[Congressional Record (Bound Edition), Volume 152 (2006), Part 15]
[Senate]
[Pages 20378-20408]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENT ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. THOMAS (for himself and Mr. Specter):
  S. 3963. A bill to amend title XVIII of the Social Security Act to 
provide for improved access to cost-effective, quality physical 
medicine and rehabilitation service under part B of the Medicare 
program, and for other purposes; to the Committee on Finance.
  Mr. THOMAS. Mr. President, I am pleased to rise today to introduce 
the ``Access to Physical Medicine and Rehabilitation Services 
Improvement Act of 2006.'' This bill would improve patient access to 
physical medicine and rehabilitation services while also reducing 
Medicare costs.
  As medicine has become increasingly specialized, the types of health 
professionals physicians employ to assist them in delivering high 
quality, cost- effective healthcare has changed dramatically. While 
States have typically kept up with these developments by creating 
regulatory mechanisms to ensure that these health professionals are 
properly educated and trained, the Medicare program has not kept pace. 
In fact, a recent Medicare policy has actually turned back the clock on 
these innovative ways of delivering care and this is having a negative 
affect on not only the availability of services, but what Medicare pays 
for these services.
  We are all well aware of the struggles the Medicare program has had 
trying to control spending for therapy services. In fact, we have had 
to impose a cap on beneficiary spending because it has gotten so out of 
control. Unfortunately, in the midst of our efforts to control 
aggregate spending on therapy services, the Centers for Medicare and 
Medicaid Services, CMS, has adopted policies that will lead to higher 
per beneficiary expenditures and make it even more difficult for 
seniors to get the care they need.
  Since late in 2005, CMS has been enforcing a policy, sometimes 
referred to as the ``therapy incident-to'' rule, that prevents doctors 
from employing anyone other than a physical therapist to provide 
physical medicine and rehabilitation services in their offices. 
Frankly, this policy ignores the fact that there are many State 
licensed or certified health professionals who are qualified to offer 
identical services at a lower cost to Medicare.
  Many of us are familiar with the devastating affects breast cancer 
has on millions of women and men each year. One of the consequences of 
breast cancer treatment is a condition called lymphedema. This is a 
debilitating and disfiguring swelling of the extremities that occurs 
from damage to the lymph nodes located in the arm pit. The only 
effective treatment for this condition is a specialized type of massage 
that should only be delivered by a certified lymphedema therapist. Due 
to CMS' policy, over \1/3\ of the nationally certified lymphedema 
therapists can no longer provide this service to Medicare 
beneficiaries. Failure to treat lymphedema often results in long 
hospitals stays due to infection and can lead to amputation in the most 
extreme cases.
  Prior to the adoption of the CMS rule, physicians had the freedom to 
choose the State licensed or authorized health professional they 
thought most appropriate to help their Medicare patients recover from 
injuries or debilitating conditions. I believe we should allow 
physicians, not government bureaucrats, to decide which State licensed 
healthcare professionals have the necessary education and training to 
provide the most high quality, cost-effective physical medicine and 
rehabilitation services to their patients. Additionally, the health 
professionals often approved to perform services are not readily 
available in many rural communities. This means patients must go 
without care or have to travel long distances to get services that were 
previously available in their home towns. As Republican Co-Chair of the 
Senate Rural Health Caucus, I have consistently supported policies and 
initiatives that help rural Medicare beneficiaries get and maintain 
access to services in their own communities in a more effective and 
efficient way.
  Finally, it is important to note that access to state licensed, 
certified professionals will save the Medicare program money--not 
increase costs. The CMS rule implemented last year will result in 
higher Medicare expenditures than if the old policy had remained in 
place. In fact, a recent Medicare Payment Advisory Commission, MedPAC, 
report based on 2002 data showed that the most cost-effective place for 
Medicare beneficiaries to obtain physical therapy was in the 
physician's office. After reviewing the legislation, I hope that my 
colleagues will consider joining me in this important effort to restore 
physician judgment, patient choice, and common sense to the Medicare 
program.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3963

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Access to Physical Medicine 
     and Rehabilitation Services Improvement Act of 2006''.

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

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

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

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

     ``Athletic Trainer Services and Lymphedema Therapist Services

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

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

[[Page 20379]]

       ``(A) who is under the care of a physician (as so defined); 
     and
       ``(B) with respect to whom a plan prescribing the type, 
     amount, and duration of services that are to be furnished to 
     such individual has been established by a physician (as so 
     defined).

     Such term does not include any services for which a facility 
     or other provider charges or is paid any amounts with respect 
     to the furnishing of such services
       ``(4) The term `certified lymphedema therapist' means an 
     individual who--
       ``(A) possesses a current unrestricted license as a health 
     professional in the State in which he or she practices;
       ``(B) after obtaining such a license, has successfully 
     completed 135 hours of Complete Decongestive Therapy 
     coursework which consists of theoretical instruction and 
     practical laboratory work utilizing teaching methods directly 
     aimed at the treatment of lymphatic and vascular disease from 
     a lymphedema training program recognized by the Secretary for 
     purposes of certifying lymphedema therapists; and
       ``(C) in the case of an individual performing services in a 
     State that provides for licensure or certification of 
     lymphedema therapists, is licensed or certified as a 
     lymphedema therapist in such State.''.
       (b) Payment.--
       (1) In general.--Section 1832(a)(2)(B) of the Social 
     Security Act (42 U.S.C. 1395k(a)(2)(B)) is amended by adding 
     at the end the following new clause:
       ``(v) athletic trainer services and lymphedema therapist 
     services; and''.
       (2) Amount.--Section 1833(a)(1) of the Social Security Act 
     (42 U.S.C. 1395l(a)(1)) is amended--
       (A) by striking ``and (V)'' and inserting ``(V)''; and
       (B) by inserting before the semicolon at the end the 
     following: ``, and (W) with respect to athletic trainer 
     services and lymphedema therapist services under section 
     1861(s)(2)(BB), the amounts paid shall be 80 percent of the 
     lesser of the actual charge for the service or the fee 
     schedule amount under section 1848 for the same service 
     performed by a physician''.
       (c) Inclusion of Services in the Therapy Cap.--Services 
     provided by a certified athletic trainer or a certified 
     lymphedema therapist (as those terms are defined in section 
     1861(ccc) of the Social Security Act, as added by subsection 
     (a)) shall be subject to the limitation on payments described 
     in section 1833(g) of such Act (42 U.S.C. 1395l(g)) in the 
     same manner those services would be subject to limitation if 
     the service had been provided by a physician personally.
       (d) Inclusion of Athletic Trainers and Lymphedema 
     Therapists as Practitioners for Assignment of Claims.--
     Section 1842(b)(18)(C) of the Social Security Act (42 
     U.S.C.1395u(b)(18)(C)) is amended by adding at the end the 
     following new clauses:
       ``(vii) A certified athletic trainer (as defined in section 
     1861(ccc)(1)).
       ``(viii) A certified lymphedema therapist (as defined in 
     section 1861(ccc)(2)).''.
       (e) Coverage of Certain Physical Medicine and 
     Rehabilitation Services Provided in Rural Health Clinics and 
     Federally Qualified Health Centers.--Section 1861(aa)(1)(B) 
     of the Social Security Act (42 U.S.C. 1395x(aa)(1)(B)) is 
     amended by striking ``or by a clinical social worker (as 
     defined in subsection (hh)(1))'' and inserting ``, by a 
     clinical social worker (as defined in subsection (hh)(1)), by 
     a certified athletic trainer (as defined in subsection 
     (ccc)(2)), or by a certified lymphedema therapist (as defined 
     in subsection (ccc)(4))''.
       (f) Effective Date.--The amendments made by this section 
     shall apply with respect to services furnished on or after 
     January 1, 2007.
                                 ______
                                 
      By Mr. LOTT:
  S. 3964. A bill to provide for the issuance of a commemorative 
postage stamp in honor of Senator Blanche Kelso Bruce; to the Committee 
on Homeland Security and Governmental Affairs.
  Mr. LOTT. Mr. President, the first African American to serve a full 
term in the United States Senate represented my great State of 
Mississippi.
  Blanche Kelso Bruce was elected to the Senate in 1874 by the 
Mississippi State Legislature where he served from 1875 until 1881.
  On February 14, 1879, he broke a second barrier by becoming the first 
African American to preside over a Senate session. He was a leader in 
the nationwide fight for African American rights, fighting for 
desegregation of the Army and protection of voting rights.
  Blanche Kelso Bruce was born into slavery near Farmville, VA, on 
March 1, 1841, and spent his early years in Virginia and Missouri. He 
was 20 years old when the Civil War broke out. He tried to enlist in 
the Union Army but was rejected because of his race.
  He then turned his attention to teaching and while in Missouri 
organized that State's first school for African Americans.
  In 1869 he moved to Mississippi to become a planter on a cotton 
plantation, and the Magnolia State is where he became active in 
Republican politics. He rose in Mississippi politics from membership on 
the Mississippi Levee Board, as the sheriff and tax collector for 
Bolivar County surrounding Cleveland, Mississippi, and as the Sergeant-
at-Arms for the Mississippi State Senate. It was Blanche Kelso Bruce's 
perseverance, selfless public service and commitment to Mississippi 
that led to the Mississippi State Legislature's election of him to 
serve in the U.S. Senate.
  In the Senate, he served on the Pensions, Manufacturers, Education 
and Labor committees. He chaired the Committee on River Improvements 
and the Select Committee to Investigate the Freedman's Savings and 
Trust Company.
  Senator Bruce left the Senate in 1881 and was appointed Registrar of 
the Treasury by President James Garfield, a position he also held in 
1897. He subsequently received appointments from Presidents Chester 
Arthur, Benjamin Harrison and William McKinley.
  Senator Bruce joined the board of Howard University in Washington, 
D.C. where he received an honorary degree. He died in Washington on 
March 17, 1898, at the age of 57.
  Four years ago, on September 17, 2002, in my position as Senate 
Majority Leader, I joined with Senator Chris Dodd in honoring this 
revered adopted son of Mississippi by unveiling the portrait of Blanche 
Kelso Bruce in the U.S. Capitol.
  Today I rise to further honor this great statesman and pioneer by 
introducing legislation to issue the Senator Blanche Kelso Bruce 
commemorative postage stamp. Mississippi takes great pride in our 
leaders who often quietly, with little fanfare, blaze paths for the 
rest of the Nation to follow. Senator Blanche Kelso Bruce is one such 
great pioneer, and I call on my colleagues to join me in honoring him.
                                 ______
                                 
      By Mrs. BOXER:
  S. 3965. A bill to address the serious health care access barriers, 
and consequently higher incidences of disease, for low-income, 
uninsured populations; to the Committee on Health, Education, Labor, 
and Pensions.
  Mrs. BOXER. Mr. President, today I rise to introduce the Latina 
Health Access Act. This important legislation addresses the serious 
health care access barriers, and consequently higher incidences of 
disease and poorer health outcomes, for the Latina population in the 
United States.
  The United States has witnessed a tremendous growth in the Latino 
population across the Nation. There are now 35 million Latinos residing 
in the U.S., and Latinas are more than half of the total Latino 
population--for a total of 18 million Latinas in the United States. In 
my home State of California, 29 percent of the female population is 
Latina--this is approximately 5 million women. The number of Latinas is 
expected to continue to grow, and it is estimated that by 2050, one out 
of every four women in the U.S. will be a Latina. Despite their growing 
numbers, Latinas continue to disproportionately face serious health 
concerns, including sexually transmitted diseases, diabetes, and 
cancer, which are otherwise preventable, or treatable, with adequate 
health access.
  Latinas are particularly at risk for being uninsured. It is estimated 
that 37 percent of Latinas are uninsured, almost double the rate of the 
national average. This lack of adequate health care results in health 
problems that could otherwise be prevented. For example, 1 in 12 
Latinas will develop breast cancer nationwide. White women have the 
highest rates of breast cancer; however, Latinas have among the lowest 
rates of breast cancer screening, diagnosis and treatment. As a result, 
Latinas are more likely to die from breast cancer than white women. 
Also, the prevalence of diabetes is at least two to four times higher 
among Latinas than among white women. More than 25 percent of Latinas 
aged 65 to 74 have Type II diabetes. All of these health problems would 
be more effectively treated or prevented with adequate health care 
coverage.

[[Page 20380]]

  To address these health concerns, the Latina Health Access Act 
provides a two-fold approach to dealing with this problem. First, the 
bill would provide greater health access to Latinas. Second, the bill 
would provide educational outreach programs targeted at Latinas in 
regards to health care access.
  The bill would create a program at the Department of Health and Human 
Services (HHS) that provides funding for high-performing hospitals and 
community health centers targeted at serving the growing Latina 
population of the United States. Also, the bill would mandate that HHS 
provide grants to various nonprofits, state or local governments that 
serve Latino communities, and lastly to women of color who seek to 
create diversity in the health care community. Finally, the bill would 
direct HHS to provide $18 million for grants to fund research 
institutions so that they may conduct research on the health status of 
Latinas.
  The Latina Health Access Act also focuses on educational outreach to 
the Latina population. The bill would fund health education programs 
targeted specifically to Latinas through community-centered 
informational forums, public service announcements and media campaigns.
  Adequate health access is the key to diagnosing and treating diseases 
before they become deadly and rampant. We need to strengthen our 
efforts to bring greater health access to the Latina population. I urge 
my colleagues to join me in supporting this effort.
  I ask unanimous consent that the text my bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3965

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Latina Health Access Act''.

     SEC. 2. FINDINGS.

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

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

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

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

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

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

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

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

     ``SEC. 2903. EDUCATION AND OUTREACH.

       ``(a) Joint Effort for Health Outcomes.--In order to 
     improve health outcomes for uninsured and low-income 
     individuals, the Secretary shall, through a joint effort with 
     health care professionals, health advocates, and community-
     based organizations in medically underserved areas, provide 
     outreach, education, and delivery of comprehensive health 
     services to uninsured and low-income individuals in a 
     culturally competent manner.
       ``(b) Targeted Health Education Programs.--The Secretary 
     shall carry out a health education program targeted 
     specifically to populations of uninsured and low-income 
     individuals, including the Latina population, through 
     community centered informational forums, public service 
     announcements, and media campaigns.
       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $18,000,000 for fiscal year 2007 and each succeeding fiscal 
     year.''.
                                 ______
                                 
      By Mrs. BOXER:
  S. 3966. A bill to provide assistance to State and nongovernmental 
entities to initiate public awareness and outreach campaigns to reduce 
teenage pregnancies; to the Committee on Health, Education, and 
Pensions.
  Mrs. BOXER. Mr. President, today I rise to reintroduce the HOPE 
(Hispanas Organized for Political Equality) Youth Pregnancy Prevention 
Act.
  The United States has the highest rate of teen pregnancy in the 
Western industrialized world, and the U.S. teen-pregnancy rate is 
nearly twice that of Canada and Great Britain. Although overall teen 
pregnancy rates have decreased in recent years, the teen pregnancy 
rates for Hispanics and other ethnic and racial minority teens in the 
United States are significantly higher than the national average. For 
example, 51 percent of Latina girls in the U.S. will become pregnant 
once before the age 20.

[[Page 20381]]

  The Latina population in the United States has grown tremendously. 
Currently, there are approximately 18 million Latinas that reside in 
the U.S. In my home State of California, 29 percent of all women are 
Latinas, this is approximately five million women. The number of 
Latinas is expected to continue to grow. It is estimated that by 2050, 
one out of every four women in the U.S. will be a Latina. Despite their 
growing numbers, Latinas continue to face serious health care access 
barriers and consequently higher incidences of teenage pregnancy.
  To address the growing risk for many reproductive and other health 
concerns that are otherwise preventable, the HOPE Youth Pregnancy 
Prevention Act would provide a comprehensive solution and the resources 
to help prevent teen pregnancy among at-risk and minority youth.
  Specifically, the bill would provide grants to States, localities, 
and non-governmental organizations for teenage pregnancy prevention 
activities targeted to areas with large ethnic minorities and other at-
risk youth. These grants could be used for a number of activities, 
including youth development, work-related interventions and other 
educational activities, parental involvement, teenage outreach and 
clinical services. The bill would authorize $30 million a year for five 
years for these grants.
  The bill would also provide grants to States and non-governmental 
organizations to establish multimedia public awareness campaigns to 
combat teenage pregnancy. These campaigns would aim to prevent teen 
pregnancy through TV, radio and print ads, billboards, posters, and the 
Internet. Priority would be given to those activities that target 
ethnic minorities and other at-risk youth.
  Over the past 10 years, we have made progress in reducing teen 
pregnancy, but our work is not done. We need to strengthen our efforts, 
especially among Latinas and other minority youth. I urge my colleagues 
to join me in supporting this effort.
  I ask unanimous consent that the text of my bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3966

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``HOPE Youth Pregnancy 
     Prevention Act''.

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

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

     ``SEC. 399Q. YOUTH PREGNANCY PREVENTION.

       ``(a) At-Risk Teen Pregnancy Prevention Grants.--
       ``(1) In general.--The Secretary shall award grants to 
     eligible entities to enable such entities to carry out 
     teenage pregnancy prevention activities that are targeted at 
     areas with large ethnic minorities and other youth at-risk of 
     becoming pregnant.
       ``(2) Eligibility.--To be eligible to receive a grant under 
     paragraph (1), an entity shall--
       ``(A) be a State or local government or a private nonprofit 
     entity; and
       ``(B) prepare and submit to the Secretary an application at 
     such time, in such manner, and containing such information as 
     the Secretary may require.
       ``(3) Eligible activities.--Activities carried out under a 
     grant under this subsection may include--
       ``(A) youth development for adolescents;
       ``(B) work-related interventions and other educational 
     activities;
       ``(C) parental involvement;
       ``(D) teenage outreach; and
       ``(E) clinical services.
       ``(b) Multimedia Public Awareness and Outreach Grants.--
       ``(1) In general.--The Secretary shall award grants to 
     eligible entities to enable such entities to establish 
     multimedia public awareness campaigns to combat teenage 
     pregnancy.
       ``(2) Eligibility.--To be eligible to receive a grant under 
     paragraph (1), an entity shall--
       ``(A) be a State government or a private nonprofit entity; 
     and
       ``(B) prepare and submit to the Secretary an application at 
     such time, in such manner, and containing such information as 
     the Secretary may require.
       ``(3) Activities.--The purpose of the campaigns established 
     under a grant under paragraph (1) shall be to prevent teenage 
     pregnancy through the use of advertising using television, 
     radio, print media, billboards, posters, the Internet, and 
     other methods determined appropriate by the Secretary.
       ``(4) Priority.--In awarding grants under this subsection, 
     the Secretary shall give priority to applicants that express 
     an intention to carry out activities that target ethnic 
     minorities and other at-risk youth.
       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated--
       ``(1) to carry out subsection (a), $30,000,000 for each of 
     fiscal years 2007 through 2011; and
       ``(2) to carry out subsection (b), $20,000,000 for each of 
     fiscal years 2007 through 2011.''.
                                 ______
                                 
      By Mrs. CLINTON:
  S. 3967. A bill to require the International Trade Commission to 
report on the specific impact of each free trade agreement in force 
with respect to the United States on a sector-by-sector basis, and for 
other purposes; to the Committee on Finance.
  Mrs. CLINTON. Mr. President, I am pleased today to introduce a bill 
that will help inform the Congress and the American people about our 
Nation's trade agreements.
  The trade policy debate here in Washington is heated and polarized. 
Supporters of ``free trade'' often view trade agreements uncritically 
and without question while others are suspicious of any agreement that 
makes it easier to trade with other countries. I believe that trade 
policy decisions should be based on an understanding of the concrete 
results of these agreements and the impact that they have on our 
economy and the American people, rather than on preconceived notions.
  My bill, the Trade Agreement Accountability Act, will inject factual 
analysis in to this debate. The bill requires the International Trade 
Commission to report on the effects of every trade agreement we sign. 
These reports will examine the good and the bad of every trade 
agreement after two years, after five years and then every five years 
after it goes into effect. They will study the effect of each trade 
agreement on a sector-by-sector basis, and conduct an assessment and 
quantitative analysis of how each agreement is fostering economic 
growth, improving living standards and helping to create jobs.
  In short, this bill will help educate policymakers and the American 
people about this important debate. I hope that by evaluating the 
results of past agreements, we will be able to better understand the 
consequences of future ones.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3967

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the `` Trade Agreement Assessment 
     Act''.

