations would be
accompanied by the safeguards that the Government
Accountability Office (GAO) has in place to protect
classified and other sensitive information, including
physical security arrangements, classification and
sensitivity reviews, and restricted distribution of certain
products.
This reaffirmation is designed to respond to Executive
Branch assertions that GAO does not have the authority to
review activities of the intelligence community. To the
contrary, GAO's current statutory audit and access
authorities permit it to evaluate a wide range of activities
in the intelligence community. To further ensure that GAO's
authorities are appropriately construed in the future, the
new Section 3523a(e), which is described below, makes clear
that nothing in this or any other provision of law shall be
construed as restricting or limiting the Comptroller
General's authority to audit and evaluate, or obtain access
to the records of, elements of the intelligence community
absent specific statutory language restricting or limiting
such audits, evaluations, or access to records.
New Section 3523a(c)(1) provides that Comptroller General
audits or evaluations of intelligence sources and methods, or
covert actions may be undertaken only upon the request of the
Select Committee on Intelligence of the Senate, or the
Permanent Select Committee on Intelligence of the House of
Representatives, or the majority or the minority leader of
the Senate or the House of Representatives. This limitation
is intended to recognize the heightened sensitivity of audits
and evaluations relating to intelligence sources and methods,
or covert actions.
The new Section 3523a(c)(2)(A) provides that the results of
such audits or evaluations under Section 3523a(c) may be
disclosed only to the original requestor, the Director of
National Intelligence, and the head of the relevant element
of the intelligence community. Since the methods GAO uses to
communicate the results of its audits or evaluations vary,
this provision restricts the dissemination of GAO's findings
under Section 3523a(c), whether through testimony, oral
briefings, or written reports, to only the original
requestor, the Director of National Intelligence, and the
head of the relevant element of the intelligence
community. Similarly, under new Section 3523a(c)(2)(B),
the Comptroller General may only provide information
obtained in the course of such an audit or evaluation to
the original requestor, the Director of National
Intelligence, and the head of the relevant element of the
intelligence community.
The new Section 3523a(c)(3)(A) provides that
notwithstanding any other provision of law, the Comptroller
General may inspect records of any element of the
intelligence community relating to intelligence sources and
methods, or covert actions in order to perform audits and
evaluations pursuant to Section 3523a(c). The Comptroller
General's access extends to any records which belong to, or
are in the possession and control of, the element of the
intelligence community regardless of who was the original
owner of such information. Under new Section 3523a(c)(3)(B),
the Comptroller General may enforce the access rights
provided under this subsection pursuant to section 716 of
title 31. However, before the Comptroller General files a
report pursuant to 31 U.S.C. 716(b)(1), the Comptroller
General must consult with the original requestor concerning
the Comptroller General's intent to file a report.
The new Section 3523a(c)(4) reiterates the Comptroller
General's obligations to protect the confidentiality of
information and adds special safeguards to protect records
and information obtained from elements of the intelligence
community for audits and evaluations performed under Section
3523a(c). For example, pursuant to new Section
3523a(c)(4)(B), the Comptroller General is to maintain on
site, in facilities furnished by the element of the
intelligence community subject to audit or evaluation, all
workpapers and records obtained for the audit or evaluation.
Under new Section 3523a(c)(4)(C), the Comptroller General is
directed, after consulting with the Select Committee on
Intelligence of the Senate and the Permanent Select Committee
on Intelligence of the House of Representatives, to establish
procedures to protect from unauthorized disclosure all
classified and other sensitive information furnished to the
Comptroller General under Section 3523a(c). Under new Section
3523a(c)(4)(D), prior to initiating an audit or evaluation
under Section 3523a(c), the Comptroller General shall provide
the Director of National Intelligence and the head of the
relevant element of the intelligence community with the name
of each officer and employee of the Government Accountability
Office who has obtained appropriate security clearances.

[[Page S10471]]

The new Section 3523a(d) provides that elements of the
intelligence community shall cooperate fully with the
Comptroller General and provide timely responses to
Comptroller General requests for documentation and
information.
The new Section 3523a(e) makes clear that nothing in this
or any other provision of law shall be construed as
restricting or limiting the Comptroller General's authority
to audit and evaluate, or obtain access to the records of,
elements of the intelligence community absent specific
statutory language restricting or limiting such audits,
evaluations, or access to records.
____

S. 3968

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 ``Intelligence Community Audit
Act of 2006''.

SEC. 2. COMPTROLLER GENERAL AUDITS AND EVALUATIONS OF
ACTIVITIES OF ELEMENTS OF THE INTELLIGENCE
COMMUNITY.

(a) Reaffirmation of Authority; Audits of Intelligence
Community Activities.--Chapter 35 of title 31, United States
Code, is amended by inserting after section 3523 the
following:

``Sec. 3523a. Audits of intelligence community; audit
requesters

``(a) In this section, the term `element of the
intelligence community' means an element of the intelligence
community specified in or designated under section 3(4) of
the National Security Act of 1947 (50 U.S.C. 401a(4)).
``(b) Congress finds that--
``(1) the authority of the Comptroller General to perform
audits and evaluations of financial transactions, programs,
and activities of elements of the intelligence community
under sections 712, 717, 3523, and 3524, and to obtain access
to records for purposes of such audits and evaluations under
section 716, is reaffirmed; and
``(2) such audits and evaluations may be requested by any
committee of jurisdiction (including the Committee on
Homeland Security of the House of Representatives and the
Committee on Homeland Security and Governmental Affairs of
the Senate), and may include but are not limited to matters
relating to the management and administration of elements of
the intelligence community in areas such as strategic
planning, financial management, information technology, human
capital, knowledge management, information sharing (including
information sharing by and with the Department of Homeland
Security), and change management.
``(c)(1) The Comptroller General may conduct an audit or
evaluation of intelligence sources and methods or covert
actions only upon request of the Select Committee on
Intelligence of the Senate or the Permanent Select Committee
on Intelligence of the House of Representatives, or the
majority or the minority leader of the Senate or the House of
Representatives.
``(2)(A) Whenever the Comptroller General conducts an audit
or evaluation under paragraph (1), the Comptroller General
shall provide the results of such audit or evaluation only to
the original requestor, the Director of National
Intelligence, and the head of the relevant element of the
intelligence community.
``(B) The Comptroller General may only provide information
obtained in the course of an audit or evaluation under
paragraph (1) to the original requestor, the Director of
National Intelligence, and the head of the relevant element
of the intelligence community.
``(3)(A) Notwithstanding any other provision of law, the
Comptroller General may inspect records of any element of the
intelligence community relating to intelligence sources and
methods, or covert actions in order to conduct audits and
evaluations under paragraph (1).
``(B) If in the conduct of an audit or evaluation under
paragraph (1), an agency record is not made available to the
Comptroller General in accordance with section 716, the
Comptroller General shall consult with the original requestor
before filing a report under subsection (b)(1) of that
section.
``(4)(A) The Comptroller General shall maintain the same
level of confidentiality for a record made available for
conducting an audit under paragraph (1) as is required of the
head of the element of the intelligence community from which
it is obtained. Officers and employees of the Government
Accountability Office are subject to the same statutory
penalties for unauthorized disclosure or use as officers or
employees of the intelligence community element that provided
the Comptroller General or officers and employees of the
Government Accountability Office with access to such records.
``(B) All workpapers of the Comptroller General and all
records and property of any element of the intelligence
community that the Comptroller General uses during an audit
or evaluation under paragraph (1) shall remain in facilities
provided by that element of the intelligence community.
Elements of the intelligence community shall give the
Comptroller General suitable and secure offices and
furniture, telephones, and access to copying facilities, for
purposes of audits and evaluations under paragraph (1).
``(C) After consultation with the Select Committee on
Intelligence of the Senate and with the Permanent Select
Committee on Intelligence of the House of Representatives,
the Comptroller General shall establish procedures to protect
from unauthorized disclosure all classified and other
sensitive information furnished to the Comptroller General or
any representative of the Comptroller General for conducting
an audit or evaluation under paragraph (1).
``(D) Before initiating an audit or evaluation under
paragraph (1), the Comptroller General shall provide the
Director of National Intelligence and the head of the
relevant element with the name of each officer and employee
of the Government Accountability Office who has obtained
appropriate security clearance and to whom, upon proper
identification, records, and information of the element of
the intelligence community shall be made available in
conducting the audit or evaluation.
``(d) Elements of the intelligence community shall
cooperate fully with the Comptroller General and provide
timely responses to Comptroller General requests for
documentation and information.
``(e) Nothing in this section or any other provision of law
shall be construed as restricting or limiting the authority
of the Comptroller General to audit and evaluate, or obtain
access to the records of, elements of the intelligence
community absent specific statutory language restricting or
limiting such audits, evaluations, or access to records.''.
(b) Clerical Amendment.--The table of sections for chapter
35 of title 31, United States Code, is amended by inserting
after the item relating to section 3523 the following:

``3523a. Audits of intelligence community; audits and requesters.''.
______

By Mr. OBAMA (for himself and Mrs. Clinton):
S. 3969. A bill to amend the Toxic Substances Control Act to assess
and reduce the levels of lead found in child-occupied facilities in the
United States, and for other purposes; to the Committee on Environment
and Public Works.
Mr. OBAMA. Mr. President, I rise today to introduce the Lead
Poisoning Reduction Act of 2006. I am pleased that Senator Clinton is
joining me in this effort.
Lead is a poison we have known about for a long time. Studies have
long linked lead exposure to learning disabilities, behavioral
problems, and, at very high levels, seizures, coma, and even death.
Lead is particularly damaging to children because their developing
brains are more susceptible to harm.
A study released last week found that children with even very low
levels of lead exposure have four times the risk of attention-deficit
hyperactivity disorder (ADHD) than normal and that childhood lead
exposure leads to 290,000 cases of ADHD.
The major source of lead exposure among U.S. children is lead-based
paint. In 1978, the Consumer Product Safety Commission recognized this
hazard and banned leaded paints. But today, 30 years later, about 24
million older homes, and millions of other buildings, have
deteriorating lead paint and elevated levels of lead-contaminated dust.
We know how children are typically exposed. We know what the health
effects from exposure are. And we know how to fix the source of the
exposure. The one thing we don't know how to do is reverse the brain
damage once it has occurred. So, otherwise healthy children wind up
facing a lifetime of disadvantage because we have failed to eradicate
this insidious problem.
Every day, millions of American parents drop their children off at
child care facilities on their way to work. Nearly 12 million children
under age 5 spend 40 hours a week in child care. And every day, many of
those children in older buildings may be exposed to lead poisoning.
While many child care facilities have taken steps to ensure sources
of potential lead exposure are eliminated, too many operate in older
buildings that need repair or remodeling to ensure these sources are
contained. These facilities may be in wealthy communities, but more
often than not, they are in poor communities where parents have few
choices for child care. I'm sure many of these facilities would fix the
problem if they only had the resources.
The Lead Poisoning Reduction Act protects our children in two ways.
First, the bill establishes a five-year, $42.6 million grant program
to help communities reduce lead exposure in facilities such as day care
centers, Head Start centers, and kindergarten classrooms where young
children spend a great deal of time. Communities

[[Page S10472]]

could use the funds for testing, abatement, and communicating the risks
of lead to children and parents.
Second, the bill requires the Environmental Protection Agency to
establish regulations to eliminate sources of lead exposure in child
care facilities, starting with new facilities in 18 months and all
facilities in five years.
It's a straightforward fix to a straightforward problem. I hope my
colleagues join me in helping to create lead-safe environments in all
child care facilities.
Mrs. CLINTON. Mr. President, I join my colleague, Senator Obama, in
support of the Lead Poisoning Reduction Act of 2006. This legislation
would close an important gap in primary prevention strategies by
providing critical resources to make all nonhome-based childcare
facilities and Head Start Programs lead-safe within 5 years.
Lead is highly toxic and continues to be a serious, persistent, and
entirely preventable threat to the health and well-being of our
children. Lead poisoning continues to pose an unacceptable
environmental health risk to infants, children, and pregnant women in
the United States, particularly in minority and low-income communities.
A CDC survey conducted between 1999 and 2002, estimated that 310,000
American children under 6 were at risk for exposure to harmful lead
levels in United States. Childhood lead poisoning has been linked to
impaired growth and function of vital organs and problems with
intellectual and behavioral development. A study from the New England
Journal of Medicine also found that children suffered up to a 7.4-
percent decrease in IQ at lead levels that CDC considers safe. At very
high levels, lead poisoning can cause seizures, coma, and even death.
It is critical that we remove lead hazards where our children live,
learn, and play. We especially need to eliminate these risks and
hazards that continue to persist in childcare facilities and schools.
Nearly 12 million children under age 5 spend 40 hours a week in
childcare. Lead paint in older buildings is a primary source of
exposure, but significant lead exposure can also come from tap water.
The Department of Housing and Urban Development estimates that about
14,200 childcare facilities have considerable lead-based hazards
present. In addition, a recent report by the U.S. Government
Accountability Office, GAO, identified significant, systemic problems
with the way in which the Environmental Protection Agency, EPA,
monitors and regulates the levels of lead in our Nation's drinking
water, including a complete lack of reliable data on which to make
assessments and decisions. The GAO study found that few schools and
childcare facilities nationwide have tested their water for lead, and
no focal point exists at either the national or State level to collect
and analyze test results. Few States have comprehensive programs to
detect and remediate lead in drinking water at schools and childcare
facilities. Only five States have required general lead testing for
schools, and of those, only four require childcare facilities to test
for lead when obtaining or renewing their licenses. Almost half the
States reported having no lead efforts of any kind. State and local
officials need more information on the pervasiveness of lead
contamination to know how best to address the issue.
Each year in New York State an additional 10,000 children under the
age of 6 years are newly identified as having elevated blood lead
levels, and over 200,000 children in New York have had documented lead
poisoning between 1992 to 2004. Exposure to lead results in increased
expenses each year for New York in the form of special educational and
other educational expenses, medical care for lead-poisoned children,
and expenditures for delinquent youth and others needing special
supervision. It is estimated that these increased expenses, as well as
lost earnings, exceed $4 billion annually. New York City and Rochester
have been at the forefront of grassroots efforts to combat lead
poisoning, and this bill would provide important resources and
incentives to implement their model programs nationwide.
______

By Mr. GRASSLEY (for himself, Mr. Isakson, Mr. Chambliss, Mr.
Burr, and Ms. Murkowski):
S. 3972. A bill to amend title XXI of the Social Security Act to
reduce funding shortfalls for the State Children's Health Insurance
Program (SCHIP) for fiscal year 2007; to the Committee on Finance.
Mr. GRASSLEY. Mr. President, I am pleased to introduce the ``Fiscal
Accountability, Integrity and Responsibility in SCHIP'' or FAIR-SCHIP
Act. I am pleased to be joined in this effort by Senator Johnny
Isakson, R-GA, Senator Saxby Chambless, R-GA, Senator Richard Burr, R-
NC and Senator Lisa Murkowski, R-AK. This legislation is a targeted one
year approach to addressing a looming problem in the State Children's
Health Insurance Program (SCHIP).
According to estimates prepared by the Congressional Research
Service, as many as 17 States will run out of SCHIP funds in 2007.
Several States will run shortfalls in the hundreds of millions of
dollars. These shortfalls will result in States having to limit the
coverage available to low-income children. These shortfalls are deep
and they will get deeper.
One of my principal objectives in the 110th Congress will be to
reauthorize the SCHIP program. There are a number of compelling issues
associated with the SCHIP program that will require thoughtful review
and discussion by Members of Congress.
Reauthorization will not be easy. Legislating on an issue as complex
and sensitive as children's health care is never easy. However, if the
Congress does not act to address some of these policies as well as the
SCHIP formula, one thing is certain: The current State entitlement is
not sufficient, in the long term, to cover the costs of maintaining the
current level of coverage provided by the States.
I am aware of legislation introduced in the Senate and the House that
would simply appropriate additional funds to cover the SCHIP
shortfalls. This is not a viable option.
If the Congress perpetuates a scenario where the SCHIP funding
formula is not improved and other programmatic changes are not enacted,
yet State SCHIP shortfalls covered year after year, there will be no
practical difference between SCHIP, which is a capped allotment, and
Medicaid, which is an open ended entitlement.
I do not believe there is majority support for turning the SCHIP
program into an entitlement program. I am concerned what going down a
path that essentially does treat SCHIP as a de facto entitlement
program means for the long standing viability of SCHIP. Therefore, the
approach envisioned in FAIR-SCHIP takes a balanced, moderate approach
to addressing this issue.
FAIR-SCHIP recognizes that additional resources will be needed if
States are to be able to continue to provide the current level of
coverage for children.
FAIR-SCHIP also recognizes that funding under the SCHIP programs can
be more equitably distributed.
FAIR-SCHIP takes a moderate, balanced approach by appropriating
approximately half of the estimated Fiscal Year 07 shortfall.
FAIR-SCHIP also includes a modest redistribution scenario that would
occur in the second half of the fiscal year and only affect the 05
allotments of States which have a 200 percent surplus of SCHIP funds,
relative to their projected 07 spending.
FAIR-SCHIP is a fiscally sound, responsible approach to the issue of
SCHIP shortfalls that will position the Congress to achieve important
programmatic improvements in the 110th Congress, when the SCHIP program
will need to be reauthorized.
I ask unanimous consent that the text of the bill be printed in the
Record.
I hope my colleagues will support the approach envisioned by FAIR-
SCHIP.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 3972

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 ``Fiscal Accountability,
Integrity, and Responsibility in SCHIP Act of 2006''or the
``FAIR-SCHIP Act of 2006''.

