[Congressional Record (Bound Edition), Volume 145 (1999), Part 20]
[Senate]
[Pages 28957-28995]
[From the U.S. Government Publishing Office, www.gpo.gov]



                 BANKRUPTCY REFORM ACT OF 1999--Resumed

  The PRESIDING OFFICER. The clerk will report the pending business.
  The legislative assistant read as follows:

       A bill (S. 625) to amend title 11, United States Code, and 
     for other purposes.

  Pending:

       Grassley amendment No. 1730, to amend title 11, United 
     States code, to provide for health care and employee 
     benefits.
       Kohl amendment No. 2516, to limit the value of certain real 
     or personal property a debtor may elect to exempt under State 
     or local law.
       Sessions amendment No. 2518 (to amendment No. 2516), to 
     limit the value of certain real or personal property a debtor 
     may elect to exempt under State or local law.
       Feingold (for Durbin) amendment No. 2521, to discourage 
     predatory lending practices.

[[Page 28958]]

       Feingold amendment No. 2522, to provide for the expenses of 
     long term care.
       Hatch/Torricelli amendment No. 1729, to provide for 
     domestic support obligations.
       Leahy/Murray/Feinstein amendment No. 2528, to ensure 
     additional expenses and income adjustments associated with 
     protection of the debtor and the debtor's family from 
     domestic violence are included in the debtor's monthly 
     expenses.
       Leahy amendment No. 2529, to save United States taxpayers 
     $24,000,000 by eliminating the blanket mandate relating to 
     the filing of tax returns.

  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, as I remember, the consent request was 
that this hour was to be used for debate on bankruptcy prior to 3. Is 
the time evenly divided, or how is the time designated?
  The PRESIDING OFFICER. There is no division of time until 3.


                         Privilege of the Floor

  Mr. KENNEDY. Mr. President, I ask unanimous consent that the 
following be granted the privilege of the floor for the bankruptcy 
bill: Kathy Curran, Jennifer Liebman, Lisa Bornstein.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KENNEDY. Mr. President, for over 100 years, Congress has 
supported a bankruptcy system that balances the needs of debtors in 
desperate financial straits and creditors who deserve repayment. Today, 
however, the tide is changing. Too often the complexity of the problems 
facing debtors is ignored. Critics, using the unfair rhetoric supplied 
by the credit industry, call bankruptcy an undeserved refuge for those 
who can't or won't manage their finances. Honest, hard-working, middle 
class families are unfairly characterized as dead-beats who abuse the 
bankruptcy system to avoid paying their debts. The result is the 
excessively harsh bankruptcy reform bill presented to the Senate.
  During this debate, every Senator must ask one essential question--
who are the winners and who are the losers if this bill becomes law. A 
fair analysis of the bill will lead members of the Senate to the same 
conclusion reached by House Judiciary Committee Chairman Henry Hyde, 
who counted dozens of provisions that favor creditors. But, decency and 
dignity need not be victims of reform. Balanced bankruptcy legislation 
is our goal. Though we must address the needs of creditors, we must 
also consider the specific circumstances and market forces that push 
middle class Americans into bankruptcy.
  Let's take the basic facts one by one.
  Fact No. 1: The rising economic tide has not lifted all boats. 
Despite low unemployment, a booming stock market, and budget surpluses, 
Wall Street cheers when companies--eager to improve profits by down-
sizing--lay off workers in large numbers. In 1998, layoffs were 
reported around the country in almost every industry--9,000 jobs were 
lost after the Exxon-Mobil merger; 5,500 jobs were lost after Deutsche 
Bank acquired Bankers Trust; Boeing laid off 9,000 workers; Johnson & 
Johnson laid off 4,100. Kodak has cut 30,000 jobs since the 1980s and 
6,300 since 1997.
  Often, when workers lose a good job, they are unable to recover. In a 
study of displaced workers in the early 1990s, the Bureau of Labor 
Statistics reported that only about one-quarter of these workers were 
working at full-time jobs paying as much as or more than they had 
earned at the job they lost. Too often, laid-off workers are forced to 
accept part-time jobs, temporary jobs, and jobs with fewer benefits or 
no benefits at all.
  Fact No. 2: Divorce rates have soared over the past 40 years. For 
better or for worse, more couples are separating, and the financial 
consequences are particularly devastating for women. Divorced women are 
four times more likely to file for bankruptcy than married women or 
single men. In 1999, 540,000 women who head their own households will 
file for bankruptcy to try to stabilize their economic lives. 200,000 
of them will also be creditors trying to collect child support or 
alimony. The rest will be debtors struggling to make ends meet.
  Fact No. 3: Over 43 million Americans have no health insurance, and 
many millions more are underinsured. Each year, millions of families 
spend more than 20 percent of their income on medical care, and older 
Americans are hit particularly hard. A June 1998 CRS Report states that 
even though Medicare provides near-universal health coverage for older 
Americans, half of this age group spend 14 percent or more of their 
after-tax income on health costs, including insurance premiums, co-
payments and prescription drugs.
  Fact No. 4: The credit card industry has engaged in a massive and 
unseemly nation-wide campaign to hook unsuspecting citizens on credit 
card debt. Credit card issuers logged 24 million telemarketing hours in 
1996 and sent out 3.45 billion--billion--credit card solicitations in 
1998. In an average month, 75 percent of all households in the country 
receive a credit card solicitation. In recent years, the credit card 
industry has also begun to offer new lines of credit targeted at people 
with low incomes--people they know can not afford to pile up credit 
card debt.
  Facts such as these have reduced the economic stability of millions 
of American families, and have led to the sharp increase in the number 
of bankruptcy filings. Two out of every three bankruptcy filers have an 
employment problem. One out of every five bankruptcy filers has a 
health-care problem. Divorced or separated people are three times more 
likely than married couples to file for bankruptcy. Working men and 
women in economic free fall often have no choice except bankruptcy.
  The bankruptcy system provides a second chance for these large 
numbers of Americans who would otherwise hit financial bottom. It 
offers an indispensable opportunity to stabilize their households after 
an economic crisis.
  Clearly, we must deal with those who take advantage of the system and 
abuse it. Reform is necessary to stop repeat filers, eliminate the 
loophole provided by the homestead exemptions in several states, and 
prevent wealthy Americans from abusing the system to avoid paying their 
debts. But the credit card industry is abusing the system, too. 
Congress needs to deal with their abuses realistically and fairly, in a 
way that protects millions of struggling middle class and low-income 
families. It would be irresponsible for Congress to act only in ways 
that reward the credit card industry for its cynical manipulation of 
these families.
  The drop in filings this year is ample indication that a harsh 
bankruptcy bill is not needed. Without any action by Congress, the 
number of bankruptcy filings is decreasing. It is estimated that there 
will be 100,000 fewer filings this year than in 1998--filings have 
dropped in 42 states. Leading economists believe that the bankruptcy 
crisis is self-correcting. As economics professor Lawrence Ausubel 
states,

       Lenders respond to an unexpected increase in personal 
     bankruptcies by curtailing new lending to consumers teetering 
     closest to bankruptcy, with or without new legislation. The 
     high rates of default at the peak of the bankruptcy crisis 
     began to impinge on the profitability of lending and--as a 
     result--lenders tightened their underwriting standards. This 
     is the non-legislative, free-market response which made the 
     crisis abate.

  Despite these facts, the Senate is pursuing legislation that is a 
taxpayer-funded administrative nightmare for struggling debtors.
  Mr. President, I will include in the Record a list of the States that 
have seen a significant--and some not so significant--drop in the 
bankruptcy filings, comparing the second quarter of 1999 to the second 
quarter of 1998. It dropped more than 62 percent in the State of 
Oklahoma. It was down 1.19 percent in Arizona. Eight States have had 
some increase. It was two-tenths of 1 percent in Indiana, three-tenths 
of 1 percent in Utah, six-tenths of 1 percent in Wyoming. It was up 
nine-tenths of 1 percent in Montana, 3.3 percent in Oregon, 6 percent 
in South Dakota, 12 percent in Alaska, and 144 percent in Delaware.
  I ask unanimous consent that this list be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

[[Page 28959]]



     Changes in Bankruptcy Filings, 2d Quarter 99, v 2d Quarter 98

       Oklahoma, -62.1%; N. Hampshire, -23.9%; Nebraska, -15.85%; 
     Connecticut, -14.67%; Minnesota, -14.19%; Colorado, -13.87%; 
     California, -13.76%; Massachusetts, -13.62%; North Dakota; 
     -13.33%; Kansas, -13.25%; Tennessee, -11.64%; Kentucky, 
     -10.59%; Idaho, -10.27%; New York, -9.82%; Texas, -9.69%.
       Michigan, -9.63%; Georgia, -8.28%; New Jersey, -7.95%; W. 
     Virginia, -7.3%; Maryland, -7.23%; Vermont, -7.18%; Maine, 
     -7.09%; Alabama, -6.49%; Nevada, -6.02%; Mississippi, -4.98%; 
     Washington, -4.76%; Pennsylvania, -4.21%; Arkansas, -4.2%; 
     Rhode Island, -3.97%; Florida, -3.89%.
       Wisconsin, -3.76%; Missouri, -3.22%; Illinois, -3.19%; So. 
     Carolina, -3.19%; Ohio, -2.67%; No. Carolina, -2.35%; 
     Virginia, -2.24%; Louisiana, -2.21%; Arizona, -1.19%; 
     Indiana, +.28%; Utah, +.38%; Wyoming, +.66%; Montana, +.9%; 
     Oregon, +3.3%; So. Dakota, +6%; Alaska, +12.63%; Delaware, 
     +144.29%.
  Mr. KENNEDY. Mr. President, coming back to the basic and fundamental 
issue about who is supporting the legislation, who the winners are and 
who the losers are, I will include in the Record at this point the 
various organizations that are opposed to the legislation.
  I ask unanimous consent that this list of organizations be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       Organizations Opposed to S. 625, the Bankruptcy Reform Act


  among the organizations that have voiced their opposition to S. 625 
                                  are:

       AFL-CIO, Alliance for Justice, American Association of 
     University Women, American Federation of Government Employees 
     (AFGE), American Federation of State, County and Municipal 
     Employees (AFSCME), American Medical Women's Association, 
     Association for Children for Enforcement of Support, Inc. 
     (ACES), Business and Professional Women/USA, Center for Law 
     and Social Policy, Center for the Advancement of Public 
     Policy, Center for the Child Care Workforce, Church Women 
     United, Coalition of Labor Union Women, Communications 
     Workers of America, Consumer Federation of America, Consumers 
     Union, Equal Rights Advocates, Feminist Majority, Hadassh, 
     International Assocication of Machinists & Aerospace Workers 
     (IAM), International Brotherhood of Boilermakers, Iron Ship 
     Builders, Blacksmiths, Forgers & Helpers, International 
     Brotherhood of Teamsters, International Women's Insolvency & 
     Restructuring Confederation, Ralph Nader, National 
     Association of Commissions for Women.
       National Black Women's Health Project, National Center for 
     Youth Law, National Consumer Law Center, National Council for 
     Jewish Women, National Council of Negro Women, National 
     Council of Senior Citizens, National Organization for Women, 
     National Partnership for Women and Families, National Women's 
     Conference, National Women's Law Center, Northwest Women's 
     Law Center, NOW Legal Defense and Education Fund, Public 
     Citizen, Union of Needletrades, Industrial & Textile 
     Employees (UNITE), United Automobiles, Aerospace and 
     Agricultural Implement Workers of America/UAW, United Food & 
     Commercial Workers International Union, United Steelworkers 
     of America, U.S. Public Interest Research Group, Wider 
     Opportunities for Women, The Woman Activist Fund, Women 
     Employed, Women Work!, Women's Institute for Freedom of the 
     Press, Women's Law Center of Maryland, Inc., YWCA of the 
     U.S.A.

  Mr. KENNEDY. Mr. President, this list represents virtually all of the 
children's protection groups--those groups that have been most 
identified with protecting women's economic and political rights, those 
groups that have been looking after workers' interests, and small 
business groups as well. Virtually every one of them are opposed to the 
underlying legislation.
  As I mentioned in the Senate Judiciary Committee, I would like to 
hear those who are in favor of it point out one single group 
representing children, workers, women, or consumers who are for this 
bill. Just bring those names to us. Let's debate it. But we have none, 
zero.
  It comes back to what we ought to be asking ourselves when we have 
this kind of a situation. Isn't it worthwhile that we find out who the 
winners are and who the losers are? If common sense is any indication, 
we will try to make a case that in justifies these comments. Virtually 
every one of the groups representing hard-working Americans--the men 
and women who work hard and play by the rules; and, in many instances, 
women who have been discriminated against for a wide variety of reasons 
and issues; children's groups who understand the importance of making 
sure that children's interests and their financial security will be 
protected--are universally opposed and say ``no'' to the bill. But we 
have others. The credit card companies say yes.
  So it is interesting, as we are coming into the final hours of this 
session, we have another one of those situations where the Republican 
leadership is putting out on the floor of the U.S. Senate a bill the 
special interests--in this case, the credit card companies--are 
strongly in favor of, but threatens the economic interests of women and 
working people and children.
  We have little time this afternoon to debate a minimum wage, which we 
have been virtually prohibited from doing before the Senate over the 
period of the last year. We are not even going to have an opportunity 
to debate something that could protect consumers, women, children, and 
workers on a Patients' Bill of Rights. That is being put off. But we 
have time to debate this issue. Why? Because the credit card companies 
have a very important and direct interest in the outcome of this 
particular legislation.
  Mr. President, I want to take a few moments of the Senate's time to 
run through some of these charts that show, I think, very effectively, 
what this case is all about.
  This chart shows that the U.S. median family income is $42,769 this 
year. Now these are constant dollars. If we look over at what the 
income was for those who went into bankruptcy, in 1981, 1991, 1995, and 
1997, you find out there has been a gradual decline--$23,000, $18,000, 
$17,000, and in 1997 it was somewhat below what it was in 1995.
  We have the greatest economic boom in the history of this country, 
with the lowest unemployment and rates of inflation. We saw an increase 
in the numbers of bankruptcies. But who are these people who are filing 
for bankruptcy? It is actually those in the lower incomes. That is who 
we are affecting with legislation that is dealing with bankruptcy. Who 
are these people down here in 1997? Let's look back in 1981. The red 
indicates joint filings. The yellow indicates men filing. The blue is 
for women filing.
  Going back to 1981, we find the greatest number of filings for 
bankruptcy were joint filings, with some single men and some single 
women. Look what happens in 1991. Joint still goes up, and there are 
increasing numbers of women and of men. In 1999, those at the top are 
women. They are at the bottom in 1981 and at the top in 1999. Do you 
see the very dramatic increase in the number of women. Why is that so?
  The reason that is so is women are being denied alimony and child 
support. That is why it is so. That is why it is so, Mr. President. 
Every indicator demonstrates that is why it is so. We are passing a 
major piece of legislation to protect not those who are being adversely 
impacted by these economic forces, but to protect the credit card 
industry. It is women who are facing challenges because of alimony and 
in terms of child support.
  If you wanted to do something about this line here, you would do more 
to make sure the deadbeat dads are going to pay up as they should in 
terms of alimony and child support. You would see this number go down 
dramatically. Nonetheless, no, no, we are not going to deal with that 
issue. We have this other kind of formula that is going to hurt these 
people--not protect them so they might have a second opportunity. The 
fact is, the number of people who are working who go into bankruptcy is 
virtually identical to those who are working generally anyway.
  Isn't that interesting? The fact is, these are not men and women who 
are dogging it, these are men and women who are out trying to make it. 
Nonetheless, are we considering a piece of legislation that is going to 
help them get back on their feet a second time and perhaps pay off 
their debt? No, no; we are thinking about the credit card companies and 
looking out after their interests.
  So we see that the great expansion and explosion in the number of 
people

[[Page 28960]]

who are going into bankruptcy are primarily women. Now it is 
interesting that bankrupt debtors are reporting job problems. Sixty-
seven percent of those who are going into bankruptcy are reporting job 
problems, a direct result of downsizing, direct result of merging, the 
direct result of being able to go down to Wall Street and cut back in 
the total number of employees and see a bang in that stock going right 
up. Extraordinary economic growth and expansion--all of which are very 
fine and good--doesn't mean that you have to come down with a hammer on 
workers who, through no fault of their own, are being merged out and 
are having difficulty in finding jobs to try to meet their 
responsibilities, especially women.
  This indicates what has been happening with regard to people who have 
been going into bankruptcy. More than 67 percent of them are showing 
that it is basically and fundamentally an issue in terms of their 
employment. These other colors indicate what those particular matters 
might be in terms of downsizing and the rest. We have some idea now.
  We have the numbers I mentioned earlier. We have the growth in the 
number of men and women who are separated, become divorced, and the 
economic implications and burdens women are faced with in terms of 
credit. We find that.
  Now let's look to see if there are other indicators. Yes, there is 
another very important indicator. That is the fact that we are seeing 
the total number of uninsured in our society growing at a rate of over 
a million a year. Make no mistake about it, that is going to increase 
and escalate. We are not doing anything about it. That is going to 
increase and escalate.
  Isn't it interesting that health care-related problems driving 
individuals into bankruptcy are the No. 1 reason besides job related 
reasons. Individuals being dropped from the health care system are 
individuals at the lower end of the economic ladder who don't have the 
protections and don't have the health insurance in the first place.
  We all know what is happening out in the job market with the 
increasing number of temps. So you do not have pensions and you do not 
have health insurance. Here we have the individuals who are losing out 
and falling further behind--women on credit, women on alimony, and 
women with challenges they have in terms of payments. Then you have the 
problems with downsizing.
  Now we have one of the other major issues reflected in the 
bankruptcies that are taking place all across this country.
  We know what is happening across the country in terms of many of the 
major companies and corporations that had good health care protection 
for retirees. Those numbers are going down in terms of coverage. We 
know the costs and what is happening in terms of prescription drugs. 
They are going up and escalating dramatically.
  When we passed Medicare in 1964, the private sector didn't have 
prescription drugs, so Medicare didn't have it. Now 90 percent of those 
policies have it, but we can't even get that issue up before the Senate 
to debate it. We haven't got the chance to debate whether we ought to 
have prescription drugs. We don't get a chance to debate whether we 
ought to try to accept the House bill that provides protection for 
consumers from the arbitrary rulings of accountants in health 
maintenance organizations. No, we can't deal with any of that. Let's 
just look out after the credit card industry. They are the ones who 
need protection--not the men and women who have lost their health care. 
No, sir; we don't have to worry about them--not the men and women who 
have been downsized. No, sir; we don't have to worry about them; and 
not women. Alimony and child care support--let's not worry about them. 
Let's worry about the good old credit card industry.
  Let's see what we have to worry about with them. What do you know? 
Here is a facsimile of a letter, Mr. President, which I ask unanimous 
consent be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                  American Bankruptcy Service,

                                  St. Paul, MN, December 18, 1998.
     Re Fresh Start VISA' Distributorship.
       Dear Counselor: We offer a unique opportunity that could be 
     of great benefit to your firm and your clients. By becoming a 
     distributor, you will have the ability to market an unsecured 
     VISA' credit card (the ``Fresh Start'' card) to 
     your clients who:
       Have filed a Chapter 7 bankruptcy;
       Have completed the 341 meeting of creditors (with no 
     outstanding issues with the Trustee);
       Have not yet received their discharge;
       Have attached a copy of the bankruptcy notice to their VISA 
     application.
       Several law firms specializing in representing consumer 
     debtors in bankruptcy have requested the ability to 
     distribute the ``Fresh Start'' VISA application to their 
     clients. In light of this, we thought perhaps your firm would 
     be interested also in a distributorship. For each credit card 
     issued, your firm will receive $10.
       There is absolutely no deposit required. This is an 
     unsecured VISA card. The credit limit will be $500 or $1,000 
     depending on income. The annual fee is $49.00. Many debtors 
     have immediate credit needs even during a bankruptcy. Some 
     are approached either by secured credit card companies but 
     cannot apply due to lack of the cash deposit required or by 
     current creditors offering a new card only with a 
     reaffirmation. This new card offer solves these problems. 
     (See sample application enclosed.) Furthermore, our 
     SuperSettlements program (brochure enclosed) provides an 
     additional method for avoiding reaffirmations with small 
     redemptions.
       This program is intended to create a fresh start for your 
     clients and an opportunity for your firm. We realize that 
     many debtors may have to file a bankruptcy due to excessive 
     credit card debt. If you feel that this is not a program for 
     them or for your firm, please disregard this letter.
       For more information, please fax or mail this form back to 
     us. Please call if you have questions.
       Yes! Our firm is interested in distributing the ``Fresh 
     Start'' VISA card applications toour Chapter 7 clients. 
     Please send us detailed information on how we can become a 
     distributor as soon as possible. The name of the person at 
     our firm to contract is:

  Mr. KENNEDY. Mr. President, here is the letter that is being sent by 
the ``American Bankruptcy Service,'' ``Re: Fresh Start VISA 
distributorship'':

       Dear counselor:

  Do you know who the counselors are? Do you know who those counselors 
are? They are counselors for the people who have gone bankrupt--the 
lawyers for people who have gone bankrupt. Here is their friendly 
``American Bankruptcy Service.''

       We offer a unique opportunity that could be of great 
     benefit to your firm and your clients. By becoming a 
     distributor, you will have the ability to market unsecured 
     VISA credit cards. We call it the ``Fresh Start'' card to 
     your clients who:
       Have filed a chapter 7 bankruptcy;
       Have completed the 341 meetings of creditors;
       Have not yet received their discharge;
       Have attached a copy of their bankruptcy notice.
       No deposit required.

  This industry is out soliciting from attorneys who have represented 
women and workers who have been downsized, those who have gone bankrupt 
and belly up because of health care bills they just can't afford to 
pay.
  Now you have the credit card industry writing to the attorneys and 
saying: Look, you can get in on the goody trail, too, because if you 
represented one, you probably represented others, and you can get on 
and be part of our credit card distributorship as well.
  That is what they are saying here. You can read this letter right 
through.

       Our firm is interested in distributing the Fresh Start 
     VISA.

  And we will just show you how to do it. You can also be a part of 
this.
  Here is their advertising.
  If you have filed for bankruptcy, you can get a Fresh Start with 
First Consumers National Bank VISA card today. If you file bankruptcy, 
that qualifies you. There is no need to wait for a bankruptcy 
discharge. Rebuild a good credit card fast with monthly accounts 
reporting to all major credit card business.
  They have got you once. They want to get you again, and again, and 
again. How many times do they want to get these people? How many times?
  We are out here debating this bill in the final couple of days. We 
are not debating a patients' bill of rights. We had

[[Page 28961]]

a heck of a time trying to get a debate on minimum wage for the whole 
session--trying to make a difference for consumers. We haven't got time 
to do prescription drugs--no way, too difficult, too complex. But we 
have all the time in the world to debate this particular legislation 
that is looking out after the credit card companies.
  That gives you some idea about what the Republican leadership's 
priorities are here in the Senate.
  We will have a chance later on to talk about the minimum wage. We 
have gone ahead and voted ourselves a $4,600 pay increase this year and 
we still won't vote a pay increase of 50 cents next year for men and 
women who are at the bottom rung of the economic ladder.
  What is this, Mr. President? We have to ask ourselves, Why?
  I can tell you, Mr. President. These issues ought to be addressed. A 
number of our colleagues have offered amendments to try to address some 
of these issues. It is going to take a lot of doing to try to make the 
difference. We are talking about real people.
  Take for example, Mr. and Mrs. M who live in the suburban community 
of East Longmeadow, Massachusetts. Although Mr. M. makes about $60,000 
per year, the family suffered when Mrs. M lost her job, and the 
household income dropped by $15,000. Since then, the family has 
struggled to make ends meet. The $14,775 loan for their 1996 Toyota and 
the $1,520 monthly mortgage payment that once seemed reasonable became 
difficult to meet.
  Even after cutting recreation expenses to zero, the family's expenses 
exceed their income by several hundred dollars a month. They fell 
behind on their credit card payments, which they had hoped to resume 
paying when Mrs. M started working again. The balance they owed to 
their credit card company ballooned to $27,500. The balance increased 
by $600 to $800 each month in finance charges and penalties. Mr. and 
Mrs. M saw no alternative to filing for relief under the bankruptcy 
laws. Their discharge in bankruptcy gave them a fresh start. They will 
continue to struggle to make ends meet, but they have relief from the 
pressures of harassing calls from collection agents and mounting debts 
they had no hope of paying.
  If this bill--S. 625--had been law, they would have had no such 
relief. The means test--which uses IRS expense standards to calculate 
living expenses and ability to repay debts--would probably force them 
out of the bankruptcy system, completely.
  Longmeadow is in Hampden County, where the IRS housing and utility 
allowance for a family of four is $1,235 a month. Although the family's 
mortgage and monthly utility expenses exceed this amount, it would not 
matter. Under this bill, they would face a statutory presumption that 
their case is abusive. The arbitrary means test--not the reality of 
their plight--dictates that Mr. and Mrs. M can afford to file a Chapter 
13 debt repayment plan, and it is highly unlikely that the family has 
any ``special circumstances'' that would allow a judge to find 
differently.
  They will be selling their home, possibly all their assets.
  This is unduly harsh. It should not pass in its current form. I will 
work with a number of our colleagues to address many of these serious 
abuses, without which it should not become law.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative assistant proceeded to call the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Mr. President, we are on legislation we started 
Thursday night. We had discussion this Friday, although we had no votes 
on any amendments to the bankruptcy reform bill. I hope we can move 
forward with this legislation and get it passed before we adjourn.
  This is the same piece of legislation that passed the Senate by a 97-
1 vote in 1998. It was conferenced with the House. The conference 
committee report passed the House of Representatives by a very wide 
margin. The bill came to the Senate in the last 3 or 4 days of the 
session with a threat of long debates and filibusters against the 
conference report. Consequently, a bill that passed 97-1, probably 
coming out of the conference more favorable to the point of view of 
those who still had some questions about it. Yet a lot of those Members 
did not want that bill to go to final passage. Therefore, the last 
Congress ended with the bankruptcy conference report not passing.
  We started over again in the new Congress. Since the first of the 
year, Senator Torricelli of New Jersey and I have been working on this 
legislation to bring our colleagues a bipartisan approach to bankruptcy 
reform that we hope will end the situation of some people who have the 
ability to repay some debt getting off scot-free. We think this 
legislation is a big step in that direction.
  In my earlier statements on the Senate floor on Thursday and Friday, 
I alluded to the role that overly aggressive bankruptcy lawyers play in 
the current crisis of our bankruptcy system. Although I cannot 
statistically support it, when I refer to the role of overly aggressive 
bankruptcy lawyers I really think, in my heart, we are talking about a 
very small minority of bankruptcy lawyers. Still, there are those who 
play a role in people going into bankruptcy who I do not think the 
bankruptcy laws were ever intended to help, or, in any case, harming 
people who have a debt owed to them which is not paid.
  One of the major problems with the bankruptcy system is the mind-set 
of some of the lawyers who specialize in bankruptcy. Many lawyers today 
view bankruptcy simply as an opportunity to make money for themselves 
with a minimal amount of effort. And this profit motive causes 
bankruptcy lawyers to promote bankruptcy even when a financially 
troubled client has the obvious ability to repay his or her debts. As 
one of the members of the National Bankruptcy Commission noted in the 
Commission's 1997 report, many who make their living off of 
thebankruptcy process have forgotten that declaring bankruptcy has a 
moral dimension. Bankruptcy lawyers shouldn't counsel someone to walk 
away from his or her debts without pointing out the moral consequences 
of making a promise to pay and then breaking that promise. As I have 
said before, it cannot be good for the moral foundation of our nation 
if people learn that it is okay just to walk away and not pay your 
bills because that's easier and more convenient, and obviously better 
for somebody's pocketbook.
  All across America some of the more unsavory bankruptcy lawyers have 
created high-volume law offices that herd people into bankruptcy as if 
they were cattle instead of individual human beings in need of advice 
and counseling. These offices are known as bankruptcy mills. These 
bankruptcy mills are nothing more than large scale processing centers 
for bankruptcy--there is little or no investigation done as to whether 
an individual actually needs bankruptcy protection or whether or not a 
person is able to at least partially repay their debts. For example, 
one bankruptcy attorney from Texas was sanctioned by a bankruptcy court 
for operating a bankruptcy mill. According to the court, this attorney 
had very little knowledge of bankruptcy law, but advertised extensively 
in the yellow pages and on television. Apparently, his advertising 
worked, because he filed about 100 new bankruptcy cases per month. Most 
of the work was done by legal assistants with very limited training. 
The court concluded that the attorney's services

       Amount to little more than a large scale petition preparer 
     service for which he receives an unreasonably high fee.

  The practices of bankruptcy mills are so deceptive and sleazy that 
the Federal Trade Commission went so far as to issue a consumer alert 
warning consumers of misleading ads promising debt consolidation.
  I refer you to this Federal Trade Commission Consumer News Bulletin, 
right here on this chart. It refers to a question,


[[Page 28962]]

       Debt Got You Down? You are not alone. Consumer debt is at 
     an all-time high. What's more, record numbers of consumers--
     more than 1 million in 1996--are filing for bankruptcy. 
     Whether your debt dilemma is the result of an illness, 
     unemployment, or simply overspending, it can seem 
     overwhelming. In your effort to get solvent, be on the alert 
     for advertisements that offer seemingly quick fixes. While 
     the ads pitch the promise of debt relief, they rarely say 
     relief may be spelled b-a-n-k-r-u-p-t-c-y. And, although 
     bankruptcy is one option to deal with financial problems, 
     it's generally considered the option of last resort. The 
     reason: Its long-term negative impact on your 
     creditworthiness. A bankruptcy stays on your credit report 
     for 10 years, and can hinder your ability to get credit, a 
     job, insurance, or even a place to live.

  I think that there is a widespread recognition that bankruptcy 
lawyers are preying on unsophisticated consumers who need counseling 
and help with setting up a budget, but who do not need to declare 
bankruptcy. It is not surprising, Mr. President, that bankruptcy 
lawyers are leading the charge against bankruptcy reform.
  Now, we have heard complaints from some on the Senate floor about 
protecting child support and alimony during bankruptcy proceedings. I 
want to point out that some bankruptcy lawyers actually advertise that 
they can help deadbeat dads get out of paying their child support and 
other marital obligations. One bankruptcy lawyer has even written a 
book entitled ``Discharging Marital Obligations in Bankruptcy.'' Some 
things about that book are displayed on this chart.
  I think that it is outrageous that bankruptcy lawyers are helping 
deadbeats to cheat divorced spouses out of alimony and to cheat 
children out of child support. This is a recipe for promoting poverty 
and human misery. Those who are concerned about protecting child 
support should join with me in condemning this sort of amoral conduct. 
Bankruptcy was never designed for the purpose of helping deadbeat 
spouses escape their financial obligations. Not only are the current 
practices of bankruptcy lawyers a disservice to their clients, they 
also cheat society as a whole.
  Mr. President, I ask consent to have printed in the Congressional 
Record an article from the Los Angeles Times dated August 12, 1998.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

     2.5% Rise in Personal Filings Pushes Bankruptcies to New High

                  [From Times Staff and Wire Reports]

       Total bankruptcies nationwide hit a record high in the 
     second quarter, apparently boosted by a flurry of personal 
     filings by people who fear imminent changes in the bankruptcy 
     law.
       Business bankruptcies continued to decline, but personal 
     bankruptcies, which account for 97% of the filings, edged up 
     2.5% from the second quarter a year earlier. That pushed the 
     total number of bankruptcy filings to 373,460 in April, May 
     and June, surpassing by nearly 2% the previous high posted in 
     the second quarter of 1997, federal court officials said this 
     week. California's figures mirrored the nationwide trend.
       Although a 2% rise is not large, given the steady and 
     previously sharper increases in bankruptcies in recent years, 
     analysts were still surprised by the continuing uptick in 
     personal filings. The economy remains relatively strong and 
     consumer delinquencies in general have come down in recent 
     quarters while some lenders have tightened their credit 
     standards.
       But bankruptcy attorneys and other experts said some 
     consumers were being prompted by pending bankruptcy reform 
     legislation, which could take effect as early as the fall and 
     is expected to make it tougher for consumers to extinguish 
     their debts.
       Indeed, attorneys are advising their clients that they may 
     want to take advantage of the current law while it is still 
     available.
       ``I'm telling clients that it might very well end up being 
     harder to file for bankruptcy,'' said Joseph Weber, a 
     bankruptcy lawyer in Costa Mesa. Weber added that he also 
     thinks a ``false optimism'' is adding to the number of 
     bankruptcy petitions. ``When they perceive the economy to be 
     better, some spend beyond their means,'' he said.