     SEC. 2. ITC REPORT.

       (a) In General.--Not later than 2 years after the date of 
     the enactment of this Act, 5 years after the date of the 
     enactment of this Act, and every 5 years thereafter, the 
     International Trade Commission shall submit a report to 
     Congress on each free trade agreement in force with respect 
     to the United States. The report shall, with respect to each 
     free trade agreement, contain an analysis and assessment of 
     the analysis and predictions made by the International Trade 
     Commission, the United States Trade Representative, and other 
     Federal agencies, before implementation of the agreement and 
     actual results of the agreement on the United States economy.
       (b) Contents of Report.--Each report required by subsection 
     (a) shall contain the following:
       (1) With respect to the United States and each country that 
     is a party to a free trade agreement, an assessment and 
     quantitative analysis of how each agreement--
       (A) is fostering economic growth;
       (B) is improving living standards;
       (C) is helping create jobs; and
       (D) is reducing or eliminating barriers to trade and 
     investment.
       (2) An assessment and quantitative analysis of how each 
     agreement is meeting the specific objectives and goals set 
     out in connection with the implementation of that agreement, 
     the impact of the agreement on the United States economy as a 
     whole, and on specific industry sectors, including the impact 
     the agreement is having on--
       (A) the gross domestic product;
       (B) exports and imports;
       (C) aggregate employment, and competitive positions of 
     industries;

[[Page 20382]]

       (D) United States consumers; and
       (E) the overall competitiveness of the United States.
       (3) An assessment and quantitative analysis of how each 
     agreement is meeting the goals and objectives for the 
     agreement on a sector-by-sector basis, including--
       (A) trade in goods;
       (B) customs matters, rules or origin, and enforcement 
     cooperation;
       (C) sanitary and phytosanitary measures;
       (D) intellectual property rights;
       (E) trade in services;
       (F) electronic commerce;
       (G) government procurement;
       (H) transparency, anti-corruption; and regulatory reform; 
     and
       (I) any other issues with respect to which the 
     International Trade Commission submitted a report under 
     section 2104(f) of the Bipartisan Trade Promotion Authority 
     Act of 2002.
       (4) A summary of how each country that is a party to an 
     agreement has changed its labor and environmental laws since 
     entry into force of the agreement.
       (5) An analysis of whether the agreement is making progress 
     in achieving the applicable purposes, policies, priorities, 
     and objectives of the Bipartisan Trade Promotion Authority 
     Act of 2002.
                                 ______
                                 
      By Mr. AKAKA (for himself and Mr. Lautenberg):
  S. 3968. A bill to affirm the authority of the Comptroller General to 
audit and evaluate the programs, activities, and financial transactions 
of the intelligence community, and for other purposes; to the Select 
Committee on Intelligence.
  Mr. AKAKA. Mr. President, I rise to introduce ``The Intelligence 
Community Audit Act of 2006,'' with Senator Lautenberg which would 
reaffirm the Comptroller General of the United States and head of the 
Government Accountability Office's, GAO, authority to audit the 
financial transactions and evaluate the programs and activities of the 
intelligence community (IC). Representative Bennie Thompson, ranking 
member of the House Homeland Security Committee, is introducing similar 
legislation.
  The bill Senator Lautenberg and I offer today is in keeping with 
legislation introduced in 1987 by Senator John Glenn, the former 
chairman of the Governmental Affairs Committee, to ensure more 
effective oversight of the Central Intelligence Agency (CIA) in the 
wake of the Iran-Contra scandal.
  The need for greater oversight and availability of information to 
appropriate congressional committees is not new. What is new is that 
Congress does not have the luxury of failure in this era of terrorism. 
Failure brings terrible consequence.
  Since 9/11, effective oversight is needed now more than ever for two 
very basic reasons: First, intelligence reforms have spawned new 
agencies with new intelligence functions demanding even more inter-
agency cooperation. The Congress needs to ensure that these agencies 
have the assets, resources, and capability to do their job in 
protecting our national security. However, now the Congress cannot do 
its job properly, in part, because its key investigative arm, the 
Government Accountability Office, is not given adequate access to the 
intelligence community, led by the Director of National Intelligence 
(DNI).
  Moreover, intelligence oversight is no longer the sole purview of the 
Senate and House intelligence committees. Other committees have 
jurisdiction over such departments as Homeland Security, State, 
Defense, Justice, Energy, and even Treasury and Commerce, which, in 
this war on terrorism, have intelligence collection and sharing 
responsibilities. Nor is the information necessary for these committees 
to exercise their oversight responsibilities restricted to the two 
intelligence committees as their organizing resolutions make clear. 
Unfortunately, the intelligence community stonewalls the GAO when 
committees of jurisdiction request that GAO investigate problems 
despite the clear responsibility of Congress to ensure that these 
agencies are operating effectively to protect America.
  This is not always the case. Some agencies recognize the valuable 
contribution that GAO makes in improving the quality of our 
intelligence. As Lieutenant General Lew Allen, Jr., then Director of 
the National Security Agency (NSA), observed in testimony before the 
Senate Select Committee To Study Governmental Operations With Respect 
To Intelligence Activities, on October 29, 1975: ``Another feature of 
congressional review is that since 1955 resident auditors of the 
General Accounting Office have been assigned at the Agency to perform 
on-site audits. Additional GAO auditors were cleared for access in 
1973, and GAO, in addition to this audit, is initiating a classified 
review of our automatic data processing functions.'' Not surprisingly, 
this outpost of the GAO still exists at the NSA.
  Second, and equally important, is the inability of Congress to ensure 
that unfettered intelligence collection does not trample civil 
liberties. New technologies and new personal information data bases 
threaten our individual right to a secure private life, free from 
unlawful government invasion. The Congress must ensure that private 
information being collected by the intelligence community is not 
misused and is secure.
  Over 30 years ago, Senator Charles Percy urged Congress to ``act now 
to gain control over the Government's dangerously proliferating police, 
investigative, and intelligence activities.'' He noted that ``we find 
ourselves threatened by the specter of a `watchdog' Government, 
breeding a nation of snoopers.''
  The privacy concerns expressed by our former colleague have become 
vastly more complicated. As I have noted, the institutional landscape 
has become littered with new intelligence agencies with ever-increasing 
demands and responsibilities on law enforcement at every level of 
government since the establishment of the Department of Homeland 
Security and the passage of the Intelligence Reform and Terrorism 
Prevention Act of 2004. They have the legitimate mission to protect the 
country against potential threats. Congress' role is to ensure that 
their mission remains legitimate.
  The intelligence community today consists of 19 different agencies or 
components: the Office of the Director of National Intelligence; 
Central Intelligence Agency; Department of Defense; Defense 
Intelligence Agency; National Security Agency; Departments of the Army, 
Navy, Marine Corps, and Air Force; Department of State; Department of 
Treasury; Department of Energy; Department of Justice; Federal Bureau 
of Investigation; National Reconnaissance Office; National Geospatial-
Intelligence Agency; Coast Guard; Department of Homeland Security, and 
the Drug Enforcement Administration.
  I ask unanimous consent that a memorandum prepared by the 
Congressional Research Service, entitled ``Congressional Intelligence 
Oversight,'' be included in the Record.
  As both House Rule 48 and Senate Resolution 400 establishing the 
intelligence oversight committees state, ``Nothing in this [charter] 
shall be construed as amending, limiting, or otherwise changing the 
authority of any standing committee of the [House/Senate] to obtain 
full and prompt access to the product of the intelligence activities of 
any department or agency of the Government relevant to a matter 
otherwise within the jurisdiction of such committee.''
  Despite this clear and unambiguous statement, the ability of non-
intelligence committees to obtain information, no matter how vital to 
improving the security of our Nation, has been restricted by the 
various elements of the intelligence community.
  Two recent incidents have made this situation disturbingly clear. At 
a hearing entitled ``Access Delayed: Fixing the Security Clearance 
Process, Part II,'' before the Subcommittee on Oversight of Government 
Management, the Federal Workforce, and the District of Columbia on 
which I serve as Ranking Member, on November 9, 2005, GAO was asked 
about steps it would take to ensure that the Office of Personnel 
Management (OPM), the Office of Management and Budget, and the 
intelligence community met the goals and objectives outlined in the OPM 
security clearance strategic plan. Fixing the security clearance 
process, which is on GAO's high-risk list, is essential to our national 
security. But as GAO observed

[[Page 20383]]

in a written response to a question raised by Senator Voinovich, 
``while we have the authority to do such work, we lack the cooperation 
we need to get our job done in that area.'' The intelligence community 
is blocking GAO's work in this essential area.
  A similar case arose in response to a GAO investigation for the 
Senate Homeland Security Committee and the House Government Reform 
Committee on how agencies are sharing terrorism-related and sensitive 
but unclassified information. The report, entitled ``Information 
Sharing, the Federal Government Needs to Establish Policies and 
Processes for Sharing Terrorism-Related and Sensitive but Unclassified 
Information'' (GAO-06-385), was released in March 2006.
  At a time when Congress is criticized by members of the 9-11 
Commission for failing to implement its recommendations, we should 
remember that improving terrorism information sharing among agencies 
was one of the critical recommendations of the 9-11 Commission. 
Moreover, the Intelligence Reform and Terrorism Prevention Act of 2004 
mandated the sharing of terrorism information through the creation of 
an Information Sharing Environment. Yet, when asked by GAO for comments 
on the GAO report, the Office of the Director of National Intelligence 
refused, stating that ``the review of intelligence activities is beyond 
GAO's purview.''
  However, as a Congressional Research Service memorandum entitled 
``Overview of `Classified' and `Sensitive but Unclassified' 
Information,'' concludes, ``it appears that pseudo-classification 
markings have, in some instances, had the effect of deterring 
information sharing for homeland security.'' I ask unanimous consent 
that the memo be printed in the Record following my remarks.
  Unfortunately I have more examples, that predate the post 9-11 
reforms. Indeed, in July 2001, in testimony entitled ``Central 
Intelligence Agency, Observations on GAO Access to Information on CIA 
Programs and Activities'' (GAO-01-975T) before the House Committee on 
Government Reform, the GAO noted, as a practical matter, ``our access 
is generally limited to obtaining information on threat assessments 
when the CIA does not perceives [sic] our audits as oversight of its 
activities.'' I ask consent that this testimony also be printed 
following my remarks.
  It is inconceivable that the GAO--the audit arm of the U.S. 
Congress--has been unable to conduct evaluations of the CIA for over 40 
years.
  If the GAO had been able to conduct basic auditing functions of the 
CIA, perhaps some of the problems that were so clearly exposed 
following the terrorist attacks in September 2001 would have been 
resolved. And yet, it is extraordinary that five years after 9-11 the 
same problems persist.
  Once more I refer to Senator Glenn's bill S. 1458, the ``General 
Accounting Office-Central Intelligence Agency Audit Act of 1987.'' On 
its introduction he said, ``in the long run, I believe carefully 
controlled GAO audits of CIA will lower the probability of future 
abuses of power, boost the credibility of CIA management, increase the 
essential public support the Agency's mission deserves, assist the 
Congress in conducting meaningful oversight, and in no way compromise 
the CIA mission.'' Unfortunately, S. 1458 did not become law, and 
nearly 20 years later, the CIA's apparent management challenges led to 
the creation of the Director of National Intelligence with the 
Intelligence Reform Act of 2004. If Senator Glenn's proposal made in 
1987 had been accepted, perhaps, again, some of the problems that 
became apparent with our intelligence agencies following 9-11 might 
never have occurred.
  I want to be clear that my legislation does not detract from the 
authority of the intelligence committees. In fact, the language makes 
explicit that the Comptroller General may conduct an audit or 
evaluation of intelligence sources and methods or covert actions only 
upon the request of the intelligence committees or at the request of 
the congressional majority or minority leaders. The measure also 
prescribes for the security of the information collected by the 
Comptroller General.
  However, my bill reaffirms the authority of the Comptroller General 
to conduct audits and evaluations--other than those relating to sources 
and methods, or covert actions--relating to the management and 
administration of elements of the intelligence community in areas such 
as strategic planning, financial management, information technology, 
human capital, knowledge management, information sharing, and change 
management for other relevant committees of the Congress.
  Attached is a detailed description of the legislation. I urge my 
colleagues to join me in supporting this legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection the materials were ordered to be printed in 
the Record, as follows:

                               Congressional Research Service,

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

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

                               Background

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

             Intelligence Committees' Statutory Obligations

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

          Intelligence Committee Obligations Under Resolution

       In an apparent effort to address various concerns relating 
     to committee jurisdiction, the House of Representatives and 
     the Senate,

[[Page 20384]]

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

                         Cross-over Membership

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

                          Summary Conclusions

       Although the President is statutorily obligated to keep the 
     congressional intelligence committees fully and currently 
     informed of intelligence activities, the statute obligates 
     the intelligence committees to inform the respective 
     chambers, or standing committees, of such activities, if 
     either of the two committees determine that further oversight 
     attention is required.
       Further, resolutions establishing the two intelligence 
     committees make clear that the intelligence committees share 
     intelligence oversight responsibilities with other standing 
     committees, to the extent that certain intelligence 
     activities affect matters that fall under the jurisdiction of 
     a committee other than the intelligence committees.
       Finally, the resolutions establishing the intelligence 
     committees provide for the designation of ``cross-over'' 
     members representing certain standing committees that played 
     a role in intelligence oversight prior to the establishment 
     of the intelligence committees in the 1970s. The resolutions, 
     however, do not specify what role, if any, these ``cross-
     over'' members play in keeping standing committees on which 
     they serve informed of certain intelligence activities. 
     Rather, each resolution states that the respective 
     intelligence committee shall make that determination.
                                  ____


             Congressional Research Service, July 18, 2006.


                               Memorandum

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


                    Security Classified Information

       Current security classification arrangements, prescribed by 
     an executive order of the President, trace their origins to a 
     March 1940 directive issued by President Franklin D. 
     Roosevelt as E.O. 8381. This development was probably 
     prompted somewhat by desires to clarify the authority of 
     civilian personnel in the national defense community to 
     classify information, to establish a broader basis for 
     protecting military information in view of growing global 
     hostilities, and to manage better a discretionary power 
     seemingly of increasing importance to the entire executive 
     branch. Prior to this 1940 order, information had been 
     designated officially secret by armed forces personnel 
     pursuant to Army and Navy general orders and regulations. The 
     first systematic procedures for the protection of national 
     defense information, devoid of special markings, were 
     established by War Department General Orders No. 3 of 
     February 1912. Records determined to be ``confidential'' were 
     to be kept under lock, ``accessible only to the officer to 
     whom intrusted.'' Serial numbers were issued for all such 
     ``confidential'' materials, with the numbers marked on the 
     documents, and lists of same kept at the offices from which 
     they emanated. With the enlargement of the armed forces after 
     the entry of the United States into World War I, the registry 
     system was abandoned and a tripartite system of 
     classification markings was inaugurated in November 1917 with 
     General Orders No. 64 of the General Headquarters of the 
     American Expeditionary Force.
       The entry of the United States into World War II prompted 
     some additional arrangements for the protection of 
     information pertaining to the nation's security. Personnel 
     cleared to work on the Manhattan Project for the production 
     of the atomic bomb, for instance, in committing themselves 
     not to disclose protected information improperly, were 
     ``required to read and sign either the Espionage Act or a 
     special secrecy agreement,'' establishing their awareness of 
     their secrecy obligations and a fiduciary trust which, if 
     breached, constituted a basis for their dismissal.
       A few years after the conclusion of World War II, President 
     Harry S. Truman, in February 1950, issued E.O. 10104, which, 
     while superseding E.O. 8381, basically reiterated its text, 
     but added a fourth Top Secret classification designation to 
     existing Restricted, Confidential, and Secret markings, 
     making American information security categories consistent 
     with those of our allies. At the time of the promulgation of 
     this order, however, plans were underway for a complete 
     overhaul of the classification program, which would result in 
     a dramatic change in policy.
       E.O. 10290, issued in September 1951, introduced three 
     sweeping innovations in security classification policy. 
     First, the order indicated the Chief Executive was relying 
     upon ``the authority vested in me by the Constitution and 
     statutes, and as President of the United States'' in issuing 
     the directive. This formula appeared to strengthen the 
     President's discretion to make official secrecy policy: it 
     intertwined his responsibility as Commander in Chief with the 
     constitutional obligation to ``take care that the laws be 
     faithfully executed.'' Second, information was now classified 
     in the interest of ``national security,'' a somewhat new, but 
     nebulous, concept, which, in the view of some, conveyed more 
     latitude for the creation of official secrets. It replaced 
     the heretofore relied upon ``national defense'' standard for 
     classification. Third, the order extended classification 
     authority to nonmilitary entities throughout the executive 
     branch, to be exercised by, presumably, but not explicitly 
     limited to, those having some role in ``national security'' 
     policy.
       The broad discretion to create official secrets granted by 
     E.G. 10290 engendered widespread criticism from the public 
     and the press. In response, President Dwight D. Eisenhower, 
     shortly after his election to office, instructed Attorney 
     General Herbert Brownell to review the order with a view to 
     revising or rescinding it. The subsequent recommendation was 
     for a new directive, which was issued in November 1953 as 
     E.O. 10501. It withdrew classification authority from 28 
     entities, limited this discretion in 17 other units to the 
     agency head, returned to the ``national defense'' standard 
     for applying secrecy, eliminated the ``Restricted'' category, 
     which was the lowest level of protection, and explicitly 
     defined the remaining three classification areas to prevent 
     their indiscriminate use.
       Thereafter, E.G. 10501, with slight amendment, prescribed 
     operative security classification policy and procedure for 
     the next two decades. Successor orders built on this reform. 
     These included E.O. 11652, issued by President Richard M. 
     Nixon in March 1972, followed by E.O. 12065, promulgated by 
     President Jimmy Carter in June 1978. For 30 years, these 
     classification directives narrowed the bases and discretion 
     for assigning