SEC. 2. FUNDING OF THE SCHIP ALLOTMENT SHORTFALLS FOR FISCAL
YEAR 2007.

(a) In General.--Section 2104 of the Social Security Act
(42 U.S.C. 1397dd) is amended by adding at the end the
following new subsection:

[[Page S10473]]

``(h) Special Rules to Address Fiscal Year 2007
Shortfalls.--
``(1) Initial down payment on shortfall for fiscal year
2007.--The provisions of subsection (d) shall apply with
respect to fiscal year 2007 in the same manner as they apply
to fiscal year 2006, except that, for purposes of this
paragraph--
``(A) any reference to `fiscal year 2006', `December 16,
2005', `2005', `2004', `September 30, 2006' and `October 1,
2006' shall be deemed a reference to `fiscal year 2007',
`December 16 2006', `2006', `2005', `September 30, 2007' and
`October 1, 2007' respectively;
``(B) there shall be substituted for the dollar amount
specified in subsection (d)(1), and shall be treated as the
amount appropriated under such subsection, $450,000,000;
``(C) paragraphs (3)(B) and (4) of subsection (d) shall not
apply (and paragraph (4) of this subsection shall apply in
lieu of paragraph (4) of such subsection);
``(D) if the dollar amount specified in subparagraph (B) is
not at least equal to the total of the shortfalls described
in subsection (d)(2) (as applied under this paragraph), the
amounts under subsection (d)(3) (as applied under this
paragraph) shall be ratably reduced.
``(2) Funding remainder of shortfall for fiscal year 2007
through redistribution of certain unused fiscal year 2005
allotments.--
``(A) In general.--Subject to subparagraph (C), the
Secretary shall provide for a redistribution under subsection
(f) from amounts made available for redistribution under
paragraph (3), to each shortfall State described in
subparagraph (B) that is one of the 50 States or District of
Columbia, such amount as the Secretary determines will
eliminate the estimated shortfall described in such
subparagraph for the State.
``(B) Shortfall state described.--For purposes of this
paragraph, a shortfall State described in this subparagraph
is a State with a State child health plan approved under this
title for which the Secretary estimates, on the basis of the
most recent data available to the Secretary as of March 31,
2007, that the projected expenditures under such plan for
such State for fiscal year 2007 will exceed the sum of--
``(i) the amount of the State's allotments for each of
fiscal years 2005 and 2006 that will not be expended by the
end of fiscal year 2006;
``(ii) the amount, if any, that is to be redistributed to
the State during fiscal year 2007 in accordance with
subsection (f) (other than under this paragraph);
``(iii) the amount of the State's allotment for fiscal year
2007; and
``(iv) the amount of any additional allotment to the State
under paragraph (1).
``(C) Proration rule.--If the amounts available for
redistribution under paragraph (3) are less than the total
amounts computed under subparagraph (A), the amount computed
under subparagraph (A) for each shortfall State shall be
reduced proportionally.
``(3) Treatment of certain states with fiscal year 2005
allotments unexpended at the end of the first half of fiscal
year 2007.--
``(A) Identification of states.--The Secretary--
``(i) shall identify those States that received an
allotment for fiscal year 2005 under subsection (b) which
have not expended all of such allotment by March 31, 2007;
and
``(ii) for each such State shall determine--

``(I) the portion of such allotment that was not so
expended by such date; and
``(II) whether the State is a described in subparagraph
(B).

``(B) States with funds in excess of 200 percent of need.--
A State described in this subparagraph is a State for which
the Secretary determines, as of March 31, 2007, the total of
all available allotments under this title as of such date, is
at least equal to 200 percent of the total projected
expenditures under this title for the State for fiscal year
2007.
``(C) Redistribution and limitation on availability.--
``(i) Application to portion of unused allotments for
certain states.--In the case of a State identified under
subparagraph (A)(i) that is also described in subparagraph
(B), notwithstanding subsection (e), the percentage specified
by the Secretary in clause (ii) of the amount described in
subparagraph (A)(ii)(I) shall not be available for
expenditure on or after April 1, 2007.
``(ii) Percentage specified.--The Secretary shall specify a
percentage which--

``(I) does not exceed 75 percent; and
``(II) when applied under clause (i) results in the total
of the amounts under such clause equaling the total of the
amounts under paragraph (2)(A).

``(4) Use of additional allotment.--Additional allotments
provided under this subsection are only available for amounts
expended under a State plan approved under this title for
child health assistance for targeted low-income children or
child health assistance or other health benefits coverage for
pregnant women.
``(5) Retrospective adjustment.--The Secretary may adjust
the determinations made under paragraphs (2) and (3) as
necessary on the basis of the amounts reported by States not
later than November 30, 2007, on CMS Form 64 or CMS Form 21,
as the case may be and as approved by the Secretary, but in
no case may the percentage specified in paragraph (3)(C)(ii)
exceed 75 percent.
``(6) 1-year availability; no redistribution of unexpended
additional allotments.--
``(A) In general.--Notwithstanding subsections (e) and (f),
amounts allotted or redistributed to a State pursuant to this
subsection for fiscal year 2007 shall only remain available
for expenditure by the State through September 30, 2007, and
any amounts of such allotments or redistributions that remain
unexpended as of such date, shall not be subject to
redistribution under subsection (f). Nothing in the preceding
sentence shall be construed as limiting the ability of the
Secretary to adjust the determinations made under paragraphs
(2) and (3) in accordance with paragraph (5).
``(B) Reversion upon termination of retrospective
adjustment period.--Any amounts of such allotments or
redistributions that remain unexpended as of September 30,
2007, shall revert to the Treasury on December 31, 2007.''.
(b) Extending Authority for Qualifying States to Use
Certain Funds for Medicaid Expenditures.--Section
2105(g)(1)(A) of such Act (42 U.S.C. 1397ee(g)(1)(A)) is
amended by striking ``or 2005'' and inserting ``2005, 2006,
or 2007''.
______

By Mr. BINGAMAN:
S. 3975. A bill to amend the Public Health Service Act to provide
grants to promote positive health behaviors in women and children; to
the Committee on Health, Education, Labor, and Pensions.
Mr. BINGAMAN. Mr. President, the legislation I am introducing today,
entitled the ``Community Health Workers Act of 2006,'' would improve
access to health education and outreach services to women in medically
underserved areas, including the U.S. border region along New Mexico.
Lack of access to adequate health care and health education is a
significant problem on the southern New Mexico border. While the access
problem is in part due to a lack of insurance, it is also attributable
to non-financial barriers to access. These barriers include a shortage
of physicians and other health professionals, and hospitals; inadequate
transportation; a shortage of bilingual health information and health
providers; and culturally insensitive systems of care.
This legislation would help to address the issue of access by
providing $15 million per year for a three year period in grants to
State, local, and tribal organizations, including community health
centers and public health departments, for the purpose of hiring
community health workers to provide health education, outreach, and
referrals to women and families who otherwise would have little or no
contact with health care services.
Recognizing factors such as poverty and language and cultural
differences that often serve as barriers to health care access in
medically underserved populations, community health workers are in a
unique position to improve health outcomes and quality of care for
groups that have traditionally lacked access to adequate services. They
often serve as ``community specialists'' and are members of the
communities in which they work. As such they can effectively serve
hard-to-reach populations.
A shining example of how community health workers serve their
communities, a group of so-called ``promotoras'' in Dona Ana County
were quickly mobilized during a recent flood emergency in rural New
Mexico. These community health workers assisted in the disaster
recovery efforts by partnering with FEMA to find, inform and register
flood victims for Federal disaster assistance. Their personal networks
and knowledge of the local culture, language, needs, assets, and
barriers greatly enhanced FEMA's community outreach efforts. The
promotoras of Dona Ana County demonstrate the important role community
health workers could play in communities across the nation, including
increasing the effectiveness of new initiatives in homeland security
and emergency preparedness, and in implementing risk communication
strategies.
The positive benefits of the community health worker model also have
been documented in research studies. Research has shown that community
health workers have been effective in increasing the utilization of
health preventive services such as cancer screenings and medical follow
up for elevated blood pressure and improving enrollment in publicly
funded health insurance programs. In the case of uninsured children, a
study by Dr. Glenn Flores, ``Community-Based Case Management in
Insuring Uninsured Latino Children,'' published in the December

[[Page S10474]]

2005 issue of Pediatrics found that uninsured children who received
community-based case management were eight times more likely to obtain
health insurance coverage than other children involved in the study
because case workers were employed to address typical barriers to
access, including insufficient knowledge about application processes
and eligibility criteria, language barriers and family mobility issues,
among others. This study confirms that community health workers could
be highly effective in reducing the numbers of uninsured children,
especially those who are at greatest risk for being uninsured.
Preliminary investigation of a community health workers project in New
Mexico similarly suggests that community health workers could be useful
in improving enrollment in Medicaid and the Children's Health Insurance
Program, SCHIP.
According to a 2003 Institute of Medicine, IOM, report entitled,
``Unequal Treatment: Confronting Racial and Ethnic Disparities in
Healthcare,'' community health workers offer promise as a community-
based resource to increase racial and ethnic minorities' access to
health care and to serve as a liaison between healthcare providers and
the communities they serve.''
Although the community health worker model is valued in the New
Mexico border region as well as other parts of the country that
encounter challenges of meeting the health care needs of medically
underserved populations, these programs often have difficulty securing
adequate financial resources to maintain and expand upon their
services. As a result, many of these programs are significantly limited
in their ability to meet the ongoing and emerging health demands of
their communities.
The IOM report also noted that ``programs to support the use of
community health workers . . . especially among medically underserved
and racial and ethnic minority populations, should be expanded,
evaluated, and replicated.''
I am introducing this legislation to increase resources for a model
that has shown significant promise for increasing access to quality
health care and health education for families in medically underserved
communities.
I ask unanimous consent that the text of the bill and Dr. Flores'
study on community-based case management be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 3975

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 ``Community Health Workers Act
of 2006''.

SEC. 2. FINDINGS.

Congress makes the following findings:
(1) Chronic diseases, defined as any condition that
requires regular medical attention or medication, are the
leading cause of death and disability for women in the United
States across racial and ethnic groups.
(2) According to the National Vital Statistics Report of
2001, the 5 leading causes of death among Hispanic, American
Indian, and African-American women are heart disease, cancer,
diabetes, cerebrovascular disease, and unintentional
injuries.
(3) Unhealthy behaviors alone lead to more than 50 percent
of premature deaths in the United States.
(4) Poor diet, physical inactivity, tobacco use, and
alcohol and drug abuse are the health risk behaviors that
most often lead to disease, premature death, and disability,
and are particularly prevalent among many groups of minority
women.
(5) Over 60 percent of Hispanic and African-American women
are classified as overweight and over 30 percent are
classified as obese. Over 60 percent of American Indian women
are classified as obese.
(6) American Indian women have the highest mortality rates
related to alcohol and drug use of all women in the United
States.
(7) High poverty rates coupled with barriers to health
preventive services and medical care contribute to racial and
ethnic disparities in health factors, including premature
death, life expectancy, risk factors associated with major
diseases, and the extent and severity of illnesses.
(8) There is increasing evidence that early life
experiences are associated with adult chronic disease and
that prevention and intervention services provided within the
community and the home may lessen the impact of chronic
outcomes, while strengthening families and communities.
(9) Community health workers, who are primarily women, can
be a critical component in conducting health promotion and
disease prevention efforts in medically underserved
populations.
(10) Recognizing the difficult barriers confronting
medically underserved communities (poverty, geographic
isolation, language and cultural differences, lack of
transportation, low literacy, and lack of access to
services), community health workers are in a unique position
to reduce preventable morbidity and mortality, improve the
quality of life, and increase the utilization of available
preventive health services for community members.
(11) Research has shown that community health workers have
been effective in significantly increasing health insurance
coverage, screening and medical follow-up visits among
residents with limited access or underutilization of health
care services.
(12) States on the United States-Mexico border have high
percentages of impoverished and ethnic minority populations:
border States accommodate 60 percent of the total Hispanic
population and 23 percent of the total population below 200
percent poverty in the United States.

SEC. 3. GRANTS TO PROMOTE POSITIVE HEALTH BEHAVIORS IN WOMEN.

Part P of title III of the Public Health Service Act (42
U.S.C. 280g et seq.) is amended by adding at the end the
following:

``SEC. 399P. GRANTS TO PROMOTE POSITIVE HEALTH BEHAVIORS IN
WOMEN.

``(a) Grants Authorized.--The Secretary, in collaboration
with the Director of the Centers for Disease Control and
Prevention and other Federal officials determined appropriate
by the Secretary, is authorized to award grants to States or
local or tribal units, to promote positive health behaviors
for women in target populations, especially racial and ethnic
minority women in medically underserved communities.
``(b) Use of Funds.--Grants awarded pursuant to subsection
(a) may be used to support community health workers--
``(1) to educate, guide, and provide outreach in a
community setting regarding health problems prevalent among
women and especially among racial and ethnic minority women;
``(2) to educate, guide, and provide experiential learning
opportunities that target behavioral risk factors including--
``(A) poor nutrition;
``(B) physical inactivity;
``(C) being overweight or obese;
``(D) tobacco use;
``(E) alcohol and substance use;
``(F) injury and violence;
``(G) risky sexual behavior; and
``(H) mental health problems;
``(3) to educate and guide regarding effective strategies
to promote positive health behaviors within the family;
``(4) to educate and provide outreach regarding enrollment
in health insurance including the State Children's Health
Insurance Program under title XXI of the Social Security Act,
Medicare under title XVIII of such Act and Medicaid under
title XIX of such Act;
``(5) to promote community wellness and awareness; and
``(6) to educate and refer target populations to
appropriate health care agencies and community-based programs
and organizations in order to increase access to quality
health care services, including preventive health services.
``(c) Application.--
``(1) In general.--Each State or local or tribal unit
(including federally recognized tribes and Alaska native
villages) that desires to receive a grant under subsection
(a) shall submit an application to the Secretary, at such
time, in such manner, and accompanied by such additional
information as the Secretary may require.
``(2) Contents.--Each application submitted pursuant to
paragraph (1) shall--
``(A) describe the activities for which assistance under
this section is sought;
``(B) contain an assurance that with respect to each
community health worker program receiving funds under the
grant awarded, such program provides training and supervision
to community health workers to enable such workers to provide
authorized program services;
``(C) contain an assurance that the applicant will evaluate
the effectiveness of community health worker programs
receiving funds under the grant;
``(D) contain an assurance that each community health
worker program receiving funds under the grant will provide
services in the cultural context most appropriate for the
individuals served by the program;
``(E) contain a plan to document and disseminate project
description and results to other States and organizations as
identified by the Secretary; and
``(F) describe plans to enhance the capacity of individuals
to utilize health services and health-related social services
under Federal, State, and local programs by--
``(i) assisting individuals in establishing eligibility
under the programs and in receiving the services or other
benefits of the programs; and
``(ii) providing other services as the Secretary determines
to be appropriate, that may include transportation and
translation services.
``(d) Priority.--In awarding grants under subsection (a),
the Secretary shall give priority to those applicants--
``(1) who propose to target geographic areas--
``(A) with a high percentage of residents who are eligible
for health insurance but are uninsured or underinsured;

[[Page S10475]]

``(B) with a high percentage of families for whom English
is not their primary language; and
``(C) that encompass the United States-Mexico border
region;
``(2) with experience in providing health or health-related
social services to individuals who are underserved with
respect to such services; and
``(3) with documented community activity and experience
with community health workers.
``(e) Collaboration With Academic Institutions.--The
Secretary shall encourage community health worker programs
receiving funds under this section to collaborate with
academic institutions. Nothing in this section shall be
construed to require such collaboration.
``(f) Quality Assurance and Cost-Effectiveness.--The
Secretary shall establish guidelines for assuring the quality
of the training and supervision of community health workers
under the programs funded under this section and for assuring
the cost-effectiveness of such programs.
``(g) Monitoring.--The Secretary shall monitor community
health worker programs identified in approved applications
and shall determine whether such programs are in compliance
with the guidelines established under subsection (f).
``(h) Technical Assistance.--The Secretary may provide
technical assistance to community health worker programs
identified in approved applications with respect to planning,
developing, and operating programs under the grant.
``(i) Report to Congress.--
``(1) In general.--Not later than 4 years after the date on
which the Secretary first awards grants under subsection (a),
the Secretary shall submit to Congress a report regarding the
grant project.
``(2) Contents.--The report required under paragraph (1)
shall include the following:
``(A) A description of the programs for which grant funds
were used.
``(B) The number of individuals served.
``(C) An evaluation of--
``(i) the effectiveness of these programs;
``(ii) the cost of these programs; and
``(iii) the impact of the project on the health outcomes of
the community residents.
``(D) Recommendations for sustaining the community health
worker programs developed or assisted under this section.
``(E) Recommendations regarding training to enhance career
opportunities for community health workers.
``(j) Definitions.--In this section:
``(1) Community health worker.--The term `community health
worker' means an individual who promotes health or nutrition
within the community in which the individual resides--
``(A) by serving as a liaison between communities and
health care agencies;
``(B) by providing guidance and social assistance to
community residents;
``(C) by enhancing community residents' ability to
effectively communicate with health care providers;
``(D) by providing culturally and linguistically
appropriate health or nutrition education;
``(E) by advocating for individual and community health or
nutrition needs; and
``(F) by providing referral and followup services.
``(2) Community setting.--The term `community setting'
means a home or a community organization located in the
neighborhood in which a participant resides.
``(3) Medically underserved community.--The term `medically
underserved community' means a community identified by a
State--
``(A) that has a substantial number of individuals who are
members of a medically underserved population, as defined by
section 330(b)(3); and
``(B) a significant portion of which is a health
professional shortage area as designated under section 332.
``(4) Support.--The term `support' means the provision of
training, supervision, and materials needed to effectively
deliver the services described in subsection (b),
reimbursement for services, and other benefits.
``(5) Target population.--The term `target population'
means women of reproductive age, regardless of their current
childbearing status.
``(k) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section
$15,000,000 for each of fiscal years 2007, 2008, and 2009.''.
____