  Mr. GRASSLEY. In this article, bankruptcy lawyers are advised to send 
out letters to anyone who has visited them recently asking about 
bankruptcy. This form letter encourages people to declare bankruptcy 
because, if Congress passes bankruptcy reform, ``Bankruptcy will be 
much more difficult, more expensive, and probably embarrassing.'' I 
hope this bill makes bankruptcy more embarrassing and more difficult. 
Opinion polls clearly show that the American people want those who 
voluntarily incur debts to pay those debts as agreed. Bankruptcy should 
be difficult, and the moral stigma that used to be associated with 
bankruptcy should be resurrected.
  I have reviewed the conduct of bankruptcy mills and bankruptcy 
lawyers to illustrate the need for Congress to hold bankruptcy lawyers 
accountable for unethical and dishonest conduct. In the bill before us, 
we have tried to do this by codifying rule 11 penalties for lawyers who 
needlessly steer people into the bankruptcy system. It's my hope that 
these penalties will cause lawyers to think twice before they willy-
nilly cart off their clients to bankruptcy court without asking a few 
questions first. I would have preferred tougher penalties, as we had in 
last year's Senate Bill, But I understand that many on the other side 
of the aisle strongly object to tougher penalties. So, in an effort to 
work with the other side, this year's penalties aren't as tough as they 
were last year.
  As I've said many times, the bankruptcy crisis is partly a moral 
crisis. And bankruptcy lawyers who push bankruptcy play the role of 
carnival barkers who promise an easy way out to anyone who will listen.
  As it stands now, this bankruptcy reform bill, S. 625, merely 
requires attorneys to investigate the financial resources of their 
clients before putting them into bankruptcy. That is not too much to 
ask and, it seems to me, something basic when advising people according 
to the tenets of the legal profession.
  Our bankruptcy system needs to be reformed in a balanced way. We need 
to address abuses by debtors who do not need bankruptcy. We need to 
address abuses by creditors who use coercive and deceptive practices to 
cheat honest debtors. And we need to address abuses by bankruptcy 
lawyers who exploit bankruptcy laws for financial gain.
  As I said before, I prefer tougher penalties against bankruptcy 
lawyers, but this bill is a step in the direction of addressing the 
problems of fast-talking bankruptcy lawyers.
  Does the Senator from Minnesota seek the floor?
  Mr. WELLSTONE. Mr. President, I know we are going to start on the 
minimum wage amendment. May I have 1 minute to call up two amendments 
and then lay them aside?
  Mr. GRASSLEY. Yes. I yield the floor.


                     Amendments Nos. 2537 and 2538

  Mr. WELLSTONE. Mr. President, I call up amendments Nos. 2537 and 
2538.
  The PRESIDING OFFICER. Is there objection to the request?
  Without objection, it is so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from Minnesota [Mr. Wellstone] proposes 
     amendments numbered 2537 and 2538.

  The amendments are as follows:


                           amendment no. 2537

      (Purpose: To disallow claims of certain insured depository 
                             institutions)

       At the appropriate place, insert the following:

     SEC. __. DISALLOWANCE OF CLAIMS OF CERTAIN INSURED DEPOSITORY 
                   INSTITUTIONS.

       Section 502(b) of title 11, United States Code, is 
     amended--
       (1) in paragraph (8), by striking ``or'' at the end;
       (2) in paragraph (9), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(10) such claim is the claim of an insured depository 
     institution (as defined in section 3 of the Federal Deposit 
     Insurance Act) that, as determined by the appropriate Federal 
     banking agency (as defined in section 3 of the Federal 
     Deposit Insurance Act)--
       ``(A) has total aggregate assets of more than $200,000,000;
       ``(B) offers retail depository services to the public; and
       ``(C) does not offer both checking and savings accounts 
     that have--
       ``(i) low fees or no fees; and
       ``(ii) low or no minimum balance requirements.''.
                                  ____



                           AMENDMENT NO. 2538

  (Purpose: To make an amendment with respect to the disallowance of 
    certain claims and to prohibit certain coercive debt collection 
                               practices)

       At the appropriate place, insert the following:

[[Page 28963]]



     SEC. __. DISALLOWANCE OF CERTAIN CLAIMS; PROHIBITION OF 
                   COERCIVE DEBT COLLECTION PRACTICES.

       (a) In General.--Section 502(b) of title 11, United States 
     Code, is amended--
       (1) in paragraph (8), by striking ``or'' at the end;
       (2) in paragraph (9), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(10) such claim arises from a transaction--
       ``(A) that is--
       ``(i) a consumer credit transaction;
       ``(ii) a transaction, for a fee--

       ``(I) in which the deposit of a personal check is deferred; 
     or
       ``(II) that consists of a credit and a right to a future 
     debit to a personal deposit account; or

       ``(iii) a transaction secured by a motor vehicle or the 
     title to a motor vehicle; and
       ``(B) in which the annual percentage rate (as determined in 
     accordance with section 107 of the Truth in Lending Act) 
     exceeds 100 percent.''.
       (b) Unfair Debt Collection Practices.--
       (1) In general.--Section 808 of the Fair Debt Collection 
     Practices Act (15 U.S.C. 1692f) is amended--
       (A) in the first sentence, by striking ``A debt collector'' 
     and inserting the following:
       ``(a) In General.--A debt collector''; and
       (B) by adding at the end the following:
       ``(b) Coercive Debt Collection Practices.--
       ``(1) In general.--It shall be unlawful for any person 
     (including a debt collector or a creditor) who, for a fee, 
     defers deposit of a personal check or who makes a loan in 
     exchange for a personal check or electronic access to a 
     personal deposit account, to--
       ``(A) threaten to use or use the criminal justice process 
     to collect on the personal check or on the loan;
       ``(B) threaten to use or use any process to seek a civil 
     penalty if the personal check is returned for insufficient 
     funds; or
       ``(C) threaten to use or use any civil process to collect 
     on the personal check or the loan that is not generally 
     available to creditors to collect on loans in default.
       ``(2) Civil liability.--Any person who violates this 
     section shall be liable to the same extent and in the same 
     manner as a debt collector is liable under section 813 for 
     failure to comply with a provision of this title.''.
       (2) Conforming amendment.--Section 803(6) of the Fair Debt 
     Collection Practices Act (15 U.S.C. 1692a(6)) is amended by 
     striking ``808(6)'' and inserting ``808(a)(6)''.

  The PRESIDING OFFICER. The amendments are set aside. The Senator from 
Massachusetts.
  Mr. KENNEDY. Mr. President, raising the minimum wage is critical to 
preventing the economic free fall that often leads to bankruptcy. Many 
of us have sponsored the Fair Minimum Wage Act of 1999 to begin to 
right that wrong.
  Amending the bankruptcy bill to increase the minimum wage will help 
many of the people this so-called bankruptcy ``reform'' is likely to 
hurt--low income families, minorities and women. For many low income 
workers, the struggle to make ends meet is too difficult, and they find 
themselves facing bankruptcy. Raising the minimum wage will help many 
of these hardworking individuals and families recover from the 
financial crises that drove them into bankruptcy.
  For nearly two-thirds of the families that file for bankruptcy, a job 
crisis led to their downfall. Many of those families faced a job loss. 
A Bureau of Labor Statistics study reported that only about a quarter 
of displaced workers had found a new job at the same or better pay as 
the job they lost. A third of displaced workers were still looking for 
work. Nearly half of the displaced workers had to settle for work at 
much lower salaries--an average 20% pay cut for those lucky enough to 
find full time jobs, and a much steeper cut for those who took part-
time work.
  Large numbers of women who will suffer under this bill will benefit 
from a minimum wage increase. Divorced women are four times more likely 
to file for bankruptcy than married women or single men. Often, they 
are forced into bankruptcy because they are owed child support or 
alimony. Divorced women trying to raise children face a daunting 
challenge to provide for their families. This bill will make it harder 
to meet that challenge. But raising the minimum wage will help almost 
seven million women, many of them struggling to maintain their 
families.
  African American and Hispanic families disproportionately face the 
threat of bankruptcy and the repercussions of a low minimum wage. They 
are six times more likely than other Americans to seek bankruptcy 
protection, and they will be disproportionately harmed by this 
bankruptcy bill. But they also comprise one-third of those who will 
benefit from an increase in the minimum wage. This amendment will help 
more African American and Hispanic families meet their families' needs.
  Low income families struggling to meet their obligations often find 
themselves facing bankruptcy. Some argue that the rise in bankruptcy 
filings is due to a lack of responsibility. But too often the problem 
is a matter of basic household economics. Families going into 
bankruptcy have less income than most Americans. A raise in the minimum 
wage will give them the economic boost they need to avoid bankruptcy.
  Our proposal will give these low income wage earners the pay raise 
they need and deserve to care more effectively for their families--to 
buy the food and clothing, and health care they need, without going 
into debt.
  Recently, members of Congress voted to raise their own pay by 
$4,600--but not the pay of minimum wage workers. Republican Senators 
don't blink about giving themselves an increase. How can they possibly 
deny a fair increase for minimum wage workers?
  In fact, the Republican leadership has gone to extraordinary lengths 
to block action by Congress on a pay raise for the hard-working 
Americans who work at the minimum wage.
  But it is time--long past time--to raise the minimum wage. Too many 
hard-working Americans struggling to keep their families afloat and 
their dignity intact can't make enough in a 40 hour week to lift their 
families out of poverty--and that's wrong. The percentage of poor who 
are full-time year-round workers was 12.6% in 1998--higher than any 
time in the last 20 years, according to a new report from the Census 
Bureau.
  Our minimum wage amendment is a modest proposal-- a one dollar 
increase in two installments--50 cents next January, and 50 cents the 
following year. Over 11 million American workers will benefit.
  At $6.15 an hour, working full-time, a minimum wage worker would earn 
$12,800 a year under this amendment--an increase of over $2,000 a year.
  That additional $2,000 will pay for seven months of groceries to feed 
the average family. It will pay the rent for five months. It will pay 
for almost ten months of utilities. It will cover a year and a half of 
tuition and fees at a two-year college, and provide greater 
opportunities for those struggling at the minimum wage to obtain the 
skills needed to obtain better jobs.
  The national economy is the strongest in a generation, with the 
lowest unemployment rate in three decades. Under the leadership of 
President Clinton, our economy is strong. Enterpriseand 
entrepreneurship are flourishing--generating unprecedented economic 
growth, with impressive efficiencies and significant job creation. The 
stock market has soared. Inflation is low, and interest rates are low. 
We are witnessing the strongest peace-time growth in our history.
  The country as a whole is enjoying an unprecedented period of growth 
and prosperity. But for millions of Americans it is someone else's 
prosperity. Working 40 hours a week, 52 weeks a year, a person earning 
the minimum wage would earn only $10,700--almost $3,200 below the 
poverty guidelines for a family of three.
  Each day we fail to raise the minimum wage, families across the 
country continue to fall farther behind. One fact says it all--the 
minimum wage would have to be $7.49 an hour today, instead of the 
current level of $5.15, to have the same purchasing power it had in 
1968. That disparity shows how far we have fallen short in the past 
generation in guaranteeing that low income workers receive their fair 
share of the nation's prosperity.
  The Republican proposal to raise the minimum wage by one dollar over 
three years beginning on March 1, 2000, is a cruel hoax on the lowest 
paid American workers. Our Democratic plan to increase the minimum wage 
by 50 cents on January 1, 2000 and another

[[Page 28964]]

50 cents on January 1, 2001, would put almost $1,200 more than the 
Republican proposal into the hands of the hard-working women and men 
who work at the minimum wage.
  The Republican proposal is an insult to low wage workers. In addition 
to robbing workers of over $1,200, it effectively repeals the overtime 
pay law that has guaranteed time-and-a-half overtime pay for over 60 
years. The so-called ``bonus'' provision of the Republican proposal 
jeopardizes the overtime pay of 73 million Americans by eliminating the 
requirement that bonuses, commissions, and other similar forms of 
compensation be included in a worker's regular pay for purposes of 
calculating overtime pay. As the United States Supreme Court said in 
interpreting the Fair Labor Standards Act, exclusion of bonuses from 
overtime pay will ``nullify all the purposes for which the [Act] was 
created.''
  The Republican proposal is just one more part of an ongoing assault 
on low wage workers that includes balancing the budget on the backs of 
the working poor; cutting workers' pay through the compensatory time 
bill; providing pensions for the wealthy but not for working families; 
blocking workers' right to organize; and undermining worker safety and 
health.
  Shame on those who want to lavish over $75 billion in tax breaks on 
business, while cutting this modest pay raise for low income workers. 
Republicans are more interested in providing tax breaks for the rich 
than in fairly compensating minimum wage workers. When Congress has 
just voted to raise its own pay, it is hypocritical and irresponsible 
to deny fair pay for the country's lowest paid workers.
  As the Washington Post said last week: ``The minimum wage should be 
increased, and the increase should not become a political football. . . 
. The price of a bill to help the working poor ought not be an 
indiscriminate tax cut for those at the very top of the economic 
mountain.''
  Our legislation does contain a fiscally responsible package of small 
business tax provisions which would cost approximately $11.5 billion 
over the next five years. Those provisions have been designed to 
provide financial assistance to the small businesses which will be 
paying the higher minimum wage to their employees. The cost of these 
tax benefits is fully paid for.
  Unlike the Republican proposals, this bill will not draw down the 
surplus. It will not jeopardize our ability to use the surplus to 
strengthen Medicare and Social Security for the future. Our tax 
proposal contains provisions which will benefit both employers and 
employees. It provides a tax credit for worksite child care facilities, 
a tax credit to encourage small businesses to offer employee pensions, 
and a tax credit for companies that provide high tech training to their 
employees. It also encourages the creation of new jobs for those who 
are currently outside the workforce by extending the work opportunity 
tax credit and the welfare-to-work tax credit, and by establishing tax 
incentives for ``new market'' community development.
  In addition, our package accelerates the deductibility of health 
insurance premiums for self-employed workers. It excludes educational 
benefits provided for employees' children from taxation, and it helps 
workers save for their retirement.
  These are the types of tax provisions that Congress should be 
enacting. They are tax cuts which will benefit a broad spectrum of 
businesses and workers and strengthen the economy. They are not tax 
breaks which only further enrich an already privileged few.
  This debate should be about the real financial needs of low income 
workers and small businesses. A modest increase in the minimum wage 
should not be held hostage to the desire for extravagant new tax breaks 
for those who are already the most economically privileged. It makes 
sense to provide fiscally responsible tax assistance to small 
businesses and their employees. All the tax cuts we are proposing are 
fully paid for and carefully targeted to meet genuine needs. It is 
appropriate to enact them as part of our legislation to raise the 
minimum wage.
  Finally, raising the minimum wage is far more than a labor issue. 
Raising the minimum wage is a women's issue. Almost 60 percent of 
minimum wage workers are women. 7 million women across the nation--
12.6% of all working women--would benefit from this increase.
  Raising the minimum wage is a children's issue. Over two million 
married couples and almost a million mothers would receive a pay raise 
as a result of our increase. Eighty-five percent of these single 
mothers have total household incomes below $25,000 a year.
  Raising the minimum wage is a civil rights issue. Over two million 
Hispanic workers and almost as many African American workers will 
receive a raise. Together, they make up one-third of those who will 
benefit from the increase.
  Raising the minimum wage is a family issue. The average minimum wage 
worker brings home half the family earnings. Half the benefits of our 
one dollar increase will go to households earning less than $25,000 a 
year. Parents need this raise so they can provide their children with 
food, clothes, and a decent place to live.
  Some of our colleagues who oppose the minimum wage still believe the 
dire ``sky is falling'' predictions of economic disaster that were 
raised before we voted to raise the minimum wage in 1996. None of those 
predictions came true. Since the last increase enacted by Congress, the 
economy has created new jobs at a rate of over 235,000 a month. Job 
creation in the sectors most affected by the minimum wage is up too--
with almost 1.2 million new jobs in the retail sector, and 400,000 new 
jobs in restaurants. Employment is up--and the unemployment rate is 
down--among teenagers, African Americans, Hispanics, and women.
  As Business Week magazine has stated,

       [H]igher minimum wages are supposed to lead to fewer jobs. 
     Not today. In a fast-growth, low-inflation economy, minimum 
     wages raise income, not unemployment. . . . A higher minimum 
     wage can be an engine for upward mobility. When employees 
     become more valuable, employers tend to boost training and 
     install equipment to make them more productive. Higher wages 
     at the bottom often lead to better education for both workers 
     and their children. . . . It is it time to set aside old 
     assumptions about the minimum wage.

  It is time to raise the federal minimum wage. No one who works for a 
living should have to live in poverty. I urge my colleagues to join me 
in raising the minimum wage.


                           Amendment No. 2751

(Purpose: To amend the Fair Labor Standards Act of 1938 to increase the 
                         Federal minimum wage)

  Mr. KENNEDY. Mr. President, I call up amendment No. 2751.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Massachusetts [Mr. Kennedy] proposes an 
     amendment numbered 2751.

  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. KENNEDY. I yield whatever time the leader desires. I understand 
we have a time agreement; am I correct?
  The PRESIDING OFFICER. There are going to be 2 hours evenly divided.
  Mr. KENNEDY. May I inquire again, what is the time agreement? I 
understand there are going to be two amendments--one offered by Senator 
Daschle and one offered by Senator Nickles or Senator Lott. We were 
going to debate both of those this afternoon and vote on them tomorrow. 
Can the Chair tell me how much time we are allocated this afternoon to 
debate the two amendments?
  The PRESIDING OFFICER. There will be 2 hours of time evenly divided 
on each of those two amendments.
  Mr. KENNEDY. For this afternoon.
  The PRESIDING OFFICER. Yes, for this afternoon.
  Mr. KENNEDY. I yield whatever time the leader wants.
  The PRESIDING OFFICER (Ms. Collins). The minority leader.
  Mr. DASCHLE. Madam President, I appreciate the clarification. That 
was the understanding. So there is no confusion, we now have 4 hours of 
debate on the two amendments.

[[Page 28965]]

  I appreciate the opportunity to come to the floor at this point to 
talk about the amendment offered on behalf of our colleagues, but 
really on behalf of the 11 million Americans who will benefit from this 
minimum wage once it is passed into law.
  I thank especially Senator Kennedy for his extraordinary leadership 
and persistence in making sure this issue was addressed prior to the 
end of the first session of this Congress. Were it not for his 
dedication and extraordinary efforts, we would not be here this 
afternoon.
  I also thank Senators Robb and Baucus for the leadership they have 
provided, and I thank many of our colleagues for their strong support 
for this legislation.
  We fought all year long to bring this amendment to the floor because 
low-income working families need and deserve a raise. The average 
American family now works an additional 265 hours a year just to 
maintain the same standard of living they had at the beginning of this 
decade. That is an additional 6 weeks a year. We believe it is time 
parents could be spending attending parent-teacher conferences or 
playing with their children or maybe just reading Harry Potter with 
them. It is time husbands and wives could be talking with each other. 
It is not enough just to talk about family values, we need to show by 
our actions that we value families. We need to raise the minimum wage, 
and we need to do it this year--now.
  I recently met a young father in South Dakota who told me that he and 
his wife eat only one meal a week together, and that is on Sundays 
after church. The rest of the week, his work schedule keeps him away 
from his family because he has more than one job.
  He is one of many workers in this Nation who are working three jobs, 
two of them at minimum wage, just to make ends meet. We can do better 
than that. In this economy, we must do better than that. We are in the 
longest, strongest period of economic recovery in our Nation's history. 
The stock market and worker productivity are both at record highs.
  It has been 3 years since the last time we increased the minimum 
wage, and if we do not pass another increase now, by the end of this 
month the purchasing power of the minimum wage will have fallen to the 
lowest point it has been in 40 years. The real value of the minimum 
wage is now at almost $2.50 below what it was in 1968--$2.50 an hour.
  We are proposing we raise the minimum wage, not by the $2.50 required 
to get back to the parity level of 1968, but $1 an hour over 2 years. 
That is as modest a proposal as anyone can propose. Under it, the 
minimum-wage worker who now works full time would earn only $12,792 a 
year, but it would be $2,000 more than he or she now earns.
  After doing all they could for as long as they could to block any 
increase in the minimum wage, now our Republican colleagues have their 
own proposal. They will raise the minimum wage, but they are saying to 
working families: ``We are not going to let you have it in 2 years. We 
know now you will only be making $12,792, but we want you to wait 3 
years for your raise. But we are for family values, we are for helping 
people get ahead.''
  They want to believe there is not a dime's worth of difference 
between their plan and our plan. That is not so. There are at least 
three major differences.
  First, this 3-year delay is going to cost a typical working family 
$1,200 over 3 years. That is what that delay costs. I know around here 
that does not sound like a lot of money, but to a family trying to 
scrape by on minimum wage, it is 10 percent of a year's income; $1,200 
a year is 3 months' worth of rent. It is 4 months' worth of groceries; 
it is 6 months' worth of utilities; and it is 1 year in tuition and 
fees at a 2-year college.
  So there is a big difference. Do not let anybody say that simply 
waiting another year for that full dollar benefit is a minor matter. We 
are talking rent; we are talking utilities; we are talking groceries. 
It is whether or not in some cases families are going to have two or 
three meals a week together or whether that one meal on Sunday will 
have to do.
  The second difference between our proposal and the Republican 
proposal has to do with the tax cuts. We offer tax cuts. I really do 
not think there is any connection, frankly, between the minimum wage 
and the need for tax cuts. Each ought to be considered in their own 
right.
  I am troubled a little bit about this tendency to want to marry tax 
cuts into something that is important to do in its own right. But I do 
understand the importance of providing meaningful tax relief targeted 
to small businesses. I am for that. And our caucus, and I hope the 
Senate, is for that.
  We offer a tax cut package that will cost $28.5 billion over 10 
years. But the tax breaks the Republican plan entails would cost $75 
billion--over twice as much. It is not just the cost that worries me, 
it is the fact that the Republican tax cuts are not paid for.
  We have heard all of this railing about Social Security trust funds. 
But the Republicans do not seem to be too concerned about Social 
Security when it comes to this tax cut. While they pay for the first 
year, there is absolutely no money for the tax cuts the second through 
the 10th years. What that means is that it is going to have to come out 
of education, other priorities, or even Social Security.
  The third difference between our tax cuts and the Republicans' is 
this: Our tax cuts target small businesses and family farms. The 
Republican tax breaks overwhelmingly benefit those in the top end of 
the income strata.
  A minimum wage increase ought to be able to pass, as I said a moment 
ago, on its own merits. If we are going to include tax cuts, they ought 
to reduce the impact, as marginal as it is, of a minimum wage increase 
on the businesses that will be most affected by it. The Republican 
proposal fails this basic test of fairness, relevance, and fiscal 
responsibility.
  How would the Democratic tax cuts help small businesses and family 
farms?
  First, we lower the cost to small businesses of making investments by 
raising to $25,000 the amount of an investment a business can write off 
immediately. If you make a $25,000 investment, you can write it off in 
the first year and you do not have to wait. That is one way to help 
small businesses.
  They tell me time and again we have to encourage them to reinvest and 
to put more money back into their businesses. There is no better way to 
do that than to say: make an investment and you can expense it 
immediately. We do that.
  Second, we provide a tax cut of up to $4,000 to cover startup costs 
of adopting a pension plan so more small businesses can offer their 
workers pensions. This not only helps businesses, it helps the workers, 
and it helps businesses attract good workers and increases workers' 
retirement security. It is a win-win.
  In this day and age, what business people tell me all through South 
Dakota, as they are attempting to compete for a very limited workforce, 
is that there has to be an incentive to be able to recruit and then 
ultimately to retain good people. There is nothing more important in 
retaining good people than ensuring that in the long term they are not 
only going to have a good income but they are going to have a good 
retirement. This package does it.
  Third, we accelerate the full deductibility of health insurance for 
the self-employed. We have already provided fulldeductibility, and now 
we move it up. We more rapidly incorporate fulldeductibility, so that 
every small business can benefit in providing health insurance in those 
cases when they are self-employed.
  Fourth, our proposal raises the special estate tax exemption for 
family-owned small businesses and farms by $450,000.
  Fifth, we make it easier for farm cooperatives to raise capital.
  Finally, and very importantly, we provide tax relief to farmers who 
are experiencing losses during the current crisis.
  That is how our tax cuts help small businesses and family farms.
  But our proposal also contains tax cuts to help low-income workers. 
We

[[Page 28966]]

extend the successful work opportunity and the welfare-to-work tax 
credits for 5 years. We increase tax incentives for entrepreneurs to 
invest in empowerment zones. First-round empowerment zones have shown 
that wage tax credits are a valuable economic development tool.
  Currently, there are no wage tax credits available for round 2 zones. 
By making these tax credits available, by building on what we know 
works, we can bring new jobs and opportunities to places such as the 
Pine Ridge Reservation empowerment zone in South Dakota and other 
communities that desperately need opportunities like it.
  We also include in our plan the President's new markets tax credit to 
help people in communities that have so far not shared in the country's 
record economic prosperity. The new markets tax credit will encourage 
private capital to flow into equity investments in businesses in these 
areas. Bipartisan support for this proposal is growing, and it is 
extremely fitting to include it in a proposal to raise the minimum 
wage.
  Our tax cut is smart; it is strategic; and I emphasize, it is paid 
for. I especially commend Senators Robb and Baucus for their efforts in 
helping to develop it. As members of the Senate Finance Committee, they 
have done an outstanding job of ensuring that as we look at the array 
of tax tools that would be helpful to workers and small businesses, we 
put the tightest, most targeted, most focused package together. And 
they have done it in this amendment.
  The third difference between our minimum wage plan and the one our 
colleagues are offering is simply this: The President will sign our 
plan. The Republican proposal is absolutely dead on arrival.
  Now, we know we will hear dire warnings from some of our colleagues 
on the other side. They will say raising the minimum wage will actually 
hurt low-income workers because employers will be forced to cut 
minimum-wage jobs.
  We now know that is nonsense. We have study after study that proves 
raising the minimum wage does not kill jobs at all. In fact, since the 
last time we raised the minimum wage--in 1996--American employers have 
created nearly 9 million new jobs. In my State, 17,000 new jobs have 
been created. The national unemployment rate has fallen from 5.2 
percent to just over 4 percent--the lowest jobless rate in 30 years. 
Even the Wall Street Journal and Business Week now say the 1996 
predictions about job losses were wrong.
  Another argument we will surely hear from our friends in the other 
party is that increasing the minimum wage has nothing to do with 
increasing family incomes. They will argue that most minimum-wage 
workers are teenagers who are working part time to pay for cars and CD 
players.
  Again, the facts show otherwise. According to the Bureau of Labor 
Statistics, 70 percent of all minimum-wage workers are 20 years old or 
older; nearly 60 percent are women; and 40 percent are sole 
breadwinners in their families.
  Our economy is the strongest it has been in my lifetime. But behind 
the prosperity, there are still far too many families who are working 
too hard, too long, for too little pay.
  In South Dakota, while many families are moving ahead, too many 
others are being left behind, creating, in effect, two South Dakotas. 
On the surface, South Dakota is fortunate. Our unemployment rate is 2.6 
percent, one of the lowest in the Nation. But in some of our counties, 
unemployment is as high as 7 percent. South Dakota is also the home to 
the poorest community in America, the Pine Ridge Indian Reservation.
  There are good people--hard-working people--all across this country, 
who are struggling to make ends meet on minimum-wage jobs. They need a 
raise. And they are not alone. That is why religious leaders around the 
country today are urging us to raise the minimum wage.
  It is critical that we not miss this opportunity. A job isn't just a 
source of income; it ought to be a source of pride. The U.S. Catholic 
Conference tells us the minimum wage should reflect principles of human 
dignity and economic justice. Unfortunately, today's minimum wage does 
not do that.
  I want to read something that I think probably puts it in perspective 
quite well. This is a quote that is not one of mine, and not one of 
Senator Kennedy's. It is a quote made by former majority leader Bob 
Dole the last time the Congress voted to raise the minimum wage in 
1996. Bob Dole said at the time: ``I never thought the Republican Party 
would stand for squeezing every nickel out of the minimum wage.''
  He was right then. If he were on the floor today, he would be right 
now. If we don't pass a minimum wage increase by the end of next month, 
more inflation will have wiped out the entire increase he was referring 
to in 1996. We cannot allow that to happen. It is time we stopped 
squeezing every last nickel out of the minimum wage. It is time to 
raise the minimum wage the right way, $1 an hour over 2 years, with 
responsible targeted tax cuts to help small business owners and family 
farmers, not an unpaid-for tax windfall for all those who need it the 
least.
  Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. DASCHLE. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DASCHLE. Madam President, I ask unanimous consent that the time I 
have just consumed be taken from my leader time for today.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DASCHLE. I yield the floor.
  Mr. KENNEDY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Madam President, I yield myself 15 minutes.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. KENNEDY. Madam President, it has taken us a long time during this 
Congress to have the opportunity to present a legislative proposal to 
the Senate that would provide an increase in the minimum wage for 
America's workers who are working on the lower rung of the economic 
ladder: 50 cents next year and 50 cents the following year.
  We have tried to bring this before the Senate over the year in a 
number of different forms and shapes. We were unable to do so. Now we 
have the opportunity to debate it this afternoon and to vote on it 
tomorrow. Hopefully, we will have success in passing it.
  It is very clear that its outcome is uncertain because of the fact 
that, rather than having a chance to vote on a freestanding piece of 
legislation that would be considered freely and then considered by the 
House, passed on to the Senate, this will be wrapped into other 
extremely controversial legislation. But we are doing the best that we 
can. We want to give assurances to those Americans who are working at 
the minimum wage that we are going to continue this battle, as we have 
over these past years. We are going to continue the battle next year at 
each and every opportunity, until we have the chance to pass meaningful 
minimum wage legislation. So there should be no doubt in anyone's mind 
that this somehow is going to conclude the debate.
  American workers are entitled to an increase in the minimum wage. We 
are prepared to make their cases. I am absolutely convinced we will be 
successful.
  It is unfortunate we have to try and convince our colleagues on the 
other side on the basis of the merits of this case, but I think it is 
important that we, in a preliminary way, address some of the reasons 
that have been raisedhistorically against the minimum wage.
  First of all, let's look at where we are on the issue of the minimum 
wage. This chart reflects where the minimum wage has been since 1967-
1968. These are real dollars. We see that if the minimum wage today was 
going to have the purchasing power it had in 1968, it would be $7.49, 
not $5.15 an hour. It would be about $2.30 higher than where