[[Page 20385]]

     official secrecy to executive branch documents and materials. 
     Then, in April 1982, this trend was reversed with E.O. 12356, 
     issued by President Ronald Reagan. This order expanded the 
     categories of classifiable information, mandated that 
     information falling within these categories be classified, 
     authorized the reclassification of previously declassified 
     documents, admonished classifiers to err on the side of 
     classification, and eliminated automatic declassification 
     arrangements.
       President William Clinton returned security classification 
     policy and procedure to the reform trend of the Eisenhower, 
     Nixon, and Carter Administrations with E.O. 12958 in April 
     1995. Adding impetus to the development and issuance of the 
     new order were changing world conditions: the democratization 
     of many eastern European countries, the demise of the Soviet 
     Union, and the end of the Cold War. Accountability and cost 
     considerations were also significant influences. In 1985, the 
     temporary Department of Defense (DOD) Security Review 
     Commission, chaired by retired General Richard G. Stilwell, 
     declared that there were ``no verifiable figures as to the 
     amount of classified material produced in DOD and in defense 
     industry each year.'' Nonetheless, it concluded that ``too 
     much information appears to be classified and much at higher 
     levels than is warranted.'' In October 1993, the cost of the 
     security classification program became clearer when the 
     General Accounting Office (GAO) reported that it was ``able 
     to identify government-wide costs directly applicable to 
     national security information totaling over $350 million for 
     1992.'' After breaking this figure down--it included only $6 
     million for declassification work--the report added that 
     ``the U.S. government also spends additional billions of 
     dollars annually to safeguard information, personnel, and 
     property.'' E.O. 12958 set limits for the duration of 
     classification, prohibited the reclassification of properly 
     declassified records, authorized government employees to 
     challenge the classification status of records, reestablished 
     the balancing test of E.O. 12065 weighing the need to protect 
     information vis-a-vis the public interest in its disclosure, 
     and created two review panels--one on classification and 
     declassification actions and one to advise on policy and 
     procedure.
       Most recently, in March 2003, President George W. Bush 
     issued E.O. 13292, amending E.O. 12958. Among the changes 
     made by this order were adding infrastructure vulnerabilities 
     or capabilities, protection services relating to national 
     security, and weapons of mass destruction to the categories 
     of classifiable information; easing the reclassification of 
     declassified records; postponing the automatic 
     declassification of protected records 25 or more years old, 
     beginning in mid-April 2003 to the end of December 2006; 
     eliminating the requirement that agencies prepare plans for 
     declassifying records; and permitting the Director of Central 
     Intelligence to block declassification actions of the 
     Interagency Security Classification Appeals Panel, unless 
     overruled by the President.
       The security classification program has evolved during the 
     past 66 years. One may not agree with all of its rules and 
     requirements, but attention to detail in its policy and 
     procedure result in a significant management regime. The 
     operative executive order, as amended, defines its principal 
     terms. Those who are authorized to exercise original 
     classification authority are identified. Exclusive categories 
     of classifiable information are specified, as are the terms 
     of the duration of classification, as well as classification 
     prohibitions and limitations. Classified information is 
     required to be marked appropriately along with the identity 
     of the original classifier, the agency or office of origin, 
     and a date or event for declassification. Authorized holders 
     of classified information who believe that its protected 
     status is improper are ``encouraged and expected'' to 
     challenge that status through prescribed arrangements. 
     Mandatory declassification reviews are also authorized to 
     determine if protected records merit continued classification 
     at their present level, a lower level, or at all. 
     Unsuccessful classification challenges and mandatory 
     declassification reviews are subject to review by the 
     Interagency Security Classification Appeals Panel. General 
     restrictions on access to classified information are 
     prescribed, as are distribution controls for classified 
     information. The Information Security Oversight Office (ISOO) 
     within the National Archives and Records Administration 
     (NARA) is mandated to provide central management and 
     oversight of the security classification program. If the 
     director of this entity finds that a violation of the order 
     or its implementing directives has occurred, it must be 
     reported to the head of the agency or to the appropriate 
     senior agency official so that corrective steps, if 
     appropriate, may be taken.
       While Congress, thus far, has elected not to create 
     statutorily mandated security classification policy and 
     procedures, the option to do so has been explored in the 
     past, and its legislative authority to do so has been 
     recognized by the Supreme Court. Congress, however, has 
     established protections for certain kinds of information--
     such as Restricted Data in the Atomic Energy Acts of 1946 and 
     1954, and intelligence sources and methods in the National 
     Security Act of 1947--which have been realized through 
     security classification arrangements. It has acknowledged 
     properly applied security classification as a basis for 
     withholding records sought pursuant to the Freedom of 
     Information Act. Also, with a view to efficiency and economy, 
     as well as effective records management, committees of 
     Congress, on various occasions, have conducted oversight of 
     security classification policy and practice, and have been 
     assisted by GAO and CRS in this regard.


                 Sensitive but Unclassified Information

       The widespread existence and use of information control 
     markings other than those prescribed for the security 
     classification of information came to congressional attention 
     in March 1972 when a subcommittee of what is now the House 
     Committee on Government Reform launched the first oversight 
     hearings on the administration and operation of the Freedom 
     of Information Act (FOIA). Enacted in 1966, FOIA had become 
     operative in July 1967. In the early months of 1972, the 
     Nixon Administration was developing new security 
     classification policy and procedure, which would be 
     prescribed in E.O. 11652, issued in early March. Preparatory 
     to this hearing, the panel had surveyed the departments and 
     agencies in August 1971, asking, among other questions, 
     ``What legend is used by your agency to identify records 
     which are not classifiable under Executive Order 10501 [the 
     operative order at the time] but which are not to be made 
     available outside the government?'' Of 58 information control 
     markings identified in response to this question, the most 
     common were For Official Use Only (11 agencies); Limited 
     Official Use (nine agencies); Official Use Only (eight 
     agencies); Restricted Data (five agencies); Administratively 
     Restricted (four agencies); Formerly Restricted Data (four 
     agencies); and Nodis, or no dissemination (four agencies). 
     Seven other markings were used by two agencies in each case. 
     A CRS review of the agency responses to the control markings 
     question prompted the following observation.
       Often no authority is cited for the establishment or origin 
     of these labels; even when some reference is provided it is a 
     handbook, manual, administrative order, or a circular but not 
     statutory authority. Exceptions to this are the Atomic Energy 
     Commission, the Defense Department and the Arms Control and 
     Disarmament Agency. These agencies cite the Atomic Energy 
     Act, N.A.T.O. related laws, and international agreements as a 
     basis for certain additional labels. The Arms Control and 
     Disarmament Agency acknowledged it honored and adopted State 
     and Defense Department labels.
       Over three decades later, it appears that approximately the 
     same number of these information control markings are in use; 
     that the majority of them are administratively, not 
     statutorily, prescribed; and that many of them have an 
     inadequate management regime, particularly when compared with 
     the detailed arrangements which govern the management of 
     classified information. A recent press account illustrates 
     another problem. In late January 2005, GCN Update, the 
     online, electronic news service of Government Computer News, 
     reported that ``dozens of classified Homeland Security 
     Department documents'' had been accidently made available on 
     a public Internet site for several days due to an apparent 
     security glitch at the Department of Energy. Describing the 
     contents of the compromised materials and reactions to the 
     breach, the account stated the ``documents were marked `for 
     official use only,' the lowest secret-level classification.'' 
     The documents, of course, were not security classified, 
     because the marking cited is not authorized by E.O. 12958. 
     Interestingly, however, in view of the fact that this 
     misinterpretation appeared in a story to which three 
     reporters contributed, perhaps it reflects, to some extent, 
     the current confusion of these information control markings 
     with security classification designations.
       Broadly considering the contemporary situation regarding 
     information control markings, a recent information security 
     report by the JASON Program Office of the MITRE Corporation 
     proffered the following assessment.
       The status of sensitive information outside of the present 
     classification system is murkier than ever. ``Sensitive but 
     unclassified'' data is increasingly defined by the eye of the 
     beholder. Lacking in definition, it is correspondingly 
     lacking in policies and procedures for protecting (or not 
     protecting) it, and regarding how and by whom it is generated 
     and used.
       A contemporaneous Heritage Foundation report appeared to 
     agree with this appraisal, saying:
       The process for classifying secret information in the 
     federal government is disciplined and explicit. The same 
     cannot be said for unclassified but security-related 
     information for which there is no usable definition, no 
     common understanding about how to control it, no agreement on 
     what significance it has for U.S. national security, and no 
     means for adjudicating concerns regarding appropriate levels 
     of protection.
       Concerning the current Sensitive but Unclassified (SBU) 
     marking, a 2004 report by the Federal Research Division of 
     the Library of Congress commented that guidelines for

[[Page 20386]]

     its use are needed, and noted that ``a uniform legal 
     definition or set of procedures applicable to all Federal 
     government agencies does not now exist.'' Indeed, the report 
     indicates that SBU has been utilized in different contexts 
     with little precision as to its scope or meaning, and, to add 
     a bit of chaos to an already confusing situation, is ``often 
     referred to as Sensitive Homeland Security Information.
       Assessments of the variety, management, and impact of 
     information control markings, other than those prescribed for 
     the classification of national security information, have 
     been conducted by CRS, GAO, and the National Security 
     Archive, a private sector research and resource center 
     located at The George Washington University. In March 2006, 
     GAO indicated that, in a recent survey, 26 federal agencies 
     reported using 56 different information control markings to 
     protect sensitive information other than classified national 
     security materia1. That same month, the National Security 
     Archive offered that, of 37 agencies surveyed, 24 used 28 
     control markings based on internal policies, procedures, or 
     practices, and eight used 10 markings based on statutory 
     authority. These numbers are important in terms of the 
     variety of such markings. GAO explained this dimension of the 
     management problem.
       [T]here are at least 13 agencies that use the designation 
     For Official Use Only [FOUO], but there are at least five 
     different definitions of FOUO. At least seven agencies or 
     agency components use the term Law Enforcement Sensitive 
     (LES), including the U.S. Marshals Service, the Department of 
     Homeland Security (DHS), the Department of Commerce, and the 
     Office of Personnel Management (OPM). These agencies gave 
     differing definitions for the term. While DHS does not 
     formally define the designation, the Department of Commerce 
     defines it to include information pertaining to the 
     protection of senior government officials, and OPM defines it 
     as unclassified information used by law enforcement personnel 
     that requires protection against unauthorized disclosure to 
     protect the sources and methods of investigative activity, 
     evidence, and the integrity of pretrial investigative 
     reports.
       Apart from the numbers, however, is another aspect of the 
     management problem, which GAO described in the following 
     terms.
       There are no governmentwide policies or procedures that 
     describe the basis on which agencies should use most of these 
     sensitive but unclassified designations, explain what the 
     different designations mean across agencies, or ensure that 
     they will be used consistently from one agency to another. In 
     this absence, each agency determines what designations to 
     apply to the sensitive but unclassified information it 
     develops or shares.
       These markings also have implications in another regard. 
     The importance of information sharing for combating terrorism 
     and realizing homeland security was emphasized by the 
     National Commission on Terrorist Attacks Upon the United 
     States. That the variously identified and marked forms of 
     sensitive but unclassified (SBU) information could be 
     problematic with regard to information sharing was recognized 
     by Congress when fashioning the Homeland Security Act of 
     2002. Section 892 of that statute specifically directed the 
     President to prescribe and implement procedures for the 
     sharing of information by relevant federal agencies, 
     including the accommodation of ``homeland security 
     information that is sensitive but unclassified.'' On July 29, 
     2003, the President assigned this responsibility largely to 
     the Secretary of Homeland Security. Nothing resulted. The 
     importance of information sharing was reinforced two years 
     later in the report of the Commission on the Intelligence 
     Capabilities of the United States Regarding Weapons of Mass 
     Destruction. Congress again responded by mandating the 
     creation of an Information Sharing Environment (ISE) when 
     legislating the Intelligence Reform and Terrorism Prevention 
     Act of 2004. Preparatory to implementing the ISE provisions, 
     the President issued a December 16, 2005, memorandum 
     recognizing the need for standardized procedures for SBU 
     information and directing department and agency officials to 
     take certain actions relative to that objective. In May 2006, 
     the newly appointed manager of the ISE agreed with a March 
     GAO assessment that, oftentimes, SBU information, designated 
     as such with some marking, was not being shared due to 
     concerns about the ability of recipients to adequately 
     protect it. In brief, it appears that pseudo-classification 
     markings have, in some instances, had the effect of deterring 
     information sharing for homeland security purposes.
       Congressional overseers have probed executive use and 
     management of information control markings other than those 
     prescribed for the classification of national security 
     information, and the extent to which they result in ``pseudo-
     classification'' or a form of overclassification. Relevant 
     remedial legislation proposed during the 109th Congress 
     includes two bills (H.R. 2331 and H.R. 5112) containing 
     sections which would require the Archivist of the United 
     States to prepare a detailed report regarding the number, 
     use, and management of these information control markings and 
     submit it to specified congressional committees, and to 
     promulgate regulations banning the use of these markings and 
     otherwise establish standards for information control 
     designations established by statute or an executive order 
     relating to the classification of national security 
     information. A section in the Department of Homeland Security 
     appropriations legislation (H.R. 5441), as approved by the 
     House, would require the Secretary of Homeland Security to 
     revise DHS MD (Management Directive) 11056 to include (1) 
     provision that information that is three years old and not 
     incorporated in a current, active transportation security 
     directive or security plan shall be determined automatically 
     to be releasable unless, for each specific document, the 
     Secretary makes a written determination that identifies a 
     compelling reason why the information must remain Sensitive 
     Security Information (SSI); (2) common and extensive examples 
     of the individual categories of SSI cited in order to 
     minimize and standardize judgment in the application of SSI 
     marking; and (3) provision that, in all judicial proceedings 
     where the judge overseeing the proceedings has adjudicated 
     that a party needs to have access to SSI, the party shall be 
     deemed a covered person for purposes of access to the SSI at 
     issue in the case unless TSA or DHS demonstrates a compelling 
     reason why the specific individual presents a risk of harm to 
     the nation. A May 25, 2006, statement of administration 
     policy on the bill strongly opposed the section, saying it 
     ``would jeopardize an important program that protects 
     Sensitive Security Information (SSI) from public release by 
     deeming it automatically releaseable in three years, 
     potentially conflict with requirements of the Privacy and 
     Freedom of Information Acts, and negate statutory provisions 
     providing original jurisdiction for lawsuits challenging the 
     designation of SSI materials in the U.S. Courts of Appeals.'' 
     The statement further indicated that the section would create 
     a ``burdensome review process'' for the Secretary of Homeland 
     Security and ``would result in different statutory 
     requirements being applied to SSI programs administered by 
     the Departments of Homeland Security and Transportation.''
       It is not anticipated that this memorandum will be updated 
     for reissuance.
                                  ____


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

                United States General Accounting Office

                      CENTRAL INTELLIGENCE AGENCY

     Observations on GAO Access to Information on CIA Programs and 
                               Activities

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

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


                                Summary

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


                               Background

       As you know, the General Accounting Office is the 
     investigative arm of the Congress

[[Page 20387]]

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


                      Oversight of CIA Activities

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


                 GAG's Authority to Review CIA Programs

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


                gao's access to the cia has been limited

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


             gao access to cia has varied through the years

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


               current access falls into three categories

       Currently, the CIA responds to our requests for information 
     in three ways: it provides the information, it provides the 
     information or a part of it with some restriction, or it does 
     not provide the information at all. Examples of each of these 
     three situations, based on the experiences of our audit staff 
     in selected reviews in recent years, are listed below.
       Sometimes the CIA straightforwardly fulfills our requests 
     for briefings or reports related to threat assessments. This 
     is especially true when we ask for threat briefings or the 
     CIA's assessments or opinions on an issue not involving CIA 
     operations.
       For our review of the State Department's Anthrax 
     Vaccination Program for the Senate Foreign Relations and 
     House International Relations Committees, we requested a 
     meeting to discuss the CIA's perspective on a recent threat 
     assessment of chemical and biological threats to U.S. 
     interests overseas. The CIA agreed with our request, provided 
     a meeting within 2 weeks, and followed up with a written 
     statement.
       While we were reviewing U.S. assistance to the Haitian 
     justice system and national police on behalf of the Senate 
     Foreign Relations and House International Relations 
     Committees, we requested a meeting to discuss the Haitian 
     justice system. The CIA agreed with our request and met with 
     our audit team within 3 weeks of our request.
       For our review of chemical and biological terrorist threats 
     for the House Armed Services Committee, and subcommittees of 
     the House Government Reform Committee and the House Veterans 
     Affairs Committee, we requested meetings with CIA analysts on 
     their threat assessments on chemical and biological weapons. 
     The CIA cooperated and gave us access to documents and 
     analysts.
       On several of our reviews of counterdrug programs for the 
     House Government Reform Committee and the Senate Foreign 
     Relations Committee we requested CIA assessments on the drug 
     threat and international activities. The CIA has provided us 
     with detailed briefings on drug cultivation, production, and 
     trafficking activities in advance of our field work overseas.
       During our reviews of Balkan security issues and the Dayton 
     Peace Accords for the

[[Page 20388]]

     House Armed Services Committee and the Senate Foreign 
     Relations Committee, we asked the CIA for threat assessments 
     relevant to our review objectives. The CIA provided us with 
     appropriate briefings and agreed to provide one of our staff 
     members with access to regular intelligence reports.
       In some instances, the CIA provides information with 
     certain access restrictions or discusses an issue with us 
     without providing detailed data or documentation.
       During our evaluation of equal employment opportunity and 
     disciplinary actions for a subcommittee of the House 
     Committee on the Post Office and Civil Service, the CIA 
     provided us with limited access to information. CIA officials 
     allowed us to review their personnel regulations and take 
     notes, but they did not allow us to review personnel folders 
     on individual disciplinary actions. This was in contrast to 
     the National Security Agency and Defense Intelligence Agency, 
     which gave us full access to personnel folders on individual 
     terminations and disciplinary actions.
       For our review of the Department of Defense's efforts to 
     address the growing risk to U.S. electronic systems from 
     high-powered radio frequency weapons for the Joint Economic 
     Committee, the CIA limited our access to one meeting. 
     Although the technology associated with such systems was 
     discussed at the meeting, the CIA did not provide any 
     documentation on research being conducted by foreign nations.
       On some of our audits related to national security issues, 
     the CIA provides us with limited access to its written threat 
     assessments and analyses, such as National Intelligence 
     Estimates. However, the CIA restricts our access to reading 
     the documents and taking notes at the CIA or other locations. 
     Examples include our readings of National Intelligence 
     Estimates related to our ongoing work evaluating federal 
     programs to combat terrorism.
       In other cases, the CIA simply denies us access to the 
     information we requested. The CIA's refusals are not related 
     to the classification level of the material. Many of our 
     staff have the high-level security clearances and accesses 
     needed to review intelligence information. But the CIA 
     considers our requests as having some implication of 
     oversight and denies us access.
       For our evaluation of national intelligence estimates 
     regarding missile threats for the House National Security 
     Committee, the CIA refused to meet with us to discuss the 
     general process and criteria for producing such estimates or 
     the specific estimates we were reviewing. In addition, 
     officials from the Departments of Defense, State, and Energy 
     told us that CIA had asked them not to cooperate with us.
       During our examination of overseas arrests of terrorists 
     for the House Armed Services Committee and a subcommittee of 
     the House Government Reform Committee, the CIA refused to 
     meet with us to discuss intelligence issues related to such 
     arrests. The CIA's actions were in contrast to those of two 
     other departments that provided us full access to their staff 
     and files.
       On our review of classified computer systems in the federal 
     government for a subcommittee of the House Government Reform 
     Committee, we requested basic information on the number and 
     nature of such systems. The CIA did not provide us with the 
     information, claiming that they would not be able to 
     participate in the review because the type of information is 
     under the purview of congressional entities charged with 
     overseeing the Intelligence Community.
       For our review of the policies and procedures used by the 
     Executive Office of the President to acquire and safeguard 
     classified intelligence information, done for the House Rules 
     Committee, we asked to review CIA forms documenting that 
     personnel had been granted appropriate clearances. The CIA 
     declined our request, advising us that type of information we 
     were seeking came under the purview of congressional entities 
     charged with overseeing the intelligence community.


                               conclusion

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

              Appendix I: Legal Framework for GAO and CIA


                         gao's audit authority

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


                   gao's access-to-records authority

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


                        relevant cia legislation

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


                            Report Language

       Section 1 of the Act provides that the Act may be cited as 
     the ``Intelligence Community Audit Act of 2006''.
       Section 2(a) of the Act adds a new Section (3523a) to title 
     31, United States Code, with respect to the Comptroller 
     General's authority to audit or evaluate activities of the 
     intelligence community. New Section

[[Page 20389]]

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


                                S. 3968

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Intelligence Community Audit 
     Act of 2006''.