A Randomized, Controlled Trial of the Effectiveness of Community-Based
Case Management in Insuring Uninsured Latino Children

(By Flores, MD; Milagros Abreu, MD; Christine E. Chaisson, MPH; Alan
Meyers, MD, MPH; Ramesh C. Sachdeva, MD, PhD, MBA; Harriet Fernandez,
BA; Patricia Francisco, BA; Beatriz Diaz, BA; Ana Milena Diaz, BA; and
Iris Santos-Guerrero, BA)

Abstract. Background. Lack of health insurance adversely
affects children's health. Eight million U.S. children are
uninsured, with Latinos being the racial/ethnic group at
greatest risk for being uninsured. A randomized, controlled
trial comparing the effectiveness of various public insurance
strategies for insuring uninsured children has never been
conducted.
Objective. To evaluate whether case managers are more
effective than traditional methods in insuring uninsured
Latino children.
Design. Randomized, controlled trial conducted from May
2002 to August 2004.
Setting and Participants. A total of 275 uninsured Latino
children and their parents were recruited from urban
community sites in Boston.
Intervention. Uninsured children were assigned randomly to
an intervention group with trained case managers or a control
group that received traditional Medicaid and State Children's
Health Insurance Program (SCHIP) outreach and enrollment.
Case managers provided information on program eligibility,
helped families complete insurance applications, acted as a
family liaison with Medicaid/SCHIP, and assisted in
maintaining coverage.
Main Outcome Measures. Obtaining health insurance, coverage
continuity, the time to obtain coverage, and parental
satisfaction with the process of obtaining insurance for
children were assessed. Subjects were contacted monthly for 1
year to monitor outcomes by a researcher blinded with respect
to group assignment.
Results. One hundred thirty-nine subjects were assigned
randomly to the intervention group and 136 to the control
group. Intervention group children were significantly more
likely to obtain health insurance (96% vs 57%) and had less
than 8 times the adjusted odds (odds ratio: 7.78; 95%
confidence interval: 5.20-11.64) of obtaining insurance.
Seventy-eight percent of intervention group children were
insured continuously, compared with 30% of control group
children. Intervention group children obtained insurance
significantly faster (mean: 87.5 vs 134.8 days), and their
parents were significantly more satisfied with the process of
obtaining insurance.
Conclusions. Community-based case managers are more
effective than traditional Medicaid/SCHIP outreach and
enrollment in insuring uninsured Latino children. Case
management may be a useful mechanism to reduce the number of
uninsured children, especially among high-risk populations.
Pediatrics 2005; 116:1433-11441; insurance, Latino, Medicaid,
medically uninsured, child health services, community health
services.
There were 8.4 million children without health insurance
coverage in the United States in 2003, equivalent to 11.4% of
children 0 to 17 years old. Latino children have the highest
risk of being uninsured of any racial/ethnic group of U.S.
children, with 21% of Latino children being uninsured,
compared with 7% of non-Latino white children, 14% of African
American children, and 12% of Asian/Pacific Islander
children. Other documented risk factors among children for
having no insurance include poverty and noncitizen status of
the parent and child.
Compared with children who have health insurance, uninsured
children have less access to health care, are less likely to
have a regular source of primary care, and use medical and
dental care less often. Uninsured children are significantly
more likely than insured children to be in poor or fair
health; to not have a regular physician or other medical
provider, to have made no medical visit in the past year, to
be immunized inadequately, to experience adverse hospital
outcomes as newborns, and to have higher mortality rates
associated with trauma and coarctation of the aorta.
To expand insurance coverage for uninsured children,
Congress enacted the State Children's Health Insurance
Program (SCHIP) in 1997. This program targets uninsured
children <19 years old with family incomes <200% of the
federal poverty level who are ineligible for Medicaid and are
not covered by private insurance. SCHIP is a matched block
grant program that allocates more than $39 billion in
federal funds over 10 years. It provides for states to
increase coverage of uninsured children by raising the
income limits of the Medicaid program so that more
children are eligible, by creating a new state insurance
program separate from Medicaid, or by implementing both
measures. Multiple studies have documented that previously
uninsured children experience significant increases in
both access to health care and more appropriate use of
services after enrollment in SCHIP and Medicaid.
Since the inception of SCHIP enrollment in January 1998,
SCHIP has provided coverage to 3.9 million children, and the
proportion of uninsured US children has decreased from 15.4
percent to 11.4 percent. In the past 4 years, however, the
numbers and proportions of uninsured children essentially
have not changed, wavering between 8.4 and 8.6 million and
11.4 percent to 11.9 percent, respectively. It has been
estimated that well over one half of uninsured children (5
million) are eligible for Medicaid or SCHIP, which suggests
that more-effective outreach and enrollment strategies are
needed. Indeed, recent research indicates that SCHIP may be
failing to reach the ``hardest-to-reach'' subpopulations of
uninsured children, such as Latinos and those who have never
been insured.
A randomized, controlled trial has never been performed
comparing traditional SCHIP and Medicaid outreach and
enrollment versus alternative strategies in terms of their
effectiveness in insuring uninsured children. Recent research
revealed that the parents of uninsured Latino children viewed
community-based case managers as an acceptable and helpful
intervention for families seeking to insure their uninsured
children. The aim of this study, therefore, was to conduct a
randomized, controlled trial comparing community-based case
management

[[Page S10476]]

with traditional SCHIP and Medicaid outreach and enrollment
with respect to their effectiveness in insuring uninsured
Latino children.

METHODS

Study Participants
Enrollment occurred from May 14, 2002, to September 30,
2003. Study participants were uninsured Latino children and
their parents from 2 communities in the greater Boston area
confirmed in prior research to have large proportions of both
uninsured children and Latino children, ie, East Boston,
where 37 percent of Latino children were found to be
uninsured in prior studies and 39 percent of the population
is Latino, and Jamaica Plain, where 27 percent of Latino
children were found to be uninsured in prior studies and 24
percent of the population is Latino. Eligibility criteria
included the following: (1) the child was 0 to 18 years old,
(2) the child had no health insurance coverage and had been
uninsured for 3 months (unless the child was an
infant who had never been insured), (3) the parent identified
her or his uninsured child's ethnicity as Latino, (4) the
parent's primary language was English or Spanish, and (5) the
parent was willing to be contacted monthly by telephone or
through a home visit by research personnel (if no functioning
telephone was present in the household). The focus of the
intervention was Latino children because they are the racial/
ethnic group of US children at greatest risk for being
uninsured. When > 1 child in a family was uninsured, the
youngest child was enrolled in the study as the ``index''
child (to ensure consistency), and data were collected only
for that child.
Study participants were recruited primarily from the
following community sites in East Boston and Jamaica Plain,
which were confirmed in prior studies to have many eligible
potential participants willing to take part in research:
supermarkets, bodegas, self-service laundries, beauty salons,
and churches. The remaining participants were recruited
through referral by other participants and in response to
notices posted at consulates and schools. Community sites for
recruitment were selected to obtain samples of parents
consisting of both documented and undocumented families in
proportions reflecting the population in each community. This
sampling method was chosen because traditional census block
methods have the potential to undercount undocumented
children and their families, given their fear of deportation
when a stranger appears at the front door of a dwelling. The
primary caretaker (herein referred to as the parent) of each
uninsured child enrolled in the study received a $50
participation honorarium at enrollment and a $5 honorarium
after each monthly follow-up contact.
Written informed parental consent (in English or Spanish,
depending on parental preference) was obtained for all
children enrolled. To avoid selection bias against parents
with low literacy levels, parents could request that the
written informed consent form be read to them by research
personnel, in English or Spanish, before they signed the
form. The study was approved by the institutional review
boards of Boston Medical Center and the Children's Hospital
of Wisconsin.
Baseline Assessments
Parents of eligible children completed a brief, verbally
administered screening questionnaire (in English or Spanish,
according to parental preference) to confirm eligibility,
determine relevant baseline characteristics, and record
contact information. Data were collected on the ages of the
child and parent, the self-identified Latino subgroup, the
number of years the parent had lived in the United States,
parental English proficiency, the highest level of parental
education, the employment status of the parent and spouse (if
currently living in the same household), the annual combined
family income, and the citizenship status of the parent.
Additional information collected included the names of the
parent and child, whether there was a functioning telephone
in the household, the telephone number, the preferred
alternate telephone number of friends or family members (if
there was no functioning telephone in the household), and the
family's address.
Randomization
Subjects were allocated to the case management intervention
group or the control group with a computer-generated,
stratified, randomization process. Stratified randomization
ensures that compared maneuvers in a randomized trial are
distributed suitably among pertinent subgroups. Randomization
was stratified by community site, with separate allocation
schedules prepared for participants from East Boston and
Jamaica Plain. The randomization schedule was prepared with
the RANUNI function of SAS software, version 8.2.
Sequentially numbered, opaque, sealed envelopes were produced
for each community site, to ensure adequate allocation
concealment. Potential participants were informed that,
depending on the randomization, some parents would get a case
manager free of charge, who would help families obtain health
insurance for their children, whereas other parents would get
no case manager and would just be contacted monthly.
Bilingual Latina research assistants who did not participate
in any aspect of preparation of randomization schedules
opened the envelopes in the presence of enrolled
participants, to inform them of their group assignment.
Parents of uninsured children allocated to the intervention
group immediately were assigned a bilingual, Latina,
community-based, case manager (the research assistant who
opened the randomization envelope with the parent became the
case manager for children assigned to the intervention
group).
Study Intervention
Case managers performed the following functions for
intervention group children and their families: (1) providing
information on the types of insurance programs available and
the application processes; (2) providing information and
assistance on program eligibility requirements; (3)
completing the child's insurance application with the parent
and submitting the application for the family; (4) expediting
final coverage decisions with early frequent contact with
the Division of Medical Assistance (DMA) (the state agency
administering Medicaid in Massachusetts) or the Department
of Public Health (DPH) (the state agency responsible for
the Children's Medical Security Plan [CMSP], which insures
nonMedicaid-eligible children in Massachusetts, including
noncitizens); (5) acting as a family advocate by being the
liaison between the family and DMA or DPH; and (6)
rectifying with DMA and DPH situations in which a child
was inappropriately deemed ineligible for insurance or had
coverage inappropriately discontinued.
All case managers received a 1-day intensive training
session on major obstacles to insuring uninsured children
reported by Latino parents in 6 focus groups, parents'
perspectives on how a case manager would be most useful in
assisting with the process of insuring uninsured children,
completing the Medical Benefit Request (the single
application used to enroll children in MassHealth [Medicaid
in Massachusetts] and CMSP), following up on submitted
applications, obtaining final coverage decisions, disputing
applications that were rejected or deemed ineligible, and the
study protocol for subject recruitment, enrollment, consent,
and follow-up monitoring. These training sessions were held
in collaboration with representatives from DMA and DPH. Case
managers also received the following training: a 1-week
session on MassHealth eligibility requirements conducted by
DMA, a 4-hour session on insurance eligibility rules
conducted by a DPH outreach coordinator, a 2-hour session on
MassHealth managed care programs and rules, a 1-day session
on CMSP conducted by a DPH representative, a 1-day seminar on
insurance programs and general assistance for impoverished
families conducted by Health Care for All (a nonprofit
organization dedicated to improving access to health care for
all people in the state of Massachusetts), monthly DMA
technical forums on MassHealth, and 1 week of supervised case
manager training in the community.
The case managers were bilingual Latina women (of
Dominican, Puerto Rican, Mexican, or Colombian ethnicity)
between 22 and 36 years old. All had graduated from high
school, some had obtained college degrees, and 1 had
postgraduate training. None had any prior experience working
as case managers insuring uninsured children. They were
recruited through job listings posted in the employment
offices of local Boston colleges and universities.
Control Group
Control group subjects received no intervention other than
the SCHlP standard-of-care outreach and enrollment efforts
administered by the MassHealth and CMSP programs. In
Massachusetts, DMA has stated that they ``have made every
effort to implement broad-based outreach activities designed
to draw attention of families, teachers, child care workers,
health providers, youth and community organizations to
enhanced opportunities in the Commonwealth for obtaining
health insurance.'' These efforts include the use of (1)
direct mailings, press releases, newspaper inserts, health
fairs, and door-to-door canvassing of target neighborhoods;
(2) special attempts to reach Latino communities, such as
radio advertisements on Spanish-language programs and
bilingual flyers; (3) mini-grants to community organizations
to provide outreach and assistance with applications; and (4)
a toll-free telephone number for applying for health
benefits.
Outcome Measures
Using standardized telephone interview methods, a trained
bilingual Latina research assistant who was blinded to
participant group assignment obtained outcome data from the
parents monthly for 11 months, beginning 1 month after the
date of study enrollment. The research assistant also made
home visits to families that lacked telephones in the
household and to those that did not respond to 10
attempted telephone contacts. To ensure ongoing rigorous
blinding, we asked parents not to reveal their group
assignment at any time to the outcomes research assistant
(and the blinded research assistant reported that no parents
revealed their child's group assignment during the study).
The primary outcome measure was the child obtaining health
insurance coverage, as determined in an interview with the
parent and confirmed, when possible, through inspection of
the coverage notification letter received by the family.
Three secondary outcomes also were assessed. The number of
days from study enrollment to obtaining coverage was
determined by using the interval between the date of the
participant's study enrollment and the date on which the

[[Page S10477]]

parent reported being notified officially that the child had
obtained coverage. Episodic coverage was defined as obtaining
but then losing insurance coverage at any time during the 12-
month follow-up period and was determined through parental
report and inspection of written notification. Parental
satisfaction with the process of obtaining coverage for the
child was determined by asking the parent, ``How satisfied
were you with the process of trying to obtain health
insurance coverage for your child?'' Parents responded by
using a 5-point Likert scale (1 = very satisfied, 2 =
satisfied, 3 = uncertain, 4 = dissatisfied, and 5 = very
dissatisfied). Overall parental satisfaction (regardless of
whether insurance coverage was obtained) was determined
during the final (11th month) follow-up contact. In addition,
for the subset of children who obtained insurance, we
assessed parental satisfaction during the first monthly
follow-up contact after the child obtained coverage. All
survey instruments were translated into Spanish and then
back-translated by a separate observer, to ensure reliability
and validity.
Statistical Analyses
All data analyses were performed as intention-to-treat
analyses with SAS software, version 8.2. Prestudy
calculations with the X² test of equal
proportions indicated that a sample size in each study arm of
90 participants provided 90 percent power to detect a 20
percent difference in the rates of insuring uninsured
children (assuming that 10 percent of the control group and a
minimum of 30 percent of the intervention group would be
insured at the end of the study), allowing for 2-sided a =
.05 and assuming 1 contact during the 12-month
follow-up period. The initial combined target recruitment
sample of N = 300 assumed that up to 40 percent of
participants might drop out or be lost to follow-up
monitoring; subsequently, recruitment was terminated at a
sample size of N = 275 when the attrition rate was observed
to be 17 percnt.
The baseline sociodemographic characteristics of the
intervention and control groups were compared with
X², Fisher's exact, and t tests. All
reported P values are 2-tailed, with P < .05 considered
statistically significant. Analyses of all outcomes,
including obtaining insurance, time to insurance, and
satisfaction with the process of obtaining insurance, were
restricted to subjects who completed 1 follow-up
visit.
Unadjusted analyses of intergroup differences in obtaining
insurance coverage (any, continuous, and sporadic) were
performed with the X² test. We then
fitted longitudinal regression models adjusting for time and
intrasubject correlations by using generalized estimating
equations implemented in PROC GENMOD in the SAS software. An
independent working correlation model and empirical variance
estimator were used for the generalized estimating equation
model.
Multivariate analyses were performed to adjust for policy
changes in the MassHealth and CMSP programs that occurred
during the study. In November 2002, an enrollment cap was
imposed on CMSP, which resulted in a waiting list of
thousands of uninsured children, and premiums were increased
for both CMSP and MassHealth. On February 1, 2003, the CMSP
enrollment freeze was lifted, children on the waiting list
began to be enrolled in the programs, and the premium
increases were reduced (but not to levels before the November
2002 policy change). Study outcomes therefore were adjusted
according to when the study participant was recruited, ie,
before, during, or after the restrictive policy change (with
construction of a 3-level variable for which the reference
group was recruitment before the policy change). Because some
subjects were not affected by the policy change, a second
variable also was constructed, consisting of a dummy
indicator for participants affected by the policy change.
Both policy change variables were included in the adjusted
models. On the basis of significant intergroup differences
noted in bivariate analyses (for parental employment status
and state insurance policy changes) and factors previously
reported to be associated with being uninsured, the final
adjusted model included the following covariates: the child's
age, the family's poverty status (dichotomized as an annual
combined family income that was 0-100% of the federal
poverty threshold for the family [individualized for each
family according to the number of people in the family
unit and the number of related children <18 years old in
the household] at the time of the study versus an income
that was above the federal poverty threshold), parental
citizenship status, parental employment status, and
participant recruitment in relation to policy changes in
state insurance coverage options available for uninsured
children.
Unadjusted analyses of the number of days from study
enrollment to obtaining coverage were performed for the
subset of subjects who obtained insurance with the t test and
then for all subjects with the Kaplan-Meier method. An
adjusted cumulative incidence curve for the time to obtaining
insurance was then plotted. Parental satisfaction with the
process of trying to obtain insurance was analyzed by coding
the 5-point Likert scale results both as a categorical
variable (using the X² test) and as a
continuous variable (using the t test).