[[Page 28967]]

it is today. What we have seen is a gradual decline of the purchasing 
power of the minimum wage. This is so despite the fact that we now have 
the greatest economic prosperity in the history of the country--more 
Americans employed, the greatest stock market, lowest interest rates, 
lowest rates of inflation, lowest unemployment, highest rate of 
employment in the history of the country. Nonetheless, for those 
individuals who are at the lower end of the economic ladder, they are 
slipping further and further and further behind.
  If our amendment does not pass, the purchasing power of the minimum 
wage will continue to decline--to the lowest minimum wage almost in the 
history of the country. Every day that we delay, minimum-wage workers 
fall further behind. If we don't raise the minimum wage by the end of 
this year, it will lose all of the value of the last increase in 1996. 
This is where we are.
  Now, what are we talking about in scope in terms of the minimum wage? 
How large an increase are we talking about? And what will be its impact 
in terms of our total economy? Increasing the minimum wage by a dollar 
is vital to workers, but it is a drop in the bucket of the national 
payroll.
  If you combine their wages and salaries, all Americans earn $4.2 
trillion a year. An increase of $1 in the minimum wage would amount to 
one-fifth of 1 percent in terms of total wages over the country. We 
should not even hear the argument--and I hope we won't--that this 
effort to raise the minimum wage is somehow going to be inflationary. 
We are talking about one-fifth of 1 percent of total wages for those 
who are working 40 hours a week 52 weeks a year. In a moment, I will 
come to that. More of them are working 50 hours a week, trying to play 
by the rules, trying to bring up a family and they are still coming up 
short.
  This is what is happening. We are finding out that those who are on 
the bottom rung of the economic ladder are working hard but still in 
poverty. The annual minimum wage is not even keeping up with the 
poverty line. We are finding more and more workers who are affected by 
this.
  Then, finally, on this phase of the debate, I want to point out the 
employment figures. We find that we have seen, since the increase in 
the minimum wage that we passed in 1996 and 1997, there has still been 
an increase in job growth. This chart shows the increase in 1996, up to 
$4.75, and then to $5.15. Even with these increases we see new jobs 
being created and strong economic growth.
  All of those on the other side of the aisle who made the predictions 
that we are going to lose 300,000 to 400,000 jobs if we pass an 
increase in the minimum wage were wrong. To the contrary, we have seen 
an expansion of job opportunities. Since the last increase was enacted 
by Congress, the economy has created new jobs at a rate of 235,000 a 
month. That addresses, I hope, the economic reasons for not having an 
increase in the minimum wage.
  Let's take a moment and think about who these people are--who are the 
minimum-wage workers? This has to be enormously distressing to all 
Americans because there is no group of Americans that is working harder 
and slipping further behind than women in our society. Almost 60 
percent of minimum wage workers are women. 7 million women across the 
nation--12.6 percent of all working women--would benefit from this 
increase.
  And working fathers are being affected too. We know now that employed 
fathers with children under 18 work longer hours, averaging 50 hours a 
week. That is well over the average work time for those tens of 
millions of Americans who go to work at 40 hours a week, and they get 
overtime. The average for fathers with children under 18 is 50 hours a 
week. Fathers' total work time has increased by 3 hours in the past 20 
years, and mothers' total work time has increased by 5 hours.
  Almost one-half, 45 percent of the workers, report having to work 
overtime with little or no notice. One in five is asked to work 
overtime 4 or more days a week, with little or no notice. What does 
that mean to the families? Here they are working at minimum wage, they 
may have one job, but they probably two jobs, trying to make ends meet, 
already working 50 hours a week. Then they are told, without warning, 
they have to work overtime, which may disrupt their other employment. 
With the number of hours at each job, especially with the addition of 
overtime, we are seeing increasing numbers of mothers and fathers 
forced to spend more and more time away from their children.
  According to a 1999 Council of Economic Advisors study, families are 
suffering. The study says that parents have, on average, experienced a 
decrease of 22 hours per week available to spend time with their 
children. That is what this minimum wage is all about--parents having 
less time to spend with their children. I hope we are not going to hear 
a lot of speeches out here about the importance of family values by 
those who vote against this increase. Twenty-two hours per week less--
that is what is available for parents to spend time with their 
children. A decrease has happened and if we really care about families 
we need to change that.
  Another factor, in addition to parents having less time to spend with 
their children, is the increasing shift work. Shift work is growing 
fastest in the service sector, which is heavily reliant on women 
workers. According to the study by Harriet Presser at the University of 
Maryland, 70 percent of the fastest growing occupations in the United 
States have a disproportionate number of female employees and require 
more than 40 percent of their workers to put in nonstandard hours.
  Here we are finding out about who is being targeted. It is women. And 
for what? Nonstandard hours and overtime. At a crucial point in their 
lives when they are trying to bring up children and be there for them, 
we find out they are working harder, working longer, and they are 
making less. Two-thirds of the workers would like to work fewer hours--
almost 20 percent more than 5 years ago. But most of those workers 
believe they can't cut back on hours because they need the money--46 
percent. These 20 percent of workers, might be able to work fewer hours 
if the minimum wage were increased.
  Another recent study, ``Working Hard, But Staying Poor,'' notes that 
working poor are predominantly hourly employees, and 71 percent have 
little paid vacation; 48 percent have no paid vacation at all--none, 
none. And 18 percent have a week or less. Madam President, 70 percent 
of those making the minimum wage have virtually no vacation, or less 
than a week of paid vacation.
  We can't give them an increase of 50 cents an hour? No. Even though 
we have just voted ourselves $4,600 a year, we are not going to vote 
for them 50 cents more an hour next year. No. This is what is happening 
to these families. This is what is happening to these fathers and 
mothers. This is what is happening to these children. And we say, oh, 
we can afford $4,600 a year for Members of Congress and the Senate, but 
we can't do something about mothers and fathers who are increasingly 
taken away from their children in order to make ends meet.
  That is what this issue is about when you come right down to it. We 
say: Wait a minute here. Where is productivity in all of this? In the 
last 10 years we have seen a 12-percent increase in productivity for 
workers in the United States, but only a 1.9 percent pay increase to 
match. That includes the highest increases by workers in the country, 
not the minimum wage. That is what has happened, a 1.9-percent 
increase. We have seen a 29-percent increase in productivity since 
1973, and the minimum wage hasn't even kept up with it. What is going 
on here? No unemployment, no inflation, productivity going up through 
the roof, and we give ourselves $4,600, and Republicans oppose 50 cents 
more an hour increase in the minimum wage.
  And are Americans really working? There are no workers in the world--
none in the world--who are working longer and harder than 
Americanworkers today. Japan works 54 hours less a year; the Canadians, 
215;

[[Page 28968]]

the British, 221; the French, 314; the Germans, 389. Every other 
industrial nation in the world is working less.
  The Americans, at the lowest end, are working longer and harder 
trying to make ends meet, with no kinds of health insurance programs, 
no paid vacations, and they are being jammed with increases in overtime 
without notification, and they are trying to provide for their 
children. What happens?
  I will tell you what happens. Today, we have the new census figures 
that are just out, and they are very interesting. The latest census 
figures show that the percentage of working poor--12.6 percent--is at 
its highest point in 20 years. That's right, at a time when our country 
is so strong economically we have the highest number of working poor in 
20 years--the highest number of working poor. You can look at those 
figures and say, well, the median income for lower income families has 
gone up. OK. I am talking about those individuals who are getting the 
minimum wage. More of them are working in poverty than at any other 
time. More of them are working, and working for less, than at any other 
time. More of them are falling further behind than at any other time.
  What do we have to prove? What is there to prove? I can tell you 
this. If you look back on the movement from welfare to work, you will 
find that every economist virtually agrees that one of the principal 
reasons for movement from welfare to work was the increase in the 
minimum wage. About 700,000 of those moved from welfare to work because 
of the minimum wage. With this additional increase of a dollar, from 
every estimate, from 200,000 to 300,000 more will move from welfare to 
work. They value work. People want to work. They did when we increased 
it last time and I think they'll do it again.
  What does it mean for the taxpayer? It is beneficial to the taxpayer. 
Why? You will find if you pay more in the minimum wage, you have fewer 
people who qualify for support programs. That makes sense. Fewer will 
be qualified for food stamps, fuel assistance programs, and other kinds 
of support programs. And it will save taxpayers billions of dollars. So 
it is difficult for me to understand the opposition we are receiving.
  In the Democratic proposal, we added a small program, but an 
important one, that primarily helps working families in the tax program 
in terms of pensions and some other matters. But we have, on the 
opposition--and I will come to this later when we will have some time 
to talk about our Republican friends on the other side--they say don't 
give them a dollar in the next 2 years; they are not worth it. They are 
worth a dollar over 3 years, but we are worth $4,600 more a year. We 
are not going to spread our pay increase out, but we are going to 
spread out the increase for those at the lowest end of the economic 
ladder. That is the Republican leadership position.
  Now, the American people must wonder what in the world is going on 
when the Senate and House are trying to get together with the President 
on this budget, and we are talking about spending Social Security, and 
we have before us in the Senate a tax break for $75 billion over the 
next 10 years. Where are we getting all that money? I hope they have 
given up this argument that, ``Well, look out for the Democrats because 
they are going to spend Social Security.'' There is $75 billion in the 
Republican program that is unpaid for.
  As I mentioned, I think the compelling reason is the fact that these 
are men and women who are hard-working. They are child care and health 
care workers who we entrust with the care of our loved ones every day. 
They clean out the buildings of American industry and factories every 
single night.
  This is a women's issue because the great majority of the minimum-
wage workers are women. It is a children's issue because whether those 
mothers and fathers are going to make a decent wage is going to affect 
those children. They worry that they are not going to have warm homes 
in the winter and enough to eat, which we know they don't have. We know 
what the Second Harvest reports are about--the number of families 
working and not making a livable wage are going out to the food 
pantries all across this country. That is why the mayors--Republican 
and Democrat alike --support our increase. It is a women's issue, a 
children's issue, and a civil rights issue because many of these men 
and women are people of color. And most of all, it is a fairness issue.
  How in the world does the Republican leadership go home to their 
communities and say we voted for a $4,600 pay increase and against your 
minimum wage?
  I hope every citizen will ask their Members of the Senate when we 
adjourn--whenever that may be, that particular issue is still in 
question--why a Member's salary is more important than theirs.
  Others desire to speak. I see my friend from Minnesota. How much time 
does he require?
  Mr. WELLSTONE. Madam President, I think I will speak for 10 minutes. 
But I think it will be less because I want the Senator to have a chance 
to respond to the Republican arguments.
  Mr. KENNEDY. The Senator can have 10 minutes.
  Mr. WELLSTONE. I thank the Senator.
  The PRESIDING OFFICER. The Senator from Minnesota is recognized.
  Mr. WELLSTONE. Madam President, first of all, let me say in a very 
personal way that when I was teaching and hoping to become a Senator, 
this is what I imagined it would be. I could come to the floor of the 
Senate and support an amendment introduced by Senator Kennedy, that I 
would be lucky enough to have Dale Bumpers' desk and be able to sit 
next to Senator Kennedy and come out here and fight for what I think is 
just elementary economic justice. I am very proud to rise to speak in 
behalf of this amendment.
  On behalf of 176,000 Minnesotans who would be helped by this, much 
less the workers and their children--there would be many more 
citizens--I thank him. On behalf of another 11 million-plus workers in 
the country who would benefit from this $1 raise over 2 years, I thank 
him.
  I say to all of my colleagues--Democrats but especially Republicans 
on the other side of the aisle--wherever I have traveled in our 
country--I start with my State of Minnesota--no matter where it is in 
Minnesota, in the city, or in rural areas, or in the suburbs, or 
whether it is the Deep South, whether it is L.A., East L.A. or Watts, 
or whether it is, inner-city Baltimore, or whether it is rural 
Minnesota--the one thing that people come up and say over and over 
again more than anything else is: We want to be able to have a job at a 
decent wage so we can support our families, so our children can have 
the care we know they need and deserve.
  When I went to visit the part of the country where my wife Sheila and 
her family come from, Appalachia, Harlan County, it was the same thing. 
That is what people want to be able to have --a living-wage job, to be 
able to earn enough of an income so they can support their children, so 
they can do right by their children. That is what this amendment is all 
about. To talk about raising the minimum wage from $5.15 an hour to 
$6.15 an hour over 2 years so we don't lose what we gained in 1997 is a 
matter of elementary justice.
  I heard Senator Kennedy say this. I guess I need to emphasize this 
one or two times myself. I don't know how Senators or Representatives 
can vote for a $4,600 increase for ourselves when we are already making 
$130,000-plus a year and say we need this because we have children who 
are in college and because we need to make sure we have enough money to 
cover expenses and then turn around and vote against a $1 increase over 
2 years from $5.15 an hour to $6.15 an hour.
  Our economy is booming. In many ways we are doing well. But the fact 
is that I still think, using Michael Harrington's term--the Senator 
from Massachusetts will remember that book--we still have ``two 
America's.'' We have one America with greater access for all the things 
that make life richer in possibilities and we have another America

[[Page 28969]]

that still struggles to make ends meet. Rising tides lift all boats. 
But in some ways, we haven't been growing together. We have been 
growing apart.
  A minimum-wage worker now makes $5.15 an hour. The average CEO in our 
country makes $5,100 an hour.
  Let me say to every Senator that this is matter of elementary 
justice. This is, as Senator Kennedy said, a family value issue. It 
makes a huge difference, if you are able to make an additional $3,000-
plus a year because of this increase in the minimum wage. That means 
you will be able to pay your utility bills, and you do not have to 
worry about being shut off. It means your children will be warm as 
opposed to cold in a cold winter in Minnesota or in Maine, Madam 
President. It means you will be able to buy clothing for your children. 
It means you can afford your rent.
  I hope and I pray it will mean we will not have so many women and so 
many children in our homeless shelters with 40 percent of these 
families having the head of the household working full time--people who 
work 52 weeks a year, 40 hours a week, and they are still poor in 
America because they don't make enough of a wage to support themselves 
and their families.
  This is a family value issue. I don't know of any issue before the 
Senate and I don't know of any debate that we have had in the Senate 
that speaks more loudly and clearly to family values.
  Colleagues, Republicans included, vote for this Kennedy amendment if 
you want to support your children. Vote for this Kennedy amendment if 
you want to support families. Vote for this Kennedy amendment if you 
want to support hard-working people who shouldn't be poor in America. 
Vote for this amendment if you want to support women. Too many women 
are the ones who are working full time and still don't make a living 
wage. This is a matter of justice. There is a matter of family values. 
This is a matter of doing the right thing. I hope we will have a 
majority vote for this amendment.
  Finally, I will admit it. I will make a blatant political point.
  I don't know how in the world anybody in this Chamber can vote a 
$4,600 salary increase for himself or herself saying we have to have 
this to make ends meet--and that is from the $130,000 salary at the 
beginning--and say no, no; we can't vote for people to have the chance 
to make enough of a wage so they can do a little better for themselves 
and, more importantly, a little better for their children.
  Mr. President, $5.15 an hour to $6.15 an hour, a $1 increase, 50 
cents a year over 2 years ought to pass with 100 votes.
  I yield the floor.
  Mr. KENNEDY. Madam President, will the Senator yield for a question?
  Is the Senator familiar with this study by the Family Work Institute? 
They had an interview with the children of minimum-wage workers. Here 
are three of the top four things children would like to change about 
the working parents and the concern about being with their parents. 
They wish their parents were less stressed out by work, less tired 
because of work, and could spend more time with them.
  The kids are right. The parents have less chance to spend time with 
them. They are working longer. They are working harder. They have less 
time to spend with their children. The children are crying out for 
help, assistance, and for understanding.
  This isn't going to solve all of their problems. But this minimum 
will put $2,000 into the family income, and it would give those parents 
time to spend with their children, perhaps buy a Christmas present or a 
birthday present, and permit them to share some additional quality 
time.
  I was wondering if that kind of response from the children of 
minimum-wage workers surprised the Senator from Minnesota. He has spent 
a great deal of time traveling this country and talking to needy 
families.
  Mr. WELLSTONE. Madam President, I thank the Senator for his question. 
I wish I had emphasized that more, I say to the Senator. I can think of 
so many poignant conversations with people in which they were saying: 
Given the wages we make, every last hour we can work, we work. We have 
no other choice because that is the only way we can put food on the 
table. However, it means we have very little time to spend with our 
children. It is not what we want. It is not the way we want it to be.
  I think this is so important for families.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Hawaii is recognized for 7 
minutes.
  Mr. AKAKA. Mr. President, I rise in support of the amendment to raise 
the minimum wage.
  My colleagues, the case for an increase in the minimum wage is clear. 
America has enjoyed eight and one-half years of economic expansion. The 
economic boom that began in March 1999 is now the longest peacetime 
expansion in American history.
  However, the rising tide of economic development has not lifted the 
boats of millions of American workers. Millions of Americans earning 
the minimum wage are rapidly becoming a permanent underclass in our 
society. This amendment is a big step forward for millions who are 
struggling to feed and raise a family, and rent decent housing, while 
earning the minimum wage.
  At the same time that our economy is expanding, the distribution of 
income is becoming more and more unequal. As the charts prepared by the 
Senator from Massachusetts make clear, the earnings of average 
Americans have grown little, and the overall distribution of income has 
become increasingly unequal. Whether you examine the trend of U.S. 
income distribution or compare the wages of U.S. workers to those in 
other industrialized countries, the result is clear: the wages of the 
average American worker are stagnating.
  While I thank the Senator from Massachusetts for championing this 
amendment, I am also grateful that his amendment extends the minimum 
wage to the only U.S. territory where minimum wage is not governed by 
Federal law. I am speaking of the Commonwealth of the Northern Mariana 
Islands.
  For my colleagues who are not familiar with this territory, the 
Commonwealth of the Northern Mariana Islands is located 4,000 miles 
west of Hawaii. In 1975, the people of the CNMI voted for political 
union with the United States. Today, the CNMI flies the flag of the 
United States as a U.S. territory.
  In 1976, Congress gave U.S. citizenship to residents of the CNMI. At 
the same time, however, Congress exempted the Commonwealth from the 
minimum wage provisions of the Fair Labor Standards Act. As we now 
know, that omission was a grave error. Today's amendment will correct 
that longstanding mistake.
  The CNMI section of this amendment stands for the simple proposition 
that America is one country and that the U.S. minimum wage--whatever 
amount it may be--should be uniform. Common sense dictates that our 
country must have a single, national law on minimum wage.
  Throughout the United States, Federal law requires that minimum wage 
workers be paid $5.15 per hour--everywhere, that is, except the 
Commonwealth of the Northern Mariana Islands. In the CNMI, the minimum 
wage is $3.15 per hour, 40 percent less than the U.S. minimum wage.
  You would have to go back twenty years, to January 1980, to find a 
time when the statutory minimum wage was that low in the United States. 
Today, workers in the CNMI are being paid wages that are 20 years 
behind the times. And the numbers I have cited do not account for the 
effect of inflation.
  Once you adjust the CNMI minimum wage for inflation, you would have 
to go back to the 1930s--the Depression years--to find a time when the 
wages of American workers had the same buying power as minimum wage 
workers in the CNMI today. Adjusted for inflation, the minimum wage in 
the CNMI--which I remind my colleagues is U.S. soil--is the equivalent 
of less than ten cents an hour. Ten cents an hour! You can't even buy a 
pencil for 10

[[Page 28970]]

cents. Adjusted for inflation, the minimum wage in this territory is 60 
years out of date.
  This situation is a disgrace. In Guam, ninety miles from the CNMI, 
they have been paying the minimum wage since 1950. It's time to end 
this embarrassment and reform the minimum wage in the Commonwealth of 
the Northern Mariana Islands. That's one of the important things that 
this amendment would do.
  I yield the floor.
  Mr. KENNEDY. I yield 10 minutes to the Senator from Rhode Island.
  Mr. REED. Mr. President, I rise as a strong and proud supporter of 
Senator Kennedy's amendment to raise theminimum wage one dollar over 2 
years. I commend Senator Kennedy not only for his leadership today but 
for his attention to the needs of working Americans throughout his 
career in the Senate.
  Today we are debating, and I hope soon adopting, legislation to 
address an issue vital to America's working families. The amendment 
before us calls for a 50-cent increase in the minimum wage in January 
of 2000, with another 50-cent increase in January of 2001. So in a 2-
year period we would increase the minimum wage from $5.15 to $6.15.
  This minimum wage increase is a necessity for many individuals 
participating in today's workforce, particularly those moving from 
welfare to work. Among the rationales behind welfare reform was that 
everyone who is able to work should work and that a job should offer a 
sustainable income. Unless we have a living minimum wage, a minimum 
wage that can support a family, a minimum wage that can allow a family 
to meet its basic needs, then it is something of a cruel hoax to force 
people into the workforce, knowing that they will not be able to 
support themselves on their income alone.
  Our economy has been performing remarkably well since the last 
increase in the minimum wage in 1996. A record 8.7 million jobs have 
been created. We all recall when we were debating the minimum wage that 
year, one of the most persistent objections was that the increase would 
kill job growth; it would prevent our economy from continuing to grow. 
The reality is that we are in the midst of a period of record economic 
expansion during which a large number of new jobs have been created.
  Increasing the minimum wage is not something that is going to hamper 
our economy. It will enable working families to provide for their 
families. Moreover, economic factors dictate that if we don't increase 
the minimum wage now, the modest growth in inflation will wipe out the 
gains of the 1996 increase. Indeed, the minimum wage is in danger of 
dropping below its pre-1996 level in real dollars if we do not pass 
this amendment.
  I believe other economic factors dictate that we increase the minimum 
wage. As we look at this economy, we are discovering fantastic growth 
in many quarters, but we also see that the incomes of the poorest 
Americans are not growing as fast as they have grown in the past.
  Between 1950 and 1978, income growth for the lowest earners grew 
proportionally more than any other income level. What has happened 
recently, because of our new information society, because of new 
technology, because of a booming stock market, the wealthiest Americans 
are increasing their incomes substantially. In fact, the wealthiest one 
percent of Americans, doubled their incomes between 1977 and 1999. In 
sharp contrast, the poorest 20 percent of Americans actually saw their 
incomes fall by 9 percent between 1977 to 1999.
  There are some things that we can do to begin to reverse this trend, 
to ensure that every part of our American family participates in our 
country's economic success. The first step is to increase the minimum 
wage.
  The reality is that today, workers making the minimum wage--heads of 
households, single heads of households with a full-time job--earn about 
$10,700. That is about $2,500 below the poverty level for a family of 
three. So essentially, what we are telling workers who are going into 
the workforce with minimum-wage jobs, is that they will not be able to 
get out of poverty. That I believe is wrong. If someone is going to go 
into the workforce, work 40 hours a week, and try to raise a family, 
they should at least be able to make enough money to live above the 
poverty line.
  The other issue that has often been raised with respect to the 
minimum wage is that, really, this is just a benefit for kids, that 
kids are the only group of people who have minimum-wage jobs. They are 
the people working at the fast food restaurants and performing other 
minimum wage jobs. This is not the truth. Statistics show that 70 
percent of minimum-wage earners are adults over 20 years of age. They 
also show that 46 percent of these minimum-wage workers have full-time 
jobs and that 59 percent are women.
  This correlates closely with the startling statistics we have seen 
with respect to children and poverty. Frankly, one of the most 
disturbing statistics is the growth in the number of children living in 
poverty. Typically, these children are in single-parent households led 
by women. Since 59 percent of minimum-wage earners are women and 40 
percent of minimum-wage earners are the sole breadwinners of their 
family, these problems seem to be directly connected.
  One of the great shames of this Nation, at a time when we are 
recording robust growth in the stock markets, at a time when we are 
seeing extraordinary development in our economy, is that one in five 
children still live in poverty in the United States; that 12 percent of 
American households cannot meet their basic nutritional needs some part 
of the year; that 39 percent of the families who turn to food banks for 
assistance have one adult member who holds a job. These are working 
Americans, but their wages are so low they cannot feed their families 
and their children live in poverty. We can do better than this in our 
great country. The first way to do better is to support this increase 
in the minimum wage proposed by Senator Kennedy.
  The reality is that having a job today does not mean you are going to 
be above the poverty level. Having a minimum-wage job frequently 
guarantees you are below the poverty level. At this time in our 
history, with such economic progress, with the vista of a new century 
before us, with the information age bursting upon us, we should be able 
to guarantee if a person works 40 hours a week, that person should be 
able to raise a family above the poverty level.
  This proposal for a minimum wage seems only to be controversial here 
in the Senate. If you go back to Rhode Island and ask people what they 
think, they think the minimum wage should go up. They recognize and 
understand how hard it is to support their own families. They know if 
they had a minimum-wage job, it would be close to impossible to do 
that.
  Indeed, there was a survey done by the Jerome Levy Economic Institute 
which showed that 87 percent of small businesses thatwere contacted and 
asked about increasing the minimum wage thought that they could absorb 
this modest cost. That is up from 79 percent just a year ago. So even 
small business believes raising the minimum wage is appropriate. That 
might be a direct reflection of the fact that many states have already 
raised the minimum wage above the federal level. Indeed, in many parts 
of the country with the highest minimum wages, there is a persistent 
shortage of labor. In fact, businesses are bidding for workers at 
levels above the minimum wage.
  We are really talking about protecting the most vulnerable workers in 
our economy, those without the power to negotiate higher wages, those 
in areas of economic activity that do not require high skill levels, 
and therefore can be easily replaced. These are the people for whom we 
should have a special concern, these are the people we should help move 
up out of poverty, not by a handout but by simply rewarding the value 
of each hour they work.
  Business Week, a magazine that is not traditionally a strong 
proponent of prolabor sentiments, had this to say:

       It is time to set aside the old assumptions about the 
     minimum wage. . . . We don't

[[Page 28971]]

     know how high the minimum wage can rise until it hurts the 
     demand for labor. But with the real minimum wage no higher 
     than it was under President Reagan, we can afford to take 
     prudent risks.

  Frankly, this is not a risk, it is a prudent investment in the 
workers of America. My own paper, the Providence Journal, adds:

       An increase to $6.15 would help take a nick out of poverty 
     and provide a more solid base for . . . economic expansion. 
     Congress ought to do it.

  I ask unanimous consent to have this Providence Journal editorial 
printed at the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. REED. I agree with the Providence Journal. It is about time 
Congress acted. It is about time we took a nick out of poverty. It is 
about time we invested in working families and gave them, through their 
own efforts, theresources to raise their families, to raise them up out 
of poverty. We must give new hope to families who are working very hard 
in this economy to raise children, to move forward and seize the 
opportunity at the heart of the American dream.
  I again commend Senator Kennedy for his great efforts, not just 
today, but for so many days on the floor, fighting for working 
families, fighting for economic justice for all our citizens.
  I yield the floor.

                               Exhibit 1

                         Raise the Minimum wage

       A proposal in Congress to raise the minimum wage, now $5.15 
     an hour, by two increments of 50 cents each over the next two 
     years seems reasonable. This would still leave those 
     subsisting on these wages well below the federal poverty 
     level, but it would at least bring them some modest relief. 
     (The debate comes, by the way, as Congress voted itself an 
     average $4,600 raise.)
       The argument is sometimes made that to raise the minimum 
     wage would reduce employment by raising employers' costs. We 
     see little indication over the past few years that the move 
     would shrink employment. For that matter, increasing the 
     minimum wage, by widening purchasing power, could 
     substantially help the economy and boost employment over the 
     long run.
       It should also be noted that higher wages often mean 
     greater loyalty and effort on the part of employees. Thus, 
     whatever the increment of a higher minimum wage, that costs 
     could be more than offset by higher revenue and profits from 
     increased productivity and reduced turnover, hiring and 
     training costs.
       It is interesting that in many states with the highest 
     state minimum wages, such as Massachusetts (now at $5.25 and 
     to be raised to $6.75 in two 75-cent increments over the next 
     two years), there are serious labor shortages. Recent 
     increases in those states' minimum wages have not brought 
     about price rises or layoffs, so far as such things can be 
     measured.
       But then, consider that the purchasing power of the current 
     minimum wage is about $2 less that of the minimum wage in 
     1968 (when the jobless rate was also very low). Further, it 
     should be noted that more than 70 percent of American workers 
     receiving the minimum wage are over age 25 or not longer in 
     school.
       An increase to $6.15 would help take a nick out of poverty 
     and provide a more solid base for the economic expansion. 
     Congress ought to do it.

  Mr. KENNEDY. Madam President, I see the Senator from North Dakota on 
the floor. I yield him 7 minutes.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized 
for 7 minutes.
  Mr. DORGAN. Madam President, we are here debating the question of the 
minimum wage: Should the minimum wage be increased? We are talking 
about people at the bottom of the economic ladder in this country, 
people who work hard, who do not ask for much. They do not have stock 
in the stock market. They have not, by and large, been blessed with 
substantial increases in income by a growing economy. In many cases, 
they have been losing ground.
  I know when we talk about the minimum wage, we tend to talk about it 
in terms of statistics, tables and charts. I have met repeatedly over 
the years with people who have had difficulty, who are trying to get 
back into the labor market, who are working at minimum-wage jobs. I 
recall one such meeting in my office in Fargo, ND, with probably a half 
dozen young women who were struggling to get off the welfare roll and 
get on a payroll and earn a living, to get some training and move into 
the job force again.
  All of them told me the same story of the difficulty of making ends 
meet on a minimum wage paycheck. They shared with me how hard it was to 
balance a checkbook on minimum wage--meeting the monthly bills like 
child care, rent, a car payment, let alone trying to find a few dollars 
to buy a Christmas present for the kids.
  The story is always the same. Those stories come to you from people 
who are trying very hard. Most of them tell those stories with tears in 
their eyes. It is the case here in Congress that the halls are not full 
today of interest groups who are well organized, who have hired some 
very skilled people to lobby on their behalf for this kind of 
legislative change. For people at the lower end of the economic ladder, 
there are not halls full of well-paid lobbyists and others pushing for 
this change. They are largely the voiceless in our society who do not 
have the capability to influence legislative events quite as easily as 
some other very important interests in this country do. But that should 
not persuade anybody that this interest is not important.
  It is very important for our country, especially in a circumstance 
where the economy is growing. All the signs are that our country is 
doing well. The stock market is doing very well. Unemployment is at a 
30 year low.
  It is important for us also to understand there are families 
struggling on minimum wage trying to make ends meet. The fact is, the 
purchasing power value of that minimum wage has diminished 
dramatically. It is about $2.50 below the purchasing power value in 
1968.
  None of us in this room are working for minimum wage. No one. So none 
of us have experienced what it is like to put in 40 or 45 hours this 
week and be paid minimum wage and then try to make a car payment, pay 
rent, buy food for the kids, and make ends meet. We cannot do that. No 
one in this Chamber would volunteer to do that, I expect. But there are 
a lot of people trying to do that because they want to pay their way. 
They want a decent job; they want an opportunity. They want to work.
  That is why it is important in this circumstance for us to increase 
the minimum wage. Its purchasing power diminishes over time because of 
inflation. The value of the minimum wage has decreased for a lot of 
these families. Many of us know that poverty in this country is 
increasingly poverty of a single woman trying to raise a family. Many 
of us have met with those folks in our offices and elsewhere telling us 
the difficulties they are having.
  In many ways, it is hopeful that both sides of the political aisle in 
this Chamber are talking about increasing the minimum wage. This is an 
important subject. We are both talking about this subject now in a 
serious way, and that is good. It ought to give hope to those at the 
bottom of the economic ladder who are trying very hard to make ends 
meet and have difficulty doing it on today's minimum wage.
  There is a difference between the proposals. The minimum wage we are 
proposing will provide a minimum wage increase on January 1, 2000. The 
alternative plan will not.
  We provide a $1 increase in the minimum wage over 2 years. The GOP 
plan does not.
  We protect overtime compensation for 73 million working Americans who 
are entitled to it. The GOP does not.
  We offset the full cost of the tax cuts, and there are some tax 
incentives and cuts in this proposal to help businesses that will 
confront some additional costs. We fully offset ours. The competing 
plan is mostly unpaid for.
  We can go on down the list. We extend the welfare-to-work credit. The 
other plan does not.
  We provide a work-site child care tax credit. The GOP plan does not.
  We provide wage tax credits for small businesses located in the 
empowerment zone which, incidentally, is very important in our part of 
the country. These are zones, especially the empowerment zone in my 
State, which have as a criteria the outmigration of people. People who 
have left. This is not unemployment and poverty. That is one sign of 
economic distress. The other sign is

[[Page 28972]]

a rural county that has lost half its population. People cannot find 
work, so they leave, and the county shrinks like a prune.
  Empowerment zones create jobs and restore economic vitality and 
health in those areas. We include that in our proposal, but the GOP 
plan does not.
  These are interesting and important differences between the two 
plans. I say this: At least we are on the right subject.
  The Senator from Massachusetts has worked tirelessly on behalf of 
those at the bottom of the economic ladder who are struggling hard and 
valiantly trying to make ends meet. By proposing this minimum wage 
increase which, in my judgment, is long overdue, the Senator from 
Massachusetts does a real service. I hope at the end of this debate we 
will be able to adopt the Senator's amendment, and I hope those who are 
working on minimum wage struggling to care for their families and 
create a future for themselves, on January 1 will be able to say: Yes, 
Congress did something that will help me and my family as well.
  Madam President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Madam President, I understand I have 8 minutes 
remaining.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. KENNEDY. The Senator from Virginia asked for 10 minutes. I ask 
unanimous consent that I have 2 additional minutes and yield 10 minutes 
to him.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator from Virginia is recognized.
  Mr. ROBB. Madam President, on Friday, November 5, Senator Baucus and 
I introduced the Small Business Tax Reduction Act of 1999. We drafted 
this legislation to complement Senator Kennedy's minimum wage 
amendment, and under the unanimous consent agreement, it was 
incorporated into that amendment which is now pending.
  The Small Business Tax Reduction Act of 1999 is targeted to provide 
tax relief for those employers who will be most affected by the minimum 
wage increase, even more than the proposal to be offered by the other 
side of the aisle.
  Our package adheres to two principles that had to be reconciled: 
First, that tax relief should be provided to those who need it most; 
and, second, that any tax relief package be fiscally responsible.
  To make sure that our package benefited those who need it most, we 
focused primarily on small businesses, those most likely to experience 
higher costs as a result of an increased minimum wage.
  To make sure the package was fiscally responsible, we used true 
offsets, not the surplus, to pay for it. In this way, we have remained 
true to both principles: This is a good tax package; it is a 
responsible tax package.
  Admittedly, deciding what provisions to include in such a bill 
required some compromises. In almost all cases, I have sponsored, or 
cosponsored, legislation that would go beyond the tax relief in many of 
the areas addressed by our bill. I will continue my efforts to move on 
these broader provisions.
  However, our commitment to paying for the tax bill and not either 
borrowing from our parents by using the Social Security trust fund or 
borrowing from our children by increasing our debt burden, precluded us 
from doing more at this time.
  In some respects, our tax package is similar to the Republican 
proposal. For example, both packages accelerate the 100-percent 
deduction for self-employed health insurance; both packages increase 
section 179 expensing for small businesses; both packages extend the 
work opportunity tax credit; and both packages raise the business meals 
deduction from 50 percent to 60 percent.
  But in other ways, our packages are quite different. For instance, we 
have included in our amendment some estate tax relief for small family-
owned farms and businesses. Inflation has left the current exemption 
simply insufficient to give adequate relief to farmers and small 
business owners. This is one of the areas where we clearly need to do 
more, but some relief is better than none.
  We have included provisions targeted to geographic areas with the 
greatest need for economic assistance. The new markets proposal, for 
example, would reward employers who operate in economically distressed 
areas where the minimum wage is the most prevalent.
  There is also a credit that encourages employers to give lower income 
employees information technology training so we can begin to close the 
so-called digital divide. I was at an announcement this morning that 
will also make a major step in that direction.
  We also expand current empowerment zone credits so more communities 
and more people are able to take advantage of these credits. The 
empowerment zone credit provides a dual benefit. It helps those who may 
not yet be reaping the benefits of our expanding economy, and it helps 
revitalize our cities which, over the long term, may be our best tool 
for reducing the pressures that lead to suburban sprawl.
  Another area we devoted our attention to is retirement security. 
Increasingly, people are apprehensive about their retirement. Many 
small businesses are struggling to provide retirement security for 
their employees.
  The pension provisions in our bill are designed to address the needs 
of these small employers who are trying to develop effective retirement 
plans for their employees.
  For example, we would allow small businesses to borrow from their 
plans, just as large businesses can, and we have included Senator 
Baucus' proposal to provide a credit for new small business pension 
plans. Everyone benefits when small businesses are better able to offer 
their employees retirement plans.
  Finally, we need to help our communities meet their increasing demand 
for new and upgraded schools. Across the Nation, there are pent-up 
needs for new schools to make room for smaller classes, for schools 
that have access to the latest technology, for schools that have decent 
heating and plumbing and leak-proof roofs.
  To help meet those needs, we have included a provision to help 
communities modernize their public schools. In this bill, we propose 
extending the Qualified Zone Academy Bond Program, or QZABs, for an 
additional year. This program helps with school modernization efforts 
and deserves to be extended.
  Again, this effort is important, but we need to do much more. While 
we could not squeeze more on school construction into this vehicle, I 
am determined to find one that is large enough to accommodate our 
Nation's schoolchildren, who, frankly, deserve better than what they 
have gotten from Congress this year.
  Let me close by reiterating why we decided to pay for this bill and 
not just take the money from the surplus.
  First of all, I believe both sides understand we made a bipartisan 
commitment to stop dipping into the Social Security surplus to pay for 
current spending outside Social Security. Honoring this commitment is 
important both to maintain pressure for fiscal discipline and to 
prevent further cynicism about the way the Federal Government operates.
  As for the non-Social Security surplus, we believe our first priority 
should be paying down the over $5 trillion debt we have accumulated by 
failing to exercise fiscal discipline in the past. The need to keep up 
the pressure for fiscal responsibility is clear.
  Congress has been breaking the spending caps at breakneck speed. CBO 
recently advised us, not only had we already spent the small surplus 
expected for fiscal year 2000, we are already $17 billion in the red 
for the next fiscal year. Until we can agree on a comprehensive package 
that balances our spending, tax relief, and debt reduction priorities, 
we should pay for the spending and the tax cutting we propose and not 
take the easy route of spending the surpluses that may or may not 
actually materialize.
  If we do not put the brakes on piecemeal tax cuts now, we could 
easily face a runaway train of politically popular

