January 21, 1997 CONGRESSIONAL RECORD — SENATE S379 the subsidy program will be so success- provide less health insurance coverage Health insurance plans offered through ful it will be used as a model for reform than larger businesses or the public the purchasing groups would be re- of the Medicaid program. Savings sector. About 73 percent of employees quired to meet basic, comprehensive through other health care reforms de- in the public sector are provided with standards with respect to benefits. tailed later in this statement will pro- health insurance; while 55.5 percent of Such benefits must include a variation vide the funds needed to implement the employees in the private sector are of benefits permitted among actuari- essential effort to take care of the covered. Both levels are far higher than ally equivalent plans to be developed health of our Nation’s children. businesses with fewer than 10 employ- by the National Association of Insur- I have also added a new title VIII to ees (25.8%); with 10 to 24 employees ance Commissioners. The standard plan establish a national fund for health re- (38.8%); or with 25 to 99 employees would consist of the following services search within the Department of Treas- (54.4%). when medically necessary or appro- ury. This fund will supplement the As I mentioned previously, title I of priate: First, Medical and surgical de- moneys appropriated for the National the bill gives federal subsidies to pro- vices; second, medical equipment; third Institutes of Health. It is to be on vide health care coverage for our Na- preventive services; and fourth, emer- budget, but the financing mechanism is tion’s children. Early estimates are gency transportation in frontier areas. not specified. This proposal was first that the total cost of these vouchers It is estimated that for businesses with developed by my distinguished col- will be approximately $24 billion over 5 fewer than 50 employees, voluntary leagues, Senators Mark Hatfield and years. This $24 billion is a worthwhile purchasing cooperatives such as those TOM HARKIN. Senator Hatfield, who re- investment because it will mean included in my legislation could cover tired after the 104th Congress, worked healthier children and substantially re- up to 10 million people who are cur- closely with me on medical research duced anxiety for millions of parents rently uninsured. funding issues. The concept of a na- who cannot afford to pay for needed My bill would also create individual tional fund for health research was in- medical care for their children. health insurance purchasing groups for corporated into the National Institutes Title II contains provisions to make individuals wishing to purchase health of Health Revitalization Act of 1996, it easier for small businesses to buy insurance on their own. In today’s mar- which was passed by the Senate, but health insurance for their workers by ket, such individuals often face a mar- not by the House. establishing voluntary purchasing ket where coverage options are not af- Responding to decreases in discre- groups. It also obligates employers to fordable. Purchasing groups will allow tionary funding, in the 104th Congress, offer, but not pay for, at least two small businesses and individuals to buy Senators Hatfield and HARKIN intro- health insurance plans that protect in- coverage by pooling together within duced S. 1251, the National Fund for dividual freedom of choice and that purchasing groups, and choose from Health Research Act. They wisely an- meet a standard minimum benefits among insurance plans that provide ticipated that we cannot continue to package. It extends COBRA benefits comprehensive benefits, with guaran- look solely to the appropriations proc- and coverage options to provide port- teed enrollment and renewability, and ess for the necessary resources to sus- ability and security of affordable cov- equal pricing through community rat- tain sufficient growth in biomedical re- erage between jobs. While it is not pos- ing adjusted by age and family size. search. The great advancements made sible to predict with certainty how Community rating will assure that no by the United States in biomedical re- many additional Americans will be one small business or individual will be search are part of what makes this covered as a result of the reforms in singularly priced out of being able to country among the best in the world title II, a reasonable expectation would buy comprehensive health coverage be- when it comes to medical care. Their be that these reforms will cover ap- cause of health status. With commu- idea is a sound one and ought to be proximately 10 million Americans. nity rating, a small group of individ- adopted. I look forward to working to- This estimate encompasses the provi- uals and businesses can join together, gether with Senator HARKIN to enact a sions included in title II which I will spread the risk, and have the same pur- biomedical research fund this Congress. discuss in further detail. chasing power that larger companies Taken together, I believe the reforms Specifically, title II extends the have today. proposed in this bill will both improve COBRA benefit option from 18 months For example, Pennsylvania has the the quality of health care delivery and to 24 months. COBRA refers to a meas- ninth lowest rate of uninsured in the will bring down the escalating costs of ure which was enacted in 1985 as part of Nation, with 90 percent of all Penn- health care in this country. These pro- the Consolidated Omnibus Budget Rec- sylvanians enrolled in some form of posals represent a blueprint which can onciliation Act [COBRA ’85] to allow health coverage. Lewin and Associates be modified, improved and expanded. In employees who leave their job, either found that one of the factors enabling total, I believe this bill can signifi- through a layoff or by choice, to con- Pennsylvania to achieve this low rate cantly reduce the number of uninsured tinue receiving their health care bene- of uninsured persons is that Pennsylva- Americans, improve the affordability fits by paying the full cost of such cov- nia’s Blue Cross-Blue Shield plans pro- of care, ensure the portability and se- erage. By extending this option, such vide guaranteed enrollment and renew- curity of coverage between jobs, and unemployed persons will have en- ability, an open enrollment period, yield cost savings of billions of dollars hanced coverage options. community rating, and coverage for to the Federal Government, which can In addition, options under COBRA persons with preexisting conditions. be used to cover the remaining unin- are expanded to include plans with My legislation seeks to enact reforms sured and underinsured Americans. lower premiums and higher deductibles to provide for more of these types of f of either $1,000 or $3,000. This provision practices. The purchasing groups, as is incorporated from legislation intro- developed and administered on a local INCREASING COVERAGE duced in the 103d Congress by Senator level, will provide small businesses and According to the U.S. Bureau of the PHIL GRAMM and will provide an extra all individuals with affordable health Census, in 1995, 224 million Americans cushion of coverage options for people coverage options. derived their health insurance cov- in transition. According to Senator Unique barriers to coverage exist in erage as follows: approximately 64 per- GRAMM, with these options, the typical both rural and urban medically under- cent from employer plans; 14.3 percent monthly premium paid for a family of served areas. Within my State of Penn- from Medicare and Medicaid; 4 percent four would drop by as much as 20 per- sylvania, such barriers result from a from other public sources; and about 7 cent when switching to a $1,000 deduct- lack of health care providers in rural percent from other private insurance. ible and as much as 52 percent when areas, and other problems associated However, 40.3 million people were not switching to a $3,000 deductible. with the lack of coverage for indigent covered by any type of health insur- With respect to the uninsured and populations living in inner cities. This ance. underinsured, my bill would permit in- bill improves access to health care Statistics from the Employment Ben- dividuals and families to purchase services for these populations by: First, efit Research Institute November 1996 guaranteed, comprehensive health cov- Expanding Public Health Service pro- show that small businesses generally erage through purchasing groups. grams and training more primary care S380 CONGRESSIONAL RECORD — SENATE January 21, 1997 providers to serve in such areas; sec- though our existing health care system estimated that between $1.1 billion and ond, increasing the utilization of non- suffers from very serious structural $2.5 billion per year could be saved if physician providers, including nurse problems, commonsense steps can be the number of low birth weight chil- practitioners, clinical nurse special- taken to head off the remaining prob- dren were reduced by 82,000 births. ists, and physician assistants, through lems before they reach crisis propor- We know that in most instances, pre- direct reimbursements under the Medi- tions. Title III of my bill includes three natal care is effective in preventing care and Medicaid Programs; and third, initiatives which will enhance primary low birth weight babies. Numerous increasing support for education and and preventive care services aimed at studies have demonstrated that low outreach. preventing disease and ill-health. birth weight that does not have a ge- Title II of my bill also includes an Each year about 7 percent, or 273,000, netic link is most often associated with important provision to give the self- of the approximately 3.9 million babies inadequate prenatal care or the lack of employed 100-percent deductibility of born in the United States are born with prenatal care. To improve pregnancy their health insurance premiums. The a low birth weight, multiplying their outcomes for women at risk of deliver- Kassebaum-Kennedy bill extended the risk of death and disability. Approxi- ing babies of low birth weight, title III deductibility of health insurance for mately 29,338 of those born die before of my bill authorizes the Secretary of the self-employed to 80 percent by 2006. their first birthday, but about 1,000 of Health and Human Services to award My bill would extend this to 100 per- those deaths are preventable. Although grants to States for Healthy Start cent in 2007. Under current law, all the infant mortality rate in the United projects to reduce infant mortality and other employers can deduct 100 percent States fell to an all-time low in 1989, an the incidence of low birth weight of the cost of health care insurance for increasing percentage of babies still births, as well as to improve the health their workers. It is unfair not to give are born of low birth weight. The Exec- and well-being of mothers and their the self-employed the same tax benefit utive Director of the National Commis- families, pregnant women and infants. as other employers receive. The self- sion To Prevent Infant Mortality put it The funds would be awarded to commu- employed are every bit in need of this this way: ‘‘More babies are being born nity-based consortia, made up of State benefit and we should be doing every- at risk and all we are doing is saving and local governments, the private sec- thing we can to support this important them with expensive technology.’’ tor, religious groups, community group which is the backbone of the It is a human tragedy for a child to health centers, and hospitals and medi- American economy. be born weighing 16 ounces with at- cal schools, whose goal would be to de- While I reiterate the difficulty of tendant problems which last a lifetime. velop and coordinate effective health making definitive conclusions regard- I first saw 1-pound babies in 1984 when care and social support services for ing the reforms put forth under this I was astounded to learn that Pitts- women and their babies. legislation and accomplishing univer- burgh, PA, had the highest infant mor- I initiated action that led to the cre- sal health coverage for all Americans, I tality rate of African-American babies ation of the Healthy Start Program in believe this is a promising starting of any city in the United States. I won- 1991, working with the Bush adminis- point. Admittedly, the figures are inex- dered how that could be true of Pitts- tration and Senator HARKIN. As chair- act, but by my rough calculations, po- burgh, which has such enormous medi- man of the Appropriations Subcommit- tentially 17.6 million of the 40.3 million cal resources. It was an amazing thing tee with jurisdiction over the Depart- uninsured will be able to obtain afford- for me to see a 1-pound baby, about as ment of Health and Human Services, I able health care coverage under my big as my hand. have worked with my colleagues to en- bill. I arrive at this figure by estimat- Beyond the human tragedy of a low sure the continued growth of this im- ing that at least 7.6 million children birth weight, there are serious finan- portant program. In 1991, we allocated will receive health insurance under the cial consequences which result. Al- $25 million for the development of 15 title I voucher system. In addition, 10 though low birth weight infants rep- demonstration projects. This number million will be able to purchase insur- resent only about 7 percent of all grew to 22 in 1994, and the Health Re- ance by encouraging individuals and births, the National Center for Health sources and Services Administration small employers to purchase insurance Statistics reports that in 1994, the ex- expects the number of projects to in- through voluntary purchasing coopera- penditures for their care totaled about crease again in 1997. For fiscal year tives. 57 percent of costs incurred for all 1997, we secured $96 million for the pro- I welcome any and all suggestions newborns. In addition, the Department gram, which is currently undergoing a that make sense within our current of Health and Human Services states formal evaluation by Mathematica constraints to increase coverage. I am that care for each premature baby Policy Research, Inc. However, pre- committed to enacting reforms this costs from $10,000 to $25,000 with a total liminary results from the projects year and would like to determine a national cost estimate of $2 billion a themselves suggest these programs time certain when Congress must re- year. Low birth weight children, those have been enormously successful. In visit this issue. We should act on these who weigh less than 5.5 pounds, ac- Pennsylvania, our Pittsburgh Healthy reforms and correct problems related count for 16 percent of all costs for ini- Start project estimates that infant to coverage where they still exist. tial hospitalization, rehospitalization, mortality has decreased 20 percent in COST SAVINGS and special services up to age 35. the overall project area as a result of It is anticipated that the increased The short- and long-term costs of this program. For those women in costs to employers electing to cover saving and caring for infants of low Pittsburgh who have taken advantage their employees as provided under title birth weight is staggering. A study is- of the case management offered by the II in my bill would be offset by the ad- sued by the Office of Technology As- program, infant mortality has been re- ministrative savings generated by de- sessment in 1988 concluded that $8 bil- duced by as much as 61 percent. Simi- velopment of the small employer pur- lion was expended in 1987 for the care larly, our Philadelphia project reports chasing groups. Such savings have been of 262,000 low birth weight infants in that infant mortality has been reduced estimated at levels as high as $9 billion excess of that which would have been by 25 percent. annually. In addition, by addressing spent on an equivalent number of ba- The second initiative under title III some of the areas within the health bies born of normal birth weight, involves the provision of comprehen- care system that have exacerbated averted by earlier or more frequent sive health education and prevention costs, significant savings can be prenatal care. If adequate prenatal care initiatives for our Nation’s children. achieved and then redirected toward di- had been provided, especially to women The Carnegie Foundation for the Ad- rect health care services. at-risk for delivering low birth weight vancement of Teaching recently con- While examining the issues that have babies, the U.S. health care system ducted a survey of teachers. More than contributed to our health care crisis, I could have saved between $14,000 and half of the respondents said that poor was struck by the fact that so much at- $30,000 per child in the first year in ad- nourishment among students is a seri- tention has been focused on treating dition to the projected savings over the ous problem at their schools; 60 percent symptoms and very little attention has lifetime of each child. The Department cited poor health as a serious problem. been given to the root causes. Al- of Health and Human Services has also Another study issued in 1992 by the January 21, 1997 CONGRESSIONAL RECORD — SENATE S381 Children’s Defense Fund reported that In recent years, we have also days of life would result in approxi- children deprived of basic health care strengthened funding for community mately $10 billion of savings in medical and nutrition are ill-prepared to learn. and migrant health centers, which pro- costs per year, and about $4.7 billion in Both studies indicated that poor health vide immunizations, health advice, and savings for Medicare alone. and social habits are carried into health professions training. For fiscal However, economic considerations adulthood and often passed on to the year 1997, over $800 million was pro- are not and should not be the primary next generation. vided for these centers, an increase of reasons for using advance directives. To interrupt this tragic cycle, our about $44 million over fiscal year 1996. They provide a means for patients to Nation must invest in proven preven- As chairman of the Select Committee exercise their autonomy over end-of- tive health education programs. My on Intelligence and Chairman of the life decisions. A study done at the legislation provides increased support Appropriations Subcommittee with ju- Thomas Jefferson University Medical to local educational agencies to de- risdiction over the Department of College in Philadelphia cited research velop and strengthen comprehensive Health and Human Services, I have which found that about 90 percent of health education programs, and to worked to transfer CIA imaging tech- the American population has expressed Head Start resource centers to support nology to the fight against breast can- interest in discussing advance direc- health education training programs for cer. Through the Office of Women’s tives, but only 8 to 15 percent of adults teachers and other day care workers. Health within the Department of have prepared a living will. My bill Title III further expands the author- Health and Human Services, I secured would provide information on an indi- ization of a variety of public health a $2 million contract in fiscal year 1996 vidual’s rights regarding living wills programs, such as breast and cervical for the University of Pennsylvania and and advanced directives, and would cancer prevention, childhood immuni- a consortium to perform the first clini- make it easier for people to have their zations, family planning, and commu- cal trials testing the use of intelligence wishes known and honored. In my view, nity health centers. These existing pro- community technology for breast can- no one has the right to decide for any- grams are designed to improve the pub- cer detection. For fiscal year 1997, an one else what constitutes appropriate lic health and prevent disease through additional $2 million was appropriated medical treatment. Encouraging the primary and secondary prevention ini- to continue the clinical trials. use of advance directives will ensure tiatives. It is essential that we invest Finally, I have been a strong sup- that patients are not needlessly and more resources in these programs now porter of funding for AIDS research, unlawfully treated against their will. if we are to make any substantial education, and prevention programs. In No health care provider would be per- progress in reducing the costs of acute fiscal year 1997, AIDS funding in- mitted to treat an adult contrary to care in this country. creased 14 percent, $392 million above the adult’s wishes as outlined in an ad- As chairman of the Appropriations the fiscal year 1996 level, for a total of vance directive. However, in no way Subcommittee with jurisdiction over $3.115 billion. Within this amount, $617 would the use of advance directives the Department of Health and Human million was allocated for prevention, condone assisted suicide or any affirm- Services, I have greatly encouraged the testing, and counseling at the CDC. ative act to end human life. development of prevention programs The proposed expansions in preven- Incentives to improve the supply of which are essential to keeping people tive health services included in title III generalist physicians and increase the healthy and lowering the cost of health of my bill are conservatively projected utilization of nonphysician providers, care in this country. In my view, no as- to save approximately $2.5 billion per such as nurse practitioners, clinical pect of health care policy is more im- year or $12.5 billion over 5 years. How- nurse specialists and physician assist- portant. Accordingly, my prevention ever, I believe the savings will be high- ants, through direct reimbursement efforts have been widespread. Specifi- er. Again, it is impossible to be certain under the Medicare and Medicaid Pro- cally, I joined my colleagues in efforts of such savings—only experience will grams are contained in title V of my to ensure that funding for the Centers tell. For example, how do you quantify bill. I believe these provisions will also for Disease Control and Prevention today the savings that will surely be yield substantial savings. A study of [CDC] increased $1.3 billion or 132 per- achieved tomorrow from future genera- the Canadian health system utilizing cent since 1989. Fiscal year 1997 funding tions of children that are truly edu- nurse practitioners projected savings of for the CDC totals $2.304 billion. We cated in a range of health-related sub- 10 to 15 percent of all medical costs. have also worked to elevate funding for jects including hygiene, nutrition, While our system is dramatically dif- CDC’s breast and cervical cancer early physical and emotional health, drug ferent from that of Canada, it may not detection program to $140 million in and alcohol abuse, and accident preven- be unreasonable to project annual sav- fiscal year 1997, a 40 percent increase in tion and safety? I have suggested these ings of 5 percent, or $55 billion, from an 2 years. In addition, I have supported projections, subject to future modifica- increased number of primary care pro- providing funding to CDC to improve tion, to give a generalized perspective viders in our system. Again, experience the detection and treatment of re- on the potential impact of this bill. will raise or lower this projection. As- emerging infectious diseases. Title IV of my bill would establish a suming these savings, based on an av- I have also supported programs at Federal standard and create uniform erage expenditure for health care of CDC which help children. CDC’s child- national forms concerning a patient’s $3,821 per person in 1995, it seems rea- hood immunization program seeks to right to decline medical treatment. sonable that we could cover over 10 eliminate preventable diseases through Nothing in my bill mandates the use of million uninsured persons with these immunization and to ensure that at uniform forms, rather, the purpose of savings. least 90 percent of 2 year olds are vac- this provision is to make it easier for Outcomes research, included in title cinated. The CDC also continues to individuals to make their own choices VI of my bill, is another area where we educate parents and care givers on the and determination regarding their can achieve considerable long term importance of immunization for chil- treatment during this vulnerable and health care savings while also improv- dren under 2 years. Along with my col- highly personal time. Studies have also ing the quality of care. According to leagues on the Appropriations Commit- indicated that advance directives do most outcomes management experts, it tee, I have helped to ensure that fund- not increase health care costs. Accord- is estimated that about 25 to 30 percent ing for this important program in- ing to recent data from the Journal of of medical care is inappropriate or un- creased by $172 million, or 58 percent. the American Medical Association au- necessary. Dr. Marcia Angell, former The CDC’s lead poisoning prevention thored by Ezekiel Emmanuel of the editor-in-chief of the New England program annually identifies about Center for Outcomes and Policy Re- Journal of Medicine, also stated that 20 50,000 children with elevated blood lev- search of the Dana Farber Cancer Insti- to 30 percent of health care procedures els and places those children under tute, end-of-life costs account for about are either inappropriate, ineffective or medical management. The program 10 percent of total health care spending unnecessary. In 1995, health care ex- prevents children’s blood levels from and 27 percent of total Medicare ex- penditures totaled $1.1 trillion annu- reaching dangerous levels and is cur- penditures. It has been projected that a ally. A cost of illness model published rently funded at over $38 million. 10 percent savings made in the final in the October 1995 issue of Archives of S382 CONGRESSIONAL RECORD — SENATE January 21, 1997 Internal Medicine estimated that $76.6 uniform cost and quality data for all term care insurance that reduce the billion annually is for drug-related hospitals and physicians in the Com- bias that currently favors institutional morbidity and mortality in the ambu- monwealth. Consumers, businesses, care over community and home-based latory setting. It is not unreasonable labor, insurance companies, health alternatives. to anticipate that with the implemen- maintenance organizations, and hos- While precision is again impossible, tation of medical practice guidelines pitals have utilized this important in- it is reasonable to project that my pro- and enhanced appropriateness of care, formation. Specifically, hospitals have posal could achieve a net annual sav- 10 to 20 percent of costs could be elimi- used this information to become more ings of between $94 and $105 billion. I nated, resulting in savings between $8 competitive in the marketplace; busi- arrive at this sum by totaling the pro- and $15 billion in drug-related morbid- nesses and labor have used this data to jected savings of $101 to $112 billion an- ity and mortality alone. Ideally, if all lower their health care expenditures; nually—$9 billion in small employer inappropriate care could be removed, health plans have used this informa- market reforms coupled with employer between $110 and $220 billion in savings tion when contracting with providers; purchasing groups; $2.5 billion for pre- could be realized annually for all and consumers have used this informa- ventive health services; $22 to $33 bil- health care expenditures. A reasonable tion to compare costs and outcomes of lion for reducing inappropriate care estimate is that with the implementa- health care providers and procedures. through outcomes research; $10 billion tion of medical practice guidelines, we The States have not yet produced from advanced directives; $55 billion may achieve savings of 20 to 30 percent any figures on statewide savings re- from increasing primary care provid- of the lower range end—$110 billion— sulting from the implementation of ers; and $2.9 billion by reducing admin- which amounts to $22 to $33 billion in health information systems, however, istrative costs and netting this against savings annually. there are many examples of savings ex- the $2.8 billion for long term care; and A well-funded program for outcomes perienced by users of these systems $4.8 billion for increasing childrens’ research is therefore essential, and is across the country. For example, the coverage. I ask unanimous consent supported by Dr. C. Everett Koop, Pennsylvania Health Care Cost Con- that a list of anticipated savings and former Surgeon General of the United tainment Council [PHC4] has been uti- costs associated with the bill be in- States. Title V of my bill would estab- lized by the Hershey Foods Corp., cluded in the RECORD. lish such a program by imposing a one- which provides health insurance cov- Although there are no precise savings estimates for each of these areas, I pro- tenth of one cent surcharge on all erage for its employees, their depend- pose this bill as a starting point to ad- health insurance premiums. Based on ents, and retirees, totaling roughly dress the remaining problems with our the Health Care Financing Administra- 17,000 persons. Hershey has offered a health care system. Experience will re- tion’s 1995 health spending review, pri- flexible benefits package since 1988, but quire modification of these projections, vate health insurance premiums to- saw health care expenditures increase and I am prepared to work with my taled $325.4 billion. As provided in my in the late 1980’s and early 1990’s. The colleagues to develop implementing bill, a surcharge would generate $325.4 company used the PHC4 data as part of legislation and to press for further ac- million for an outcomes research fund, its health care plan reengineering ef- tion in the important area of health in addition to the $144 million appro- forts and created its own Health Main- care reform. priated in this area for fiscal year 1997. tenance Organization [HMO] called It is also vital to reduce the adminis- HealthStyles as another alternative to CONCLUSION trative costs incurred by our health the four traditional HMO’s already of- The provisions which I have outlined care system. According to the Health fered to employees and retirees. The today contain the framework for pro- Care Financing Administration, in PHC4 data were used to help Hershey viding affordable health care for all Americans. I am opposed to rationing 1994, about 6.2 percent of our total na- define its specialized hospital network health care. I do not want rationing for tional health care expenditures were within this new HMO. Hershey states myself, for my family, or for America. for administrative costs—over $58 bil- that the company has seen costs de- The question is whether we have the lion annually. We can reasonably ex- cline for some of the services provided essential resources—doctors and other pect to reduce administrative costs by by the other HMO plans offered to its health care providers, hospitals, and 5 percent, or $2.9 billion annually. employees. This is just one example of pharmaceutical products—to provide While the development of a national how health data information can be medical care for all Americans. I am electronic claims system to handle the used wisely to inform the public and confident that we do. The issue is how billions of dollars in claims is complex consumers and allow the market to to pay for and deliver such health care. and will take time to implement fully, control costs. There are many other ex- In my judgment, we should not scrap, I believe it is an essential component amples of savings being achieved, and I but rather we should build on our cur- in the operation of a more efficient believe that if these systems were im- rent health delivery system. We do not health care system, and for achieving plemented in every State, the savings need the overwhelming bureaucracy the necessary savings to provide insur- could be substantial. that President Clinton and other ance for the remaining uninsured Home nursing care is another signifi- Democratic leaders proposed in 1993 to Americans. Title VI of my bill is in- cant issue which must be addressed. accomplish this. I believe we can pro- tended to improve consumer access to The cost of this care is exorbitant. vide care for the 40.3 million Americans health care information. True cost con- Title VII of my bill therefore would who are now not covered and reduce tainment and competition cannot provide a tax credit for premiums paid health care costs for those who are cov- occur if purchasers of health care serv- to purchase private long-term care in- ered within the currently growing $1.1 ices do not have the information avail- surance. It also proposes home and trillion in health care spending. able to them to compare cost and qual- community-based care benefits as less With the savings projected in this ity. costly alternatives to institutional bill, I believe it is possible to provide Title VI also authorizes the Sec- care. The Joint Tax Committee esti- access to comprehensive affordable retary of Health and Human Services mates that the cost of this long term health care for 17.6 million Americans. to award grants to States to establish care tax credit to the Treasury would This bill is a significant next step in or improve a health care data informa- be approximately $14 billion over 5 obtaining that objective. It is obvious tion system. Currently, 38 States have years. Other tax incentives and reforms that reforming our health care system a mandate to establish such a system, provided in my bill to make long term will not be achieved immediately or and 23 States are in various stages of care insurance more affordable include: easily, but the time has come for con- implementation. In my own State, the First, allowing employees to select certed action in this arena. Pennsylvania Health Care Cost Con- long-term care insurance as part of a I understand that there are several tainment Council has received national cafeteria plan and allowing employers controversial issues presented in this recognition for the work it has done to to deduct this expense; second, exclud- bill and I am open to suggestions on help control health care costs through ing from income tax the life insurance possible modifications. I urge the con- the promotion of competition in the savings used to pay for long term care; gressional leadership, including the ap- collection, analysis and distribution of and third, setting standards for long propriate committee chairmen, to January 21, 1997 CONGRESSIONAL RECORD — SENATE S383 move this legislation and other health ing a family of four 52 percent in monthly searchers, consumers, States, etc. Such data care bills forward promptly. premiums. has enabled hospitals to become more com- I ask unanimous consent that a sum- Title III: Primary and Preventive Care petitive, businesses to save health care dol- Services: Authorizes the Secretary of Health mary and other material be printed in lars, and consumers to make informed and Human Services to provide grants to choices regarding their care. the RECORD. States for projects (healthy start initiatives) Title VII: Tax Incentives for Purchase of There being no objection, the mate- to reduce infant mortality and low weight Qualified Long-Term Care Insurance: In- rial was ordered to be printed in the births and to improve the health and well- creases access to long-term care by: (1) es- RECORD, as follows: being of mothers and their families, preg- tablishing a tax credit for amounts paid to- HEALTH CARE ASSURANCE ACT OF 1997 nant women and infants. Title III also would ward long-term care services of family mem- provide assistance through a grant program SUMMARY OF THE BILL bers; (2) excluding life insurance savings used to local education agencies and pre-school to pay for long-term care from income tax; Title I: Health Care Coverage for Children: programs to provide comprehensive health Title I ensures health care coverage for all (3) allowing employees to select long-term education. In addition, Title III increases au- care insurance as part of a cafeteria plan and eligible children in the United States under thorization of several existing preventive the age of 18. States complying with rules allowing employers to deduct this expense; health programs such as, breast and cervical (4) setting standards that require long-term approved by the Secretary shall receive fed- cancer prevention, childhood immunizations, eral funds to provide vouchers to families care to eliminate the current bias that fa- and community health centers. In addition, vors institutional care over community and with eligible children. This will enable the Title II reauthorizes the Adolescent Family states to enroll children in health plans that home-based alternatives. Life program (Title XX) for the first time Title VIII: National Fund for Health Re- provide coverage for preventive, primary since 1984. It has been funded annually in care, and acute care services. Payments to search: Authorizes the establishment of a Labor, Health and Human Services and Edu- National Fund for Health Research to sup- states will be calculated based upon the av- cation appropriations, but without author- erage annual cost of enrollment in a health plement biomedical research through the ization or reform. This program provides National Institutes of Health. Funds will be care plan providing those types of services to demonstration grants and contracts for ini- children in the state. Children in families distributed to each of the member institutes tiatives focusing directly on issue of absti- and centers in the same proportion as the with a combined income of 185% of poverty nence education. level ($28,860 for a family of four) and not eli- amount of appropriations they receive for Title IV: Patient’s Right to Decline Medi- the fiscal year. gible for Medicaid will receive a full subsidy cal Treatment: Improves the effectiveness for enrollment in health plans, and children and portability of advance directives by who are in families with incomes up to 235% NET ANNUAL HEALTH CARE SYSTEM SAVINGS FROM THE strengthening the federal law regarding pa- HEALTH CARE ASSURANCE ACT OF 1997 of poverty level ($36,660 for a family of four) tient self-determination and establishing will receive a partial subsidy reduced on a uniform federal forms with regard to self-de- [In billions of dollars] sliding scale based on poverty level. States termination. will have the flexibility to design and imple- Annual Annual Title V: Primary and Preventive Care Pro- Bill title savings cost ment their programs as they see fit. viders: Utilizes non-physician providers such Title II: Health Care Insurance Coverage: as nurse practitioners, physician assistants, I—Increase health insurance coverage for children ...... (4.8) Tax Equity for the Self-Employed: Provides II—Small businesses group purchasing ...... 