RESULTS

Participants
A total of 275 uninsured Latino children (and their
families) who met all enrollment criteria were identified at
the 2 study sites; 139 were assigned randomly to receive the
community-based case management intervention and 136 were
allocated to the control group. Figure 1 summarizes the
enrollment, randomization, follow-up, and data analysis for
all study participants. At least 1 monthly follow-up contact
was made for 97% (n = 135) of the intervention group and 90%
(n = 122) of the control group, and follow-up contact 1 year
after study enrollment occurred successfully for 72% (n = 97)
of the intervention group and 62% (n = 76) of the control
group. The 18 subjects who were assigned randomly but then
were lost to follow-up monitoring or withdrew before any
follow-up contacts were more likely than other subjects to
have been allocated to the control group (75% in the control
group vs 48% in the control group among subjects with
1 follow-up contact; P < .04), but there were no
significant differences between these 2 groups in any other
characteristic, including the children's age, number of
children in the family, annual combined family income, or
parental age, citizenship, and employment status.
There were no baseline differences between the 2 groups in
the mean ages of the children or parents; annual combined
family income; number of children in the family; parental
ethnicity, citizenship, English proficiency, marital status,
or education; mean number of subject follow-up contacts; or
recruitment site (Table 1). Case management group families,
however, were more likely to have 1 parent
employed full-time, and there was a statistically significant
but minor intergroup difference in the proportions of
subjects recruited before, during, and after the policy
change in state coverage of uninsured children, with a
slightly greater proportion of intervention group subjects
being recruited before the policy change and slightly greater
proportions of control group children being recruited while
the restrictive policy change was in effect and after
reestablishment of most of the prior policy. There also was a
slight but statistically significant difference in the number
of subjects lost to follow-up before any follow-up interviews
(3% of the intervention group vs 9% of the control group; P =
.04).
Insurance Coverage of Children
Children who received community-based case management were
substantially more likely to obtain health insurance coverage
compared with children in the control group (96% vs 57%; P <
.0001) (Table 2). Intervention group children also were
significantly more likely than control group children to be
insured continuously throughout the 1-year follow-up period
(78% vs 30%; P < .0001) and significantly less likely to be
insured sporadically (18% vs 27%; P < .0001) or uninsured
continuously (4% vs 43%; P < .0001) during the 1-year follow-
up period.
The case management group was almost 8 times more likely
than the control group to obtain insurance coverage (odds
ratio: 7.78; 95% confidence interval: 5.20-11.64), after
multivariate adjustment for potential confounders (the
child's age, family income, parental citizenship, parental
employment, and the period of policy change in state coverage
of uninsured children) (Table 3). The adjusted incidence
curve (Fig 2) shows that the marked difference between the
groups in obtaining insurance coverage emerged at 30 days
and was sustained. Multivariate analyses also revealed that
older children and adolescents and participants enrolled
during the state freeze on CMSP had lower adjusted odds of
obtaining insurance coverage (Table 3).
Time to Obtaining Insurance Coverage
Among the children who obtained health insurance, case
management group children were insured substantially more
quickly than control children (Table 2), with a mean of just
under 3 months to obtain coverage, compared with a mean of
>4.5 months for control children (87.5 68 days
for the intervention group vs 134.8 102 days for
the control group; P < .0001).
Parental Satisfaction With the Process of Obtaining Insurance
Parents of children in the intervention group were
substantially more likely than parents of control group
children to report being very satisfied with the process of
obtaining health insurance for their child (80% vs 29%; P <
.0001) (Table 2). Conversely, control group parents were
considerably more likely than intervention group parents to
report being very dissatisfied (14% vs 1%; P < .0001) or
either dissatisfied or very dissatisfied (27% vs 3%; P <
.0001) with the process of obtaining the child's insurance.
Similar intergroup differences were observed when parental
satisfaction was examined with Likert scale scores (where 1 =
very satisfied and 5 = very dissatisfied); the mean
satisfaction score for intervention group parents was
significantly better than that for control group parents (1.3
vs 2.4; P < .0001). These significant intergroup satisfaction
differences persisted when the analysis was restricted to
subjects who had obtained insurance; at the first follow-up
contact with parents of children who obtained insurance, 74%
of intervention group parents but only 24% of control group
parents reported being very satisfied with the process of
obtaining coverage for their children (P < .0001), and the
respective Likert scale satisfaction scores (mean
SD) were 1.19 0.46 vs 1.56
0.72 (P < .0001).

DISCUSSION

Community-based case managers were found to be
substantially more effective in obtaining health insurance
for uninsured

[[Page S10478]]

Latino children than traditional Medicaid and SCHIP outreach
and enrollment. In addition, compared with control group
children, children in the case management group obtained
insurance coverage sooner, were more likely to be insured
continuously during 1 year of follow-up, and had parents who
were much more satisfied with the process of obtaining
coverage for their children.
Several characteristics of the case management intervention
might account for its greater effectiveness in comparison
with traditional Medicaid and SCHIP outreach and enrollment.
First, case managers received training and focused their
efforts on addressing barriers to insuring uninsured children
that had been identified specifically by Latino families in
prior research, including lack of knowledge about the
application process and eligibility, language barriers,
immigration issues, income cutoff values and verification,
hassles, pending decisions, family mobility, misinformation
from insurance representatives, and system problems. Second,
case managers were active agents in the process of obtaining
insurance coverage for children, assisting parents with
application completion and acting as a family liaison and
advocate whenever complications or setbacks occurred;
traditional SCHIP and Medicaid outreach and enrollment tended
to be much more passive, with outreach being heavily reliant
on direct mailings, flyers, radio advertisements, and
toll-free telephone numbers, but frequently with little or
no assistance with the enrollment process. Third, the case
managers were all bilingual, bicultural Latinas, which
enhanced the cultural competency of the process and
eliminated the often considerable language barriers faced
by Latino parents seeking to insure their uninsured
children. Therefore, the evidence-based, customized,
active, culturally competent features in a community-based
setting distinguish this intervention from traditional
case management approaches and may account for its
effectiveness.
The success of the community-based case management
intervention is noteworthy, given a study population
characterized by multiple factors known to place children at
especially high risk for being uninsured. All intervention
group children were Latino, 69 percent lived in poverty, 96
percent lived in families with incomes 200 percent
of the federal poverty threshold, only 10 percent of parents
were U.S. citizens, and one fifth of parents were unemployed.
These findings suggest that community-based case management
might prove especially useful in regions characterized by
large proportions of uninsured children who are Latino, poor,
immigrants, and have parents who are unemployed. Additional
research is needed to determine whether community-based case
managers would be equally effective in insuring uninsured
children from other racial/ethnic groups and socioeconomic
strata and those with parents who are primarily U.S. citizens
and employed.
The effectiveness of community-based case management
suggests that it could play an important role in states with
large proportions of uninsured Latino children. In Texas, for
example, where 21 percent of children (equivalent to 1.4
million children) are uninsured and an estimated 56 percent
of uninsured children are Latino, community-based case
management potentially could insure >750000 uninsured
Latino children, assuming the 96 percent effectiveness of
case management observed in this study. The study findings
suggest that community-based case management has the
potential to be highly effective in reducing the number of
uninsured children even in states such as Texas where
children from undocumented families are not eligible for
insurance programs; community-based case management was
found to be more effective than traditional Medicaid and
SCHIP outreach and enrollment even after adjustment for
parental citizenship, and more than one half of all
uninsured U.S. children are eligible for Medicaid or
SCHIP. As demonstrated in our study, however, in states
with relatively small proportions of uninsured children,
such as Massachusetts, case management might prove to be
an important means of insuring the hardest-to-reach
populations of uninsured children who have continued to be
uninsured despite 7 years of SCHIP and Medicaid expansion,
such as Latinos, poor children, and those with noncitizen
parents. Our study findings may be of particular relevance
for states such as Florida, which, like Massachusetts, has
a SCHIP program (the Florida KidCare program) that covers
both citizen and qualified noncitizen children.
Certain limitations of this study should be noted. The case
management intervention was studied only among Latino
children; therefore, the results may not pertain to other
racial/ethnic groups. The Latino subgroups represented in the
study sample were typical of an urban area in the Northeast,
and the findings may not be generalizable to populations with
greater proportions of Mexican Americans, in other regions of
the country, or in rural or suburban areas. Because the study
aim was to determine the effectiveness of the case management
intervention, a cost analysis was not performed, and the
cost-effectiveness of the intervention could not be
determined. However, we did evaluate the feasibility of
conducting a cost-effectiveness analysis by collecting pilot
data on 10 consecutive families enrolled in the study. Pilot
data collected included the number of missed school days, the
number of missed work days, out-of-pocket expenses incurred
during a child's illness, the number of emergency department
and clinic visits, hospitalizations, and estimates of the
costs of implementing the program, including personnel
salaries and time spent implementing the intervention. These
pilot data suggest that a formal cost-effectiveness analysis
of the intervention is feasible for this population and could
be performed in future studies. Future cost-effectiveness
analyses of this intervention should consider comprehensive
evaluation of direct, indirect, and opportunity costs
associated with implementing the case management intervention
in other communities and populations.
It can be speculated that insuring children through
community-based case managers might have the potential to
contribute to the revitalization of impoverished Latino
communities. Case management not only could effectively
reduce the number of uninsured children in a community but
also might serve as a means of enhancing a community's
employment opportunities. The case managers could be trained
individuals from the community who serve their own community,
drawn from welfare-to-work and other local and state
employment programs. Part of each case manager's earnings, in
turn, might be spent at local businesses, resulting in a
``triple effect'' of reducing the number of uninsured
children, increasing parental employment, and stimulating the
local economy. Under this scenario, SCHIP and Medicaid
programs could partner with state employment agencies to
train and to hire the community case managers. As an
intervention that is comprehensive, community-based, and
focused on the family, community-based case management
shares key features with several established family
support programs considered to be effective in improving
child health outcomes, such as Head Start and early
intervention programs for children with special health
care needs.

conclusions

This randomized, controlled trial indicates that community-
based case managers are significantly more effective than
traditional SCHIP/Medicaid outreach and enrollment in
insuring uninsured Latino children. Community case management
seems to be a useful mechanism for reducing the number of
uninsured children, especially among children most at risk
for being uninsured.

TABLE 1.--BASELINE CHARACTERISTICS OF STUDY PARTICIPANTS
----------------------------------------------------------------------------------------------------------------
Case management Control
Characteristic ------------------------------------------------------ P
(n=139) (n=136)
----------------------------------------------------------------------------------------------------------------
Child's age, y, mean SD......................... 8.9 5.0 8.9 4.9 .96
Parent's age, y, mean SD........................ 36.7 9.1 36.7 8.9 .98
Annual combined family income, median (range)..... $13,200 ($0-72,000) $12,945 ($0-48,000) .41
Annual combined family income, no. (%)\1\: .57
0-100% of federal poverty threshold........... 92 (69) 86 (73)
101-200% of federal poverty threshold......... 36 (27 30 (25)
>200% of federal poverty threshold............ 5 (4) 2 (2)
Number of children in family, no. (%): .64
1............................................. 49 (35) 42 (31)
2............................................. 52 (37) 54 (40)
3............................................. 25 (18) 21 (15)
4............................................. 13 (9) 18 (13)
Parent's ethnicity, no. (%): .51
Colombian..................................... 58 (42) 47 (35)
Dominican..................................... 27 (19) 24 (18)
Salvadoran.................................... 29 (21) 32 (24)
Guatemalan.................................... 7 (5) 13 (10)
Mexican....................................... 3 (2) 6 (4)
Other......................................... 15 (11) 14 (10)
At least 1 parent employed full-time, no. (%)..... 119 (86) 99 (73) .01
Parental citizenship, no. (%): .96
US citizen.................................... 14 (10) 15 (11)
Legal resident................................ 69 (51) 67 (49)
Undocumented.................................. 56 (40) 54 (40)
Parent limited in English proficiency, no. (%) \2\ 127 (91) 126 (93) .96

[[Page S10479]]

Parental marital status, no. (%): .82
Married....................................... 63 (45) 59 (43)
Separated..................................... 19 (14) 15 (11)
Divorced...................................... 9 (6) 9 (7)
Single........................................ 29 (21) 39 (29)
Common law.................................... 16 (12) 12 (9)
Widowed/other................................. 3 (2) 2 (1)
Parental educational attainment, no. (%): .75
None/grade school............................. 43 (31) 38 (28)
6th to 11th grade............................. 24 (17) 20 (15)
High school graduate.......................... 38 (28) 44 (32)
Some college.................................. 11 (8) 15 (11)
College degree \3\............................ 22 (16) 19 (14)
Lost/withdrew from study before any follow up 4 (3) 12 (9) .04
contact, no. (%).................................
Follow-up contacts, no., mean SD \4\.. 8.3 2.2 7.9 2.3 .14
Recruitment site, no. (%): .91
East Boston................................... 101 (73) 98 (72)
Jamaica Plain................................. 38 (27) 38 (28)
Participant recruitment in relation to policy .02
change in state coverage of uninsured children,
no. (%):
Before policy change.......................... 38 (27) 20 (15)
Restrictive change in effect.................. 14 (10) 22 (17)
Reestablishment of most of prior policy....... 87 (63) 94 (70)
----------------------------------------------------------------------------------------------------------------
\1\ Three parents in the intervention group and 18 in the control group chose not to answer questions on family
income.
\2\ U.S. Census definition of self-rated English-speaking ability of less than very well (ie, well, not very
well, or not at all).
\3\ Associate, bachelor's, or postgraduate degree.
\4\ Among participants with any follow-up contacts.

TABLE 2.--STUDY OUTCOMES ACCORDING TO GROUP ASSIGNMENT
----------------------------------------------------------------------------------------------------------------
Case management Control
Outcome -------------------------------------------------- P
(n = 139) (n = 136)
----------------------------------------------------------------------------------------------------------------
Child obtained health insurance coverage, %...... 96 57 <.0001
Continuously insured......................... 78 30 <.0001
Sporadically insured 1....................... 18 27 <.0001
Child continuously uninsured, %.................. 4 43 <.0001
Mean time to obtain insurance, d, mean SD...... 87.5 68 134.8 102.4 <.009
Parental satisfaction with process of obtaining
child's insurance, % 2:
Very satisfied............................... 80 29 3 <.0001
Satisfied.................................... 12 41
Uncertain.................................... 5 4
Dissatisfied................................. 2 13
Very dissatisfied............................ 1 14
Mean parental satisfaction score for process of 1.33 0.77 2.40 1.40 <.0001
obtaining child's insurance (5-point Likert
scale), mean SD 2 4...........................
----------------------------------------------------------------------------------------------------------------
1 Obtained but then lost health insurance coverage.
2 Regardless of whether child was insured or continuously uninsured; data were collected at the final 1-year
follow-up contact.
3 By Wilcoxon 2-sample test, Kruskal-Wallis test, and Cochran-Armitage trend test.
4 Where 1 = very satisfied, 2 = satisfied, 3 = uncertain, 4 = dissatisfied, and 5 = very dissatisfied.