[[Page 28973]]

proposals that are not likely to be in the best long-term interests of 
the Nation. When we are ready to put everything on the table and 
consider the various priorities--such as using the surplus to pay down 
the debt--we can engage in that discussion. Until then, we should focus 
on achieving the current objective, which is to assist employers, 
particularly small employers, who may be adversely affected by the 
minimum wage increase.
  In short, this tax package accomplishes its purpose of providing 
relief to those employers who are most likely to have higher costs when 
the minimum wage increases. It is responsible. It does not squander the 
surplus we have fought so hard to achieve but maintains it for debt 
reduction. At the same time, it protects Social Security trust funds 
from being misallocated to other programs and expenditures. This is a 
good tax package, and I urge our colleagues to support it.
  With that, Madam President, I reserve any time remaining and yield 
the floor.
  Mr. KENNEDY. Madam President, I suggest the absence of a quorum and 
ask unanimous consent that it not be charged to either side.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will call the roll.
  The legislative assistant proceeded to call the roll.
  Mr. DOMENICI. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOMENICI. Madam President, parliamentary inquiry. Could the Chair 
tell me, is it now appropriate for me to call up the amendment that is 
pending that has been filed with reference to an alternative minimum 
wage and tax plan?
  The PRESIDING OFFICER. If the Senator yields back the remaining time 
on the Kennedy amendment, the answer is yes.
  Mr. DOMENICI. Parliamentary inquiry. How much time do we have on the 
Kennedy amendment?
  The PRESIDING OFFICER. There are 60 minutes remaining.
  Mr. DOMENICI. In the event I do not yield that back, what is the 
remaining time arrangement for the day and for tomorrow on the two 
respective amendments, the Kennedy amendment and the Domenici 
amendment?
  The PRESIDING OFFICER. After the 60 minutes of remaining debate on 
the Kennedy amendment is used, there would be a period of 2 hours for 
debating the amendment which the Senator would be proposing.
  Mr. DOMENICI. Then what is the agreed-upon schedule for tomorrow with 
reference to the amendments?
  The PRESIDING OFFICER. There is 1 hour of debate beginning at 9:30, 
with a vote scheduled to occur at 10:30.
  Mr. DOMENICI. Madam President, might I ask Senator Kennedy a 
question?
  Mr. KENNEDY. Please.
  Mr. DOMENICI. I ask Senator Kennedy, I understand you have no 
additional speakers now.
  Mr. KENNEDY. If I could answer the Senator, I think we do actually 
have some additional speakers. They can either do it now or at some 
other appropriate time after all the time has expired.
  Mr. DOMENICI. I understand that as far as today's debate is 
concerned, you are out of time.
  Is that what the Parliamentarian told me?
  The PRESIDING OFFICER. The Senator is correct, that the time 
controlled by Senator Kennedy on the Kennedy amendment has expired. 
Sixty minutes remain for those opposing the Kennedy amendment.
  Mr. KENNEDY. But, I say to the Senator, as I understand it, when you 
offer your amendment, you will have 60 minutes and we will have 60 
minutes. I think we could accommodate the other Senators. Senator 
Feinstein is here. We have probably two other Senators. We can let them 
speak at that particular time. So it is just a question of working out 
the remaining time this evening.
  Mr. DOMENICI. I yield back any time we have in opposition to the----
  Mr. NICKLES. No.
  Mr. DOMENICI. Excuse me.
  Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative assistant proceeded to call the roll.
  Mr. NICKLES. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. NICKLES. Madam President, as I understand the parliamentary 
situation, we have 2 hours equally divided: One on the Kennedy 
amendment, and the other 2 hours on an amendment that will be offered 
by Senator Domenici.
  I wish to speak very briefly in opposition to the Kennedy amendment. 
Then I will yield back the time, and that will eliminate at least that 
round. Then there will be 2 hours equally divided on the Domenici 
amendment. People can speak on either proposal, as they wish.
  For the information of our colleagues, we will have one hour of 
debate tomorrow morning and a vote at 10:30 on both proposals.
  I urge my colleagues to vote no on the so-called Kennedy minimum wage 
proposal that is now before the Senate. I compliment my colleague from 
Massachusetts. He has offered this time and time again. I am sure he 
will be back next year and the following year to increase the minimum 
wage. If you ask the question: should there be an increase in the 
minimum wage, I am sure a lot of people would say yes because they want 
everybody who is making a low wage to make more.
  I happen to agree with that very strongly. It is very important for 
people to be able to climb the economic ladder. What people many times 
don't recognize is that if you have a very significant increase in the 
minimum wage--such as Senator Kennedy's proposal of approximately a 20-
percent increase, increasing it from $5.15 to $6.15, a $1 over the next 
13\1/2\ months. That is OK, I suppose, if everybody can just pass it 
along without any repercussions. But there may be some businesses that 
can't. If they can't, what are they going to do? They may hire less 
people. They may let some people go.
  I know it does not seem as if that would be the case, but frankly it 
is. It may not happen in every case, but it happens in many cases. 
There are some employers that may not be able to pay $5.15 an hour or 
$6 an hour. Senator Kennedy's proposal says in 13\1/2\ months you have 
to be paid $6.15 an hour or it is against the law for you to have a 
job.
  The Federal Government has determined that, in our infinite wisdom, 
in rural Montana or where ever, we don't care if pumping gas can only 
pay $5.50 or the corner grocery store can only afford to pay that 
amount, we don't care. We are deciding up here in Washington DC, that 
the Federal Government does not want you to have a job. It is against 
the law for you to have a job. The Federal Government has decided 
employers must pay at lease $6.15 an hour or they cannot hire anyone. 
Sorry, 15-year-old, 16-year-old, or 17-year-old trying to get a summer 
job, if there are no summer jobs available at that amount. It may be 
fine for the State of Massachusetts. That may be great in New York 
City. I can't help but think there are some areas of the country where 
maybe that does not apply and will not work.
  This idea that raising the minimum wage can only have a positive 
economic impact is grossly incorrect. The Congressional Budget Office 
has stated it would mean a job loss of between 100,000 and 500,000 
jobs. That is a pretty significant hit. Maybe it is not a hit for 
everybody because we have millions of people working, but for between 
100,000, and 400,000 people who could lose their jobs, that is pretty 
significant. If they find themselves unemployed because they couldn't 
get a job as a result of the minimum wage increase we have created a 
real injustice. Maybe they are looking for summer work, maybe they are 
looking for part-time work, or maybe they are trying to supplement a 
job working evenings. Why should we price them out of the market?

[[Page 28974]]

  Let me address a few other things that are in Senator Kennedy's 
proposal. There are some tax cuts. Senator Robb just spoke regarding 
those. Many of those are similar to ones we have in our package that 
Senator Domenici will be talking about briefly. I compliment them on 
those tax cuts. What I criticize them for are the tax increases. You 
didn't know they had a lot of tax increases in the Democrat proposal? 
Well, they do. The fact is, there are more tax increases than there are 
tax cuts.
  What tax increases do they have? They have two or three things. They 
have a little provision in here that reauthorizes Superfund taxes. We 
do not reauthorize Superfund because the program is flawed. Does it 
make sense that they are going to extend Superfund taxes without fixing 
the program? I am absolutely confident, 100 percent confident this 
Congress is not going to reauthorize and extend Superfund taxes unless 
we reauthorize the program. The program is broken. We are raising 
billions of dollars or have raised billions of dollars and we are 
wasting it.
  The lawyers and trial attorneys reap great benefits, but we spend 
very little money cleaning up the program. Many of us are in favor of 
fixing the program. Let's make sure 90 percent of the money that is 
raised for Superfund cleanup actually goes to cleanup, rather than the 
current situation in which two-thirds of it goes to legal fees.
  The Kennedy legislation also includes several other tax increases. 
There is a proposal that goes by the name of the Doggett proposal. 
According to a lot of different groups--including the Cattlemen's 
Association, Taxpayers Union, U.S. Chamber of Commerce, and National 
Federation of Independent Businesses--this is a really big, bad tax 
increase. It is called the Abusive Tax Shelter Shutdown Act of 1998.
  Most people think of it simply as an IRS enhancement act. Well, they 
are quite mistaken. I mean, should we really give the IRS a blank check 
to go after lots of people for a lot of things because we think maybe 
we will disallow noneconomic tax attributes, whatever that means. It is 
essentially a $10 billion tax increase and we are going to turn the IRS 
loose.
  We spent a lot of time and passed, in a bipartisan fashion--my 
compliments to Senators Roth and Moynihan--last year a very significant 
IRS reform bill that curbed the appetite of the IRS. This legislation 
would say, forget about those reforms. It would give the IRS more power 
to go after what they consider noneconomic attributes. It is truly a 
bad idea.
  There are a lot of bad proposals within the Kennedy language. There 
are tax increases and the tax increases won't work. The tax increases 
will extend taxes that shouldn't be extended until the programs are 
reauthorized.
  It is a heavy hit, particularly on small business, too quick, too 
much, too early. A 20-percent increase in the next 13 and a half 
months, in my opinion, is too much. It would have economic 
ramifications that would cause many people to lose their jobs. How 
many? Hundreds of thousands. According to CBO, it says job loss would 
be between 100,000 and 500,000.
  I ask unanimous consent that this conclusion of the CBO be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

      Congressional Budget Office Private-Sector Mandate Statement

     S. 1805--Fair Minimum Wage Act of 1998
       Summary: S. 1805 would amend the Fair Labor Standards Act 
     of 1938 (FLSA) to increase the minimum wage rate under the 
     Act from $5.15 per hour to $5.65 per hour on January 1, 1999, 
     and to $6.15 per hour on January 1, 2000.
       Private-sector mandates contained in bill: S. 1805 contains 
     a mandate on private-sector employers covered by the FLSA. It 
     would require those employers to pay a higher minimum wage 
     rate than they are required to pay under current law.
       Estimated direct cost to the private sector: CBO's estimate 
     of the direct cost of the private-sector mandate in S. 1805 
     is displayed in the following table.

                  DIRECT COST OF PRIVATE-SECTOR MANDATE
                        [In billions of dollars]
------------------------------------------------------------------------
                                                 Fiscal years--
              Provision               ----------------------------------
                                        1999   2000   2001   2002   2003
------------------------------------------------------------------------
Increase the minimum wage rate.......    2.7    7.4    7.9    7.0    6.2
------------------------------------------------------------------------

       Basis of the estimate: S. 1805 specifies that the minimum 
     wage is to increase from $5.15 to $5.65 per hour on January 
     1, 1999, and to $6.15 on January 1, 2000. Other sections of 
     the FLSA providing different rules for certain workers and 
     employers, including the provision permitting employers to 
     pay teenagers $4.25 per hour during the first 90 consecutive 
     days of employment, would not change.
       To estimate the direct cost to private employers, 
     information was used on the number of workers whose wages 
     would be affected in January 1999 and subsequent months, the 
     wage rates these workers would receive in the absence of the 
     enactment of the proposal, and the number of hours for which 
     they would be compensated.
       The estimate was made in two steps. CBO used data from the 
     Current Population Survey (CPS) to estimate how much it would 
     have cost employers to comply with the mandate had they been 
     required to do so in early 1998. Second, these estimates were 
     then used to project the costs to employers beginning in 
     January 1999, taking into account the expected decline in the 
     number of workers in the relevant wage range. The remainder 
     of this section discusses the way this estimate was 
     constructed and limitations of the data and methods.
       The methods used for this estimate are similar to those 
     used for CBO's estimates of proposals made in 1996, the most 
     recent year in which bills to increase the federal minimum 
     wage rate were considered on the floor of the Senate and the 
     House. Unlike in 1996, CBO only has information about the 
     number of workers in the relevant wage range for a very short 
     time period since the current minimum wage rate became 
     effective. In preparing the estimates in 1996, CBO was able 
     to use data from several years when the minimum wage was at 
     the then-existing rate of $4.25 per hour. The current rate of 
     $5.15 per hour was implemented in September 1997. As more 
     information becomes available, this estimate might need to be 
     revised.
     Estimates from the current population survey
       Data on hourly wage rates contained in the January 1998 CPS 
     provide CBO's estimate of the number of private-sector 
     workers in that month who were paid in the relevant wage. At 
     that time, about 2.2 million workers in the private sector 
     were paid exactly $5.15 per hour and an additional 9.5 
     million workers were paid between $5.16 and $6.14 per hour. 
     (About 1.5 million additional workers reported being paid 
     $5.00 per hour; as discussed below, it is assumed that these 
     workers were also covered by the $5.15 minimum wage and were 
     misreporting their wage rates.) Roughly one-quarter of the 
     workers in the relevant wage range were teenagers. Based on 
     information from the Bureau of Labor Statistics, it is 
     assumed that about 30 percent of those teenagers were in 
     their first 90 days of employment with their current employer 
     and therefore not covered by the increase in the minimum 
     wage.\1\
---------------------------------------------------------------------------
     \1\ Footnotes at end of statement.
---------------------------------------------------------------------------
       CBO estimates that if the workers in the private sector who 
     had been paid between $5.00 and $5.64 per hour in January 
     1998 had been paid $5.65 instead (with no change in the 
     number of hours worked), their employers would have paid them 
     approximately $300 million in additional wages in that month. 
     If the workers who had been paid between $5.00 and $6.14 had 
     been paid $6.15, their employers would have incurred an 
     additional wage bill of about $900 million in that month. 
     Moreover, employers would have had to pay the employers' 
     share of the payroll taxes on those additional wages; these 
     taxes are included in CBO's estimate of the total direct cost 
     of the mandate.
     Applying the estimates from the CPS to the projection period
       The monthly cost to employers of the proposed increases in 
     the minimum wage would be smaller in the future because the 
     number of workers in the affected range will decline. For 
     example, during the eight-year period starting in 1981 when 
     the minimum wage remained at $3.35 per hour, the number of 
     workers paid exactly that rate declined from 4.2 million to 
     1.8 million, as market forces and increases in state minimum 
     wage rates raised the level of wages paid. In 1996, CBO used 
     data from the March 1992 and March 1995 CPS to estimate that 
     the cost of complying with a minimum wage of $5.15 per hour 
     would have fallen by almost 40 percent over this three-year 
     period, or about one percent per month.
       CBO assumes that the direct mandate cost would continue to 
     decrease at this rate throughout the projection period. Thus, 
     the monthly cost of raising the minimum wage to $5.65 in 
     January 1999 would be roughly 87 percent of the cost 
     estimated using the January 1998 data. The estimated cost of 
     raising the minimum wage to $6.15 in January 2000 would be 
     about 79 percent of the cost of doing so in January 1998.
       Estimates for each fiscal year were then made by 
     aggregating the monthly costs. The estimate for fiscal year 
     1999 is the smallest

[[Page 28975]]

     because that period only includes an increased minimum wage 
     for nine months. The estimate for 2000 includes the cost of a 
     $5.65 minimum wage for three months and a $6.15 minimum wage 
     for nine months. The estimate of the direct cost to the 
     private sector is highest for 2001, when all twelve months 
     would be at $6.15 per hour.
     Limitations
       Estimates of the direct cost of this mandate are uncertain 
     for at least two reasons. First, the main source of data--the 
     January 1998 CPS--is subject to sampling error and other 
     problems when used for this purpose. For example, CBO assumed 
     that the workers who reported being paid $5.00 per hour after 
     the minimum wage had risen to $5.15 were actually earning 
     $5.15 because there is no evidence that compliance with the 
     Fair Labor Standards Act fell.\2\ The wage rates of other 
     low-wage workers--some of the workers who reported being paid 
     below $5.00 per hour and some of the workers not paid on an 
     hourly basis--would also be affected by an increase in the 
     statutory minimum.\3\ Second, there is no solid basis for 
     projecting the future number of workers who would have wage 
     rates in the relevant range, their precise wage rates, nor 
     the number of hours they would work under current law. The 
     annual decline estimated from the 1992-1995 period could turn 
     out to be too rapid or too slow.
       Indirect effects of an increase in the minimum wage: An 
     increase in the minimum wage rate from $5.15 to $6.15 would 
     require employers to raise the wages paid to the lowest-paid 
     workers covered by the FLSA by 19 percent, and would require 
     employers to raise the wages of workers in the range between 
     the old and the new statutory rates by smaller amounts. As 
     under current law, employers could still pay teenage workers 
     $4.25 per hour during their first 90 calendar days.
       Economists have devoted considerable energy to the task of 
     estimating how employers would respond to such a mandate. 
     Although most economists would agree that an increase in the 
     minimum wage rate would cause firms to employ fewer low-wage 
     workers (or employ them for fewer hours), there is 
     considerable disagreement about the magnitude of the 
     reduction. It has proven difficult to isolate the effects of 
     past changes in the minimum wage. Moreover, the estimates 
     from such analysts are hard to apply to future changes.
       Based on CBO's review of a number of these studies, a 
     plausible range of estimates for illustrating the potential 
     losses is that a 10 percent increase in the minimum wage 
     would resulting a 0.5 percent to 2 percent reduction in the 
     employment level of teenagers and a smaller percentage 
     reduction for young adults (ages 20 to 24).\4\ These 
     estimates would produce employment losses for an increase in 
     the minimum wage of the extent provided in this bill of 
     roughly 100,000 to 500,000 jobs. The individuals whose 
     employment opportunities would be reduced are likely to 
     include the lest-skilled job-seekers who might benefit most 
     from the work experience.
       This range of employment impacts is the same as CBO 
     estimated two years ago when Congress was considering a 21 
     percent ($0.90 per hour) increase in the minimum wage.\5\ At 
     that time, the low end of the range seemed more realistic 
     because the number of workers in the relevant wage range and 
     the size of the minimum wage relative to the average wage 
     were relatively low. This time, however, those special 
     considerations do not apply because less time has elapsed 
     since the most recent increase in the minimum wage. About 50 
     percent more workers are in the affected wage range now than 
     were in the relevant wage range when the 1996 legislation was 
     being considered. Likewise, the minimum wage is currently 
     about 41 percent of the average hourly earnings of production 
     or nonsupervisory workers in the private sector, compared 
     with about 36 percent just before the 1996 legislation was 
     enacted.
       But two additional differences from the situation that 
     existed in 1996 could reduce employment impacts. First, the 
     labor market is exceptionally tight, with the total 
     unemployment rate at 4.6 percent and the teenage unemployment 
     rate at 14.7 percent (February 1998). In 1996, the total 
     unemployment rate was nearly one point higher and the teenage 
     unemployment rate was two points higher. Second, the most 
     recent increase in the minimum wage amended the FLSA to 
     permit employers to pay teenagers $4.25 per hour for the 
     first 90 days, and the current bill would not change this 
     provision. The literature on which the estimates reported 
     above are based did not reflect such a differential. 
     Presumably, the differential could result in fewer employment 
     losses for teenagers, more losses for adults, and fewer 
     losses overall. Although recent data indicate that few 
     employers are using the option, its availability could 
     cushion employment losses if labor markets weakened.
       In addition to its effect on employment levels, an increase 
     in the minimum wage could have many other economic impacts. 
     For example, one consequence that has received considerable 
     attention is its potential effects on the earnings of low-
     wage workers. CBO estimates that the direct effect of the 
     proposed increase would be to increase the aggregate earnings 
     of workers who would otherwise have received between $5.15 
     and $6.14 per hour by over $7 billion in 2001. An indirect 
     effect of the increase in the minimum wage might be that 
     employers would also voluntarily raise the wage rates of 
     workers who were already being paid just above the new rate 
     in order to maintain differentials (the ``spillover 
     effect'').
       Previous CBO estimate: On March 3, 1998, CBO issued an 
     estimate of S. 1573, which would increase the minimum wage 
     rate in three annual steps to $6.65 per hour and then would 
     adjust the minimum wage thereafter to reflect changes in the 
     Consumer Price Index. The current estimate of the direct cost 
     to the private sector is based on the same methodology.
       Estimate prepared by: Ralph Smith.
       Estimate approved by: Joseph Antos, Assistant Director for 
     Health and Human Resources.


                               footnotes

     \1\ This estimate is derived from information on job tenure, 
     by age, provided by the Bureau of Labor Statistics, based on 
     supplemental questions included in the February 1996 Current 
     Population Survey.
     \2\ Staff within the Department of Labor's Employment 
     Standards Administration, the agency responsible for 
     enforcing the FLSA, report no increase in the number of 
     complaints filed since the minimum wage increased to $5.15.
     \3\ In January 1998, there were almost 2 million workers who 
     reported being paid an hourly wage rate of less than $5.00. 
     Some workers, such as employees in retail firms whose gross 
     volume of sales is less than $500,000 are not covered by the 
     minimum wage, while others, such as certain tipped workers, 
     are covered but can be paid a lower wage rate.
     \4\ See, for example, Alison J. Wellington, ``Effects of the 
     Minimum Wage on the Employment Status of Youths; An Update,'' 
     Journal of Human Resources, Vol. XXVI, No. 1 (Winter 1991), 
     pp. 27-46, Charles Brown, ``Minimum Wage Laws; Are They 
     Overrated?'' Journal of Economic Perspectives, Vol. 2, No. 3 
     (Summer 1988), pp. 133-145, David Card and Alan B. Krueger, 
     Myth and Measurement; the New Economics of the Minimum Wage 
     (Princeton University Press, 1995), and Marvin H. Kosters, 
     editor, The Effects of the Minimum Wage on Employment (AEI 
     Press, 1996).
     \5\ On March 25, 1996, CBO provided an estimate of the cost 
     to the private sector of S. 413, which would have increased 
     the minimum wage rate in two annual steps, from $4.25 per 
     hour to $5.15 per hour. That bill did not include the youth 
     differential and other special provisions that were contained 
     in the legislation enacted later that year.

  Mr. NICKLES. I say that 100,000 to 500,000 lost jobs is too heavy a 
penalty. For that one person who might lose his or her job, it is a 
very heavy penalty. According to the Federal Reserve Bank of San 
Francisco, there would be from 145,000 to 436,000 lost jobs. These are 
independent studies, not branches of a Don Nickles study group that 
says this is a bad idea. The CBO and Federal Reserve state that this 
will cost hundreds of thousands of jobs.
  If there is no job loss or negative economic consequence, why stop at 
$6.15 an hour? Why don't we make it $20 an hour? I want everybody in 
America to make $20 an hour. I do. If they work 2,000 hours a year, 
that is an average of 40 hours a week for 50 weeks. If everybody made 
$20 an hour, hey, that would be great. That would be $40,000. I would 
love for everybody in America to make $40,000. But guess what. Some 
jobs might not pay that.
  Does it make good economic sense to pass a law to say it is against 
the law for somebody to work for $40,000? I don't think so. Whether it 
would mean the loss of 100,000 jobs or 500,000 jobs, I don't know. But, 
I don't want to put even 100,000 people out of work. I don't want to 
discourage any young person or any person at all from trying to climb 
the economic ladder. We pulled it up. Sorry. We would rather have you 
unemployed than have you climbing the economic ladder.
  I think that is a huge mistake. I think this proposal is too big of a 
hit, too quickly. I think the tax increase in the Democrat proposal is 
completely unworkable and it is certainly unfair.
  The other side might claim that they paid for their tax cuts, and 
that Senator Domenici will have a proposal to benefit small business, 
and he didn't pay for his because it comes out of the surplus.
  I disagree, especially when we are looking at having significant 
surpluses in the next 10 years. Basically what our Democrat colleagues 
are saying is: We want no tax cut whatsoever.
  Less than 2 months ago, they voted for a $300 billion tax cut that 
was not paid for. Now they are saying we have to pay for this; even if 
it is only $18 billion over 5 years, we have to pay for every dime of 
it so we have more money to spend.
  I urge my colleagues to vote ``no'' on the Kennedy proposal.
  I understand Senator Kennedy and his side have used their hour. If 
there is no objection, I will yield back the remainder of the time in 
opposition to the Kennedy amendment.

[[Page 28976]]

  The PRESIDING OFFICER. All time has been yielded back on the Kennedy 
amendment.
  The Senator from New Mexico is recognized.
  Mr. DOMENICI. Madam President, I have no objection to yielding to the 
Senator from California to speak in favor of the Kennedy amendment if 
she would tell me how long she wishes to speak.
  Mrs. FEINSTEIN. Probably 10 to 15 minutes. I can certainly wait.
  Mr. DOMENICI. They would be using that off the opposition time to the 
Domenici amendment.
  The PRESIDING OFFICER. The second amendment would have to be called 
up.


                           Amendment No. 2547

   (Purpose: To increase the Federal minimum wage and protect small 
                               business)

  Mr. DOMENICI. Madam President, I send an amendment to the desk and 
ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative assistant read as follows:

       The Senator from New Mexico [Mr. Domenici], for himself, 
     Mr. Abraham, and Mr. Santorum, proposes an amendment numbered 
     2547.

  Mr. DOMENICI. Madam President, I ask unanimous consent that reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. DOMENICI. Madam President, I yield the floor at this time.
  The PRESIDING OFFICER. The Senator from California is recognized.


                      Unanimous-Consent Agreement

  Mrs. FEINSTEIN. Madam President, I ask unanimous consent to 
temporarily lay aside the pending amendment so I might send to the desk 
two amendments and then lay them aside.
  The PRESIDING OFFICER. Is there objection to the unanimous-consent 
request of the Senator from California?
  Mr. NICKLES. I didn't hear the request. Will the Senator repeat it.
  Mrs. FEINSTEIN. Certainly. It is a unanimous-consent request so I 
might call up and then lay aside two amendments.
  Mr. DOMENICI. What are they related to?
  Mrs. FEINSTEIN. To the bankruptcy bill.
  Mr. DOMENICI. Madam President, is that inconsistent with any order we 
have entered at this point?
  The PRESIDING OFFICER. It is not inconsistent with any order that has 
been entered into.
  Mr. NICKLES. Reserving the right to object----
  Mrs. FEINSTEIN. I am going to call them up and lay them aside.
  Mr. NICKLES. Madam President, parliamentary inquiry.
  The PRESIDING OFFICER. The Senator will state his inquiry.
  Mr. NICKLES. Under the unanimous-consent request we have entered 
into, there were three nongermane amendments basically offered by 
Democrats and Republicans; is that correct?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. NICKLES. We also stated under the unanimous-consent agreement 
that all other amendments had to be relevant to the bankruptcy bill; is 
that correct?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. NICKLES. Might I ask my colleague, are the two amendments she is 
trying to offer right now germane to the bankruptcy bill?
  Mrs. FEINSTEIN. Yes, they are.
  Mr. NICKLES. Might I inquire what they deal with?
  Mrs. FEINSTEIN. One is amendment No. 1697, to place a $1,500 limit on 
credit to minors, unless they have independent proof of income or the 
card is cosigned signed by a parent or legal guardian. The second is 
amendment No. 2755, directing the Federal Reserve Board to conduct a 
study of credit industry lending practices.
  Mr. NICKLES. Madam President, I have no objection.


                 Amendments Nos. 1696 and 2755, En Bloc

  Mrs. FEINSTEIN. Madam President, I send two amendments to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from California [Mrs. Feinstein] proposes 
     amendments numbered 1696 and 2755, en bloc.

  Mrs. FEINSTEIN. Madam President, I ask unanimous consent that reading 
of the amendments be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendments are as follows:

                           AMENDMENT NO. 1696

  (Purpose: To limit the amount of credit extended under an open end 
  consumer credit plan to persons under the age of 21, and for other 
                               purposes)

       At the appropriate place, insert the following:

     SEC. __. ISSUANCE OF CREDIT CARDS TO UNDERAGE CONSUMERS.

       (a) Applications by Underage Consumers.--Section 127(c) of 
     the Truth in Lending Act (15 U.S.C. 1637(c)) is amended--
       (1) by redesignating paragraph (5) as paragraph (7); and
       (2) by inserting after paragraph (4) the following:
       ``(5) Applications from underage obligors.--
       ``(A) Prohibition on issuance.--Except in response to a 
     written request or application to the card issuer that meets 
     the requirements of subparagraph (B), a card issuer may not--
       ``(i) issue a credit card account under an open end 
     consumer credit plan to, or establish such an account on 
     behalf of, an obligor who has not attained the age of 21; or
       ``(ii) increase the amount of credit authorized to be 
     extended under such an account to an obligor described in 
     clause (i).
       ``(B) Application requirements.--A written request or 
     application to open a credit card account under an open end 
     consumer credit plan, or to increase the amount of credit 
     authorized to be extended under such an account, submitted by 
     an obligor who has not attained the age of 21 as of the date 
     of such submission, shall require--
       ``(i) submission by the obligor of information regarding 
     any other credit card account under an open end consumer 
     credit plan issued to, or established on behalf of, the 
     obligor (other than an account established in response to a 
     written request or application that meets the requirements of 
     clause (ii) or (iii)), indicating that the proposed extension 
     of credit under the account for which the written request or 
     application is submitted would not thereby increase the total 
     amount of credit extended to the obligor under any such 
     account to an amount in excess of $1,500 (which amount shall 
     be adjusted annually by the Board to account for any increase 
     in the Consumer Price Index);
       ``(ii) the signature of a parent or guardian of that 
     obligor indicating joint liability for debts incurred in 
     connection with the account before the obligor attains the 
     age of 21; or
       ``(iii) submission by the obligor of financial information 
     indicating an independent means of repaying any obligation 
     arising from the proposed extension of credit in connection 
     with the account.
       ``(C) Notification.--A card issuer of a credit card account 
     under an open end consumer credit plan shall notify any 
     obligor who has not attained the age of 21 that the obligor 
     is not eligible for an extension of credit in connection with 
     the account unless the requirements of this paragraph are 
     met.
       ``(D) Limit on enforcement.--A card issuer may not collect 
     or otherwise enforce a debt arising from a credit card 
     account under an open end consumer credit plan if the obligor 
     had not attained the age of 21 at the time the debt was 
     incurred, unless the requirements of this paragraph have been 
     met with respect to that obligor.
       ``(6) Parental approval required to increase credit lines 
     for accounts for which parent is jointly liable.--In addition 
     to the requirements of paragraph (5), no increase may be made 
     in the amount of credit authorized to be extended under a 
     credit card account under an open end credit plan for which a 
     parent or guardian of the obligor has joint liability for 
     debts incurred in connection with the account before the 
     obligor attains the age of 21, unless the parent or guardian 
     of the obligor approves, in writing, and assumes joint 
     liability for, such increase.''.
       (b) Regulatory Authority.--The Board of Governors of the 
     Federal Reserve System may issue such rules or publish such 
     model forms as it considers necessary to carry out paragraphs 
     (5) and (6) of section 127(c) of the Truth in Lending Act, as 
     amended by this section.
       (c) Effective Date.--Paragraphs (5) and (6) of section 
     127(c) of the Truth in Lending Act, as amended by this 
     section, shall apply to the issuance of credit card accounts 
     under open end consumer credit plans, and the increase of the 
     amount of credit authorized to be extended thereunder, as 
     described in those paragraphs, on and after the date of 
     enactment of this Act.