9.0 and clinical nurse specialists by providing III—Preventive care services ...... 2.5 self-employed individuals and their families direct reimbursement without regard to the IV—Advanced directives ...... 10 100 percent tax deductibility for the cost of setting where services are provided through V—Increase use of non-physician providers ...... 55 health insurance coverage beginning in 2007. VI—Outcomes research ...... 33 the Medicare and Medicaid programs. Title V —national electronic claims system ...... 2.9 Under current law, beginning in 1997, self- also seeks to encourage students early on in VII—Long term care ...... (2.8) employed persons may deduct 40 percent of their medical training to pursue a career in Net Annual Total Savings ...... 104. cost; 45 percent in 1998 through 2002; 50 per- primary care and it provides assistance to cent in 2003; 60 percent in 2004; 70 percent in medical training programs to recruit such 2005; and 80 percent in 2006 and thereafter. [From the Pittsburgh Post Gazette, Oct. 12, students. 1996] However, all other employers may deduct 100 Title VI: Cost Containment: Cost contain- percent of such costs. Title II corrects this ment provisions include: Outcomes Re- RAY ATTACKS NEW SPECTER BRAIN TUMOR inequity for the self-employed, 3.9 million of search: Expands funding for outcomes re- (By Steve Twedt) which are currently uninsured. search necessary for the development of U.S. Sen. Arlen Specter greeted well-wish- Small Employer and Individual Purchasing medical practice guidelines and increasing Groups: Establishes voluntary small em- ers in spirited fashion yesterday, hours after consumers’ access to information in order to undergoing a specialized radiation treatment ployer and individual purchasing groups de- reduce the delivery of unnecessary and over- signed to provide affordable, comprehensive at the University of Pittsburgh Medical Cen- priced care. ter to stop the regrowth of a benign brain health coverage options for such employers, New Drug Clinical Trials Program: Author- tumor. their employees, and other uninsured and izes a program at the National Institutes of And, after answering reporters’ questions underinsured individuals and families. Health to expand support for clinical trials at a hastily scheduled press conference, Health plans offering coverage through such on promising new drugs and disease treat- Specter, his wife, Joan, and son, Shanin, left groups will: (1) provide a standard health ments with priority given to the most costly the hospital, declining his doctor’s sugges- benefits package; (2) adjust community rated diseases impacting the greatest number of tion that he stay overnight. premiums by age and family size in order to people. spread risk and provide price equity to all; National Health Insurance Data and ‘‘I feel fine,’’ he assured everyone. ‘‘I’ve and (3) meet certain other guidelines involv- Claims System: Authorizes the development had a tougher time when I’ve gone to the ing marketing practices. of a National Health Insurance Data System dentist.’’’ Standard Benefits Package: The standard to curtail the escalating costs associated Specter, 66, revealed yesterday that, dur- package of benefits would include a vari- with paperwork and bureaucracy. The Sec- ing a routine magnetic resonance imaging ation of benefits permitted among actuari- retary of Health and Human Services is di- scan in June, doctors discovered that a ally equivalent plans developed through the rected to create a system to centralize tumor surgically removed three years earlier National Association of Insurance Commis- health insurance and health outcomes infor- had reappeared at the left front part of his sioners (NAIC). The standard plan will con- mation incorporating effective privacy pro- brain. He said he never felt any symptoms. sist of the following services when medically tections. Standardizing such information The tumor was one-tenth the size of the necessary or appropriate: (1) medical and will reduce the time and expense involved in one found in 1993 and, because it grew slowly, surgical services; (2) medical equipment; (3) processing paperwork, increase efficiency, Specter waited until the end of the congres- preventive services; and (4) emergency trans- and reduce costs. sional session to seek treatment. portation in frontier areas. Health Care Cost Containment and Quality He said he came to UPMC because of the COBRA Portability Reform: For those per- Information Project: Authorizes the Sec- experience and reputation of Dr. L. Dade sons who are uninsured between jobs and for retary of Health and Human Services to Lunsford’s gamma knife program, the first of insured persons who fear losing coverage award grants to States to establish a health its kind in North America when it began in should they lose their jobs, Title II reforms care cost and quality information system or 1987. The program has treated more than the existing COBRA law by: (1) extending to to improve an existing system. Currently 39 2,000 patients during the past nine years. 24 months the minimum time period in States have State mandates to establish an The gamma knife is used to treat tumors which COBRA covers individuals through information system, and of those 39, approxi- and malformed blood vessels in sensitive their former employers’ plans; and (2) ex- mately 20 States have information systems areas of the brain. Without making a sur- panding coverage options to include plans in operation. Information such as hospital gical cut, the machine precisely shoots 201 with a lower premium and a $1,000 deduct- charge data and patient procedure outcomes beams of cobalt-60 photon radiation at the ible—saving a typical family of four 20 per- data, which the State agency or council col- tumor while the patient lies on a bed with a cent in monthly premiums—and plans with a lects is used by businesses, labor, health special helmet covering his head. Only a lower premium and a $3,000 deductible—sav- maintenance organizations, hospitals, re- local anesthetic is used. S384 CONGRESSIONAL RECORD — SENATE January 21, 1997 Specter’s procedure took less than four would be more than made up by preventing ment, pharmaceuticals, etc. to provide for hours. When the Philadelphia Republican more serious illness and higher costs later. all our people. My pending legislation pro- met with reporters a few hours later, the While my June 1993 operation was per- vides a plan to do that with the current $1 only evidence of his treatment was a faint formed by one of the finest surgeons at one trillion expenditure. red mark on each side of his forehead from of the best hospitals, I was among the ap- Informed, aggressive patients can do much the pins used to hold his head still. proximately 15 percent where tiny calls at to help themselves. Lunsford, who is chief of neurosurgery at the margin apparently caused a small re- UPMC, said he saw no evidence that the growth. The general recommendation was By Mr. MCCAIN (for himself, Mr. tumor in Specter’s brain, called a menin- surgery. FEINGOLD, Mr. THOMPSON, Mr. gioma, was malignant, nor any indication of A minority of doctors suggested consider- WELLSTONE, Mr. GRAHAM, Mr. other tumors. ation of a relatively new procedure known as KERREY, Mr. DODD, Mr. KERRY, On the basis of his experience with other the Gamma Knife. Since there was no ur- Mr. BINGAMAN, Mr. GLENN, Mrs. patients, Lunsford said, there’s a 98 percent gency. I took some time to study the alter- chance the gamma knife will accomplish its natives. MURRAY, Mr. KOHL, Mr. WYDEN, goal—halting the tumor’s growth. Nearly Most doctors, even some with extensive ex- Ms. MOSELEY-BRAUN, Mr. REID, half the time, the tumors will even shrink, perience with the Gamma Knife, insisted on Mr. FORD, Mr. LEAHY, Mr. he said. conventional surgery. Why? (1) Because that CLELAND, Mr. JOHNSON, and Mr. Patients undergoing $12,000 gamma knife was the traditional approach; (2) because DURBIN): treatment usually do not experience nausea there was more long-term follow-up data on S. 25. A bill to reform the financing or headaches, and typically leave the hos- surgery even though successful Gamma of Federal elections; to the Committee pital within 24 hours. Knife procedures were on record for more on Rules and Administration. than 20 years; and (8) because the tumor was [From the East Penn Press, Nov. 4–10, 1996] in a good location for surgery. THE BIPARTISAN CAMPAIGN FINANCE BILL OF 1997 SOMETIMES PATIENTS SHOULD BE IMPATIENT Somehow the Gamma Knife, it was argued, should be reserved for locations the sur- Mr. MCCAIN. Mr. President, I am I can personally report on the miracles of geon’s knife could not reach. But my tumor pleased to be joined by Senators modern medicine. was also in a good spot for radiation. FEINGOLD, THOMPSON, and WELLSTONE Three years ago, an MRI detected a benign My inquiries among doctors in the United tumor (meningioma) at the outer edge of my in introducing the Bipartisan Cam- States and Sweden (where the Gamma Knife paign Finance Reform bill of 1997. This brain. It was removed by conventional sur- was invented) disclosed almost universal gery with five days of hospitalization and agreement that the Gamma Knife, if unsuc- measure is similar to last year’s bill five more weeks of recuperation. cessful, would not make the tumor more dif- that we introduced on the same sub- When a small regrowth was detected by a ficult to treat. Later surgery could always be ject. I will not lay out all the details of follow-up MRI this June, it was treated with utilized. The non-invasive Gamma Knife the bill at this time, but will submit high powered radiation from the ‘‘Gamma eliminated the risk of anesthesia and infec- for the record a summary of our bill at Knife.’’ I entered the hospital in the morning tion from surgery. and left the same afternoon, ready to resume a later date. With a high success rate from the world- Passage of campaign finance reform my regular schedule. Like the MRI, the wide experience of 40,000 Gamma Knife pro- Gamma Knife is a recent invention, coming is necessary if we are to curb the cedures and 5,000 meningioma like my own, public’s growing cynicism for politics into widespread use in the past decade. it was hard to understand why it was not My own experience as a patient has given used more. I found Dr. Dade Lunsford at the and Congress in particular. We can no me deeper insights into the American health University of Pittsburgh Presbyterian Hos- longer wait to address this issue. care system beyond the U.S. Senate hearings pital had to most experience in the United I am under no illusions that this will where I preside as chairman of the Appro- States with the Gamma Knife. be an easy fight. No other issue is felt priations Subcommittee with jurisdiction Since 1987, his team had used the procedure more personally by Members of this over health and human services. I have 2,100 times. Only one of his 270 memingioma body. No other issue stirs the emotions learned: (1) our health care system, the best patients had required later surgery. Dr. in the world, is worth every cent we pay for of Members of the Senate more. But we Lunsford estimated the overall success rate were sent here to make tough decisions it; (2) patients sometimes have to press their at 98 percent. own cases beyond the doctors’ standard ad- So I checked into the hospital at 6:15 one and we must address this subject. vice; (3) greater flexibility must be provided morning, had a brace attached to my head The public demands that we achieve on testing and treatment; and (4) our system and took another MRI. All I required was three goals: limit the role of money in has the resources to treat the 40 million local anesthesia before pins were pressed to politics, make the playing field more Americans not now covered, but we must my head to make the brace secure. level between challengers and incum- find the way to pay for it. I then watched the computer calculate how bents, and to pass a legislative initia- Health care in America costs $1 trillion out much radiation should be applied to the of our $7 trillion economy. The Senate and tive that will become law. tumor and its margins as shown on the MRI To pass a bill will require principled House Subcommittees on Health have taken scan. the lead to raise funding for medical re- At about 9:30 a.m., my head was inserted compromise and a great deal of work. I search for the National Institutes of Health. into a 500 pound helmet with 201 holes which want the members of my party to know Notwithstanding budget cuts generally, we directed cobalt beams from all directions to that I am willing to work with you to added $820 million this year to bring the focus on the meningioma. Each beam was address your concerns regarding this total research budget to $12.7 billion. relatively minute, but the confluence was legislation. I want to let my friends For that investment, we have seen dra- high powered. know on the other side of the aisle that matic breakthroughs in gene therapy and ad- There were seven bombardments of radi- the offer also stands for them. The co- vances in treatment for heart disease, can- ation for three minutes or less. In between, cer, AIDS, diabetes, Alzheimers, etc. Scan- my position was altered with one change of sponsors for this bill are willing to ne- ning devices such as satellite imaging used the helmet. gotiate technical aspects of the bill. by the CIA are now applied to detect breast At about 10:50 a.m., the radiation was com- The three principals I just outlined, cancer. Complex computerization assists pleted and a head compress was applied for however, are not negotiable. MRIs to define the scope of treatment. two hours. After lunch and a brief conversa- Twenty-five years after Watergate, It isn’t enough to have such machines. We tion with Dr. Lunsford, we briefed the news the electoral system is out of control. have to use them more extensively. media. I left the hospital in mid-afternoon to Our elections are awash in money In the spring of 1993, I complained to many spend the night in a local hotel and then re- which is flowing into the system at doctors about a tightness in my collar and sume my schedule the next day. light pains running up the sides of my head. Now, five days later, I feel fine. I am back record levels. Some public interest All tests proved negative. The symptoms on the squash court. I am back to my 14-hour groups estimate that when all is said persisted. days traveling across Pennsylvania. and done, that nearly $1 billion will I asked for an MRI scan. The doctor said it An MRI will be taken in six months. I have have been spent during this last elec- wasn’t indicated. I insisted. I got it. The MRI some apprehension as to how it will all work tion cycle. Something must be done. showed a benign tumor the size of a golf ball out, but so far, so good. I feel very lucky! Do we have the perfect solution? No. between my brain and skull. Nothing is more important than a person’s I do not know if a perfect solution even While MRIs are expensive, those costs can health. We have done a great job in the Unit- exists. But our bill, the McCain- be reduced by around-the-clock use of the ed States in producing the greatest health machine. The marginal cost of operating it care system in the world. I am aware that it Feingold-Thompson bill is a good first from midnight to 8 a.m. are small. is better for some, like myself, than for oth- step toward reform. I hope that soon The inconvenience to the patient is worth ers. I am convinced that America has the we will be on the floor debating this it. The extra cost to insurance companies doctors, nurses, hospitals, medical equip- measure. I look forward to working January 21, 1997 CONGRESSIONAL RECORD — SENATE S385 with all my colleagues as we move for- primarily on what I believe are the two lowest unit rate—our bill would cut the ward. It is only in a bipartisan manner, cornerstones of reform. The first cor- costs of television advertising for eligi- putting parochial interests aside, that nerstone is the creation of a voluntary ble candidates almost in half. we will be able to do the people’s busi- system that offers qualified candidates That, Mr. President, is the first foun- ness—that we will pass meaningful an opportunity to participate in the dation of meaningful reform, creating campaign finance reform. electoral process without being com- a voluntary system—purely vol- Mr. FEINGOLD. I rise today to join pelled to raise and spend outrageous untary—that provides candidates who with my colleague from Arizona [Mr. sums of money. agree to limit their campaign spending MCCAIN] in introducing the Bipartisan This voluntary system merely says with the means to convey their ideas Campaign Reform Act. to candidates that if you agree to fol- and message to the voters and also sig- I want to acknowledge the Demo- low a set of ground rules, we will pro- nificantly reduce their campaign costs, cratic and Republican Senators who vide you with the tools that will not therefore reducing the need to raise have agreed to join myself and the Sen- only reduce the high costs associated millions and millions of dollars. ator from Arizona [Mr. MCCAIN] as with campaigning, but at the same The second foundation of reform is to original co-sponsors in introducing this time enhance your ability to suffi- ban so-called ‘‘soft money,’’ those con- historic legislation. Those co-sponsors ciently convey your message to the tributions to the national parties from include the Senator from Tennessee voters of your State. corporations, labor unions and wealthy [Mr. THOMPSON], the Senator from Min- What are those ground rules and ben- individuals that are unlimited and un- nesota [Mr. WELLSTONE], the Senator efits, Mr. President. regulated by federal election law and from Florida [Mr. GRAHAM], the Sen- First, candidates who elect to volun- yet are funneled into federal cam- ator from Connecticut [Mr. DODD], the tarily participate in the system must paigns around the country. Senator from Nebraska [Mr. KERREY], agree to limit the overall amount of It was soft money, Mr. President, the Senator from Massachusetts [Mr. money they spend on their campaigns. that garnered so much outrage in the KERRY], the Senator from New Mexico This spending cap is based on the vot- last election. To illustrate how expan- sive of a loophole soft money has be- [Mr. BINGAMAN], the Senator from ing-age population in each State. For come, consider how much of this un- Washington [Mrs. MURRAY], the Sen- example, in my State of Wisconsin the regulated money the national parties ator from Wisconsin [Mr. KOHL], the primary spending limit would be about have raised over the last two election Senator from Oregon [Mr. WYDEN], the $1 million while the general election cycles in which we had a presidential Senator from Illinois [Ms. MOSELEY- cap would be about $1.5 million. In a election. In 1992, the Republican Na- BRAUN], the Senator from Kentucky larger State such as New York, the pri- tional Committee raised $50 million in [Mr. FORD], the Senator from Vermont mary limit would be about $2.7 million [Mr. LEAHY], the Senator from Nevada soft money while the Democratic Na- while the general election limit would [Mr. REID], the Senator from Georgia tional Committee raised $36 million. In be about $4 million. 1996, the RNC raised $141 million while [Mr. CLELAND], the Senator from South The second rule candidates must fol- the DNC raised $122 million. Overall, Dakota [Mr. JOHNSON] and the Senator low is to limit how much of their per- soft money contributions to the two from Illinois [Mr. DURBIN]. sonal wealth they contribute to their I think it is clear Mr. President, that parties went from $86 million in 1992 to campaigns. Again, this would be based the few remaining pillars holding up $263 million in 1996. That is a stagger- on the size of each State. In Wisconsin, our crumbling election system finally ing increase. collapsed. According to the latest fig- it would be about $150,000 and in no In the wake of the countless media ures provided by the Federal Election State would it be higher than $250,000. reports documenting this abuse, Amer- Finally, candidates must agree to Commission, congressional candidates icans were left wondering why an indi- raise 60 percent of their contributions spent a total of $742 million in the 1996 vidual who is limited to contributing elections, a noticeable increase over from individuals within their home $1,000 to a federal candidate by federal the 1994 levels despite the absence of a States. This rule is grounded in our be- election law is somehow able to con- single Senate contest in any of the lief that anyone wishing to receive the tribute $100,000 or $1 million to the largest States including California, benefits of the bill should be able to Democratic or Republican National New York, Florida, Pennsylvania, or demonstrate a strong base of support Committees. They want to understand Ohio. And that $742 million figure does from the people they intend to rep- why labor unions and corporations, not even include the record amounts of resent. Moreover, candidates and of- which are prohibited by law from using so-called ‘‘soft money’’ contributions ficeholders will be compelled to focus their treasury funds to make contribu- raised and spent by the national politi- their campaign and fundraising activi- tions or expenditures to advocate for or cal parties in the last election cycle. ties on the people who matter most against a federal candidate, are able to Every campaign year we are hit with —the voters back home. funnel millions and millions of their these astonishing spending figures and If candidates elect to participate in treasury dollars directly into the two every year we acknowledge that a new the system and follow these simple national parties and indirectly into record has been set. And just when the ground rules, they are entitled to cer- various House and Senate elections. spending and abuses seem like they tain benefits. Clearly, a ban on soft money contribu- cannot get any worse, they do. Last The first benefit is a postage dis- tions to the political parties must be a November, our campaign finance sys- count. Eligible candidates would be part of a serious reform proposal. tem lurched out of control, filling the given a special postage rate, currently The Supreme Court has spoken clear- headlines and airwaves with charges only available to non-profit organiza- ly on the constitutionality of limiting and countercharges about which can- tions and political parties, for a num- campaign contributions from individ- didates and parties were abusing our ber of mailings equal to two times the uals and organizations. They have laws and loopholes the worst. Another voting-age population of the can- upheld the statutes barring corporate cadre of millionaires spent vast sums didate’s State. and labor union direct contributions. of personal wealth on their campaigns, Second, the bill provides each eligi- They have upheld the statute limiting 94 percent of House and Senate chal- ble candidate with up to 30 minutes of individuals to contributing $1,000 to lengers lost their election bids, and the free television advertising time from federal candidates per election and smallest percentage of Americans went the broadcast stations in the can- $20,000 to national parties per year. to the ballot box in 72 years. didate’s State and any adjoining And yet the soft money loophole has Coupled with the continued need to States. allowed interested parties to blow reduce the Federal budget deficit, Third, and most importantly, the bill these limits away, leaving the average there may be no more fundamentally offers eligible candidates a 50-percent citizen who wishes to contribute $25 to important issue than the need to pass discount off of the lowest unit rate for their local congressman wondering just meaningful reform of our campaign fi- their television advertising 60 days be- how much of a voice they have in the nance system. fore their general election and 30 days electoral process. The bill we are introducing today has before the primary. Current law merely The McCain-Feingold proposal sim- several components, but is centered provides Federal candidates with the ply bans all soft money contributions S386 CONGRESSIONAL RECORD — SENATE January 21, 1997 to the national parties. Individuals can activities under the guise that there is their spending and has been targeted still contribute to the national parties, an absence of express advocacy. Cur- by such an expenditure. This will give but they will have to abide by the cur- rent FEC regulations defining express candidates advance notice that they rent law $20,000 ‘‘hard money’’ limit. advocacy are so weak that these orga- have been targeted. The legislation Corporations and labor unions will also nizations are able to channel unlimited also allows candidates to respond to be able to contribute to the national resources into activities that are thin- such expenditures without these ‘‘re- parties, but they too will have to fol- ly veiled as ‘‘voter education’’ or sponse expenditures’’ counting against low the ‘‘hard money’’ limits. That ‘‘issue ads’’ when in truth they seek to their overall spending limit. This will means they will have to contribute directly advocate the election or defeat ensure that targeted candidates are not through their separate segregate funds, of a candidate. bound by the spending caps and unable also known as PAC’s, rather than using These activities, outside the scope of to respond. And finally, the bill their general treasury funds, and their federal election law, have come to tightens statutory language to ensure contributions to the national parties dominate many House and Senate cam- that independent expenditures made by will be limited to $15,000 per party com- paigns. And while political parties and political parties are truly independent mittee per year. outside organizations have poured un- and not coordinated with campaigns in We heard considerable debate in the limited resources into these ‘‘issue any way. last election about foreign money— ads,’’ candidates have found their role The legislation also includes a ban on both coming from foreign nationals in their own elections shockingly di- Political Action Committee [PAC] con- oversees, which is clearly illegal, and minished. tributions to federal candidates. In from noncitizens residing in the United If we are to have any control of our case such a ban is held to be unconsti- States, which is not. This is a problem election process, we must have a clear tutional by the Supreme Court, the and we have a new provision in our leg- standard in the law that defines what legislation includes a ‘‘back-up’’ provi- islation to address this abuse. But I sort of activities are an attempt to in- sion that lowers the PAC contribution have always said that the problem is fluence the outcome of a federal elec- limit from $5,000 to $1,000 and limits whether anyone should be permitted to tion. Senate candidates to accepting no contribute $400,000 in our election sys- The McCain-Feingold proposal in- more than 20% of the applicable overall tem, whether it is from Jakarta or cludes a new definition of what con- spending limit in aggregate PAC con- Janesville, WI. And the soft money ban stitutes ‘‘express advocacy.’’ Under tributions. in our legislation will prohibit any fu- this proposal, the definition of ‘‘express The bipartisan bill is further helpful ture such contributions, regardless of advocacy’’ will include any general to challengers in that it prohibits Sen- their source. public communication that advocates ators from sending out taxpayer-fi- The legislation includes a new pro- the election or defeat of a clearly iden- nanced, unsolicited franked mass posal that bars anyone who is not eligi- tified candidate for federal office by mailings in the calendar year of an ble to vote in a federal election from using such expressions as ‘‘vote for’’, election. Often, these mass mailings contributing to a federal candidate. ‘‘support’’ or ‘‘defeat’’. Further, any are thinly disguised ‘‘newsletters’’ that This will affect noncitizens, minors disbursement aggregating $10,000 or help to bolster an incumbent’s name under 18 years of age and certain con- more for a communication that is recognition and inform constituents of victed felons. Simply put, if our laws made within 30 days of a primary elec- their accomplishments. Such unsolic- and Constitution do not allow an indi- tion or 60 days of a general election ited activity by officeholders can be vidual to participate in the political shall be considered express advocacy if unfair in an election year. process with their ballot, there is no the communication refers to a clearly The final major piece of this reform reason the same individual should be identified candidate and a reasonable effort is our enhanced enforcement pro- permitted to participate with their person would understand it as advocat- visions. There is legitimate criticism checkbook. ing the election or defeat of that can- that our federal election laws are not The McCain-Feingold bill includes a didate. adequately enforced, and much of this number of other important provisions If such a communication is made out- problem can be directly attributed to as well. For example, we propose a new side of the 30 day period before the pri- Congress’ unwillingness to provide ade- definition of what constitutes ‘‘express mary election or the 60 day period be- quate funding to what is supposed to be advocacy’’ in a federal election. ‘‘Ex- fore the general election, it shall be the government’s watchdog agency, the press advocacy’’ is the standard used to considered express advocacy if the Federal Election Commission. Regard- determine to what extent election ac- communication is made with the pur- less, there are reforms we can pass that tivities may be limited and regulated. pose of advocating the election or de- will allow the FEC to better enforce If a particular activity, such as an feat of a candidate as shown by one or the current laws we have on the books independent expenditure, is deemed to more factors including a statement or as well as the new laws enacted as part expressly advocate the election or de- action by the person making the com- of this legislation. feat of a particular federal candidate, munication, the targeting or place- First and foremost is a provision that then that activity must be paid for ment of the communication, or the use will require all federal campaigns to with fully disclosed and limited ‘‘hard by the person making the communica- file their disclosure reports with the money’’ dollars. Labor unions, corpora- tion of polling or other similar data re- FEC electronically. Currently, this is tions and other political organizations lating to the candidate’s campaign or optional and the result is a disclosure would have to fund such activities election. system that is marginally reliable. We through a PAC, comprised of vol- This will ensure that a much larger need a disclosure system that is readily untary, limited and disclosed contribu- proportion of the expenditures made by accessible to the public and will allow tions. political parties and independent orga- the American people to know where If on the other hand, an expenditure nizations with the intent to influence from and to whom the money is flow- is used for an activity that does not ex- the outcome of a federal election will ing. The bill also requires candidates to pressly advocate the election or defeat be covered by federal law and subject disclose the name and address of every of a particular candidate, such as a tel- to the appropriate restrictions and dis- contributor who gives more than $50 to evision ad that attempts to raise im- closure requirements. a candidate. Currently, that threshold portant issues without advocating a The McCain-Feingold proposal will is only for contributions over $200 and candidate, then that expenditure may also protect candidates who are tar- the result is millions of dollars of un- be funded with ‘‘soft money’’ dollars— geted by independent expenditures. disclosed contributor information. undisclosed and unlimited monies, such First, the legislation requires groups Second, we allow the FEC to conduct as corporation’s profits or a labor who fund independent expenditures to random audits of campaigns. This will union’s member dues. immediately disclose those expendi- provide a mechanism to make sure Unquestionably, the largest abuse in tures. The FEC would then be required candidates are complying with all of recent elections is the use of non-party to transmit a copy of that report to the limitations and restrictions in fed- soft money to fund huge electioneering any candidate who has agreed to limit eral election law. January 21, 1997 CONGRESSIONAL RECORD — SENATE S387 The bill toughens penalties for The factors which led us to introduce I look forward to working with our ‘‘knowing and willful’’ violations of the this legislation in the last Congress colleagues on both sides of the aisle, in law. If such a standard is met, the FEC have become even more prominent. the House of Representatives, and with is permitted to triple the amount of Too much money is needed, too much the President to fashion and pass the civil penalty. We must send a mes- time must be spent raising it, too meaningful reform. I believe a success- sage to candidates and campaigns that much is asked of a limited number of ful effort will renew the public’s faith deliberate attempts to evade the law special interests, and too much is going in our system and in us, and thus in will be met with serious penalties. on outside of the regulatory system we our ability to do what they sent us Mr. President, the support the established—some within the bounds of here to do. McCain-Feingold proposal garnered the law, some allegedly not. Mr. WELLSTONE. Mr. President. I last year was bipartisan and broad Most importantly, in my view, the am extremely pleased to be an original based. It was strongly supported by public is increasingly concerned by cosponsor of the McCain-Feingold- President Clinton, who first endorsed what they see happening here. If they Thompson-Wellstone campaign finance the McCain-Feingold proposal in his have no faith in the system which put reform bill. I hope the Senate will State of the Union Address almost one us here, if they are turned off by what bring it to the floor very early in this year ago and has recently reaffirmed we do to get elected, how are they Congress—preferably during the first his strong commitment to the legisla- going to trust us to carry out our work three months of this year. Campaign fi- tion this year. It was endorsed by Ross in their best interests? nance reform is clearly one of the most Perot, Common Cause, Public Citizen, Next, money raising consumes an in- crucial issues we face, and the public is United We Stand America, the Amer- ordinate amount of office-holders’ and more than ready for fundamental re- ican Association of Retired Persons candidates’ time and effort. Candidates form. and some 30 other grassroots organiza- should be reaching out to as broad a I have been working hard with my tions. It received editorial support spectrum of people and interests as colleagues on this bipartisan bill, from over 60 newspapers nationwide. possible, and not feel they must con- which we hope becomes the vehicle for This legislation is also bicameral. centrate on those who can afford to genuine reform this year. I hope that Republican Representative CHRIS make a donation. public dissatisfaction with campaign SHAYS, Democratic Representative Last, it is difficult for a challenger to politics-as-usual, especially as exempli- MARTY MEEHAN and a number of others raise sufficient funds to get his or her fied by the abuses of the campaign sea- will soon be introducing a House ver- message out. Congress needs to move son just past, will push this Congress sion of the McCain-Feingold proposal away from professionalism and more to act decisively. We should choose the in the 105th Congress. toward a citizen legislature. The proc- best aspects of the various bills that Recently, the Wall Street Journal ess should be more open, instead of will be introduced this year and fix the conducted a poll on this issue. They more closed. Because of the role money problems which have made themselves found that 92 percent of the American plays, unless a candidate has access to so apparent. We know there will oppo- people believe we spend too much large sums of money, he or she is pret- sition to any significant changes in the money on political campaigns. This is ty much cut out of the process. way we organize and finance campaigns consistent with numerous other polls I believe the revised legislation I am for federal office, but if there is suffi- that have found similar results. Cou- joining my colleagues Senators MCCAIN cient pressure from around the coun- pled with the troubling fact that the and FEINGOLD in introducing provides try, we can pass real reform. smallest percentage of Americans went some solutions to these problems. It So let us bring this bill to the floor to the ballot box in 72 years, it is clear doesn’t provide all the solutions, or and amend it. No reform bill is perfect. that the American people want mean- perfect solutions, but it is a good faith Let Republicans and Democrats offer ingful reform of our electoral process. effort and, in my view, a good place to their changes. As the only viable, bi- It is also clear that they want less po- start. partisan campaign finance reform bill, larization in the Congress, and for This legislation reduces the appear- this proposal represents our best hope Democrats and Republicans to work to- ance and reality of special interests for taking a significant step toward gether and find effective solutions to buying and selling political favors by genuine reform. our common problems. In some ways this bill does not go as prohibiting federal PACs, restricting For years, campaign finance reform far as I believe will be necessary in contribution ‘‘bundling’’, prohibiting has stalled because of the inability of order to repair our damaged campaign so-called ‘‘soft money’’, and putting a the two parties to join together and finance system. But it would ban ‘‘soft cap on out-of-state fundraising. I do craft a reform proposal that was fair to money’’ contributions to parties. It not believe PACs are inherently evil. both sides. We believed we have bridged would impose voluntary spending lim- There are other ways special interests those differences, and produced a pro- its and require greater disclosure of can enhance their financial influence posal that calls for mutual disar- independent expenditures. It would re- in a campaign. Contributions are bun- mament and will lead to fair and com- strict PAC contributions and ‘‘bun- petitive elections. dled, or the word just goes out that a dling,’’ and it would place more restric- It is my hope that the distinguished particular interest—be it business, or tions on foreign contributions. It is a majority leader will recognize how im- social, or labor—is concentrating dona- good bill. Its enactment would be an portant this issue is to the American tions on a particular race. PACs are a excellent start toward restoring integ- people and our democratic system and more formal association of people with rity to our political process. will allow this legislation to be consid- common interests. Our test in legislat- We must enact comprehensive re- ered in the coming weeks. I want to ing reforms should be whether the pub- form. But I am especially committed thank my friend from Arizona [Mr. lic feels they continue to serve an ac- this year to addressing the striking MCCAIN] for his dedication to this ceptable purpose. abuses in the areas of ‘‘soft money’’ issue. Furthermore, in this revised bill we and issue-advocacy ads. A system Mr. THOMPSON. Mr. President I join have tightened up on the definitions of which invites circumvention mocks it- my colleagues in reintroducing our independent and coordinated expendi- self. campaign finance reform legislation tures, as well as those for express advo- Mr. President, I intend to speak at with mixed emotions. On the one hand, cacy. Today we have a system under greater length in the coming days on I am more optimistic about the which, in many cases, the majority of the subject of campaign finance re- chances of our being able to enact re- the expenditures in an election are out- form. Today, I enthusiastically endorse forms than I was when we introduced side the system and the candidate’s this bipartisan effort to move real re- our bill over a year ago. On the other control. In 1992, ‘‘soft money’’ expendi- form and to begin to restore Ameri- hand, I regret that it has taken an- tures by the Republican and Demo- cans’ belief in our democratic institu- other round of public disappointment cratic parties totaled $86 million. In tions. and anger over the role of money in 1996, they totaled $263 million. It is lit- federal elections to bring us to this tle wonder that we are looking at By Mr. DASCHLE (for himself, point. where some of it came from. Mr. JOHNSON, Mr. DORGAN, Mr. S388 CONGRESSIONAL RECORD — SENATE January 21, 1997