TABLE 3.--MULTIPLE LOGISTIC-REGRESSION ANALYSIS OF FACTORS ASSOCIATED
WITH CHILDREN OBTAINING INSURANCE COVERAGE
------------------------------------------------------------------------
Adjusted odds ratio (95%
confidence interval) for
Independence variable obtaining insurance
coverage
------------------------------------------------------------------------
Group assignment:
Control................................. Referent
Case management......................... 7.78 (5.20-11.64)
Child's age:
0-5 y................................... Referent
6-11 y.................................. 0.32 (0.19-0.56)
12-18 y................................. 0.35 (0.019-0.63)
Annual combined family income:
At or below federal poverty threshold... Referent
Above poverty threshold................. 1.19 (0.70-2.02)
Parental citizenship:
Undocumented............................ Referent
Legal resident.......................... 1.42 (0.82-2.44)
U.S. citizen............................ 2.40 (0.08-7.48)
Parental employment:
Employed................................ Referent
Unemployed.............................. 0.78 (0.45-1.37)
Participant recruitment in relation to
policy change in state coverage of
uninsured children:
Before policy change.................... Referent
Restrictive change in effect............ 0.46 (0.22-0.99)
Reestablishment of most of prior policy. 0.74 (0.45-1.21)
------------------------------------------------------------------------

______

By Mr. DURBIN (for himself and Mr. Obama):
2. 3977. A bill to provide a Federal income tax credit for Patriot
employers, and for other purposes; to the Committee on Finance.
Mr. DURBIN. Mr. President, when companies make headlines today it is
often for all the wrong reasons: fraud, tax avoidance, profiteering,
etc. Yet many of the companies that are currently providing jobs across
America are conscientious corporate citizens that strive to treat their
workers fairly even as they seek to create good products that consumers
want and to maximize profits for their shareholders. I believe that we
should reward such companies for providing good jobs to American
workers, and create incentives that encourage more companies to do
likewise. The Patriot Employers bill does just that.
This legislation, which I am introducing today along with Senator
Obama, would provide a tax credit to reward the companies that treat
American workers best. Companies that provide American jobs, pay decent
wages, provide good benefits, and support their employees when they are
called to active duty should enjoy more favorable tax treatment than
companies that are unwilling to make the same commitment to American
workers. The Patriot Employers tax credit would put the tax code on the
side of those deserving companies by acknowledging their commitments.
The Patriot Employers legislation would provide a tax credit equal to
1 percent of taxable income to employers that meet the following
criteria:

First, invest in American jobs, by maintaining or increase
the number of full-time workers in America relative to the
number of full-time workers outside of America and also by
maintaining their corporate headquarters in America if the
company has ever been headquartered in America.
Second, pay decent wages, by paying each worker an hourly
wage that would ensure that a full-time worker would earn
enough to keep a family of three out of poverty, at least
$8.00 per hour.
Third, prepare workers for retirement, either by providing
either a defined benefit plan or by providing a defined
contribution plan that fully matches at least 5 percent of
worker contributions for every employee.
Fourth, provide health insurance, by paying at least 60
percent of each worker's health care premiums.
Fifth, support our troops, by paying the difference between
the regular salary and the military salary of all National
Guard and Reserve employees who are called for active duty,
and also by continuing their health insurance coverage.

In recognition of the different business circumstances that small
employers face, companies with fewer than 50 employees could achieve
Patriot Employer status by fulfilling a smaller number of these
criteria.
There is more to the story of corporate American than the widely-
publicized wrong-doing. Patriot Employers should be publicly recognized
for doing right by their workers even while they do well for their
customers and shareholders. I urge my colleagues to join Senator Obama
and me in supporting this effort. Our best companies, and our American
workers, deserve nothing less.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

[[Page S10480]]

S. 3977

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

SECTION 1. REDUCED TAXES FOR PATRIOT EMPLOYERS.

(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new section:

``SEC. 45N. REDUCTION IN TAX OF PATRIOT EMPLOYERS.

``(a) In General.--In the case of any taxable year with
respect to which a taxpayer is certified by the Secretary as
a Patriot employer, the Patriot employer credit determined
under this section for purposes of section 38 shall be equal
to 1 percent of the taxable income of the taxpayer which is
properly allocable to all trades or businesses with respect
to which the taxpayer is certified as a Patriot employer for
the taxable year.
``(b) Patriot Employer.--For purposes of subsection (a),
the term `Patriot employer' means, with respect to any
taxable year, any taxpayer which--
``(1) maintains its headquarters in the United States if
the taxpayer has ever been headquartered in the United
States,
``(2) pays at least 60 percent of each employee's health
care premiums,
``(3) if such taxpayer employs at least 50 employees on
average during the taxable year--
``(A) maintains or increases the number of full-time
workers in the United States relative to the number of full-
time workers outside of United States,
``(B) compensates each employee of the taxpayer at an
hourly rate (or equivalent thereof) not less than an amount
equal to the Federal poverty level for a family of three for
the calendar year in which the taxable year begins divided by
2,080,
``(C) provides either--
``(i) a defined contribution plan which for any plan year--

``(I) requires the employer to make nonelective
contributions of at least 5 percent of compensation for each
employee who is not a highly compensated employee, or
``(II) requires the employer to make matching contributions
of 100 percent of the elective contributions of each employee
who is not a highly compensated employee to the extent such
contributions do not exceed the percentage specified by the
plan (not less than 5 percent) of the employee's
compensation, or

``(ii) a defined benefit plan which for any plan year
requires the employer to make contributions on behalf of each
employee who is not a highly compensated employee in an
amount which will provide an accrued benefit under the plan
for the plan year which is not less than 5 percent of the
employee's compensation, and
``(D) provides full differential salary and insurance
benefits for all National Guard and Reserve employees who are
called for active duty, and
``(4) if such taxpayer employs less than 50 employees on
average during the taxable year, either--
``(A) compensates each employee of the taxpayer at an
hourly rate (or equivalent thereof) not less than an amount
equal to the Federal poverty level for a family of 3 for the
calendar year in which the taxable year begins divided by
2,080, or
``(B) provides either--
``(i) a defined contribution plan which for any plan year--

``(ii) a defined benefit plan which for any plan year
requires the employer to make contributions on behalf of each
employee who is not a highly compensated employee in an
amount which will provide an accrued benefit under the plan
for the plan year which is not less than 5 percent of the
employee's compensation.''.
(b) Allowance as General Business Credit.--Section 38(b) of
the Internal Revenue Code or 1986 is amended by striking
``and'' at the end of paragraph (25), by striking the period
at the end of paragraph (26) and inserting ``, and'', and by
adding at the end the following:
``(27) the Patriot employer credit determined under section
45N.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2006.

Mr. OBAMA. Mr. President, I rise today, with my good friend and
colleague, the senior Senator from the great State of Illinois, to
introduce the Patriot Employers Act of 2006.
This measure is designed to help businesses and American workers
seeking to compete in the global economy. By reducing corporate taxes
for those firms that invest in America and American employees, the
Patriot Employers Act rewards companies that, among other things, pay
decent benefits, provide health coverage and support our troops by
paying a full differential salary for deployed National Guard
employees.
Too often we hear troubling news reports of American companies
outsourcing jobs and exploiting corporate tax loopholes--by setting up
incorporated offices, for example, in the Cayman Islands to avoid
paying their fair share of taxes. Such companies fail to see that they
are connected to the markets in which they operate, and by dodging
their financial responsibilities, they are harming the very economy
that they, too, will need to rely on in the future.
Recognizing these challenges, this bill says that we are going to
align our corporate tax policy with the corporate practices we want to
encourage.
The Patriot Employers Act cuts taxes for American companies that:
maintain headquarters in the U.S.; pay at least 60 percent of
employees' healthcare premiums; maintain or increase their U.S.
workforce relative to their workforce located abroad; pay an hourly
rate several dollars above the outdated minimum wage; provide either a
defined benefit retirement plan or a defined contribution plan with an
employer match; and provide full differential salary and benefits for
National Guard employees called into active duty.
It is important that our American firms remain competitive and
innovate, in part by investing in the long-term health of those workers
and communities in which they operate and impact. Increasing corporate
shareholder value and acting in the interests of the public good are
not mutually exclusive goals, and this legislation recognizes that
point. All of us have a stake in improving returns to all corporate
stakeholders, including investors, managers, employees, consumers, and
our communities.
To this end, I am proud to be an original cosponsor of this bill and
I hope that it will renew attempts by lawmakers--both legislative and
otherwise--to engage productively with the business community to
address their long-term market concerns while promoting the well-being
of American workers. Government does not create jobs; entrepreneurs and
businesses do. The future of the American economy requires that
American businesses continue to grow and improve their productivity and
competitiveness. It requires that American companies have the very best
workforce and infrastructure to compete and win in every market they
enter.
Ensuring American competitiveness will demand new thinking from
leaders in business, labor, education, and government: it will demand
new responses and roles, new coalitions and collaborations, among these
stakeholders. Long-term American competitiveness will demand bipartisan
commitment to strengthening all parts of our economy and improving
opportunities for all Americans.
The Patriot Employers Act is an important step in this process. Let's
align business incentives with the investments we need in the future of
the American workforce. Let's begin the conversation about how to
ensure American competitiveness for the 21st century and beyond.
I urge quick support for this important legislation.
______

By Mrs. CLINTON:
S. 3978. A bill to provide consumer protections for lost or stolen
check cards and debit cards similar to those provided with respect to
credit cards, and for other purposes, to the Committee on Banking,
Housing, and Urban Affairs.
Mrs. CLINTON. Mr. President, today I am introducing the Debit and
Check Card Consumer Protection Act of 2006, an important piece of
legislation in the battle against consumer fraud. Despite consumers'
best efforts, debit and check card fraud is a serious problem making
consumer liability an important issue. Unfortunately, current consumer
protection laws do not adequately protect debit and check card holders
from fraud.
Over the last decade, debit and check card use has experienced double
digit growth and now over 80 percent of American consumer households
possess a debit or check card. This growth has outpaced that of credit
cards and recent reports indicate that between 2001 and 2003 consumers
made 42.5 billion

[[Page S10481]]

transactions with debit cards, 2.3 billion more transactions than with
credit cards.
While debit and check card growth benefits the American economy,
consumers continually face greater challenges to prevent and protect
themselves from debit and check card fraud. Recent statistics show that
in 2005, ATM/debit card fraud in the United States generated losses of
$2.75 billion. During the same period, ATM fraud alone affected 3
million U.S. consumers.
Despite these findings, debit and check card consumer liability
protections under the law remain substandard as compared to credit
cards. Under current law, debit and check card holders are liable for
fraudulent transactions dependent upon when they report the fraud. In
some cases the consumer can be held accountable for $500 worth of
fraudulent transactions. Conversely, credit card holders who face
similar consumer challenges are liable for a maximum payment of $50 and
are allowed to refuse or ``chargeback'' a payment when goods or
services fail to arrive or they are dissatisfied with a transaction.
Debit and check card holders are not provided with similar
``chargeback'' protections. Fortunately, some debit and check card
issuers provide customers with stronger liability protections; however,
it is essential that consumers are assured liability protections under
the law, not just through a company's policy.
The Debit and Check Card Consumer Protection Act of 2006 remedies
these inconsistencies between credit card liability protections and
debit and check card liability protections by simply affording the same
level of protection to debit and check card users given to credit card
users. This legislation is an important step in ensuring consumer
protections in an economy increasingly driven by electronic commercial
transactions, and I am proud that Consumers Union, one of the largest
nonpartisan advocate organizations for consumer rights, has endorsed
it.
The time has come to strengthen debit and check card liability
protections for the American consumer, and I urge my colleagues to
support this simple and commonsense remedy to a growing problem. I ask
unanimous consent that the text of the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 3978

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 ``Debit and Check Card
Consumer Protection Act of 2006''.

SEC. 2. FINDINGS.

Congress finds that--
(1) debit and check card use has experienced double digit
growth for longer than a decade, and more than 80 percent of
American consumer households now posses a debit or check
card;
(2) between 2001 and 2003, consumers made 42,500,000,000
transactions with debit cards, eclipsing credit card
transactions by 2,300,000,000;
(3) as of 2003, debit cards accounted for \1/3\ of all
purchases in stores;
(4) in addition to the rise in debit and check card use,
debit and check card fraud increasingly challenges American
consumers;
(5) in 2005, debit card and ATM fraud accounted for losses
of $2,750,000,000;
(6) despite that growth, statutory debit and check card
consumer liability protections remain substandard, as
compared to credit cards;
(7) the debit and check card industry has, in some
instances, instituted liability protections that often exceed
the requirements set forth under the provisions of law; and
(8) the law should be changed to ensure a continued level
of liability protection.

SEC. 3. CAP ON DEBIT CARD LIABILITY.

Section 909(a) of the Electronic Funds Transfer Act (15
U.S.C. 1693g(a)) is amended--
(1) by striking ``Notwithstanding the foregoing'' and all
that follows through ``whichever is less.''; and
(2) by striking ``meana'' and inserting ``means''.

SEC. 4. DEBIT CARD ERROR RESOLUTION.

Section 908(f) of the Electronic Funds Transfer Act (15
U.S.C. 1693f(f)) is amended--
(1) by redesignating paragraphs (6) and (7) as paragraphs
(7) and (8), respectively; and
(2) by inserting after paragraph (5) the following:
``(6) a charge for goods or services not accepted by the
consumer or the designee thereof, or not delivered to the
consumer or the designee thereof, in accordance with the
agreement made at the time of a transaction;''.

SEC. 5. CONSUMER RIGHTS.

Section 908 of the Electronic Funds Transfer Act (15 U.S.C.
1693f) is amended by adding at the end the following:
``(g) Rights of Consumers With Respect to Accepted Cards.--
``(1) In general.--Subject to the limitation contained in
paragraph (2), the issuer of an accepted card to a consumer
shall be subject to all claims (other than tort claims) and
defenses arising out of any transaction in which the accepted
card is used as a method of payment, if--
``(A) the consumer has made a good faith attempt to obtain
satisfactory resolution of a disagreement or problem relative
to the transaction from the person honoring the accepted
card;
``(B) the amount of the initial transaction exceeds $50;
and
``(C) the transaction was initiated by the consumer in the
same State as the mailing address previously provided by the
consumer, or within 100 miles from such address, except that
the limitations set forth in subparagraphs (A) and (B) with
respect to the right of a consumer to assert claims and
defenses against the issuer of the card shall not be
applicable to any transaction in which the person honoring
the accepted card--
``(i) is the same person as the card issuer;
``(ii) is controlled by the card issuer;
``(iii) is under direct or indirect common control with the
card issuer;
``(iv) is a franchised dealer in the products or services
of the card issuer; or
``(v) has obtained the order for such transaction through a
mail solicitation made by or participated in by the card
issuer in which the cardholder is solicited to enter into
such transaction by using the accepted card issued by the
card issuer.
``(2) Limitation.--The amount of claims or defenses
asserted by the cardholder under this subsection may not
exceed the amount paid by the cardholder with respect to the
subject transaction at the time at which the cardholder first
notifies the card issuer or the person honoring the accepted
card of such claim or defense.''.

SEC. 6. REGULATIONS.

Not later than 90 days after the date of enactment of this
Act, the Board of Governors of the Federal Reserve System
shall issue final regulations to carry out the amendments
made by this Act, which regulations shall be consistent, to
the extent practicable, with regulations issued to carry out
similar provisions under the Truth in Lending Act.
______

By Mr. DODD (for himself, Mr. Frist, Mr. Harkin, Mrs. Clinton,
Mr. Reed, and Mr. Durbin):
S. 3980. A bill to direct the Secretary of Health and Human Services,
in consultation with the Secretary of Education, to develop a policy
for managing the risk of food allergy and anaphylaxis in schools, to
establish school-based food allergy management grants, and for other
purposes; to the Committee on Health, Education, Labor, and Pensions.
Mr. DODD. Mr. President, food allergies are an increasing food safety
and public health concern in this country, especially among young
children. I know first-hand just how frightening food allergies can be
in a young person's life. My own family has been personally touched by
this troubling condition and we continue to struggle with it each and
every day. Sadly, there is no cure for food allergies.
In the past 5 years, the number of Americans with food allergies has
nearly doubled from 6 million to almost 12 million. While food
allergies were at one time considered relatively infrequent, today they
rank 3rd among common chronic diseases in children under 18 years old.
Peanuts are among several allergenic foods that can produce life-
threatening allergic reactions in susceptible children. Peanut
allergies have doubled among school-age children from 1997 to 2002.
Clearly, food allergies are of great concern for school-age children
Nation-wide, and yet, there are no Federal guidelines concerning the
management of life-threatening food allergies in our Nation's schools.
I have heard from parents, teachers and school administrators that
students with severe food allergies often face inconsistent food
allergy management approaches when they change schools--whether they
get promoted or move to a different city. Too often, families are not
aware of the food allergy policy at their children's school, or the
policy is vastly different from the one they knew at their previous
school, and they are left wondering whether their child is safe.
Last year, Connecticut became the first State to enact school-based
guidelines concerning food allergies and the