[[Page 28977]]

     
                                  ____
                           AMENDMENT NO. 2755

    (Purpose: To discourage indiscriminate extensions of credit and 
         resulting consumer insolvency, and for other purposes)

       At the appropriate place, insert the following:

     SEC. __. ENCOURAGING CREDITWORTHINESS.

       (a) Sense of the Congress.--It is the sense of the Congress 
     that--
       (1) certain lenders may sometimes offer credit to consumers 
     indiscriminately, without taking steps to ensure that 
     consumers are capable of repaying the resulting debt, and in 
     a manner which may encourage certain consumers to accumulate 
     additional debt; and
       (2) resulting consumer debt may increasingly be a major 
     contributing factor to consumer insolvency.
       (b) Study Required.--The Board of Governors of the Federal 
     Reserve System (hereafter in this section referred to as the 
     ``Board'') shall conduct a study of--
       (1) consumer credit industry practices of soliciting and 
     extending credit--
       (A) indiscriminately;
       (B) without taking steps to ensure that consumers are 
     capable of repaying the resulting debt; and
       (C) in a manner that encourages consumers to accumulate 
     additional debt; and
       (2) the effects of such practices on consumer debt and 
     insolvency.
       (c) Report and Regulations.--Not later than 12 months after 
     the date of enactment of this Act, the Board--
       (1) shall make public a report on its findings with respect 
     to the indiscriminate solicitation and extension of credit by 
     the credit industry;
       (2) may issue regulations that would require additional 
     disclosures to consumers; and
       (3) may take any other actions, consistent with its 
     existing statutory authority, that the Board finds necessary 
     to ensure responsible industrywide practices and to prevent 
     resulting consumer debt and insolvency.

  Mrs. FEINSTEIN. I ask unanimous consent that the amendments be set 
aside.
  The PRESIDING OFFICER. The amendments will be set aside.


                           Amendment No. 2751

  Mrs. FEINSTEIN. Madam President, today I rise in support of the 
amendment offered by the minority leader to raise the minimum wage from 
$5.15 to $6.15 in two steps by September 1 of the year 2000. Before 
addressing my remarks directly, I want to make two comments. The first 
is really to thank the senior Senator from Massachusetts for his 
prodigious, sustained, and enthusiastic work on a minimum wage 
increase. I very much doubt that this would be on the calendar were it 
not for his constant perseverance.
  The second is to say that I do not believe there is any piece of 
legislation that has been passed by this Congress or this Senate this 
year that can have the possible positive impact on Americans an 
increase in the minimum wage will at this particular point in time. I 
want to make that argument.
  This amendment is about families making ends meet. It is about people 
being able to pay for rent and put food on the table. The bottom line 
is that the current minimum wage is simply not enough to live on. An 
estimated 11.4 million workers will benefit from the passage of this 
amendment; 1.5 million of them are in California alone. For a full-time 
worker, a $1 an hour increase in the minimum wage means a $2,000 a year 
raise. That is an extra $2,000 to pay the rent, to buy groceries, to 
send their children to school. For these workers, an increase in the 
minimum wage will make a huge difference.
  Although the number of people living in poverty in the United States 
since 1992 has declined--and it has--by about 9 percent, from 38 
million people to 34.5 million people, in California the number of 
people living in poverty has actually remained relatively unchanged, 
5.19 million people to 5.12 million people living in poverty.
  As recently as 1997, California has actually seen a 5 percent 
increase in the number of people living in poverty. Despite the 
incredible economic growth the United States has experienced throughout 
the mid and late 1990s, in California more than 15 percent of the 
population of the seventh largest economic engine on Earth lives in 
poverty. That is incredible. This troubling statistic clearly shows 
that not all segments of the workforce are benefiting from the economic 
expansion.
  On September 4, the Center on Budget and Policy Priority released 
what I am sure my colleagues know, and hopefully will agree, is a very 
disturbing report on the widening gap between the rich and the poor 
over the last 20 years. California is an example of that gap.
  Based on data collected by the Congressional Budget Office, the study 
found that the average after-tax income of the top 20 percent of 
households increased from about $74,000 in 1977 to more than $102,000 
in 1999. The average after-tax income of the top 1 percent of the 
economic earners in this country will almost double, going from 
$234,000 to $515,000 in 1999. This indicates that those in the top 
income levels are doing very well all across this great Nation.
  The bad news is that the income of the bottom fifth of households is 
actually falling. It has fallen from $9,900 to $8,700 over the same 
period.
  So while the top income earners are prospering, those at the lower 
end of the income scale are doing worse than a generation ago.
  When you have a high-cost State, this chasm is actually exaggerated. 
So what you have is a growing split between the very wealthy and the 
very poor in this country.
  In 1977, the top 1 percent of the U.S. households received 7.3 
percent of the Nation's after-tax income, and 22 years later that has 
gone up; they received 12.9 percent. That is a 4.4 percent increase for 
upper income Americans. In fact, the top 1 percent will receive as much 
after-tax income as the bottom 38 percent. This means the 2.7 million 
wealthiest Americans will be earning the same amount as the poorest 100 
million Americans.
  That is the case with 15 percent of the people in California.
  Over the past several years, we have seen an explosion in the 
creation of wealth that is unprecedented in U.S. history. The strong 
economy has brought prosperity to large numbers of people. But that is 
not the whole story. More individuals and families are earning less and 
having a difficult time making ends meet.
  It is time, I think, that we recognize this and do something about 
it. Passing the Daschle amendment is the first step we can take--50-
cent minimum wage increase the first year and 50-cent minimum wage the 
second year.
  Perhaps the greatest testament to the inadequacy of the minimum wage 
is that many communities are now recognizing how inadequate it is. And 
they are moving on their own to create a new concept that is called a 
``living wage.'' These jurisdictions are insisting that those who do 
business with the local government pay their employees a living wage 
salary.
  San Jose, CA, has adopted a living wage of $10.75.
  In San Antonio, TX, it is $10.13 an hour.
  In Boston, it is $8.23 an hour.
  In my hometown of San Francisco, there is consideration ongoing for a 
living wage of $11.
  More than 35 other localities and municipalities have adopted living 
wages. Clearly, it is a reaction to the inadequacy of the Federal 
minimum wage, which is generally too little too late to sustain people. 
So it is time for the Federal Government to follow the lead of our 
cities and take the simple step that is so important to millions of 
working families.
  Many families in this country are just one paycheck away from 
disaster, whether it is an illness, the need to move, or a car that 
breaks down. People live paycheck to paycheck, and they live with the 
fear that they might not be able to make it this month or next month.
  I think those figures and those statements are responsible for some 
of the things the Senator from Massachusetts pointed out on the floor a 
little bit earlier: The fear that families have, the stress that women 
work under, and the additional hours for women in the workplace more 
than men, the fact that so many children wish their family could have 
less stress, and could spend more time with them is all a part of this 
picture.
  People can work 40 hours a week. In the most industrialized country 
on Earth, those people still can't support their family, still can't 
repair a broken

[[Page 28978]]

car, still can't pay their rent, and still live from paycheck to 
paycheck.
  In fact, a minimum-wage worker who works 40 hours a week 50 weeks a 
year earns only $10,300 a year. The poverty line for a family of three 
is $13,880, and, for a family of four, it is $16,700.
  So you have a worker who is working at a minimum-wage job and has a 
family, that worker is substantially below the poverty level and the 
family is below the poverty level. What happens? People are forced to 
hold two jobs. Families are forced to have both parents working. 
Children are often left alone because child care, of course, is too 
costly or nonexistent.
  Let me give you one case, a resident of San Francisco. Her name is 
Bernardine Emperado. She works more than 60 hours a week at a rental 
car job, and she supplements this salary by selling hot dogs at 49ers 
games on Sunday.
  Nobody can tell me rental car agencies shouldn't pay a minimum wage 
of $6-plus. Nobody can ever convince me of that. Despite two incomes, 
she can't afford her own apartment. She lives with her mother and 
college-age daughter. Something is seriously wrong with our wage scale 
if someone working 60 hours a week is unable to afford life's basic 
necessities.
  The traditional argument against raising the minimum wage is that 
when you increase wages, it costs jobs. And we just heard the majority 
whip make that point eloquently. The facts don't bear that out. Since 
the minimum wage was increased in October of 1996, we have gained 8.7 
million new jobs in this country, most of them in the form of small 
businesses and new businesses. As a matter of fact, that has been the 
explosion--new businesses, small businesses, just the businesses that 
pay many of their people a minimum-wage salary.
  In a strong economy, raising the minimum wage will not cost jobs. And 
it is time to do it. As a matter of fact, there is no better time to do 
it than when the economy is flush. And the economy has not been this 
flush in a long time.
  I say to you that if we fail to raise the minimum wage, and to raise 
it on a regular basis, we will see virtually every city in this Nation, 
in addition to the 35 that are now doing it, enact their own living 
wage. This will vary. I think we will increasingly find this minimum 
wage is going to be $10 or more if it is left to the city.
  I think it is prudent to raise the minimum wage. I think this is the 
time to do it. I think it is unfair to ask someone to live on $10,000. 
I think for the millions of workers who, as a product of this action, 
will have $2,000 more in their pocket to pay for rent, to pay for 
clothes, to fix a car, to make a move, this is the single most 
important piece of social economic legislation this body can pass.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Santorum). The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I yield myself 10 minutes.
  I am very pleased to introduce a minimum wage amendment on behalf of 
myself and many other Senators. With reference to the minimum wage, 
this coming January under the amendment Senator Kennedy introduced, 
minimum wage goes up 50 cents; 12 months later it goes up 50 cents 
again. Under the proposal which I offer today, it will go up 35 cents, 
35 cents, and 30 cents each March 1. It is also a $1 increase in 
minimum wage. It takes 12 months longer, so this will be completed in 
2002. At that point, it will be $6.15.
  I think Senator Nickles made a point. If the economy, or if training 
people for jobs, or if employers being able to pay for the services 
employees render, if none of that was relevant, then everyone would 
like a minimum wage bill that might be higher than either of these two. 
That is what we would wish for everyone.
  Up front, I remind everyone the best economic advice we have is 50 
percent of the minimum-wage jobs affected have to do with teenagers. 
Half of the minimum-wage jobs we are talking about are the young men 
and women who are working while they are attending school--afterschool 
and in the summer months--at either the McDonald's drive-ins or various 
places across America.
  It seems to this Senator, a minimum wage that applies to 50 percent 
of the minimum-wage earners in America, who are students, and that goes 
up 35 cents, 35 cents, and 30 cents, respectively, over the next 26 
months, since it far exceeds inflation, it is good for the teenagers of 
America, good for those who hire them, and an excellent way to make 
sure that portion of the American population in their first entry jobs 
in our marketplace-oriented economy get a chance to earn that money, to 
learn what it is to work, and at the same time make that large group of 
young American men and women a part of the marketplace.
  If we make it too high, businesses won't be hiring them and they will 
be looking to others to fill the jobs. We still need in America a place 
for people to start.
  If we had a minimum wage bill and that is all we did, knowing what we 
know about welfare reform, we would not have a very good bill. The work 
opportunity credit, where employers give welfare men and women a job, 
is now a temporary work incentive credit; we make that permanent. That 
means as we have reduced the assistance for welfare in the United 
States by 48 percent, down to 2.7 million people, we want the employees 
of America to make a living wage. We want them to have a chance, but we 
also want to encourage them to be hired, even if there is some 
additional training and some skills that have to be added along the 
way.
  We are increasing opportunities for the young people, and we are 
increasing many of the welfare-related jobs with this additional 
minimum wage we are adding. Many in this body worked hard on the work 
opportunity credit. I can recall back in the 1970s when I first came 
here, we started that as a work incentive program for the 
disadvantaged, disabled, and others by giving a tax credit. It was 
highly abused later. People wanted to get rid of it, but the idea 
remained to give American small business an opportunity to hire people 
who may need a little extra help, a little more guidance, a little more 
skill and training. We give them credit for that. We have done that.
  We have two provisions in this amendment directed at health care. One 
of them is a very dramatic change from the way we have treated health 
care in the past. It is not going to cost very much because we are not 
so sure how many people will understand it. We are going to say to 
American men and women if they are not getting health insurance on 
their job, we give them an opportunity to buy their own health 
insurance and they can deduct every single penny of their health 
insurance from their pay before paying income tax.
  Heretofore, we were letting them pool those expenses along with other 
health care costs and if that exceeded 7.5 percent of the income, they 
could deduct it. There are many people who work for small businesses 
and others would don't furnish insurance, and perhaps they could buy 
their own insurance. But right now, they don't get to deduct the 
premiums. We add that to the basket of opportunities for health 
insurance.
  Then, there are the independent employees who work essentially for 
themselves. Under this bill, we finally make the health care costs 100 
percent deductible. I think health insurance deduction is very 
important for the self-employed.
  We increase the small business expensing, which means there are 
certain items they can deduct, up to $30,000 under this new law in the 
year of the expanse rather than having to charge it off over time, 
which is desired by small business that will bear the brunt of this 
added minimum wage.
  We reduce the unemployment surtax, and we make permanent the work 
opportunity tax credit. A number of pension plans are reformed in this 
legislation so that more of the small businesses in this country will 
be able to take maximum advantage of their employees creating pension 
plans under the auspices of their employer as we currently have them in 
numerable places in the Tax Code.

[[Page 28979]]

  We can talk about how this affects our individual States. I will have 
for the record how the Domenici plan will affect New Mexicans on the 
tax side once we have it figured out, as well as on the minimum wage 
side.
  In summary, we will increase the minimum wage in the Domenici 
amendment--which the occupant of the Chair is a cosponsor, and I thank 
him for that--increase it $1, but it will take 12 additional months 
before we get to that. It will be 35 cents, 35 cents, and 30 cents. 
Senator Kennedy does it in two installments. Senators have to decide 
which best fits the needs of our country.
  If we were wishing and hoping, we would pay everybody a lot more. I 
repeat, half of the minimum wage earners in America are young people 
who are in part-time jobs, such as afterschool and summer jobs. We 
believe the 3-year installment increase, which far exceeds inflation 
annually as it applies to the current minimum wage, is probably good 
for the teenagers of our country, good to keep them employed, get them 
that entrance job and not have so many owners looking around for other 
employees who have more experience, which they will if we make the 
minimum wage too high.
  In addition, many of those getting off welfare--and we know there are 
thousands--they need some training and some extra skills preparation 
and the like. We are hoping they will get jobs. We are increasing their 
take-home pay so they can, indeed, have a better chance of succeeding 
off the rolls and move up the employment chain and get better and 
better jobs. The other things I mentioned in the health care field will 
be welcomed by millions of Americans, and in particular millions, 
millions of self-employed business men and women across America.
  With that, I know there are others who would like to speak, if not 
tonight, we obviously will share time with them tomorrow.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time? The Senator from Montana.
  Mr. BAUCUS. Mr. President, will somebody yield time to me?
  Mr. KENNEDY. Yes. I yield 10 minutes.
  The PRESIDING OFFICER. The Senator is recognized for 10 minutes.


                           Amendment No. 2751

  Mr. BAUCUS. Mr. President, I was very impressed with the statement of 
the Senator from Massachusetts earlier when he showed us the charts of 
how minimum wage has not kept up with inflation. As I recall the chart 
of the Senator, it was very dramatic, showing with the minimum wage 
increase of $1 over 2 years, still we would not keep up with inflation 
in real terms.
  He had a second chart. If you chart the poverty line, you will see 
the minimum wage has constantly been below the poverty line. So for all 
those who are worried about statistics and figures, rest assured this 
increase in the minimum wage proposed by the Senator from Massachusetts 
is not above inflation. It may be true in 1 year's time it is above 
what inflation might be in that single year, but on the question 
whether minimum wage has kept up with inflation or not, historically it 
has not kept up with inflation.
  Second, I want to relate a personal story which made a huge 
difference to me.
  Mr. KENNEDY. Will the Senator be good enough to yield on that point?
  Mr. BAUCUS. Yes.
  Mr. KENNEDY. The Senator talked about the poverty line and the 
minimum wage. There is a third element, and that is productivity. As we 
pointed out in the earlier presentation, the productivity in the last 
10 years has increased by 12 percent, and the total wages of all 
workers, 1.9 percent.
  The Senator, as a member of the Finance Committee, knows one of the 
key elements in an economic analysis is the issue of productivity. Here 
we have fallen so far behind, not only in the poverty rate but also in 
productivity growth.
  Mr. BAUCUS. That is an excellent point. I regret telling the Senator 
from Massachusetts I was not able to see that chart, but I am glad the 
Senator has explained this point. It is absolutely true. If you 
increase productivity, and everybody knows productivity means the 
amount of output per worker hour--if productivity has increased 
dramatically, that is all the more reason why it is unfair the minimum 
wage has not kept up with inflation. The amendment offered by the 
Senator from Massachusetts will help accommodate that.
  The point I was going to make is when I last ran for reelection, I 
walked across our State. I will never forget talking to a woman, a 
single mom, who told me how hard she worked to try to stay off welfare. 
She had a minimum-wage job in my home State.
  She tried for a couple of years to stay off welfare. She was 
determined to stay off welfare. It was a matter of principle, a matter 
of pride. She slept on the sofa in her parents' home, she did all the 
things she could do to cut corners so she could raise her young child 
and stay off welfare. But she finally realized with her minimum-wage 
job and the day-care costs--I have forgotten the exact percent, but it 
was 30 or 40 percent of her take-home pay went to childcare--she could 
not do it. She had to finally give up and go onto welfare because her 
minimum-wage job did not earn her enough money for her and her child to 
survive.
  We can help get people off the welfare rolls by increasing minimum 
wage. It is not the total solution. There are lots of parts to that 
problem, lots of parts to the solution. But certainly, raising the 
minimum wage makes a huge difference.
  I might also add, in my home State of Montana there is a very 
unfortunate economic trend. In 1946, Montana ranked 10th in per capita 
income. In roughly 1992 or 1993, Montana ranked not 10th anymore but 
about 35th or 36th. Where does Montana rank today in per capita income? 
It depends on how you calculate it, but 48th, 49th, or 50th.
  The State used to be a natural resources, commodity-based State with 
mining business and timber industries that had good-paying jobs; in 
agriculture income was up too. Today, those mining jobs, those timber 
industry jobs, those commodity-based resource jobs are disappearing 
because of the greater importance of value added. We are now becoming a 
tourism State, a recreation State, a service industry State. And 
service industries pay very low wages compared with commodity-based 
industries.
  I am sure this is true in lots of other States in the Nation. An 
increase in the minimum wage is going to help increase the pay for 
service jobs, which is going to help a lot. I might also add keeping 
workers' pay up only makes sense; it is only fair because of all the 
profits so many companies have received, particularly over the past 
couple or 3 years, the best evidence of which is the skyrocketing 
increases of the stock indexes on the various stock exchanges.
  It was said earlier this is just a minimum wage for younger people. 
Mr. President, I am sure you have experienced this. When you stop in 
McDonald's, you go to a store, say a Penny's or some store downtown, 
you are going to find a lot of medium-age people and older people 
working there. I am astounded at the number of older women who work at 
McDonald's. I am astounded. This is not only a younger person's issue. 
In fact, if statistics were shown, my guess is it would be more of a 
women's issue and a medium-age issue--people having a hard time making 
ends meet, not school kids working for pocket change.
  Not only should there be an increase in the minimum wage--and I think 
the amendment offered by the Senator from Massachusetts is more than 
fair--the amendment offered by the Senator from Massachusetts is paid 
for. I ask consent to speak for 5 more minutes
  Mr. KENNEDY. I yield 5 more minutes.
  Mr. BAUCUS. The amendment by the Senator from Massachusetts is paid 
for. What do I mean by that? By that I mean that the cost to the 
private sector of this increase, by CBO estimates, might be roughly $30 
billion over 10 years. The amendment by the Senator from Massachusetts 
has several key

[[Page 28980]]

tax cut provisions that would help offset whatever cost businesses 
might experience in paying the increased minimum wage. I would like to 
highlight just a couple.
  One of the main provisions is a small business pension startup tax 
credit. We want to help small business. We want to help small business 
provide pensions for their employees. We all know one of the big 
problems today is that while big businesses usually provide good 
pensions for their employees, small businesses do not, because of their 
narrower profit margins. It is very difficult to begin a small 
business. Startup costs in particular make the early years very 
difficult, because you have to pay that payroll tax on the first day of 
business whether or not you make a profit, and when you start out in 
small business you are not going to make a profit that first day. You 
don't have to pay income taxes, but you have to pay that payroll tax. 
Small businesses therefore have a very hard time doing what a lot of 
those small businesses want to do: Set up a pension fund for their 
employees.
  If we are going to solve the retirement problem of this country, we 
certainly have to reform Social Security, and we certainly have to 
increase private savings. But we all know that a third leg of the 
retirement stool is pension benefits. We clearly need more incentives 
so small business can provide pension benefits to their employees. They 
will be better employees. They will be more likely to stay there. They 
are going to be more committed to the business. And they are going to 
be more committed to helping that company make a buck. Our package has 
a tax credit for small businesses, about $4 billion, to help make that 
happen.
  What else do we do? We accelerate the 100-percent deduction of health 
insurance for the self-employed. The Republican bill does that, and so 
do we. It is very important that self-employed people get the health 
insurance deduction quickly.
  Other major highlights: Our bill has a tax credit for information 
technology training expenses. We have heard it many times that a lot of 
small firms cannot find enough good employees. There are not enough 
around. We provide a tax credit to those companies for technology 
training expenses. It makes a lot of sense.
  We also provide $2 billion over 10 years for a low-income housing tax 
credit, to help reduce housing costs of the buildings so many workers 
earning minimum wages live in.
  We provide estate tax relief. Strangely, that is not in the bill 
offered by the other side. We offer estate tax relief targeted to 
family-owned businesses.
  We increase the unified credit by $450,000 phased in to the year 
2003.
  In addition, we increase the small business meals deduction up to 60 
percent in the year 2002. These are all provisions targeted to small 
business.
  Rather than risking dipping into the Social Security Trust Fund, 
however, we pay for our provisions.
  Why do I say all that? Because the alternative offered on the other 
side is much more expensive. It will lose about $75 billion in revenue 
and there are no offsets for the lost revenue. Our proposal provides 
offsets for the $28 billion tax cut. The major offsets are extending 
the current Superfund tax and, second, closing corporate tax shelters. 
We close down a lot of loopholes in current law of which many companies 
are taking advantage.
  Let me say a couple of words about the ``pay for.'' Right now, the 
balance in the Superfund trust fund is declining dramatically. In 1996, 
the balance in the Superfund trust fund was about $4 billion. The 
estimate for this next year is about $1 billion.
  Why is that important? That is important to continue cleanups under 
the Superfund Program. If the trust fund is declining rapidly and gets 
close to zero, we are not going to have the cleanups this country 
wants. That is, ground water is going to be polluted, drinking water 
polluted, hazardous waste in the soil. It is very important we extend 
the Superfund provisions so the trust fund has the requisite dollars to 
continue cleanups, irrespective of whether we modify the Superfund law. 
I hope we do. But the trust fund is going to decline to zero pretty 
quickly whether or not Congress reauthorizes the trust fund.
  Second, if we continue this Superfund tax, the Appropriations 
Committee is more likely to fund Superfund. Technically, it does not 
have to though it usually appropriates dollars anyway. If the amount of 
money in the trust fund continues to be level and does not taper off--
and I note that it has been tapering off without the continuation of 
the tax--it is more likely the Appropriations Committee is going to 
find the dollars for Superfund cleanups. If we do not reinstate the 
trust fund, what is going to happen? Instead of the polluter paying for 
the cleanup, it will be the general revenue taxpayer who will pay to 
clean up. The polluters will not be paying for it; the general revenue 
taxpayer will pay for the pollution caused by major companies. It is 
imperative we extend the Superfund tax.
  The second major ``pay for'' provision we have in our bill is 
targeted toward tax shelters. Every time Congress shuts down some 
abusive tax shelters, tax attorneys are so smart, they figure out 
another loophole and a way to beat the system. What we are saying is 
for $10 billion over 10 years, let's enact a provision which makes 
transactions such as this much more difficult.
  Many organizations testified there is a problem that needs to be 
addressed in this area. The American Bar Association, the New York 
State Bar Association, the American Association of CPAs, and many 
others have testified there has to be a solution to this problem.
  Even Congressman Archer has admitted we have been very successful in 
shutting down about $50 billion of specific shelters over the last 5 
years, and those are just the tip of the iceberg, according to a lot of 
practitioners.
  So to summarize reasons to support our amendment: No. 1, we increase 
minimum wage because it makes sense, and lets people keep up with 
inflation. No. 2, we give tax breaks to small businesses that need it. 
They are very directed and targeted to the tune of about $28 billion. 
No. 3, we pay for our tax breaks in a very fair way. Contrast that with 
the other side, which stretches out the minimum wage increase, which 
hurts people and, in addition, has a tax bill which is not targeted.
  I ask for a few more minutes.
  Mr. KENNEDY. I yield 3 more minutes.
  Mr. BAUCUS. Mr. President, I have a chart. I noticed the Senator from 
New Mexico was looking at it with a quizzical expression on his face. 
The source is the Center on Budget and Policy Priorities. Everybody has 
a chart these days. Essentially, this chart shows the assumptions. This 
line shows the on-budget deficit.
  The chart assumes we will continue 1999 discretionary spending levels 
inflated for present CPI and historical levels of emergency spending, 
which is an average of the last 8 years. It only addresses spending. 
What this chart does not show is how much the deficit is going to 
increase if we pass the tax cut bill from the other side, about $75 
billion.
  This chart shows that, even without the tax cut the other side wants 
to enact, we are not going to reach a surplus until the year 2005 under 
current scorekeeping. If you add to that the $75 billion tax cut, it is 
clearly going to be a lot later before we even get a surplus. Do not 
forget, you have to add in the last interest and expenses that 
otherwise would be available.
  This is a no-brainer. Let's increase minimum wage fairly. Then let's 
enact tax provisions, tax cuts targeted to small business. Let's pay 
for it in a responsible way. Otherwise, we have the other side which is 
not paid for, a huge tax break which the President is going to veto 
anyway. So let's pass something the President will sign.
  The PRESIDING OFFICER. The Senator's time has expired.


                    Amendment No. 1730, As Modified

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the pending 
Grassley amendment No. 1730 be modified with the text I now send to the 
desk and that the vote occur on or in

[[Page 28981]]

relation to the amendment at 5:30 this evening. That is right now.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment, as modified, is as follows:

       Redesignate titles XI and XII as titles XII and XIII, 
     respectively.
       After title X, insert the following:

              TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS

     SEC. 1101. DEFINITIONS.

       (a) Health Care Business Defined.--Section 101 of title 11, 
     United States Code, as amended by section 1003(a) of this 
     Act, is amended--
       (1) by redesignating paragraph (27A) as paragraph (27B); 
     and
       (2) inserting after paragraph (27) the following:
       ``(27A) `health care business'--
       ``(A) means any public or private entity (without regard to 
     whether that entity is organized for profit or not for 
     profit) that is primarily engaged in offering to the general 
     public facilities and services for--
       ``(i) the diagnosis or treatment of injury, deformity, or 
     disease; and
       ``(ii) surgical, drug treatment, psychiatric or obstetric 
     care; and
       ``(B) includes--
       ``(i) any--

       ``(I) general or specialized hospital;
       ``(II) ancillary ambulatory, emergency, or surgical 
     treatment facility;
       ``(III) hospice;
       ``(IV) home health agency; and
       ``(V) other health care institution that is similar to an 
     entity referred to in subclause (I), (II), (III), or (IV); 
     and

       ``(ii) any long-term care facility, including any--

       ``(I) skilled nursing facility;
       ``(II) intermediate care facility;
       ``(III) assisted living facility;
       ``(IV) home for the aged;
       ``(V) domicilary care facility; and
       ``(VI) health care institution that is related to a 
     facility referred to in subclause (I), (II), (III), (IV), or 
     (V), if that institution is primarily engaged in offering 
     room, board, laundry, or personal assistance with activities 
     of daily living and incidentals to activities of daily 
     living;''.

       (b) Patient Defined.--Section 101 of title 11, United 
     States Code, as amended by subsection (a) of this section, is 
     amended by inserting after paragraph (40) the following:
       ``(40A) `patient' means any person who obtains or receives 
     services from a health care business;''.
       (c) Patient Records Defined.--Section 101 of title 11, 
     United States Code, as amended by subsection (b) of this 
     section, is amended by inserting after paragraph (40A) the 
     following:
       ``(40B) `patient records' means any written document 
     relating to a patient or record recorded in a magnetic, 
     optical, or other form of electronic medium;''.
       (d) Rule of Construction.--The amendments made by 
     subsection (a) of this section shall not affect the 
     interpretation of section 109(b) of title 11, United States 
     Code.

     SEC. 1102. DISPOSAL OF PATIENT RECORDS.

       (a) In General.--Subchapter III of chapter 3 of title 11, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 351. Disposal of patient records

       ``If a health care business commences a case under chapter 
     7, 9, or 11, and the trustee does not have a sufficient 
     amount of funds to pay for the storage of patient records in 
     the manner required under applicable Federal or State law, 
     the following requirements shall apply:
       ``(1) The trustee shall--
       ``(A) publish notice, in 1 or more appropriate newspapers, 
     that if patient records are not claimed by the patient or an 
     insurance provider (if applicable law permits the insurance 
     provider to make that claim) by the date that is 90 days 
     after the date of that notification, the trustee will destroy 
     the patient records; and
       ``(B) during the 90-day period described in subparagraph 
     (A), attempt to notify directly each patient that is the 
     subject of the patient records and appropriate insurance 
     carrier concerning the patient records by mailing to the last 
     known address of that patientance appropriate insurance 
     carrier an appropriate notice regarding the claiming or 
     disposing of patient records.
       ``(2) If after providing the notification under paragraph 
     (1), patient records are not claimed during the 90-day period 
     described under that paragraph, the trustee shall mail, by 
     certified mail, at the end of such 90-day period a written 
     request to each appropriate Federal or State agency to 
     request permission from that agency to deposit the patient 
     records with that agency.
       ``(3) If, following the period in paragraph (2) and after 
     providing the notification under paragraph (1), patient 
     records are not claimed during the 90-day period described in 
     paragraph (1)(A) or in any case in which a notice is mailed 
     under paragraph (1)(B), during the 90-day period beginning on 
     the date on which the notice is mailed, by a patient or 
     insurance provider in accordance with that paragraph, the 
     trustee shall destroy those records by--
       ``(A) if the records are written, shredding or burning the 
     records; or
       ``(B) if the records are magnetic, optical, or other 
     electronic records, by otherwise destroying those records so 
     that those records cannot be retrieved.''.
       (b) Clerical Amendment.--The chapter analysis for chapter 3 
     of title 11, United States Code, is amended by inserting 
     after the item relating to section 350 the following:

``351. Disposal of patient records.''.

     SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF CLOSING 
                   A HEALTH CARE BUSINESS.

       Section 503(b) of title 11, United States Code, is 
     amended--
       (1) in paragraph (5), by striking ``and'' at the end;
       (2) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(7) the actual, necessary costs and expenses of closing a 
     health care business incurred by a trustee or by a Federal 
     agency (as that term is defined in section 551(1) of title 5) 
     or a department or agency of a State or political subdivision 
     thereof, including any cost or expense incurred--
       ``(A) in disposing of patient records in accordance with 
     section 351; or
       ``(B) in connection with transferring patients from the 
     health care business that is in the process of being closed 
     to another health care business.''.

     SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PATIENT 
                   ADVOCATE.