CONRAD, Mr. KERREY, and Mr. ‘‘(C) be actuarially sound’’. was considered by the U.S. Supreme BINGAMAN): SEC. 4. PRIORITY FOR FARMER-OWNED VALUE- Court. However, by the time the Su- S. 26. A bill to provide a safety net ADDED PROCESSING FACILITIES. preme Court resolved the issue in 1994, Section 310B of the Consolidated Farm and well over 100 lower courts had ruled on for farmers and consumers and to pro- Rural Development Act (7 U.S.C. 1932) is mote the development of farmer-owned amended by adding at the end the following: this question, and their decisions were value added processing facilities, and ‘‘(h) PRIORITY FOR FARMER-OWNED VALUE- split. Countless litigants across the for other purposes; to the Committee ADDED PROCESSING FACILITIES.—In approving country expended substantial resources on Agriculture, Nutrition, and For- applications for loans and grants authorized debating this threshold procedural estry. under this section, section 306(a)(11), and issue. other applicable provisions of this title (as AGRICULTURAL SAFETY NET ACT OF 1997 In the same way, the issues of wheth- determined by the Secretary), the Secretary Mr. DASCHLE. Mr. President, I ask unani- er new legislation creates a private shall give a high priority to applications for right of action or preempts State law mous consent that the text of the bill be projects that encourage farmer-owned value- printed in the RECORD. added processing facilities.’’. are frequently presented in courts There being no objection, the bill was around the country, yielding expensive ordered to be printed in the RECORD, as By Mr. THURMOND: litigation and conflicting results. follows: S. 27. A bill to amend title 1 of the The bill I am introducing today S. 26 United States Code to clarify the effect eliminates this problem by providing the rule of construction that, unless fu- Be it enacted by the Senate and House of Rep- and application of legislation; to the resentatives of the United States of America in Committee on the Judiciary. ture legislation specifies otherwise, Congress assembled, AN ACT TO CLARIFY THE APPLICATION AND newly enacted laws are not to be ap- SECTION 1. SHORT TITLE. EFFECT OF LEGISLATION plied retroactively, do not create a pri- This Act may be cited as the ‘‘Agricultural Mr. THURMOND. Mr. President, I vate right of action, and are presumed Safety Net Act of 1997’’. rise today to introduce an act to clar- not to preempt State law. Of course, SEC. 2. MARKETING ASSISTANCE LOANS. ify the application and effect of legisla- my bill does not in any way restrict (a) IN GENERAL.—Section 132 of the Agri- tion which the Congress enacts. My act the Congress on these important is- cultural Market Transition Act (7 U.S.C. provides that unless future legislation sues. The Congress may override this 7232) is amended— expressly states otherwise, new enact- ordinary rule by simply stating when it (1) in subsection (a)(1)— wishes legislation to be retroactive, (A) by striking ‘‘be—’’ and all that follows ments would be applied prospectively, would not create private rights of ac- create new private rights of action or through ‘‘(A) not’’ and inserting ‘‘be not’’; preempt existing State law. and tion, and would be presumed not to (B) by striking ‘‘; but’’ and all that follows preempt existing State law. This will This act will eliminate uncertainty through ‘‘per bushel’’; significantly reduce unnecessary liti- and provide rules which are applicable (2) in subsection (b)(1)— gation and court costs, and will benefit when the Congress fails to specify its (A) by striking ‘‘be—’’ and all that follows both the public and our judicial sys- position on these important issues in through ‘‘(A) not’’ and inserting ‘‘be not’’; tem. legislation it passes. One U.S. District and Judge in my State informs me that he (B) by striking ‘‘; but’’ and all that follows The purpose of this legislation is quite simple. Many congressional en- spends 10 to 15 percent of his time on through ‘‘per bushel’’; these issues. It is clear that this legis- (3) in subsection (c)(2), by striking ‘‘or actments do not indicate whether the more than $0.5192 per pound’’; legislation is to be applied retro- lation would save litigants and our ju- (4) in subsection (d)— actively, whether it creates private dicial system millions and millions of (A) by striking ‘‘be—’’ and all that follows rights of action, or whether it pre- dollars by avoiding much uncertainty through ‘‘(1) not’’ and inserting ‘‘be not’’; empts existing State law. The failure and litigation which currently exists and or inability of the Congress to address over these issues. (B) by striking ‘‘; but’’ and all that follows Mr. President, if we are truly con- these issues in each piece of legislation through ‘‘per pound’’; and cerned about relieving the backlog of results in unnecessary confusion and (5) in subsection (f)— cases in our courts and reducing the litigation. Additionally, this contrib- (A) in paragraph (1)(B), by striking ‘‘or costs of litigation, we should help our more than $5.26’’; and utes to the high cost of litigation and judicial system to focus its limited re- (B) in paragraph (2)(B), by striking ‘‘or the congestion of our courts. sources, time and effort on resolving more than $0.093’’. In the absence of action by the Con- the merits of disputes, rather than de- (b) TERM OF LOAN.—Section 133 of the Agri- gress on these critical threshold ques- cultural Market Transition Act (7 U.S.C. ciding these preliminary matters. 7233) is amended by striking subsection (c) tions of retroactivity, private rights of and inserting the following: action and preemption, the outcome is By Mr. LUGAR: ‘‘(c) EXTENSIONS.—The Secretary may ex- left up to the courts. The courts are S. 29. A bill to repeal the Federal es- tend the term of a marketing assistance loan frequently required to resolve these tate and gift taxes and the tax on gen- for any loan commodity for a period not to matters without any guidance from the eration-skipping transfers; to the Com- exceed 6 months.’’. legislation itself. Although these issues mittee on Finance. SEC. 3. EXPANSION OF CROP REVENUE INSUR- are generally raised early in a lawsuit, S. 30 A bill to increase the unified es- ANCE. a decision that the lawsuit can proceed tate and gift tax credit to exempt Section 508 of the Federal Crop Insurance generally cannot be appealed until the small businesses and farmers from in- Act (7 U.S.C. 1508) is amended— (1) in subsection (b)— end of the case. If the appellate court heritance taxes; to the Committee on (A) by striking paragraph (9); and eventually rules that one of these is- Finance. (B) by redesignating paragraph (10) as sues should have prevented the trial, S. 31. A bill to phase out and repeal paragraph (9); and the litigants have been put to substan- the Federal estate and gift taxes and (2) by adding at the end the following: tial burden and unnecessary expense the tax on generation-skipping trans- ‘‘(o) CROP REVENUE INSURANCE.— which could have been avoided. fers; to the Committee on Finance. ‘‘(1) IN GENERAL.—The Secretary shall offer Trial courts around the country ESTATE TAX LEGISLATION a producer of wheat, feed grains, soybeans, or such other commodity as the Secretary often reach conflicting and inconsist- Mr. LUGAR. Mr. President, I am considers appropriate insurance against loss ent results on these issues, as do appel- pleased to introduce three bills aimed of revenue from prevented or reduced pro- late courts when the issues are ap- at eliminating the burden that estate duction of the commodity, as determined by pealed. As a result, many of these cases and gift taxes place on our economy. the Secretary. eventually make their way to the Su- My first bill would repeal the estate ‘‘(2) ADMINISTRATION.—Revenue insurance preme Court. This problem was dra- and gift taxes outright. My second bill under this subsection shall— matically illustrated after the passage would phase out the estate tax over 5 ‘‘(A) be offered by the Corporation or of the Civil Rights Act of 1991. District years by gradually raising the unified through a re-insurance arrangement with a private insurance company; courts and courts of appeal all over credit each year until the tax is re- ‘‘(B) offer at least a minimum level of cov- this Nation were required to resolve pealed after the fifth year. My third erage that is an alternative to catastrophic whether the 1991 act should be applied bill would immediately raise the effec- crop insurance; and retroactively, and the issue ultimately tive unified credit from $600,000 to $5 January 21, 1997 CONGRESSIONAL RECORD — SENATE S389 million in an effort to address the dis- economic growth, virtually all new net Fortunately, after a number of years, proportionate burden that the estate jobs were created by firms with fewer we were successful in working out the tax places on farmers and small busi- than twenty employees. financial problems and repaying the nesses. Recent economic studies and surveys money. We were lucky. That farm is I believe the best option is a simple of small business owners support the profitable and still in the family. But repeal of the estate tax. I am hopeful thesis that the estate tax discourages many of today’s farmers and small that during this Congress, as Members economic growth. A 1994 study by the business owners are not so fortunate. become more aware of the effects of Tax Foundation concluded that the es- Only about 30 percent of businesses are this tax, we can eliminate it from the tate tax may have roughly the same ef- transferred from parent to child, and Tax Code. However, even if the estate fect on entrepreneurial incentives as only about 12 percent of businesses tax is not repealed, the unified credit would a doubling of income tax rates. make it to a grandchild. must be raised. The credit has not been A 1996 report prepared by Price The strongest negative effects of the increased since 1987 when it was estab- Waterhouse found that even more fam- estate tax are felt by the American lished at the $600,000 level. Since then, ily business owners were concerned family farmer. Currently, proprietor- inflation has caused a growing percent- about estate taxes than about capital ships and partnerships make up about age of estates to be subjected to the es- gains taxes. A Gallup poll found that 95 percent of farms and ranches. In the tate tax. My second bill is intended to one-third of family-owned businesses vast majority of cases, family farms do highlight this point and provide a grad- expect to sell their family’s firm to pay not produce luxurious lifestyles for ual path to repeal. estate tax liability. Sixty-eight per- their owners. Farmers have large as- Finally, my third bill focuses on re- cent said the estate tax makes them sets but relatively little income. The lieving the estate tax burden that falls less likely to make investments in income of a family-run farm depends disproportionately on farmers and their business, and 60 percent said that on modest returns from sizable small business owners. By raising the without an estate tax, they would have amounts of invested capital. Much of exemption amount from $600,000 to $5 expanded their workforce. what the farmer makes after taxes in million, 96 percent of estates with farm If we are sincere about boosting eco- reinvested into the farm, bolstering the assets and 90 percent of estates with nomic growth, we must consider what estate-tax-derived ‘‘paper value’’ even noncorporate business assets would not effect the estate tax has on a business more. have to pay estate taxes, according to owner deciding whether to invest in As happens so often, family farms the IRS. new capital goods or hire a new em- cannot maintain the cash assets nec- The estate tax began as a temporary ployee. We must consider its affect on essary to pay estate taxes upon the tax in 1916, limited to 10 percent of a farmer deciding whether to buy new death of the owner. Frequently, selling one’s inheritance. The tax intended to land, additional livestock or a new part of a farm is not an option, either prevent the accumulation of wealth in tractor. If you know that when you die because there is no suitable buyer or the hands of a few families. Today, your children will probably have to sell because reducing acreage would make however, the effect is often the oppo- the business you build up over your the operation inviable. In these cases, a site. The estate tax forces many fam- lifetime, does that make you more fire-sale of the family farm or business ily-owned farms and small businesses likely to take the risk of starting a is required to pay the estate tax. Dev- to sell to larger corporations, further new business or enlarging your present astating to any business, such a forced concentrating the wealth. business? It is apparent that the estate sale hits farm families particularly The estate tax has mushroomed into tax does discourage business and farm hard because they frequently must sell an exorbitant tax on death that dis- investments. at a price far below the invested value. courages savings, economic growth and One might expect that for all the eco- Entire lifetimes of work are liquidated, job formation by blocking the accumu- nomic disincentives caused by the es- and the skills of family members expe- lation of entrepreneurial capital and by tate tax, it must at least provide a siz- rienced in agriculture are lost to the breaking up family businesses and able contribution to the U.S. Treasury. American economy. Mr. President, I introduce today a set farms. With the highest marginal rate But in reality, the estate tax only ac- of bills to repeal the estate tax in an at 55 percent, more than half of an es- counts for about 1 percent of federal effort to expand investment incentives tate can go directly to the government. taxes. It cannot be justified as an indis- and job creation and to reinvigorate an By the time the inheritance tax is lev- pensable revenue raiser. Given the blow important part of the American ied on families, their assets have al- delivered to job formation and eco- Dream. I am hopeful that Senators will ready been taxed at least once. This nomic growth, the estate tax may even join me in the effort to free small busi- form of double taxation violates per- cost the Treasury money. Our nation’s nesses, family farms and our economy ceptions of fairness in our tax system. ability to create new jobs, new oppor- from this counterproductive tax. In addition to tax liabilities, families tunities and wealth is damaged as a re- often must pay lawyers, accountants sult of our insistence on collecting a By Mr. THURMOND: and planners to untangle one of the tax that earns less than 1 percent of S. 32. A bill to amend title 28 of the most complicated areas of our tax our revenue. United States Code to clarify the reme- code. In 1996, a Gallup poll estimated But this tax affects more than just dial jurisdiction of inferior Federal that a small family-owned business the national economy. It affects how courts; to the Committee on the Judi- spent an average of $33,138 for lawyers we as a nation think about community, ciary. and accountants to settle estates with family and work. Small businesses and JUDICIAL TAXATION PROHIBITION ACT the IRS. Larger family-owned busi- farms represent much more than as- Mr. THURMOND. Mr. President, I nesses averaged $70,000. Families aver- sets. They represent years of toil and rise today to introduce legislation to aged 167 hours complying with the Byz- entrepreneurial risk taking. They also prohibit Federal judges from ordering antine rules of the estate tax, and the represent the hopes that families have new taxes or ordering increases in ex- IRS estimates that they must audit for their children. Part of the Amer- isting tax rates as a judicial remedy. nearly 40 percent of estate tax re- ican Dream has always been to build up In 1990, the Supreme Court decided in turns—a much higher rate than the 1.7 a business, farm or ranch so that eco- Missouri versus Jenkins to allow Fed- percent audit rate on incomes taxes. nomic opportunities and a way of life eral judges to order new taxes or in- Let us consider the consequences of can be passed on to one’s children and creases as a judicial remedy. It is my the estate tax on the American econ- grandchildren. firm belief that this narrow 5 to 4 deci- omy. The estate tax is counter- I have some personal experience in sion permits Federal judges to exceed productive because it falls so heavily this area. My father died when I was in their proper boundaries of jurisdiction on our most dynamic job creators— my early thirties, leaving his 604-acre and authority under the Constitution. small businesses. About two out of farm in Marion County, Indiana, to his Mr. President, this ruling and con- every three new jobs in this country family. I managed the farm, which gressional response raises two con- are created by small business. From built up considerable debts during my stitutional issues which warrant dis- 1989 to 1991, a period of unusually slow father’s illness at the end of his life. cussion. One is whether Federal courts S390 CONGRESSIONAL RECORD — SENATE January 21, 1997 have authority under the Constitution against England. While Grenville’s suc- order or decree requiring imposition of to inject themselves into the legisla- cessor was determined to repeal the ‘‘any new tax or to increase any exist- tive area of taxation. The second con- law, the social, economic and political ing tax or tax rate.’’ I firmly believe stitutional issue arises in light of the climate in the colonies brought on the that this language is wholly consistent Judicial Taxation Prohibition Act American Revolution. The principles with Congressional authority under Ar- which I am now introducing to restrict expressed during the earlier crisis ticle III, Section 1 of the Constitution. against taxation without representa- the remedial jurisdiction of the Fed- There is nothing in this legislation tion became firmly embedded in our eral courts. This narrowly drafted leg- which would restrict the power of the islation would prohibit Federal judges Federal Constitution of 1787. Yet, the Supreme Court has over- Federal courts from hearing constitu- from ordering new taxes or ordering in- tional claims. It accords due respect to creases in existing tax rates. I believe looked this fundamental lesson in American history. The Jenkins deci- all provisions of the Constitution and it is clear under article III that the merely limits the availability of a par- Congress has the authority to restrict sion extends the power of the judiciary into an area which has traditionally ticular judicial remedy which has tra- the remedial jurisdiction of the Fed- ditionally been a legislative function. eral courts in this fashion. been reserved as a legislative function within the Federal, State, and local The objective of this legislation is First, I want to speak on the issue of straightforward, to prohibit Federal judicial taxation. Not since Great Brit- governments. In the Federalist No. 48, James Madison explained that in our courts from increasing taxes. The lan- ain’s ministry of George Grenville in guage in this bill applies to the lower 1765 have the American people faced democratic system, ‘‘the legislative branch alone has access to the pockets Federal courts and does not deny the assault of taxation without rep- claimants judicial access to seek re- resentation as now authorized in the of the people.’’ This idea has remained steadfast in dress of any Federal constitutional Jenkins decision. right. As part of his imperial reforms to America for over 200 years. Elected of- tighten British control in the colonies, ficials with authority to tax are di- Mr. President, how long will it be be- rectly accountable to the people who Grenville pushed the Stamp Act fore a Federal judge orders tax in- give their consent to taxation through through the Parliament in 1765. This creases to build new highways or pris- the ballot box. The shield of account- Act required excise duties to be paid by ons? I do not believe the Founding Fa- ability against unwarranted taxes has the colonists in the forms of revenue thers had this type of activism in mind been removed now that the Supreme stamps affixed to a variety of legal when they established the judicial Court has sanctioned judicially im- documents. This action came at a time branch of government. The role of the posed taxes. The American citizenry when the colonies were in an uproar judiciary is to interpret the law. The lacks adequate protection when they over the Sugar Act of 1764 which levied power to tax is an exclusive legislative are subject to taxation by unelected, duties on certain imports such as right belonging to the Congress and life tenured Federal judges. sugar, indigo, coffee, linens and other governments at the state level. We are There are many programs and accountable to the citizens and must items. projects competing for a finite number The ensuing firestorm of debate in justify any new taxes. The American of tax dollars. The public debate sur- America centered on the power of Brit- people deserve a timely response to the rounding taxation is always intense. ain to tax the colonies. James Otis, a Jenkins decision and we must provide Sensitive discussions are held by elect- young Boston attorney, echoed the protection against the imposition of ed officials and their constituents con- taxes by an independent judiciary. opinion of most colonists stating that cerning increases and expenditures of the Parliament did not have power to scarce tax dollars. To allow Federal tax the colonies because Americans judges to impose taxes is to discount By Mr. THURMOND: had no representation in that body. Mr. valuable public debate concerning pri- S. 33. A bill to provide that a Federal Otis had been attributed in 1761 with orities for expenditures of a limited justice or judge convicted of a felony the statement that ‘‘taxation without public resource. shall be suspended from office without representation is tyranny.’’ Mr. President, the dispositive issue pay, to amend the retirement age and In October, 1765, delegates from nine presented by the Jenkins decision is service requirements for Federal jus- states were sent to New York as part of whether the American people want, as tices and judges convicted of a felony, the Stamp Act Congress to protest the a matter of national policy, to be ex- and for other purposes; to the Commit- new law. It was during this time that posed to taxation without their con- tee on the Judiciary. John Adams wrote in opposition to the sent by an independent and insulated Stamp Act, ‘‘We have always under- judiciary. I most assuredly believe they FEDERAL JUDGE LEGISLATION stood it to be a grand and fundamental do not. Mr. THURMOND. Mr. President, principle . . . that no freeman shall be This brings us to the second Con- today I am introducing legislation subject to any tax to which he has not stitutional issue which we must ad- which provides that a justice or judge given his own consent, in person or by dress in light of this Jenkins decision. convicted of a felony shall be sus- proxy.’’ A number of resolutions were That issue is Congressional authority pended from office without pay pending adopted by the Stamp Act Congress under the Constitution to limit the re- the disposition of impeachment pro- protesting the acts of Parliament. One medial jurisdiction of lower Federal ceedings. resolution stated, ‘‘It is inseparably es- courts established by the Congress. Ar- I believe that the citizens of the sential to the freedom of a ticle III, Section 1, of the Constitution United States will agree that those people . . . that no taxes be imposed provides jurisdiction to the lower Fed- who have been convicted of felonies on them, but with their own consent, eral courts as the ‘‘Congress may from should not be allowed to continue to given personally or by their represent- time to time ordain and establish.’’ occupy positions of trust and respon- atives.’’ The resolutions concluded that There is no mandate in the Constitu- sibility in our Government. Neverthe- the Stamp Act had a ‘‘manifest tend- tion to confer equity jurisdiction to less, under current constitutional law ency to subvert the rights and liberties the inferior Federal courts. Congress it is possible for judges to continue to of the colonists.’’ has the flexibility under Article III to receive a salary and to still sit on the Opposition to the Stamp Act was ve- ‘‘ordain and establish’’ the lower Fed- bench and hear cases even after being hemently continued through the colo- eral courts as it deems appropriate. convicted of a felony. If they are un- nies in pamphlet form. These pam- This basic premise has been upheld by willing to resign, the only method phlets asserted that the basic premise the Supreme Court in a number of which may be used to remove them of a free government included taxation cases including Lockerty versus Phil- of the people by themselves or through lips, Lauf versus E.G. Skinner and Co., from the Federal payroll is impeach- their representatives. Kline versus Burke Construction Co., ment. Other Americans reacted to the and Sheldon versus Sill. Currently, the Congress has the Stamp Act by rioting, intimidating tax This legislation would preclude the power to impeach officers of the Gov- collectors, and boycotts directed lower Federal courts from issuing any ernment who have committed treason, January 21, 1997 CONGRESSIONAL RECORD — SENATE S391 bribery, or other high crimes and mis- Only the TVA power programs are in- In fiscal year 1996, I successfully demeanors. Even when a court has al- tended to be self-supporting, by relying sponsored an amendment to cap fund- ready found an official guilty of a seri- on TVA utility customers to foot the ing for the TVA Environmental Re- ous crime, Congress must then essen- bill. The expense of these ‘‘nonpower’’ search Center. The amendment also re- tially retry the official before he or she programs, on the other hand, are cov- quired the Center to examine its re- can be removed from the Federal pay- ered by appropriated taxpayer funds. search program, and evaluate how it roll. The impeachment process is typi- This legislation terminates funding could reduce its dependence on appro- cally very time consuming and can oc- for all appropriated programs of the priated funds. Though the funding cap cupy a great deal of the resources of TVA after fiscal year 2000. While I un- was eliminated in conference on the Congress. derstand the role that TVA has played fiscal year 1996 Energy and Water Ap- Mr. President, one way to solve this in our history, I also know that we face propriations, TVA did complete an as- problem would be to amend the Con- tremendous Federal budget pressure to sessment of its research program. The stitution. Today, I am also introducing reduce spending in many areas. I be- Center proposes to make a complete a Senate resolution proposing a con- lieve that TVA’s discretionary funds transition to competing for Federal stitutional amendment providing for should be on the table, and that Con- grants by fiscal year 2000. My measure forfeiture of office by Government offi- gress should act, in accordance with would codify such a transition. cials and judges convicted of felonies this legislation, to put the TVA appro- I have included specific language on involving moral turpitude. While I be- priated programs on a glide path to- the Environmental Research Center in lieve that a constitutional amendment ward dependence on sources of funds this legislation because I believe that may be the best solution to the prob- other than appropriated funds. I think it is important certain regions do not lem, I am also introducing this statu- that this legislation is a reasonable receive earmarked preference over oth- tory remedy to address the current sit- phased-in approach to achieve this ob- ers in receiving scarce environmental uation. jective, and explicitly codifies both the research, natural resource manage- This legislation will provide that a fiscal year 1996 President’s Budget and ment and economic development dol- judge convicted of a felony involving TVA’s own recommendations regarding lars from the Federal Government. In moral turpitude shall be suspended activities at the TVA’s Environmental this time of tight budgets, I believe from office without pay. The legisla- Research Center in Alabama. that all opportunities to decrease and tion specifies that the suspension be- I am introducing this legislation to supplement Federal support for gins upon conviction and that no addi- terminate TVA’S appropriated pro- projects and leverage additional pri- tional time accrues toward retirement grams because there are lingering con- vate, local and State government funds from that date. However, the judge cerns, brought to light in a 1993 Con- should be examined and implemented would be reinstated if the criminal gressional Budget Office [CBO] report, when feasible. conviction is reversed upon appeal or if that nonpower program funds subsidize Again, while I understand the impor- articles of impeachment do not result activities that should be paid for by tant role that TVA played in the devel- in conviction by the Senate. non-Federal interests. When I ran for opment of the Tennessee Valley, many Mr. President, the framers of the the Senate in 1992, I developed an 82+ other areas of the country have become Constitution could not have intended point plan to eliminate the Federal more creative in Federal and State fi- convicted felons to continue to serve deficit and have continued to work on nancing arrangements to address re- on the bench and to receive compensa- the implementation of that plan since gional concerns. Specifically, in those tion once they have seriously violated that time. That plan includes a number areas where there may be excesses the law and the trust of the people. I of elements in the natural resource within TVA, I believe we can do better urge my colleagues to carefully con- area, including the termination of to curb subsidies and eliminate the burden on taxpayers without com- sider this legislation. TVA’s appropriations-funded programs. In its 1993 report, CBO focused on two pletely eliminating the TVA, as some By Mr. FEINGOLD: programs: The TVA Stewardship Pro- in the other body have suggested. Mr. President, I ask unanimous con- S. 34. A bill to phase out Federal gram and the Environmental Research sent that the full text of this measure funding of the Tennessee Valley Au- Center. Stewardship activities receive thority; to the Committee on Environ- be printed in the RECORD. the largest share of TVA’s appropriated There being no objection, the bill was ment and Public Works. funds. The funds are used for dam re- ordered to be printed in the RECORD, as TENNESSEE VALLEY AUTHORITY LEGISLATION pair and maintenance activities. Ac- follows: Mr. FEINGOLD. Mr. President, today cording to 1995 testimony provided by S. 34 I am introducing legislation, similar to TVA before the House Subcommittee that which I sponsored in the 104th Be it enacted by the Senate and House of Rep- on Energy and Water Appropriations, resentatives of the United States of America in Congress, to terminate funding for lit- when TVA repairs a dam it pays 70 per- Congress assembled, tle known activities of the Tennessee cent, on average, of repair costs with SECTION 1. TENNESSEE VALLEY AUTHORITY. Valley Authority [TVA], the TVA’s appropriated dollars and covers the re- (a) DISCONTINUANCE OF APPROPRIATIONS.— nonpower programs, that are funded by maining 30 percent with funds collected Section 27 of the Tennessee Valley Authority appropriated funds. In fiscal year 1997, from electricity ratepayers. Act of 1933 (16 U.S.C. 831z) is amended— Congress appropriated a total of $106 This practice of charging a portion of (1) by inserting ‘‘for fiscal years through fiscal year 2000’’ before the period; and million to support these programs. dam repair costs to the taxpayer, CBO (2) by adding at the end the following: ‘‘No The TVA was created in 1933 as a gov- highlighted, amounts to a significant appropriations may be made available for ernment-owned corporation for the subsidy. If TVA were a private utility, the Tennessee Vally Authority Environ- unified development of a river basin and it made modifications to a dam or mental Research Center for fiscal year comprised of parts of seven States. performed routine dredging, the rate- 2000.’’. Those activities included the construc- payers would pay for all of the costs as- (b) PLAN.