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

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

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

       ``(a) In this section, the term `element of the 
     intelligence community' means an element of the intelligence 
     community specified in or designated under section 3(4) of 
     the National Security Act of 1947 (50 U.S.C. 401a(4)).
       ``(b) Congress finds that--
       ``(1) the authority of the Comptroller General to perform 
     audits and evaluations of financial transactions, programs, 
     and activities of elements of the intelligence community 
     under sections 712, 717, 3523, and 3524, and to obtain access 
     to records for purposes of such audits and evaluations under 
     section 716, is reaffirmed; and
       ``(2) such audits and evaluations may be requested by any 
     committee of jurisdiction (including the Committee on 
     Homeland Security of the House of Representatives and the 
     Committee on Homeland Security and Governmental Affairs of 
     the Senate), and may include but are not limited to matters 
     relating to the management and administration of elements of 
     the intelligence community in areas such as strategic 
     planning, financial management, information technology, human 
     capital, knowledge management, information sharing (including 
     information sharing by and with the Department of Homeland 
     Security), and change management.
       ``(c)(1) The Comptroller General may conduct an audit or 
     evaluation of intelligence sources and methods or covert 
     actions only upon request of the Select Committee on 
     Intelligence of the Senate or the Permanent Select Committee 
     on Intelligence of the House of Representatives, or the 
     majority or the minority leader of the Senate or the House of 
     Representatives.
       ``(2)(A) Whenever the Comptroller General conducts an audit 
     or evaluation under paragraph (1), the Comptroller General 
     shall provide the results of such audit or evaluation only to 
     the original requestor, the Director of National 
     Intelligence, and the head of the relevant element of the 
     intelligence community.
       ``(B) The Comptroller General may only provide information 
     obtained in the course of an audit or evaluation under 
     paragraph (1) to the original requestor, the Director of 
     National Intelligence, and the head of the relevant element 
     of the intelligence community.
       ``(3)(A) Notwithstanding any other provision of law, the 
     Comptroller General may inspect records of any element of the 
     intelligence community relating to intelligence sources and 
     methods, or covert actions in order to conduct audits and 
     evaluations under paragraph (1).
       ``(B) If in the conduct of an audit or evaluation under 
     paragraph (1), an agency record is not made available to the 
     Comptroller General in accordance with section 716, the 
     Comptroller General shall consult with the original requestor 
     before filing a report under subsection (b)(1) of that 
     section.
       ``(4)(A) The Comptroller General shall maintain the same 
     level of confidentiality for a record made available for 
     conducting an audit under paragraph (1) as is required of

[[Page 20390]]

     the head of the element of the intelligence community from 
     which it is obtained. Officers and employees of the 
     Government Accountability Office are subject to the same 
     statutory penalties for unauthorized disclosure or use as 
     officers or employees of the intelligence community element 
     that provided the Comptroller General or officers and 
     employees of the Government Accountability Office with access 
     to such records.
       ``(B) All workpapers of the Comptroller General and all 
     records and property of any element of the intelligence 
     community that the Comptroller General uses during an audit 
     or evaluation under paragraph (1) shall remain in facilities 
     provided by that element of the intelligence community. 
     Elements of the intelligence community shall give the 
     Comptroller General suitable and secure offices and 
     furniture, telephones, and access to copying facilities, for 
     purposes of audits and evaluations under paragraph (1).
       ``(C) After consultation with the Select Committee on 
     Intelligence of the Senate and with the Permanent Select 
     Committee on Intelligence of the House of Representatives, 
     the Comptroller General shall establish procedures to protect 
     from unauthorized disclosure all classified and other 
     sensitive information furnished to the Comptroller General or 
     any representative of the Comptroller General for conducting 
     an audit or evaluation under paragraph (1).
       ``(D) Before initiating an audit or evaluation under 
     paragraph (1), the Comptroller General shall provide the 
     Director of National Intelligence and the head of the 
     relevant element with the name of each officer and employee 
     of the Government Accountability Office who has obtained 
     appropriate security clearance and to whom, upon proper 
     identification, records, and information of the element of 
     the intelligence community shall be made available in 
     conducting the audit or evaluation.
       ``(d) Elements of the intelligence community shall 
     cooperate fully with the Comptroller General and provide 
     timely responses to Comptroller General requests for 
     documentation and information.
       ``(e) Nothing in this section or any other provision of law 
     shall be construed as restricting or limiting the authority 
     of the Comptroller General to audit and evaluate, or obtain 
     access to the records of, elements of the intelligence 
     community absent specific statutory language restricting or 
     limiting such audits, evaluations, or access to records.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     35 of title 31, United States Code, is amended by inserting 
     after the item relating to section 3523 the following:

``3523a. Audits of intelligence community; audits and requesters.''.
                                 ______
                                 
      By Mr. OBAMA (for himself and Mrs. Clinton):
  S. 3969. A bill to amend the Toxic Substances Control Act to assess 
and reduce the levels of lead found in child-occupied facilities in the 
United States, and for other purposes; to the Committee on Environment 
and Public Works.
  Mr. OBAMA. Mr. President, I rise today to introduce the Lead 
Poisoning Reduction Act of 2006. I am pleased that Senator Clinton is 
joining me in this effort.
  Lead is a poison we have known about for a long time. Studies have 
long linked lead exposure to learning disabilities, behavioral 
problems, and, at very high levels, seizures, coma, and even death. 
Lead is particularly damaging to children because their developing 
brains are more susceptible to harm.
  A study released last week found that children with even very low 
levels of lead exposure have four times the risk of attention-deficit 
hyperactivity disorder (ADHD) than normal and that childhood lead 
exposure leads to 290,000 cases of ADHD.
  The major source of lead exposure among U.S. children is lead-based 
paint. In 1978, the Consumer Product Safety Commission recognized this 
hazard and banned leaded paints. But today, 30 years later, about 24 
million older homes, and millions of other buildings, have 
deteriorating lead paint and elevated levels of lead-contaminated dust.
  We know how children are typically exposed. We know what the health 
effects from exposure are. And we know how to fix the source of the 
exposure. The one thing we don't know how to do is reverse the brain 
damage once it has occurred. So, otherwise healthy children wind up 
facing a lifetime of disadvantage because we have failed to eradicate 
this insidious problem.
  Every day, millions of American parents drop their children off at 
child care facilities on their way to work. Nearly 12 million children 
under age 5 spend 40 hours a week in child care. And every day, many of 
those children in older buildings may be exposed to lead poisoning.
  While many child care facilities have taken steps to ensure sources 
of potential lead exposure are eliminated, too many operate in older 
buildings that need repair or remodeling to ensure these sources are 
contained. These facilities may be in wealthy communities, but more 
often than not, they are in poor communities where parents have few 
choices for child care. I'm sure many of these facilities would fix the 
problem if they only had the resources.
  The Lead Poisoning Reduction Act protects our children in two ways.
  First, the bill establishes a five-year, $42.6 million grant program 
to help communities reduce lead exposure in facilities such as day care 
centers, Head Start centers, and kindergarten classrooms where young 
children spend a great deal of time. Communities could use the funds 
for testing, abatement, and communicating the risks of lead to children 
and parents.
  Second, the bill requires the Environmental Protection Agency to 
establish regulations to eliminate sources of lead exposure in child 
care facilities, starting with new facilities in 18 months and all 
facilities in five years.
  It's a straightforward fix to a straightforward problem. I hope my 
colleagues join me in helping to create lead-safe environments in all 
child care facilities.
  Mrs. CLINTON. Mr. President, I join my colleague, Senator Obama, in 
support of the Lead Poisoning Reduction Act of 2006. This legislation 
would close an important gap in primary prevention strategies by 
providing critical resources to make all nonhome-based childcare 
facilities and Head Start Programs lead-safe within 5 years.
  Lead is highly toxic and continues to be a serious, persistent, and 
entirely preventable threat to the health and well-being of our 
children. Lead poisoning continues to pose an unacceptable 
environmental health risk to infants, children, and pregnant women in 
the United States, particularly in minority and low-income communities. 
A CDC survey conducted between 1999 and 2002, estimated that 310,000 
American children under 6 were at risk for exposure to harmful lead 
levels in United States. Childhood lead poisoning has been linked to 
impaired growth and function of vital organs and problems with 
intellectual and behavioral development. A study from the New England 
Journal of Medicine also found that children suffered up to a 7.4-
percent decrease in IQ at lead levels that CDC considers safe. At very 
high levels, lead poisoning can cause seizures, coma, and even death.
  It is critical that we remove lead hazards where our children live, 
learn, and play. We especially need to eliminate these risks and 
hazards that continue to persist in childcare facilities and schools. 
Nearly 12 million children under age 5 spend 40 hours a week in 
childcare. Lead paint in older buildings is a primary source of 
exposure, but significant lead exposure can also come from tap water. 
The Department of Housing and Urban Development estimates that about 
14,200 childcare facilities have considerable lead-based hazards 
present. In addition, a recent report by the U.S. Government 
Accountability Office, GAO, identified significant, systemic problems 
with the way in which the Environmental Protection Agency, EPA, 
monitors and regulates the levels of lead in our Nation's drinking 
water, including a complete lack of reliable data on which to make 
assessments and decisions. The GAO study found that few schools and 
childcare facilities nationwide have tested their water for lead, and 
no focal point exists at either the national or State level to collect 
and analyze test results. Few States have comprehensive programs to 
detect and remediate lead in drinking water at schools and childcare 
facilities. Only five States have required general lead testing for 
schools, and of those, only four require childcare facilities to test 
for lead when obtaining or renewing their licenses. Almost half the 
States reported having no lead efforts of any kind. State and local 
officials need more information on the

[[Page 20391]]

pervasiveness of lead contamination to know how best to address the 
issue.
  Each year in New York State an additional 10,000 children under the 
age of 6 years are newly identified as having elevated blood lead 
levels, and over 200,000 children in New York have had documented lead 
poisoning between 1992 to 2004. Exposure to lead results in increased 
expenses each year for New York in the form of special educational and 
other educational expenses, medical care for lead-poisoned children, 
and expenditures for delinquent youth and others needing special 
supervision. It is estimated that these increased expenses, as well as 
lost earnings, exceed $4 billion annually. New York City and Rochester 
have been at the forefront of grassroots efforts to combat lead 
poisoning, and this bill would provide important resources and 
incentives to implement their model programs nationwide.
                                 ______
                                 
      By Mr. GRASSLEY (for himself, Mr. Isakson, Mr. Chambliss, Mr. 
        Burr, and Ms. Murkowski):
  S. 3972. A bill to amend title XXI of the Social Security Act to 
reduce funding shortfalls for the State Children's Health Insurance 
Program (SCHIP) for fiscal year 2007; to the Committee on Finance.
  Mr. GRASSLEY. Mr. President, I am pleased to introduce the ``Fiscal 
Accountability, Integrity and Responsibility in SCHIP'' or FAIR-SCHIP 
Act. I am pleased to be joined in this effort by Senator Johnny 
Isakson, R-GA, Senator Saxby Chambliss, R-GA, Senator Richard Burr, R-
NC and Senator Lisa Murkowski, R-AK. This legislation is a targeted one 
year approach to addressing a looming problem in the State Children's 
Health Insurance Program (SCHIP).
  According to estimates prepared by the Congressional Research 
Service, as many as 17 States will run out of SCHIP funds in 2007. 
Several States will run shortfalls in the hundreds of millions of 
dollars. These shortfalls will result in States having to limit the 
coverage available to low-income children. These shortfalls are deep 
and they will get deeper.
  One of my principal objectives in the 110th Congress will be to 
reauthorize the SCHIP program. There are a number of compelling issues 
associated with the SCHIP program that will require thoughtful review 
and discussion by Members of Congress.
  Reauthorization will not be easy. Legislating on an issue as complex 
and sensitive as children's health care is never easy. However, if the 
Congress does not act to address some of these policies as well as the 
SCHIP formula, one thing is certain: The current State entitlement is 
not sufficient, in the long term, to cover the costs of maintaining the 
current level of coverage provided by the States.
  I am aware of legislation introduced in the Senate and the House that 
would simply appropriate additional funds to cover the SCHIP 
shortfalls. This is not a viable option.
  If the Congress perpetuates a scenario where the SCHIP funding 
formula is not improved and other programmatic changes are not enacted, 
yet State SCHIP shortfalls covered year after year, there will be no 
practical difference between SCHIP, which is a capped allotment, and 
Medicaid, which is an open ended entitlement.
  I do not believe there is majority support for turning the SCHIP 
program into an entitlement program. I am concerned what going down a 
path that essentially does treat SCHIP as a de facto entitlement 
program means for the long standing viability of SCHIP. Therefore, the 
approach envisioned in FAIR-SCHIP takes a balanced, moderate approach 
to addressing this issue.
  FAIR-SCHIP recognizes that additional resources will be needed if 
States are to be able to continue to provide the current level of 
coverage for children.
  FAIR-SCHIP also recognizes that funding under the SCHIP programs can 
be more equitably distributed.
  FAIR-SCHIP takes a moderate, balanced approach by appropriating 
approximately half of the estimated Fiscal Year 07 shortfall.
  FAIR-SCHIP also includes a modest redistribution scenario that would 
occur in the second half of the fiscal year and only affect the 05 
allotments of States which have a 200 percent surplus of SCHIP funds, 
relative to their projected 07 spending.
  FAIR-SCHIP is a fiscally sound, responsible approach to the issue of 
SCHIP shortfalls that will position the Congress to achieve important 
programmatic improvements in the 110th Congress, when the SCHIP program 
will need to be reauthorized.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  I hope my colleagues will support the approach envisioned by FAIR-
SCHIP.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3972

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Fiscal Accountability, 
     Integrity, and Responsibility in SCHIP Act of 2006''or the 
     ``FAIR-SCHIP Act of 2006''.

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

       (a) In General.--Section 2104 of the Social Security Act 
     (42 U.S.C. 1397dd) is amended by adding at the end the 
     following new subsection:
       ``(h) Special Rules to Address Fiscal Year 2007 
     Shortfalls.--
       ``(1) Initial down payment on shortfall for fiscal year 
     2007.--The provisions of subsection (d) shall apply with 
     respect to fiscal year 2007 in the same manner as they apply 
     to fiscal year 2006, except that, for purposes of this 
     paragraph--
       ``(A) any reference to `fiscal year 2006', `December 16, 
     2005', `2005', `2004', `September 30, 2006' and `October 1, 
     2006' shall be deemed a reference to `fiscal year 2007', 
     `December 16 2006', `2006', `2005', `September 30, 2007' and 
     `October 1, 2007' respectively;
       ``(B) there shall be substituted for the dollar amount 
     specified in subsection (d)(1), and shall be treated as the 
     amount appropriated under such subsection, $450,000,000;
       ``(C) paragraphs (3)(B) and (4) of subsection (d) shall not 
     apply (and paragraph (4) of this subsection shall apply in 
     lieu of paragraph (4) of such subsection);
       ``(D) if the dollar amount specified in subparagraph (B) is 
     not at least equal to the total of the shortfalls described 
     in subsection (d)(2) (as applied under this paragraph), the 
     amounts under subsection (d)(3) (as applied under this 
     paragraph) shall be ratably reduced.
       ``(2) Funding remainder of shortfall for fiscal year 2007 
     through redistribution of certain unused fiscal year 2005 
     allotments.--
       ``(A) In general.--Subject to subparagraph (C), the 
     Secretary shall provide for a redistribution under subsection 
     (f) from amounts made available for redistribution under 
     paragraph (3), to each shortfall State described in 
     subparagraph (B) that is one of the 50 States or District of 
     Columbia, such amount as the Secretary determines will 
     eliminate the estimated shortfall described in such 
     subparagraph for the State.
       ``(B) Shortfall state described.--For purposes of this 
     paragraph, a shortfall State described in this subparagraph 
     is a State with a State child health plan approved under this 
     title for which the Secretary estimates, on the basis of the 
     most recent data available to the Secretary as of March 31, 
     2007, that the projected expenditures under such plan for 
     such State for fiscal year 2007 will exceed the sum of--
       ``(i) the amount of the State's allotments for each of 
     fiscal years 2005 and 2006 that will not be expended by the 
     end of fiscal year 2006;
       ``(ii) the amount, if any, that is to be redistributed to 
     the State during fiscal year 2007 in accordance with 
     subsection (f) (other than under this paragraph);
       ``(iii) the amount of the State's allotment for fiscal year 
     2007; and
       ``(iv) the amount of any additional allotment to the State 
     under paragraph (1).
       ``(C) Proration rule.--If the amounts available for 
     redistribution under paragraph (3) are less than the total 
     amounts computed under subparagraph (A), the amount computed 
     under subparagraph (A) for each shortfall State shall be 
     reduced proportionally.
       ``(3) Treatment of certain states with fiscal year 2005 
     allotments unexpended at the end of the first half of fiscal 
     year 2007.--
       ``(A) Identification of states.--The Secretary--
       ``(i) shall identify those States that received an 
     allotment for fiscal year 2005 under subsection (b) which 
     have not expended all of such allotment by March 31, 2007; 
     and
       ``(ii) for each such State shall determine--

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

       ``(B) States with funds in excess of 200 percent of need.--
     A State described in this

[[Page 20392]]

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

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

       ``(4) Use of additional allotment.--Additional allotments 
     provided under this subsection are only available for amounts 
     expended under a State plan approved under this title for 
     child health assistance for targeted low-income children or 
     child health assistance or other health benefits coverage for 
     pregnant women.
       ``(5) Retrospective adjustment.--The Secretary may adjust 
     the determinations made under paragraphs (2) and (3) as 
     necessary on the basis of the amounts reported by States not 
     later than November 30, 2007, on CMS Form 64 or CMS Form 21, 
     as the case may be and as approved by the Secretary, but in 
     no case may the percentage specified in paragraph (3)(C)(ii) 
     exceed 75 percent.
       ``(6) 1-year availability; no redistribution of unexpended 
     additional allotments.--
       ``(A) In general.--Notwithstanding subsections (e) and (f), 
     amounts allotted or redistributed to a State pursuant to this 
     subsection for fiscal year 2007 shall only remain available 
     for expenditure by the State through September 30, 2007, and 
     any amounts of such allotments or redistributions that remain 
     unexpended as of such date, shall not be subject to 
     redistribution under subsection (f). Nothing in the preceding 
     sentence shall be construed as limiting the ability of the 
     Secretary to adjust the determinations made under paragraphs 
     (2) and (3) in accordance with paragraph (5).
       ``(B) Reversion upon termination of retrospective 
     adjustment period.--Any amounts of such allotments or 
     redistributions that remain unexpended as of September 30, 
     2007, shall revert to the Treasury on December 31, 2007.''.
       (b) Extending Authority for Qualifying States to Use 
     Certain Funds for Medicaid Expenditures.--Section 
     2105(g)(1)(A) of such Act (42 U.S.C. 1397ee(g)(1)(A)) is 
     amended by striking ``or 2005'' and inserting ``2005, 2006, 
     or 2007''.
                                 ______
                                 