       (a) In General.--
       (1) Appointment of ombudsman.--Subchapter II of chapter 3 
     of title 11, United States Code, is amended by inserting 
     after section 331 the following:

     ``Sec. 332. Appointment of ombudsman

       ``(a) Not later than 30 days after a case is commenced by a 
     health care business under chapter 7, 9, or 11, the court 
     shall appoint an ombudsman with appropriate expertise in 
     monitoring the quality of patient care to represent the 
     interests of the patients of the health care business. The 
     court may appoint as an ombudsman a person who is serving as 
     a State Long-Term Care Ombudsman appointed under title III or 
     VII of the Older Americans Act of 1965 (42 U.S.C. 3021 et 
     seq. and 3058 et seq.).
       ``(b) An ombudsman appointed under subsection (a) shall--
       ``(1) monitor the quality of patient care, to the extent 
     necessary under the circumstances, including reviewing 
     records and interviewing patients and physicians;
       ``(2) not later than 60 days after the date of appointment, 
     and not less frequently than every 60 days thereafter, report 
     to the court, at a hearing or in writing, regarding the 
     quality of patient care at the health care business involved; 
     and
       ``(3) if the ombudsman determines that the quality of 
     patient care is declining significantly or is otherwise being 
     materially compromised, notify the court by motion or written 
     report, with notice to appropriate parties in interest, 
     immediately upon making that determination.
       ``(c) An ombudsman shall maintain any information obtained 
     by the ombudsman under this section that relates to patients 
     (including information relating to patient records) as 
     confidential information.''.
       (2) Clerical amendment.--The chapter analysis for chapter 3 
     of title 11, United States Code, is amended by inserting 
     after the item relating to section 331 the following:

``332. Appointment of ombudsman.''.
       (b) Compensation of Ombudsman.--Section 330(a)(1) of title 
     11, United States Code, is amended--
       (1) in the matter proceeding subparagraph (A), by inserting 
     ``an ombudsman appointed under section 331, or'' before ``a 
     professional person''; and
       (2) in subparagraph (A), by inserting ``ombudsman,'' before 
     ``professional person''.

     SEC. 1105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO TRANSFER 
                   PATIENTS.

       (a) In General.--Section 704(a) of title 11, United States 
     Code, as amended by section 219 of this Act, is amended--
       (1) in paragraph (9), by striking ``and'' at the end;
       (2) in paragraph (10), by striking the period and inserting 
     ``; and''; and
       (3) by adding at the end the following:
       ``(11) use all reasonable and best efforts to transfer 
     patients from a health care business that is in the process 
     of being closed to an appropriate health care business that--
       ``(A) is in the vicinity of the health care business that 
     is closing;
       ``(B) provides the patient with services that are 
     substantially similar to those provided by the health care 
     business that is in the process of being closed; and
       ``(C) maintains a reasonable quality of care.''.
       (b) Conforming Amendment.--Section 1106(a)(1) of title 11, 
     United States Code, is amended by striking ``704(2), 704(5), 
     704(7), 704(8), and 704(9)'' and inserting ``704(a) (2), (5), 
     (7), (8), (9), and (11)''.

     SEC. 1106. ESTABLISHMENT OF POLICY AND PROTOCOLS RELATING TO 
                   BANKRUPTCIES OF HEALTH CARE BUSINESSES.

       Not later than 30 days after the date of enactment of this 
     Act, the Attorney General of

[[Page 28982]]

     the United States, in consultation with the Secretary of 
     Health and Human Services and the National Association of 
     Attorneys General, shall establish a policy and protocols for 
     coordinating a response to bankruptcies of health care 
     businesses (as that term is defined in section 101 of title 
     11, United States Code), including assessing the appropriate 
     time frame for disposal of patient records under section 1102 
     of this Act.

     SEC. 1107. EXCLUSION FROM PROGRAM PARTICIPATION NOT SUBJECT 
                   TO AUTOMATIC STAY.

       Section 362(b) of title 11, United States Code, as amended 
     by section 901(d) of this Act, is amended--
       (1) in paragraph (27), by striking ``or'' at the end;
       (2) in paragraph (28), by striking the period at the end 
     and inserting ``; or''; and
       (3) by inserting after paragraph (28) the following:
       ``(29) under subsection (a), of the exclusion by the 
     Secretary of Health and Human Services of the debtor from 
     participation in the medicare program or any other Federal 
     health care program (as defined in section 1128B(f) of the 
     Social Security Act (42 U.S.C. 1320a-7b(f)) pursuant to title 
     XI of such Act (42 U.S.C. 1301 et seq.) or title XVIII of 
     such Act (42 U.S.C. 1395 et seq.).''.

  Mr. GRASSLEY. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  Mr. DOMENICI. Is there any time before the vote or are we supposed to 
vote now?
  The PRESIDING OFFICER. Nine seconds.


                           amendment No. 2547

  Mr. DOMENICI. Mr. President, if we pass this minimum wage bill that I 
offered today with the taxes we have on it, we would welcome the 
President vetoing it. As a matter of fact, I do not believe he would. 
We have not only the minimum wage, but these are the right kinds of tax 
cuts to go along with it, and they are very desirable for the American 
economy right now.
  The PRESIDING OFFICER. The Senator's time has expired.


                VOTE ON AMENDMENT NO. 1730, AS MODIFIED

  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
1730, as modified. The yeas and nays have been ordered. The clerk will 
call the roll.
  The bill clerk called the roll.
  Mr. FITZGERALD (when his name was called). Present.
  Mr. NICKLES. I announce that Senator from Texas (Mr. Gramm) is 
necessarily absent.
  Mr. REID. I announce that the Senator from New York (Mr. Moynihan) is 
necessarrily absent.
  I further announce that the Senator from Vermont (Mr. Leahy) is 
absent due to family illness.
  I also announce that the Senator from South Carolina (Mr. Hollings) 
is absent due to a death in family.
  I further announce that, if present and voting, the Senator from New 
York (Mr. Moynihan) and the Senator from Vermont (Mr. Leahy) would each 
vote ``yea.''
  The result was announced--yeas 94, nays 0, as follows:

                      [Rollcall Vote No. 355 Leg.]

                                YEAS--94

     Abraham
     Akaka
     Allard
     Ashcroft
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Brownback
     Bryan
     Bunning
     Burns
     Byrd
     Campbell
     Chafee, L.
     Cleland
     Cochran
     Collins
     Conrad
     Coverdell
     Craig
     Crapo
     Daschle
     DeWine
     Dodd
     Domenici
     Dorgan
     Durbin
     Edwards
     Enzi
     Feingold
     Feinstein
     Frist
     Gorton
     Graham
     Grams
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Kyl
     Landrieu
     Levin
     Lieberman
     Lincoln
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Mikulski
     Murkowski
     Murray
     Nickles
     Reed
     Reid
     Robb
     Roberts
     Rockefeller
     Roth
     Santorum
     Sarbanes
     Schumer
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Voinovich
     Warner
     Wellstone
     Wyden

                        ANSWERED ``PRESENT''--1

       
     Fitzgerald
       

                             NOT VOTING--5

     Gramm
     Hollings
     Lautenberg
     Leahy
     Moynihan
  The amendment (No. 1730), as modified, was agreed to:


                           amendment no. 2751

  Mr. KENNEDY. Mr. President, how much time does our side have?
  The PRESIDING OFFICER (Mr. Fitzgerald). The Senator from 
Massachusetts controls 27 minutes.
  Mrs. MURRAY. Mr. President, I rise today in strong support of the 
Kennedy amendment and as a cosponsor of the minimum wage increase.
  In this debate, many people have the wrong idea about who this 
increase would affect. Many people think the typical wage earner is a 
young man or woman flipping burgers or working at a convenience store 
trying to make a few extra dollars to buy some CD's or to go to the 
movies. That image is inaccurate. And until we really understand who 
the people are who rely on the minimum wage, we won't approach this 
debate with the urgency it requires.
  To clear up that misconception, let me set the record straight. In 
reality, 70 percent of the people earning a minimum wage are over the 
age of 20. That means that 11.4 million adults this year will have to 
try to live on a salary of $10,700.
  Forty percent of these same adults are the sole source of income for 
their families. These are people who are working hard--just to get by 
and support their families. They deserve a fighting chance.
  I am especially concerned that 59 percent of those struggling on the 
minimum wage are women. 6.8 million women--many of these single 
mothers--would benefit directly from this increase.
  These single mothers are doing their best. They are trying to raise 
two kids--on average--on a below-poverty income. And how does this 
Congress support these struggling parents? By attacking programs like 
Medicaid, by cutting child care support, by taking away funding for 
nutrition programs, and by taking actions that hurt working families in 
need.
  These are the same group of people that Congress says it wants to 
keep off of public support.
  But how does this Congress support these struggling parents? By 
cutting vital programs and fighting efforts like this one--an effort 
that will help them work themselves above the poverty line.
  This amendment does not eliminate jobs. It keeps people working--
people who otherwise would be completely reliant on public support. 
Just a $1.00 raise would generate $2,000 in potential income for 
minimum wage workers. For an average family of four, that means 7 
months of groceries, 5 months of rent, or 13 months of health care 
expenses.
  I reached my decision to support this increase after very careful 
consideration. I have listened to the concerns of small business owners 
from across my state, who shared with me their thoughts about this 
increase.
  I am happy to say that most of the businesses in Washington state are 
experiencing unprecedented growth.
  In fact, since the federal minimum wage was last increased in 1996-
97, employment in Washington has grown. Since September 1996, 231,900 
new jobs have been created in Washington state--an increase of 9.5%. 
Washington's economy is strong, and our low-wage workers should share 
in that success.
  Because my constituents understand the value of the minimum wage, 
they overwhelmingly passed their own minimum wage increase last year in 
Washington state. They raised the state minimum wage to $5.70 this 
year. In the year 2000, it will move to $6.50, and after that it will 
be indexed based on the Consumer Price Index. Mr. President, we should 
follow the example of my state and increase the minimum wage for all 
Americans.
  The increase that we passed in the last Congress should be the first 
step--not the last--on our road to help these hard-working citizens.
  It should be the first step because the economy and our world have 
changed--and we need to keep up with those changes. In 1979, a person 
could work 40 hours a week at minimum wage and stay out of poverty. 
Today, it takes 52

[[Page 28983]]

hours. To just reach the poverty line for a family of four, the minimum 
wage would have to be $7.89. That's why our last increase was a good 
start and why this proposed increase is the next vital step to helping 
these working families rise out of poverty.
  Overall, a slight increase in the minimum wage provides those who 
work hard and play-by-the-rules an increased opportunity to succeed. If 
any of my colleagues oppose this minimum wage increase, I would ask 
them to consider trying to live on $10,700 this year--not just live on 
it--but try to raise a family on it. I think when you consider this 
debate in those terms, the right thing to do becomes clear.
  It would be embarrassing if this Congress voted to raise its own 
salary but didn't vote to let hard-working American families work their 
way out of poverty.
  I urge my colleagues to vote to increase the minimum wage. Let's show 
the American people that we have our priorities straight.
  Mr. KENNEDY. I yield 10 minutes to the Senator from Illinois.
  Mr. DOMENICI. Will the Senator yield?
  Mr. DURBIN. Yes.
  Mr. DOMENICI. Mr. President, might I ask, is the Senator speaking on 
his time on the Domenici amendment?
  Mr. DURBIN. That's correct.
  Mr. DOMENICI. Mr. President, I ask unanimous consent that, following 
the distinguished Senator from Illinois, Senator Kay Bailey Hutchison 
be the next speaker on our side.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Illinois is recognized.
  Mr. DURBIN. Mr. President, when the Senate returns tomorrow morning, 
our very first vote will be an important one for literally millions of 
American workers and families, and some 320,000 in Illinois, who are 
watching carefully to see if this Senate is listening to America. It is 
the question of the minimum wage and whether or not it is going to be 
increased.
  Senator Kennedy has a proposal that I support which calls for an 
increase in the minimum wage from the current level of $5.15 an hour to 
50 cents more on January 1 of the year 2000, and then 50 cents again on 
the following January 1.
  So that those who are going to work every single day, trying to raise 
their families, trying to make a decent income, will, in fact, move 
closer to a livable wage. This is still a long way away from it because 
people who are earning $5.15 an hour or $6.15 an hour hardly live in 
the lap of luxury.
  There is a noteworthy difference between the approach being suggested 
by my friend and colleague, the Senator from New Mexico, on the 
Republican side, and the suggestion of Senator Kennedy, my friend and 
colleague on the Democratic side, when it comes to a minimum wage. The 
difference may seem cosmetic to those who do not take a close look 
because the Republican side suggests that to raise the minimum wage by 
$1, we should take an extra year or 3 years instead of 2 to achieve 
this.
  What does that mean to the working person? If the Republican approach 
should pass, it means $1,200. For someone making $50,000 a year or 
$100,000, or more, $1,200 hardly seems to be a grand amount of money to 
be worried over when you stretch it over a period of time. But imagine 
if your income was only $10,000 a year on a minimum wage, and what is 
at stake here is $1,200. The Republican approach would shortchange 
those who go to work every single day in America on a minimum wage by 
$1,200 as they stretch this out over a 3-year period of time.
  Of course, the bill does much more than address the increase in the 
minimum wage. It also addresses some needed changes in tax law.
  I support Senator Kennedy's approach. He does provide the kind of 
relief which small businesses need in order to find the tax relief to 
provide things for their employees. It is a proposal from Senator Chuck 
Robb of Virginia and Senator Max Baucus of Montana, a small business 
tax proposal which, among other things, finally puts a 100-percent 
deduction for the health insurance costs of self-employed people. The 
Senate and Congress have been moving toward this goal. This bill will 
achieve it on the Democratic side, if it is passed.
  It also provides assistance to small businesses that provide child 
care. Think about families, particularly single mothers and single 
parents who have to worry every single day whether or not their kids 
are safe. This is an incentive for small businesses to provide child 
care facilities, a tax credit, one that can assist them and their 
workers.
  In addition, there is a pension package which has been supported by 
Senator Graham, a Democrat of Florida, and Senator Grassley, a 
Republican of Iowa. The Democratic package is not only a well-balanced 
package providing child care health and retirement benefits for small 
businesses, but more important than anything, the Democratic package is 
paid for. It is paid for. The Republican package of tax changes is not.
  In other words, it is an extension of the possibility of debt. It is 
a promise that can't be kept. The Democratic package is paid for. The 
Republican one is not. The Democratic package increases the minimum 
wage over 2 years by $1 an hour, and the Republicans over 3 years 
costing workers $1,200 by taking the Republican approach.
  I say to those who are working across America that this is hardly 
what they need. It is curious to me that only a few weeks ago, the same 
Republican Party that cannot produce $1,200 for people who get up and 
go to work every day at minimum-wage jobs came before us with a $792 
billion tax cut primarily for wealthiest people in this country.
  Mr. DOMENICI. Mr. President, can we have order? The Senator deserves 
to be heard.
  The PRESIDING OFFICER. The Senate will be in order.
  The Senator from Illinois.
  Mr. DURBIN. I thank the Senator from New Mexico.
  Mr. President, consider that only a few weeks ago, this Chamber was 
seriously considering a $792 billion tax cut for some of the wealthiest 
people in America, and many people on the other side of the aisle said 
that is good, wise policy. Alan Greenspan of the Federal Reserve didn't 
think so. Frankly, the people of America don't think so. They told the 
Republican Party to keep this tax cut primarily for wealthy people.
  Now comes a proposal from the Republican side when it comes to the 
working families that would cut out $1,200 in income, $1,200 to a 
family making about $10,000 a year. That is an upside down priority. 
That is a priority that forgets the real people who are working in this 
country to make America strong. Eleven point four million workers would 
get a pay increase with the Democratic Kennedy minimum wage increase 
package, and with this proposed increase that Senator Kennedy has 
proposed and I am supporting, it means over $2,000 a year for people 
who are scraping to get by, primarily women who are in the minimum wage 
workforce, African-Americans, and Hispanics, people who go to work 
every single day who understand the importance of work and deserve our 
respect for doing so.
  The vote tomorrow morning will be a measure of how much respect we 
have for them. This $2,000 increase for these workers can mean 7 months 
of groceries, 5 months of rent, 10 months of utilities, tuition and 
fees at a community college so one of their kids has a chance to even 
have a better and more successful life.
  I say to the Senate this is a test. It is a test as we wrap up this 
session about where our values will be. Will they be with these working 
families? Will we make certain they get an increase in their basic wage 
or will we stand with those who want to delay it and delay and delay 
it? The argument is often made that if you increase the minimum wage, 
you are going to lose jobs.
  Take a look at my home State of Illinois. Since the 1996 increase in 
the minimum wage, take a look at the real statistics: 268,100 new jobs 
since we last increased the minimum wage; 33,100 new retail jobs, the 
area where most

[[Page 28984]]

minimum-wage jobs are found; unemployment is down 10 percent; and the 
unemployment rate is 4.7 percent.
  As we increase the minimum wage, we have not seen all of the things 
that the Republicans tell us we should be afraid of--afraid of losing 
jobs and creating chaos in the workplace. Exactly the opposite has 
happened across America. Since we last raised the minimum wage, we have 
seen an economy moving forward.
  Now the real test for this Senate is whether or not we are going to 
bring on board this ship as it moves forward the people who get up and 
go to work every single day, the men and women who work in the 
convenience stores, who make our beds in motels and hotels we stay in 
overnight, the folks who serve our food and cook it in the kitchen. 
These are the invisible people who keep America moving forward. But 
these invisible people will be watching tomorrow to see if this Senate 
is going to give the minimum wage increase which is so essential.
  I hope those on the Republican side who are preaching fiscal 
integrity and fiscal soundness will think twice about voting for a bill 
that not only stretches the minimum wage an extra year but provides tax 
cuts without compensating offsets. What does that mean in layman's 
terms? The Republican package doesn't pay for the tax cuts that they 
are trying to enact. They have some good ideas, I am sure. But it isn't 
honest if you didn't pay for them.
  What Senator Kennedy and the Democrats have done, what we have said 
is when it comes to small business and the tax proposal, we have the 
means of paying for them. And by and large, we are going to make sure 
that when the small businesses that enact these increases in the 
minimum wage turn to us and say, are you listening to some of our other 
concerns, the answer will be yes. We want to make sure you can deduct 
every single penny of your health insurance premiums as every major 
corporation can. Self-employed people, farmers, and small businesses 
deserve the same benefit: Make sure that there is a facility available 
for child care; make sure that a pension package can be offered--things 
that will help small businesses extend opportunities for their 
workforce and create better employee moral and productivity.
  I close by saying that this vote tomorrow morning at 10:30 is a test 
of the Senate's will and the Senate's values. I hope that we will stand 
by people who go to work every single day.
  It is one thing to preach on the floor about people looking for a 
handout; these folks are looking for a hand up. They are working and 
need assistance and an increase in their minimum wage. I rise in strong 
support of the proposal by Senator Kennedy. I hope my colleagues on 
both sides of the aisle will join me.
  I yield the floor.


                           Amendment No. 2547

  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mrs. HUTCHISON. Mr. President, I rise to support the Domenici 
substitute for the Kennedy amendment because I think it strikes the 
balance we need to have. We have a strong economy today. We want to 
make sure it stays strong. We are talking about a minimum wage increase 
that is $1 over a period of 3 years. This should not be a shock to the 
small businesses, the farmers, and the ranchers who are concerned about 
having base costs go up--not even people who don't pay minimum wage but 
people who are concerned about paying at the higher levels and 
increasing the potential for inflation. I think stretching it out over 
1 more year makes sense.
  I also think we need to look at the small business tax cuts we tried 
to give to small businesses in the tax cut package the President 
vetoed. We have brought some of those back. It provides a balance of 
adding more to the working person, especially the part-time worker, but 
also giving a little bit of tax help to the self-employed and small 
business people who might get hit by having the whole wage scale 
increased. What we are looking for is balance.
  I will talk about a few of the tax cuts with which we are going to 
try to help small business. First is an amendment from a bill I 
introduced that is called the Bonus Incentive Act. Today, employers can 
give a performance-based bonus to a person who is exempt, a salaried 
employee, and that person will be able to take that bonus, pay their 
withholding taxes, and go on their merry way; an employer can't do that 
for an hourly employee. If they give a performance-based bonus to an 
hourly employee, the employer has to go back and figure the whole 
year's wages and refigure any overtime pay that has been given to that 
employee. Many employers say it is just not worth the trouble, or they 
try to disguise the bonus as something else.
  Employers have come to Congress and testified they want to be able to 
reward hourly employees for good service. At the House Education and 
Workforce Committee, Pam Farr, the former senior vice president for 
Marriott Lodging, recently testified that Marriott used game-sharing 
plans for customer service personnel that rewarded employees for 
friendly treatment of customers. Cordant Technologies, which makes 
solid rocket boosters for the space shuttle, rewards their workers for 
reaching goals, for workplace safety, indirect cost reduction, and 
customer satisfaction. Many employers are concerned about all the 
paperwork that would have to be prepared if they gave this employment 
bonus. In other testimony from a human resources director, it took 4 
people 160 hours to calculate the bonuses for 235 employees.
  What has been incorporated into the Domenici amendment makes it easy 
for employers to give performance-based bonuses to hourly employees. 
There is no reason we should have a big, mumbo-jumbo set of regulations 
that make it difficult. We want to make it easier for those employees 
to be rewarded for merit.
  Other tax relief in this bill is an above-the-line real deduction for 
health insurance expenses for individuals who don't have health care 
coverage. I know people who don't have insurance who have huge medical 
bills. Why shouldn't they be able to deduct all of their medical 
expenses if they don't have employer-provided insurance coverage? It 
also provides 100-percent deductibility for health care insurance for 
the self-employed.
  I think it should be the goal of everyone in this Chamber to 
encourage employers to be able to give health insurance to their 
employees and for the self-employed or the individual to buy health 
insurance. Why wouldn't we give incentives for people to buy health 
care insurance? We have been talking about that for the last 5 years. 
Why don't we put our incentives where they can make a difference?
  It also accelerates an increase in small business expensing. This is 
particularly helpful for farmers with direct expensing and accelerating 
the expensing, especially for small businesses. It reduces the Federal 
unemployment tax that small businesses pay from 0.8 percent to 0.6 
percent. It makes permanent the work opportunity tax credit. This is a 
very important tax credit that is an incentive for people to hire 
people off welfare. It gives a tax credit of up to $2,400 for wages 
paid to employees who are hired right off the welfare rolls. We think 
this is a wonderful opportunity to give the people whom we want to give 
a chance at contributing to their families, coming off welfare, to have 
that incentive for the employer to hire the person off welfare and give 
that person that first chance to be a contributing member of society.
  These are some of the tax relief parts of the bill I think are so 
important.
  There is one more area I want to talk about because it is my 
amendment. This is an amendment I have introduced before. It was in the 
bill the President unfortunately vetoed. In fact, I introduced this 
bill 2 years ago. It allows women over 50 to have makeup payments to 
their pension plans. How many women do we know who have left the 
workforce to have their children or to raise their children until they 
go into elementary school, or perhaps they stay home and raise their 
children all the way through high school; then they come back into the 
workforce. Perhaps they lose their spouse and they don't have a good 
source of income. They go back to

[[Page 28985]]

work, and they are penalized in their pension systems and their 
stability in their retirement years because they lost all those years 
that would allow them to start building that pension plan.
  Women who leave the workforce to raise their children and then come 
back are penalized in this society. These are the people who need 
retirement stability the most. These are the people who live the 
longest and who don't have the same opportunity for a pension plan 
because they haven't been able to establish a pension over the years 
because they have stayed home and raised their children.
  Senator Domenici's amendment allows women over 50 who are coming back 
into the workplace to make up the payments they have lost when they 
left the workplace. The Domenici amendment is a good amendment. It is a 
balanced amendment. It provides a minimum wage increase over a 3-year 
period, and it gives help and relief to the small businesses of our 
country that are going to be hit by the minimum wage increase. This 
will offset it.
  These are good reliefs. It is relief for health insurance coverage. 
It is relief for people who have medical expenses, who don't have 
health care coverage. It is relief for small business expensing, relief 
for women who are discriminated against in the pension systems when 
they leave the workplace to raise their children and then cannot 
continue to contribute to their retirement systems. It reduces the 
Federal unemployment tax that is a huge burden on small businesses, and 
it makes permanent the Work Opportunity Tax Credit, the credit that 
gives a $2,400 tax credit to people who hire people off welfare.
  I urge my colleagues to support this balanced approach, giving help 
to the workers, giving help to the small business people who may be 
affected by this added expense in their business. It is a fair 
approach. It is a balanced approach. I think it will have the best 
chance to keep our economy strong by keeping the people in business who 
are creating the jobs that keep this economy going. We want more 
opportunity for more workers, and that is what this amendment will do.
  I urge support for the Domenici amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, how much time do we have remaining?
  The PRESIDING OFFICER. The Senator has 17 minutes.
  Mr. KENNEDY. Mr. President, I yield myself 7 minutes.
  Mr. President, I think it is probably appropriate the Senate take a 
moment to look at what the majority leader has stated about increasing 
the minimum wage. Over the course of the afternoon, we have had a 
number of speakers who have made a powerful case in favor of increasing 
the minimum wage. Yet we have against this background what the majority 
leader, Senator Lott, said about our proposal:

       It will not go to the President. I can guarantee you that.

  So the American people ought to understand no matter how they might 
agree with us and are convinced of both the importance and the fairness 
of the issue, that is the position of the majority leader. That is part 
of the difficulty and the complexity we have been facing over this 
whole year. There has been this unalterable opposition to any break for 
the hardest working Americans, the ones at the lower rung of the 
economic ladder. Even if we are able to somehow be successful in 
winning this tomorrow morning, it is not going to go to the President. 
He is going to use every effort he possibly can to defeat this.
  Earlier this evening, the Senator from Oklahoma, Senator Nickles, 
pointed out CBO estimates of a loss of 100,000 to 500,000 jobs. Those 
are absolutely identical figures to what they said when we raised it in 
1996 and 1997. They were found to be completely inaccurate.
  I ask unanimous consent to have printed in the Record the references 
to 27 different studies that have been done nationwide, looking at the 
economic impact of the last increase in the minimum wage that will 
indicate positively that there has been an expansion of employment.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Studies That Conclude a Moderate Increase in the Minimum Wage Does Not 
                               Cost Jobs

       Belman, Dale, and Paul Wolfson. 1998. ``The Minimum Wage: 
     The Bark Is Worse Than The Bite.'' Working Paper.
       ___ and ___. 1997. ``A Time Series Analysis of Employment, 
     Wages, and the Minimum Wage.'' Working Paper.
       Bernstein, Jared, and John Schmitt. 1997. ``The Sky Hasn't 
     Fallen: An Evaluation of the Minimum-Wage Increase.'' 
     Economic Policy Institute Briefing Paper.
       ___ and ___. 1997. ``Estimating the Employment Impact of 
     the 1996 Minimum Wage Increase Using Deere, Murphy, and 
     Welch's Approach.'' Economic Policy Institute Working Paper.
       Burdett, Kenneth, and Dale Mortensen. 1989. ``Equilibrium 
     Wage Differentials and Employer Size.'' Discussion Paper, No. 
     860. Evanston, IL: Northwestern University Center for 
     Mathematical Studies in Economics and Management Science.
       Card, David. 1992. ``Using Regional Variation in Wages to 
     Measure the Effects of the Federal Minimum Wage.'' Industrial 
     and Labor Relations Review, 46:22-37.
       ___. 1992. ``Do Minimum Wages Reduce Employment?'' A Case 
     Study of California, 1987-1989.'' Industrial and Labor 
     Relations Review, 46:38-54.
       ___, and Alan Krueger. 1994. ``Minimum Wages and 
     Employment: A Case Study of the Fast-Food Industry in New 
     Jersey and Pennsylvania.'' American Economic Review, 84:772-
     93.
       ___ and ___. Myth and Measurement: The New Economics of the 
     Minimum Wage (Princeton, NJ: Princeton University Press, 
     1995).
       ___ and ___. 1999. ``A Reanalysis of the Effect of the New 
     Jersey Minimum Wage Increase on the Fast-Food Industry with 
     Representative Payroll Data.'' Princeton University 
     Industrial Relations Section Working Paper #393.
       Connolly, Laura, and Lewis M. Segal. 1995. ``Minimum Wage 
     Legislation and the Working Poor.'' Working Paper.
       Dickens, Richard, Stephan Machin, and Alan Manning. ``The 
     Effects of Minimum Wages on Employment: Theory and Evidence 
     from the UK.'' NBER Working Paper No. 4742, Cambridge, MA, 
     1994.
       Freeman, Richard. 1994. ``Minimum Wages--Again!'' 
     International Journal of Manpower, 15:8-25.
       Grenier, Gilles, and Marc Seguin. 1991. ``L'incidence du 
     Salaire Minimum sur le Marche du Travail des Adolescents au 
     Canada: Une Reconsideration des Resultats Empiriques.'' 
     L'Actualite Economique, 67:123-43.
       Katz, Lawrence, and Alan B. Krueger. 1992. ``The Effect of 
     the Minimum Wage on the Fast Food Industry.'' Industrial and 
     Labor Relations Review, 46:6-21.
       Klerman, Jacob. 1992. ``Study 12: Employment Effect of 
     Mandated Health Benefits.'' In Health Benefits and the 
     Workforce, U.S. Department of Labor, Pension, and Welfare 
     Benefits Administration. Washington, D.C.: U.S. Government 
     Printing Office.
       Lang, Kevin. 1994. ``The Effect of Minimum Wage Laws on the 
     Distribution of Employment: Theory and Evidence.'' 
     Unpublished paper. Boston University, Department of 
     Economics.
       Lester, Richard. 1964. Economics of Labor. (New York: 
     Macmillian).
       Machin, Stephen, and Alan Manning. 1994. ``The Effects of 
     Minimum Wages on Wage Dispersion and Employment: Evidence 
     from the U.K. Wage Councils.'' Industrial and Labor Relations 
     Review, 47:319-29.
       Rosenbaum, Paul. ``Using Quantile Averages in Matched 
     Observational Studies.'' Working Paper.
       ___. ``Choice As An Alternative To Control in Observational 
     Studies,'' Working Paper.
       Siskind, Frederic. 1977. ``Minimum Wage Legislation in the 
     United States: Comment.'' Economic Inquiry, January: 135-38.
       Spriggs, William. 1994. ``Changes in the Federal Minimum 
     Wage: A Test of Wage Norms.'' Journal of Post-Keynesian 
     Economics, Winter 1993/94, pp. 221-239.
       Wellington, Allison. 1991. ``Effects of the Minimum Wage on 
     the Employment Status of Youths: An Update.'' Journal of 
     Human Resources, 26:27-46.
       Wessels, Walter. 1994. ``Restaurants as Monopsonies: 
     Minimum Wages and Tipped Services.'' Working Paper. North 
     Carolina State University.
       Wolfson, Paul. 1998. ``A Re-Examination of Time Series 
     Evidence of the Effect of the Minimum Wage on Youth 
     Employment and Unemployment.'' Working Paper.
       Zaidi, Albert. 1970. A Study of the Effects of the $1.25 
     Minimum Wage Under the Canada Labour (Standards) Code. Task 
     Force of Labour Relations, study no. 16. Ottawa: Privy 
     Council Office.