[[Page S10482]]

prevention of life-threatening incidents in schools. I am very proud of
these efforts, and I know that the parents of children who suffer from
food allergies in Connecticut have confidence that their children are
safe throughout the school day. Other States, such as Massachusetts,
have enacted similar guidelines. Tennessee school districts are poised
to implement their statewide guidelines in July. But too many States
across the country have food allergy management guidelines that are
inconsistent from one school district to the next.
In my view, this lack of consistency underscores the need for
enactment of uniform, Federal policies that school districts can choose
to adopt and implement.
For this reason, my colleague, Senator Frist, and I introduce the
Food Allergy and Anaphylaxis Management Act of 2006 today to address
the growing need for uniform and consistent school-based food allergy
management policy. I thank Senator Frist for his hard work and
commitment to this important legislation.
The legislation does two things. First, it directs the Secretary of
Health and Human Services, in consultation with the Secretary of
Education, to develop and make available voluntary food allergy
management guidelines for preventing exposure to food allergens and
assuring a prompt response when a student suffers a potentially fatal
anaphylactic reaction.
Second, the bill provides for incentive grants to school districts to
assist them with adoption and implementation of the Federal
Government's allergy management guidelines in all K-12 public schools.
I wish to acknowledge and offer my sincere appreciation to the
members of the Food Allergy and Anaphylaxis Network for their
commitment to this legislation and for raising public awareness,
providing advocacy, and advancing research on behalf of all individuals
who suffer from food allergies.
I hope that my colleagues in the Senate and in the House will
consider and pass this important legislation before the end of the year
so that the Department of Health and Human Services can begin work on
developing national guidelines as soon as possible. Schoolchildren
across the country deserve nothing less than a safe and healthy
learning environment.
Mr. FRIST. Mr. President, 6 years ago, my great-nephew had some
peanut butter. He was 13 months old. For most 13-month-old children,
this wouldn't be an issue. But for McClain Portis, it was.
You see, unbeknownst to him or his parents at the time, McClain is
allergic to peanuts. When he ate that peanut butter, he had an
anaphylactic reaction.
Within 30 seconds, his lips and eyes swelled shut, his face turned
bright red, and he developed what is called a full body hive.
But McClain's parents were quick thinkers. They called 911, and he
was soon better after a dose of epinephrine. That's what calms the
anaphylactic reaction, if administered in time.
But 6 hours later, the epinephrine wore off. McClain had a biphasic
reaction and had to return to the pediatrician to receive steroids. His
older sister, just 4 years old at the time, asked their mother, ``Is my
brother going to die?''
McClain is 7 years old now--in first grade. He's an active boy, with
many friends. And he enjoys school. But school hasn't been easy--for
McClain or his parents.
It's that way for a lot of children with food allergies, especially
when they find themselves switching schools.
I recently met another young man from Nashville--Andrew Wright. He's
14 now, and he attends the same high school from which I graduated.
He's endured food allergies nearly his entire life--but somehow the
high-spirited teen keeps a positive outlook on life.
For a long time, every year he and his parents had to start from
scratch. They had to teach the schools how to recognize and treat an
allergic reaction. And they had to teach them about his allergens--
sheep's milk, tree nuts, peanuts, and possibly shellfish. That's
stressful work--for Andrew, for his parents, and even for the schools.
Andrew and McClain aren't alone in their struggles. Across the
country, 3 million children suffer from food allergies.
Milk. Eggs. Fish. Shellfish. Tree nuts. Peanuts. Wheat. Soy.
Foods that most people enjoy. But these 8 foods account for 90
percent of all food allergic reactions.
And for 3 million American children, these foods frequently aren't
safe. Their immune system makes a mistake. It treats something in a
certain food as if it's dangerous.
The food itself isn't harmful, but the body's reaction is.
Within a few hours--or sometimes, only minutes--of consuming a food
allergen, a host of symptoms can burst forth, affecting the eyes, nose,
throat, respiratory system, skin, and digestive system. The reaction
could be mild--or it could be more severe, like it was for my great-
nephew McClain.
Food-allergic reactions are the leading cause of anaphylaxis. If left
untreated for too long, anaphylaxis can prove fatal. But it's
treatable--with adrenaline, or epinephrine.
In fact, studies have demonstrated an association between a delay in
the administration of epinephrine--or non-administration--and
anaphylaxis fatalities.
So it makes sense that we'd want schools to keep epinephrine on
hand--in case a child experiences a food-allergic reaction leading to
anaphylaxis. And it makes sense that we'd want school personnel to know
how to recognize and treat food-allergic reactions.
But currently, there are no Federal guidelines concerning the
management of life-threatening food allergies in the school setting.
In fact, in a recent survey, three-fourths of elementary school
nurses reported developing their own training guidelines for responding
to food allergies.
This means that when children change schools--they're promoted, they
move, they're redistricted--for whatever reason--they and their parents
face different food allergy management approaches. And there's no
across-the-board consistency.
That's why Senator Dodd and I have introduced the Food Allergy and
Anaphylaxis Management Act of 2006.
We believe the Federal Government should establish uniform, voluntary
food allergy management guidelines--and schools should be strongly
encouraged to adopt and implement such guidelines.
The bill directs the Secretary of Health and Human Services--in
consultation with the Secretary of Education--to develop voluntary food
allergy management guidelines.
The guidelines would help prevent exposure to food allergens and help
ensure a prompt response when a child suffers a potentially fatal
anaphylactic reaction. Under the bill, these guidelines must be
developed and made available within one year of enactment.
Additionally, the bill provides for school-based allergy management
incentive grants to local education agencies. These grants assist with
the adoption and implementation of food allergy management guidelines
in public schools.
There are 3 million American children who suffer from food allergies.
We can't cure them of their allergies. But we can help prevent allergic
reactions, and we can help ensure timely treatment of them when they
occur.
I urge my colleagues to support this bipartisan measure--so we can
help keep America's children healthy.
______

By Mr. KOHL (for himself and Mr. Leahy):
S. 3981. A bill to amend the Federal Food, Drug, and Cosmetic Act to
establish requirements for certain petitions submitted to the Food and
Drug Administration, and for other purposes; to the Committee on
Health, Education, Labor, and Pensions.
Mr. KOHL. Mr. President, I rise today to introduce the Citizen
Petition Fairness and Accuracy Act of 2006. This legislation will help
speed the introduction of cost-saving generic drugs by preventing
abuses of the Food and Drug Administration citizen petition process.
Consumers continue to suffer all across our country from the high--
and ever rising--cost of prescription drugs. A recent independent study
found that prescription drug spending has more than quadrupled since
1990, and now accounts for 11 percent of all health care

[[Page S10483]]

spending. At the same time, the pharmaceutical industry is one of the
most profitable industries in the world, returning more than 15 percent
on their investments.
One key method to bring prescription drug prices down is to promote
the introduction of generic alternatives to expensive brand name drugs.
Consumers realize substantial savings once generic drugs enter the
market. Generic drugs cost on average of 63 percent less than their
brand-name equivalents. One study estimates that every 1 percent
increase in the use of generic drugs could save $4 billion in health
care costs.
This is why I have been so active in the last year in pursuing
legislation designed to combat practices which impede the introduction
of generic drugs--including S. 3582, the Preserve Access to Generics
Act, which would forbid payments from brand name drug manufacturers to
generic manufacturers to keep generic drugs off the markets, and S.
2300, the Lower Priced Drugs Act, legislation I co-sponsored to combat
other conduct which impedes the marketing of generic drugs. The
legislation I introduce today targets yet another practice by brand
name drug companies to impede or block the marketing of generic drugs--
abuse of the FDA citizen petition process.
FDA rules permit any person to file a so-called ``citizen petition''
to raise concerns about the safety or efficacy of a generic drug that a
manufacturer is seeking FDA approval to bring to market. While this
citizen petition process was put in place for a laudable purpose,
unfortunately in recent years it has been abused by frivolous petitions
submitted by brand name drug manufacturers (or individuals acting at
their behest) whose only purpose is to delay the introduction of
generic competition. The FDA has a policy of not granting any new
generic manufacturer's drug application until after it has considered
and evaluated any citizen petitions regarding that drug. The process of
resolving a citizen petition (even if ultimately found to be
groundless) can delay the approval by months or years. Indeed, brand
name drug manufacturers often wait to file citizen petitions until just
before the FDA is about to grant the application to market the new
generic drug, solely for the purpose of delaying the introduction of
the generic competitor for the maximum amount of time possible. This
gaming of the system should not be tolerated.
In recent years, FDA officials have expressed serious concerns about
the abuse of the citizen petition process. Last year, FDA Chief Counsel
Sheldon Bradshaw noted that ``[t]he citizen petition process is in some
cases being abused. Sometimes, stakeholders try to use this mechanism
to unnecessarily delay approval of a competitor's products.'' He added
that he found it ``particularly troublesome'' that he had ``seen
several examples of citizen petitions that appear designed not to raise
timely concerns with respect to the legality or scientific soundness of
approving a drug application, but rather to delay approval by
compelling the agency to take the time to consider the arguments raised
in the petition, regardless of their merits, and regardless of whether
the petitioner could have made those very arguments months and months
before.''
And a simple look at the statistics gives credence to these concerns.
Of the 21 citizen petitions for which the FDA has reached a decision
since 2003, 20 or 95 percent of them have been found to be without
merit. Of these, ten were identified as ``eleventh hour petitions'',
defined as those filed less than 6 months prior to the estimated entry
date of the generic drug. None of these ten ``eleventh hour petitions''
were found to have merit, but each caused unnecessary delays in the
marketing of the generic drug by months or over a year, causing
consumers to spend millions and millions more for their prescription
drugs than they would have spent without these abusive filings.
Despite the expense these frivolous citizen petitions cause consumers
and the FDA, under current law the government has absolutely no ability
to sanction or penalize those who abuse the citizen petition process,
or who file citizen petitions simply to keep competition off the
market. Our legislation will correct this obvious shortcoming and give
the Department of Health and Human Services--the FDA's parent agency--
the power to sanction those who abuse the process.
Our bill will, for the first time, require all those who file citizen
petitions to affirm certain basic facts about the truthfulness and good
faith of the petition, similar to what is required of every litigant
who makes a filing in court. The party filing the citizen petition will
be required to affirm that the petition is well grounded in fact and
warranted by law; is not submitted for an improper purpose, such as to
harass or cause unnecessary delay in approval of competing drugs; and
does not contain any materially false, misleading or fraudulent
statement. The Secretary of the Department of Health and Human Services
is empowered to investigate a citizen petition to determine if it has
violated any of these principles, was submitted for an improper
purpose, or contained false or misleading statements. Further, the
Secretary is authorized to penalize anyone found to have submitted an
abusive citizen petition. Possible sanctions include a fine up to one
million dollars, a suspension or permanent revocation of the right of
the violator to file future citizens' petition, and a dismissal of the
petition at issue. HHS is also authorized to refer the matter to the
Federal Trade Commission so that the FTC can undertake its own
investigation as to the competitive consequences of the frivolous
petition and take any action it finds appropriate. Finally, the bill
directs the HHS that all citizen petitions be adjudicated within six
months of filing, which will put an end to excessive delays in bringing
needed generic drugs to market because of the filings of these
petitions.
While our bill will not have any effect on any person filing a truly
meritorious citizen petition, this legislation will serve as a strong
deterrent to attempts by brand name drug manufacturers or any other
party that seeks to abuse the citizen petition process to thwart
competition. It will thereby remove one significant obstacle exploiting
by brand name drug companies to prevent or delay the introduction of
generic drugs. I urge my colleagues to support this legislation.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 3981

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 ``Citizen Petition Fairness
and Accuracy Act of 2006''.

SEC. 2. CITIZEN PETITIONS AND PETITIONS FOR STAY OF AGENCY
ACTION.

Section 505(j)(5) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 355(j)(5)) is amended by adding at the end the
following:
``(G)(i) Notwithstanding any other provision of law, any
petition submitted under section 10.30 or section 10.35 of
title 21, Code of Federal Regulations (or any successor
regulation), shall include a statement that to the
petitioner's best knowledge and belief, the petition--
``(I) includes all information and views on which the
petitioner relies, including all representative data and
information known to the petitioner that is favorable or
unfavorable to the petition;
``(II) is well grounded in fact and is warranted by law;
``(III) is not submitted for an improper purpose, such as
to harass or cause unnecessary delay (including unnecessary
delay of competition or agency action); and
``(IV) does not contain a materially false, misleading, or
fraudulent statement.
``(ii) The Secretary shall investigate, on receipt of a
complaint, a request under clause (vi), or on its own
initiative, any petition submitted under such section 10.30
or section 10.35 (or any successor regulation), that--
``(I) does not comply with the requirements of clause (i);
``(II) may have been submitted for an improper purpose as
described in clause (i)(III); or
``(III) may contain a materially false, misleading, or
fraudulent statement as described in clause (i)(IV).
``(iii) If the Secretary finds that the petitioner has
knowingly and willingly submitted the petition for an
improper purpose as described in clause (i)(III), or which
contains a materially false, misleading, or fraudulent
statement as described in clause (i)(IV), the Secretary may--
``(I) impose a civil penalty of not more than $1,000,000,
plus attorneys fees and costs of reviewing the petition and
any related proceedings;

[[Page S10484]]

``(II) suspend the authority of the petitioner to submit a
petition under such section 10.30 or section 10.35 (or any
successor regulation), for a period of not more than 10
years;
``(III) revoke permanently the authority of the petitioner
to submit a petition under such section 10.30 or section
10.35 (or any successor regulation); or
``(IV) dismiss the petition at issue in its entirety.
``(iv) If the Secretary takes an enforcement action
described in subclause (I), (II), (III), or (IV) of clause
(iii) with respect to a petition, the Secretary shall refer
that petition to the Federal Trade Commission for further
action as the Federal Trade Commission finds appropriate.
``(v) In determining whether to take an enforcement action
described in subclause (I), (II), (III), or (IV) of clause
(iii) with respect to a petition, and in determining the
amount of any civil penalty or the length of any suspension
imposed under that clause, the Secretary shall consider the
specific circumstances of the situation, such as the gravity
and seriousness of the violation involved, the amount of
resources expended in reviewing the petition at issue, the
effect on marketing of competing drugs of the pendency of the
improperly submitted petition, including whether the timing
of the submission of the petition appears to have been
calculated to cause delay in the marketing of any drug
awaiting approval, and whether the petitioner has a history
of submitting petitions in violation of this subparagraph.
``(vi)(I) Any person aggrieved by a petition filed under
such section 10.30 or section 10.35 (or any successor
regulation), including a person filing an application under
subsection (b)(2) or (j) of this section to which such
petition relates, may request that the Secretary initiate an
investigation described under clause (ii) for an enforcement
action described under clause (iii).
``(II) The aggrieved person shall specify the basis for its
belief that the petition at issue is false, misleading,
fraudulent, or submitted for an improper purpose. The
aggrieved person shall certify that the request is submitted
in good faith, is well grounded in fact, and not submitted
for any improper purpose. Any aggrieved person who knowingly
and intentionally violates the preceding sentence shall be
subject to the civil penalty described under clause (iii)(I).
``(vii) The Secretary shall take final agency action with
respect to a petition filed under such section 10.30 or
section 10.35 (or any successor regulation) within 6 months
of receipt of such petition. The Secretary shall not extend
such 6-month review period, even with consent of the
petitioner, for any reason, including based upon the
submission of comments relating to a petition or supplemental
information supplied by the petitioner. If the Secretary has
not taken final agency action on a petition by the date that
is 6 months after the date of receipt of the petition, such
petition shall be deemed to have been denied on such date.
``(viii) The Secretary may promulgate regulations to carry
out this subparagraph, including to determine whether
petitions filed under such section 10.30 or section 10.35 (or
any successor regulation) merit enforcement action by the
Secretary under this subparagraph.''.
______

By Mr. HARKIN (for himself, Mr. Leahy, Ms. Mikulski, and Mr.
Kerry):
S. 3984. A bill to improve programs for the identification and
treatment of post-deployment mental health conditions, including post-
traumatic stress disorder, in veterans and members of the Armed Forces,
and for other purposes; to the Committee on Veterans' Affairs.
Mr. HARKIN. Mr. President, more than 41 million Americans suffer from
a moderate or serious mental disorder each year. Unfortunately, because
of the lingering stigma attached to mental illness, and lack of
coverage under health insurance, these disorders often go untreated. I
am particularly concerned that we are neglecting the mental health of
our returning war veterans.
Earlier this year, I introduced a bill directing the Department of
Veterans Affairs to create a program to address the shocking rate of
suicide among veterans returning from combat in Iraq and Afghanistan.
That bill, the Joshua Omvig Suicide Prevention Act of 2006, was named
in honor of a young hero from Grundy Center who killed himself soon
after returning from a tour of duty in Iraq.
But we also need a broader strategy for addressing the mental health
needs of service members exposed to the stress and trauma of war.
And that is why I introduced legislation today directing the
Department of Veterans Affairs to develop a comprehensive plan to
improve the diagnosis and treatment of Post Traumatic Stress Disorder,
PTSD, in our veterans. My bill would require the VA to create a
curriculum and required protocols for training VA staff to better
screen PTSD. It also would require the VA to commit additional staff
and resources to this challenge.
During my years in the Navy, I learned one of the most important
lessons of my entire life: Never leave a buddy behind. That's true on
the battlefield--and it's also true after our service members return
home.
Often, the physical wounds of combat are repaired, but the mental
damage--the psychological scars of combat--can haunt a person for a
lifetime.
One study shows that about 17 percent of active-duty service members
who served in Iraq screened positive for anxiety, depression, or PTSD.
This number is comparable to rates of PTSD experienced by Vietnam War
veterans. But, in the decades since, scientists have learned that quick
intervention is critical to ensuring that an acute stress reaction does
not become a chronic mental illness.
This is exactly the aim of my bill: to improve early detection and
intervention . . . to save lives . . . and to prevent long-term mental
illness. The Federal Government has a moral contract with those who
have fought for our country and sacrificed so much. This bill is about
making good on that contract.
______

By Mr. OBAMA:
S. 3988. A bill to amend title 10 and 38, United States Code, to
improve benefits and services for members of the Armed Forces, veterans
of the Global War on Terrorism, and other veterans, to require reports
on the effects of the Global War on Terrorism, and for other purposes;
to the Committee on Veterans' Affairs.
Mr. OBAMA. Mr. President, I rise today to introduce legislation that
is significant both in the problems it seeks to address and the man it
seeks to honor.
Since the day he arrived in Congress more than two decades ago, Lane
Evans has been a tireless advocate for the men and women with whom he
served. When Vietnam vets started falling ill from Agent Orange, he led
the effort to get them compensation. Lane was one of the first in
Congress to speak out about the health problems facing Persian Gulf war
veterans. He's worked to help veterans suffering from Post-Traumatic
Stress Disorder, and he's also helped make sure thousands of homeless
veterans in our country have a place to sleep.
Lane Evans has fought these battles for more than 20 years, and even
in the face of his own debilitating disease, he kept fighting. Today,
veterans across America have Lane Evans to thank for reminding this
country of its duty to take care of those who have risked their lives
to defend ours.
I am very proud today to introduce the Lane Evans Veterans Healthcare
and Benefits Improvement Act of 2006. This bill honors a legislator who
leaves behind an enduring legacy of service to our veterans. The
legislation also is an important step towards caring for our men and
women who are currently fighting for us.
Today, nearly 1.5 million American troops have been deployed overseas
as part of the global war on terror. These brave men and women who
protected us are beginning to return home. Six hundred thousand people
who served in Iraq and Afghanistan are now veterans, and at least
184,400 have already received treatment at the VA. That number is
increasing every day. Many of these fighting men and women are coming
home with major injuries. As a country, we are only beginning to
understand the true costs of the global war on terror.
For instance, last week, the Government Accountability Office
reported that VA has faced $3 billion in budget shortfalls since 2005
because it underestimated the costs of caring for Iraq and Afghanistan
veterans. The VA wasn't getting the information it needed from the
Pentagon and was relying on outdated data and incorrect forecasting
models. We cannot let these kind of bureaucratic blunders get in the
way of the care and support we owe our servicemembers.
To avoid these costly shortfalls in the future, we have to do a
better job keeping track of veterans. That's why the first thing the
Lane Evans Act does is to establish a system to track global war on
terror veterans. The VA established a similar data system following the
Persian Gulf War. That effort has

[[Page S10485]]

been invaluable in budget planning as well as in monitoring emerging
health trends and diseases linked to the gulf war. The Gulf War
Veterans Information System also has been important to medical research
and improved care for veterans. The sooner we begin keeping accurate
track of our fighting men and women in Iraq, Afghanistan and beyond,
the better and more efficiently we will be able to care for them.