      By Mr. BINGAMAN:
  S. 3975. A bill to amend the Public Health Service Act to provide 
grants to promote positive health behaviors in women and children; to 
the Committee on Health, Education, Labor, and Pensions.
  Mr. BINGAMAN. Mr. President, the legislation I am introducing today, 
entitled the ``Community Health Workers Act of 2006,'' would improve 
access to health education and outreach services to women in medically 
underserved areas, including the U.S. border region along New Mexico.
  Lack of access to adequate health care and health education is a 
significant problem on the southern New Mexico border. While the access 
problem is in part due to a lack of insurance, it is also attributable 
to non-financial barriers to access. These barriers include a shortage 
of physicians and other health professionals, and hospitals; inadequate 
transportation; a shortage of bilingual health information and health 
providers; and culturally insensitive systems of care.
  This legislation would help to address the issue of access by 
providing $15 million per year for a three year period in grants to 
State, local, and tribal organizations, including community health 
centers and public health departments, for the purpose of hiring 
community health workers to provide health education, outreach, and 
referrals to women and families who otherwise would have little or no 
contact with health care services.
  Recognizing factors such as poverty and language and cultural 
differences that often serve as barriers to health care access in 
medically underserved populations, community health workers are in a 
unique position to improve health outcomes and quality of care for 
groups that have traditionally lacked access to adequate services. They 
often serve as ``community specialists'' and are members of the 
communities in which they work. As such they can effectively serve 
hard-to-reach populations.
  A shining example of how community health workers serve their 
communities, a group of so-called ``promotoras'' in Dona Ana County 
were quickly mobilized during a recent flood emergency in rural New 
Mexico. These community health workers assisted in the disaster 
recovery efforts by partnering with FEMA to find, inform and register 
flood victims for Federal disaster assistance. Their personal networks 
and knowledge of the local culture, language, needs, assets, and 
barriers greatly enhanced FEMA's community outreach efforts. The 
promotoras of Dona Ana County demonstrate the important role community 
health workers could play in communities across the nation, including 
increasing the effectiveness of new initiatives in homeland security 
and emergency preparedness, and in implementing risk communication 
strategies.
  The positive benefits of the community health worker model also have 
been documented in research studies. Research has shown that community 
health workers have been effective in increasing the utilization of 
health preventive services such as cancer screenings and medical follow 
up for elevated blood pressure and improving enrollment in publicly 
funded health insurance programs. In the case of uninsured children, a 
study by Dr. Glenn Flores, ``Community-Based Case Management in 
Insuring Uninsured Latino Children,'' published in the December 2005 
issue of Pediatrics found that uninsured children who received 
community-based case management were eight times more likely to obtain 
health insurance coverage than other children involved in the study 
because case workers were employed to address typical barriers to 
access, including insufficient knowledge about application processes 
and eligibility criteria, language barriers and family mobility issues, 
among others. This study confirms that community health workers could 
be highly effective in reducing the numbers of uninsured children, 
especially those who are at greatest risk for being uninsured. 
Preliminary investigation of a community health workers project in New 
Mexico similarly suggests that community health workers could be useful 
in improving enrollment in Medicaid and the Children's Health Insurance 
Program, SCHIP.
  According to a 2003 Institute of Medicine, IOM, report entitled, 
``Unequal Treatment: Confronting Racial and Ethnic Disparities in 
Healthcare,'' community health workers offer promise as a community-
based resource to increase racial and ethnic minorities' access to 
health care and to serve as a liaison between healthcare providers and 
the communities they serve.''
  Although the community health worker model is valued in the New 
Mexico border region as well as other parts of the country that 
encounter challenges of meeting the health care needs of medically 
underserved populations, these programs often have difficulty securing 
adequate financial resources to maintain and expand upon their 
services. As a result, many of these programs are significantly limited 
in their ability to meet the ongoing and emerging health demands of 
their communities.
  The IOM report also noted that ``programs to support the use of 
community health workers . . . especially among medically underserved 
and racial and ethnic minority populations, should be expanded, 
evaluated, and replicated.''
  I am introducing this legislation to increase resources for a model 
that has shown significant promise for increasing access to quality 
health care and health education for families in medically underserved 
communities.
  I ask unanimous consent that the text of the bill and Dr. Flores' 
study on community-based case management be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

[[Page 20393]]



                                S. 3975

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Community Health Workers Act 
     of 2006''.

     SEC. 2. FINDINGS.

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

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

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

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

       ``(a) Grants Authorized.--The Secretary, in collaboration 
     with the Director of the Centers for Disease Control and 
     Prevention and other Federal officials determined appropriate 
     by the Secretary, is authorized to award grants to States or 
     local or tribal units, to promote positive health behaviors 
     for women in target populations, especially racial and ethnic 
     minority women in medically underserved communities.
       ``(b) Use of Funds.--Grants awarded pursuant to subsection 
     (a) may be used to support community health workers--
       ``(1) to educate, guide, and provide outreach in a 
     community setting regarding health problems prevalent among 
     women and especially among racial and ethnic minority women;
       ``(2) to educate, guide, and provide experiential learning 
     opportunities that target behavioral risk factors including--
       ``(A) poor nutrition;
       ``(B) physical inactivity;
       ``(C) being overweight or obese;
       ``(D) tobacco use;
       ``(E) alcohol and substance use;
       ``(F) injury and violence;
       ``(G) risky sexual behavior; and
       ``(H) mental health problems;
       ``(3) to educate and guide regarding effective strategies 
     to promote positive health behaviors within the family;
       ``(4) to educate and provide outreach regarding enrollment 
     in health insurance including the State Children's Health 
     Insurance Program under title XXI of the Social Security Act, 
     Medicare under title XVIII of such Act and Medicaid under 
     title XIX of such Act;
       ``(5) to promote community wellness and awareness; and
       ``(6) to educate and refer target populations to 
     appropriate health care agencies and community-based programs 
     and organizations in order to increase access to quality 
     health care services, including preventive health services.
       ``(c) Application.--
       ``(1) In general.--Each State or local or tribal unit 
     (including federally recognized tribes and Alaska native 
     villages) that desires to receive a grant under subsection 
     (a) shall submit an application to the Secretary, at such 
     time, in such manner, and accompanied by such additional 
     information as the Secretary may require.
       ``(2) Contents.--Each application submitted pursuant to 
     paragraph (1) shall--
       ``(A) describe the activities for which assistance under 
     this section is sought;
       ``(B) contain an assurance that with respect to each 
     community health worker program receiving funds under the 
     grant awarded, such program provides training and supervision 
     to community health workers to enable such workers to provide 
     authorized program services;
       ``(C) contain an assurance that the applicant will evaluate 
     the effectiveness of community health worker programs 
     receiving funds under the grant;
       ``(D) contain an assurance that each community health 
     worker program receiving funds under the grant will provide 
     services in the cultural context most appropriate for the 
     individuals served by the program;
       ``(E) contain a plan to document and disseminate project 
     description and results to other States and organizations as 
     identified by the Secretary; and
       ``(F) describe plans to enhance the capacity of individuals 
     to utilize health services and health-related social services 
     under Federal, State, and local programs by--
       ``(i) assisting individuals in establishing eligibility 
     under the programs and in receiving the services or other 
     benefits of the programs; and
       ``(ii) providing other services as the Secretary determines 
     to be appropriate, that may include transportation and 
     translation services.
       ``(d) Priority.--In awarding grants under subsection (a), 
     the Secretary shall give priority to those applicants--
       ``(1) who propose to target geographic areas--
       ``(A) with a high percentage of residents who are eligible 
     for health insurance but are uninsured or underinsured;
       ``(B) with a high percentage of families for whom English 
     is not their primary language; and
       ``(C) that encompass the United States-Mexico border 
     region;
       ``(2) with experience in providing health or health-related 
     social services to individuals who are underserved with 
     respect to such services; and
       ``(3) with documented community activity and experience 
     with community health workers.
       ``(e) Collaboration With Academic Institutions.--The 
     Secretary shall encourage community health worker programs 
     receiving funds under this section to collaborate with 
     academic institutions. Nothing in this section shall be 
     construed to require such collaboration.
       ``(f) Quality Assurance and Cost-Effectiveness.--The 
     Secretary shall establish guidelines for assuring the quality 
     of the training and supervision of community health workers 
     under the programs funded under this section and for assuring 
     the cost-effectiveness of such programs.
       ``(g) Monitoring.--The Secretary shall monitor community 
     health worker programs identified in approved applications 
     and shall determine whether such programs are in compliance 
     with the guidelines established under subsection (f).
       ``(h) Technical Assistance.--The Secretary may provide 
     technical assistance to community health worker programs 
     identified in approved applications with respect to planning, 
     developing, and operating programs under the grant.
       ``(i) Report to Congress.--
       ``(1) In general.--Not later than 4 years after the date on 
     which the Secretary first awards grants under subsection (a), 
     the Secretary shall submit to Congress a report regarding the 
     grant project.
       ``(2) Contents.--The report required under paragraph (1) 
     shall include the following:
       ``(A) A description of the programs for which grant funds 
     were used.
       ``(B) The number of individuals served.
       ``(C) An evaluation of--
       ``(i) the effectiveness of these programs;
       ``(ii) the cost of these programs; and
       ``(iii) the impact of the project on the health outcomes of 
     the community residents.
       ``(D) Recommendations for sustaining the community health 
     worker programs developed or assisted under this section.
       ``(E) Recommendations regarding training to enhance career 
     opportunities for community health workers.
       ``(j) Definitions.--In this section:

[[Page 20394]]

       ``(1) Community health worker.--The term `community health 
     worker' means an individual who promotes health or nutrition 
     within the community in which the individual resides--
       ``(A) by serving as a liaison between communities and 
     health care agencies;
       ``(B) by providing guidance and social assistance to 
     community residents;
       ``(C) by enhancing community residents' ability to 
     effectively communicate with health care providers;
       ``(D) by providing culturally and linguistically 
     appropriate health or nutrition education;
       ``(E) by advocating for individual and community health or 
     nutrition needs; and
       ``(F) by providing referral and followup services.
       ``(2) Community setting.--The term `community setting' 
     means a home or a community organization located in the 
     neighborhood in which a participant resides.
       ``(3) Medically underserved community.--The term `medically 
     underserved community' means a community identified by a 
     State--
       ``(A) that has a substantial number of individuals who are 
     members of a medically underserved population, as defined by 
     section 330(b)(3); and
       ``(B) a significant portion of which is a health 
     professional shortage area as designated under section 332.
       ``(4) Support.--The term `support' means the provision of 
     training, supervision, and materials needed to effectively 
     deliver the services described in subsection (b), 
     reimbursement for services, and other benefits.
       ``(5) Target population.--The term `target population' 
     means women of reproductive age, regardless of their current 
     childbearing status.
       ``(k) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $15,000,000 for each of fiscal years 2007, 2008, and 2009.''.
                                  ____


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

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

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


                                METHODS

     Study Participants
       Enrollment occurred from May 14, 2002, to September 30, 
     2003. Study participants were uninsured Latino children and 
     their parents from 2 communities in the greater Boston area 
     confirmed in prior research to have large proportions of both 
     uninsured children and Latino children, ie, East Boston, 
     where 37 percent of Latino children were found to be 
     uninsured in prior studies and 39 percent of the population 
     is Latino, and Jamaica Plain, where 27 percent of Latino 
     children were found to be uninsured in prior studies and 24 
     percent of the population is Latino. Eligibility criteria 
     included the following: (1) the child was 0 to 18 years old, 
     (2) the child had no health insurance coverage and had been 
     uninsured for  3 months (unless the child was an 
     infant who had never been insured), (3) the parent identified 
     her or his uninsured child's ethnicity as Latino, (4) the 
     parent's primary language was English or Spanish, and (5) the 
     parent was willing to be contacted monthly by telephone or 
     through a home visit by research personnel (if no functioning 
     telephone was present in the household). The focus of the 
     intervention was Latino children because they are the racial/
     ethnic group of US children at greatest risk for being 
     uninsured. When > 1 child in a family was uninsured, the 
     youngest child was enrolled in the study as the ``index'' 
     child (to ensure consistency), and data were collected only 
     for that child.
       Study participants were recruited primarily from the 
     following community sites in East Boston and Jamaica Plain, 
     which were confirmed in prior studies to have many eligible 
     potential participants willing to take part in research: 
     supermarkets, bodegas, self-service laundries, beauty salons, 
     and churches. The remaining participants were recruited 
     through referral by other participants and in response to 
     notices

[[Page 20395]]

     posted at consulates and schools. Community sites for 
     recruitment were selected to obtain samples of parents 
     consisting of both documented and undocumented families in 
     proportions reflecting the population in each community. This 
     sampling method was chosen because traditional census block 
     methods have the potential to undercount undocumented 
     children and their families, given their fear of deportation 
     when a stranger appears at the front door of a dwelling. The 
     primary caretaker (herein referred to as the parent) of each 
     uninsured child enrolled in the study received a $50 
     participation honorarium at enrollment and a $5 honorarium 
     after each monthly follow-up contact.
       Written informed parental consent (in English or Spanish, 
     depending on parental preference) was obtained for all 
     children enrolled. To avoid selection bias against parents 
     with low literacy levels, parents could request that the 
     written informed consent form be read to them by research 
     personnel, in English or Spanish, before they signed the 
     form. The study was approved by the institutional review 
     boards of Boston Medical Center and the Children's Hospital 
     of Wisconsin.
     Baseline Assessments
       Parents of eligible children completed a brief, verbally 
     administered screening questionnaire (in English or Spanish, 
     according to parental preference) to confirm eligibility, 
     determine relevant baseline characteristics, and record 
     contact information. Data were collected on the ages of the 
     child and parent, the self-identified Latino subgroup, the 
     number of years the parent had lived in the United States, 
     parental English proficiency, the highest level of parental 
     education, the employment status of the parent and spouse (if 
     currently living in the same household), the annual combined 
     family income, and the citizenship status of the parent. 
     Additional information collected included the names of the 
     parent and child, whether there was a functioning telephone 
     in the household, the telephone number, the preferred 
     alternate telephone number of friends or family members (if 
     there was no functioning telephone in the household), and the 
     family's address.
     Randomization
       Subjects were allocated to the case management intervention 
     group or the control group with a computer-generated, 
     stratified, randomization process. Stratified randomization 
     ensures that compared maneuvers in a randomized trial are 
     distributed suitably among pertinent subgroups. Randomization 
     was stratified by community site, with separate allocation 
     schedules prepared for participants from East Boston and 
     Jamaica Plain. The randomization schedule was prepared with 
     the RANUNI function of SAS software, version 8.2. 
     Sequentially numbered, opaque, sealed envelopes were produced 
     for each community site, to ensure adequate allocation 
     concealment. Potential participants were informed that, 
     depending on the randomization, some parents would get a case 
     manager free of charge, who would help families obtain health 
     insurance for their children, whereas other parents would get 
     no case manager and would just be contacted monthly. 
     Bilingual Latina research assistants who did not participate 
     in any aspect of preparation of randomization schedules 
     opened the envelopes in the presence of enrolled 
     participants, to inform them of their group assignment. 
     Parents of uninsured children allocated to the intervention 
     group immediately were assigned a bilingual, Latina, 
     community-based, case manager (the research assistant who 
     opened the randomization envelope with the parent became the 
     case manager for children assigned to the intervention 
     group).
     Study Intervention
       Case managers performed the following functions for 
     intervention group children and their families: (1) providing 
     information on the types of insurance programs available and 
     the application processes; (2) providing information and 
     assistance on program eligibility requirements; (3) 
     completing the child's insurance application with the parent 
     and submitting the application for the family; (4) expediting 
     final coverage decisions with early frequent contact with the 
     Division of Medical Assistance (DMA) (the state agency 
     administering Medicaid in Massachusetts) or the Department of 
     Public Health (DPH) (the state agency responsible for the 
     Children's Medical Security Plan [CMSP], which insures 
     nonMedicaid-eligible children in Massachusetts, including 
     noncitizens); (5) acting as a family advocate by being the 
     liaison between the family and DMA or DPH; and (6) rectifying 
     with DMA and DPH situations in which a child was 
     inappropriately deemed ineligible for insurance or had 
     coverage inappropriately discontinued.
       All case managers received a 1-day intensive training 
     session on major obstacles to insuring uninsured children 
     reported by Latino parents in 6 focus groups, parents' 
     perspectives on how a case manager would be most useful in 
     assisting with the process of insuring uninsured children, 
     completing the Medical Benefit Request (the single 
     application used to enroll children in MassHealth [Medicaid 
     in Massachusetts] and CMSP), following up on submitted 
     applications, obtaining final coverage decisions, disputing 
     applications that were rejected or deemed ineligible, and the 
     study protocol for subject recruitment, enrollment, consent, 
     and follow-up monitoring. These training sessions were held 
     in collaboration with representatives from DMA and DPH. Case 
     managers also received the following training: a 1-week 
     session on MassHealth eligibility requirements conducted by 
     DMA, a 4-hour session on insurance eligibility rules 
     conducted by a DPH outreach coordinator, a 2-hour session on 
     MassHealth managed care programs and rules, a 1-day session 
     on CMSP conducted by a DPH representative, a 1-day seminar on 
     insurance programs and general assistance for impoverished 
     families conducted by Health Care for All (a nonprofit 
     organization dedicated to improving access to health care for 
     all people in the state of Massachusetts), monthly DMA 
     technical forums on MassHealth, and 1 week of supervised case 
     manager training in the community.
       The case managers were bilingual Latina women (of 
     Dominican, Puerto Rican, Mexican, or Colombian ethnicity) 
     between 22 and 36 years old. All had graduated from high 
     school, some had obtained college degrees, and 1 had 
     postgraduate training. None had any prior experience working 
     as case managers insuring uninsured children. They were 
     recruited through job listings posted in the employment 
     offices of local Boston colleges and universities.
     Control Group
       Control group subjects received no intervention other than 
     the SCHlP standard-of-care outreach and enrollment efforts 
     administered by the MassHealth and CMSP programs. In 
     Massachusetts, DMA has stated that they ``have made every 
     effort to implement broad-based outreach activities designed 
     to draw attention of families, teachers, child care workers, 
     health providers, youth and community organizations to 
     enhanced opportunities in the Commonwealth for obtaining 
     health insurance.'' These efforts include the use of (1) 
     direct mailings, press releases, newspaper inserts, health 
     fairs, and door-to-door canvassing of target neighborhoods; 
     (2) special attempts to reach Latino communities, such as 
     radio advertisements on Spanish-language programs and 
     bilingual flyers; (3) mini-grants to community organizations 
     to provide outreach and assistance with applications; and (4) 
     a toll-free telephone number for applying for health 
     benefits.
     Outcome Measures
       Using standardized telephone interview methods, a trained 
     bilingual Latina research assistant who was blinded to 
     participant group assignment obtained outcome data from the 
     parents monthly for 11 months, beginning 1 month after the 
     date of study enrollment. The research assistant also made 
     home visits to families that lacked telephones in the 
     household and to those that did not respond to 10 
     attempted telephone contacts. To ensure ongoing rigorous 
     blinding, we asked parents not to reveal their group 
     assignment at any time to the outcomes research assistant 
     (and the blinded research assistant reported that no parents 
     revealed their child's group assignment during the study).
       The primary outcome measure was the child obtaining health 
     insurance coverage, as determined in an interview with the 
     parent and confirmed, when possible, through inspection of 
     the coverage notification letter received by the family. 
     Three secondary outcomes also were assessed. The number of 
     days from study enrollment to obtaining coverage was 
     determined by using the interval between the date of the 
     participant's study enrollment and the date on which the 
     parent reported being notified officially that the child had 
     obtained coverage. Episodic coverage was defined as obtaining 
     but then losing insurance coverage at any time during the 12-
     month follow-up period and was determined through parental 
     report and inspection of written notification. Parental 
     satisfaction with the process of obtaining coverage for the 
     child was determined by asking the parent, ``How satisfied 
     were you with the process of trying to obtain health 
     insurance coverage for your child?'' Parents responded by 
     using a 5-point Likert scale (1 = very satisfied, 2 = 
     satisfied, 3 = uncertain, 4 = dissatisfied, and 5 = very 
     dissatisfied). Overall parental satisfaction (regardless of 
     whether insurance coverage was obtained) was determined 
     during the final (11th month) follow-up contact. In addition, 
     for the subset of children who obtained insurance, we 
     assessed parental satisfaction during the first monthly 
     follow-up contact after the child obtained coverage. All 
     survey instruments were translated into Spanish and then 
     back-translated by a separate observer, to ensure reliability 
     and validity.
     Statistical Analyses
       All data analyses were performed as intention-to-treat 
     analyses with SAS software, version 8.2. Prestudy 
     calculations with the X2 test of equal 
     proportions indicated that a sample size in each study arm of 
     90 participants provided 90 percent power to detect a 20 
     percent difference in the rates of insuring uninsured 
     children (assuming that 10 percent of the control group and a 
     minimum of 30 percent of the intervention group would be 
     insured at the end of the study), allowing for