  Mr. KENNEDY. Mr. President, perhaps tomorrow we will be able to take 
the time to talk about what is happening to minimum-wage workers. As I

[[Page 28986]]

mentioned earlier today, minimum-wage workers are teachers' aides, 
nursing home aides. Nursing home aides have a 94-percent turnover. The 
principal reason for the turnover is because they are paid so poorly. 
They are the people working to try to provide some care and attention 
to the elderly. I see our good friend from Connecticut who has been a 
leader in establishing day care. The turnover that is taking place in 
the day-care centers is very similar. It is not quite as high but very 
dramatic. These are our children. This is our future. This is as a 
result of failing to provide an adequate increase in the minimum wage.
  There are two final points I want to raise with regard to the 
Republican proposal. As has been mentioned earlier, the effect of the 
Republican proposal will mean that 3 years from now, the average 
minimum-wage worker will have made $1,200 less--$1,200 less--than they 
would have if we had passed the Daschle proposal. That is a lot of 
money for working Americans. That is 5 months of rent, a year of 
tuition, 6 months of utilities. This is important to hard-working 
Americans, make no mistake about it.
  It might not mean a lot to Members of the Senate who have just voted 
themselves a $4,600 pay increase. We are not deferring that pay 
increase for Senators 2 years or 3 years. We are saying the minimum 
wage ought to be over a 2-year period. But our Republican friends say, 
no, let's spread it over 3 years. We are not doing that with regard to 
our pay increase.
  I hope when Members go back and talk to their constituents, they are 
able to justify why we were worth $4,600 more this year while saying no 
to hard-working Americans--they are not worth 50 cents more next year 
and 50 cents more the year after.
  Finally, I want to mention one very important aspect of the 
Republican proposal that has not been addressed.
  I yield myself 2 more minutes, Mr. President.
  With this particular chart, we illustrate what we have been facing 
over this past year with regard to the Republican attack on working 
families: Resisting a pay increase with the minimum wage; balancing the 
budget on the backs of the working poor. Governor Bush pointed that 
out. You do not have to hear it from Democrats. We have seen some 
retreat on that by the Republican leadership. Then providing pensions 
for the wealthiest individuals as they do under this proposal; blocking 
workers' rights to organize, the salting bill; and undermining worker 
safety, providing the waivers of penalties for violations of OSHA; 
cutting workers' pay.
  You can say, where does that come in? Under the Republican proposal, 
they recalculate how overtime is going to be considered. This has not 
been done since 1945 when the proposal was struck down by the Supreme 
Court which said they basically, fundamentally undermine the Fair Labor 
Standards Act. If you take the Republican proposal on recomputing 
overtime, effectively you are undermining what many workers would be 
able to receive with an increase in the minimum wage. There has not 
been a word of that spoken by the proponents of this amendment. They 
tucked this right into their particular proposal.
  Mr. WELLSTONE. Will the Senator yield for a question?
  Mr. KENNEDY. I yield for a question.
  Mr. WELLSTONE. I am listening to this for the first time. This has 
not been a part of this debate. There are 73 million Americans right 
now who are entitled to overtime pay. Is the Senator saying part of the 
Republican amendment effectively repeals the overtime pay provisions of 
the Fair Labor Standards Act, which act has been in effect for 60 
years? This is a cornerstone of fairness for working families in this 
country. Is that what the Senator is saying?
  Mr. KENNEDY. This Senator is saying there will be an overtime 
payment, but the overtime payment will be calculated in a way that will 
diminish, in a significant way, the actual overtime workers should be 
entitled to and the way it has been computed for the last 45 years. It 
is a dramatic change in the Fair Labor Standards Act.
  The Supreme Court has said, as I said, if that provision had been 
accepted when it was offered in 1945, it effectively emasculates the 
overtime provision of the Fair Labor Standards Act. The overtime words 
will be there, there will be a base pay that they will pay overtime on, 
but not the way they are being paid now. The Republican proposal will 
undermine, in a significant and dramatic way, the way that hourly 
workers are being paid in the United States.
  Mr. WELLSTONE. Mr. President, one final question for the Senator. If 
companies are going to now be able to make the payment in bonuses and 
do an end run, basically, around the Fair Labor Standards Act, which is 
so important to 73 million Americans who right now are entitled to that 
overtime pay, then am I not correct that what the Republicans are 
proposing is not a step forward, it is a great leap backward; that this 
overturns 60 years of sweat and tears of workers' commitment to getting 
a fair pay for fair work, including overtime work?
  They give a minimum wage increase with one hand and then they 
basically repeal part of the Fair Labor Standards Act with the other 
hand. People need to understand this, I say to the Senator.
  Mr. KENNEDY. The Senator is absolutely correct. It is one of the 
reasons why we ought to have an opportunity to debate this in the light 
of day, not under the time limit. We are forced to take these time 
limits in order to at least have a vote on the minimum wage. But this 
issue is too important to working families to be dismissed lightly. I 
hope, for reasons I have outlined briefly, the amendment of the Senator 
from New Mexico will not be accepted.
  The Senator from Connecticut desires time. I know the Senator from 
Iowa wants time. Mr. President, how much time remains?
  The PRESIDING OFFICER. The Senator has 7 minutes 50 seconds.
  Mr. KENNEDY. I yield 5 minutes to the Senator from Connecticut.
  Mr. DODD. Mr. President, I thank my colleague for yielding this time. 
I commend him for his leadership on the minimum wage issue. There is so 
much to talk about concerning the proposal of the Senator from 
Massachusetts and the distinguishing features between that and what is 
being offered on the other side.
  We are talking about a 50-cent increase over the next 2 years, as 
opposed to a 35-cent increase in year one and year two and a 30-cent 
increase in year three. But there is an added feature to the Republican 
proposal on which some may not have focused. While they are suggesting 
approximately 33 cents a year for minimum-wage workers, there is also 
roughly a $75 billion tax cut, the bulk of which goes to the top income 
earners of the country. That is part of their minimum wage package.
  It is somewhat ironic that we are talking about a 30-cent to 35-cent 
increase for the lowest paid workers in the country instead of 50 
cents, and we are going to have a $75 billion tax cut, the bulk of 
which goes to the top income earners in the country.
  By the way, there is no offset for the $75 billion tax cut. We do not 
know where the money comes from to pay for that. We heard a lot of 
speeches in the last couple of weeks about not dipping into the Social 
Security trust funds. One basic question is, From where does the $75 
billion come? How are we paying for that? I have yet to hear anybody 
explain from where it is going to come. I put that out for 
consideration as we talk about these amendments this evening.
  It is extremely important for a lot of people that we increase the 
minimum wage; 11.4 million people will actually get a pay raise if the 
minimum wage increase goes into effect. Some may say the economy has 
been so great, everyone is doing so well, why do people at the minimum-
wage level need to have any increase at all?
  While the economy has been fabulous and unprecedented historically, 
not everybody in America has been the beneficiary of this great 
prosperity. For a lot of Americans in the bottom 20 percent of income 
earners, things have

[[Page 28987]]

been rather stagnant. This income group has not seen the kind of 
tremendous increase in their earning power as have the top 1 percent of 
households.
  The top 1 percent of households is expected to gain 115 percent in 
after-tax income as compared to an only 8-percent gain for the middle 
fifth of households in America. In contrast, the lowest fifth of 
households experienced a 9-percent decline during the same period, from 
1977 through 1999.
  If you were doing well in America in 1977, then you are doing even 
better today. If you are in the middle in America, you have had a 
slight increase of about 8 percent. If you are in the bottom 20 
percent, you have actually seen a decline in your earning power in the 
last 20 years.
  While we herald the great success of the economy with the lowest 
unemployment rates in years, we need to remind ourselves that for a lot 
of our citizens from Maine to California who work every day at the 
bottom levels of the economic ladder in this country, it has not been a 
great period for them.
  We talk about 50 cents, $1 over 2 years. What better way to welcome 
the new millennium, than to say to 11.4 million workers in this 
country: We recognize your contributions to the success of this country 
by giving you a $1 increase over the next 2 years.
  What does that amount to? How about 7 months of groceries; 5 months 
of rent for the average minimum-wage worker; 10 months of utility 
bills; about 1\1/2\ years of tuition and fees at a community college.
  Mr. President, $1 over 2 years may not seem like a lot, but if you 
multiply that at a 40-hour workweek, 52 weeks a year, that dollar makes 
a huge difference to some of the lowest paid workers in America. Again 
I mention, there are 11.4 million workers who will directly benefit 
from the Kennedy proposal to increase the minimum wage.
  The PRESIDING OFFICER. The Senator has used his 5 minutes.
  Mr. DODD. I ask for 1 additional minute.
  Mr. HARKIN. I yield 1 minute.
  Mr. DODD. Seventy percent of the workers who would benefit are over 
the age of 20; 59 percent are women; 46 percent of these people have 
full-time jobs; 15 percent are African American; 18 percent are 
Hispanic American; and 46 percent work in retail.
  The great boom that has occurred in our economy has been magnificent 
for those at the upper-income levels. Unfortunately, after-tax income 
has remained relatively flat for those in the middle, and actually 
declined for those in the bottom 20 percent.
  This minimum wage increase will make a difference to some of the 
hardest working people in this country. I hope by tomorrow when this 
issue comes for a vote, a proposal to increase the minimum wage, not 
smuggle a $75 billion tax cut without paying for it, will be the choice 
of the Senate.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, how much time remains on this side on 
the minimum wage issue?
  The PRESIDING OFFICER. Thirty-nine minutes 39 seconds.
  Mr. GRASSLEY. I yield myself such time as I might consume.
  Mr. President, I rise today in support of the pension reform 
provisions which have been included in the minimum wage and business 
tax amendment sponsored by colleague Senator Domenici.
  Earlier this year I cosponsored with Senator Bob Graham of Florida, 
comprehensive pension reform legislation--S. 741, The Pension Coverage 
and Portability Act. Many of the provisions in S. 741 were included in 
the vetoed Taxpayer Refund Act of 1999. Now, those provisions have been 
included as part of the Republican minimum wage amendment.
  Experts say that, ideally, pension benefits should comprise about a 
third of a retired worker's income. But pension benefits make up only 
about one-fifth of the income in elderly households. Obviously, workers 
are reaching retirement with too little income from an employer 
pension. Workers who are planning for their retirement will need more 
pension income to make up for a lower Social Security benefit and to 
support longer life expectancies. While we have seen a small increase 
in the number of workers who are expected to receive a pension in 
retirement, only one half of our workforce is covered by a pension 
plan.
  There is a tremendous gap in pension coverage between small employers 
and large employers. Eighty-five percent of the companies with at least 
100 workers offer pension coverage. Companies with less than 100 
workers are much less likely to offer pension coverage. Only about 50 
percent of the companies with less than 100 workers offer pension 
coverage. Small employers who may just be starting out in business are 
already squeezing every penny to make ends meet. These employers are 
also people who open up the business in the morning, talk to customers, 
do the marketing, pay the bills, and just do not know how they can take 
on the additional duties, responsibilities, and liabilities of 
sponsoring a pension plan.
  I firmly believe that an increase in the number of people covered by 
pension plans will occur only when small employers have more 
substantial incentives to establish them. The pension provisions 
contained in the minimum wage amendment offered by Senator Domenici 
would provide more flexibility for small employers, relief from 
burdensome rules and regulations, and a tax incentive to start new 
plans for their employees. These reforms would create new retirement 
plans which would help thousands of workers build a secure retirement 
nest egg.
  The amendment also contains provisions which promote new 
opportunities to roll over accounts from an old employer to a new 
employer. The lack of portability among plans is one of the weak links 
in our current pension system. This amendment contains technical 
improvements which will help ease the implementation of portability 
among the different types of defined contribution plans.
  There has been criticism that the benefits of pension reform 
legislation would largely be directed toward the rich. However, to the 
contrary, evidence suggests that pension benefits largely benefit 
middle class workers. Over 75 percent of current workers participating 
in a pension plan have earnings of less than $50,000. Among married 
couples nearly 70 percent of those receiving a pension had incomes 
below $50,000. Among widows and widowers, over 55 percent of pension 
recipients had incomes below $25,000.
  Furthermore, there are provisions in the amendment specifically 
designed to help rank-and-file workers earn meaningful benefits. 
Provisions such as reducing the vesting period for employer matching 
contributions in defined contribution plans and eliminating the twenty-
five percent of compensation limit on combined employer and employee 
contributions to defined contribution plans.
  Finally, let me say there is a precedent for including reforms to the 
employer provided pension system with an increase in the minimum wage. 
Three years ago we increased the minimum wage from $4.25 to $5.15 as 
part of the Small Business Job Protection Act of 1996. Included in that 
legislation were a number of reforms to the employer-provided pension 
system. One in particular, was the creation of the SIMPLE pension 
plan--which has expanded coverage to thousands of employees of small 
businesses who otherwise might not have been able to participate in a 
pension plan.
  We have an opportunity to improve the incomes of the lowest paid 
members of the American labor market, and to improve retirement 
security for millions of workers and their families. I support my 
colleague's efforts, and encourage others to do the same.
  Mr. BIDEN. Mr. President, I am pleased to join with my colleagues, 
Senator Grassley and Senator Torricelli, in bringing bankruptcy reform 
legislation before the Senate today.
  Senator Grassley is the Senate's acknowledged leader on this issue, 
in every sense of the word. He has made reform of our bankruptcy code 
his cause, and he has stayed the course, through the last session of 
Congress

[[Page 28988]]

and again this year, to bring us to where we are today.
  It is evidence of Senator Grassley's commitment that he has reached 
out to the ranking Democrat on his Subcommittee, Senator Torricelli, to 
join him in that effort. He certainly chose the right man for the job.
  Senator Torricelli has worked with Senator Grassley to bring the kind 
of balance to the bill before us today that marked last year's Senate 
floor a bill that was reported out of the Judiciary Committee by a 
bipartisan, 14-to-4 margin.
  Last year, we brought to the floor a bill that passed the Senate 97 
to 1--virtually unanimous agreement that our bankruptcy code needs 
reform, as well as consensus that reform must be fair.
  I would like to address both of those points today, Mr. President--
the need for reform, and the need for that reform to be balanced and 
equitable.
  To a large extent, the numbers speak for themselves--the number of 
bankruptcy filings has exploded in recent years, reaching a record 1.4 
million last year. That's on top of double-digit increases in the 
number of consumer bankruptcy filings for most of this decade. This 
record was set in a time of the best economic conditions our country 
has ever seen--the lowest persistent unemployment and inflation, the 
highest sustained growth, widespread income gains, and a booming stock 
market.
  These are not the conditions that we normally associate with the kind 
of widespread financial distress that could trigger a wave of 
bankruptcy filings.
  This tells me--and a lot of others, as well--that there is something 
wrong with the way our consumer bankruptcy code operates today. Simply 
put, too many people are finding it too easy too easy to walk away from 
their legitimate obligations by filing for bankruptcy. When that 
happens, somebody else pays the bill.
  In the past year, a number different studies have looked at just how 
big that bill can be. These studies have been conducted by all sides in 
the debate, including the credit industry and the bankruptcy bar. The 
study conducted by the Department of Justice concluded that American 
businesses lose $3.2 billion annually to bankruptcies filed by 
individuals who have the capacity to repay their debts.
  The size of the bankruptcy problem--both the number of filings and 
the dead-weight losses to our economy--was the foundation for last 
year's overwhelming Senate support for reform.
  The principle behind the reforms we bring to the floor today is 
simple, Mr. President--if you file for the protection of bankruptcy, 
one basic question will be asked: do you have the ability to pay some 
of your bills, or not?
  If the facts--looking at your income on the one hand, and the bills 
you have to pay on the other--show that you can pay, then you must file 
under Chapter 13, that requires a period of at least partial repayment 
before you are forgiven your remaining debts. Under such a Chapter 13 
plan, you are not required to sell off major assets such as your house 
or your car.
  If the facts show that you simply don't have the income to under take 
a Chapter 13 repayment plan, then the protection of Chapter 7 is still 
there for you. Chapter 7, however, requires that you sell off any 
significant assets, and the proceeds go to your creditors.
  Most Americans would agree that this is fair, and would be surprised 
to find that no test of someone's ability to pay is required to get the 
protection of Chapter 7. But in fact, as even the strongest opponents 
of bankruptcy reform admit, today pretty much all the assumptions in 
the bankruptcy code are in favor of the filers, who can voluntarily 
choose a Chapter 7 liquidation or a Chapter 13 repayment plan.
  The bill we bring to the floor today attempts to restore some balance 
to those assumptions, to require more responsibility on the part of 
those who seek the protection of bankruptcy.
  But some of my colleagues will argue during this debate that the 
source of this problem is not really the operation of our bankruptcy 
laws, but what they call ``irresponsible'' lending. Creditors--
especially the aggressive credit card companies--are pushing debt onto 
people, and that is what is driving people into bankruptcy.
  Now, I am sure all of us are tired of those millions--actually 
billions--of credit card solicitations that come through the mail every 
year. But I ask my colleagues to reflect for a moment on what the 
alternative to widely available consumer credit would be.
  When I first came to the Senate, we were fighting against lending 
practices that ``red-lined'' whole neighborhoods, Mr. President, in 
which banks would simply decide that some people were not worthy of 
credit, that they were incapable of managing their own affairs. A lot 
of us in Congress saw that as just plain wrong, and we worked to change 
it.
  One of the things we did, in 1977, was to pass the Community 
Reinvestment Act, that requires banks to lend into local communities 
where incomes may be lower or the risks of repayment higher than 
bankers might prefer.
  We just passed an historic overhaul of our country's banking laws. 
The Financial Services Modernization Act took many years of hard work 
to complete. Among the most contentious issues was the treatment of the 
Community Reinvestment Act.
  In fact, President Clinton threatened a veto of that bill if the 
principles of the Community Reinvestment Act were not protected in the 
final deal. Those principles boil down to the idea that everyone 
deserves access to credit, and it is the policy of this country that 
banks must not unfairly restrict credit, despite what they think is the 
best way to maximize returns and minimize the risks on their loans.
  Now, I am not here to argue that the flood of credit card 
solicitations is part of some new social program by the credit card 
companies. Of course they are trying to make money. By the way, it is 
also evidence of a lot of competition in the lending business, as well. 
But when I hear my colleagues argue about ``irresponsible lending,'' I 
hear echoes of those earlier debates about red-lining.
  The ``democratization of credit,'' as some people have called it, has 
risks, of course. Some people will not use credit responsibly. But the 
alternative to widely available credit--passing laws to cut back on 
credit to the kinds of people we here in Washington have decided just 
can't be trusted to use it wisely--that alternative is far, far, worse, 
in my view.
  Should we do more to make sure that consumers are fully informed, and 
that lenders disclose the full cost consumers pay for credit? Of course 
we should, Mr. President. During our Committee deliberations on this 
bill, we considered proposals by Senator Schumer that would have 
imposed requirements for more complete disclosure, in billing and in 
advertising, by creditors.
  Because those issues are under the jurisdiction of the Banking 
Committee, we made the conscious decision to leave those provisions for 
an amendment here during the floor debate. That amendment will be among 
the first items of business on this bill.
  Should we do more to make sure consumers are informed about how to 
handle debt, and how to avoid the ultimate step of bankruptcy? Of 
course we should, Mr. President. The bankruptcy reform bill before us 
today calls for new initiatives in those areas, as well. We look to the 
causes of bankruptcy as part of a comprehensive approach to reform.
  But to try to stem the tide of bankruptcies by making credit harder 
to get, Mr. President, is a cure that will prove to be worse than the 
disease.
  I thought one of the most important aspects of last years's Senate 
debate was how, as we attempt to reduce the number of bankruptcy 
filings, to still make sure that we continue to provide the full 
protection from creditors and the fresh start that many Americans will 
continue to require and deserve.
  For many of my colleagues, particularly on my side of the aisle, that 
has been the real focus of the debate over bankruptcy reform, and it 
should be.
  I know that many of my colleagues are concerned that the means test 
in this bill, that determines a bankruptcy filer's ability to pay, will 
be unfair to those who really need the full protection from creditors 
and the fresh start

[[Page 28989]]

that Chapter 7 has historically provided. In fact, however, the means 
test is intended to ensure that a repayment plan--under Chapter 13--
will be required only of those individuals who actually have the 
documented ability to continue to pay some of their legal obligations.
  A range of studies from all sides in this debate has found that only 
3 to 15 per cent of filers under the current system would be steered 
from the complete protection of Chapter 7 into Chapter 13, where they 
will be required to continue payments on--and, I have to stress, retain 
possession of--their credit purchases. The means test is designed to 
make sure that these new responsibilities will be required only of 
those who have the resources to meet them.
  The managers' amendment that we will bring to the floor will provide 
additional refinements and safeguards to make sure the means test 
achieves that goal.
  Another major concern that has been expressed by my colleagues is 
that bankruptcy reform will unfairly affect women and children, who may 
depend on family support payments--alimony, child support--that are all 
too often part of the picture in the financial and personal distress 
that can lead to bankruptcy. I want my colleagues to know just how much 
we have done to protect family support payments--to protect them much 
more than current law.
  This bill will give alimony and child support payments the highest 
possible priority--over credit card companies, over department stores, 
over all other creditors--when the line forms to collect payments from 
someone who is in bankruptcy. This bill also requires that all alimony 
and child support must be paid in full before the final discharge of 
debts at the end of bankruptcy. These are just two of the significant 
improvements in the treatment of alimony and child support in this 
bill, and there are others.
  The reform of our bankruptcy code is a complicated issue, and in the 
coming days we will be debating a lot of the thousands of important 
details that are involved. But if we keep our eye on the big picture--
fundamental principles of fairness, responsibility, and effectiveness--
I am convinced that this bill will enjoy overwhelming bipartisan 
support on final passage.
  Mr. KYL. Mr. President, the Administrative Office of the U.S. Courts 
released a report in August that included some good news and some bad. 
On the one hand, the report indicated that bankruptcy filings for the 
12-month period ending June 30, 1999 were down, albeit slightly--about 
0.3 percent. On the other hand, it noted that the number of petitions 
filed still represented a 62.2 percent increase over the same period 
ending in 1995.
  Extraordinary circumstances can strike anyone, which is why it is 
important to preserve access to bankruptcy relief. No one disputes that 
there should be an opportunity to seek relief and a fresh start when 
someone is struck by terrible circumstances beyond his or her control--
for example, when families are torn apart by divorce or ill health. I 
suspect that creditors would be more than willing to work with someone 
when such tragedy strikes to help him or her through tough times.
  But there is a good deal of evidence that too many people who file 
for relief under Chapter 7 actually have the ability to pay back some, 
or even all, of what they owe. Inappropriate use of Chapter 7, or 
straight bankruptcy, imposes higher costs on the vast majority of 
consumers who make good on their obligations. The Justice Department 
estimates these costs at about $3.2 billion annually. This phenomenon 
of bankruptcy for the sake of convenience--bankruptcy as a financial 
planning tool--is what led to the drafting of the bill before us today.
  The Bankruptcy Reform Act, S. 625, is the product of a number of 
hearings, and months and months of deliberations. This bill has been in 
the legislative process for several years now. It enjoys broad 
bipartisan support, having been approved overwhelmingly by the Senate 
Judiciary Committee on a vote of 14 to 4. In fact, similar bipartisan 
legislation in the House of Representatives passed on May 5, by a 
lopsided vote of 313 to 108--an even greater margin than last year.
  The bill would establish a presumption that a chapter 7 bankruptcy 
filing--what is generally known as straight bankruptcy--should be 
dismissed or should be converted to Chapter 13 if, after taking into 
account secured debts and priority debts like child support and living 
expenses, the debtor could repay 25 percent or more of his or her 
general unsecured debt, or $15,000, over a five-year period. The debtor 
could rebut the presumption by demonstrating special circumstances to 
show that he or she does not have a meaningful ability to repay his or 
her debts.
  I suspect that most Americans would be surprised to find that this is 
not already the norm. At the moment, bankruptcy judges do not 
necessarily consider whether a debtor has a demonstrable capacity to 
repay his or her debts before granting Chapter 7 relief.
  Studies suggest that this means test we propose here would force 
between three percent and 15 percent of debtors to pay more to 
creditors. This represents a relatively small number of debtors, but 
they are the ones who have the means to repay, and fairness dictates 
that they do so.
  In short, the bill would steer individuals with the ability to repay 
some or all of their debts into Chapter 13 repayment plans, while 
preserving access to Chapter 7 for those who truly need its protection 
and the fresh start it would provide. This is a reasonable and balanced 
approach.
  Remember, when people run up debts they have no intention of paying, 
they shift a greater financial burden onto honest, hard-working 
families in America. Estimates are that bankruptcy costs every American 
family more than $400 a year. Treasury Secretary Lawrence Summers 
acknowledged as much during a recent hearing before the Finance 
Committee. When asked whether debt discharged in bankruptcy results in 
higher prices for goods and services as businesses have to offset 
losses, here is what he said:

       Certainly there is a strong tendency in that direction, and 
     also towards higher interest rates for other borrowers who 
     are going to pay back their debt.

  So when we hear opponents of the bill talk of their concern for 
consumers, let us remember the cost that the abuse of bankruptcy law 
imposes on the vast majority of consumers who responsibly abide by 
their obligations and pay back their debts. What we have here is really 
the most pro-consumer bill we will consider this year.
  I want to share with Senators a very good editorial that appeared in 
the Tribune on May 24, 1999. I ask unanimous consent that the editorial 
be printed in the Record at this point.
  There being no objection, the editorial was ordered to be printed in 
the Record, as follows:

                           Picking Up the Tab

       It's quite possible you receive several solicitations a 
     month for carpet-cleaning. But if you do, it's unlikely you 
     have someone clean your carpets that often. You know when to 
     say no.
       It's also likely that you receive several credit card 
     solicitations every month. But that doesn't mean you sign up 
     for every card and then run out and charge the limit.
       Or does it?
       Consumer advocates seem to be of the opinion that Americans 
     are all but helpless when credit card companies sing their 
     siren song. That they are powerless to say no when the offers 
     come in the mail or over the phone. And that when they get 
     into financial trouble because of credit card debt, it's not 
     really their fault.
       That scenario is being played out more and more often these 
     days, and soaring bankruptcy figures prove it. In 1980, three 
     out of every 1,000 Arizona households sought protection under 
     bankruptcy laws. In the supposedly booming year of 1998, that 
     number had jumped to 14.
       Credit card debt is often a major factor.
       When people wiggle out of paying their debts, of course, 
     someone else is left holding the bag--either their creditors, 
     or the creditors' other customers, who have to fork over 
     higher interest rates and fees to cover the loss.
       Often bankruptcy is unavoidable. Loss of income, health 
     problems and other calamities can quickly plunge even 
     affluent families into hot water.
       But often it is avoidable, and personal irresponsibility 
     plays a part.
       That's why Congress is considering legislation to tighten 
     up bankruptcy laws so that

[[Page 28990]]

     people would be held more accountable for debts they incur. 
     More people would be required to file under Chapter 13, which 
     mandates repayment of certain debts, and fewer would be 
     allowed to use Chapter 7, which is much easier on borrowers.
       The House already has passed the legislation, with all six 
     of Arizona's lawmakers voting for it.
       Banks and credit card companies love the bill, of course. 
     And some see a connection between big-business campaign 
     contributions and the supposedly anti-consumer legislation.
       But the bill, in truth, is not anti-consumer. At least it's 
     not anti- the consumers who do pay their debts and who, 
     because of higher interest rates, have to cover the tab for 
     those who don't.
       Nor does it wash to blame the companies for luring people 
     into debt because of the incessant barrage of credit card 
     solicitations. Yes, there are a lot of them. It's called 
     advertising. In a capitalist, market economy, that's how 
     companies make their products available. It can be annoying, 
     but it's not wrong.
       As with any product (beer, cigarettes, carpet-cleaning), it 
     falls on the individual consumer to make responsible choices.
       Those who don't should not expect the rest of us to clean 
     up for the financial messes they themselves create.

  Mr. KYL. I want to stop at this point and single out a few provisions 
of the bill for comment. These are provisions that I believe illustrate 
the deficiencies in current law--provisions that demonstrate why this 
legislation represents common sense reform of the bankruptcy system.
  The first provision appears in Section 314 of the bill and provides 
that debts that are fraudulently incurred could no longer be discharged 
in Chapter 13--the same as in Chapter 7. Again, I think most Americans 
would be surprised to find out that this is not already the law.
  Currently, at the conclusion of a Chapter 13 plan, a debtor is 
eligible for a broader discharge than is available in Chapter 7, and 
this superdischarge can result in several types of debts, including 
those for fraud and intentional torts, being discharged whereas they 
could not be discharged in Chapter 7. The language of the bill tracks 
an amendment I offered last year, and would simply add fraudulent debts 
to the list of debts that are nondischargeable under Chapter 13. It is 
as simple as that.
  Here is what the Deputy Associate Attorney General, Francis M. 
Allegra, said about the dichargeability of fraudulent debts in a letter 
dated June 19, 1997:

       We are unconvinced that providing a (fresh start) under 
     Chapter 13 superdischarge to those who commit fraud or whose 
     debts result from other forms of misconduct is desirable as a 
     policy matter.

  Here is what Judge Edith Jones of Fifth Circuit Court of Appeals said 
in a dissenting opinion to the report of the Bankruptcy Review 
Commission:

       The superdischarge satisfies no justifiable social policy 
     and only encourages the use of Chapter 13 by embezzlers, 
     felons, and tax dodgers.

  Judith Starr, the Assistant Chief of the Litigation Counsel Division 
of Enforcement of the Securities and Exchange Commission, testified 
before the House Judiciary Committee on March 18, 1998. Speaking about 
the fraud issue, she said:

       We believe that, in enacting the Bankruptcy Code, Congress 
     never intended to extend the privilege of the ``fresh start'' 
     to those who lie, cheat, and steal from the public.

  She goes on to say:

       A fair consumer bankruptcy system should help honest but 
     unfortunate debtors get their financial affairs back in order 
     by providing benefits and protections that will help the 
     honest to the exclusion of the dishonest, and not vice versa. 
     It is an anomaly of the current system that bankruptcy is 
     often more attractive to persons who commit fraud than to 
     their innocent victims. Bankruptcy should not be a refuge for 
     those who have committed intentional wrongs, nor should it 
     encourage gamesmanship by failing to provide real 
     consequences for abuse of its protections.

  And she concludes:

       We support [the provision of the House bill] which makes 
     fraud debts nondischargeable in Chapter 13 cases. Inducements 
     to file under Chapter 13 rather than Chapter 7 should be 
     aimed at honest debtors, not at those who have committed 
     fraud.

  A final quotation: The Honorable Heidi Heitkamp, the Attorney General 
of North Dakota, testified to the following before the House Committee 
last year:

       When a true ``bad actor'' is in the picture--a scam artist, 
     a fraudulent telemarketer, a polluter who stubbornly refuses 
     to clean up the mess he has created there is a real potential 
     for bankruptcy to become a serious impediment to protecting 
     our citizenry.

  Furthermore, she says:

       We must all be concerned because bankruptcy is, in many 
     ways, a challenge to the normal structure of a civilized 
     society. The economy functions based on the assumption that 
     debts will be paid, that laws will be obeyed, that order to 
     incur costs to comply with statutory obligations will be 
     complied with, and that monetary penalties for failure to 
     comply will apply and will ``sting.'' If those norms can be 
     ignored with impunity, and with little or no future 
     consequences for the debtor, this bodes poorly for the 
     ability of society to continue to enforce those requirements.

  Mr. President, I hope there will be no dissent to these anti-fraud 
provisions. Certainly, there should not be. Bankruptcy relief should be 
available to people who work hard and play by rules, yet fall 
unexpectedly upon hard times. Perpetrators of fraud should not be 
allowed to find safe haven in the bankruptcy code.
  The second amendment I offered, which was included in last year's 
bill, and which is again in this year's bill, is also found in Section 
314. It says that debts that are incurred to pay non-dischargeable 
debts are themselves non-dischargeable. In other words, if someone 
borrows money to pay a debt that cannot be erased in bankruptcy, that 
new debt could not be erased either. The idea is to prevent individuals 
from gaming the system and obtaining a discharge of debt that would 
otherwise be non-dischargeable.
  I want to emphasize that we have taken special care to ensure that 
debts incurred to pay non-dischargeable debts will not compete with 
non-dischargeable child- or family-support in a post-bankruptcy 
environment.
  The third amendment of mine is reflected in Section 310 of the bill, 
and it is intended to discourage people from running up large debts on 
the eve of bankruptcy, particularly when they have no ability or 
intention of making good on their obligations.
  Current law effectively gives unscrupulous debtors a green light to 
run up their credit cards just before filing for bankruptcy, knowing 
they will never be liable for the charges they are incurring. That is 
wrong, and it has got to stop.
  The provision would establish a presumption that consumer debt run up 
on the eve of bankruptcy is non-dischargeable. The provision is not 
self-executing. In other words, it would still require that a lawsuit 
be brought by the creditor against the debtor so that a bankruptcy 
judge could consider the circumstances and assess the claim. But if 
this provision achieves the intended purpose, debtors will not only 
minimize the run-up of additional debt, they will have more money 
available after bankruptcy to pay priority obligations, including 
alimony and child support.
  Again, special care has been taken to ensure that we are only talking 
about consumer debts incurred within 90 days of bankruptcy for goods or 
services that are not necessary for the maintenance or support of the 
debtor or dependent child. We want to be sure that family obligations 
are met.
  I will discuss one other aspect of the bill before closing, and that 
relates to the many provisions that Senators Hatch, Grassley, and I 
crafted last year--and which have been improved on in this year's 
bill--to protect the interests of women and children.
  Nothing in the earlier versions of the bill reduced the priority of, 
or any of the protections that are accorded to, child-support and 
alimony under current law. Nevertheless, concerns were expressed that 
provisions of the legislation might indirectly or even inadvertently 
affect ex-spouses and children of divorce. Assuming that critics were 
operating in good faith--and because our intent was always to ensure 
that family obligations were met first--Senators Hatch, Grassley, and I 
crafted an amendment last year to remove any doubt whatsoever about 
whether women and children come first.