—No later than January 1, 1998, tion of an extensive power system, for sociated with that activity. the Director of the Office of Management which the region is now famous, and TVA also runs an Environmental Re- and Budget shall develop and submit a plan to Congress that— regional development or ‘‘nonpower’’ search Center, formerly a Fertilizer (1) provides for the Tennessee Valley Au- programs. TVA’s responsibilities in the Research Center, that received $15 mil- thority Environmental Research Center to nonpower programs include maintain- lion in funding in fiscal year 1997. The make a transition to sources of funds other ing its system of dams, reservoirs and Center formerly developed and tested than appropriated funds by fiscal year 2000; navigation facilities, and managing about 80 percent of commercial fer- and TVA-held lands. In addition, TVA pro- tilizers developed in the United States, (2) recommends any legislation that may be appropriate to carry out the objectives of vides recreational programs, makes which CBO identified as a direct re- this Act. economic development grants to com- search cost subsidy to fertilizer compa- munities, promotes public use of its nies. The measure I am introducing By Mr. FEINGOLD: land and water resources, and operates today phases out Federal funding for S. 35. A bill to amend the Reclama- an Environmental Research Center. the Center by the year 2000. tion Reform Act of 1982 to clarify the S392 CONGRESSIONAL RECORD — SENATE January 21, 1997 acreage limitations and incorporate a close loopholes through which Federal about $1.3 million less in 1987 for Fed- means test for certain farm operations, subsidies were flowing to large agri- eral water than they would have paid if and for other purposes; to the Commit- businesses rather than the small fam- their collective land holdings were con- tee on Energy and Natural Resources. ily farmers that reclamation projects sidered as large farms subject to the IRRIGATION SUBSIDY REDUCTION ACT OF 1997 were designed to serve. Agribusinesses Reclamation Act acreage limits. Had Mr. FEINGOLD. Mr. President, I am were expected to pay full cost for all Westhaven Trust been required to pay introducing a measure that I sponsored water received on land in excess of full cost, GAO estimated in 1990, it in the 104th Congress to reduce the their 960 acre entitlement. Despite the would have paid $2 million more for its amount of Federal irrigation subsidies express mandate of Congress, regula- water. The GAO also found, in all seven received by large agribusiness inter- tions promulgated under the Reclama- of these cases, that reduced revenues ests. I believe that reforming Federal tion Reform Act of 1982 have failed to are likely to continue unless Congress water pricing policy by reducing sub- keep big agricultural water users from amends the Reclamation Act to close sidies is an important area to examine receiving federal subsidies. The Gen- the loopholes allowing benefits for as a means to achieve our deficit reduc- eral Accounting Office and the Inspec- trusts. tion objectives. This legislation is also tor General of the Department of the The legislation that I am introducing needed to curb fundamental abuses of Interior continue to find that the acre- today combines various elements of reclamation law that cost the taxpayer age limits established in law are cir- proposals introduced during previous millions of dollars every year. cumvented through the creation of ar- attempts by other Members of Con- In 1901, President Theodore Roosevelt rangements such as farming trusts. gress to close loopholes in the 1982 leg- proposed legislation, which came to be These trusts, which in total acreage islation and to impose a $500,000 means known as the Reclamation Act of 1902, will exceed the 960 acre limit, are com- test. This new approach limits the to encourage development of family prised of smaller units that are not amount of subsidized irrigation water farms throughout the western United subject to the reclamation acreage cap. delivered to any operation in excess of States. The idea was to provide needed These smaller units are farmed under a the 960 acre limit which claimed water for areas that were otherwise dry single management agreement often $500,000 or more in gross income, as re- and give small farms—those no larger through a combination of leasing and ported on their most recent IRS tax than 160 acres—a chance, with a help- ownership. form. If the $500,000 threshold were ex- ing hand from the Federal Govern- In a 1989 GAO report, the activities of ceeded, an income ratio would be used ment, to establish themselves. Accord- six agribusiness trusts were fully ex- to determine how much of the water ing to a 1996 General Accounting Office plored. According to GAO, one 12,345 should be delivered to the user at the report, since the passage of the Rec- acre cotton farm (roughly 20 square full-cost rate, and how much at the lamation Act, the Federal Government miles), operating under a single part- below-cost rate. For example, if a 961 has spent $21.8 billion to construct 133 nership, was reorganized to avoid the acre operation earned $1 million dol- water projects in the west which pro- 960 acre limitation into 15 separate lars, a ratio of $500,000 (the means test vide water for irrigation. Irrigators, land holdings through 18 partnerships, value) divided by their gross income and other project beneficiaries, are re- 24 corporations, and 11 trusts which would determine the full cost rate, quired under the law to repay to the were all operated as one large unit. A thus the water user would pay the full Federal Government their allocated seventh very large trust was the sole cost rate on half of their acreage and share of the costs of constructing these topic of a 1990 GAO report. The the below cost rate on the remaining projects. Westhaven Trust is a 23,238 acre farm- half. However, as a result of the subsidized ing operation in California’s Central financing provided by the Federal Gov- Valley. It was formed for the benefit of This means testing proposal will be ernment, some of the beneficiaries of 326 salaried employees of the J.G. Bos- featured, for the second year in a row, Federal water projects repay consider- well Company. Boswell, GAO found, in this year’s 1997 Green Scissors re- ably less than their full share of these had taken advantage of section 214 of port which is scheduled for release next costs. According to the 1996 GAO re- the RRA, which exempts from its 960 month. This report is compiled by port, irrigators generally receive the acre limit land held for beneficiaries by Friends of the Earth and Taxpayers for largest amount of Federal financial as- a trustee in a fiduciary capacity, as Common Sense and supported by a sistance. Since the initiation of the ir- long as no single beneficiary’s interest number of environmental and rigation program in 1902, construction exceeds the law’s ownership limits. The consumer groups, including the Con- costs associated with irrigation have RRA, as I have mentioned, does not cord Coalition, and the Progressive been repaid without interest. The GAO preclude multiple land holdings from Policy Institute. The premise of the re- further found, in reviewing the Bureau being operated collectively under a port is that there are a number of sub- of Reclamation’s financial reports, trust as one farm while qualifying indi- sidies and projects that could be cut to that $16.9 billion, or 78 percent, of the vidually for federally subsidized water. both reduce the deficit and benefit the $21.8 billion of Federal investment in Accordingly, the J.G. Boswell Company environment. This report underscores water projects is considered to be reim- reorganized 23,238 acres it held as the what I and many others in the Senate bursable. Of the reimbursable costs, Boston Ranch by selling them to the have long known: we must eliminate the largest share—$7.1 billion—is allo- Westhaven Trust, with the land hold- practices that can no longer be justi- cated to irrigators. As of September 30, ings attributed to each beneficiary fied in light of our enormous annual 1994 irrigators have repaid only $941 being eligible to receive federally sub- deficit and national debt. The Green million of the $7.1 billion they owe. sidized water. Scissors recommendation on means GAO also found that the Bureau of Before the land was sold to testing water subsidies indicates that Reclamation will likely shift $3.4 bil- Westhaven Trust, the J.G. Boswell if a test is successful in reducing sub- lion of the debt owed by irrigators to Company operated the acreage as one sidy payments to the highest grossing other users of the water projects for re- large farm and paid full cost for the 10% of farms, then the Federal Govern- payment. Federal irrigation water delivered for ment would recover between $440 mil- There are several reasons why the 18-month period ending in May lion and $1.1 billion per year, or at irrigators continue to receive such sig- 1989. When the trust bought the land, least $2.2 billion over 5 years. nificant subsidies. Under the Reclama- due to the loopholes in the law, the en- When countless Federal programs are tion Reform Act of 1982, Congress acted tire acreage became eligible to receive subjected to various types of means to expand the size of the farms that federally subsidized water because the tests to limit benefits to those who could receive subsidized water from 160 land holdings attributed to the 326 truly need assistance, it makes little acres to 960 acres. The RRA of 1982 ex- trust beneficiaries range from 21 acres sense to continue to allow large busi- pressly prohibits farms that exceed 960 to 547 acres—all well under the 960 acre ness interests to dip into a program in- acres in size from receiving federally- limit. tended to help small entities struggling subsidized water. These restrictions In the six cases the GAO reviewed in to survive. Taxpayers have legitimate were added to the reclamation law to 1989, owners or lessees paid a total of concerns when they learn that their January 21, 1997 CONGRESSIONAL RECORD — SENATE S393 hard earned tax dollars are being ex- SEC. 3. AMENDMENTS. single individual or legal entity is the owner, pended to assist large corporate inter- (a) DEFINITIONS.—Section 202 of the Rec- lessee, or other individual that performs the ests in select regions of the country lamation Reform Act of 1982 (43 U.S.C. 390bb) greatest proportion of decisionmaking for, is amended— who benefit from these loopholes, par- and supervision of, the farm operation on a (1) in paragraph (6), by striking ‘‘owned or parcel of land— ticularly in tight budgetary times. operated under a lease which’’ and inserting ‘‘(1) all individuals and legal entities that Other users of Federal water projects, ‘‘that is owned, leased, or operated by an in- own, lease, or perform a proportion of deci- such as the power recipients, should dividual or legal entity and that’’; sionmaking and supervision that is equal as also be concerned when they learn that (2) by redesignating paragraphs (7), (8), (9), among themselves but greater than the pro- they will be expected to pick up the tab (10), and (11) as paragraphs (8), (10), (11), (12), portion performed by any other individual or for a portion of the funds that and (13), respectively; legal entity shall be considered jointly to be irrigators were supposed to pay back. (3) by inserting after paragraph (6) the fol- the owner, lessee, or operator; and lowing: The Federal water program was simply ‘‘(2) all parcels of land of which any such ‘‘(7) LEGAL ENTITY.—The term ‘legal entity’ individual or legal entity is the owner, les- never intended to benefit these large includes a corporation, association, partner- see, or operator shall be considered to be interests, and I am hopeful that legis- ship, trust, joint tenancy, or tenancy in com- part of the single farm operation of the lative efforts, such as the measure I am mon, or any other entity that owns, leases, owner, lessee, or operator identified under introducing today, will prompt Con- or operates a farm operation for the benefit paragraph (1).’’. gress to fully reevaluate our Federal of more than 1 individual under any form of (c) PRICING.—Section 205 of the Reclama- water pricing policy. agreement or arrangement.’’; tion Reform Act of 1982 (43 U.S.C. 390ee) is In conclusion, Mr. President, it is (4) by inserting after paragraph (8) (as re- amended by adding at the end the following: designated by paragraph (2)) the following: ‘‘(d) SINGLE FARM OPERATIONS GENERATING clear that the conflicting policies of ‘‘(9) OPERATOR.— MORE THAN $500,000 IN GROSS FARM INCOME.— the Federal Government in this area ‘‘(A) IN GENERAL.—The term ‘operator’— ‘‘(1) IN GENERAL.—Notwithstanding sub- are in need of reform, and that Con- ‘‘(i) means an individual or legal entity sections (a), (b), and (c), in the case of— gress should act. Large agribusinesses that operates a single farm operation on a ‘‘(A) a qualified recipient that reports should not be able to continue to soak parcel (or parcels) of land that is owned or gross farm income from a single farm oper- the taxpayers, and should make their leased by another person (or persons) under ation in excess of $500,000 for a taxable year; fair share of payments to the Federal any form of agreement or arrangement (or or Government. We should act to close agreements or arrangements); and ‘‘(B) a limited recipient that received irri- ‘‘(ii) if the individual or legal entity— gation water on or before October 1, 1981, and these loopholes and increase the return ‘‘(I) is an employee of another individual or that reports gross farm income from a single to the Treasury from irrigators as soon legal entity, includes each such other indi- farm operation in excess of $500,000 for a tax- as possible. vidual or legal entity; or able year; Mr. President, I ask unanimous con- ‘‘(II) is a legal entity that controls, is con- irrigation water may be delivered to the sin- sent that the text of the bill be printed trolled by, or is under common control with gle farm operation of the qualified recipient in the RECORD. another legal entity, includes each such or limited recipient at less than full cost to There being no objection, the bill was other legal entity. a number of acres that does not exceed the ‘‘(B) OPERATION OF A FARM OPERATION.—For ordered to be printed in the RECORD, as number of acres determined under paragraph the purposes of subparagraph (A), an individ- follows: (2). ual or legal entity shall be considered to op- ‘‘(2) MAXIMUM NUMBER OF ACRES TO WHICH S. 35 erate a farm operation if the individual or IRRIGATION WATER MAY BE DELIVERED AT LESS Be it enacted by the Senate and House of Rep- legal entity is the person that performs the THAN FULL COST.—The number of acres deter- resentatives of the United States of America in greatest proportion of the decisionmaking mined under this paragraph is the number Congress assembled, for, and supervision of, the farm operation equal to the number of acres of the single SECTION 1. SHORT TITLE. on land served with irrigation water.’’; and farm operation multiplied by a fraction, the This Act may be cited as the ‘‘Irrigation (5) by adding at the end the following: numerator of which is $500,000 and the de- Subsidy Reduction Act of 1997’’. ‘‘(14) SINGLE FARM OPERATION.— nominator of which is the amount of gross SEC. 2. FINDINGS. ‘‘(A) IN GENERAL.—The term ‘single farm farm income reported by the qualified recipi- Congress finds that— operation’ means the total acreage of land ent or limited recipient in the most recent (1) the Federal reclamation program has served with irrigation water for which an in- taxable year. been in existence for over 90 years, with an dividual or legal entity is the operator. ‘‘(3) INFLATION ADJUSTMENT.— estimated taxpayer investment of over ‘‘(B) RULES FOR DETERMINING WHETHER SEP- ‘‘(A) IN GENERAL.—For any taxable year be- $70,000,000,000; ARATE PARCELS ARE OPERATED AS A SINGLE ginning in a calendar year after 1997, the (2) the program has had and continues to FARM OPERATION.— $500,000 amount under paragraphs (1) and (2) have an enormous effect on the water re- ‘‘(i) EQUIPMENT- AND LABOR-SHARING ACTIVI- shall be equal to the product of— sources and aquatic environments of the TIES.—The conduct of equipment- and labor- ‘‘(i) $500,000; and western States; sharing activities on separate parcels of land ‘‘(ii) the inflation adjustment factor for (3) irrigation water made available from by separate individuals or legal entities shall the taxable year. Federal water projects in the West is a very not by itself serve as a basis for concluding ‘‘(B) INFLATION ADJUSTMENT FACTOR.—The valuable resource for which there are in- that the farm operations of the individuals term ‘inflation adjustment factor’ means, creasing and competing demands; or legal entities constitute a single farm op- with respect to any calendar year, a fraction (4) the justification for providing water at eration. the numerator of which is the GDP implicit less than full cost was to benefit and pro- ‘‘(ii) PERFORMANCE OF CERTAIN SERVICES.— price deflator for the preceding calendar mote the development of small family farms The performance by an individual or legal year and the denominator of which is the and exclude large corporate farms, but this entity of an agricultural chemical applica- GDP implicit price deflator for 1996. Not purpose has been frustrated over the years tion, pruning, or harvesting for a farm oper- later than April 1 of any calendar year, the by inadequate implementation of subsidy ation on a parcel of land shall not by itself Secretary shall publish the inflation adjust- and acreage limits; serve as a basis for concluding that the farm ment factor for the preceding calendar year. (5) below-cost water prices tend to encour- operation on that parcel of land is part of a ‘‘(C) GDP IMPLICIT PRICE DEFLATOR.—In age excessive use of scarce water supplies in single farm operation operated by the indi- subparagraph (B), the term ‘GDP implicit the arid regions of the West, and reasonable vidual or entity on other parcels of land.’’. price deflator’ means the first revision of the (b) IDENTIFICATION OF OWNERS, LESSEES, price increases to the wealthiest western implicit price deflator for the gross domestic AND OPERATORS OF SINGLE FARM OPER- farmers would provide an economic incentive product as computed and published by the ATIONS.—The Reclamation Reform Act of Secretary of Commerce. for greater water conservation; 1982 (43 U.S.C. 390aa et seq.) is amended by ‘‘(D) ROUNDING.—If any adjustment of the (6) the Federal Government has increas- inserting after section 202 the following: ingly applied eligibility tests based on in- $500,000 amount determined under subpara- ‘‘SEC. 202A. IDENTIFICATION OF OWNERS, LES- graph (A) is not a multiple of $100, the ad- come for Federal entitlement and subsidy SEES, AND OPERATORS OF SINGLE programs, measures that are consistent with FARM OPERATIONS. justment shall be rounded to the next lowest the historic approach of the reclamation pro- ‘‘(a) IN GENERAL.—Subject to subsection multiple of $100.’’. gram’s acreage limitations that seek to (b), for each parcel of land to which irriga- (d) CERTIFICATION OF COMPLIANCE.—Section limit water subsidies to smaller farms; and tion water is delivered or proposed to be de- 206 of the Reclamation Reform Act of 1982 (43 (7) including a means test based on gross livered, the Secretary shall identify a single U.S.C. 390ff) is amended to read as follows: income in the reclamation program will in- individual or legal entity as the owner, les- ‘‘SEC. 206. CERTIFICATION OF COMPLIANCE. crease the effectiveness of carrying out the see, or operator. ‘‘(a) IN GENERAL.—As a condition to the re- family farm goals of the Federal reclamation ‘‘(b) SHARED DECISIONMAKING AND SUPER- ceipt of irrigation water for land in a district laws. VISION.—If the Secretary determines that no that has a contract described in section 203, S394 CONGRESSIONAL RECORD — SENATE January 21, 1997 each owner, lessee, or operator in the dis- nating the Uniformed Services Univer- relying primarily on these other trict shall furnish the district, in a form pre- sity of the Health Sciences [USUHS], a sources has not compromised the abil- scribed by the Secretary, a certificate that medical school run by the Department ity of military physicians to meet the the owner, lessee, or operator is in compli- ance with this title, including a statement of of Defense. The measure is one I pro- needs of the Pentagon. According to the number of acres owned, leased, or oper- posed when I ran for the U.S. Senate, the Office of Management and Budget, ated, the terms of any lease or agreement and was part of a larger, 82 point plan of the approximately 2,000 physicians pertaining to the operation of a farm oper- to reduce the Federal budget deficit. serving in Desert Storm, only 103, ation, and, in the case of a lessee or opera- The Congressional Budget Office [CBO] about 5 percent, were USUHS trained. tor, a certification that the rent or other estimates that terminating the school fees paid reflect the reasonable value of the Mr. President, let me conclude by would save $369 million over the next recognizing that USUHS has some irrigation water to the productivity of the six years. land. dedicated supporters in the U.S. Sen- USUHS was created in 1972 to meet ‘‘(b) DOCUMENTATION.—The Secretary may ate, and I realize that there are legiti- an expected shortage of military medi- require a lessee or operator to submit for the mate arguments that those supporters cal personnel. Today, however, USUHS Secretary’s examination— have made in defense of this institu- ‘‘(1) a complete copy of any lease or other accounts for only a small fraction of tion. The problem, however, is that the agreement executed by each of the parties to the military’s new physicians, less federal government can no longer af- the lease or other agreement; and than 12 percent in 1994 according to ford to continue every program that ‘‘(2) a copy of the return of income tax im- CBO. This contrasts dramatically with posed by chapter 1 of the Internal Revenue provides some useful function. the military’s scholarship program Code of 1986 for any taxable year in which In the face of our staggering national the single farm operation of the lessee or op- which provided over 80 percent of the erator received irrigation water at less than military’s new physicians in that year. debt and annual deficits, we must full cost.’’. Mr. President, what is even more prioritize and eliminate programs that (e) TRUSTS.—Section 214 of the Reclama- troubling is that USUHS is also the can no longer be sustained with limited tion Reform Act of 1982 (43 U.S.C. 390nn) is single most costly source of new physi- Federal dollars, or where a more cost- repealed. cians for the military. CBO reports effective means of fulfilling those func- (f) ADMINISTRATIVE PROVISIONS.— that based on figures from 1995, USUHS tions can be substituted. The future of (1) PENALTIES.—Section 224(c) of the Rec- lamation Reform Act of 1982 (43 U.S.C. trained physicians cost the military USUHS continues to be debated pre- 390ww(c)) is amended— $615,000 per person. By comparison, the cisely because in these times of budget (A) by striking ‘‘(c) The Secretary’’ and in- scholarship program cost about $125,000 restraint it does not appear to pass the serting the following: per person, with other sources provid- higher threshold tests which must be ‘‘(c) REGULATIONS; DATA COLLECTION; PEN- ing new physicians at a cost of $60,000. applied to all Federal spending pro- ALTIES.— As CBO noted in their Spending and grams. ‘‘(1) REGULATIONS; DATA COLLECTION.—The Revenue Options publication, even ad- Secretary’’; and Mr. President, I ask unanimous con- (B) by adding at the end the following: justing for the lengthier service com- sent that the text of the legislation be ‘‘(2) PENALTIES.—Notwithstanding any mitment required of USUHS trained printed in the RECORD. other provision of law, the Secretary shall physicians, the cost of training them is establish appropriate and effective penalties still higher than that of training physi- There being no objection, the bill was for failure to comply with any provision of cians from other sources, an assess- ordered to be printed in the RECORD, as this Act or any regulation issued under this ment shared by the Pentagon itself. In- follows: Act.’’. deed, CBO’s estimate of the savings S. 37 (2) INTEREST.—Section 224(i) of the Rec- generated by this measure also in- lamation Reform Act of 1982 (43 U.S.C. cludes the cost of obtaining physicians Be it enacted by the Senate and House of Rep- 390ww(i)) is amended by striking the last resentatives of the United States of America in sentence and inserting the following: ‘‘The from other sources. Congress assembled, interest rate applicable to underpayments The other body has voted to termi- shall be equal to the rate applicable to ex- nate this program on several occasions, SECTION 1. SHORT TITLE. penditures under section 202(3)(C).’’. and the Vice President’s National Per- This Act may be cited as the ‘‘Uniformed (g) REPORTING.—Section 228 of the Rec- formance Review joined others, rang- Services University of the Health Sciences lamation Reform Act of 1982 (43 U.S.C. 390zz) ing from the Grace Commission to the Termination and Deficit Reduction Act of is amended by inserting ‘‘operator or’’ before 1997’’. ‘‘contracting entity’’ each place it appears. CBO, in raising the question of whether (h) MEMORANDUM OF UNDERSTANDING.—The this medical school, which graduated SEC. 2. TERMINATION OF THE UNIFORMED SERV- Reclamation Reform Act of 1982 (43 U.S.C. its first class in 1980, should be closed ICES UNIVERSITY OF THE HEALTH 390aa et seq.) is amended— because it is so much more costly than SCIENCES. (1) by redesignating sections 229 and 230 as alternative sources of physicians for (a) TERMINATION.— sections 230 and 231, respectively; and the military. (1) IN GENERAL.—The Uniformed Services (2) by inserting after section 228 the follow- Mr. President, the real issue we must University of the Health Sciences is termi- ing: address is whether USUHS is essential nated. ‘‘SEC. 229. MEMORANDUM OF UNDERSTANDING. to the needs of today’s military struc- (2) CONFORMING AMENDMENTS.— ‘‘The Secretary, the Secretary of the ture, or if we can do without this cost- (A) Chapter 104 of title 10, United States Treasury, and the Secretary of Agriculture Code, is repealed. shall enter into a memorandum of under- ly program. The proponents of USUHS (B) The table of chapters at the beginning standing or other appropriate instrument to frequently cite the higher retention of subtitle A of such title, and at the begin- permit the Secretary, notwithstanding sec- rates of USUHS graduates over physi- ning of part III of such subtitle, are each tion 6103 of the Internal Revenue Code of cians obtained from other sources as a amended by striking out the item relating to 1986, to have access to and use of available justification for continuation of this chapter 104. information collected or maintained by the program, but while a greater percent- (b) EFFECTIVE DATE.—The termination re- Department of the Treasury and the Depart- age of USUHS trained physicians may ferred to in subsection (a), and the amend- ment of Agriculture that would aid enforce- ments made by such subsection, shall take ment of the ownership and pricing limita- remain in the military longer than effect on the date of the graduation from the tions of Federal reclamation law.’’. those from other sources, the Pentagon indicates that the alternative sources Uniformed Services University of the Health By Mr. FEINGOLD: already provide an appropriate mix of Sciences of the last class of students that en- rolled in such university on or before the S. 37. A bill to terminate the Uni- retention rates. Testimony by the De- date of the enactment of this Act. formed Services University of the partment of Defense before the Sub- Health Sciences; to the Committee on committee on Force Requirements and By Mr. FEINGOLD (for himself Armed Services. Personnel noted that the military’s and Mr. MCCAIN): THE UNIFORMED SERVICES UNIVERSITY OF THE scholarship program meets the reten- HEALTH SCIENCES TERMINATION AND DEFICIT tion needs of the services. S. 38. A bill to reduce the number of REDUCTION ACT OF 1997 And while USUHS only provides a executive branch political appointees; Mr. FEINGOLD. Mr. President, I am small fraction of the military’s new to the Committee on Governmental Af- today introducing legislation termi- physicians, it is important to note that fairs. January 21, 1997 CONGRESSIONAL RECORD — SENATE S395 PRESIDENTIAL APPOINTEES LEGISLATION Presidential appointees simply cannot In addition to leaving vacancies Mr. FEINGOLD. Mr. President, I am be managed effectively by any Presi- among key leadership positions in Gov- pleased to be joined by my good friend dent or White House. This lack of con- ernment, the appointment process the senior Senator from Arizona [Mr. trol is aggravated by the often compet- delays can have a detrimental effect on MCCAIN] in introducing legislation to ing political agendas and constitu- potential appointees. The Twentieth reduce the number of presidential po- encies that some appointees might Century Fund Task Force reported litical appointees. Specifically, the bill bring with them to their new positions. that appointees can ‘‘wait for months caps the number of political appointees Altogether, the commission argued on end in a limbo of uncertainty and at 2,000. The Congressional Budget Of- that this lack of control and political awkward transition from the private to fice [CBO] estimates this measure focus ‘‘may actually dilute the Presi- the public sector.’’ would save $392 million over the next 6 dent’s ability to develop and enforce a Mr. President, a story in the Na- years. coherent, coordinated program and to tional Journal in November of 1993, fo- The bill is based on the recommenda- hold cabinet secretaries accountable.’’ cusing upon the delays in the Clinton tions of a number of distinguished pan- The Volcker Commission also re- administration in filling political posi- els, including most recently, the Twen- ported that the excessive number of ap- tions, noted that in Great Britain, the tieth Century Fund Task Force on the pointees are a barrier to critical exper- transition to a new government is fin- Presidential Appointment Process. The tise, distancing the President and his ished a week after it begins, once 40 or task force findings, released last fall, principal assistants from the most ex- so political appointments are made. are only the latest in a long line of rec- perienced career officials. Though bu- That certainly is not the case in the ommendations that we reduce the reaucracies can certainly impede need- United States, recognizing, of course, ed reforms, they can also be a source of number of political appointees in the that we have a quite different system unbiased analysis. Adding organiza- executive branch. For many years, the of government from the British par- tional layers of political appointees proposal has been included in CBO’s an- liament form of government. can restrict access to important re- nual publication Reducing the Deficit: Nevertheless, there is little doubt sources, while doing nothing to reduce Spending and Revenue Options, and it that the vast number of political ap- bureaucratic impediments. was one of the central recommenda- Author Paul Light says, ‘‘As this pointments that are currently made tions of the National Commission on sediment has thickened over the dec- creates a somewhat cumbersome proc- the Public Service, chaired by former ades, presidents have grown increas- ess, even in the best of circumstances. Federal Reserve Board Chairman Paul ingly distant from the lines of govern- The long delays and logjams created in Volcker. ment, and the front lines from them.’’ filling these positions under the Bush Mr. President, this proposal is also Light adds that ‘‘Presidential leader- and Clinton administrations simply il- consistent with the recommendations ship, therefore, may reside in stripping lustrates another reason why the num- of the Vice President’s National Per- government of the barriers to doing its ber of positions should be cut back. formance Review, which called for re- job effectively* * *’’ Mr. President, let me also stress that ductions in the number of federal man- Finally, the Volcker Commission the problem is not simply the initial agers and supervisors, arguing that also asserted that this thickening bar- filling of a political appointment, but ‘‘over-control and micro management’’ rier of temporary appointees between keeping someone in that position over not only ‘‘stifle the creativity of line the President and career officials can time. In a recent report, the General managers and workers, they consume undermine development of a proficient Accounting Office reviewed a portion billions per year in salary, benefits, civil service by discouraging talented of these positions for the period of 1981 and administrative costs.’’ individuals from remaining in Govern- to 1991, and found high levels of turn- Those sentiments were also expressed ment service or even pursuing a career over—7 appointees in 10 years for one in the 1989 report of the Volcker Com- in Government in the first place. position—as well as delays, usually of mission, when it argued the growing Mr. President, former Attorney Gen- months but sometimes years, in filling number of presidential appointees may eral Elliot Richardson put it well when vacancies. ‘‘actually undermine effective presi- he noted: Mr. President, while I recognize that dential control of the executive But a White House personnel assistant sees this legislative proposal is not likely branch.’’ The Volcker Commission rec- the position of deputy assistant secretary as to be popular with some in both par- ommended limiting the number of po- a fourth-echelon slot. In his eyes that makes ties, I want to stress that this effort to litical appointees to 2,000, as this legis- it an ideal reward for a fourth-echelon politi- reduce the number of political ap- cal type—a campaign advance man, or a re- lation does. gional political organizer. For a senior civil pointees is bipartisan. The sponsorship Mr. President, it is essential that any servant, it’s irksome to see a position one of this bill reflects this, and the bill it- administration be able to implement has spent 20 or 30 years preparing for pre- self applies not only to the current the policies that brought it into office empted by an outsider who doesn’t know the Democratic administration, but to all in the first place. Government must be difference between an audit exception and an future administrations as well, what- responsive to the priorities of the elec- authorizing bill. ever their party affiliation. torate. But as the Volcker Commission Mr. President, the report of the The sacrifices that deficit reduction noted, the great increase in the number Twentieth Century Fund Task Force efforts require must be spread among of political appointees in recent years on the Presidential Appointment Proc- all of us. This measure requires us to has not made government more effec- ess identified another problem aggra- bite the bullet and impose limitations tive or more responsive to political vated by the mushrooming number of upon political appointments that both leadership. political appointees, namely the in- parties may well wish to retain. The Between 1980 and 1992, the ranks of creasingly lengthy process of filling test of commitment to deficit reduc- political appointees grew 17 percent, these thousands of positions. As the tion, however, is not simply to propose over three times as fast as the total task force reported, both President measures that impact someone else. number of executive branch employees Bush and President Clinton were into As we move forward to implement and looking back to 1960 their growth their presidencies for many months be- the NPR recommendations to reduce is even more dramatic. In his recently fore their leadership teams were fully the number of government employees, published book Thickening Govern- in place. The task force noted that ‘‘on streamline agencies, and make govern- ment: Federal Government and the Dif- average, appointees in both adminis- ment more responsive, we should also fusion of Accountability, author Paul trations were confirmed more than right size the number of political ap- Light reports a startling 430 percent in- eight months after the inauguration— pointees, ensuring a sufficient number crease in the number of political ap- one-sixth of an entire presidential to implement the policies of any ad- pointees and senior executives in Fed- term.’’ By contrast, the report noted ministration without burdening the eral Government between 1960 and 1992. that in the presidential transition of Federal budget with unnecessary, pos- In recommending a cap on political 1960, ‘‘Kennedy appointees were con- sibly counterproductive political jobs. appointees, the Volcker Commission firmed, on average, two and a half Mr. President, when I ran for the U.S. report noted that the large number of months after the inauguration.’’ Senate in 1992, I developed an 82 point S396 CONGRESSIONAL RECORD — SENATE January 21, 1997 plan to reduce the Federal deficit and branch must not protect itself from Ocean (ETP). Our bill was approved by achieve a balanced budget. Since that needed cuts. Our current $5 trillion voice vote in the Senate Commerce time, I have continued to work toward debt and our efforts to reach a balance Committee, and its companion (H.R. enactment of many of the provisions of budget by the year 2002 call for imme- 2823) was passed overwhelmingly in the that plan and have added new provi- diate action. No area of Government House of Representatives. sions on a regular basis. spending should be overlooked, not the Because of our focus in the second The legislation I am introducing least of which is funding for Govern- session of the 104th Congress on reau- today reflects one of the points in- ment employees. I am hopeful that this thorizing the Magnuson-Stevens Fish- cluded on the original 82 point plan administration will live up to their ery Conservation and Management Act, calling for streamlining various Fed- rhetoric about reducing the deficit and we were not able to turn to the Inter- eral agencies and reducing agency balancing the budget by supporting national Dolphin Conservation Pro- overhead costs. I am pleased to have this and other measures that get us gram Act until the closing weeks, and this opportunity to continue to work closer to a balanced budget. opponents of the measure were able to toward implementation of the ele- Since this measure is consistent with prevent its passage simply by objecting ments of the deficit reduction plan. the recommendations of the Vice on the Senate floor. We believe the bill Mr. President, I ask unanimous con- President’s National Performance Re- would have passed in the Senate by a sent that the bill be printed in the view [NPR], the administration should large majority if they had not objected. I am pleased today to be joined by RECORD. not have a problem endorsing this leg- Senators BREAUX, THURMOND, and MUR- There being no objection, the bill was islation. NPR called for reducing Fed- KOWSKI in reintroducing the bill. On ordered to be printed in the RECORD, as eral managers and supervisors, arguing September 30, 1996, Majority Leader follows: that ‘‘over-control and micromanage- S. 38 LOTT committed to us that he will do ment’’ not only ‘‘stifle the creativity of everything he can to provide time on Be it enacted by the Senate and House of Rep- line managers and workers, they resentatives of the United States of America in the Senate floor if it is necessary to Congress assembled, consume billions per year in salary, pass this important measure. SECTION 1. REDUCTION IN NUMBER OF POLITI- benefits, and administrative costs.’’ The Panama Declaration would cap CAL APPOINTEES. Limiting the number of political ap- dolphin mortality in the ETP at 5,000 (a) DEFINITION.