The Lane Evans Act also tackles Post-Traumatic Stress Disorder.
Mental health patients account for about a third of the new veterans
seeking care at the VA. The VA's National Center for PTSD reports that
``the wars in Afghanistan and Iraq are the most sustained combat
operations since the Vietnam War, and initial signs imply that these
ongoing wars are likely to produce a new generation of veterans with
chronic mental health problems.''
This bill addresses PTSD in 2 ways. First, it extends the window
during which new veterans can automatically get care for mental health
from 2 years to 5 years. Right now, any servicemember discharged from
the military has up to 2 years to walk into the VA and get care, no
questions asked. After that, vets have to prove that they are disabled
because of a service-connected injury, or they have to prove their
income is below threshold levels. Unfortunately, it can take years for
symptoms of PTSD to manifest themselves. The time it takes to prove
service-connection for mental health illness is valuable time lost
during which veterans are not receiving critically needed treatment.
The Lane Evans Act allows veterans to walk into a VA any time 5 years
after discharge and get assessed for mental health care. This both
extends the window and shortens the wait for vets to get care.
Second, the legislation makes face-to-face physical and mental health
screening mandatory 30 to 90 days after a soldier is deployed in a war
zone. This will ensure that our fighting force is ready for battle, and
that we can identify and treat those at risk for PTSD. By making the
exams mandatory, we can help eliminate the stigma associated with
mental health screening and treatment.
Another problem veterans face is that the VA and DoD do not
effectively share medical and military records. Older veterans often
have to wait years for their benefits as the Department of Defense
recovers aging and lost paper records. Under the Lane Evans Act, the
Department of Defense would provide each separating service member at
the time of discharge with a secure full electronic copy of all
military and medical records to help them apply for healthcare and
benefits. DoD possesses the technology to do this now. The information
could be useful to VA to quickly and accurately document receipt of
vaccinations or deployment to a war zone. The electronic data will also
be helpful in future generations when family members of veterans seek
information about military service, awards, and wartime deployment that
goes well beyond the existing single-sheet DD-214 discharge
certificate, which is all veterans currently receive.
Finally, the legislation improves the transition assistance that
guardsmen and reservists receive when they return from deployment. A
2005 GAG report found that because demobilization for guardsmen and
reservists is accelerated, reserve units get abbreviated and
perfunctory transition assistance including limited employment
training. VA should provide equal briefings and transition services for
all service members regarding VA healthcare, disability compensation,
and other benefits, regardless of their duty status.
Lane Evans dedicated his life to serving this country and dedicated
his time in Congress to serving veterans. The legislation I am
introducing today, honors both the man and his mission, and will
continue his legacy to the next generation of American veterans.
______

By Mr. BIDEN:
S. 3989. A bill to establish a Homeland Security and Neighborhood
Safety Trust Fund and refocus Federal priorities toward securing the
Homeland, and for other purposes; to the Committee on Homeland Security
and Governmental Affairs.
Mr. BIDEN. Mr. President, I rise today to introduce the Homeland
Security Trust Fund Act of 2006. And, I do so because it is my sincere
belief, that in order to better prevent attacks here at home, we must
dramatically reorder the priorities of the Federal Government.
This legislation, which I unsuccessfully attempted to attach to the
port security legislation 2 weeks ago, will reorder our priorities by
creating a homeland security trust fund that will set aside $53.3
billion to invest in our homeland security over the next 5 years.
Through this trust fund we will allocate an additional $10 billion per
year over the next 5 years to enhance the safety of our communities.
Everyone in this body knows that we are not yet safe enough.
Independent experts, law enforcement personnel, and first responders
have warned us that we have not done enough to prevent an attack and we
are ill-equipped to respond to one. Hurricane Katrina, which happened
just over a year ago, demonstrated this unfortunate truth and showed us
the devastating consequences of our failure to act responsibly here in
Washington. And, last December, the 9/11 Commission issued their report
card on the administration's and Congresses' progress in implementing
their recommendations. The result was a report card riddled with D's
and F's.
And, to add to this, the FBI reported earlier this summer that
violent crime and murders are on the rise for the first time in a
decade. Given all of this, it is hard to argue that we are as safe as
we should be.
To turn this around, we have to get serious about our security. If we
establish the right priorities, we can do the job. We can fund local
law enforcement, which the President has attempted to slash by over $2
billion for fiscal year 2007. We can give the FBI an additional 1,000
agents to allow them to implement reforms without abandoning local
crime. We can secure the soft targets in our critical infrastructure,
to ensure that our chemical plants and electricity grids are protected
from attacks. We can immediately re-allocate spectrum from the
television networks and give it to our first responders so they can
talk during an emergency.
I know what many of my colleagues here will argue. They will argue
that it is simply too expensive to do everything. This argument is
complete malarkey. This is all about priorities. And, quite frankly
this Congress and this administration have had the wrong priorities for
the past 5 years.
For example, this year the tax cut for Americans that make over $1
million is nearly $60 billion. Let me repeat that, just one year of the
Bush tax cut for Americans making over $1 million is nearly $60
billion. In contrast, we dedicate roughly one-half of that--
approximately $32 billion--to fund the operations of the Department of
Homeland Security. We have invested twice as much for a tax cut for
millionaires--less than 1 percent of the population--than we do for the
Department intended to help secure the entire nation.

For a Nation that is repeatedly warned about the grave threats we
face, how can this be the right priority? The Homeland Security Trust
Fund Act of 2006 would change this by taking less than 1 year of the
tax cut for millionaires--$53.3 billion--and investing it in homeland
security over the next 5 years. By investing this over the next 5 years
at just over $10 billion per year, we could implement all the 9/11
Commission recommendations and do those commonsense things that we know
will make us safer.
For example, under this amendment, we could hire 50,000 additional
police officers and help local agencies create locally based counter-
terrorism units. We could hire an additional 1,000 FBI agents to help
ensure that FBI is able to implement critical reforms without
abandoning its traditional crime fighting functions. We could also
invest in security upgrades within our critical infrastructure and
nearly double the funding for state homeland security grants. And, the
list goes on.
We continually authorize funding for critical homeland security
programs, but a look back at our recent appropriations bills tells us
that the funding rarely matches the authorization. Just this July we
passed the Department of Homeland Security Appropriations Budget. In
that legislation, the Senate allocated only $210 million for port
security grants--which is just over one-half of the amounts authorized
in the

[[Page S10486]]

bipartisan port security legislation that passed the Senate 2 weeks
ago.
Yet, another example of this problem is our shameful record on
providing funding for rail security. For the last two Congresses, the
Senate has passed bipartisan rail security legislation sponsored by
myself, Senator McCain and others. This legislation authorizes $1.2
billion to secure the soft targets in our rail system, such as the
tunnels and stations. Notwithstanding, we have only allocated $150
million per year for rail and transit security with less than $15
million allocated for intercity passenger rail security.
So, while it is critical that we have acknowledged the need for
increased rail security funding by passing authorizations, unless we
invest the money, it doesn't really mean much. Unfortunately, this is
an example that is repeated over and over.
We know that the murder rate is up and that there is an officer
shortage in communities throughout the Nation. Yet, we provide $0
funding for the COPS hiring program and we've slashed funding for the
Justice Assistance Grant.
We know that our first responders can't talk because they don't have
enough interoperable equipment. Yet, we have not forced the networks to
turn over critical spectrum, and we vote down funding to help local
agencies purchase equipment every year.
We know that only 5 percent of cargo containers are screened, yet we
do not invest in the personnel and equipment to upgrade our systems.
We know that our critical infrastructure is vulnerable. Yet, we allow
industry to decide what is best and provide scant resources to harden
soft targets.
The 9/11 Commission's report card issued last December stated bluntly
that ``it is time we stop talking about setting priorities and actually
set some.''
This legislation will set some priorities. First, we provide the
funding necessary to implement the recommendations of the 9/11
Commission. Next, we take the commonsense steps to make our Nation
safer. We make sure that law enforcement and first responders have the
personnel, equipment, training they need, and are sufficiently
coordinated to do the job by providing $1.15 billion per year for COPS
grants; $160 million per year to hire 1,000 FBI agents; $200 million to
hire and equip 1,000 rail police. $900 million for the Justice
Assistance Grants; $1 billion per year for interoperable
communications; $1 billion for Fire Act and SAFER grants.
In addition, we could invest in new screening technologies to protect
the American people by providing $100 million to improve airline
screening checkpoints and $100 million for research and development on
improving screening technologies. We also set aside funding to soften
hard targets by setting aside $500 million per year for general
infrastructure grants; $500 million per year for port security grants,
and $200 million per year to harden our rail infrastructure. And the
list goes on.
I will conclude where I started. This is all about setting the right
priorities for America. Instead of giving a tax cut to the richest
Americans who don't need it, we should take some of it and dedicate it
towards the security of all Americans. Our Nation's most fortunate are
just as patriotic as the middle class. They are just as willing to
sacrifice for the good of our Nation. The problem is that no one has
asked them to sacrifice.
The Homeland Security Trust Fund Act of 2006 will ask them to
sacrifice for the good of the Nation, and I'm convinced that they will
gladly help us out. And to those who say this won't work, I would
remind them that the 1994 Crime Bill established the Violent Crime
Reduction Trust Fund, specifically designated for public safety, that
put more than 100,000 cops on the street, funded prevention programs
and more prison beds to lock up violent offenders. It worked; violent
crime went down every year for 8 years from the historic highs to the
lowest levels in a generation.
Our Nation is at its best when we all pull together and sacrifice.
Our Nation's most fortunate citizens are just as patriotic as those in
the middle class, and I am confident that they will be willing to forgo
1 year of their tax cut for the greater good of securing the homeland.
The bottom line is that with this legislation, we make clear what our
national priorities should be, we set out how we will pay for them, and
we ensure those who are asked to sacrifice, that money the government
raises for security actually gets spent on security.
This legislation is about re-ordering our homeland security
priorities. I realize that it will not be enacted this year, but I will
introduce this legislation again in the next Congress and I will push
for its prompt passage and I hope to gain the support of my colleagues
in this effort.
______

By Mr. BUNNING:
S. 3992. A bill to amend the Exchange Rates and International
Economic Policy Coordination Act of 1998 to clarify the definition of
manipulation with respect to currency, and for other purposes; read the
first time.
Mr. BUNNING. 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. 3992

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 ``United States Fair Currency
Practices Act of 2006''.

SEC. 2. FINDINGS.

(a) Congress makes the following findings:
(1) Since the Exchange Rates and International Economic
Policy Coordination Act of 1988 (22 U.S.C. 5302(3)) was
enacted the global economy has changed dramatically, with
increased capital account openness, a sharp increase in the
flow of funds internationally, and an ever growing number of
emerging market economies becoming systemically important to
the global flow of goods, services, and capital. In addition,
practices such as the maintenance of multiple currency
regimes have become rare.
(2) Exchange rates among major trading nations are
occasionally manipulated or fundamentally misaligned due to
direct or indirect governmental intervention in the exchange
market.
(3) A major focus of national economic policy should be a
market-driven exchange rate for the United States dollar at a
level consistent with a sustainable balance in the United
States current account.
(4) While some degree of surpluses and deficits in payments
balances may be expected, particularly in response to
increasing economic globalization, large and growing
imbalances raise concerns of possible disruption to financial
markets. In part, such imbalances often reflect exchange rate
policies that foster fundamental misalignment of currencies.
(5) Currencies in fundamental misalignment can seriously
impair the ability of international markets to adjust
appropriately to global capital and trade flows, threatening
trade flows and causing economic harm to the United States.
(6) The effects of a fundamentally misaligned currency may
be so harmful that it is essential to correct the fundamental
misalignment without regard to the purpose of any policy that
contributed to the misalignment.
(7) In the interests of facilitating the exchange of goods,
services, and capital among countries, sustaining sound
economic growth, and fostering financial and economic
stability, Article IV of the International Monetary Fund's
Articles of Agreement obligates each member of the
International Monetary Fund to avoid manipulating exchange
rates in order to prevent effective balance of payments
adjustment or to gain an unfair competitive advantage over
other members.
(8) The failure of a government to acknowledge a
fundamental misalignment of its currency or to take steps to
correct such a fundamental misalignment, either through
inaction or mere token action, is a form of exchange rate
manipulation and is inconsistent with that government's
obligations under Article IV of the International Monetary
Fund's Articles of Agreement.

TITLE I--INTERNATIONAL MONETARY AND FINANCIAL POLICY

SEC. 101. AMENDMENTS TO DEFINITIONS.

Section 3006 of the Exchange Rates and International
Economic Policy Coordination Act of 1988 (22 U.S.C. 5306) is
amended by adding at the end the following:
``(3) Fundamental misalignment.--The term `fundamental
misalignment' means a material sustained disparity between
the observed levels of an effective exchange rate for a
currency and the corresponding levels of an effective
exchange rate for that currency that would be consistent with
fundamental macroeconomic conditions based on a generally
accepted economic rationale.
``(4) Effective exchange rate.--The term `effective
exchange rate' means a weighted average of bilateral exchange
rates, expressed in either nominal or real terms.
``(5) Generally accepted economic rationale.--The term
`generally accepted economic rationale' means an explanation
drawn on widely recognized macroeconomic

[[Page S10487]]

theory for which there is a significant degree of empirical
support.''.

SEC. 102. BILATERAL NEGOTIATIONS.

(a) In General.--Section 3004(b) of the Exchange Rates and
International Economic Policy Coordination Act of 1988 (22
U.S.C. 5304(b)) is amended to read as follows:
``(b) Bilateral Negotiations.--
``(1) In general.--The Secretary of the Treasury shall
analyze on an annual basis the exchange rate policies of
foreign countries, in consultation with the International
Monetary Fund, and consider whether countries--
``(A) manipulate the rate of exchange between their
currency and the United States dollar for purposes of
preventing effective balance of payments adjustments or
gaining unfair competitive advantage in international trade;
or
``(B) have a currency that is in fundamental misalignment.
``(2) Affirmative determination.--If the Secretary
considers that such manipulation or fundamental misalignment
is occurring with respect to countries that--
``(A) have material global current account surpluses; or
``(B) have significant bilateral trade surpluses with the
United States,

the Secretary of the Treasury shall take action to initiate
negotiations with such foreign countries on an expedited
basis, in the International Monetary Fund or bilaterally, for
the purpose of ensuring that such countries regularly and
promptly adjust the rate of exchange between their currencies
and the United States dollar to permit effective balance of
payments adjustments and to eliminate the unfair advantage.
``(3) Exception.--The Secretary shall not be required to
initiate negotiations if the Secretary determines that such
negotiations would have a serious detrimental impact on vital
national economic and security interests. The Secretary shall
inform the chairman and the ranking minority member of the
Committee on Banking, Housing, and Urban Affairs of the
Senate and of the Committee on Financial Services of the
House of Representatives of the Secretary's determination.''.

SEC. 103. REPORTING REQUIREMENTS.

Section 3005 of the Exchange Rates and International
Economic Policy Coordination Act of 1988 (22 U.S.C. 5305) is
amended to read as follows:

``SEC. 3005. REPORTING REQUIREMENTS.