[[Page 28991]]

  As now written, the bill elevates the priority of child-support from 
its current number seven on the priority list for purposes of payment 
to number one. Our amendment mandates that all child support and 
alimony be paid before all other obligations in a Chapter 13 plan. It 
conditions both confirmation and discharge of a Chapter 13 plan upon 
complete payment of all child support and alimony that is due before 
and after the bankruptcy petition is filed. It helps women and children 
reach exempt property and collect support payments notwithstanding 
contrary federal or state law. And it extends the protection accorded 
an ex-spouse by making almost all obligations one ex-spouse owes to the 
other non-dischargeable.
  Many of us have heard the argument by opponents of this bill that 
women and children will be forced to compete with credit-card companies 
to collect resources from debtors, particularly once they emerge from 
bankruptcy. The provisions I just described answer that concern. 
Moreover, I think it is important to point out that the post-discharge 
debtor generally does not have the option to pay a credit-card company 
before his or her former spouse anyway. More and more child support is 
withheld from wages by the state. In other words, child support 
obligations are paid before the non-custodial parent or former spouse 
ever receives his or her paycheck. If withholding is not in place when 
the bankruptcy is filed, it can be put in place quickly under other 
provisions of the pending bill.
  If any of these provisions can be improved on further, I know that 
Senators Hatch and Grassley, and myself would be more than willing to 
modify them. My concern is that we do not allow concern for women and 
children to become an excuse for opposing the broader bill and letting 
other debtors off the hook for debts they are able to repay. That would 
only hurt women and children in need by forcing them to bear the higher 
costs associated with such bankruptcy abuse.
  Mr. President, this is a good bill--a bill that protects debtors who 
truly need relief, while also protecting the interests of consumers who 
meet their obligations to creditors by repaying their debts. It 
protects the interests of women and children through a series of new 
provisions. I hope my colleagues will join me in voting for this fair 
and balanced piece of legislation.
  I yield the floor.
  Mr. HARKIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. HARKIN. Mr. President, parliamentary inquiry.
  First of all, under what order are we operating? Is there a time 
limit on remarks?
  The PRESIDING OFFICER. There is a time limit. The minority had 1 
minute 20 seconds.
  Mr. HARKIN. Further parliamentary inquiry.
  Once that time is exhausted, what business will transpire, then, on 
the floor of the Senate?
  The PRESIDING OFFICER. Further amendments to the bill can be called 
up by unanimous consent.
  Mr. HARKIN. Mr. President, I yield myself the--what is it?--1 minute 
20 seconds and ask unanimous consent that I be permitted to speak for 
an additional 9 minutes, and it not be taken off the majority's time.
  Mr. SCHUMER. Reserving the right to object, and I will not object, 
but I have just worked out a unanimous consent request with the Senator 
from Iowa about laying down some amendments on the bill. Might I do 
that now?
  Mr. HARKIN. How much time does the Senator intend to take in laying 
down the amendments?
  Mr. SCHUMER. About 15 seconds for me to ask unanimous consent to 
offer them and then lay them aside.
  Mr. HARKIN. I yield my right to the floor, Mr. President, for the 
unanimous consent that the Senator from New York be allowed to lay down 
his amendments. And at the expiration of that time, I ask unanimous 
consent that I be recognized again for the minute 20 seconds, plus 9 
additional minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.


       Amendments Nos. 2759, 2762, 2763, 2764, and 2765, En Bloc

  Mr. SCHUMER. Mr. President, I ask unanimous consent to offer my 
amendments Nos. 2759, 2762, 2763, 2764, and 2765 to the bankruptcy 
bill. I have a few others, but we need to work those out with the 
Banking Committee.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from New York [Mr. Schumer] proposes, en bloc, 
     the amendments numbered 2759, 2762, 2763, 2764, and 2765.

  The amendments, en bloc, are as follows:


                           amendment no. 2759

  (Purpose: To make amendments with respect to national standards and 
                   homeowner home maintenance costs)

       On page 7, line 15, strike ``(ii) The debtor's'' and insert 
     the following:
       ``(ii)(I) Subject to subclause (II), the debtor's''.
       On page 7, line 21, strike the period and insert the 
     following: ``, until such time as the Director of the 
     Executive Office for the United States Trustees issues 
     standards under section 586(f) of title 28, at which time the 
     debtor's monthly expenses shall be the applicable monthly 
     expenses under standards issued by the Director under section 
     586(f) of title 28, and the applicable monthly (excluding 
     payments for debts) expenses under standards (excluding the 
     national standards) issued by the Internal Revenue Service 
     for the area in which the debtor resides, as in effect on the 
     date of the entry of the order for relief, for the debtor, 
     the dependents of the debtor, and the spouse of the debtor in 
     a joint case, if the spouse is not otherwise a dependent.
       ``(II) In the case of a debtor who owns the debtor's 
     primary residence, the debtor's monthly expenses shall 
     include reasonably necessary costs of maintaining such 
     primary residence not included in subclause (I) of this 
     clause or clause (iii), including the reasonably necessary 
     costs of utilities, maintenance and repair, homeowners 
     insurance, and property taxes, until such time as the 
     Director of the Executive Office for the United States 
     Trustees issues standards under section 586(f) of title 28.
       On page 14, after the matter between lines 18 and 19, 
     insert the following:
       (d) Standards for Assessing Certain Expenses.--Section 586 
     of title 28, United States Code, is amended by adding at the 
     end the following:
       ``(f)(1) Not later than 1 year after the date of enactment 
     of this subsection, the Director of the Executive Office for 
     the United States Trustees, in consultation with the 
     Secretary of the Treasury, shall issue standards, specific 
     and appropriate to bankruptcy, for assessing the monthly 
     expenses of the debtor under section 707(b)(2) of title 11, 
     for--
       ``(A) the categories of expenses included under the 
     national standards issued by the Internal Revenue Service; 
     and
       ``(B) the categories of expenses related to maintaining a 
     primary residence not included in clause (ii)(I) or (iii) of 
     section 707(b)(2)(A) of title 11, including expenses for 
     utilities, maintenance and repair, homeowners insurance, and 
     property taxes, for a debtor who owns the debtor's primary 
     residence.
       ``(2) In issuing standards under paragraph (1), the 
     Director shall--
       ``(A) establish set expense amounts at levels that afford 
     debtors adequate and not excessive means to provide for basic 
     living expenses for the categories of expenses described in 
     paragraph (1); and
       ``(B) ensure that such set expense amounts account for, at 
     a minimum, regional variations in the cost of living and for 
     variations in family size.''.
       On page 169, line 11, strike ``(f)'' and insert ``(g)''.
       On page 169, line 13, strike ``(f)'' and insert ``(g)''.
       On page 172, line 7, strike ``(f)'' and insert ``(g)''.
       On page 172, line 13, strike ``(f)'' and insert ``(g)''.
                                  ____



                           amendment no. 2762

 (Purpose: To modify the means test relating to safe harbor provisions)

       On page 9, insert between lines 17 and 18 the following:
       ``(ii) A debtor against whom a judge, United States 
     trustee, panel trustee, bankruptcy administrator, or other 
     party in interest may not, for the reason specified in 
     subparagraph (D), bring a motion alleging abuse of this 
     chapter based upon the presumption established by this 
     paragraph, shall not be required to include calculations that 
     determine whether a presumption arises under this paragraph 
     as part of the schedule of current income and expenditures 
     required under section 521.
       On page 9, line 18, strike ``(ii)'' and insert ``(iii)''.

[[Page 28992]]

       On page 9, insert between lines 21 and 22 the following:
       ``(D)(i) No judge, United States trustee, panel trustee, 
     bankruptcy administrator, or other party in interest shall 
     bring a motion alleging abuse of this chapter based upon the 
     presumption established by this paragraph, if the debtor and 
     the debtor's spouse combined, as of the date of the order for 
     relief, have current monthly total income equal to or less 
     than the national or applicable State median household 
     monthly income calculated (subject to clause (ii)) on a 
     semiannual basis for a household of equal size.
       ``(ii) For a household of more than 4 individuals, the 
     national or applicable State median household monthly income 
     shall be that of a household of 4 individuals, plus $583 for 
     each additional member of that household.
       On page 11, line 9, strike ``(A)'' and insert ``(A)(i) 
     except as provided under clause (ii),''.
       On page 11, insert between lines 14 and 15 the following:
       ``(ii) with respect to an individual debtor under this 
     chapter against whom a judge, United States trustee, panel 
     trustee, bankruptcy administrator, or other party in interest 
     may not, for the reason specified in section 707(b)(2)(D), 
     bring a motion alleging abuse of this chapter based upon the 
     presumption established by section 707(b)(2), the United 
     States trustee or bankruptcy administrator shall not be 
     required to file with the court a statement as to whether the 
     debtor's case would be presumed to be an abuse under section 
     707(b)(2); and
       On page 11, line 19, strike ``receiving'' and insert 
     ``filing''.
       On page 11, line 20, strike ``filed''.
       On page 14, strike lines 8 through 14 and insert the 
     following:
       ``(5)(A) Only the judge, United States trustee, bankruptcy 
     administrator, or panel trustee may bring a motion under 
     section 707(b), if the current monthly income of the debtor 
     and the debtor's spouse combined, as of the date of the order 
     for relief, when multiplied by 12, is equal to or less than--
       ``(i) the national or applicable State median household 
     income last reported by the Bureau of the Census for a 
     household of equal size, whichever is greater; or
       ``(ii) in the case of a household of 1 person, the national 
     or applicable State median household income last reported by 
     the Bureau of the Census for 1 earner, whichever is greater.
       ``(B) Notwithstanding subparagraph (A), the national or 
     applicable State median household income for a household of 
     more than 4 individuals shall be the national or applicable 
     State median household income last reported by the Bureau of 
     the Census for a household of 4 individuals, whichever is 
     greater, plus $6,996 for each additional member of that 
     household.''.
                                  ____



                           AMENDMENT NO. 2763

(Purpose: To ensure that debts incurred as a result of clinic violence 
                         are nondischargeable)

       On page 124, between lines 14 and 15, insert the following:

     SEC. 322. NONDISCHARGEABILITY OF DEBTS INCURRED THROUGH THE 
                   COMMISSION OF VIOLENCE AT CLINICS.

       Section 523(a) of title 11, United States Code, as amended 
     by section 224 of this Act, is amended--
       (1) in paragraph (18), by striking ``or'' at the end;
       (2) in paragraph (19)(B), by striking the period and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(20) that results from any judgment, order, consent 
     order, or decree entered in any Federal or State court, or 
     contained in any settlement agreement entered into by the 
     debtor, including any damages, fine, penalty, citation, or 
     attorney fee or cost owed by the debtor, arising from--
       ``(A) an actual or potential action under section 248 of 
     title 18;
       ``(B) an actual or potential action under any Federal, 
     State, or local law, the purpose of which is to protect--
       ``(i) access to a health care facility, including a 
     facility providing reproductive health services, as defined 
     in section 248(e) of title 18 (referred to in this paragraph 
     as a `health care facility'); or
       ``(ii) the provision of health services, including 
     reproductive health services (referred to in this paragraph 
     as `health services');
       ``(C) an actual or potential action alleging the violation 
     of any Federal, State, or local statutory or common law, 
     including chapter 96 of title 18 and the Federal civil rights 
     laws (including sections 1977 through 1980 of the Revised 
     Statutes) that results from the debtor's actual, attempted, 
     or alleged--
       ``(i) harassment of, intimidation of, interference with, 
     obstruction of, injury to, threat to, or violence against any 
     person--

       ``(I) because that person provides or has provided health 
     services;
       ``(II) because that person is or has been obtaining health 
     services; or
       ``(III) to deter that person, any other person, or a class 
     of persons from obtaining or providing health services; or

       ``(ii) damage or destruction of property of a health care 
     facility; or
       ``(D) an actual or alleged violation of a court order or 
     injunction that protects access to a health care facility or 
     the provision of health services.''.
                                  ____



                           AMENDMENT NO. 2764

  (Purpose: To provide for greater accuracy in certain means testing)

       On page 7, line 9, after ``reduced by'' insert ``estimated 
     administrative expenses and reasonable attorneys' fees, 
     and''.
       On page 7, strike line 24 through page 8, line 3, and 
     insert the following:

       ``(I) the sum of--

       ``(aa) the total of all amounts scheduled as contractually 
     due to secured creditors in each month of the 60 months 
     following the date of the petition; and
       ``(bb) any additional payments to secured creditors 
     necessary for the debtor, in filing a plan under chapter 13 
     of this title, to maintain possession of the debtor's 
     property that serves as collateral for secured debts; divided 
     by

       ``(II) 60.

       On page 9, line 6, after ``reduced by'' insert ``estimated 
     administrative expenses and reasonable attorneys' fees, 
     and''.
       On page 10, strike lines 12 and 13 and insert the 
     following:
       (1) in section 101--
       (A) by inserting after paragraph (10) the following:
       On page 11, insert between lines 2 and 3 the following:
       (B) by inserting after paragraph (17) the following:
       ``(17A) `estimated administrative expenses and reasonable 
     attorneys' fees' means 10 percent of projected payments under 
     a chapter 13 plan;'' and
                                  ____



                           AMENDMENT NO. 2765

   (Purpose: To include certain dislocated workers' expenses in the 
                       debtor's monthly expenses)

       On page 7, line 15, strike ``(ii)'' and insert ``(ii)(I)''.
       On page 7, between lines 21 and 22, insert the following:
       ``(II) In addition, the debtor's monthly expenses shall 
     include the reasonably necessary monthly expenses incurred by 
     a debtor who is eligible to receive or is receiving payments 
     under State unemployment insurance laws, the Federal 
     dislocated workers assistance programs under title III of the 
     Job Training Partnership Act (29 U.S.C. 1501 et seq.) or the 
     successor Workforce Investment Act of 1998 (20 U.S.C. 9201 et 
     seq.), the trade adjustment assistance programs provided for 
     under title II of the Trade Act of 1974 (19 U.S.C. 2251 et 
     seq.), or State assistance programs for displaced or 
     dislocated workers and incurred for the purpose of obtaining 
     and maintaining employment.

  Mr. SCHUMER. I ask unanimous consent that the amendments be laid 
aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SCHUMER. I yield the floor to the Senator from Iowa.


                           amendment no. 2751

  Mr. HARKIN. Mr. President. When I think of who the minimum wage 
increase would benefit and why it is needed--I don't think of the 
teenager popping corn at the movie theater.
  I think of the single mother of two, a full-time cashier at the local 
grocery store, struggling to put dinner on the table and clothe her 
kids. She's off welfare, but still living far below the poverty level. 
Right now, the minimum wage pays her less than $11,000 a year, working 
40 hours a week.
  If we really want to help parent succeed on their own, they need a 
fair wage. Senator Kennedy's amendment would help us get there.
  Today we have the opportunity to assure that 11.8 million American 
workers are provided with a much needed and much deserved raise. Two-
thirds of minimum wage workers are adults. Nearly sixty percent are 
women. More than \1/3\ are the sole breadwinners, like the woman I 
spoke of.
  Mr. President, it is a sad fact that in today's booming economy and 
skyrocketing executive pay, minimum wage workers earn 19 percent less, 
adjusted for inflation, than minimum wage workers earned 20 years ago. 
The proposed increased would restore the wage floor to just above its 
1983 level--which is a positive step despite the fact that it would 
still be 13 percent below its 1979 peak.
  I believe that these workers are central to the U.S. economy and that 
they should benefit from the recent surge in economic growth--not be 
left behind.
  But, I keep hearing the same tired argument echo in this chamber--
that raising the minimum wage would cause widespread job loss. Critics 
need to find another argument--because they're wrong on this one--
always have been.

[[Page 28993]]

  Let's look at what happened last time: The Economic Policy Institute 
reported that in September 1996, one month before the minimum wage 
increased from $4.25 to $4.75, the national unemployment rate was 5.2 
percent. In December 1997, two months after the second annual increase 
boosted the minimum wage to $5.15, the national unemployment rate was 
4.2 percent--a full point lower. More telling, retail trade jobs which 
disproportionately employ low wage workers, grew as fast as jobs 
overall.
  A recent Business Week editorial backed that up saying--

       In a fast-growth, low-inflation economy, higher minimum 
     wages raise income, not unemployment.

  The workers who this amendment would target are central to the 
economy--and they should benefit from the incredible growth of our 
economy.
  I know that there are proposals for a more gradual increase in the 
minimum wage--3 years instead of 2. This would cut the income of a 
full-time, year-around worker roughly $1,500 over three years compared 
with the current proposal. The minimum wage has already lost a lot of 
ground with inflation. The three-year proposal would only hinder this 
effort to catch up.
  There is another critical piece of Senator Kennedy's amendment--
stopping the abuse of workers on U.S. land. It would apply the U.S. 
minimum wage to the Commonwealth of the Northern Mariana Islands--the 
CNMI, also known as Saipan. The local government's current minimum wage 
there is $3.10 an hour. This amendment would go a long way toward 
relieving some of the egregious abuse and exploitation of temporary 
foreign workers brought to the U.S. territory to work at the garment 
factories--most of which are owned by foreign interests.
  The bottom line is this: All of America deserves a raise--that 
includes those living and working in Saipan--and the 143,000 Iowans who 
would benefit from the raise.
  Profits and productivity are way up. There is room to give workers a 
wage they deserve without hurting economic growth. The rest of the 
economy shouldn't be doing better than the people who make it run.
  So I urge my colleagues to support a raise in the minimum wage. It is 
the right thing to do for women, for America's families, and it is long 
overdue.
  The Kennedy amendment also includes a number of very important tax 
provisions that I strongly support. One of the most important points 
about the tax provisions is that the new tax benefits are fully paid 
for. The cost of these benefits are offset both for the coming year and 
for the coming ten years so we do not eat into the funds we need to pay 
for Social Security and needed improvements in Medicare as the baby 
boomers start retiring. It closes tax loopholes that allow some large 
companies to escape paying their fair share of taxes by creating 
artificial accounting gimmicks that have no purpose whatsoever except 
shifting the burden of taxes from a company to average taxpayers or the 
public debt.
  I am very pleased that this amendment includes the text of S. 1300, 
the Older Workers Protection Act, which I have sponsored. Across 
America, workers have worked for companies anticipating the secure 
retirement which is their due and expectation under their company's 
pension plan. Now, as more Americans than ever before in history 
approach retirement, some employers are trying to cut their pension 
benefits.
  Under current law, a company cannot take away pension benefits that 
have already been earned. But, in a slight of hand, when some companies 
change their pension plan making it less generous, they quietly, simply 
do not pay anything into an employee's account, often for 5 years or 
more till the employee's pension is ``worn away'' to the lower value of 
the new plan. This wear away is, I believe illegal under current age 
discrimination law. It certainly is a violation of the spirit of the 
law. This provision would clear, real protections for many thousands of 
workers who are having their pensions slashed without their knowledge. 
This measure eliminates wear away. It provides a company must pay into 
an employee's pension account under a new pension plan without regard 
to higher accrued benefits that might have been earned prior to plan 
change.
  The amendment also provides for numerous provisions that help smaller 
businesses and their owners that I support. These include:
  100 percent deductibility for self-employed health insurance staring 
on January 1, that I have been working for many years,
  A tax credit for the start up costs of a small company pension plan 
including a 50 percent credit for the match that a small employer puts 
into a employee's account during the first 5 years. This could really 
make a difference; giving employers real incentives to setting up 
quality pension plans so crucial to workers retirement, a 25 percent 
tax credit for an employer's cost in setting up a day care center, 
Expanding the amount a small business can expanse to 25,000, Extension 
of the Work Opportunity Tax Credit and the related to Work Tax Credit, 
Expanding the Low Income Housing Tax Credit. But, I would have liked to 
see a far faster increase in the increase in this program than the 
amendment provided. The measure contains a number of benefits of 
particular interest to farmers that I strongly support including a 
provision that prevents the use of income averaging pushing a farmer 
into having to pay the Alternative Minimum tax. And it provides for a 
10 year carryback for farmers that I have been advocating. This would I 
believe it would be important to have the carryback provision take 
effect for loses that occurred in both 1998 and 1999.
  On the other hand, the Republican tax amendment has a net cost of 
over $75 billion over the coming decade that is not offset by closing 
tax loop holes or by other means. That means that the Republican 
proposal will have the likely effect of cutting into the funds we need 
to protect Social Security and to preserve and improve Medicare. That 
is a real problem under current projections of government revenues and 
costs. But it is even worse if we end up with a serious downturn in our 
economy. Some claim that the reason for these tax provisions is a 
desire to mitigate the costs of the minimum wage increase on small 
employers. But, the burden on Social Security and Medicare is three 
times the effect of the estimated effect of the version of the minimum 
wage provisions in the Majority package.
  Many of the provisions are worthy of support, many are also in the 
Democratic proposal where they are paid for. It also contains some 
provisions that I support but which were not included in the Democratic 
proposal because of its cost. These include the tax benefits for health 
insurance and long term care. On the other hand, this proposal unfairly 
benefits the wealthy. For example, there is a $396 million cost to the 
government over 10 years to allow a person to increase the amount of 
money that can be received from a defined benefit plan from $130,000 to 
$160,000 per year. Every penny of this cost benefits those at the top 
of the income scale, not one of whom is making less than 10 times the 
minimum wage just from one retirement benefit!
  Unfortunately, there are a large number of provisions in the GOP plan 
that reduce the incentive for small businesses to set up a good pension 
plan for their workers. The tax code provides about $130 billion a year 
in tax benefits to promote pensions. The purpose of that considerable 
public investment is to provide incentives for people to invest in 
pensions and for companies to fund pension plans for all of their 
workers, not just owners and key employees. Many small employers are 
pushed by the law's limits on what they can put into their own pension 
accounts without providing benefits to all employees to provide decent 
pension plans for their workers. The majority amendment reduces those 
restraints and will likely result in far fewer employees getting 
pensions. That is bad public policy.
  Lastly, the majority amendment includes provisions that provides 
significant special interest loopholes in the tax code. There is a 
provision regarding

[[Page 28994]]

ESOPs: employee stock ownership plans. The Treasury believes this 
provision opens up a significant loophole for some taxpayers. If a high 
income self employed person or someone in a partnership with others, 
arranges that all of the people that work with him and his partners are 
considered employees of another entity, then the partners can 
incorporate and form an ESOP. Under the provision in the amendment, the 
doctors could then defer all of the income they desire, effectively as 
pension income without any limit. So, if they each make $300,000 and 
one decides that he needs to spend only $150,000 to live on, that high 
income taxpayer could defer their taxes on the whole whopping $150,000 
unspent. That is outrageous. Why should we be putting these very 
generous loopholes in the tax code that allow a few to not pay their 
fair share of taxes? They become a special class of taxpayers who only 
have to pay taxes on what they spend and everything they save goes into 
the equivalent of a super IRA with all taxes deferred. That makes no 
sense at all.
  We need tax provisions that are designed to promote the creation of 
pensions for the average employee making $25,000 or $50,000, not 
creating special provisions only of interest to very high income 
taxpayers that actually reduce their interest in setting up pension 
plans for their workers. I urge that we pass the Kennedy amendment and 
reject the majority amendment.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President do I have some additional time?
  The PRESIDING OFFICER. Thirty-two minutes 24 seconds remaining.
  Mr. DOMENICI. I note Senator Landrieu is here from Louisiana. I won't 
take that much time, and I will yield back the remainder so she may 
proceed in morning business, if that is her desire.
  Let me just say, it is absolutely amazing that some group proposes 
that the minimum wage should be increased because the poor families in 
America, who are out there working at jobs, are the ones it will help, 
only to find that every study reveals that isn't the case.
  I am going to talk a minute about CNN. They proceeded with a very 
intense analysis of their own, and they have been running it on 
television. It is sort of shocking to hear what they find versus what 
we are hearing in justification of a $1 increase in the minimum wage in 
the next 13 months-14 months.
  First, let me start and read the dialog that occurred on CNN with 
reference to their research and who is helped and not helped by the 
minimum wage:

       Highlight: Next week, Congress will be raising the minimum 
     wage by $1 to $6.15, which could benefit perhaps 10 million 
     low-wage workers. A look at who a minimum wage increase would 
     benefit. Body of the report: Jim Moret, anchor. There were 
     fewer Americans out of work last month. The jobless rate 
     dropped to 4.1 percent, the lowest it has been in 3 decades. 
     Also in the Labor Department's report, average hourly 
     earnings rose by only 1 penny last month to $13.37. That is 
     the average per hour. Next week, Congress considers a 
     minmimum wage of $1 which could benefit perhaps those 10 
     million low-wage workers.

  But who are they?

       Our Brooks Jackson has some answers that may surprise you.

  He says:

       Who would be helped if the minimum wage went up to $6.15 
     cents?

  The answer is:

       Not these workers.

  The ones they have been talking about.

       Bob Seidner, owner, Classic Auto Salon: I wouldn't even 
     consider paying somebody that level, because we're not going 
     to get the level of employee.
       Jackson: In today's hot job market, Bob Seidner says he has 
     to pay $8 an hour to get an experienced car washer in 
     Maryland. And in his Atlanta restaurant, nobody stays at the 
     minimum wage for long.

  They all move up rather rapidly.

       Greg Vojnovic, Restaurant owner: If you look at the economy 
     today, there is so much pressure on the labor marketplace 
     that you can't pay anybody a minimum wage for any period of 
     time. Our typical dishwasher, who is typically the lowest 
     position, is making [more than the minimum wage today. In 
     fact, he is making] $7 an hour.
       Jackson: So who would be helped? Experts say fewer than one 
     worker out of every ten, most of them part-time workers, and 
     mostly not in poverty.

  Let me repeat that:

       So who would be helped? One out of every ten, and most of 
     them are part-time workers and mostly not in poverty.

  I am going to jump away from this for a minute and say, who do you 
think those part-time workers are? They are the teenagers of America 
who are working in restaurants, drive-ins, and all the kinds of places 
where they want to get jobs to learn how to work. Let's be honest about 
it; it would be nice if we could give them a 50-cent increase in the 
minimum wage in January and 50 cents the next year. But let's also be 
honest that they are not the poverty people of America; they are 
teenagers breaking in at their new job. And it is most interesting, for 
these comments and others that I have read say that even they are 
getting paid more than the minimum wage these days.

       Teenagers like Sara Schroff, a 19-year-old student making 
     $5.15, but only the start. She'll be promoted in a week.
       Even McDonald's offers more than the minimum wage.

  Says another who has looked out in the job market.

       In fact, teenagers make up 28 percent of those who would 
     gain, and only 23 percent of the gainers are the main earners 
     in their families.
       Opponents say there's still a good reason to raise the 
     minimum wage.

  And the Economic Policy Institute says:

       It's true that while the increase is not perfectly 
     targeted, most of the benefits do go to lower-income working 
     families. Fifty percent of the benefits, of the gains from 
     this next increase, will go to families whose income is 
     $25,000 or less; that's lower middle income. . . .
       Those working poor households would get only 17 percent of 
     the gain from raising the minimum wage.

  Frankly, we have heard all kinds of numbers on how many minimum-wage 
people we have in America. I am just going to be rebutting their 
comments for a moment, and then I will tell Americans about our bill.
  To get to the 10 million they are bantering around here on the floor, 
let me tell you where that comes from. Minimum-wage earners are 1.6 
million of this 10 million that is being bantered around. Workers 
making between the present minimum wage and the new wage of $6.15, 
under these amendments, are 5.9 million. Workers making less than the 
minimum wage and who are not going to be affected by the minimum wage 
because they are tip people, or the like, are 2.7.
  So, in summary, 1.6 million are really minimum-wage earners working 
under the minimum wage as a means of recompense for an hour's work. 
Nonetheless, we have an amendment that I believe is far superior to the 
Democrat amendment. I am very pleased to have been part of putting it 
together. We want to raise the minimum wage to keep steadily ahead of 
inflation, and it will be raised 30 cents in January, 35 cents the 
following January, and 30 cents the following--$1 in a period of 26 
months instead of a period of 14 months.
  In addition, very simply put, we change some provisions in the tax 
law, which I now hear we should not do because it cuts taxes. Well, 
does anyone seriously believe that with the kind of surpluses we have 
projected in the United States, we are not going to give the taxpayers 
back some of that money? I can say, with surpluses that are approaching 
$3.4 trillion, does anybody believe there is a better time to give the 
American people a tax reduction, give them back some of their money? If 
we can't do that now, I ask you, when can we? These are the largest 
deficit, largest surpluses we could have predicted in the best of 
times.
  The budget is under control. It is growing at the lowest rate in all 
categories in the past 40 years on an annual basis. We take some credit 
for that. The President deserves some credit for that. But that is 
success. That is building a surplus. In the last year, we have not 
spent one penny of the Social Security trust fund money--in the year 
that just passed. The Congressional Budget Office says, as a

[[Page 28995]]

matter of fact, we have a surplus of a billion dollars. That has not 
occurred in 40 years. We want to say to the Social Security trust fund, 
you keep all that is yours. That is about $2 trillion. What do we do 
with the other $1.3 trillion to $1.4 trillion? Do we leave it around 
here so we can spend it?
  Does anybody doubt, if we don't make appropriate tax cuts, or tax 
reductions, that it won't be spent? We have already heard that the 
worst thing to do with the surplus is to spend it. The best economic 
advisers that our country has say the worst thing you can do is spend 
it. So we have, in the first 5 years, $18.5 billion in tax relief, 
mostly for small businesses so they can continue to be the driving 
force behind America's growth.
  I am going to just quickly, in a moment, tick off three or four of 
those tax proposals that I think are very good. Somebody said this is a 
waste of effort because if the Republican package passes--and I hope it 
does because I think it is a very good package--the President will just 
veto it. Well, I am not too sure of that. Let me make sure the Senate 
understands that the tax package included in this Domenici, et al., 
proposal is 12.5 percent of the tax package we passed some months ago. 
It is 12.5 percent--not 50 percent of it, not 75, but 12.5. If you 
can't get that through, what can you get through? I believe the 
President would sign it in a minute because it does the kinds of things 
that even he has talked about as being necessary for American business 
to retain its energizing effect and its competitive qualities.
  For a moment, let's quickly go through the amendments we have 
attached and put in the tax amendments in this package.
  One: For the first time, we really help workers in America pay for 
health care insurance. Heretofore, if a worker bought his own 
insurance, he could not deduct it. He would have to put it in a large 
pot called health expenditures.
  Only if it exceeds 7.5 of his income could it be included in the 
deduction. We have said let's try this out. Let's see what would happen 
if workers who buy their own health insurance--for whatever reason--
deducted the whole thing the same as a company today deducts the whole 
thing under an exclusionary rule that we have established by precedent 
around here, and then we made it part of the rule of law. That is in 
there.
  Self-employed men and women have had a raw deal on health insurance. 
Everybody in this Chamber knows it. If we have a surplus, we ought to 
make that right. Let self-employed Americans deduct 100 percent of 
their insurance costs--not some percentage. That is built in with a 
rather rapid curve where they will be able to deduct the full amount.
  This is a work opportunity tax credit. Almost everybody in this 
Senate wanted that when we put it in before and made it temporary. It 
runs along with welfare reform. We have reduced welfare by 48 percent, 
and we cry out to business to hire welfare trainees. Yet the credit 
they get for doing that is temporary. We want to make it permanent. So 
a welfare trainee is more apt to get a job if the employer can get some 
incentives up front while they are training them and helping them.
  Who can be against that? Will the President veto that? I can't 
believe it.
  There is an item where small business can do an expensing of certain 
capital improvements. But we have a limit on it. Otherwise they have to 
depreciate it over time. We have increased that to $30,000 a year. It 
will be marvelous for small business to deduct those kinds of expenses 
that are encapsulated in that amendment. It will make their businesses 
grow and prosper. There are two or three others that go with this.
  But essentially, I believe when you put that package together you are 
saying there will be fewer minimum-wage workers in the future, small 
business will have a chance to profit more, and they will pay higher 
wages because the marketplace will force them to. In the meantime, we 
also increase minimum wage by $1. We just take 12 months longer to do 
it.
  I believe it is a good package. I hope the Senate passes it tomorrow. 
We will have a few more minutes of debate tomorrow before the vote. In 
the meantime, I hope everyone looks at the package in their offices and 
will get briefed on it because it is a very good package. I not only 
yield the floor, but I yield back any time that I had on my amendment.


                 Amendments Nos. 2768 And 2772 En Bloc

  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. LEVIN. Mr. President, I ask unanimous consent that the pending 
amendment be laid aside, and that two amendments be called up en bloc, 
No. 2768, relating to retroactive finance charges, and 2772 relative to 
residency issues on credit card issuance.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Michigan [Mr. Levin] proposes amendments 
     numbered 2768 and 2772, en bloc.

  Mr. LEVIN. Mr. President, I ask unanimous consent that reading of the 
amendments be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendments, en bloc, are as follows:


                           AMENDMENT NO. 2768

       (Purpose: To prohibit certain retroactive finance charges)

       At the appropriate place, insert the following:

     SEC. __. PROHIBITION ON CERTAIN RETROACTIVE FINANCE CHARGES.

       Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is 
     amended by adding at the end the following:
       ``(h) Prohibition on Retroactive Finance Charges.--
       ``(1) In general.--In the case of any credit card account 
     under an open end credit plan, if the creditor provides a 
     grace period applicable to any new extension of credit under 
     the account, no finance charge may be imposed subsequent to 
     the grace period with regard to any amount that was paid on 
     or before the end of that grace period.
       ``(2) Definition.--For purposes of this subsection, the 
     term `grace period' means a period during which the extension 
     of credit may be repaid, in whole or in part, without 
     incurring a finance charge for the extension of credit.''.
                                  ____



                           AMENDMENT NO. 2772

    (Purpose: To express the sense of the Senate concerning credit 
                              worthiness)

       At the appropriate place, insert the following:
       The Federal Trade Commission shall report to the Banking 
     Committee of Congress within 6 months of enactment of this 
     act as to whether and how the location of the residence of an 
     applicant for a credit card is considered by financial 
     institutions in deciding whether an applicant should be 
     granted such credit card.

  Mr. LEVIN. Mr. President, I ask unanimous consent that those two 
amendments be laid aside and that I be permitted to call up amendment 
No. 2658 relating to the nondischargeability of debts arising from 
firearm-related deaths.
  The PRESIDING OFFICER. Is there objection?
  Mr. GRASSLEY. I object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. LEVIN. I thank the Chair. I thank my friend from Iowa.

                          ____________________