[[Page 20396]]

     2-sided a = .05 and assuming 1 contact during the 
     12-month follow-up period. The initial combined target 
     recruitment sample of N = 300 assumed that up to 40 percent 
     of participants might drop out or be lost to follow-up 
     monitoring; subsequently, recruitment was terminated at a 
     sample size of N = 275 when the attrition rate was observed 
     to be 17 percnt.
       The baseline sociodemographic characteristics of the 
     intervention and control groups were compared with 
     X2, Fisher's exact, and t tests. All 
     reported P values are 2-tailed, with P < .05 considered 
     statistically significant. Analyses of all outcomes, 
     including obtaining insurance, time to insurance, and 
     satisfaction with the process of obtaining insurance, were 
     restricted to subjects who completed 1 follow-up 
     visit.
       Unadjusted analyses of intergroup differences in obtaining 
     insurance coverage (any, continuous, and sporadic) were 
     performed with the X2 test. We then 
     fitted longitudinal regression models adjusting for time and 
     intrasubject correlations by using generalized estimating 
     equations implemented in PROC GENMOD in the SAS software. An 
     independent working correlation model and empirical variance 
     estimator were used for the generalized estimating equation 
     model.
       Multivariate analyses were performed to adjust for policy 
     changes in the MassHealth and CMSP programs that occurred 
     during the study. In November 2002, an enrollment cap was 
     imposed on CMSP, which resulted in a waiting list of 
     thousands of uninsured children, and premiums were increased 
     for both CMSP and MassHealth. On February 1, 2003, the CMSP 
     enrollment freeze was lifted, children on the waiting list 
     began to be enrolled in the programs, and the premium 
     increases were reduced (but not to levels before the November 
     2002 policy change). Study outcomes therefore were adjusted 
     according to when the study participant was recruited, ie, 
     before, during, or after the restrictive policy change (with 
     construction of a 3-level variable for which the reference 
     group was recruitment before the policy change). Because some 
     subjects were not affected by the policy change, a second 
     variable also was constructed, consisting of a dummy 
     indicator for participants affected by the policy change. 
     Both policy change variables were included in the adjusted 
     models. On the basis of significant intergroup differences 
     noted in bivariate analyses (for parental employment status 
     and state insurance policy changes) and factors previously 
     reported to be associated with being uninsured, the final 
     adjusted model included the following covariates: the child's 
     age, the family's poverty status (dichotomized as an annual 
     combined family income that was 0-100% of the federal poverty 
     threshold for the family [individualized for each family 
     according to the number of people in the family unit and the 
     number of related children <18 years old in the household] at 
     the time of the study versus an income that was above the 
     federal poverty threshold), parental citizenship status, 
     parental employment status, and participant recruitment in 
     relation to policy changes in state insurance coverage 
     options available for uninsured children.
       Unadjusted analyses of the number of days from study 
     enrollment to obtaining coverage were performed for the 
     subset of subjects who obtained insurance with the t test and 
     then for all subjects with the Kaplan-Meier method. An 
     adjusted cumulative incidence curve for the time to obtaining 
     insurance was then plotted. Parental satisfaction with the 
     process of trying to obtain insurance was analyzed by coding 
     the 5-point Likert scale results both as a categorical 
     variable (using the X2 test) and as a 
     continuous variable (using the t test).


                                RESULTS

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


                               DISCUSSION

       Community-based case managers were found to be 
     substantially more effective in obtaining health insurance 
     for uninsured Latino children than traditional Medicaid and 
     SCHIP outreach and enrollment. In addition, compared with 
     control group children, children in the case management group 
     obtained insurance coverage sooner, were more likely to be 
     insured continuously during 1 year of follow-up, and had 
     parents who were much more satisfied with the process of 
     obtaining coverage for their children.
       Several characteristics of the case management intervention 
     might account for its greater effectiveness in comparison 
     with traditional Medicaid and SCHIP outreach and enrollment. 
     First, case managers received training and focused their 
     efforts on addressing barriers to insuring uninsured children 
     that had been identified specifically by Latino families in 
     prior research, including lack of knowledge about the 
     application process and eligibility, language barriers, 
     immigration issues, income cutoff values and verification, 
     hassles, pending decisions, family mobility, misinformation 
     from insurance representatives, and system problems. Second, 
     case managers were active agents in the process of obtaining 
     insurance coverage for children, assisting parents with 
     application completion and acting as a family liaison and 
     advocate whenever complications or

[[Page 20397]]

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


                              conclusions

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

                            TABLE 1.--BASELINE CHARACTERISTICS OF STUDY PARTICIPANTS
----------------------------------------------------------------------------------------------------------------
                                                         Case management                Control
                  Characteristic                   ------------------------------------------------------    P
                                                             (n=139)                    (n=136)
----------------------------------------------------------------------------------------------------------------
Child's age, y, mean  SD.........................                  8.9  5.0                  8.9  4.9     .96
Parent's age, y, mean  SD........................                 36.7  9.1                 36.7  8.9     .98
Annual combined family income, median (range).....        $13,200 ($0-72,000)        $12,945 ($0-48,000)     .41
Annual combined family income, no. (%)\1\:                                                                   .57
    0-100% of federal poverty threshold...........                    92 (69)                    86 (73)
    101-200% of federal poverty threshold.........                     36 (27                    30 (25)
    >200% of federal poverty threshold............                      5 (4)                      2 (2)
Number of children in family, no. (%):                                                                       .64
    1.............................................                    49 (35)                    42 (31)
    2.............................................                    52 (37)                    54 (40)
    3.............................................                    25 (18)                    21 (15)
    4.............................................                     13 (9)                    18 (13)
Parent's ethnicity, no. (%):                                                                                 .51
    Colombian.....................................                    58 (42)                    47 (35)
    Dominican.....................................                    27 (19)                    24 (18)
    Salvadoran....................................                    29 (21)                    32 (24)
    Guatemalan....................................                      7 (5)                    13 (10)
    Mexican.......................................                      3 (2)                      6 (4)
    Other.........................................                    15 (11)                    14 (10)
At least 1 parent employed full-time, no. (%).....                   119 (86)                    99 (73)     .01
Parental citizenship, no. (%):                                                                               .96
    US citizen....................................                    14 (10)                    15 (11)
    Legal resident................................                    69 (51)                    67 (49)
    Undocumented..................................                    56 (40)                    54 (40)
Parent limited in English proficiency, no. (%)\2\.                   127 (91)                   126 (93)     .96
Parental marital status, no. (%):                                                                            .82
    Married.......................................                    63 (45)                    59 (43)
    Separated.....................................                    19 (14)                    15 (11)
    Divorced......................................                      9 (6)                      9 (7)
    Single........................................                    29 (21)                    39 (29)
    Common law....................................                    16 (12)                     12 (9)
    Widowed/other.................................                      3 (2)                      2 (1)
Parental educational attainment, no. (%):                                                                    .75
    None/grade school.............................                    43 (31)                    38 (28)

[[Page 20398]]

 
    6th to 11th grade.............................                    24 (17)                    20 (15)
    High school graduate..........................                    38 (28)                    44 (32)
    Some college..................................                     11 (8)                    15 (11)
    College degree\3\.............................                    22 (16)                    19 (14)
Lost/withdrew from study before any follow up                           4 (3)                     12 (9)     .04
 contact, no. (%).................................
Follow-up contacts, no., mean SD\4\...                   8.3 2.2                   7.9 2.3     .14
Recruitment site, no. (%):                                                                                   .91
    East Boston...................................                   101 (73)                    98 (72)
    Jamaica Plain.................................                    38 (27)                    38 (28)
Participant recruitment in relation to policy                                                                .02
 change in state coverage of uninsured children,
 no. (%):
    Before policy change..........................                    38 (27)                    20 (15)
    Restrictive change in effect..................                    14 (10)                    22 (17)
    Reestablishment of most of prior policy.......                    87 (63)                   94 (70)
----------------------------------------------------------------------------------------------------------------
\1\Three parents in the intervention group and 18 in the control group chose not to answer questions on family
  income.
\2\U.S. Census definition of self-rated English-speaking ability of less than very well (ie, well, not very
  well, or not at all).
\3\Associate, bachelor's, or postgraduate degree.
\4\Among participants with any follow-up contacts.


                             TABLE 2.--STUDY OUTCOMES ACCORDING TO GROUP ASSIGNMENT
----------------------------------------------------------------------------------------------------------------
                                                       Case management              Control
                     Outcome                      --------------------------------------------------      P
                                                          (n = 139)                (n = 136)
----------------------------------------------------------------------------------------------------------------
Child obtained health insurance coverage, %......                       96                       57       <.0001
    Continuously insured.........................                       78                       30       <.0001
    Sporadically insured1........................                       18                       27       <.0001
Child continuously uninsured, %..................                        4                       43       <.0001
Mean time to obtain insurance, d, mean  SD......                87.5  68            134.8  102.4        <.009
Parental satisfaction with process of obtaining
 child's insurance, %2:
    Very satisfied...............................                       80                       29      3<.0001
    Satisfied....................................                       12                       41
    Uncertain....................................                        5                        4
    Dissatisfied.................................                        2                       13
    Very dissatisfied............................                        1                       14
Mean parental satisfaction score for process of                1.33  0.77              2.40  1.40       <.0001
 obtaining child's insurance (5-point Likert
 scale), mean  SD24.............................
----------------------------------------------------------------------------------------------------------------
1Obtained but then lost health insurance coverage.
2Regardless of whether child was insured or continuously uninsured; data were collected at the final 1-year
  follow-up contact.
3By Wilcoxon 2-sample test, Kruskal-Wallis test, and Cochran-Armitage trend test.
4Where 1 = very satisfied, 2 = satisfied, 3 = uncertain, 4 = dissatisfied, and 5 = very dissatisfied.


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

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

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

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

                                S. 3977

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

     SECTION 1. REDUCED TAXES FOR PATRIOT EMPLOYERS.

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

[[Page 20399]]



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

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

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

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

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

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

  Mr. OBAMA. Mr. President, I rise today, with my good friend and 
colleague, the senior Senator from the great State of Illinois, to 
introduce the Patriot Employers Act of 2006.
  This measure is designed to help businesses and American workers 
seeking to compete in the global economy. By reducing corporate taxes 
for those firms that invest in America and American employees, the 
Patriot Employers Act rewards companies that, among other things, pay 
decent benefits, provide health coverage and support our troops by 
paying a full differential salary for deployed National Guard 
employees.
  Too often we hear troubling news reports of American companies 
outsourcing jobs and exploiting corporate tax loopholes--by setting up 
incorporated offices, for example, in the Cayman Islands to avoid 
paying their fair share of taxes. Such companies fail to see that they 
are connected to the markets in which they operate, and by dodging 
their financial responsibilities, they are harming the very economy 
that they, too, will need to rely on in the future.
  Recognizing these challenges, this bill says that we are going to 
align our corporate tax policy with the corporate practices we want to 
encourage.
  The Patriot Employers Act cuts taxes for American companies that: 
maintain headquarters in the U.S.; pay at least 60 percent of 
employees' healthcare premiums; maintain or increase their U.S. 
workforce relative to their workforce located abroad; pay an hourly 
rate several dollars above the outdated minimum wage; provide either a 
defined benefit retirement plan or a defined contribution plan with an 
employer match; and provide full differential salary and benefits for 
National Guard employees called into active duty.
  It is important that our American firms remain competitive and 
innovate, in part by investing in the long-term health of those workers 
and communities in which they operate and impact. Increasing corporate 
shareholder value and acting in the interests of the public good are 
not mutually exclusive goals, and this legislation recognizes that 
point. All of us have a stake in improving returns to all corporate 
stakeholders, including investors, managers, employees, consumers, and 
our communities.
  To this end, I am proud to be an original cosponsor of this bill and 
I hope that it will renew attempts by lawmakers--both legislative and 
otherwise--to engage productively with the business community to 
address their long-term market concerns while promoting the well-being 
of American workers. Government does not create jobs; entrepreneurs and 
businesses do. The future of the American economy requires that 
American businesses continue to grow and improve their productivity and 
competitiveness. It requires that American companies have the very best 
workforce and infrastructure to compete and win in every market they 
enter.
  Ensuring American competitiveness will demand new thinking from 
leaders in business, labor, education, and government: it will demand 
new responses and roles, new coalitions and collaborations, among these 
stakeholders. Long-term American competitiveness will demand bipartisan 
commitment to strengthening all parts of our economy and improving 
opportunities for all Americans.
  The Patriot Employers Act is an important step in this process. Let's 
align business incentives with the investments we need in the future of 
the American workforce. Let's begin the conversation about how to 
ensure American competitiveness for the 21st century and beyond.
  I urge quick support for this important legislation.
                                 ______
                                 
      By Mrs. CLINTON:
  S. 3978. A bill to provide consumer protections for lost or stolen 
check cards and debit cards similar to those provided with respect to 
credit cards, and for other purposes, to the Committee on Banking, 
Housing, and Urban Affairs.
  Mrs. CLINTON. Mr. President, today I am introducing the Debit and 
Check Card Consumer Protection Act of 2006, an important piece of 
legislation in the battle against consumer fraud. Despite consumers' 
best efforts, debit and check card fraud is a serious problem making 
consumer liability an important issue. Unfortunately, current consumer 
protection laws do not adequately protect debit and check card holders 
from fraud.
  Over the last decade, debit and check card use has experienced double 
digit growth and now over 80 percent of American consumer households 
possess a debit or check card. This growth has outpaced that of credit 
cards and recent reports indicate that between 2001 and 2003 consumers 
made 42.5 billion transactions with debit cards, 2.3 billion more 
transactions than with credit cards.

[[Page 20400]]

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

                                S. 3978

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Debit and Check Card 
     Consumer Protection Act of 2006''.

     SEC. 2. FINDINGS.

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

     SEC. 3. CAP ON DEBIT CARD LIABILITY.

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

     SEC. 4. DEBIT CARD ERROR RESOLUTION.

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

     SEC. 5. CONSUMER RIGHTS.

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

     SEC. 6. REGULATIONS.

       Not later than 90 days after the date of enactment of this 
     Act, the Board of Governors of the Federal Reserve System 
     shall issue final regulations to carry out the amendments 
     made by this Act, which regulations shall be consistent, to 
     the extent practicable, with regulations issued to carry out 
     similar provisions under the Truth in Lending Act.
                                 ______
                                 
      By Mr. DODD (for himself, Mr. Frist, Mr. Harkin, Mrs. Clinton, 
        Mr. Reed, and Mr. Durbin):
  S. 3980. A bill to direct the Secretary of Health and Human Services, 
in consultation with the Secretary of Education, to develop a policy 
for managing the risk of food allergy and anaphylaxis in schools, to 
establish school-based food allergy management grants, and for other 
purposes; to the Committee on Health, Education, Labor, and Pensions.
  Mr. DODD. Mr. President, food allergies are an increasing food safety 
and public health concern in this country, especially among young 
children. I know first-hand just how frightening food allergies can be 
in a young person's life. My own family has been personally touched by 
this troubling condition and we continue to struggle with it each and 
every day. Sadly, there is no cure for food allergies.
  In the past 5 years, the number of Americans with food allergies has 
nearly doubled from 6 million to almost 12 million. While food 
allergies were at one time considered relatively infrequent, today they 
rank 3rd among common chronic diseases in children under 18 years old. 
Peanuts are among several allergenic foods that can produce life-
threatening allergic reactions in susceptible children. Peanut 
allergies have doubled among school-age children from 1997 to 2002.
  Clearly, food allergies are of great concern for school-age children 
Nation-wide, and yet, there are no Federal guidelines concerning the 
management of life-threatening food allergies in our Nation's schools.
  I have heard from parents, teachers and school administrators that 
students with severe food allergies often face inconsistent food 
allergy management approaches when they change schools--whether they 
get promoted or move to a different city. Too often, families are not 
aware of the food allergy policy at their children's school, or the 
policy is vastly different from the one they knew at their previous

[[Page 20401]]

school, and they are left wondering whether their child is safe.
  Last year, Connecticut became the first State to enact school-based 
guidelines concerning food allergies and the prevention of life-
threatening incidents in schools. I am very proud of these efforts, and 
I know that the parents of children who suffer from food allergies in 
Connecticut have confidence that their children are safe throughout the 
school day. Other States, such as Massachusetts, have enacted similar 
guidelines. Tennessee school districts are poised to implement their 
statewide guidelines in July. But too many States across the country 
have food allergy management guidelines that are inconsistent from one 
school district to the next.
  In my view, this lack of consistency underscores the need for 
enactment of uniform, Federal policies that school districts can choose 
to adopt and implement.
  For this reason, my colleague, Senator Frist, and I introduce the 
Food Allergy and Anaphylaxis Management Act of 2006 today to address 
the growing need for uniform and consistent school-based food allergy 
management policy. I thank Senator Frist for his hard work and 
commitment to this important legislation.
  The legislation does two things. First, it directs the Secretary of 
Health and Human Services, in consultation with the Secretary of 
Education, to develop and make available voluntary food allergy 
management guidelines for preventing exposure to food allergens and 
assuring a prompt response when a student suffers a potentially fatal 
anaphylactic reaction.
  Second, the bill provides for incentive grants to school districts to 
assist them with adoption and implementation of the Federal 
Government's allergy management guidelines in all K-12 public schools.
  I wish to acknowledge and offer my sincere appreciation to the 
members of the Food Allergy and Anaphylaxis Network for their 
commitment to this legislation and for raising public awareness, 
providing advocacy, and advancing research on behalf of all individuals 
who suffer from food allergies.
  I hope that my colleagues in the Senate and in the House will 
consider and pass this important legislation before the end of the year 
so that the Department of Health and Human Services can begin work on 
developing national guidelines as soon as possible. Schoolchildren 
across the country deserve nothing less than a safe and healthy 
learning environment.
  Mr. FRIST. Mr. President, 6 years ago, my great-nephew had some 
peanut butter. He was 13 months old. For most 13-month-old children, 
this wouldn't be an issue. But for McClain Portis, it was.
  You see, unbeknownst to him or his parents at the time, McClain is 
allergic to peanuts. When he ate that peanut butter, he had an 
anaphylactic reaction.
  Within 30 seconds, his lips and eyes swelled shut, his face turned 
bright red, and he developed what is called a full body hive.
  But McClain's parents were quick thinkers. They called 911, and he 
was soon better after a dose of epinephrine. That's what calms the 
anaphylactic reaction, if administered in time.
  But 6 hours later, the epinephrine wore off. McClain had a biphasic 
reaction and had to return to the pediatrician to receive steroids. His 
older sister, just 4 years old at the time, asked their mother, ``Is my 
brother going to die?''
  McClain is 7 years old now--in first grade. He's an active boy, with 
many friends. And he enjoys school. But school hasn't been easy--for 
McClain or his parents.
  It's that way for a lot of children with food allergies, especially 
when they find themselves switching schools.
  I recently met another young man from Nashville--Andrew Wright. He's 
14 now, and he attends the same high school from which I graduated.
  He's endured food allergies nearly his entire life--but somehow the 
high-spirited teen keeps a positive outlook on life.
  For a long time, every year he and his parents had to start from 
scratch. They had to teach the schools how to recognize and treat an 
allergic reaction. And they had to teach them about his allergens--
sheep's milk, tree nuts, peanuts, and possibly shellfish. That's 
stressful work--for Andrew, for his parents, and even for the schools.
  Andrew and McClain aren't alone in their struggles. Across the 
country, 3 million children suffer from food allergies.
  Milk. Eggs. Fish. Shellfish. Tree nuts. Peanuts. Wheat. Soy.
  Foods that most people enjoy. But these 8 foods account for 90 
percent of all food allergic reactions.
  And for 3 million American children, these foods frequently aren't 
safe. Their immune system makes a mistake. It treats something in a 
certain food as if it's dangerous.
  The food itself isn't harmful, but the body's reaction is.
  Within a few hours--or sometimes, only minutes--of consuming a food 
allergen, a host of symptoms can burst forth, affecting the eyes, nose, 
throat, respiratory system, skin, and digestive system. The reaction 
could be mild--or it could be more severe, like it was for my great-
nephew McClain.
  Food-allergic reactions are the leading cause of anaphylaxis. If left 
untreated for too long, anaphylaxis can prove fatal. But it's 
treatable--with adrenaline, or epinephrine.
  In fact, studies have demonstrated an association between a delay in 
the administration of epinephrine--or non-administration--and 
anaphylaxis fatalities.
  So it makes sense that we'd want schools to keep epinephrine on 
hand--in case a child experiences a food-allergic reaction leading to 
anaphylaxis. And it makes sense that we'd want school personnel to know 
how to recognize and treat food-allergic reactions.
  But currently, there are no Federal guidelines concerning the 
management of life-threatening food allergies in the school setting.
  In fact, in a recent survey, three-fourths of elementary school 
nurses reported developing their own training guidelines for responding 
to food allergies.
  This means that when children change schools--they're promoted, they 
move, they're redistricted--for whatever reason--they and their parents 
face different food allergy management approaches. And there's no 
across-the-board consistency.
  That's why Senator Dodd and I have introduced the Food Allergy and 
Anaphylaxis Management Act of 2006.
  We believe the Federal Government should establish uniform, voluntary 
food allergy management guidelines--and schools should be strongly 
encouraged to adopt and implement such guidelines.
  The bill directs the Secretary of Health and Human Services--in 
consultation with the Secretary of Education--to develop voluntary food 
allergy management guidelines.
  The guidelines would help prevent exposure to food allergens and help 
ensure a prompt response when a child suffers a potentially fatal 
anaphylactic reaction. Under the bill, these guidelines must be 
developed and made available within one year of enactment.
  Additionally, the bill provides for school-based allergy management 
incentive grants to local education agencies. These grants assist with 
the adoption and implementation of food allergy management guidelines 
in public schools.
  There are 3 million American children who suffer from food allergies. 
We can't cure them of their allergies. But we can help prevent allergic 
reactions, and we can help ensure timely treatment of them when they 
occur.
  I urge my colleagues to support this bipartisan measure--so we can 
help keep America's children healthy.
                                 ______
                                 