``(a) Reports Required.--
``(1) In general.--The Secretary, after consulting with the
Chairman of the Board, shall submit to Congress, on or before
October 15 of each year, a written report on international
economic policy and currency exchange rates.
``(2) Interim report.--The Secretary, after consulting with
the Chairman of the Board, shall submit to Congress, on or
before April 15 of each year, a written report on interim
developments with respect to international economic policy
and currency exchange rates.
``(b) Contents of Reports.--Each report submitted under
subsection (a) shall contain--
``(1) an analysis of currency market developments and the
relationship between the United States dollar and the
currencies of major economies and United States trading
partners;
``(2) a review of the economic and financial policies of
major economies and United States trading partners and an
evaluation of the impact that such policies have on currency
exchange rates;
``(3) a description of any currency intervention by the
United States or other major economies or United States
trading partners, or other actions undertaken to adjust the
actual exchange rate of the dollar;
``(4) an evaluation of the factors that underlie conditions
in the currency markets, including--
``(A) monetary and financial conditions;
``(B) foreign exchange reserve accumulation;
``(C) macroeconomic trends;
``(D) trends in current and financial account balances;
``(E) the size and composition of, and changes in,
international capital flows;
``(F) the impact of the external sector on economic
changes;
``(G) the size and growth of external indebtedness;
``(H) trends in the net level of international investment;
and
``(I) capital controls, trade, and exchange restrictions;
``(5) a list of currencies of the major economies or
economic areas that are manipulated or in fundamental
misalignment and a description of any economic models or
methodologies used to establish the list;
``(6) a description of any reason or circumstance that
accounts for why each currency identified under paragraph (5)
is manipulated or in fundamental misalignment based on a
generally accepted economic rationale;
``(7) a list of each currency identified under paragraph
(5) for which the manipulation or fundamental misalignment
causes, or contributes to, a material adverse impact on the
economy of the United States, including a description of any
reason or circumstance that explains why the manipulation or
fundamental misalignment is not accounted for under paragraph
(6);
``(8) the results of any prior consultations conducted or
other steps taken; and
``(9)(A) a list of each occasion during the reporting
period when the issue of exchange-rate misalignment was
raised in a countervailing duty proceeding under subtitle A
of title VII of the Tariff Act of 1930 or in an investigation
under section 421 of the Trade Act of 1974;
``(B) a summary in each such instance of whether or not
exchange-rate misalignment was found and the reasoning and
data underlying that finding; and
``(C) a discussion regarding each affirmative finding of
exchange-rate misalignment to consider the circumstances
underlying that exchange-rate misalignment and what action
appropriately has been or might be taken by the Secretary
apart from and in addition to import relief to correct the
exchange-rate misalignment.
``(c) Development of Reports.--The Secretary shall consult
with the Chairman of the Board with respect to the
preparation of each report required under subsection (a). Any
comments provided by the Chairman of the Board shall be
submitted to the Secretary not later than the date that is 15
days before the date each report is due under subsection (a).
The Secretary shall submit the report after taking into
account all comments received.''.

SEC. 104. INTERNATIONAL FINANCIAL INSTITUTION GOVERNANCE
ARRANGEMENTS.

(a) Initial Review.--Notwithstanding any other provision of
law, before the United States approves a proposed change in
the governance arrangement of any international financial
institution, as defined in section 1701(c)(2) of the
International Financial Institutions Act (22 U.S.C.
262r(c)(2)), the Secretary of the Treasury shall determine
whether any member of the international financial institution
that would benefit from the proposed change, in the form of
increased voting shares or representation, has a currency
that is manipulated or in fundamental misalignment, and if
so, whether the manipulation or fundamental misalignment
causes or contributes to a material adverse impact on the
economy of the United States. The determination shall be
reported to Congress.
(b) Subsequent Action.--The United States shall oppose any
proposed change in the governance arrangement of any
international financial institution (as defined in subsection
(a)), if the Secretary renders an affirmative determination
pursuant to subsection (a).
(c) Further Action.--The United States shall continue to
oppose any proposed change in the governance arrangement of
an international financial institution, pursuant to
subsection (b), until the Secretary determines and reports to
Congress that the currency of each member of the
international financial institution that would benefit from
the proposed change, in the form of increased voting shares
or representation, is neither manipulated nor in fundamental
misalignment.

SEC. 105. NONMARKET ECONOMY STATUS.

(a) In General.--Paragraph (18)(B)(vi) of section 771 of
the Tariff Act of 1930 (19 U.S.C. 1677(18)(B)(vi)) is amended
by inserting before the end period the following: ``,
including whether the currency of the foreign country has
been identified pursuant to section 3005(b)(7) of the
Exchange Rates and International Economic Policy Coordination
Act of 1988 (22 U.S.C. 5305(b)(7)) in any written report
required by such section 3005(b)(7) during the 24-month
period immediately preceding the month during which the
administering authority seeks to revoke a determination that
such foreign country is a nonmarket economy country''.
(b) Termination.--The amendment made by this section shall
apply during the 10-year period beginning on the date of the
enactment of this Act.

TITLE II--SUBSIDIES AND PRODUCT-SPECIFIC SAFEGUARD MECHANISM

SEC. 201. FINDINGS.

Congress makes the following findings:
(1) The economy and national security of the United States
are critically dependent upon a vibrant manufacturing and
agricultural base.
(2) The good health of United States manufacturing and
agriculture requires, among other things, unfettered access
to open markets abroad and fairly traded raw materials and
products in accord with the international legal principles
and agreements of the World Trade Organization and the
International Monetary Fund.
(3) The International Monetary Fund, the G-8, and other
international organizations have repeatedly noted that
exchange-rate misalignment can cause imbalances in the
international trading system that could ultimately undercut
the stability of the system, but have taken no action to
address such misalignments and imbalances.
(4) Since 1994, the People's Republic of China and other
countries have aggressively intervened in currency markets
and taken measures that have significantly misaligned the
values of their currencies against the United States dollar
and other currencies.
(5) This policy by the People's Republic of China, for
example, has resulted in substantial undervaluation of the
renminbi, by up to 40 percent or more.
(6) Evidence of this undervaluation can be found in the
large and growing annual trade surpluses of the People's
Republic of China; substantially expanding foreign direct
investment in China; and the rapidly increasing aggregate
amount of foreign currency reserves that are held by the
People's Republic of China.

[[Page S10488]]

(7) Undervaluation by the People's Republic of China and by
other countries acts as both a subsidy for their exports and
as a nontariff barrier against imports into their
territories, to the serious detriment of United States
manufacturing and agriculture.
(8)(A) As members of both the World Trade Organization and
the International Monetary Fund, the People's Republic of
China and other countries have assumed a series of
international legal obligations to eliminate all subsidies
for exports and to facilitate international trade by
fostering a monetary system that does not tend to produce
erratic disruptions, that does not prevent effective balance-
of-payments adjustment, and that does not gain unfair
competitive advantage.
(B) These obligations are most prominently set forth in
Articles VI, XV, and XVI of the GATT 1994 (as defined in
section 2(1)(B) of the Uruguay Round Agreements Act (19
U.S.C. 3501(1)(B)), in the Agreement on Subsidies and
Countervailing Measures (as defined in section 101(d)(12) of
the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(12)), and
in Articles IV and VIII of the International Monetary Fund's
Articles of Agreement.
(9) Under the foregoing circumstances, it is consistent
with the international legal obligations of the People's
Republic of China and similarly situated countries and with
the corresponding international legal rights of the United
States to amend relevant United States trade laws to make
explicit that exchange-rate misalignment is actionable as a
countervailable export subsidy.

SEC. 202. CLARIFICATION TO INCLUDE EXCHANGE-RATE MISALIGNMENT
AS A COUNTERVAILABLE SUBSIDY UNDER TITLE VII OF
THE TARIFF ACT OF 1930.

(a) Amendments to Definition of Countervailable Subsidy.--
(1) Financial contribution.--Section 771(5)(D) of the
Tariff Act of 1930 (19 U.S.C. 1677(5)(D)) is amended--
(A) by redesignating clauses (i) through (iv) as subclauses
(I) through (IV), respectively;
(B) by striking ``The term'' and inserting ``(i) The
term''; and
(C) by adding at the end the following:
``(ii) Exchange-rate misalignment (as defined in paragraph
(5C)) constitutes a financial contribution within the meaning
of subclauses I and III of clause (i).''.
(2) Benefit conferred.--Section 771(5)(E) of the Tariff Act
of 1930 (19 U.S.C. 1677(5)(E)) is amended--
(A) in clause (iii), by striking ``, and'' and inserting a
comma;
(B) in clause (iv), by striking the period at the end and
inserting ``, and''; and
(C) by adding at the end the following new clause:
``(v) in the case of exchange-rate misalignment (as defined
in paragraph (5C)), if the price of exported goods in United
States dollars is less than what the price of such goods
would be without the exchange-rate misalignment.''.
(3) Specificity.--Section 771(5A)(B) of the Tariff Act of
1930 (19 U.S.C. 1677(5A)(B)) is amended by adding at the end
before the period the following: ``, such as exchange-rate
misalignment (as defined in paragraph (5C))''.
(b) Definition of Exchange-Rate Misalignment.--Section 771
of the Tariff Act of 1930 (19 U.S.C. 1677) is amended by
inserting after paragraph (5B) the following new paragraph:
``(5C) Exchange-rate misalignment.--
``(A) In general.--For purposes of paragraphs (5) and (5A),
the term `exchange-rate misalignment' means a significant
undervaluation of a foreign currency as a result of
protracted large-scale intervention by or at the direction of
a governmental authority in exchange markets. Such
undervaluation shall be found when the observed exchange rate
for a foreign currency is significantly below the exchange
rate that could reasonably be expected for that foreign
currency absent the intervention.
``(B) Factors.--In determining whether exchange-rate
misalignment is occurring and a benefit thereby is conferred,
the administering authority in each case--
``(i) shall consider the exporting country's--

``(I) bilateral balance-of-trade surplus or deficit with
the United States;
``(II) balance-of-trade surplus or deficit with its other
trading partners individually and in the aggregate;
``(III) foreign direct investment in its territory;
``(IV) currency-specific and aggregate amounts of foreign
currency reserves; and
``(V) mechanisms employed to maintain its currency at an
undervalued exchange rate relative to another currency and,
particularly, the nature, duration, and monetary expenditures
of those mechanisms;

``(ii) may consider such other economic factors as are
relevant; and
``(iii) shall measure the trade surpluses or deficits
described in subclauses (I) and (II) of clause (i) with
reference to the trade data reported by the United States and
the other trading partners of the exporting country, unless
such trade data are not available or are demonstrably
inaccurate, in which case the exporting country's trade data
may be relied upon if shown to be sufficiently accurate and
trustworthy.
``(C) Computation.--In calculating the extent of exchange-
rate misalignment, the administering authority shall, in
consultation with the Treasury Department and the Federal
Reserve, develop and apply an objective methodology that is
consistent with widely recognized macroeconomic theory and
shall rely upon governmentally published and other publicly
available data.
``(D) Type of economy.--An authority found to be engaged in
exchange-rate misalignment may have either a market economy
or a nonmarket economy or a combination thereof.''.
(c) Effective Date.--The amendments made by this section
apply with respect to a countervailing duty proceeding
initiated under subtitle A of title VII of the Tariff Act of
1930 before, on, or after the date of enactment of this Act.

SEC. 203. CLARIFICATION TO INCLUDE EXCHANGE-RATE MISALIGNMENT
BY THE PEOPLE'S REPUBLIC OF CHINA AS A
CONDITION TO BE CONSIDERED WITH RESPECT TO
MARKET DISRUPTION UNDER CHAPTER 2 OF TITLE IV
OF THE TRADE ACT OF 1974.

(a) Market Disruption.--
(1) In general.--Section 421(c) of the Trade Act of 1974
(19 U.S.C. 2451(c)) is amended by adding at the end the
following new paragraphs:
``(3) For purposes of this section, the term `under such
conditions' includes exchange-rate misalignment (as defined
in paragraph (4)).''.
``(4)(A) For purposes of this section, the term `exchange-
rate misalignment' means a significant undervaluation of the
renminbi as a result of protracted large-scale intervention
by or at the direction of the Government of the People's
Republic of China in exchange markets. Such undervaluation
shall be found when the observed exchange rate for the
renminbi is significantly below the exchange rate that could
reasonably be expected for the renminbi absent the
intervention.
``(B) In determining whether exchange-rate misalignment is
occurring, the Commission in each case--
``(i) shall consider the People's Republic of China's--
``(I) bilateral balance-of-trade surplus or deficit with
the United States;
``(II) balance-of-trade surplus or deficit with its other
trading partners individually and in the aggregate;
``(III) foreign-direct investment in its territory;
``(IV) currency-specific and aggregate amounts of foreign
currency reserves; and
``(V) mechanisms employed to maintain its currency at an
undervalued exchange rate relative to another currency and,
particularly, the nature, duration, and monetary expenditures
of those mechanisms;
``(ii) may consider such other economic factors as are
relevant; and
``(iii) shall measure the trade surpluses or deficits
described in subclauses (I) and (II) of clause (i) with
reference to the trade data reported by the United States and
the other trading partners of the People's Republic of China,
unless such trade data are not available or are demonstrably
inaccurate, in which case the trade data of the People's
Republic of China may be relied upon if shown to be
sufficiently accurate and trustworthy.
``(C) In calculating the extent of exchange-rate
misalignment, the Commission shall, in consultation with the
Treasury Department and the Federal Reserve, develop and
apply an objective methodology that is consistent with widely
recognized macroeconomic theory and shall rely upon
governmentally published and other publicly available
data.''.
(b) Critical Circumstances.--Section 421(i)(1) of the Trade
Act of 1974 (19 U.S.C. 2451(i)(1)) is amended--
(1) in subparagraph (A), by striking ``and'' at the end;
(2) in subparagraph (B), by striking the period at the end
and inserting ``; and''; and
(3) by inserting after subparagraph (B) the following new
subparagraph:
``(C) if the petition alleges and reasonably documents that
exchange-rate misalignment is occurring, such exchange-rate
misalignment shall be considered as a factor weighing in
favor of affirmative findings in subparagraphs (A) and
(B).''.
(c) Standard for Presidential Action.--Section 421(k)(2) of
the Trade Act of 1974 (19 U.S.C. 2451(k)(2)) is amended by
adding at the end the following new sentence: ``If the
Commission makes an affirmative determination that exchange-
rate misalignment is occurring, the President shall consider
such exchange-rate misalignment as a factor weighing in favor
of providing import relief in accordance with subsection
(a).''.
(d) Modifications of Relief.--Section 421(n)(2) of the
Trade Act of 1974 (19 U.S.C. 2451(n)(2)) is amended by adding
at the end the following new sentence: ``If the Commission
affirmatively determines that exchange-rate misalignment is
occurring, the Commission and the President shall consider
such exchange-rate misalignment as a factor weighing in favor
of finding that continuation of relief is necessary to
prevent or remedy the market disruption at issue.''.
(e) Extension of Action.--Section 421(o) of the Trade Act
of 1974 (19 U.S.C. 2451(o)) is amended--
(1) in paragraph (1), by adding at the end the following
new sentence: ``If the Commission makes an affirmative
determination that exchange-rate misalignment is occurring,
the Commission shall consider such exchange-rate misalignment
as a factor weighing in favor of finding that an extension of
the period of relief is necessary to prevent or remedy the
market disruption at issue.''; and

[[Page S10489]]

(2) in paragraph (4), by adding at the end the following
new sentence: ``If the Commission makes an affirmative
determination that exchange-rate misalignment is occurring,
the President shall consider such exchange-rate misalignment
as a factor weighing in favor of finding that an extension of
the period of relief is necessary to prevent or remedy the
market disruption at issue.''.
(f) Effective Date.--The amendments made by this section
apply with respect to an investigation initiated under
chapter 2 of title IV of the Trade Act of 1974 before, on, or
after the date of the enactment of this Act.

SEC. 204. PROHIBITION ON PROCUREMENT BY THE DEPARTMENT OF
DEFENSE OF CERTAIN DEFENSE ARTICLES IMPORTED
FROM THE PEOPLE'S REPUBLIC OF CHINA.

(a) Copy of Petition, Request, or Resolution to Be
Transmitted to the Secretary of Defense.--Section 421(b)(4)
of the Trade Act of 1974 (19 U.S.C. 2451(b)(4)) is amended by
inserting ``, the Secretary of Defense'' after ``, the Trade
Representative''.
(b) Determination of Secretary of Defense.--Section 421(b)
of the Trade Act of 1974 (19 U.S.C. 2451(b)) is amended by
adding at the end the following new paragraph:
``(6) Not later than 15 days after the date on which an
investigation is initiated under this subsection, the
Secretary of Defense shall submit to the Commission a report
in writing which contains the determination of the Secretary
as to whether or not the articles of the People's Republic of
China that are the subject of the investigation are like or
directly competitive with articles produced by a domestic
industry that are critical to the defense industrial base of
the United States.''.
(c) Prohibition on Procurement by the Department of Defense
of Certain Defense Articles.--
(1) Prohibition.--If the United States International Trade
Commission makes an affirmative determination under section
421(b) of the Trade Act of 1974 (19 U.S.C. 2451(b)), or a
determination which the President or the United States Trade
Representative may consider as affirmative under section
421(e) of such Act (19 U.S.C. 2451(e)), with respect to
articles of the People's Republic of China that the Secretary
of Defense has determined are like or directly competitive
with articles produced by a domestic industry that are
critical to the defense industrial base of the United States,
the Secretary of Defense may not procure, directly or
indirectly, such articles of the People's Republic of China.
(2) Waiver.--The President may waive the application of the
prohibition contained in paragraph (1) on a case-by-case
basis if the President determines and certifies to Congress
that it is in the national security interests of the United
States to do so.

SEC. 205. APPLICATION TO GOODS FROM CANADA AND MEXICO.

Pursuant to article 1902 of the North American Free Trade
Agreement and section 408 of the North American Free Trade
Agreement Implementation Act of 1993 (19 U.S.C. 3438), the
amendments made by sections 105 and 202 of this Act shall
apply to goods from Canada and Mexico.

____________________