      By Mr. KOHL (for himself and Mr. Leahy):
  S. 3981. A bill to amend the Federal Food, Drug, and Cosmetic Act to 
establish requirements for certain petitions submitted to the Food and 
Drug Administration, and for other purposes; to the Committee on 
Health, Education, Labor, and Pensions.
  Mr. KOHL. Mr. President, I rise today to introduce the Citizen 
Petition

[[Page 20402]]

Fairness and Accuracy Act of 2006. This legislation will help speed the 
introduction of cost-saving generic drugs by preventing abuses of the 
Food and Drug Administration citizen petition process.
  Consumers continue to suffer all across our country from the high--
and ever rising--cost of prescription drugs. A recent independent study 
found that prescription drug spending has more than quadrupled since 
1990, and now accounts for 11 percent of all health care spending. At 
the same time, the pharmaceutical industry is one of the most 
profitable industries in the world, returning more than 15 percent on 
their investments.
  One key method to bring prescription drug prices down is to promote 
the introduction of generic alternatives to expensive brand name drugs. 
Consumers realize substantial savings once generic drugs enter the 
market. Generic drugs cost on average of 63 percent less than their 
brand-name equivalents. One study estimates that every 1 percent 
increase in the use of generic drugs could save $4 billion in health 
care costs.
  This is why I have been so active in the last year in pursuing 
legislation designed to combat practices which impede the introduction 
of generic drugs--including S. 3582, the Preserve Access to Generics 
Act, which would forbid payments from brand name drug manufacturers to 
generic manufacturers to keep generic drugs off the markets, and S. 
2300, the Lower Priced Drugs Act, legislation I co-sponsored to combat 
other conduct which impedes the marketing of generic drugs. The 
legislation I introduce today targets yet another practice by brand 
name drug companies to impede or block the marketing of generic drugs--
abuse of the FDA citizen petition process.
  FDA rules permit any person to file a so-called ``citizen petition'' 
to raise concerns about the safety or efficacy of a generic drug that a 
manufacturer is seeking FDA approval to bring to market. While this 
citizen petition process was put in place for a laudable purpose, 
unfortunately in recent years it has been abused by frivolous petitions 
submitted by brand name drug manufacturers (or individuals acting at 
their behest) whose only purpose is to delay the introduction of 
generic competition. The FDA has a policy of not granting any new 
generic manufacturer's drug application until after it has considered 
and evaluated any citizen petitions regarding that drug. The process of 
resolving a citizen petition (even if ultimately found to be 
groundless) can delay the approval by months or years. Indeed, brand 
name drug manufacturers often wait to file citizen petitions until just 
before the FDA is about to grant the application to market the new 
generic drug, solely for the purpose of delaying the introduction of 
the generic competitor for the maximum amount of time possible. This 
gaming of the system should not be tolerated.
  In recent years, FDA officials have expressed serious concerns about 
the abuse of the citizen petition process. Last year, FDA Chief Counsel 
Sheldon Bradshaw noted that ``[t]he citizen petition process is in some 
cases being abused. Sometimes, stakeholders try to use this mechanism 
to unnecessarily delay approval of a competitor's products.'' He added 
that he found it ``particularly troublesome'' that he had ``seen 
several examples of citizen petitions that appear designed not to raise 
timely concerns with respect to the legality or scientific soundness of 
approving a drug application, but rather to delay approval by 
compelling the agency to take the time to consider the arguments raised 
in the petition, regardless of their merits, and regardless of whether 
the petitioner could have made those very arguments months and months 
before.''
  And a simple look at the statistics gives credence to these concerns. 
Of the 21 citizen petitions for which the FDA has reached a decision 
since 2003, 20 or 95 percent of them have been found to be without 
merit. Of these, ten were identified as ``eleventh hour petitions'', 
defined as those filed less than 6 months prior to the estimated entry 
date of the generic drug. None of these ten ``eleventh hour petitions'' 
were found to have merit, but each caused unnecessary delays in the 
marketing of the generic drug by months or over a year, causing 
consumers to spend millions and millions more for their prescription 
drugs than they would have spent without these abusive filings.
  Despite the expense these frivolous citizen petitions cause consumers 
and the FDA, under current law the government has absolutely no ability 
to sanction or penalize those who abuse the citizen petition process, 
or who file citizen petitions simply to keep competition off the 
market. Our legislation will correct this obvious shortcoming and give 
the Department of Health and Human Services--the FDA's parent agency--
the power to sanction those who abuse the process.
  Our bill will, for the first time, require all those who file citizen 
petitions to affirm certain basic facts about the truthfulness and good 
faith of the petition, similar to what is required of every litigant 
who makes a filing in court. The party filing the citizen petition will 
be required to affirm that the petition is well grounded in fact and 
warranted by law; is not submitted for an improper purpose, such as to 
harass or cause unnecessary delay in approval of competing drugs; and 
does not contain any materially false, misleading or fraudulent 
statement. The Secretary of the Department of Health and Human Services 
is empowered to investigate a citizen petition to determine if it has 
violated any of these principles, was submitted for an improper 
purpose, or contained false or misleading statements. Further, the 
Secretary is authorized to penalize anyone found to have submitted an 
abusive citizen petition. Possible sanctions include a fine up to one 
million dollars, a suspension or permanent revocation of the right of 
the violator to file future citizens' petition, and a dismissal of the 
petition at issue. HHS is also authorized to refer the matter to the 
Federal Trade Commission so that the FTC can undertake its own 
investigation as to the competitive consequences of the frivolous 
petition and take any action it finds appropriate. Finally, the bill 
directs the HHS that all citizen petitions be adjudicated within six 
months of filing, which will put an end to excessive delays in bringing 
needed generic drugs to market because of the filings of these 
petitions.
  While our bill will not have any effect on any person filing a truly 
meritorious citizen petition, this legislation will serve as a strong 
deterrent to attempts by brand name drug manufacturers or any other 
party that seeks to abuse the citizen petition process to thwart 
competition. It will thereby remove one significant obstacle exploiting 
by brand name drug companies to prevent or delay the introduction of 
generic drugs. I urge my colleagues to support this legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3981

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Citizen Petition Fairness 
     and Accuracy Act of 2006''.

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

       Section 505(j)(5) of the Federal Food, Drug, and Cosmetic 
     Act (21 U.S.C. 355(j)(5)) is amended by adding at the end the 
     following:
       ``(G)(i) Notwithstanding any other provision of law, any 
     petition submitted under section 10.30 or section 10.35 of 
     title 21, Code of Federal Regulations (or any successor 
     regulation), shall include a statement that to the 
     petitioner's best knowledge and belief, the petition--
       ``(I) includes all information and views on which the 
     petitioner relies, including all representative data and 
     information known to the petitioner that is favorable or 
     unfavorable to the petition;
       ``(II) is well grounded in fact and is warranted by law;
       ``(III) is not submitted for an improper purpose, such as 
     to harass or cause unnecessary delay (including unnecessary 
     delay of competition or agency action); and
       ``(IV) does not contain a materially false, misleading, or 
     fraudulent statement.
       ``(ii) The Secretary shall investigate, on receipt of a 
     complaint, a request under

[[Page 20403]]

     clause (vi), or on its own initiative, any petition submitted 
     under such section 10.30 or section 10.35 (or any successor 
     regulation), that--
       ``(I) does not comply with the requirements of clause (i);
       ``(II) may have been submitted for an improper purpose as 
     described in clause (i)(III); or
       ``(III) may contain a materially false, misleading, or 
     fraudulent statement as described in clause (i)(IV).
       ``(iii) If the Secretary finds that the petitioner has 
     knowingly and willingly submitted the petition for an 
     improper purpose as described in clause (i)(III), or which 
     contains a materially false, misleading, or fraudulent 
     statement as described in clause (i)(IV), the Secretary may--
       ``(I) impose a civil penalty of not more than $1,000,000, 
     plus attorneys fees and costs of reviewing the petition and 
     any related proceedings;
       ``(II) suspend the authority of the petitioner to submit a 
     petition under such section 10.30 or section 10.35 (or any 
     successor regulation), for a period of not more than 10 
     years;
       ``(III) revoke permanently the authority of the petitioner 
     to submit a petition under such section 10.30 or section 
     10.35 (or any successor regulation); or
       ``(IV) dismiss the petition at issue in its entirety.
       ``(iv) If the Secretary takes an enforcement action 
     described in subclause (I), (II), (III), or (IV) of clause 
     (iii) with respect to a petition, the Secretary shall refer 
     that petition to the Federal Trade Commission for further 
     action as the Federal Trade Commission finds appropriate.
       ``(v) In determining whether to take an enforcement action 
     described in subclause (I), (II), (III), or (IV) of clause 
     (iii) with respect to a petition, and in determining the 
     amount of any civil penalty or the length of any suspension 
     imposed under that clause, the Secretary shall consider the 
     specific circumstances of the situation, such as the gravity 
     and seriousness of the violation involved, the amount of 
     resources expended in reviewing the petition at issue, the 
     effect on marketing of competing drugs of the pendency of the 
     improperly submitted petition, including whether the timing 
     of the submission of the petition appears to have been 
     calculated to cause delay in the marketing of any drug 
     awaiting approval, and whether the petitioner has a history 
     of submitting petitions in violation of this subparagraph.
       ``(vi)(I) Any person aggrieved by a petition filed under 
     such section 10.30 or section 10.35 (or any successor 
     regulation), including a person filing an application under 
     subsection (b)(2) or (j) of this section to which such 
     petition relates, may request that the Secretary initiate an 
     investigation described under clause (ii) for an enforcement 
     action described under clause (iii).
       ``(II) The aggrieved person shall specify the basis for its 
     belief that the petition at issue is false, misleading, 
     fraudulent, or submitted for an improper purpose. The 
     aggrieved person shall certify that the request is submitted 
     in good faith, is well grounded in fact, and not submitted 
     for any improper purpose. Any aggrieved person who knowingly 
     and intentionally violates the preceding sentence shall be 
     subject to the civil penalty described under clause (iii)(I).
       ``(vii) The Secretary shall take final agency action with 
     respect to a petition filed under such section 10.30 or 
     section 10.35 (or any successor regulation) within 6 months 
     of receipt of such petition. The Secretary shall not extend 
     such 6-month review period, even with consent of the 
     petitioner, for any reason, including based upon the 
     submission of comments relating to a petition or supplemental 
     information supplied by the petitioner. If the Secretary has 
     not taken final agency action on a petition by the date that 
     is 6 months after the date of receipt of the petition, such 
     petition shall be deemed to have been denied on such date.
       ``(viii) The Secretary may promulgate regulations to carry 
     out this subparagraph, including to determine whether 
     petitions filed under such section 10.30 or section 10.35 (or 
     any successor regulation) merit enforcement action by the 
     Secretary under this subparagraph.''.
                                 ______
                                 
      By Mr. HARKIN (for himself, Mr. Leahy, Ms. Mikulski, and Mr. 
        Kerry):
  S. 3984. A bill to improve programs for the identification and 
treatment of post-deployment mental health conditions, including post-
traumatic stress disorder, in veterans and members of the Armed Forces, 
and for other purposes; to the Committee on Veterans' Affairs.
  Mr. HARKIN. Mr. President, more than 41 million Americans suffer from 
a moderate or serious mental disorder each year. Unfortunately, because 
of the lingering stigma attached to mental illness, and lack of 
coverage under health insurance, these disorders often go untreated. I 
am particularly concerned that we are neglecting the mental health of 
our returning war veterans.
  Earlier this year, I introduced a bill directing the Department of 
Veterans Affairs to create a program to address the shocking rate of 
suicide among veterans returning from combat in Iraq and Afghanistan. 
That bill, the Joshua Omvig Suicide Prevention Act of 2006, was named 
in honor of a young hero from Grundy Center who killed himself soon 
after returning from a tour of duty in Iraq.
  But we also need a broader strategy for addressing the mental health 
needs of service members exposed to the stress and trauma of war.
  And that is why I introduced legislation today directing the 
Department of Veterans Affairs to develop a comprehensive plan to 
improve the diagnosis and treatment of Post Traumatic Stress Disorder, 
PTSD, in our veterans. My bill would require the VA to create a 
curriculum and required protocols for training VA staff to better 
screen PTSD. It also would require the VA to commit additional staff 
and resources to this challenge.
  During my years in the Navy, I learned one of the most important 
lessons of my entire life: Never leave a buddy behind. That's true on 
the battlefield--and it's also true after our service members return 
home.
  Often, the physical wounds of combat are repaired, but the mental 
damage--the psychological scars of combat--can haunt a person for a 
lifetime.
  One study shows that about 17 percent of active-duty service members 
who served in Iraq screened positive for anxiety, depression, or PTSD. 
This number is comparable to rates of PTSD experienced by Vietnam War 
veterans. But, in the decades since, scientists have learned that quick 
intervention is critical to ensuring that an acute stress reaction does 
not become a chronic mental illness.
  This is exactly the aim of my bill: to improve early detection and 
intervention . . . to save lives . . . and to prevent long-term mental 
illness. The Federal Government has a moral contract with those who 
have fought for our country and sacrificed so much. This bill is about 
making good on that contract.
                                 ______
                                 
      By Mr. OBAMA:
  S. 3988. A bill to amend title 10 and 38, United States Code, to 
improve benefits and services for members of the Armed Forces, veterans 
of the Global War on Terrorism, and other veterans, to require reports 
on the effects of the Global War on Terrorism, and for other purposes; 
to the Committee on Veterans' Affairs.
  Mr. OBAMA. Mr. President, I rise today to introduce legislation that 
is significant both in the problems it seeks to address and the man it 
seeks to honor.
  Since the day he arrived in Congress more than two decades ago, Lane 
Evans has been a tireless advocate for the men and women with whom he 
served. When Vietnam vets started falling ill from Agent Orange, he led 
the effort to get them compensation. Lane was one of the first in 
Congress to speak out about the health problems facing Persian Gulf war 
veterans. He's worked to help veterans suffering from Post-Traumatic 
Stress Disorder, and he's also helped make sure thousands of homeless 
veterans in our country have a place to sleep.
  Lane Evans has fought these battles for more than 20 years, and even 
in the face of his own debilitating disease, he kept fighting. Today, 
veterans across America have Lane Evans to thank for reminding this 
country of its duty to take care of those who have risked their lives 
to defend ours.
  I am very proud today to introduce the Lane Evans Veterans Healthcare 
and Benefits Improvement Act of 2006. This bill honors a legislator who 
leaves behind an enduring legacy of service to our veterans. The 
legislation also is an important step towards caring for our men and 
women who are currently fighting for us.
  Today, nearly 1.5 million American troops have been deployed overseas 
as part of the global war on terror. These brave men and women who 
protected us are beginning to return home. Six hundred thousand people 
who served in Iraq and Afghanistan are now veterans,

[[Page 20404]]

and at least 184,400 have already received treatment at the VA. That 
number is increasing every day. Many of these fighting men and women 
are coming home with major injuries. As a country, we are only 
beginning to understand the true costs of the global war on terror.
  For instance, last week, the Government Accountability Office 
reported that VA has faced $3 billion in budget shortfalls since 2005 
because it underestimated the costs of caring for Iraq and Afghanistan 
veterans. The VA wasn't getting the information it needed from the 
Pentagon and was relying on outdated data and incorrect forecasting 
models. We cannot let these kind of bureaucratic blunders get in the 
way of the care and support we owe our servicemembers.
  To avoid these costly shortfalls in the future, we have to do a 
better job keeping track of veterans. That's why the first thing the 
Lane Evans Act does is to establish a system to track global war on 
terror veterans. The VA established a similar data system following the 
Persian Gulf War. That effort has been invaluable in budget planning as 
well as in monitoring emerging health trends and diseases linked to the 
gulf war. The Gulf War Veterans Information System also has been 
important to medical research and improved care for veterans. The 
sooner we begin keeping accurate track of our fighting men and women in 
Iraq, Afghanistan and beyond, the better and more efficiently we will 
be able to care for them.
  The Lane Evans Act also tackles Post-Traumatic Stress Disorder. 
Mental health patients account for about a third of the new veterans 
seeking care at the VA. The VA's National Center for PTSD reports that 
``the wars in Afghanistan and Iraq are the most sustained combat 
operations since the Vietnam War, and initial signs imply that these 
ongoing wars are likely to produce a new generation of veterans with 
chronic mental health problems.''
  This bill addresses PTSD in 2 ways. First, it extends the window 
during which new veterans can automatically get care for mental health 
from 2 years to 5 years. Right now, any servicemember discharged from 
the military has up to 2 years to walk into the VA and get care, no 
questions asked. After that, vets have to prove that they are disabled 
because of a service-connected injury, or they have to prove their 
income is below threshold levels. Unfortunately, it can take years for 
symptoms of PTSD to manifest themselves. The time it takes to prove 
service-connection for mental health illness is valuable time lost 
during which veterans are not receiving critically needed treatment. 
The Lane Evans Act allows veterans to walk into a VA any time 5 years 
after discharge and get assessed for mental health care. This both 
extends the window and shortens the wait for vets to get care.
  Second, the legislation makes face-to-face physical and mental health 
screening mandatory 30 to 90 days after a soldier is deployed in a war 
zone. This will ensure that our fighting force is ready for battle, and 
that we can identify and treat those at risk for PTSD. By making the 
exams mandatory, we can help eliminate the stigma associated with 
mental health screening and treatment.
  Another problem veterans face is that the VA and DoD do not 
effectively share medical and military records. Older veterans often 
have to wait years for their benefits as the Department of Defense 
recovers aging and lost paper records. Under the Lane Evans Act, the 
Department of Defense would provide each separating service member at 
the time of discharge with a secure full electronic copy of all 
military and medical records to help them apply for healthcare and 
benefits. DoD possesses the technology to do this now. The information 
could be useful to VA to quickly and accurately document receipt of 
vaccinations or deployment to a war zone. The electronic data will also 
be helpful in future generations when family members of veterans seek 
information about military service, awards, and wartime deployment that 
goes well beyond the existing single-sheet DD-214 discharge 
certificate, which is all veterans currently receive.
  Finally, the legislation improves the transition assistance that 
guardsmen and reservists receive when they return from deployment. A 
2005 GAG report found that because demobilization for guardsmen and 
reservists is accelerated, reserve units get abbreviated and 
perfunctory transition assistance including limited employment 
training. VA should provide equal briefings and transition services for 
all service members regarding VA healthcare, disability compensation, 
and other benefits, regardless of their duty status.
  Lane Evans dedicated his life to serving this country and dedicated 
his time in Congress to serving veterans. The legislation I am 
introducing today, honors both the man and his mission, and will 
continue his legacy to the next generation of American veterans.
                                 ______
                                 
      By Mr. BIDEN:
  S. 3989. A bill to establish a Homeland Security and Neighborhood 
Safety Trust Fund and refocus Federal priorities toward securing the 
Homeland, and for other purposes; to the Committee on Homeland Security 
and Governmental Affairs.
  Mr. BIDEN. Mr. President, I rise today to introduce the Homeland 
Security Trust Fund Act of 2006. And, I do so because it is my sincere 
belief, that in order to better prevent attacks here at home, we must 
dramatically reorder the priorities of the Federal Government.
  This legislation, which I unsuccessfully attempted to attach to the 
port security legislation 2 weeks ago, will reorder our priorities by 
creating a homeland security trust fund that will set aside $53.3 
billion to invest in our homeland security over the next 5 years. 
Through this trust fund we will allocate an additional $10 billion per 
year over the next 5 years to enhance the safety of our communities.
  Everyone in this body knows that we are not yet safe enough. 
Independent experts, law enforcement personnel, and first responders 
have warned us that we have not done enough to prevent an attack and we 
are ill-equipped to respond to one. Hurricane Katrina, which happened 
just over a year ago, demonstrated this unfortunate truth and showed us 
the devastating consequences of our failure to act responsibly here in 
Washington. And, last December, the 9/11 Commission issued their report 
card on the administration's and Congresses' progress in implementing 
their recommendations. The result was a report card riddled with D's 
and F's.
  And, to add to this, the FBI reported earlier this summer that 
violent crime and murders are on the rise for the first time in a 
decade. Given all of this, it is hard to argue that we are as safe as 
we should be.
  To turn this around, we have to get serious about our security. If we 
establish the right priorities, we can do the job. We can fund local 
law enforcement, which the President has attempted to slash by over $2 
billion for fiscal year 2007. We can give the FBI an additional 1,000 
agents to allow them to implement reforms without abandoning local 
crime. We can secure the soft targets in our critical infrastructure, 
to ensure that our chemical plants and electricity grids are protected 
from attacks. We can immediately re-allocate spectrum from the 
television networks and give it to our first responders so they can 
talk during an emergency.
  I know what many of my colleagues here will argue. They will argue 
that it is simply too expensive to do everything. This argument is 
complete malarkey. This is all about priorities. And, quite frankly 
this Congress and this administration have had the wrong priorities for 
the past 5 years.
  For example, this year the tax cut for Americans that make over $1 
million is nearly $60 billion. Let me repeat that, just one year of the 
Bush tax cut for Americans making over $1 million is nearly $60 
billion. In contrast, we dedicate roughly one-half of that--
approximately $32 billion--to fund the operations of the Department of 
Homeland Security. We have invested twice as much for a tax cut for 
millionaires--less than 1 percent of the population--than we do for the 
Department intended to help secure the entire nation.
  For a Nation that is repeatedly warned about the grave threats we

[[Page 20405]]

face, how can this be the right priority? The Homeland Security Trust 
Fund Act of 2006 would change this by taking less than 1 year of the 
tax cut for millionaires--$53.3 billion--and investing it in homeland 
security over the next 5 years. By investing this over the next 5 years 
at just over $10 billion per year, we could implement all the 9/11 
Commission recommendations and do those commonsense things that we know 
will make us safer.
  For example, under this amendment, we could hire 50,000 additional 
police officers and help local agencies create locally based counter-
terrorism units. We could hire an additional 1,000 FBI agents to help 
ensure that FBI is able to implement critical reforms without 
abandoning its traditional crime fighting functions. We could also 
invest in security upgrades within our critical infrastructure and 
nearly double the funding for state homeland security grants. And, the 
list goes on.
  We continually authorize funding for critical homeland security 
programs, but a look back at our recent appropriations bills tells us 
that the funding rarely matches the authorization. Just this July we 
passed the Department of Homeland Security Appropriations Budget. In 
that legislation, the Senate allocated only $210 million for port 
security grants--which is just over one-half of the amounts authorized 
in the bipartisan port security legislation that passed the Senate 2 
weeks ago.
  Yet, another example of this problem is our shameful record on 
providing funding for rail security. For the last two Congresses, the 
Senate has passed bipartisan rail security legislation sponsored by 
myself, Senator McCain and others. This legislation authorizes $1.2 
billion to secure the soft targets in our rail system, such as the 
tunnels and stations. Notwithstanding, we have only allocated $150 
million per year for rail and transit security with less than $15 
million allocated for intercity passenger rail security.
  So, while it is critical that we have acknowledged the need for 
increased rail security funding by passing authorizations, unless we 
invest the money, it doesn't really mean much. Unfortunately, this is 
an example that is repeated over and over.
  We know that the murder rate is up and that there is an officer 
shortage in communities throughout the Nation. Yet, we provide $0 
funding for the COPS hiring program and we've slashed funding for the 
Justice Assistance Grant.
  We know that our first responders can't talk because they don't have 
enough interoperable equipment. Yet, we have not forced the networks to 
turn over critical spectrum, and we vote down funding to help local 
agencies purchase equipment every year.
  We know that only 5 percent of cargo containers are screened, yet we 
do not invest in the personnel and equipment to upgrade our systems.
  We know that our critical infrastructure is vulnerable. Yet, we allow 
industry to decide what is best and provide scant resources to harden 
soft targets.
  The 9/11 Commission's report card issued last December stated bluntly 
that ``it is time we stop talking about setting priorities and actually 
set some.''
  This legislation will set some priorities. First, we provide the 
funding necessary to implement the recommendations of the 9/11 
Commission. Next, we take the commonsense steps to make our Nation 
safer. We make sure that law enforcement and first responders have the 
personnel, equipment, training they need, and are sufficiently 
coordinated to do the job by providing $1.15 billion per year for COPS 
grants; $160 million per year to hire 1,000 FBI agents; $200 million to 
hire and equip 1,000 rail police. $900 million for the Justice 
Assistance Grants; $1 billion per year for interoperable 
communications; $1 billion for Fire Act and SAFER grants.
  In addition, we could invest in new screening technologies to protect 
the American people by providing $100 million to improve airline 
screening checkpoints and $100 million for research and development on 
improving screening technologies. We also set aside funding to soften 
hard targets by setting aside $500 million per year for general 
infrastructure grants; $500 million per year for port security grants, 
and $200 million per year to harden our rail infrastructure. And the 
list goes on.
  I will conclude where I started. This is all about setting the right 
priorities for America. Instead of giving a tax cut to the richest 
Americans who don't need it, we should take some of it and dedicate it 
towards the security of all Americans. Our Nation's most fortunate are 
just as patriotic as the middle class. They are just as willing to 
sacrifice for the good of our Nation. The problem is that no one has 
asked them to sacrifice.
  The Homeland Security Trust Fund Act of 2006 will ask them to 
sacrifice for the good of the Nation, and I'm convinced that they will 
gladly help us out. And to those who say this won't work, I would 
remind them that the 1994 Crime Bill established the Violent Crime 
Reduction Trust Fund, specifically designated for public safety, that 
put more than 100,000 cops on the street, funded prevention programs 
and more prison beds to lock up violent offenders. It worked; violent 
crime went down every year for 8 years from the historic highs to the 
lowest levels in a generation.
  Our Nation is at its best when we all pull together and sacrifice. 
Our Nation's most fortunate citizens are just as patriotic as those in 
the middle class, and I am confident that they will be willing to forgo 
1 year of their tax cut for the greater good of securing the homeland. 
The bottom line is that with this legislation, we make clear what our 
national priorities should be, we set out how we will pay for them, and 
we ensure those who are asked to sacrifice, that money the government 
raises for security actually gets spent on security.
  This legislation is about re-ordering our homeland security 
priorities. I realize that it will not be enacted this year, but I will 
introduce this legislation again in the next Congress and I will push 
for its prompt passage and I hope to gain the support of my colleagues 
in this effort.
                                 ______
                                 
      By Mr. BUNNING:
  S. 3992. A bill to amend the Exchange Rates and International 
Economic Policy Coordination Act of 1998 to clarify the definition of 
manipulation with respect to currency, and for other purposes; read the 
first time.
  Mr. BUNNING. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3992

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``United States Fair Currency 
     Practices Act of 2006''.

     SEC. 2. FINDINGS.

       (a) Congress makes the following findings:
       (1) Since the Exchange Rates and International Economic 
     Policy Coordination Act of 1988 (22 U.S.C. 5302(3)) was 
     enacted the global economy has changed dramatically, with 
     increased capital account openness, a sharp increase in the 
     flow of funds internationally, and an ever growing number of 
     emerging market economies becoming systemically important to 
     the global flow of goods, services, and capital. In addition, 
     practices such as the maintenance of multiple currency 
     regimes have become rare.
       (2) Exchange rates among major trading nations are 
     occasionally manipulated or fundamentally misaligned due to 
     direct or indirect governmental intervention in the exchange 
     market.
       (3) A major focus of national economic policy should be a 
     market-driven exchange rate for the United States dollar at a 
     level consistent with a sustainable balance in the United 
     States current account.
       (4) While some degree of surpluses and deficits in payments 
     balances may be expected, particularly in response to 
     increasing economic globalization, large and growing 
     imbalances raise concerns of possible disruption to financial 
     markets. In part, such imbalances often reflect exchange rate 
     policies that foster fundamental misalignment of currencies.
       (5) Currencies in fundamental misalignment can seriously 
     impair the ability of international markets to adjust 
     appropriately to global capital and trade flows, threatening 
     trade flows and causing economic harm to the United States.
       (6) The effects of a fundamentally misaligned currency may 
     be so harmful that it

[[Page 20406]]

     is essential to correct the fundamental misalignment without 
     regard to the purpose of any policy that contributed to the 
     misalignment.
       (7) In the interests of facilitating the exchange of goods, 
     services, and capital among countries, sustaining sound 
     economic growth, and fostering financial and economic 
     stability, Article IV of the International Monetary Fund's 
     Articles of Agreement obligates each member of the 
     International Monetary Fund to avoid manipulating exchange 
     rates in order to prevent effective balance of payments 
     adjustment or to gain an unfair competitive advantage over 
     other members.
       (8) The failure of a government to acknowledge a 
     fundamental misalignment of its currency or to take steps to 
     correct such a fundamental misalignment, either through 
     inaction or mere token action, is a form of exchange rate 
     manipulation and is inconsistent with that government's 
     obligations under Article IV of the International Monetary 
     Fund's Articles of Agreement.

          TITLE I--INTERNATIONAL MONETARY AND FINANCIAL POLICY

     SEC. 101. AMENDMENTS TO DEFINITIONS.

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

     SEC. 102. BILATERAL NEGOTIATIONS.

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

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

     SEC. 103. REPORTING REQUIREMENTS.

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

     ``SEC. 3005. REPORTING REQUIREMENTS.

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

     SEC. 104. INTERNATIONAL FINANCIAL INSTITUTION GOVERNANCE 
                   ARRANGEMENTS.

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

     SEC. 105. NONMARKET ECONOMY STATUS.

       (a) In General.--Paragraph (18)(B)(vi) of section 771 of 
     the Tariff Act of 1930 (19 U.S.C.

[[Page 20407]]

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

      TITLE II--SUBSIDIES AND PRODUCT-SPECIFIC SAFEGUARD MECHANISM

     SEC. 201. FINDINGS.

       Congress makes the following findings:
       (1) The economy and national security of the United States 
     are critically dependent upon a vibrant manufacturing and 
     agricultural base.
       (2) The good health of United States manufacturing and 
     agriculture requires, among other things, unfettered access 
     to open markets abroad and fairly traded raw materials and 
     products in accord with the international legal principles 
     and agreements of the World Trade Organization and the 
     International Monetary Fund.
       (3) The International Monetary Fund, the G-8, and other 
     international organizations have repeatedly noted that 
     exchange-rate misalignment can cause imbalances in the 
     international trading system that could ultimately undercut 
     the stability of the system, but have taken no action to 
     address such misalignments and imbalances.
       (4) Since 1994, the People's Republic of China and other 
     countries have aggressively intervened in currency markets 
     and taken measures that have significantly misaligned the 
     values of their currencies against the United States dollar 
     and other currencies.
       (5) This policy by the People's Republic of China, for 
     example, has resulted in substantial undervaluation of the 
     renminbi, by up to 40 percent or more.
       (6) Evidence of this undervaluation can be found in the 
     large and growing annual trade surpluses of the People's 
     Republic of China; substantially expanding foreign direct 
     investment in China; and the rapidly increasing aggregate 
     amount of foreign currency reserves that are held by the 
     People's Republic of China.
       (7) Undervaluation by the People's Republic of China and by 
     other countries acts as both a subsidy for their exports and 
     as a nontariff barrier against imports into their 
     territories, to the serious detriment of United States 
     manufacturing and agriculture.
       (8)(A) As members of both the World Trade Organization and 
     the International Monetary Fund, the People's Republic of 
     China and other countries have assumed a series of 
     international legal obligations to eliminate all subsidies 
     for exports and to facilitate international trade by 
     fostering a monetary system that does not tend to produce 
     erratic disruptions, that does not prevent effective balance-
     of-payments adjustment, and that does not gain unfair 
     competitive advantage.
       (B) These obligations are most prominently set forth in 
     Articles VI, XV, and XVI of the GATT 1994 (as defined in 
     section 2(1)(B) of the Uruguay Round Agreements Act (19 
     U.S.C. 3501(1)(B)), in the Agreement on Subsidies and 
     Countervailing Measures (as defined in section 101(d)(12) of 
     the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(12)), and 
     in Articles IV and VIII of the International Monetary Fund's 
     Articles of Agreement.
       (9) Under the foregoing circumstances, it is consistent 
     with the international legal obligations of the People's 
     Republic of China and similarly situated countries and with 
     the corresponding international legal rights of the United 
     States to amend relevant United States trade laws to make 
     explicit that exchange-rate misalignment is actionable as a 
     countervailable export subsidy.

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

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

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

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

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

       (a) Market Disruption.--
       (1) In general.--Section 421(c) of the Trade Act of 1974 
     (19 U.S.C. 2451(c)) is amended by adding at the end the 
     following new paragraphs:
       ``(3) For purposes of this section, the term `under such 
     conditions' includes exchange-rate misalignment (as defined 
     in paragraph (4)).''.
       ``(4)(A) For purposes of this section, the term `exchange-
     rate misalignment' means a significant undervaluation of the 
     renminbi as a result of protracted large-scale intervention 
     by or at the direction of the Government of the People's 
     Republic of China in exchange markets. Such undervaluation 
     shall be found when the observed exchange rate for the 
     renminbi is significantly below the exchange rate that could 
     reasonably be expected for the renminbi absent the 
     intervention.
       ``(B) In determining whether exchange-rate misalignment is 
     occurring, the Commission in each case--
       ``(i) shall consider the People's Republic of China's--
       ``(I) bilateral balance-of-trade surplus or deficit with 
     the United States;
       ``(II) balance-of-trade surplus or deficit with its other 
     trading partners individually and in the aggregate;
       ``(III) foreign-direct investment in its territory;
       ``(IV) currency-specific and aggregate amounts of foreign 
     currency reserves; and
       ``(V) mechanisms employed to maintain its currency at an 
     undervalued exchange rate

[[Page 20408]]

     relative to another currency and, particularly, the nature, 
     duration, and monetary expenditures of those mechanisms;
       ``(ii) may consider such other economic factors as are 
     relevant; and
       ``(iii) shall measure the trade surpluses or deficits 
     described in subclauses (I) and (II) of clause (i) with 
     reference to the trade data reported by the United States and 
     the other trading partners of the People's Republic of China, 
     unless such trade data are not available or are demonstrably 
     inaccurate, in which case the trade data of the People's 
     Republic of China may be relied upon if shown to be 
     sufficiently accurate and trustworthy.
       ``(C) In calculating the extent of exchange-rate 
     misalignment, the Commission shall, in consultation with the 
     Treasury Department and the Federal Reserve, develop and 
     apply an objective methodology that is consistent with widely 
     recognized macroeconomic theory and shall rely upon 
     governmentally published and other publicly available 
     data.''.
       (b) Critical Circumstances.--Section 421(i)(1) of the Trade 
     Act of 1974 (19 U.S.C. 2451(i)(1)) is amended--
       (1) in subparagraph (A), by striking ``and'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (3) by inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) if the petition alleges and reasonably documents that 
     exchange-rate misalignment is occurring, such exchange-rate 
     misalignment shall be considered as a factor weighing in 
     favor of affirmative findings in subparagraphs (A) and 
     (B).''.
       (c) Standard for Presidential Action.--Section 421(k)(2) of 
     the Trade Act of 1974 (19 U.S.C. 2451(k)(2)) is amended by 
     adding at the end the following new sentence: ``If the 
     Commission makes an affirmative determination that exchange-
     rate misalignment is occurring, the President shall consider 
     such exchange-rate misalignment as a factor weighing in favor 
     of providing import relief in accordance with subsection 
     (a).''.
       (d) Modifications of Relief.--Section 421(n)(2) of the 
     Trade Act of 1974 (19 U.S.C. 2451(n)(2)) is amended by adding 
     at the end the following new sentence: ``If the Commission 
     affirmatively determines that exchange-rate misalignment is 
     occurring, the Commission and the President shall consider 
     such exchange-rate misalignment as a factor weighing in favor 
     of finding that continuation of relief is necessary to 
     prevent or remedy the market disruption at issue.''.
       (e) Extension of Action.--Section 421(o) of the Trade Act 
     of 1974 (19 U.S.C. 2451(o)) is amended--
       (1) in paragraph (1), by adding at the end the following 
     new sentence: ``If the Commission makes an affirmative 
     determination that exchange-rate misalignment is occurring, 
     the Commission shall consider such exchange-rate misalignment 
     as a factor weighing in favor of finding that an extension of 
     the period of relief is necessary to prevent or remedy the 
     market disruption at issue.''; and
       (2) in paragraph (4), by adding at the end the following 
     new sentence: ``If the Commission makes an affirmative 
     determination that exchange-rate misalignment is occurring, 
     the President shall consider such exchange-rate misalignment 
     as a factor weighing in favor of finding that an extension of 
     the period of relief is necessary to prevent or remedy the 
     market disruption at issue.''.
       (f) Effective Date.--The amendments made by this section 
     apply with respect to an investigation initiated under 
     chapter 2 of title IV of the Trade Act of 1974 before, on, or 
     after the date of the enactment of this Act.

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

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

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

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

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