—In this section, the term pointees to 2000 was recommended by dolphin per year and set a goal of even- ‘‘political appointee’’ means any individual former Federal Reserve Board Chair- tually eliminating dolphin mortality who— man Paul Volcker who chaired The Na- altogether in that area. Only twenty (1) is employed in a position on the execu- tional Commission on Public Service. years ago, hundreds of thousands of tive schedule under sections 5312 through His report supported reducing the num- 5316 of title 5, United States Code; dolphin were being killed each year in (2) is a limited term appointee, limited ber of Presidential appointees, stating the ETP. The Declaration presents the emergency appointee, or noncareer ap- that the number of political appointees opportunity to lock in a maximum of pointee in the senior executive service as de- may ‘‘actually undermine effective 5,000 dolphin mortalities per year and fined under section 3132(a) (5), (6), and (7) of presidential control of the executive strengthen other conservation meas- title 5, United States Code, respectively; or branch.’’ ures, including measures relating to (3) is employed in a position in the execu- Despite all this compelling evidence, fishery observers, bycatch reduction, tive branch of the Government of a confiden- Senator FEINGOLD and I have yet to be and the protection of specific stocks of tial or policy-determining character under successful in actually getting this leg- dolphins in the ETP. Schedule C of subpart C of part 213 of title 5 islation enacted. Last year, we passed of the Code of Federal Regulations. The dolphin mortality cap and new (b) LIMITATION.—The President, acting an amendment to the Treasury-Postal conservation measures under the Pan- through the Office of Management and Budg- appropriations bill that would have ama Declaration will only take effect et and the Office of Personnel Management, placed a 2300 cap on political ap- if specific changes are made to U.S. shall take such actions as necessary (includ- pointees. Unfortunately, however, the law. The two key changes are: (1) a ing reduction in force actions under proce- cap was dropped in conference. Given change to allow tuna caught in compli- dures established under section 3595 of title the new era of bipartisanship and the ance with the Panama Declaration (in- 5, United States Code) to ensure that the total number of political appointees shall President’s repeated statements that cluding through the encirclement of not exceed 2,000. he wants to balance the budget, I am dolphins) to be imported into the Unit- (c) EFFECTIVE DATE.—This section shall hopeful that we will be successful in ed States; and (2) a change so that take effect on October 1, 1997. this Congress. ‘‘dolphin Safe’’ in the U.S. will mean Mr. McCAIN. Mr. President, I am I look forward to working with my tuna caught in a set in which no dol- pleased to join with my good friend, friend from Wisconsin to enact this im- phin mortality occurred (rather than the junior Senator from Wisconsin [Mr. portant legislation that will streamline through non-encirclement). Our bill FEINGOLD] to introduce legislation that Government operations and save the would make these changes and allow will limit the number of political ap- taxpayers money. the new regime under the Panama Dec- pointees in the executive branch a laration to go forward. If the U.S. does total of 2000. This legislation could By Mr. STEVENS (for himself, not make the changes, other nations save an estimated $400 million over the Mr. BREAUX, Mr. THURMOND, will move forward without adequate next five years. and Mr. MURKOWSKI): conservation measures and significant There is no doubt that our Govern- S. 39. A bill to amend the Marine increases in dolphin mortality may ment is bloated. In recent years, the Mammal Protection Act of 1972 to sup- occur. number of political appointees has port the International Dolphin Con- Our legislation would guarantee U.S. grown exponentially. Author Paul servation Program in the eastern tropi- consumers that no dolphin were killed Light, in his book Thickening Govern- cal Pacific Ocean, and for other pur- during the harvest of tuna that is la- ment: Federal Government and the Dif- poses; to the Committee on Commerce, beled as ‘‘dolphin safe.’’ Under existing fusion of Accountability, reports a 430 Science, and Transportation. law, dolphins may have been killed, but percent increase in the number of po- THE INTERNATIONAL DOLPHIN CONSERVATION as long as the tuna was not harvested litical appointees and senior executives PROGRAM ACT by intentionally encircling dolphins, it in the Federal Government between Mr. STEVENS. Mr. President, during can be labeled as ‘‘dolphin safe.’’ To 1960 and 1992. The Congressional Re- the 104th Congress, Senators BREAUX, avoid consumer confusion and increase search Service also found that from CHAFEE, MOSELEY-BRAUN, MURKOWSKI, confidence in the ‘‘dolphin safe’’ label, 1980 to 1992, the number of political ap- THURMOND, SIMPSON and I introduced other labels with respect to marine pointees in the executive branch grew 3 legislation (S. 1420) to implement the mammals will not be allowed. Only times faster than the total number of ‘‘Panama Declaration,’’ an agreement ETP tuna caught without killing any executive branch employees 17 percent under which twelve nations would com- dolphins would be labeled as ‘‘dolphin compared to 5.6 percent. ply with a new regime to reduce dol- safe.’’ The Government must continue to phin mortality and conserve marine re- The Administration helped negotiate tighten its belt, and the executive sources in the Eastern Tropical Pacific the Panama Declaration, and the January 21, 1997 CONGRESSIONAL RECORD — SENATE S397 President and Vice President strongly accomplished by adoption of a binding reso- Conduct in 1998 a scientific review and as- support our legislation to implement lution of the IATTC or other legally binding sessment of progress toward the year 2001 ob- it. The bill is also supported by the instrument. The adoption of the IATTC reso- jective, and consider recommendations as lution or other legally binding instrument, U.S. tuna boat owners, mainstream en- appropriate. Up to the year 2001, in the event that utilizes to the maximum extent possible that annual mortality of 0.2% of Nmin is ex- vironmental groups such as the existing structure of the IATTC, is con- ceeded for any stock, all sets on that stock Greenpeace, the Center for Marine Con- tingent upon the enactment of changes in and on any mixed schools containing mem- servation, the Environmental Defense United States law as envisioned in Annex I bers of that stock shall cease for that fishing Fund, the National Wildlife Federa- to this Declaration. The binding legal instru- year. Beginning in the year 2001, in the event tion, and the World Wildlife Fund, the ment shall build upon the strengths and that annual mortality of 0.1% of Nmin for American Sportfishing Association, the achievements of the La Jolla Agreement, the any stock is exceeded, all sets on that stock working groups established under it, and the and on any mixed schools containing mem- National Fisherman’s Union, Seafarers actions of the Governments participating in International, and United Industrial bers of that stock shall cease for that fishing that Agreement. This binding legal instru- year. In the event that annual mortality of Workers, the 12 nations who signed the ment shall consist of the La Jolla Agree- 0.1% of Nmin is exceeded for either Eastern Panama Declaration (Belize, Columbia, ment, its appendices, and the decisions of the Spinner or Northeastern Spotted dolphin Costa Rica, Ecuador, France, Hon- governments under that Agreement as modi- stocks, the governments commit to conduct duras, Mexico, Panama, Spain, fied to achieve the objectives and commit- a scientific review and assessment and con- Vanuatu, and Venezuela), and the edi- ments contained herein. sider further recommendations. The Governments meeting in Panama torial boards of a number of the major Establish a per-vessel maximum annual agree that in concluding, adopting, and im- DML consistent with the established per- U.S. newspapers. plementing this binding legal instrument, I ask for unanimous consent that the year mortality caps. they will: Establish a system that provides incen- following material related to the bill Commit to the conservation of ecosystems tives to vessel captains to continue to reduce be printed in the RECORD immediately and the sustainable use of living marine re- dolphin mortality, with the goal of eliminat- following my statement: First, the sources related to the tuna fishery within ing dolphin mortality in the EPO. Panama Declaration; second, letter the EPO. Adopt conservation and manage- Establish or strengthen National Scientific ment measures that ensure the long-term from President Clinton to the Presi- Advisory Committees (NATSAC), or the sustainability of tuna stocks and other equivalent, of qualified experts, operating in dent to the Mexico supporting the leg- stocks of living marine resources in the EPO. islation; third, letter from Vice Presi- their individual capacities, which shall ad- Such measures shall be based on the best sci- vise their respective governments on mecha- dent GORE supporting the legislation; entific evidence, including that based on a nisms to facilitate research, and on the for- fourth, article by State Department precautionary methodology, and shall be de- mulation of recommendations for achieving signed to maintain or restore the biomass of Under Secretary Tim Wirth supporting the objectives and commitments contained harvested stocks at or above levels capable the legislation; and fifth, editorials, herein, or strengthen existing structures in of producing maximum sustainable yield, order to conform with the requirements de- op-eds, and opinion pieces from USA and with the goal to maintain or restore the lineated herein. Membership to NATSACs Today, the Washington Post, the Dal- biomass of associated stocks at or above lev- shall include, inter alia, qualified scientists las Morning News, the Houston Chron- els capable of producing maximum sustain- from the public and private sector and NGOs. icle, the New York Times, and the able yield. These measures and methodology The NATSACs shall: should take into consideration, and account Christian Science Monitor supporting 1. Receive and review data, including data for, natural variation, recruitment rate, nat- the legislation; sixth, letters from nu- provided to national authorities by the ural mortality rate, population growth rate, merous environmental, fishing, and LATTC; individual growth rate, population param- 2. Advise and recommend to their govern- labor organizations supporting the leg- eters K and r, and scientific uncertainty. ments measures and actions that should be islation. Commit, according to their capacities and I look forward to working with the in coordination with the IATTC, to the as- undertaken to conserve and manage the Chairman and Ranking Member of the sessment of the catch and bycatch of juve- stocks of living marine resources of the EPO; 3. Make recommendations to their govern- nile yellowfin tuna and other stocks of living Senate Commerce Committee to secure ments regarding research needs, including marine resources related to the tuna fishery the expeditious approval of the Com- ecosystems; fishing practices; and gear tech- in the EPO and the establishment of meas- mittee of this important bill, and with nology research, including the development the majority leader once the bill has ures to, inter alia, avoid, reduce and mini- mize the bycatch of juvenile yellowfin tuna and use of selective, environmentally safe been reported by the Committee. and bycatch of non-target species, in order and cost-effective fishing gear; and the co- There being no objection, the mate- to ensure the long-term sustainability of all ordination and facilitation of such research; 4. Conduct scientific reviews and assess- rial was ordered to be printed in the these species, taking into consideration of ments by the year 1998 regarding progress to- RECORD, as follows: the interrelationships among species in the ecosystem. ward the year 2001 objective stated above, DECLARATION OF PANAMA and make appropriate recommendations to The Governments of Belize, Colombia, Commit in the exercise of their national sovereignty to enact and enforce this instru- their governments concerning these reviews Costa Rica, Ecuador, France, Honduras, Mex- ment through domestic legislation and/or and assessments, as well as additional as- ico, Panama, Spain, United States of Amer- regulation, as appropriate. sessments in the year 2001 as provided above; ica, Vanuatu and Venezuela, meeting in Pan- Adopt cooperative measures to ensure 5. Consult other experts as needed; ama City, Republic of Panama on October 4, compliance with this instrument, building 6. Assure the regular and timely full ex- 1995, hereby reaffirm the commitments and upon decision IGM 6/93, Appendix IV, ‘‘Guid- change of data among the parties and the objectives of the La Jolla Agreement of (1) ing Principles Respecting Relationships be- NATSACs on catch of tuna and associated progressively reducing dolphin mortality in tween Stats Both Party and Non-Party to species and bycatch, including dolphin mor- the eastern Pacific Ocean (EPO) fishery to the Agreement,’’ taken by the nations par- tality data, for the purposes of developing levels approaching zero through the setting ticipating in the La Jolla Agreement Work- conservation and management recommenda- of annual limits and (2) with a goal of elimi- ing Group in Vanuatu in June 1993, and ad- tions to their governments as well as rec- nating dolphin mortality in this fishery, vance the work of the Working Group on ommendations for enforcement and sci- seeking ecologically sound means of captur- Compliance, building upon decision IGM 6/93, entific research while not violating the con- ing large yellowfin tunas not in association Appendix V, ‘‘Options for Action Against Na- fidentiality of business-confidential data; with dolphins. tions Not Complying With the Agreement.’’ 7. Establish procedures to, inter alia, hold Recognizing the strong commitments of (Annex II) public meetings and maintain the confiden- nations participating in the La Jolla Agree- Enhance the practice of reviewing and re- tiality of business-confidential data. ment and the substantial successes realized porting on compliance with this instrument, Reports of the NATSACs, including of through multilateral cooperation and sup- building upon past practices under the La their cooperative meetings, shall be avail- porting national action under that Agree- Jolla Agreement. able to the parties and the public. ment, the Governments meeting in Panama, Establish a per-stock per-year cap of be- The NATSACs shall cooperate, through including those which are, or have an- tween 0.2% of the Minimum Estimated Abun- regular and timely meetings, including at a nounced their intention to become, members dance (Nmin) (as calculated by the U.S. Na- minimum in conjunction with the meetings of the Inter-American Tropical Tuna Com- tional Marine Fisheries Service or equiva- of the LATTC, in the review of data and the mission (IATTC), announce their intention lent calculation standard) and 0.1% of Nmin, status of stocks, and in the development of to formalize by January 31, 1996, the La Jolla but in no event shall the total annual mor- advice for achieving the objectives and com- Agreement as a binding legal instrument tality exceed 5000 consistent with the com- mitments contained herein. which shall be open to all nations with mitments and objectives stated in the pre- Promote transparency in their implemen- coastlines bordering the EPO or with vessels amble above. In the year 2001, the per-stock, tation of this Declaration, including through fishing for tuna in this region. This shall be per-year cap shall be 0.1% of Nmin. public participation as appropriate. S398 CONGRESSIONAL RECORD — SENATE January 21, 1997

As soon as possible, the nations of the Restriction of access to ports and port THE WHITE HOUSE, Intergovernmental Group convened under servicing facilities for tuna fishing vessels of Washington, October 7, 1996. the auspices of the LATTC will initiate dis- the non-complying nation. This would not His Excellency, ERNESTO ZEDILLO PONCE DE cussions related to formulation of a new, apply to vessels in distress. LEON, permanent, binding instrument. Refusal of logistical support and/or sup- President of the United Mexican States, Mexico, ANNEX I plies to tuna-fishing vessels of the non-com- D.F. plying nation. Reduction of Dolphin Mortal- Envisioned changes in United States law: DEAR MR. PRESIDENT: As you know, our 1. Primary and Secondary Embargoes. Ef- ity Limits (DMLs) to all vessels of the non- governments have been working diligently fectively lifted for tuna caught in compli- complying Party by specified percentages. for several years to protect dolphins and ance with the La Jolla Agreement as formal- DMLs would be restored immediately upon a other marine life in the Eastern Tropical Pa- ized and modified through the processes set determination that the nation is in compli- cific. The adoption of the Panama Declara- forth in the Panama Declaration. ance. tion last year brought with it the promise of 2. Market Access. Effectively opened to Economic sanctions: further international cooperation in these Trade measures. The Working Group dis- tuna caught in compliance with the La Jolla efforts. cussed at length trade measures against non- Agreement as formalized and modified This year, the United States Congress con- complying nations. These might include em- through the processes set forth in the Pan- sidered legislation to implement the Panama bargoes or other restrictions on the imports ama Declaration with respect to States to Declaration. The House of Representatives of, for example, tuna, other fish products, include: IATTC Member States and other passed such legislation by a large majority. other marine products, or other products. States that have initiated steps, in accord- However, despite the considerable efforts of The consideration of such measures was ance with Article 5.3 of the IATTC Conven- my Administration and many others in our recognized to be an extremely delicate and tion, to become members of that organiza- country who support the Panama Declara- evolving policy issue for which few guide- tion. tion, we were unable to secure final passage lines exist in international law. The Working 3. Labeling. The term ‘‘dolphin safe’’ may of the legislation. Group noted ongoing discussions concerning not be used for any tuna caught in the EPO I wanted to express my deep disappoint- this issue in other international fora. In by a purse seine vessel in a set in which a ment with the failure to enact legislation to light of these considerations, the Working dolphin mortality occurred as documented implement the Panama Declaration this Group agreed that trade measures should re- by observers by weight calculation and well year. Let me assure you that passing such ceive further review by the Parties prior to location. legislation is a top priority for my Adminis- making any recommendation in this respect. tration and for me personally. We will work ANNEX II Fines (monetary penalties). The Working with members of the bipartisan coalition Guiding Principles respecting relationships Group considered that the IRP should iden- supporting the Panama Declaration to intro- between States both Party and Non-Party to tify procedures for imposing fines, including duce implementing legislation in the first 30 the Agreement. defining the value of the fines (this could be days of the new Congress and to pass such The Parties to the Agreement incorporate based on a percentage of the amount of the legislation as soon as possible thereafter. into the Agreement a guiding principle that commercial value of the catch), and the des- I believe it is important for us to continue no Party shall act in a manner that assists tination of the fines (e.g., an international to work together on this issue. non-parties to avoid compliance with the ob- trust fund) as issues that the Parties should Sincerely, jectives of the Agreement. discuss. The Working Group noted that there BILL CLINTON. When a coastal state that is a Party issues apparently is no precedent for such fines. a license to engage in fishing in its Exclusive B. Options for Action With Respect to Na- THE VICE PRESIDENT, Economic Zone portion of the eastern Pa- tions Not Party to the Agreement Washington, June 3, 1996. cific Ocean (EPO), either directly or through Diplomatic actions: Hon. TED STEVENS, a licensing agreement, to a vessel of a non- Collective representation to the non-party. Chairman, Subcommittee on Oceans and Fish- party, the license should be subject to the This would constitute a communication eries, U.S. Senate, Hart Senate Office Build- provisions of the Agreement. emanating from a plenary meeting of the ing, Washington, DC. The Parties should consider prohibiting participating nations after consultations DEAR TED: I am writing to thank you for persons under their jurisdiction from assist- with the non-party. your leadership on the International Dolphin ing in any way vessels of non-complying Par- Diplomatic communication. Each partici- Conservation Program Act, S. 1420. As you ties or non-parties operating in the fishery. pating nation, acting individually or in con- know, the Administration strongly supports Any state whose vessels are conducting cert with other nations, would undertake a this legislation, which is essential to the purse-seine tuna-fishing operations in the diplomatic demarche to the non-party. EPO should be invited to join the Agree- Public opinion actions: protection of dolphins and other marine life ment. The Parties should draw the attention Dissemination of information regarding in the Eastern Tropical Pacific. In recent years, we have reduced dolphin of any state that is not a party to the Agree- the non-compliance of the non-party to the mortality in the Eastern Tropical Pacific ment to any activity undertaken by its na- public through appropriate media, e.g., a tuna fishery far below historic levels. Your tionals or vessels which, in the opinion of press conference. legislation will codify an international the Parties, affects the implementation of Operational restrictions: agreement to lock these gains in place, fur- the objectives of the Agreement. Restriction of access to ports and port Options for Action With Respect to Na- servicing facilities for tuna-fishing vessels of ther reduce dolphin mortality, and protect tions Party to the Agreement the non-party. The scope of this action other marine life in the region. This agree- Diplomatic actions: would have to be determined by the IRP by ment was signed last year by the United Collective representation to the non-com- defining what constitutes a tuna-fishing ves- States and 11 other nations, but will not plying nation. This would constitute a com- sel, i.e., solely vessels covered by the Agree- take effect unless your legislation is enacted munication emanating from plenary meeting ment, or other tuna-fishing vessels as well. into law. of the participating nations after consulta- This action should not restrict freedom of As you know, S. 1420 is supported by major tion with the non-complying nation. navigation and other rights of vessels under environmental groups, including Greenpeace, Diplomatic communication. Each partici- international law, and particularly would the World Wildlife Fund, the National Wild- pating nation, acting individually or in con- not apply to vessels in distress. life Federation, the Center for Marine Con- cert with other nations, would undertake a Refusal of logistical support and/or sup- servation, and the Environmental Defense diplomatic demarche to the non-complying plies to tuna fishing vessels of the non-party Fund. The legislation is also supported by nation. nation. the U.S. fishing industry, which has been Public opinion actions: Prohibiting nationals from assisting in any barred from the Eastern Tropical Pacific Dissemination of information regarding way vessels of the non-party operating in the tuna fishery. the non-compliance of the nation to the pub- fishery. Opponents of this legislation promote al- lic through appropriate media, e.g., a press Economic sanctions: ternative fishing methods, such as ‘‘log fish- conference. The Working Group noted that economic ing’’ and ‘‘school fishing,’’ but these are en- Operational restrictions: sanctions with respect to non-parties call vironmentally unsound. These fishing meth- Denial of access to the Exclusive Economic into consideration all the issues raised above ods involve unacceptably high by-catch of Zones of nations party to the agreement for with respect to the imposition of such sanc- juvenile tunas, billfish, sharks, endangered fishing operations by tuna fishing vessels of tions on Parties, and noted that the imposi- sea turtles and other species, and pose long- the non-complying nation. The scope of this tion of such sanctions with respect to non- term threats to the marine ecosystem. action have to be determined by the Inter- parties involves additional complex legal I urge your colleagues to support this leg- national Review Panel (IRP) by defining considerations. The Working Group rec- islation. Passage of this legislation this ses- what constitutes a tuna-fishing vessel, i.e., ommends that the Parties consider whether sion is integral to ensure implementation of vessels covered by the Agreement, or other such sanctions against non-parties are an ap- an important international agreement that tuna-fishing vessels as well. This action propriate means of promoting compliance protects dolphins and other marine life in should not restrict freedom of navigation or with the objectives of the Agreement and the Eastern Tropical Pacific. other rights of vessels under international whether they are consistent with inter- Sincerely, law. national law. AL GORE. January 21, 1997 CONGRESSIONAL RECORD — SENATE S399 [From the Christian Science Monitor] in the name of long-term ecological and eco- Federation and World Wildlife Fund all sup- TAKE THE FINAL STEP TO PROTECT DOLPHINS nomic health. This is particularly true with port legislation in Congress to implement (By Timothy E. Wirth) dolphin conservation. Without the Panama the Panama Declaration, a binding inter- Declaration, most observers say, the IATTC national agreement signed by the United One of the sharpest criticisms of the envi- will collapse. States and 11 Latin American nations. The ronmental movement is that it is forever There are some environmental organiza- agreement will ensure continued reduction emphasizing major ecological ailments while tions who understandably say we should aim of dolphin deaths in the Eastern Tropical Pa- refusing to acknowledge even the slightest for an even higher moral standard, one where cific (ETP) tuna fishery and also protect environmental progress. no dolphins are killed during tuna fishing other ocean wildlife. Make no mistake, the magnitude of the (the Panama agreements would allow inci- As one of the organizations that led the world’s environmental challenges is as im- dental deaths totalling less than one-tenth fight for dolphin-safe labeling, CMC agrees mense as it is ominous. Yet in only a flash of of 1 percent of all dolphins in the Eastern with USA TODAY that we should benefit human history, we have begun to take on Tropical Pacific). Yet the Panama Declara- from experience and recognize that the cur- these challenges. There are successes about tion is more than a moral victory. It cele- rent law is having some unintended and un- which we can be optimistic; and they dem- brates an environmental success story and acceptably harmful impacts on ocean life. onstrate that reason and resolve, partnership rewards international partners for their co- Our commitment to conserving dolphins and passion, can get the better of dangerous operation and commitment in conserving and all ocean creatures leads us to support ecologist trends. marine mammals. It aims for no dolphin legislation to implement the Panama Dec- Almost 10 years ago, horrific footage of deaths in the future. laration. The legislation would lock in the dolphins being slaughtered in large numbers There is little alternative to the agree- dramatic progress that has been made in re- drove home the need for efforts to prevent ments signed in Panama. Countries through- ducing dolphin deaths in the ETP by more dolphin mortality in the tuna fishing indus- out the hemisphere have made it clear they than 95 percent. It would reduce unintended try. Having adopted a Marine Mammal Pro- are losing patience with what they see as an catches of sharks, billfish and sea turtles in tection Act for domestic fishing operations, unfair trade barrier—particularly in light of tuna nets and assure U.S. consumers no dol- the US began working with international the progress made in reducing dolphin mor- phins died, regardless of fishing method, in partners through the Inter-American Tropi- talities. If the US fails to take the steps nec- capturing the tuna found on the shelves. cal Tuna Commission (IATTC), with the aim essary to implement the Panama Declara- While those who oppose the agreement of reducing dolphin mortality. Congress also tion, these countries intend to return to fish- might like to live in a world where the U.S. enacted legislation that included a domestic ing methods that kill more dolphins. dictates international environmental policy, ban on the sale of tuna not caught in a man- At a time when our environmental laws the reality is far different. Increasingly, we ner deemed ‘‘dolphin safe.’’ and commitments are under attack, it is es- are seeing the need to promote international The results: Dolphin mortality has been sential that we consolidate gains made in cooperation, which can be a tremendous virtually eliminated, cut by more than 90 protecting the global environment. It’s time boon to environmental protection. percent in what is known as the Eastern to declare victory with swift congressional Failure to adopt this legislation could re- Tropical Pacific tuna fishery. This dramatic enactment of legislation that will implement sult in loss of controls on dolphin deaths. decline in dolphin mortality is attributable the Panama Declaration. The choice is between the rule of law and an- to American leadership and international co- archy on the seas. operation. The IATTC has evolved into one [From USA Today, Jan. 6, 1997] of the best and most rigorously enforced con- HELP SAVE DOLPHINS [From the USA Today, Dec. 27, 1996] servation regimes in the world. It’s time the United States and all con- I was pleased to see your Dec. 27 editorial DOLPHIN LAW HAS SERVED ITS PURPOSE; servationists recognize the enormous drop in supporting enactment of legislation for the REFORM IT dolphin mortality, strengthen this inter- protection of dolphins accidentally caught Last year, fewer than 3,300 dolphins died in national program, and set the stage for fur- during fishing operations for tuna (‘‘Dolphin the gigantic nets used to catch yellowfin ther progress. To do this we must reopen our law has served its purpose; reform it,’’ Our tuna in the eastern tropical Pacific Ocean. market to trade in tuna with cooperative na- View, Debate). That sounds like a lot, but it’s down from tions in the hemisphere. This legislation would implement a strong more than 130,000 in 1986, and it’s compelling Fortunately, last fall a coalition of envi- international agreement among the nations evidence that it’s time to reform the federal ronmental groups and Latin American coun- fishing for tuna in the eastern Pacific—one ban on tuna that is not ‘‘dolphin safe.’’ tries reached an agreement in Panama that of the best international marine resource For some unknown reason, tuna swim be- will accomplish these goals. The ‘‘Panama agreements in the world. neath dolphins. So for years, fishers set their Declaration,’’ endorsed by Greenpeace, the The agreement locks into place the dra- tuna nets around dolphins. Unfortunately, Center for Marine Conservation, the Envi- matic reduction in dolphin mortalities, the dolphins would get tangled in the nets ronmental Defense Fund, National Wildlife which is highlighted in the editorial, and in- with the tuna. Hundreds of thousands Federation, and the World Wildlife Fund, is a cludes a commitment by the nations in- drowned each year. model agreement not only for international volved in the fishery to work toward a goal That slaughter inspired Congress to begin cooperation, but also as a way to acknowl- of eliminating all dolphin deaths. The agree- passing laws to protect marine mammals as edge our accomplishments even as we aim to ment also provides for comprehensive mon- early as 1972. And the tuna industry has re- do better in the future. itoring by observers and strict penalties for sponded, designing dolphin-friendly nets and The Panama Declaration sets a goal of violations. developing tactics for herding dolphins out eliminating dolphin mortality altogether, Because the tuna fishery in the eastern Pa- before winching tuna in. Most recently, in establishes a binding program to protect a cific Ocean is conducted almost entirely by 1992, Congress embargoed all tuna caught by wide variety of species throughout the East- foreign vessels on the high seas or in their encircling dolphins and made the ‘‘dolphin- ern Tropical Pacific ecosystem, and requires own waters, it can be regulated effectively safe’’ label a condition for all tuna sold in that internationally trained observers are on only by international agreement. Yet, as the country. all tuna vessels, as well as additional meas- your editorial recognizes, the dolphin protec- The result has been both satisfying and ures to ensure compliance. tion agreement is in jeopardy because tuna troubling. The industry has developed safe The US will enable the Panama agree- trade embargoes imposed before the agree- ways of netting the tuna that run with dol- ments to take effect by reopening the US ment was negotiated continue against those phins. But the embargo also encourages fish- market to tuna caught in compliance with nations participating in the program. The ers to set their nets around ocean debris and the IATTC program, lifting the tuna embar- administration strongly supports your call schools of smaller tuna. This is ‘‘dolphin go, and requiring that labels for ‘‘dolphin for legislative reform to remove the trade safe,’’ but it nets and kills thousands of tons safe’’ tuna define fish caught without inci- embargoes and implement this important a year of other creatures—sharks, marlin, dental deaths of dolphins. A bipartisan coali- international program. even endangered sea turtles. tion—led by Sens. John Breaux (D) of Louisi- That’s a fast way to trash an ecosystem. ana and Ted Stevens (R) of Alaska—has in- [From USA Today, Jan. 3, 1997] Yet the practice continues because other- troduced legislation to implement these INTERNATIONAL COOPERATION NEEDED TO wise—no label. And no label, no market. agreements, and the Clinton administration PROTECT DOLPHINS, OTHER OCEAN LIFE It’s time to sing a different tuna. First, lift is working with Congress to ensure their im- The editorial ‘‘Dolphin law has served its the embargo, which applies only to tuna mediate passage. purpose; reform it’’ (Our View, Debate, Dec. caught by encircling dolphins, even though Gains of this magnitude in the conserva- 27) hit the nail on the head by pointing out other tactics may kill some dolphins, too. tion of marine mammals are difficult enough that so-called dolphin-safe fishing methods Instead, embargo fish when strict dolphin for one nation to achieve. Brokering resolu- are harmful to other wildlife including mortality rates are exceeded. And redefine tion to these challenges on an international sharks, billfish and sea turtles, which are as ‘‘dolphin safe’’ to mean fish caught without scale is far more challenging. It means per- much a part of the oceans as dolphins. a single dolphin death. This will: suading other nations, particularly those That is a major reason the Center for Ma- Help ease testy trade relations with coun- less fortunate than our own, to sacrifice rine Conservation (CMC), Environmental De- tries like Mexico, which has lost market short-term political and economic interests fense Fund, Greenpeace, National Wildlife share because of the embargo. S400 CONGRESSIONAL RECORD — SENATE January 21, 1997 Give the industry a reason to fish with ment will come unraveled and old-style fish- ing a healthy tuna fishery to future genera- methods that are ‘‘ocean safe’’ as well as dol- ing, cruder and cheaper, will reappear along tions. phin safe. with much higher dolphin deaths. They’re The pending legislation in the House and And help recover some of the American right. This agreement, carried out by the bill Senate would undo damage from a well-in- jobs that fled to Asia when the embargo that Sens. Ted Stevens (R-Alaska) and John tentioned 1988 embargo that banned tuna made it difficult to compete. Breaux (D-La.) are sponsoring, can provide from any nation that fished in the Eastern Contrary to some claims, the reforms permanent protection—as present law does Tropic Pacific Ocean (ETP) that killed dol- would not put dolphins in greater peril. In not—to the Pacific’s dolphins. phin at rates higher than did the U.S. fleet, fact, without these changes, nations that The hope was to stop the annual drowning of now voluntarily follow dolphin-safe practices [From the Dallas Morning News, July 30, hundreds of thousands of dolphins in nets have threatened to stop. That would increase 1996] cast around them for the tuna that tend to dolphin mortality. FOUL FISHING swim with dolphins. It backfired. Within two There’s another reason to reform the law. years, all foreign nations had been embar- U.S. SHOULD ACT TO MAKE TUNA TRULY To be effective, the nation’s enviroregs need goed. to harness market forces. And to be credible, ‘‘DOLPHIN-SAFE’’ Then, in 1990, Congress said any fishing they must also acknowledge success. Tuna Congratulations, Flipper! boats that stopped using the dangerous en- reform would satisfy both requirements Your chances of surviving to old age have circling net technology in the ETP could while proving to skeptics that Congress can improved greatly since the United States label their product ‘‘dolphin safe.’’ This too indeed capitalize on and reward compliance. began to embargo tuna caught in dolphin- has been a disaster because other fishing Doing so should be at the top of the new Con- killing nets and the food industry began to methods tend to kill great numbers of other gress’ fish-list. entice environmentally conscious consumers animals, such as endangered sea turtles, DOLPHINS SAFER with ‘‘dolphin-safe’’ tuna. sharks, billfish and juvenile tuna. The proof is in the numbers: Dolphin The number of dolphins killed in tuna nets Moreover, these attempts to protect dol- deaths related to tuna fishing in the eastern in the eastern tropical Pacific Ocean has phins in the ETP prompted a mass exodus of Pacific Ocean fell to fewer than 5,000 in 1994 fallen steeply. the U.S. tuna fleet in those waters, leaving from 600,000 in 1972. foreign fishing boats, which were embargoed 1989 96,979 However, you probably think that 5,000 dol- in the U.S. anyway to continue their harm- 1990 52,531 phin deaths are still too many. And you’re ful fishing practices in the ETP and the U.S. 1991 27,292 probably concerned that the methods used to fleet to continue ensnaring dolphins else- 1992 15,539 trap tuna still end up killing hundreds of 1993 3,601 where. thousands of pounds of other species, includ- 1994 4,096 Under the proposal before Congress, only ing sharks, marlins and endangered sea tur- 1995 1 3,274 tuna catches that involved no dolphin kills 1 Estimated. Source: Marine Mammal Commission. tles. whatsoever—and that fact must be certified Furthermore, you probably worry that the by an independent inspector aboard ship— [From the Washington Post, Dec. 16, 1995] ‘‘dolphin-safe’’ label on tuna cans is mislead- could be labeled ‘‘dolphin safe.’’ Such observ- ing. The label means only that dolphins were ers are already aboard many ships as a result SAVING DOLPHINS not encircled by nets in the eastern Pacific. of voluntary measures adopted by 12 coun- American law tries to protect dolphins It does not mean that no dolphins were tries, including the United States and Mex- even in international waters, and the time killed, or that dolphin-deadly methods were ico. The bill also seeks to lift the tuna em- has come to revise that law. In its present not used elsewhere in the Pacific or in other bargo to give foreign fishermen the incentive form, it will be much less effective in the fu- waters. to continue those voluntary measures. ture. But the opposed revisions now moving So, you probably like the new inter- The voluntary agreement, which induced through Congress sharply divide environ- national agreement designed to drastically tuna fishermen to actually free ensnared dol- mentalists. reduce the killing. So do we. Emphatically. phins by hand, are set to expire in 1999. Best Tuna have the habit of swimming under The Panama Declaration, which was signed estimates show only 5,000 dolphins were the dolphins, and to get the tuna, fishermen last year by the United States and 11 other killed under the voluntary protection meas- encircle the dolphins with their nets. In the countries, would allow fleets to return to the ures. Congress should continue this progress past this has led to an immense slaughter of old encirclement method of catching tuna. by passing this vital legislation. dolphins—three decades ago, more than But it would require signatories to use tech- [From the New York Times, July 7, 1996] 700,000 a year died in those nets in the great niques that allow dolphins to escape. Those THE BEST WAY TO SAVE DOLPHINS fishing grounds of the eastern Pacific. Amer- countries also would investigate ways to ican law now bans the importation not only avoid killing other species. The environmental community is engaged of tuna caught by encirclement but tuna The best thing about the new agreement is in a rare and bitter brawl over competing from any country that permits its fishermen that it is multilateral rather than unilat- Congressional bills aimed at protecting a be- to use those nets. That includes Mexico, but eral. In other words, it involves many coun- loved environmental symbol—the bottle- Mexican fishermen, hoping to regain access tries rather than just the United States. nosed dolphin. Each side thinks it has the to the U.S. market, have greatly improved Current U.S. law is well meaning, but it better scheme to protect dolphins that are their practices. The dolphin kill last year puts the heaviest burden on U.S. fleets by incidentally trapped and killed by the giant was under 5,000—a triumph of conservation. forbidding them alone from using the nets used by tuna fleets. This is a complex, But it won’t last. For one thing, the alter- ancirclement method. And it puts the United emotional issue and all the disputants are native methods of catching tuna, while spar- States in the awkward position of heavy- animated by the best of intentions. But the ing the dolphins, are wasteful of other valu- handedly denying its market to foreigners to approach contained in a measure sponsored able and sometimes rare marine life. More compel good behavior. by Representative Wayne Gilchrest, a Mary- important, admission to the U.S. market is Bills to approve the agreement have passed land Republican, and supported by the Clin- becoming less effective as an incentive. unanimously in Senate and House commit- ton Administration, offers the dolphin a bet- Other markets are opening up rapidly in tees. They have President Clinton’s support. ter chance than the alternatives. Asian and Latin American countries that Despite opposition from some environmental Mr. Gilchrest’s bill rubs a lot of people the have no rules whatever on the tuna catch. groups, who cling to the outdated notion wrong way because it seems to endorse the To lock in the recent progress, the United that unilateral action by the United States very fishing methods that got the dolphin in States has negotiated a binding agreement is best, there is no good reason why both trouble in the first place. For reasons that among all the countries that have fishing houses of Congress should not pass the bills are not fully understood by scientists, adult fleets in the eastern Pacific. It would con- and send them to Mr. Clinton for his signa- tuna in the rich fishing grounds of the east- tinue to press for lower dolphin mortality, ture. ern Pacific tend to congregate underneath but it would permit the use of the encircling dolphins. Tuna vessels follow a school of dol- nets. They can be manipulated to spill out phins, cast their mile-long nets and haul in [From the Houston Chronicle, July 13, 1996] the dolphin before the tuna are hauled the tuna below. Until a few years ago, thou- aboard, and international observers are on DOLPHIN SAFE sands of dolphins routinely drowned in the every tuna boat in the eastern Pacific. The Consumers who choose only tuna marked nets or were crushed when the boats winched new agreement would allow into this coun- ‘‘dolphin safe’’ because they believe it means them in. try tuna taken in any supervised haul that these highly intelligent mammals are not In 1990, Congress placed an embargo on all did not result in the death of dolphins. being harmed in the tuna fishing process tuna caught by this method, known as ‘‘en- Some environmental organizations object may not be getting what they are paying for. circlement,’’ costing big tuna-fishing coun- vehemently to encircling nets on any terms A bill now before Congress that has broad tries like Mexico, Ecuador and Costa Rica and point out that, while the number of dol- support from environmental groups and the hundreds of millions of dollars. In 1992, these phin deaths would be small, it wouldn’t be tuna fishing industry will ensure that ‘‘dol- countries convened in La Jolla, Calif., with zero. They demand zero. Other environ- phin safe’’ means what it implies. The bill United States officials and pledged to adopt mentalists reply that if Congress doesn’t ac- would also help safeguard the delicate eco- safer fishing methods. They did not abandon cept this deal, the new international agree- system of prime tuna fishing waters, ensur- the encirclement method, but they vastly January 21, 1997 CONGRESSIONAL RECORD — SENATE S401 improved it. They installed dolphin ‘‘safety bargo lifted. The argument is simple: If and managed the tuna fishery in the Eastern panels’’ in their nets, which acted as escape fleets do not receive some reward for their Tropical Pacific; hatches. They deployed divers to assist dol- changed behavior soon, they will revert to Link enforcement of the binding inter- phins who could not find their way out. They their old and easier ways of fishing, and dol- national agreement to strong embargo provi- learned how to dip their nets deeper into the phin casualties will rise. Under the proposal, sions; water to allow dolphins to escape while re- the international monitoring program would Protect the ecosystem of the Eastern Trop- taining the tuna. These new techniques led remain in effect. ical Pacific Ocean by reducing bycatch of to a stunning drop in dolphin mortality in But opponents in Congress may stall any other marine species such as juvenile tuna, the eastern Pacific—from 133,000 killed in action. The opponents are backed by other sharks, and endangered sea turtles in the 1986 to 3,274 last year, a figure calculated by environmental groups, such as the Sierra tuna fishery; and independent monitors on boats that used the Club and Earth Island Institute. They argue Strengthen the scientific basis for the con- improved encirclement techniques. Even so, for zero-tolerance in dolphin-killing, and servation and management of the tuna fish- the tuna caught by encirclement have re- they also believe that the chasing and encir- ery, as well as research into assessing the mained embargoed. clement may harm dolphins without killing impact of chase and encirclement on dol- Mr. Gilchrest’s bill, which has the endorse- them. phins and developing gear and techniques ment of Vice President Al Gore, would re- Unfortunately, alternative methods of that do not require setting nets around dol- ward these efforts by lifting the embargo. tuna fishing appear to produce large phins to catch tuna. The bill would also reward any batch of tuna ‘‘bycatches’’ of immature tuna, thus raising In short, the current voluntary inter- caught without a single dolphin death—a questions of depletion, and of other species, national regime is not durable. Accordingly, fact to be verified by on-board monitors— including endangered turtles. More to the it is essential that we act now to lock in with the coveted and commercially impor- point, an insistence on zero dolphin deaths long term protections for dolphin popu- tant ‘‘dolphin-safe’’ label. could squander the progress made so far, lations, rather than wait until the inter- The Gilchrest measure has the support of since virtually all of the fishing in question national commitments for dolphin conserva- Greenpeace, the Environmental Defense takes place in international waters by for- tion unravel. This legislation will resolve Fund and several other advocacy groups. It eign fleets. And alternative markets exist. the long-standing tuna/dolphin controversy is opposed by the Sierra Club and the De- Sen. Barbara Boxer (D-Calif.), who helped and establish measures that will protect dol- fenders of Wildlife, and by the Earth Island lead the campaign for dolphin-free tuna, is phins and the ecosystem. We urge you to co- Institute in San Francisco, which has done right to insist on research on the effects on sponsor H.R. 2823. If you have questions, more than any other group to call attention the dolphin population of circle-net fishing. please contact: Rodrigo Prudencio, National to dolphin mortality. Earth Island’s cham- Further studies also should be conducted on Wildlife Federation, 202–797–6603; Nina pion in the Senate is Barbara Boxer, the the bycatch dangers of alternative methods. Young, Center for Marine Conservation, 202– California Democrat, whose bill would con- But this is one case where a quest for perfec- 857–3276; Annie Petsonk, Environmental De- tinue to ban all tuna caught by the encircle- tion could unravel the substantial progress fense Fund, 202–387–3500; Gerry Leape, ment method. that has been achieved. Greenpeace, 202–462–1177; Scott Burns/David Unfortunately, the other methods of trap- Schorr, World Wildlife Fund, 202–293–4800. ping tuna carry serious disadvantages. Under ATTENTION REPRESENTATIVES—OPEN LETTER one approach, fishermen cast their nets TO REPRESENTATIVES ON H.R. 2823, THE CENTER FOR MARINE CONSERVATION, ENVIRON- around logs and other debris floating near INTERNATIONAL DOLPHIN CONSERVATION MENTAL DEFENSE FUND GREENPEACE, NA- the shoreline, which often attract tuna. That PROGRAM ACT AND THE PANAMA DECLARA- TIONAL WILDLIFE FEDERATION, WORLD is safe for dolphins, but it kills a huge ‘‘by- TION, JANUARY 3, 1996 WILDLIFE FUND catch’’ of sharks, turtles and other valuable DEAR REPRESENTATIVE: Recently, twelve ‘‘GREEN’’ POINTS IN SUPPORT OF H.R. 2823 marine life, not to mention tons of juvenile nations, including the United States, signed From a conservation and environmental tuna whose demise imperils future tuna the Declaration of Panama, an historic perspective, H.R. 2823 (the International Dol- stocks. international agreement to protect dolphins phin Conservation Program Act) merits full Senator John Chafee, a Republican envi- and biodiversity in the Eastern Tropical Pa- House passage because (not prioritized): ronmentalist who is sponsoring a Senate bill cific Ocean. The Panama Declaration, en- 1. It’s Better for Dolphins: comparable to Mr. Gilchrest’s, believes that dorsed by the Clinton Administration, the Locks into place binding international not just the dolphin but an entire marine Center for Marine Conservation, Environ- legal protections for dolphins in the Eastern ecosystem is at stake. He has concluded, mental Defense Fund, Greenpeace, National Tropical Pacific (ETP) Ocean. The current rightly, that the best response is the once- Wildlife Federation, and World Wildlife ETP dolphin protection is entirely vol- reviled but much-improved encirclement Fund, will continue progress in reducing dol- untary, based on the 1992 ‘‘La Jolla’’ pro- method. phin deaths in these waters and will extend gram. In October 1995, all of the ETP fishing protection to other marine life as well. nations signed the ‘‘Panama Declaration.’’ [From the Washington Post, July 4, 1996] Further, the Center for Marine Conserva- That Declaration strengthens further the SAVE MOST OF THE DOLPHINS tion, the Environmental Defense Fund, ‘‘La Jolla’’ program, and sets in motion a For reasons humans have yet to under- Greenpeace, National Wildlife Federation, process to make the program legally binding, stand, dolphins in the eastern Pacific Ocean and World Wildlife Fund support H.R. 2823, contingent on changes in U.S. law that are often swim above schools of yellowfin tuna. the International Dolphin Conservation Pro- part and parcel of H.R. 2823’s reforms, includ- This made them for years the unintended tection Act. H.R. 2823, if enacted, will imple- ing observers and other monitoring, verifica- victims of tuna fishermen, innocent bystand- ment the Panama Declaration which will: tion and tracking of catch; research and en- ers killed at a rate of perhaps half a million Achieve a legally binding agreement on all forcement. per year. In 1990, when American consumers fishing nations, mandating progressive re- Allows dolphin stocks to recover. The re- saw videotape of dolphins suffering in giant ductions in dolphin mortality toward zero markable success of the MMPA and the vol- tuna nets, an outcry led to a movement for through the setting of annual limits; untary La Jolla agreement have resulted in ‘‘dolphin-safe’’ tuna. The largest canneries Build upon recent gains in dolphin protec- an almost 99 percent reduction in dolphin pledged not to buy any fish captured along- tion, accelerate the current schedule for re- mortality in the ETP. Up until the early side dolphin, and Congress enacted an embar- ducing dolphin mortality by several years, 1990s, though, many dolphin species in the go against countries engaging in the kind of impose mortality limits that are more re- ETP suffered annual mortality rates high fishing that endangers these highly intel- strictive than those currently in place, and enough to hamper or retard their recovery. ligent animals. lock in the goal of eliminating dolphin mor- But now, those stocks are stable, with mor- Since then, an international effort led by tality in the tuna fishery; tality rates (for all stocks) below 0.2% of the the United States has led to a remarkable Establish mortality limits and protection population abundance—a level more than change in the behavior of the fishing fleet. for individual dolphin stocks to ensure their four times lower than that recommended by Boats in the eastern Pacific still use circle growth and recovery; the National Research Council to allow re- nets that capture dolphins, but their opera- Preserve and strengthen the existing dol- covery. Moreover, H.R. 2823 requires that tors have developed gear and methods that phin conservation program which makes it these annual mortality rates be further re- allow most of the dolphins to escape. During illegal to set nets around dolphins after dark duced to less than 0.1% of the population the past two years, the number of dolphins or use explosives to disorient dolphins; abundance, with the goal of eliminating killed has fallen to about 4,000 per year. Expand and further develop enforceable on- mortality entirely. These new levels of pro- International observers posted on every boat board observer programs and tracking sys- tection for dolphins have been endorsed by makes these figures credible. The dolphin tems that guarantee that no dolphins died to leading scientists. population of 9.5 million is believed to be catch ‘‘dolphin-safe’’ tuna from the Eastern Addresses effectively the issue of ‘‘chase stable or increasing. Tropical Pacific Ocean; and encirclement’’ of dolphins, establishing Now the Clinton administration, with bi- Prevent the dismantlement of existing a process for investigation and further ac- partisan backing in Congress and the support international agreements and the Inter- tion, as merited, regarding the health-relat- of Greenpeace, the World Wildlife Fund and American Tropical Tuna Commission which ed impacts of capture stress. Concerns have other environmental groups, wants the em- have effectively reduced dolphin mortality been raised that the chase and encirclement S402 CONGRESSIONAL RECORD — SENATE January 21, 1997 of dolphins causes harm and stress levels sanction that serves as one of the means of utable to U.S. tuna vessels, these deaths con- that can impede dolphin reproduction or re- ensuring compliance with and enforcement tinue in regions where U.S. law is irrelevant. sult in dolphin deaths. While dolphins that of the proposed legally binding agreement Disallowing encirclement of dolphins, with are chased and encircled probably experience called for in the Panama Declaration. whom adult tuna migrate, put fishermen in some level of stress, there is no conclusive Makes possible stronger international con- the position of focusing their effort or juve- scientific evidenced that chase and encircle- servation policy for dolphins, as well as nile tuna which tend to congregate near ment reduces reproductive capacity, causes other marine species impacted in the ETP shore in schools, or under floating debris dolphins to die after release, or develop fishery. The Panama Declaration, and the re- such as logs. This breaks the cardinal rule of stress-related diseases. In fact, there is evi- sulting multilateral environmental agree- successful fisheries management; harvest dence that some dolphins have habituated to ment (MEA) made possible by H.R. 2823’s only mature fish which have spawned at encirclement and have developed behaviors passage, will result in strengthened con- least once. Biologists are concerned that a that reduce their risks in the net. Neverthe- servation and enforcement measures applica- currently well-managed, healthy fishery will less, the stress issue should be further inves- ble to all ETP fishing nations. At the same begin to decline if efforts continue to focus tigated, followed by a report and rec- time, that MEA, once agreed by all ETP fish- on young tuna. ommendations to Congress—as called for in ing nations, will be far less vulnerable to a Equally alarming is a Greenpeace study H.R. 2823 (Sec. 302(d)(4)). WTO-type trade challenge than have been showing that methods considered ‘‘dolphin- 2. It’s Better for Other Sea Life: the unilateral MMPA sanctions like those safe’’ under U.S. law have resulted in hun- Contains tough provisions that require challenged by Mexico in 1991. dreds of thousands of pounds of by-catch (in- fishers to protect not only the dolphins, but cidental harvest) of other species in the past A DOLPHIN-SAFE LABEL THAT REALLY MEANS also the tuna stocks on which the fishery de- 3 years alone. Sharks, sea turtles, other fish, IT pends, as well as other species, like sharks, and yes, even dolphins, congregate with juve- bill fish and sea turtles that get caught in What’s in a label? Well, if you have eaten nile tuna and are unavoidably killed in the the purse seine nets used in the ETP fishery. tuna in the past five years, take note: the fishery. From an ecosystem perspective, this One of the MMPA’s stated objectives is to ‘‘dolphin-safe’’ label you have grown to trust is intolerable. maintain the health and stability of marine is neither as dolphin-safe nor ecologically- So what needs to be done to protect dol- ecosystems, but to date little attention has sound as you may think. Our nation’s land- phins? Switching from one fishing method to been given to this objective. H.R. 2823 re- mark dolphin protection and product label- another in a small section of the world’s quires observers stationed on every vessel to ing laws have resulted in unintended con- ocean has not solved the problem. And sim- record bycatch of all species, and requires sequences which have actually exacerbated ply shutting down the tuna fishery alto- fishers to minimize that bycatch. some marine resource problems, while fail- gether would threaten the survival of fishing Recognizes that ‘‘dolphin-safe’’ and ‘‘eco- ing to guarantee that dolphins were not communities and the ability to feed a grow- system-safe’’ fishing go hand-in-hand. Re- killed when harvesting your tuna. ing world population. Tuna is the leading cent data indicate that fishing methods that The campaign to save dolphins had all the seafood product consumed in America, and a do not involve setting nets around dolphins, right intentions. Combined with the 25-year renewable protein source for poor and low-in- such as setting nets on schools of tuna or effort to enact and strengthen the Marine come persons the world over. logs, have 10 to 100 times greater bycatch of Mammal Protection Act (MMPA), the cam- Unilateral embargoes by the U.S. alone also have proved unable to save the world’s other sea life. This bycatch is alarming, es- paign educated the public about a serious dolphins. Indeed, the unilateral embargo on pecially for species that reproduce slowly, problem. Since its 1972 passage, the MMPA imports of ‘‘dolphin-unsafe’’ tuna has led to such as sharks, sea turtles and billfish. In went on to spur a reduction in dolphin mor- a trade dispute under the General Agreement addition, the IATTC estimates that, if sets talities in the Eastern Tropical Pacific ocean on Tariffs and Trade (GATT). on dolphin were replaced by school and log (ETP) from as many as 600,000 a year to fewer than 5,000 by 1994. Clearly, there has long been a need for a sets, from 10 to 25 million juvenile tuna strong international approach. Recognizing would be discarded. Domestic and inter- The effort to continue this success resulted in the landmark 1992 dolphin-safe laws, this, international negotiators began devel- national fisheries conservation efforts have oping an alternative, multilateral agreement made bycatch reduction a priority. H.R. 2823 which encompassed three key elements: dis- allowing the common fishing practice of en- which put observers on all tuna vessels fish- provides the best vehicle to develop imme- ing in the ETP, regardless of nationality and diate measures to avoid, reduce, and mini- circling dolphins to catch the tuna that mi- grate with them, monitoring and reporting method of fishing. That program also set mize bycatch of juvenile yellowfin tuna and progressively declining caps on dolphin mor- other marine life. In contrast, the Miller of any dolphin deaths that did occur, and an embargo on imports of non-dolphin-safe tality. substitute (H.R. 2856) unfortunately pro- This plan has now been strengthened and tuna. These principles were the backbone of motes a substantial increase in the waste of extended in a recent accord known as the what American consumers recognize as the immature tuna and other bycatch species, by ‘‘Panama Declaration.’’ Supported by ‘‘dolphin-safe’’ label. encouraging shifts to those non-encircle- Greenpeace, the Seafarers International More than three years later, however, the ment fishing methods. Union (SIU), the Clinton administration and failings of the 1992 law are evidenced not 3. It’s Better for Consumers: a growing contingent in Congress, this ac- only in the continuing deaths of dolphins, Strengthens the popular ‘‘dolphin-safe’’ cord take a significant step towards achiev- but of the damage to the ocean ecosystem as label, assuring consumers that no dolphins ing the twin goals of saving dolphins and a whole. To understand why this destruction died in the catch of labelled tuna. Under the other marine species from extinction while of marine life persists, it is necessary to ex- current definition (carried forward in the insuring a sustainable and healthy tuna fish- Miller substitute), consumers are misled into amine the shortcomings of the 1992 laws— ery. believing the current ‘‘dolphin-safe’’ label and the recent and most promising attempt Hammered out through difficult negotia- has solved the tuna-dolphin issue, and that to address these problems on an inter- tions between government representatives, dolphins no longer die in tuna sets. Sadly, national level, the Panama Declaration. environmentalists, and fishermen, this this is not the case. Fishers continue to en- At the root of the problem is the fact that agreement would legally bind countries to circle dolphins at the same rate as prior to while tuna is caught around the world, U.S. require mandatory enforcement measures the establishment of the ‘‘dolphin-safe’’ dolphin protection laws are applicable only and reporting internationally, while reward- label. Truth-in-labeling lies in the passage of in the ETP. As strong as the laws may be, ing fishermen who do not kill dolphins. The H.R. 2823, because it tells the consumer they do not uniformly apply in other re- agreement would mandate continued reduc- whether or not a dolphin died, and not just gions, which yield as much as 80 percent of tions of dolphin deaths, and would bring about what fishing technique was used. It the world’s tuna. Unfortunately, this policy many new boats under a regulatory frame- gives consumers the ability to choose tuna is based on the unproven assumption that work to reduce by-catch of all marine spe- caught without killing dolphins, and that tuna outside the ETP do not migrate with cies. power of choice, in turn, gives fishers the in- marine mammals. Hence, tuna sold in the To take the next step, U.S. laws on dol- centive to reduce dolphin mortality further U.S. from other regions are also afforded the phin-safe labeling requirements must be re- toward zero. ‘‘dolphin-safe’’ label, amounting to little written in accord with the Panama Declara- 4. It’s Better for International Environ- more than a p.r. gimmick here and abroad. tion. Also, the current unilateral embargo mental Policy: Furthermore, the ‘‘dolphin-safe’’ label only must be replaced with internationally agreed Raises other countries’ environmental per- means that no dolphins were ‘‘encircled’’ by upon enforcement measures which allow the formance to the U.S. level, and to more sus- fishing nets in the ETP; it does not mean U.S. to impose trade sanctions on nations tainable levels, by ensuring that foreign- that no dolphins or other marine mammals failing to live up to their commitment to caught tuna sold in foreign countries will were harmed or killed during tuna harvests. dolphins. Congress is now considering these meet the same strong dolphin and other spe- The prohibition of dolphin encirclement by changes. Greenpeace and the SIU strongly cies/ecosystem protection requirements that American vessels in the ETP sparked a mass opposed passage of the NAFTA and GATT we apply to tuna sold in our country. More- exodus of more than 95 percent of the U.S. treaties last year. We believed then as now over, H.R. 2823 provides that if ETP fishing fleet. Most vessels headed for the Southern that those agreements fundamentally weak- nations fail to meet the multilaterally- Pacific, while some owners simply sold their en a nation’s ability to pass and enforce agreed standards, their tuna will be banned boats to citizens of other nations. So while strong environmental, health, safety, and from import into the United States—a trade few if any recent dolphin deaths are attrib- labor protection laws. January 21, 1997 CONGRESSIONAL RECORD — SENATE S403 At the same time, many environmental In recent years, there has been some tablishes a common environmental crises know no borders, and the unnecessary concern about these fishing practices standard for all countries fishing in the killing of marine mammals is one such cri- which, in the past, have resulted in ex- region. By formalizing the La Jolla sis. One country acting alone cannot save the oceans and protect their bounty. Once we cessive incidental mortality to dol- Agreement, U.S. and foreign fishermen succeed in getting governments and fisher- phins. In 1992, in an effort to address in the eastern tropical Pacific will be men to agree to a goal of zero dolphin this problem, 10 nations with tuna ves- subject to the most stringent fishery deaths, we will achieve real truth in label- sels operating in the eastern tropical regulations in the world. ing, and more importantly, a package dol- Pacific signed an agreement known as The Panama Declaration represents a phins can truly live with. the La Jolla Agreement. The La Jolla tremendous environmental achieve- BARBARA DUDLEY, Agreement established the Inter- ment, and it enjoys support from such Executive Director, national Dolphin Conservation Pro- diverse interests as major, mainstream Greenpeace U.S. gram [IDCP], which is administered by environmental groups, the U.S. tuna JOSEPH SACCO, Executive Vice Presi- the IATTC. fishing fleet, the Clinton administra- dent, Seafarers The regional objective of the IDCP is tion, and other countries whose fisher- International Union to reduce dolphin mortalities to insig- men operate in the eastern tropical Pa- of North America. nificant levels approaching zero, with a cific. STEVE EDNEY, goal of eliminating them entirely. Pur- Mr. President, I ask unanimous con- National Director, suant to that program, the number of sent that a letter of support from Vice United Industrial dolphins killed accidentally in the President GORE be entered into the Workers. tuna fishery has been reduced to less RECORD. TERRY HOINSKY, I am encouraged that the majority President, Fishermen’s than 4,000. annually from a previous Union of America. average of over 300,000 killed annually. leader, on the Senate floor on Septem- ber 30, 1996, had promised to provide Mr. BREAUX. Mr. President, today, The current dolphin mortality rep- floor time at the beginning of this Con- along with Senator STEVENS and oth- resents approximately four one-hun- gress to vote on this legislation. I urge ers, I am introducing legislation that dredths of 1 percent of the 9.5 million my colleagues to join me in supporting will implement the Panama Declara- dolphins of the eastern tropical Pa- this legislation in order that we may tion for the protection of dolphins in cific. Thus, the IDCP has been remark- implement this important inter- the tuna fishery of the eastern tropical ably successful in achieving its goal of national agreement. Pacific Ocean. The United States reducing unintended dolphin mortali- There being no objection, the letter signed the Panama Declaration on Oc- ties to biologically insignificant levels was ordered to be printed in the tober 4, 1995, along with the Govern- approaching zero. RECORD, as follows: ments of Belize, Colombia, Costa Rica, This legislation will implement the THE VICE PRESIDENT, Ecuador, France, Honduras, Mexico, Panama Declaration, formalize the 1992 La Jolla Agreement and make it a Washington, June 3, 1996. Panama, Spain, Vanuatu, and Ven- Hon. JOHN B. BREAUX, ezuela. by agreeing to the Panama Dec- legal agreement binding on the mem- U.S. Senate, laration, these countries have dem- ber countries of the IATTC. The Pan- Washington, DC. onstrated their commitment to the ama Declaration strengthens the IDCP DEAR JOHN: I am writing to thank you for conservation of ecosystems and the and furthers its goals by placing a cap your leadership on the International Dolphin sustainable use of living resources re- of 5,000 per year on dolphin mortalities. Conservation Program Act, S. 1420. As you Although U.S. fishermen developed know, the Administration strongly supports lated to the tuna fishery in the eastern this legislation, which is essential to the tropical Pacific. the techniques now used in capturing tuna and safely releasing dolphins, protection of dolphins and other marine life By implementing the Panama Dec- in the Eastern Tropical Pacific. laration, we will strengthen the Inter- they effectively have been forced from In recent years, we have reduced dolphin American Tropical Tuna Commission fishing in the eastern tropical Pacific mortality in the Eastern Tropical Pacific [IATTC], which has proven to be an ex- since the 1992 amendments to the Ma- tuna fishery far below historic levels. Your tremely effective international re- rine Mammal Protection Act, which legislation will codify an international source management organization. Im- prohibit the encirclement of dolphins. agreement to lock these gains in place, fur- plementing the Panama Declaration The legislation to implement the Pan- ther reduce dolphin mortality, and protect ama Declaration will eliminate the in- other marine life in the region. This agree- will ensure the reduction of dolphin ment was signed last year by the United mortalities associated with tuna fish- equitable treatment of United States States and 11 other nations, but will not ing in the eastern tropical Pacific tuna fishermen and enable them to re- take effect unless your legislation is enacted Ocean. In addition, we will enable enter this important fishery on an into law. American tuna fishermen to re-enter equal footing with foreign fishermen. As you know, S. 1420 is supported by major that tuna fishery on the same footing The 1992 ban on encirclement of dol- environmental groups, including Greenpeace, as foreign fishermen. phins has required fishermen to use al- the World Wildlife Fund, the National Wild- Since 1949, the IATTC has served as ternative fishing practices which have life Federation, the Center for Marine Con- the regional fishery management orga- serious environmental consequences. servation, and the Environmental Defense Fund. The legislation is also supported by nization for the tuna fishery of the Alternative fishing practices lead to the U.S. fishing industry, which has been eastern tropical Pacific Ocean, manag- excessive bycatch of endangered sea barred from the Eastern Tropical Pacific ing that fishery in an exemplary man- turtles, sharks, billfish, and great num- tuna fishery. ner. Managing migratory species re- bers of immature tuna and other fish Opponents of this legislation promote al- quires a multilateral approach, one species. In an attempt to manage a sin- ternative fishing methods, such as ‘‘log fish- which the IATTC is well-suited to per- gle species, in this case dolphins, we ing’’ and ‘‘school fishing,’’ but these are en- form. The yellowfin tuna fishery of the have caused serious harm to the entire vironmentally unsound. These fishing meth- eastern tropical Pacific Ocean, which ecosystem. This legislation will result ods involve unacceptably high by-catch of juvenile tunas, billfish, sharks, endangered the Panama Declaration addresses, in a reduction of this bycatch problem sea turtles and other species, and pose long- falls under the auspices of the IATTC. as well as permit fishermen to encircle term threats to the marine ecosystem. In that fishery, tuna fishermen use dol- dolphins as long as they comply with I urge your colleagues to support this leg- phins to locate schools of large, mature the stringent regulations imposed by islation. Passage of this legislation this ses- yellowfin tuna which, for unknown rea- the IATTC. sion is integral to ensure implementation of sons, associate with schools of dolphin. The purpose of this bill is to improve an important international agreement that Once the schools of dolphin have been and solidify efforts to protect dolphins protects dolphins and other marine life in located, the fishermen use purse seine in the eastern tropical Pacific Ocean, the Eastern Tropical Pacific. Sincerely, nets to encircle the dolphins with the eliminate the bycatch problems caused AL GORE. objective of catching the tuna swim- by alternative fishing methods, and ming below. The dolphins are then recognize the tremendous gains by By Mr. HELMS: safely released before the tuna is other countries in reducing dolphin S. 41. A bill to prohibit the provision hauled abroad. mortality. The Panama Declaration es- of Federal funds to any State or local S404 CONGRESSIONAL RECORD — SENATE January 21, 1997 educational agency that denies or pre- faced with real consequences for mak- huge majority of the American people, vents participation in constitutional ing uninformed and unconstitutional and enact this legislation. A Wirthlin prayer in schools; read twice and decisions prohibiting all voluntary poll reported in Reader’s Digest indi- placed on the calendar. prayer. The bill creates a complete sys- cates that 75 percent of our citizens VOLUNTARY SCHOOL PRAYER PROTECTION tem of checks and balances to ensure favor prayer in public schools. My leg- Mr. HELMS. Mr. President, this year that school districts do not short- islation ensures that the American marks the 200th anniversary of George change their students one way or the people’s will to protect constitu- Washington’s departure from public other. tionally sanctioned prayer in our Na- life. A few months before the end of his This proposal, Mr. President, pre- tion’s schools is accomplished—and Presidency, in his farewell address to vents public schools from prohibiting shows Congress’s respect for the moral the Nation, he included a parting word constitutionally protected voluntary and spiritual values that make our Na- of advice—and a final warning—that is student-initiated prayer. It does not tion whole. just as significant and relevant today mandate school prayer and suggestions as it was then. Washington counseled to the contrary are simply in error. By Mr. HELMS: the new Nation: Nor does it require schools to write any S. 42. A bill to protect the lives of un- Of all the dispositions and habits which particular prayer, or compel any stu- born human beings; read twice, and lead to political prosperity, religion and mo- dent to participate in prayer. It does placed on the calendar. rality are indispensable supports. In vain not prevent school districts from estab- THE UNBORN CHILDREN’S CIVIL RIGHTS ACT would that man claim the tribute to patriot- lishing appropriate time, place, and Mr. HELMS. Mr. President, 2 years ism who should labor to subvert these great manner restrictions on voluntary pray- pillars of human happiness. ago—and on five occasions prior to er—the same kind of restrictions that that—I have offered the Unborn Chil- Our Founding Fathers understood are placed on other forms of speech in dren’s Civil Rights Act, proposing that well the intricate relationship between the schools. the Senate go on record in favor of re- freedom and responsibility. They knew What this proposal will do is prevent versing the Roe versus Wade decision. that the blessings of liberty engendered school districts from establishing offi- That wrongful U.S. Supreme Court de- certain obligations on the part of a free cial policies or procedures with the in- cision, handed down 24 years ago to- people—namely, that citizens conduct tent of prohibiting students from exer- morrow, paved the way for the destruc- their actions in such a way that soci- cising their constitutionally protected tion of more than 35 million innocent ety can remain cohesive without exces- right to lead, or participate in, vol- children—1.5 million little innocent, sive government intrusion. The Amer- untary prayer in school. helpless lives every year. ican experiment would never have suc- Mr. President, this bill is especially An enormous number of men and ceeded without the traditional moral noxious to school prayer opponents be- women of all ages will descend upon and spiritual values of the American cause it explodes the myth popular Washington tomorrow—as they have people—values that allow people to among school administrators and bu- every year since the fateful Roe versus govern themselves, rather than be gov- reaucrats—a myth perpetuated by lib- Wade decision—pleading with Congress erned. eral groups such as the American Civil to remember that a nation which fails Not long ago, my friend, Margaret Liberties Union—that the U.S. Con- to value the God-given gifts of life and Thatcher, highlighted for us the words stitution somehow prohibits every last liberty will one day find itself in the of another of our Nation’s founders, vestige of religion from the public dustbin of history. John Adams, who said, ‘‘Our Constitu- schools. tion was designed only for a moral and Seldom is it heard on the issue of So, as the 105th Congress begins its religious people. It is wholly inad- school prayer that the Constitution work, I do hope that all Senators will equate for the government of any also forbids governmental restrictions give thought to the need to put an end other.’’ Yet over the last 30 years, our on the free exercise of religion, or that to the legalized deliberate destruction society has evidenced increasing apa- the Constitution protects students’ of the lives of innocent, helpless little thy—and, in some cases, outright hos- free speech—whether religious or not— human beings. tility—toward the spiritual principles and that student-initiated, voluntary The Unborn Children’s Civil Rights upon which our Nation was founded. prayer expressed at an appropriate Act proposes four things: Mr. President, Bill Bennett once ob- time, place and manner, has never been First, to put Congress clearly on served to me that America has become outlawed by the Supreme Court. record as declaring that one, every the kind of country that civilized coun- Mr. President, I find it more than a abortion destroys deliberately, the life tries once dispatched missionaries to little ironic that I am forced to revisit of an unborn child; two, that the U.S. centuries ago. If we care about clean- this issue on the floor of the Senate. I Constitution sanctions no right to ing up the streets and classrooms, if we remind Senators that in 1994, this same abortion; and three, that Roe versus care about the long-term survival of proposal—offered in amendment form Wade was improperly decided. our Nation—how could there be any- by Senator LOTT and myself—passed Second, this legislation will prohibi- thing more important for Congress to this body overwhelmingly, 75 to 22. In tion Federal funding to pay for, or to protect than the right of America’s the House of Representatives, this lan- promote, abortion. Further, this legis- children to participate in voluntary, guage was approved on two different lation proposes to defund abortion per- constitutionally protected prayer in occasions by similar 3-to-1 margins. manently, thereby relieving Congress their schools? Yet this simple protection of constitu- of annual legislative battles about Mr. President, the legislation I am tional rights was dropped in the closing abortion restrictions in appropriation introducing today will ensure that stu- 60 seconds of a conference with no de- bills. dent-initiated prayer is treated the bate, no discussion, and no vote—just a Third, the Unborn Children’s Civil same as all other student-initiated free wink and a nod between the senior Sen- Rights Act proposes to end indirect speech—which the U.S. Supreme Court ator from Massachusetts and his coun- Federal funding for abortions by one, has upheld as constitutionally pro- terpart on the House side. prohibiting discrimination, at all fed- tected as long as it is done in an appro- So I am obliged to offer this measure erally funded institutions, against citi- priate time, place, and manner such once again to protect the constitu- zens who as a matter of conscience ob- that it ‘‘does not materially disrupt tional rights of America’s children to ject to abortion and two, curtailing at- the school day’’. [Tinker v. Des Moines participate in voluntary school prayer. torney’s fees in abortion-related cases. School District, 393 U.S. 503.] Indeed, standing here brings to mind Fourth, this legislation proposes that Under this bill, school districts could the words of the legendary New York appeals to the Supreme Court be pro- not continue—in constitutional igno- Yankee catcher, manager, and philoso- vided as a right if and when any lower rance—enforcing blanket denials of pher Yogi Berra: ‘‘it’s deja vu all over Federal court declares restrictions on students’ rights to voluntary prayer again.’’ abortion unconstitutional, thus effec- and religious activity in the schools. Well, this time, Mr. President, I hope tively assuring Supreme Court recon- For the first time, schools would be Congress will accede to the wishes of a sideration of the abortion issue. January 21, 1997 CONGRESSIONAL RECORD — SENATE S405 Mr. President, it has become fashion- punishment is life imprisonment or the this invitation to us: ‘‘Had Congress in- able today for America’s courts to dis- death penalty. tended possession alone to trigger li- card the Constitution in order to cre- This is just common sense, Mr. Presi- ability * * * it easily could have so pro- ate rights and protect freedoms found- dent; violent felons who possess fire- vided.’’ That, Mr. President, is pre- ed upon mankind’s depraved nature in- arms are demonstrably more dangerous cisely the intent of this legislation—to stead of God’s eternal and moral than those who do not. This legisla- make clear that possession alone does truths. tion, of course, does not apply to any- indeed trigger liability. Yet, never has a court handed down one lawfully possessing a gun. Mr. President, a modified version of such a misguided decision than when it Current Federal law provides that a this legislation passed the Senate last created the right of a woman to choose person who, during a Federal crime of year, only to be blocked in the House to terminate the life of her child. Roe violence or drug trafficking crime, uses of Representatives. This bill is a nec- versus Wade has no foundation whatso- or carries a firearm shall be sentenced essary and appropriate response to the ever in the text or history of the Con- to 5 years in prison. That law has been Supreme Court’s judicial limitation of stitution. It was a callous invention. used effectively by Federal prosecutors the mandatory penalty for gun-toting Justice White said it best in his dis- across the country to add 5 additional criminals. According to Sentencing sent: Roe, he declared, was an exercise years to the prison sentences of crimi- Commission statistics, more than 9,000 in raw judicial power. nals who use or carry firearms. armed violent felons were convicted Why has this Supreme Court’s exer- But along came the Supreme Court’s from April 1991, through October 1995. cise in raw judicial power been allowed unwise decision thwarting prosecutors’ In North Carolina alone, this statute to stand? Why has Congress stood idly effective use of this statute. The Court, was used to help imprison over 800 vio- by for 24 years while 4,000 unborn ba- in Bailey versus United States, inter- lent criminals. We must strengthen law bies are deliberately, intentionally de- preted the law to require that a violent enforcement’s ability to use this strong stroyed every day as a result of legal- felon actively employ a firearm as a anticrime provision. ized abortion? precondition of receiving an additional Fighting crime is, and must be, a The answer is simple, Mr. President. 5-year sentence. The Court held that prime concern in America. It has been Even though Roe versus Wade was and the firearm must be brandished, fired estimated that in the United States is an unconstitutional decision, Con- or otherwise actively used; so if a one violent crime is committed every gress has been unwilling to exercise its criminal merely possesses a firearm, 16 seconds. We must fight back with powers to check and balance a Supreme but doesn’t fire or otherwise use it, he the most severe punishment possible Court that deliberately allows the de- escapes the additional 5 year penalty. for those who terrorize law-abiding Someone put it this way: As a result struction of the most defenseless, most citizens. Enactment of this legislation of the Court’s decision, any thug who innocent humanity imaginable. is a necessary step toward recommit- hides a gun under the back seat of his So, Mr. President, Roe versus Wade ting our Government and our citizens car, or who stashes a gun with his still stands; millions of children con- to a real honest-to-God war on crime. drugs, may now get off with a slap on tinue to be deprived of their right to Mr. ABRAHAM. Mr. President, I rise the wrist. The fact is, Mr. President, live, to love, and to be loved. It is not to cosponsor Senator HELMS’ bill to that firearms are the tools of the trade a failure of the U.S. Constitution. It is amend section 924 of title 18 of the of most drug traffickers. Weapons a failure of both the Supreme Court United States Code. This bill would en- clearly facilitate the criminal trans- and the Congress for 24 years to over- sure that stiff, mandatory sentences actions and embolden violent thugs to turn Roe versus Wade. are imposed on criminals who possess commit their crimes. firearms while committing a crime of By Mr. HELMS (for himself, Mr. Mr. President, this Supreme Court decision poses serious problems for law violence or drug trafficking offense. DEWINE, Mr. HATCH, Mr. NICK- enforcement. It has weakened the Fed- As currently written, title 18 of sec- LES, Mr. ABRAHAM, and Mr. eral criminal law and has already led tion 924(c) already mandates that a FAIRCLOTH): to the early release of hundreds of vio- sentence of 5 years or more be imposed S. 43. A bill to throttle criminal use on any defendant who uses or carries a of guns; read twice and placed on the lent criminals. After the word got out about the Bai- firearm while committing a crime of calendar ley decision, prisoners frantically violence or drug trafficking offense. THROTTLE CRIMINAL USE OF GUNS began preparing and filing motions to Over the past several years, however, Mr. HELMS. Mr. President, on De- get out of jail as fast as they could courts have struggled with the issue of cember 6, 1995, the U.S. Supreme Court write. Prosecutors were inundated with whether a defendant uses a weapon for handed down an opinion that has un- petitions from criminals. One example purposes of section 924(c) if he tech- dermined the prosecution of literally is a man named Lancelot Martin, who nically possesses the weapon but does hundreds of violent and drug traffick- ran a Haitian drug trafficking oper- not actually employ it in committing ing criminals. There could not have ation out of Raleigh, my hometown, the underlying offense. been a worse time to go soft on crimi- the capital city of North Carolina. This issue was recently taken up by nals, but when the Supreme Court’s de- Martin used the U.S. Postal Service to the Supreme Court in the case of Bai- cision was announced, hardened con- receive and sell drugs. Police seized his ley versus United States. Hewing close- victs across America were overjoyed by drugs and recovered a 9 mm semiauto- ly to the ordinary meaning of ‘‘use,’’ the prospect of prison doors swinging matic pistol that Martin used to pro- the Court unanimously held that ‘‘use’’ open for them. tect his drug business. in section 924(c) signifies ‘‘an active Sure enough, since the Court’s deci- Lancelot Martin was convicted of employment of the firearm by the de- sion just over 1 year ago, hundreds of drug trafficking charges and received a fendant.’’ After observing that the criminals have indeed been set free. 5-year sentence for using the gun. But term ‘‘possess’’ is frequently used else- The bill I am introducing today will on March 11 of last year, years before where in Federal gun-crime statutes, correct the Supreme Court’s blunder, his sentence expired, Martin walked the Court reasoned that, ‘‘[h]ad Con- and it will crack down on gun-toting free, simply because while his gun and gress intended possession alone to trig- thugs who commit all manner of un- a hefty supply of drugs were found—the ger liability under section 924(c)(1), it speakable crimes. I am advised that my gun was not actively employed at the easily could have so provided.’’ bill is being numbered S. 43, and it pro- time he was caught. The bill I cosponsor today does so vides that a 5-year mandatory mini- So, Mr. President, this bill will en- provide, as it would amend section mum sentence shall be imposed upon sure that future criminals possessing 924(c)(1) to apply to any defendant who any criminal possessing a gun during guns, like Lancelot Martin, serve real ‘‘uses, carries, or possesses’’ a firearm and in relation to the commission of a time when they possess a gun in fur- while committing a crime of violence violent or drug trafficking crime. If the therance of a violent or drug traffick- or drug trafficking offense. This is a criminal fires the weapon, the manda- ing crime. worthwhile change. Any crime becomes tory penalty is elevated to 10 years. If The Supreme Court, recognizing the far more dangerous when committed by there is a killing during the crime, the consequences of its decision, issued a criminal who controls a firearm. S406 CONGRESSIONAL RECORD — SENATE January 21, 1997 Such a criminal should not be rewarded orities of America have fallen. Profes- pect NOW and NARAL supporters in if, in a particular case, it turns out sor George Annas of the Boston Univer- the Senate will do their best to stop that he has no need actually to employ sity School of Medicine was quoted as the Civil Rights of Infants Act. Cries the weapon. The fact that he so aug- saying: will go up and the charge will be made mented the danger attending his crime I think the [medical] profession should set that the Senate is somehow trying to is reason enough to impose the stiff limits and I think most people would be out- take away the freedom of American sentences set forth in section 924. raged, and properly so, at the notion that women. In the meantime, the freedoms Thus, in short, this bill closes a dan- you would have an abortion because you of life and liberty are being denied to gerous loophole in current law. I ap- don’t want a boy or you don’t want a girl. If thousands of unborn children. you are worried about a woman’s right to an Nonetheless, those of us who support plaud the Senator from North Carolina abortion, the easiest way to lose it is not set for his leadership on this issue, and any limits on this technology. the rights of the unborn must do our best. Hopefully, this 105th Congress look forward to the bill’s speedy enact- Mr. President, how sad it is that any will take early action to fulfill the de- ment. mother in a civilized society would be sires of the overwhelming majority of willing to destroy the unborn female By Mr. HELMS: the American people who rightfully be- child she is carrying simply because S. 44. A bill to make it a violation of lieve it is immoral to destroy unborn she happens to prefer a male child—or a right secured by the Constitution and babies simply because the mother de- vice-versa. But believe it. It is happen- laws of the United States to perform an mands freedom-of-gender choice. abortion with the knowledge that the ing without the Government of the abortion is being performed solely be- United States lifting an eyebrow, let By Mr. HELMS: cause of the gender of the fetus; read alone a finger. S. 45. A bill to amend title X of the And that, Mr. President, is why I am twice and placed on the calendar. Public Health Service Act to permit again offering legislation to limit this family planning projects to offer adop- CIVIL RIGHTS OF INFANTS ACT incredibly inhumane practice. tion services; read twice and placed on Mr. HELMS. Mr. President, the dis- As I mentioned at the outset of my the calendar. tinguished Senator from New Hamp- remarks, the 104th Congress acted on FEDERAL ADOPTION SERVICES ACT OF 1997 shire, Mr. ROBERT SMITH, introduced legislation to outlaw the brutal Mr. HELMS. Mr. President, there’s a legislation in the 104th Congress pro- killings of unborn babies subjected to significant question about the use of hibiting the destruction of helpless, un- partial-birth abortions. I pray the 105th the American taxpayers’ money. born babies by a procedure called par- Congress will take action to end an- Should State and local health depart- tial-birth abortions. other callous cruelty against the un- ments, hospitals, and other family Congress heeded the outcry of the born—gender-selection abortions. planning organizations funded under American people against this shameful Specifically, the legislation I have title X of the Public Health Services abuse of the most innocent humans sent to the desk proposes to amend Act, be specifically allowed to offer imaginable; the Partial-Birth Abortion title 42 of the United States Code gov- adoption services to pregnant women? Ban Act was passed by both the House erning civil rights. Anyone who admin- The answer, Mr. President, is: Abso- and the Senate only to have it vetoed isters an abortion for the purpose of lutely. by President Clinton. choosing the gender of the infant will And Congress should be unmistak- Mr. President, another stalwart Sen- protect unborn children as title 42 pres- ably clear in expressing our judgment ator of New Hampshire, Mr. Humphrey ently protects any other citizen who is that public and private health facili- brought to the attention of the Senate a victim of discrimination. ties can and should offer adoption serv- in 1989 incredibly brutal practice in Mr. President, the American people ices. America—abortions performed solely are clearly opposed to this practice. A The vast majority of the American because prospective mothers prefer a Boston Globe poll reports that 93 per- people agree. Many polls have shown child of a gender from the babies in cent of the American people reject the that people approve of their tax dollars their womb. taking of life as a means of gender se- being used by clinics to promote and Senator Humphrey, in the 1989 debate lection. Another poll conducted by encourage adoptions instead of the hei- called attention to the New York Newsweek/Gallup showed that four out nous destruction of unborn children. Times article published Christmas of every five Americans oppose gender Statistics emphasize the merit of the morning the year before. It was titled selection abortions. proposal that clinics and agencies re- ‘‘Fetal Sex Test Used as Step to Abor- Even radical feminists cannot ignore ceiving title X funding should explic- tion.’’ Sadly, Senator Humphrey’s re- the absurdity of denying a child the itly be authorized to offer adoption marks and subsequent legislation were right to life simply because the parents services. The National Council for met with general disinterest among happened to prefer a child of the oppo- Adoption asserts that an estimated 2 those who sanctimoniously defend site gender. The Associated Press re- million couples are today hopefully what they regard as a woman’s right to ported on August 22, 1996, that the plat- and prayerfully waiting to adopt a destroy her unborn child. Those hold- form adopted by last year’s U.N. wom- child. Yet, 1.5 million babies are re- ing such views never discuss an unborn en’s conference in Beijing included a fused the right to live every year. child’s right to live, to love and be provision condemning sex-selection Mr. President, if every abortion in loved. abortions. this country could be prevented this Mr. President, it was typical for The Of course, feminists proclaim that year there would still be 500,000 couples New York Times, that the Times arti- gender selection abortions are atroc- ready and waiting to adopt children. cle which Senator Humphrey deplored ities in China—or in India where a sur- Small wonder that adoption is called began as follows: vey was taken 7 years ago which re- ‘‘the loving option.’’ In a major change in medical attitudes and vealed that of 8,000 abortions, 7,999 But it is even more tragic, Mr. Presi- practices, many doctors are providing pre- were female. dent, that women with unplanned or natal diagnoses to pregnant women who Now, Mr. President, I do not be- unwanted pregnancies are unaware of want to abort a fetus on the basis of the gen- lieve—even for a minute—that the pro- the wonderful opportunities available der of the unborn child. abortion crowd and its amen corner in to their child through adoption. These Geneticists say that the reasons for this change in attitude are an increased avail- Congress would want to see action on women, states Jeff Rosenberg, formerly ability of diagnostic technologies, a growing this legislation. I deliberately stated of the National Council for Adoption, disinclination of doctors to be paternalistic, that the feminists in Beijing—led by ‘‘are not hearing about adoption, and deciding for patients what is best, and an in- the American coalition—could not ig- thus [are] not considering it as a possi- creasing tendency for patients to ask for the nore this cruel practice. But lip service bility. Young pregnant women are fre- tests. Many geneticists and ethicists say is all that will be paid to this violent quently not told by counselors and so- they are disturbed by the trend. practice by most of those who call cial workers that adoption is an alter- Mr. President, this rhetorical horse- themselves pro-choice. native.’’ radish is simply another measurement Just as they did during debate on the With this in mind, I offer today the of how far the moral and spiritual pri- Partial-Birth Abortion Ban Act, I sus- Federal Adoption Services Act of 1997, January 21, 1997 CONGRESSIONAL RECORD — SENATE S407 a bill that proposes to amend title X of aided and abetted by an activist Fed- In other words, expansion of the em- the Public Health Services Act to per- eral judiciary—have so perverted the ployee pool is specifically provided for mit federally-funded planning services plain language and intent of the Civil under this act. to provide adoption services based on Rights Act that it is unrecognizable. Mr. President, this legislation is nec- two factors: No. 1, the needs of the My proposal today is intended to en- essary because in the 33 years since the community in which the clinic is lo- sure that all civil rights laws are con- passage of the Civil Rights Act, the cated, and No. 2, the ability of an indi- sistent with the goal of a color-blind Federal Government and the courts vidual clinic to provide such services. society. have combined to corrupt the spirit of Mr. President, those familiar with Specifically, this legislation prevents the act as enumerated by both Hubert the many Senate debates of the past Federal agencies, and the Federal Humphrey and Everett Dirksen, who regarding title X will recall the exces- courts, from interpreting title VII of made clear that they were unalterably sive emphasis placed on preventing the Civil Rights Act of 1964 to allow an opposed to racial quotas. Yet in spite and/or spacing of pregnancies, and lim- employer to grant preferential treat- of the clear intent of Congress, busi- iting the size of the American family. ment in employment to any group or nesses large and small must adhere to I hope that this year, we can refocus individual on account of race. hiring quotas in order to keep the all- this debate, emphasizing the need to This proposal prohibits the use of ra- powerful Federal Government off their affirm life rather than preventing or cial quotas once and for all. During the backs. terminating it. past several years, almost every Mem- Several times before, I have directed Sure, the radical feminists and other ber of the Senate—and the President of the attention of Senators to the Daniel pro-abortionists will voice their the United States—have proclaimed Lamp Co., a small Chicago lamp fac- hysterical objections. So before they that they are opposed to quotas. This tory harassed by investigators from raise their voices, let’s make clear bill will give Senators an opportunity the Equal Employment Opportunity what this legislation will not do. For to reinforce their statements by voting Commission. The CBS news program, example: in a rollcall vote against quotas. ‘‘60 Minutes,’’ did a story several years No woman will be threatened or ca- Mr. President, this legislation em- back that exposed the mentality of the joled into giving up her child for adop- phasizes that from here on out, em- quota-enforcing bureaucrats at the tion. Family planning clinics will not ployers must hire on a race neutral EEOC to the Nation. be required to provide adoption serv- basis. They can reach out into the com- The Daniel Lamp Co. was a small, ices. Rather, this legislation will make munity to the disadvantaged and they struggling business which employed 28 it clear that Federal policy will allow, can even have businesses with 80 or 90 people when ‘‘60 Minutes’’ began its in- or even encourage adoption as a means percent minority workforces as long as vestigation—8 of whom were black and of family planning. Women who use the motivating factor in employment 18 of whom were Hispanic. But this ob- title X services—one-third of whom are is not race. viously nondiscriminatory hiring prac- teenagers—will be in a better position This bill clarifies section 703(j) of tice was simply not enough for the to make informed, compassionate judg- title VII of the Civil Rights Act of 1964 EEOC. According to the ‘‘60 Minutes’’ ments about the unborn children they to make it consistent with the intent reporter, Morley Safer, the EEOC told are carrying. of its authors, Hubert Humphrey and the owner of the Daniel Lamp Co. that Mr. President, I contend that it is Everett Dirksen. Let me state it for ‘‘based on other larger companies’ per- not the responsibility of civilized soci- the RECORD: sonnel, Daniel Lamp should employ ety to protect the rights of the most It shall be an unlawful employment prac- 8.45 blacks.’’ In other words, this small innocent and most helpless human tice for any entity that is an employer, em- company—which had never had over 30 beings imaginable. Furthermore, ployment agency, labor organization, or people on its payroll—had failed to shouldn’t we do our best to provide joint labor-management committee subject meet the Federal Government’s hiring couples willing to love and care for to this title to grant preferential treatment to any individual or group with respect to se- quotas. these children an opportunity to do so? lection for, discharge from, compensation The Daniel Lamp Co., which was jus- That question, Mr. President, answers for, or the terms, conditions, or privileges of, itself—in the affirmative. tifiably proud of its mostly minority employment or union membership, on the workforce, decided to stand up to the basis of the race, color, religion, sex, or na- By Mr. HELMS: tional origin of such individual or group, for EEOC. For their troubles, they were S. 46. A bill to amend the Civil any person, except as provided in subsection forced to pay a fine of $148,000, meet Rights Act of 1964 to make preferential (e) or paragraph (2). the quota set by the agency, and spend treatment an unlawful employment It shall not be an unlawful employment $10,000 on newspaper advertisements to practice, and for other purposes; read practice for an entity described in paragraph tell other job applicants that they twice and placed on the calendar. (1) to recruit individuals of an underrep- might have been discriminated resented race, color, religion, sex, or na- against—and to please contact the CIVIL RIGHTS RESTORATION ACT OF 1997 tional origin, to expand the applicant pool of Mr. HELMS. Mr. President, I send to the individuals seeking employment or Daniel Lamp Co. for a potential finan- the desk legislation I first submitted in union membership with the entity. cial windfall. amendment form on June 25, 1991— Specifically, this bill proposes to Yet through all of this outrageous which I subsequently introduced as a make part (j) of section 703 of the 1964 conduct, the EEOC continued to insist bill in both the 103d and 104th Con- Civil Rights Act consistent with sub- that the agency does not set hiring gresses. But as I introduce once more sections (a) and (d) of that section. It quotas. And although one would have the Civil Rights Restoration Act, I re- contains the identical language used in reasonably expected that ‘‘60 Minutes’’ call that similar antidiscrimination those subsections to make preferential exposure of the Daniel Lamp Co.’s pre- legislation passed this body long before treatment on the basis of race—that is, dicament would embarrass the Federal 1973, when I first became a Member of quotas—an unlawful employment prac- Government’s quota establishment the Senate. tice. into mending its ways, it is still busi- Thirty-three years ago, Congress Mr. President, I want to be clear that ness as usual among the bureaucrats. passed the historic Civil Rights Act of this legislation does not make out- For example, on November 21, 1996, 1964. The intent of that legislation was reach programs an unlawful employ- my office received an unsolicited fac- to prohibit discrimination based on ment practice. Under language sug- simile transmission from the Depart- race in a broad variety of cir- gested years ago by the distinguished ment of Labor’s Office of Federal Con- cumstances, including hiring practices. Senator from Kansas, Bob Dole, a com- tract Compliance Program [OFCCP]. Proponents of the Civil Rights Act pro- pany can recruit and hire in the inner For those unfamiliar with the OFCCP, claimed that there was nothing in the city, prefer people who are disadvan- this is the branch of the Department of bill that would require any quotas or taged, create literacy programs, re- Labor that engages in race and gender preferential treatment. cruit in the schools, establish day care nose-counting for private businesses Well, three decades later, the Federal programs, and expand its labor pool in who have contracts with the federal Government’s quota establishment— the poorest sections of the community. government. S408 CONGRESSIONAL RECORD — SENATE January 21, 1997 This facsimile was titled ‘‘OFCCP eating the pages one after another because it professor, says he decided to join Wood in Egregious Discrimination Cases.’’ Curi- is not there.’’ drafting the initiative because he was con- ous as to what constituted egregious in Those words have become so familiar cerned about the destructive impact racial the eyes of the Labor Department bu- to us during the course of our debates quotas were having on higher education, where ‘‘diversity’’ overshadows academic reaucrats, I reviewed this document— regarding this issue, that they perhaps merit. and one particular case caught my eye. need a little added emphasis. The au- The California initiative has drawn sup- During June 1993, OFCCP investiga- thors of the Civil Rights Act explicitly port from across the political spectrum. tors conducted a so-called compliance stated that the bill was not to be inter- Charles Geshekter, a teacher of African his- review of the San Diego Marriott and preted to require any quotas or per- tory at Chico State University and a sup- Marina. In the course of their walk- centage-based hiring. porter of the initiative, wrote in the August through, the OFCCP officers believed Well, Mr. President, tell that to the 14 Chico Enterprise Record: ‘‘As a liberal Dem- they did not see enough African-Amer- Daniel Lamp Company. Tell that to the ocrat, I despise those who advocate pref- ican women in visible jobs to satisfy San Diego Marriot. Tell that to all the erential treatment based on genitalia or skin color. Having taught university classes on their notion of an acceptable work- policemen, firemen, or small business- the history of European racism toward Afri- place. men across this country who have ca for 25 years, I am appalled to watch sexist This unscientific observation found that, in the United States of and racist demands for equality of outcomes prompted a massive investigation of America, merit and achievement is erode the principle of affirmative equality of the San Diego Marriott’s hiring prac- sometimes not good enough. opportunity.’’ University of California Re- tices. After a year-long inquiry—paid Mr. President, after 30 years, it is ob- gent Ward Connerly, a black businessman for by the American taxpayer, I might vious that the social experiment who supports the initiative, lamented in the add—the OFCCP uncovered only this known as affirmative action has out- August 10 Sacramento Bee that ‘‘we have in- stitutionalized this preferential treatment.’’ unremarkable revelation: that of the lived its usefulness. It is time for the hotel’s 1,579 employees, 950 were mi- Congress to return the civil rights laws THE PERVASIVENESS OF PREFERENCES norities and/or women, including 101 to their original intent of preventing Opposition to quotas was initially African-Americans. discrimination, and restore the prin- unfocused, because their impact was not Instead of being satisfied that over 60 ciples upon which our country was widely felt. The public was aware of a few percent of the workforce were minori- built—personal responsibility, self-reli- celebrated cases, but they seemed to be the exception rather than the rule. This is no ties or women, the OFCCP found this ance, and hard work. The Civil Rights longer the case. Preferential treatment an egregious case of race discrimina- Restoration Act aims to do just that. based on race and sex pervades private and tion—because not enough black women Mr. President, I ask unanimous con- public employment, university admissions were employed to suit their idea of di- sent that a March 20, 1995 article by and hiring, and the allocation of government versity. In the view of the OFCCP, a 60 Paul Craig Roberts and Lawrence M. contracts, broadcast licenses, and research percent minority workforce is insuffi- Stratton, Jr. in National Review be grants. Consider a few examples: cient unless the ‘‘right’’ kind of mi- printed in the RECORD. A 1989 survey by Fortune magazine found norities are represented. Mr. President, There being no objection, the article that only 14 per cent of Fortune 500 compa- if that is not a quota, I don’t know was ordered to be printed in the nies hired employees based on talent and merit alone; 18 per cent admitted that they RECORD, as follows: what is. had racial quotas, while 54 per cent used the In any event, rather than trying to [From the National Review, March 20, 1995] euphemism ‘‘goals.’’ fight the Department of Labor, the San HOW WE GOT QUOTAS—COLOR CODE —A Defense Department memo cited on Diego Marriott settled to the tune of (By Paul Craig Roberts and Lawrence M. the November 18 broadcast of ABC’s 20/20 de- $627,000. And Mr. President, the Mar- Stratton, Jr.) clares, ‘‘In the future, special permission will riott Corporation could at least afford Bureaucrats and judges have turned the be required for the promotion of all white such an extravagant settlement. Thou- 1964 Civil Rights Act on its head, creating a men without disabilities.’’ sands of small businesses across the system of preferences based on race and sex. —The Federal Aviation Administration of- country would be bankrupt by such a Can we restore equality before the law? ficially recognizes the Council of African Forty years after Brown v. Board of Edu- American Employees, the National Asian Pa- fine—and all it would take is one Fed- cific American Association, the Gay, Les- eral bureaucrat failing to see what he cation, the civil-rights movement has strayed far from the color-blind principles of Martin bian, or Bisexual Employees group, and the or she considers the right kind of faces Luther King Jr., Public outrage over pref- Native American/Alaska Native Coalition, in the workplace. erential treatment for ‘‘protected minori- granting them access to bulletin boards, pho- Well, this bill is designed to put an ties’’ has taken the place of guilt over seg- tocopiers, electronic mail, voice mail, and end to all this nonsense bandied about regation. Americans who supported rooms in government buildings for meetings by the Federal Government’s power- desegration and equal rights are astonished on government time. By contrast, the Coali- hungry quota establishment. to find themselves governed by quotas, tion of Federal White Aviation Employees which were prohibited by the Civil Rights has been seeking recognition from the FAA Mr. President, as I have said at out- since 1992 without success; FAA employees set, this legislation should be familiar Act of 1964. In California momentum is building for a are even forbidden to read the group’s lit- to students of history. This legislation 1996 initiative, modeled on the 1964 Civil erature. will bring our civil rights laws full cir- Rights Act, that would amend the state’s —In the 1994 case Hapwood v. State of Texas, cle, putting America back on the constitution to prohibit the use of quotas by U.S. District Court Judge Sam Sparks found course that Everett Dirksen and Hu- state institutions. Polls indicate that the that the constitutional rights of four white bert Humphrey envisioned when they initiative’s objective of ending affirmative law-school applicants had been violated by sponsored the Civil Rights Act of 1964. action is enormously popular, even in tradi- quota policies at the University of Texas. Speaking of Hubert Humphrey, Mr. tionally liberal bastions such as Berkeley However, he awarded them each only $1 in damages and refused to order them admitted President—he was a man admired by and San Francisco. Citizens in other states are organizing to place similar measures on ahead of protected minorities with substan- all of us who served with him. Senator the ballot. The prospects for such measures tially lower scores. Humphrey was one of the principal au- are bright: surveys find that some 80 per cent A case that came before the U.S. Supreme thors of the Civil Rights Act of 1964. He of Americans oppose affirmative action in Court in January shows even more clearly hated the idea of quotas and pref- employment and education. how preferential policies have warped basic erential treatment based on race. Sen- The hostility to race and gender prefer- concepts of fairness. Randy Pech, owner of ator Humphrey stood right here on the ments reflects a general sense that reverse Adarand Constructors, lost in the bidding for floor of this chamber and said in the discrimination violates fundamental norms a guard-rail construction project in Colo- strongest terms possible that the Act of justice and fair play. Thomas Wood, a co- rado’s San Juan National Forest because of drafter of the California initiative and exec- his skin color. Pech put in the lowest bid. could not possibly be interpreted to utive director of the California Association However, the prime contractor was eligible permit quotas: of Scholars, says he has been denied a teach- for a bounty of $10,000 in taxpayers’ money ‘‘if there is any language [in the Civil ing job because he is a white male: ‘‘I was from the U.S. Department of Transportation Rights Act of 1964] which provides that any told by a member of a search committee at for hiring minority-owned subcontractors, employer will have to hire on the basis of a university, ‘You’d walk into this job if you and the bounty was greater than the dif- percentages or quotas related to color, race, were the right gender.’ ’’ Glynn Custred, a ference in the bids submitted by Pech and or religion or national origin, I will start California State University anthropology his competitor, a Hispanic-owned firm. January 21, 1997 CONGRESSIONAL RECORD — SENATE S409 Pech filed a discrimination lawsuit. When employer who hires a less qualified white be- history. The destruction of our society over it reached the Supreme Court, U.S. Solicitor cause of prejudice against blacks will dis- the race question is not inevitable.’’ General Drew S. Days III argued that Pech advantage himself in competition against BLUMROSEN’S AGENDA had no standing to sue, even though the U.S. those who hire the best employees they can Blumrosen figured that a redefinition of Government had paid the prime contractor find. discrimination to include anything that Indeed, scholars who studied the cases han- $10,000 to discriminate against him. What- yielded statistical disparities between blacks dled by FEP commissions found that the ever the technical merits of the solicitor and whites would force employers to give complainant’s problem was usually his job general’s argument, it reveals the system of preferential treatment to blacks in pursuit qualifications, not his race. Sociologist Leon racial preferments that today passes for civil of proportional representation, so as to avoid rights. ‘‘Protected minorities’’ have standing Mayhew, who studied employment-discrimi- nation complaints filed with the Massachu- liability in class-action suits. He set out to to sue without any requirement of showing ‘‘liberally construe’’ Title VII of the Civil that they themselves have ever suffered from setts FEP commission from 1946 to 1962, found that most complaints were based on Rights Act, which prohibited discrimination an act of discrimination. Today’s college- in employment, in order to advance ‘‘the aged protected minorities have never suf- ‘‘mere suspicion’’ and usually resulted in a finding that the employer had not discrimi- needs of the minorities for whom the statute fered from legal discrimination, yet U.S. pol- had been adopted.’’ By promoting quotas, he icy assumes they are victims and provides nated. He pointed out that most complain- ants were poor and lacked job skills. Thus, could ‘‘maximize the effect of the statute on remedies in the form of preferments. In con- employment discrimination without going trast, victims of reverse discrimination have ordinary, profit-oriented business decisions ‘‘regularly produced experiences that could back to the Congress for more substantive no remedy and no legal standing. legislation.’’ The political repercussions of this double be interpreted as discrimination.’’ This phe- nomenon ‘‘permits Negroes to blame dis- Blumrosen’s EEOC colleagues kidded him standard are by no means restricted to Cali- that he was working on a textbook entitled fornia. In November’s congressional elec- crimination for their troubles. Hence, some complaints represent a projection of one’s Blumrosen on Loopholes. He took pride in his tions, white males deserted the Democratic reputation for ‘‘free and easy ways with stat- Party in droves, voting Republican by a mar- own deficiencies onto the outside world.’’ This argument did not appeal to those who utory construction.’’ He later praised the gin of 63 per cent to 37 per cent. The Wall agency for being like ‘‘the proverbial bumble Street Journal has identified ‘‘angry white wanted to achieve racial integration through government policy. Activists such as Rut- bee’’ that flies ‘‘in defiance of the laws gov- males’’ as an important new political group. erning its operation.’’ Blumrosen’s strategy But more is at stake than the plight of gers law professor Alfred W. Blumrosen, who was based on his bet that ‘‘most of the prob- white males and the relative fortunes of po- as the EEOC’s first compliance chief became lems confronting the EEOC could be solved litical parties. At issue is equality before the the de facto head of the commission in its by creative interpretation of Title VII which law and the democratic process itself. As formative years, rejected the complaint- would be upheld by the courts, partly out of freedom of conscience, goodwill, and persua- based, ‘‘retail’’ model of FEP enforcement deference to the administrators.’’ History sion are supplanted by regulatory and judi- and envisioned a ‘‘wholesale’’ model attack- has proved Blumrosen right. cial coercion, privilege reappears in open de- ing the entrenched legacy of discrimination. As inside-the-Beltway lore expresses it, fiance of Justice John Marshall Harlan’s dic- In 1965 Blumrosen wrote in the Rutgers Law ‘‘Personnel is policy.’’ Blumrosen had a free tum: ‘‘There is no caste here. Our Constitu- Review that FEP commissions focused too hand because Franklin Delano Roosevelt Jr., tion is color-blind.’’ much on individual acts of discrimination the EEOC’s first chairman, spent most of his Color-blindness was the guiding principle and ‘‘did not remedy the broader social prob- time yachting. Staffers jokingly changed the of the 1964 Civil Rights Act. The basic act lems’’ by reducing the disparity between lyrics of the song ‘‘Anchors Aweigh’’ and was full of language prohibiting quotas, and black and white unemployment. Seeking to sang ‘‘Franklin’s Away’’ during his frequent various amendments to it defined discrimi- redefine discrimination in terms of statis- absences. Roosevelt resigned before a year nation as an intentional act, insulated pro- tical disparity, he dismissed other expla- was out, and his successors stayed little fessionally developed employment tests from nations of economic differences between longer. The EEOC had four chairmen in its attack for disproportionately screening out blacks and whites, such as education and il- first five years, which enhanced Blumrosen’s racial minorities, and restricted the Equal legitimacy, as harmful ‘‘attempt[s] to shift power. Employment Opportunity Commission focus.’’ Blumrosen disdained the Civil Rights The White House Conference on Equal Em- (EEOC) from issuing any substantive inter- Act’s definition of discrimination as an in- ployment Opportunity in August 1965 indi- pretive regulations. Senator Hubert H. Hum- tentional act, preferring a definition that cated what was to come. Speaker after phrey (D., Minn.), the chief sponsor of the Congress had rejected. In his 1971 book, Black speaker described ‘‘deeply rooted patterns of act, confidently declared that if anyone Employment and the Law, he wrote:‘‘ discrimination’’ and ‘‘under-representation’’ could find ‘‘any language which provides ‘‘If discrimination is narrowly defined, for of minorities that the EEOC should counter that an employer will have to hire on the example, by requiring an evil intent to in- in order to promote ‘‘equal employment op- basis of percentage or quota related to color, jure minorities, then it will be difficult to portunity.’’ The conference report stressed race, religion, or national origin, I will start find that it exists. If it does not exist, then on its first page that the ‘‘conferees were eating the pages one after another, because the plight of racial and ethnic minorities eager to move beyond the letter of the law to it is not in there.’’ In less than a decade, fed- must be attributable to some more general- a sympathetic discussion of those affirma- eral bureaucrats and judges had cast aside ized failures in society, in the fields of basic tive actions required to make the legal re- Congress’s rejection of preferential treat- education, housing, family relations, and the quirement of equal opportunity an operating ment for minorities and stuffed the pages of like. The search for efforts to improve the reality.’’ Another telling line said that ‘‘it is the 1964 Civil Rights Act down Hubert Hum- condition of minorities must then focus in not enough to obey the technical letter of phrey’s throat. these general and difficult areas, and the an- swers can come only gradually as basic insti- the law; we must go a step beyond in order TWO MODELS OF DISCRIMINATION tutions, attitudes, customs, and practices to assure equal employment opportunity.’’ The Civil Rights Act of 1964 undertook to are changed. We thus would have before us One panel concluded that ‘‘it is possible that put millions of employer decisions through a generations of time before the effects of sub- the letter of the law can be obeyed to the government filter. Such a massive intrusion jugation of minorities are dissipated. fullest extent without eliminating discrimi- into private life had not previously occurred ‘‘But if discrimination is broadly defined, nation in hiring and promotion. For the leg- in a free society. Congress assumed that the as, for example, by including all conduct islative intent of Title VII to be met, the law EEOC, the agency created by the act to run which adversely affects minority group em- will have to be obeyed in spirit as well as in the filter, would be like the state Fair Em- ployment opportunities . . . then the pros- letter.’’ ployment Practice (FEP) commissions that pects for rapid improvement in minority em- The report noted that many panelists had been created in some Northern states ployment opportunities are greatly in- shared Blumrosen’s suspicion that if the after World War II. creased. Industrial relations systems are EEOC limited its activities to responding to Civil-rights activists regarded these com- flexible; they are in control of defined indi- complaints of discrimination, the agency missions, many of which had more power viduals and institutions; they can be altered would never ‘‘reach the extent of discrimina- than the EEOC, as ineffective. As University either by negotiation or by law. If discrimi- tory patterns.’’ Blumrosen inserted a para- of Chicago economist Gary Becker observed, nation exists within these institutions, the graph into the report suggesting that the however, there was an explanation for the solution lies within our immediate grasp. It agency should initiate proceedings against paucity of enforcement actions by the FEP is not embedded in the complications of fun- employers even in the absence of complaints commissions: discrimination doesn’t pay. In damental sociology but can be sharply influ- of discrimination. Underutilizers of minority his 1957 book, The Economics of Discrimina- enced by intelligent, effective, and aggres- workers could be identified by using ‘‘em- tion, Becker showed that racial discrimina- sive legal action. ployer reports of the racial composition of tion is costly to those who practice it and ‘‘This is the optimistic view of the racial the work force as a sociological ‘radar net’ therefore sets in motion forces that inex- problem in our nation. This view finds dis- to determine the existence of patterns of dis- orably reduce it. Meritorious employees who crimination at every turn where minorities crimination.’’ are underpaid and underutilized because of are adversely affected by institutional deci- Blumrosen succeeded in setting up a na- their race will move to firms where they get sions, which are subject to legal regulation. tional reporting system of racial employ- paid according to their contributions. An In this view, we are in control of our own ment statistics despite the Civil Rights Act’s S410 CONGRESSIONAL RECORD — SENATE January 21, 1997 specific prohibition of such data collection. assault employment tests that failed blacks word ‘‘intentional’’ into the statute, the his- An amendment introduced by Senator Ever- at a higher rate than whites. Commissioner tory said ‘‘courts cannot assume as a matter ett Dirksen (R., Ill.), said employers did not Samuel Jackson told members of the NAACP of statutory construction that Congress have to report statistics to the EEOC if they that the EEOC had decided to interpret Title meant to accomplish an empty act by the were already reporting them to local or state VII as banning not only racial discrimina- amendment’’ defining discrimination as in- FEP commissions. Blumrosen later admitted tion per se but also employment practices tentional. The history predicted that ‘‘the that the requirement he imposed on employ- ‘‘which prove to have a demonstrable racial Commission and the courts will be in dis- ers to report the racial composition of their effect.’’ EEOC lawyers formed an alliance agreement as to the basis on which they find work forces was based on ‘‘a reading of the with civil-rights attorneys at the NAACP an unlawful employment practice’’ and con- statute contrary to the plain meaning.’’ But and began a litigation drive to redefine dis- clude that ‘‘eventually this will call for the what was a mere statute? crimination in terms of statistical effects. reconsideration of the amendment by Con- Columbia University law professor Michael Summer riots and Vietnam protests helped gress or the reconsideration of its interpreta- Sovern predicted that the EEOC would be activists target employment tests. The tion by the Commission.’’ called on the carpet for exceeding its author- Kerner Commission’s report on civil dis- As things turned out neither the EEOC nor ity. In a study for the Twentieth Century orders described employment tests as ‘‘arti- Congress had to reconsider the meaning of Fund, Legal Restraints on Racial Discrimina- ficial barriers to employment and pro- discrimination, because the courts also ig- tion, he wrote that Title VII ‘‘cannot pos- motion.’’ The Kerner Commission blamed nored the law. In the 1971 case Griggs v. Duke sibly be stretched to permit the Commission these ‘‘artificial barriers’’ and the ‘‘explosive Power, the Supreme Court accepted the to insist on the filing of reports’’ and pre- mixture which has been accumulating in our EEOC’s rewrite of the Civil Rights Act. The dicted that Blumrosen would ‘‘encounter re- cities’’ on racism and concluded, ‘‘Our nation opinion was written by Chief Justice Warren sistance.’’ But no resistance materialized. As is moving toward two societies, one black, Burger, President Richard Nixon’s first ap- Hugh Davis Graham observed in The Civil one white—separate and unequal.’’ pointee to the Supreme Court. Coveting the Rights Era, ‘‘In 1965 Congress was distracted The EEOC’s chief psychologist, William H. fame of his predecessor, Earl Warren, Chief by debates over voting rights and Vietnam Enneis, attacked ‘‘irrelevant and unreason- Justice Burger told his clerks that he want- and Watts and inflation and scores of other able standards for job applicants and upgrad- ed to ‘‘confuse his detractors in the press’’ by issues more pressing than agency records.’’ ing of employees, [which] pose serious writing some ‘‘liberal opinions.’’ After Blumrosen got his way in forcing em- threats to our social and economic system. ployers to submit reports, the agency devel- The results will be denial of employment to BLUMROSEN WINS HIS BET oped the confidence to dispense with other qualified and trainable minorities and When Burger declared that ‘‘the adminis- statutory restrictions on its mission. The women.’’ Enneis said the EEOC would not trative interpretation of the Act by the en- EEOC saw the reporting requirement as a ‘‘stand idle in the face of this challenge. The forcing agency is entitled to great def- ‘‘calling card’’ that ‘‘gives credibility to an cult of credentialism is one of our targets,’’ erence,’’ Professor Blumrosen won his bet otherwise weak statute.’’ Blumrosen knew to be fought ‘‘in whatever form is occurs.’’ that the EEOC’s ‘‘creative interpretation of that ‘‘with the aid of a computer,’’ the EEOC The EEOC issued guidelines in 1966 and 1970 Title VII would be upheld by the courts, could now get ‘‘lists of employers who, prima designed to abrogate the pro-testing amend- partly out of deference to the administra- facie, may be underutilizing minority-group ment to the Civil Rights Act introduced by tors.’’ Burger got the acclaim he coveted. persons’’ and eventually force them to en- Senator John Tower (R., Tex.) by defining Blumrosen cheered the Chief Justice’s opin- gage in preferential hiring of blacks. the phrase ‘‘professionally developed ability ion as a ‘‘sensitive, liberal interpretation of In mid 1965 Blumrosen sent EEOC inves- tests’’ as tests that either passed blacks and Title VII’’ that ‘‘has the imprimatur of per- tigators to Newport News, Virginia, to so- whites at an equal rate or met complex ‘‘val- manence.’’ licit discrimination complaints against the idation’’ requirements for ‘‘fairness’’ and In Griggs the Court ignored clear statutory Newport News Shipbuilding & Dry Dock ‘‘utility.’’ Under the validation requirements language and unambiguous legislative his- Company, one of the world’s largest ship- that Enneis designed, employers had to tory. In fact, Griggs paralleled a 1964 Illinois yards, employing 22,000 workers. Knocking prove that the tests measured skills they case, Myart v. Motorola, that had troubled on doors in black neighborhoods, the inves- needed. The objective was to make tests so many of the legislators who approved the tigators found 41 complainants, later nar- difficult to defend in court that employers Civil Rights Act. Myart struck down Motor- rowed down to 4. Blumrosen then success- would simply abandon them and hire by ra- ola Corporation’s use of an employment test fully pressured the company, which received cial quota. Enneis testified before Congress that blacks failed at a higher rate than 75 per cent of its business from Navy con- in 1974 that he knew of only three or four whites. The EEOC’s history for the Johnson tracts, to promote 3,890 of its 5,000 black test-validation studies that satisfied his Library noted that ‘‘many members of Con- workers, designate 100 blacks as supervisors, guidelines. As a 1971 Harvard Law Review sur- gress were concerned about this issue be- and adopt a quota system in which the ratio vey of developments in employment law de- cause the court order against Motorola was of black to white apprentices in a given year duced, the EEOC guidelines ‘‘appear designed handed down during the debates. The record would match the region’s ratio of blacks to to scare employers away from any objective establishes that the use of professionally de- whites. One shipyard worker told Barron’s standards which have a differential impact veloped ability tests would not be considered that the EEOC had done its worst to ‘‘set on minority groups, because, applied strict- discriminatory.’’ Nevertheless, the Supreme black against white, labor against manage- ly, the testing requirements are impossible Court ruled that Duke Power Company was ment, and disconcert everybody.’’ for many employers to follow.’’ As a result, discriminating against blacks by requiring Armed with the national reporting sys- the guidelines ‘‘encourage many employers employees seeking promotions to have a tem’s racial data and the victory at Newport to use a quota system of hiring.’’ An EEOC high-school diploma or a passing grade on in- News, Blumrosen and his colleagues decided staffer told the Harvard Law Review that telligence and mechanical-comprehension to build a body of case law under Title VII to ‘‘the anti-preferential-hiring provisions [of tests. impose minority-preference schemes on em- Title VII] are a big zero, a nothing, a nullity. The Supreme Court agreed with the lower ployers across the country. The barrier to They don’t mean anything at all to us.’’ courts that Duke Power had not adopted the this strategy was Title VII itself. An inter- The EEOC’s attack on tests gutted not requirement with any intention to discrimi- nal EEOC legal memorandum concluded: only Senator Tower’s amendment but also nate against blacks. Burger admitted that ‘‘Under the literal language of Title VII, the the statutory definition of discrimination as the company’s policy of financing two-thirds only actions required by a covered employer an intentional act. The commission was well of the cost of adult high-school education for are to past notices, and not to discriminate aware that it was treading on legal thin ice. its employees suggested good intent. But the subsequent to July 2, 1965. By the explicit A history of the EEOC during the Johnson lack of a racist motive did not make any dif- terms of Section 703(j), an employer is not Administration, prepared by the EEOC for ference to the Chief Justice. He decreed that required to redress an imbalance in his work the Johnson Library under the direction of the ‘‘absence of discriminatory intent does force which is the result of past discrimina- Vice Chairman Luther Holcomb, detailed the not redeem employment procedures or test- tion.’’ Fearing a storm over quotas like the EEOC’s strategy of redefining discrimination ing mechanisms that operate as ‘built-in one that had occurred during the congres- and suggested that it was on a collision headwinds’ for minority groups.’’ Burger was sional debates on the Civil Rights Act, the course with the text and legislative intent of mistaken when he wrote, ‘‘Congress directed EEOC ruled out trying to amend the Act it- Title VII. The history said the EEOC had re- the thrust of the Act to the consequences of self. The memorandum instead urged the jected the ‘‘traditional meaning’’ of dis- employment practices, not simply the moti- agency to rewrite the statute on its own and crimination as ‘‘one of intent in the state of vation.’’ It was precisely this misinterpreta- influence the courts to embrace the EEOC’s mind of the actor’’ in favor of a ‘‘construc- tion of the statute that the Dirksen Amend- ‘‘affirmative theory of nondiscrimination,’’ tive proof of discrimination’’ that would ment was crafted to prevent. under which compliance with Title VII re- ‘‘disregard intent as crucial to the finding of Burger viewed the promotion requirements quires that ‘‘Negroes are recruited, hired, an unlawful employment practice’’ and for- as ‘‘built-in-headwinds’’ against blacks be- transferred, and promoted in line with their bid employment criteria that have a ‘‘de- cause blacks were less likely than whites to ability and numbers.’’ monstrable racial effect without clear and have completed high school or to do well on THE ASSAULT ON EMPLOYMENT TESTS convincing business motive.’’ aptitude tests. He cited 1960 census statistics To implement the ‘‘affirmative theory of Noting that this redefinition would con- showing that 34 percent of white males in non-discrimination,’’ the EEOC decided to flict with Senator Dirksen’s insertion of the North Carolina had completed high school, January 21, 1997 CONGRESSIONAL RECORD — SENATE S411 compared to 12 percent of black males, and and thanks to Griggs it would get them. ‘‘At not just freedom but opportunity. We seek EEOC findings that 58 percent of whites the EEOC we believe in numbers,’’ Chairman not just legal equity but human ability, not passed the tests used by Duke Power, com- Clifford Alexander declared in 1968. In pur- just equality as a right and a theory but pared to 6 percent of blacks. Blaming these suit of its goal, the agency assumed powers equality as a fact and equality as a result.’’ disparities on segregation, Burger said that it did not have. In 1972 Blumrosen boasted in To back up his speech with action, John- ‘‘under the Act, practices, procedures, or the Michigan Law Review that the EEOC’s son issued Executive Order 11246, which put tests neutral on their face, and even neutral power to issue guidelines ‘‘does not flow the phrase ‘‘affirmative action’’ into com- in terms of intent, cannot be maintained if from any congressional grant of authority.’’ mon parlance. The order required all Federal they operate to ‘freeze’ the status quo of When Burger created what would come to Government contractors and subcontractors prior discriminatory employment practices.’’ be known as disparate-impact analysis he did to ‘‘take affirmative action to ensure that Burger destroyed job testing when he de- not realize its quota implications. He applicants are employed, and that employees clared, ‘‘The Act proscribes not only overt thought he was just attacking are treated during employment, without re- discrimination but also practices that are ‘‘credentialism.’’ As the holder of a law de- gard to their race, creed, color, or national fair in form, but discriminatory in oper- gree from an obscure night school in St. origin.’’ ation.’’ Paul, Minnesota, Burger may have been Johnson’s equality-of-results rhetoric and Burger’s casuistry was to be given a name. thinking of himself when he wrote that ‘‘his- his metaphor of helping a hobbled runner In the 1976 book Employment Discrimination tory is filled with examples of men and have provided the main emotional justifica- women who rendered highly effective per- Law, EEOC District Counsel Barbara tion for ‘‘affirmative action,’’ but the quotas formance without the conventional badges of Lindemann Schlei and co-author Paul Gross- that now web federal contractors under Ex- accomplishment in terms of certificates, di- man called the new emphasis on con- ecutive Order 11246 were not implemented by plomas, or degrees.’’ Surrounded by Court sequences ‘‘disparate impact’’ analysis. One his Administration. Facing strong opposition colleagues and clerks with prestigious Ivy year later, the Supreme Court used the from the Department of Defense, labor League degrees, Burger might have tasted unions, members of Congress, and Comptrol- phrase for the first time in the case Inter- credential discrimination. He thought that national Brotherhood of Teamsters v. United ler General Elmer Staats, Johnson’s labor the Court could take away the ‘‘headwind’’ secretary, Willard Wirtz, dropped his plans States, which dealt with burdens of proof in of credentialism that blew against blacks Title VII cases attacking union seniority to impose quotas on federal construction without creating a privileged position for projects in Philadelphia. systems. ‘‘Proof of discriminatory motive,’’ minorities. the Court said, ‘‘is not required under a dis- That task fell to George P. Shultz, Richard Yet before Griggs, any employer who was so Nixon’s labor secretary. Just as Burger con- parate-impact theory.’’ Henceforth, any re- inclined could take the measure of prospec- quirement that had a disparate impact on sidered Griggs a blow against credentialism, tive employees and make bets on people with Shultz, a labor economist from the Univer- the races, regardless of intent or the reason- obscure backgrounds who may not have had ableness of the requirement, constituted dis- sity of Chicago, saw the Philadelphia Plan as the best chances in life. After Griggs, no em- a way of making an end run around the crimination. In employment and promotions, ployer could risk hiring a white male from unequals had to be treated as equals. The Davis-Bacon Act, which inflated the cost of William Mitchell Law School in St. Paul federal construction contracts by setting same was soon to follow in university admis- over a black from Harvard. Griggs made race sions testing. Race-based privileges had wages at ‘‘prevailing union levels.’’ Davis- a critical factor in employment decisions. Bacon meant non-union contractors and la- found their way into law. High-school diplomas, arrest records, wage In Griggs Chief Justice Burger said employ- borers (many of whom were black) could not garnishments, dishonorable military dis- get government contract work. Sensitive to ers could escape prima facie Title VII liabil- charges, and grade-point averages all became ity only if test requirements are ‘‘demon- charges that he was hostile to civil rights, forbidden considerations in hiring decisions, Nixon wrote in his memoirs that he accepted strably a reasonable measure of job perform- because they are criteria that could have a ance.’’ Pulling a phrase out of thin air, Burg- Shultz’s proposal to revive the Philadelphia disparate impact on blacks. Farmers have Plan in order to demonstrate to blacks ‘‘that er said ‘‘the touchstone is business necessity. even been sued for asking prospective farm If an employment practice which operates to we do care.’’ hands whether they could use a hoe, on the On June 27, 1969, Assistant Secretary of exclude Negroes cannot be shown to be relat- grounds that blacks have a greater propen- Labor Arthur A. Fletcher, a black former ed to job performance, the practice is prohib- sity to back problems. Perfectly sensible businessman who had been a professional ited.’’ Burger invented a statutory hook for height and weight requirements for prison football player, announced the Philadelphia his ruling by asserting, falsely, that ‘‘Con- guards and police officers have also been Plan in the City of Brotherly Love. He said gress has placed on the employer the burden struck down for having a disparate impact that while ‘‘visible, measurable goals to cor- of showing that any given requirement must on women. rect obvious imbalances are essential,’’ the have a manifest relationship to the employ- The EEOC strategy that led to Griggs was plan did not involve ‘‘rigid quotas.’’ The Con- ment in question.’’ It was precisely this not created in a vacuum. Civil-rights activ- gressional Quarterly disagreed with Fletcher’s heavyhanded intrusion into job requirements ists needed a new cause, and preferences that scholastic distinction, calling the Philadel- that the Tower Amendment was designed to would enable blacks to attain equality of re- phia Plan a ‘‘nonnegotiable quota system.’’ prevent. sult became the new goal. In January 1965, Under the plan, the Labor Department’s Burger’s deference to the EEOC meant that Playboy asked Martin Luther King Jr., ‘‘Do Office of Federal Contract Compliance the agency would become the national arbi- you feel it’s fair to request a multibillion- (OFCC) would assess conditions in the five- ter of job tests. Following Griggs, the agency dollar program of preferential treatment for county Philadelphia area and set a target immediately issued manuals warning em- the Negro, or for any other minority group?’’ percentage of minorities to be employed in ployers that unless they ‘‘voluntarily’’ in- King replied, ‘‘I do indeed.’’ In 1969, the U.S. several construction trades, with the aim of creased their minority statistics, they risked Court of Appeals for the Fifth Circuit, the attaining a racially proportionate work costly liability. Ultimately, it became pro- same court that had initiated school busing force. Potential federal contractors would hibitively expensive to use job tests unless in the name of ‘‘racial balance,’’ cast aside have to submit complex plans detailing goals they were race-normed so that blacks could the prohibition of quotas in Section 703(j) of and timetables for hiring blacks within each qualify with lower scores. the Civil Rights Act by upholding a court trade to satisfy the OFCC’s ‘‘utilization’’ order that every other person admitted to a THE IMPACT OF DISPARATE IMPACT targets. Arthur Fletcher said the Philadel- Louisiana labor union must be black. Re- In a subsequent case interpreting Griggs, phia Plan ‘‘put economic flesh and bones on sponding to the argument that this order Justice Harry Blackmun expressed his con- Dr. King’s dream.’’ clearly violated Section 703(j), the three cern that the EEOC’s guidelines would lead In 1971 the U.S. Court of Appeals for the judge panel simply wrote, ‘‘We disagree.’’ to hiring based on race rather than merit. He Third Circuit accepted the Nixon Adminis- President Johnson was the most prominent tration’s argument that ‘‘goals and time- warned that ‘‘a too-rigid application of the proponent of the shift away from the color- tables’’ were not quotas and that, even if EEOC guidelines will leave the employer lit- blind ideal. At his commencement speech at tle choice, save an impossibly expensive and Howard University on June 4, 1965, Johnson they were, the Civil Rights Act’s ban on complex validation study, but to engage in a said the disappearance of legal segregation quotas applied to Title VII remedies, not to subjective quota system of employment se- was not enough: executive orders. The Supreme Court avoid- lection. This, of course, is far from the in- ‘‘You do not take a person who, for years, ed the controversial quota issue by refusing tent of Title VII.’’ has been hobbled by chains and liberate him, to review the case. Although the appeals By then it was too late. Griggs had killed bring him up to the starting line of a race, court’s ruling had no force outside the Third four birds with one stone: Senator Tower’s and then say, ‘‘You are free to compete with Circuit, the Nixon Administration inter- amendment on tests, Senator Dirksen’s all the others,’’ and still justly believe that preted the Supreme Court’s lack of interest amendment on intent, Senator Humphrey’s you have been completely fair. as a green light. As Laurence H. Silberman, guarantee that the Civil Rights Act could ‘‘Thus it is not enough just to open the who was undersecretary of labor at the time, not be used to induce quotas, and the amend- gates of opportunity. All our citizens must later wrote, the Nixon Administration went ment introduced by Representative Emanuel have the ability to work through those on to spread Philadelphia Plans ‘‘across the Celler (D., N.Y.) prohibiting the EEOC from gates. country like Johnny Appleseed.’’ The Labor issuing substantive regulatory interpreta- ‘‘This is the next and the more profound Department quickly issued Order #4, which tions of Title VII. The EEOC wanted quotas, state of the battle for civil rights. We seek required all federal contractors to meet S412 CONGRESSIONAL RECORD — SENATE January 21, 1997 ‘‘goals and timetables’’ to ‘‘correct any iden- demic credentials inferior to Bakke’s. In a structed. Burger and Rehnquist’s alarm tifiable deficiencies’’ of minorities in their 156-page opinion with 167 footnotes, the Jus- showed in their dissenting language: ‘‘By a work forces. The carrot of government con- tices reached the schizophrenic conclusion tour de force reminiscent not of jurists such tracts and the stick of disparate-impact li- that Bakke should be admitted, but that cer- as Hale, Holmes, and Hughes, but of escape ability under Griggs quickly established tain skin colors could nevertheless be con- artists such as Houdini, the Court eludes quotas. For many corporate managers, hir- sidered grounds for college admissions if the clear statutory language, uncontradicted ing by the numbers was the only protection goal was to enhance ‘‘educational diversity.’’ legislative history, and uniform precedent in against discrimination lawsuits and the loss A year later the Supreme Court ruled that concluding that employers are, after all, per- of lucrative government contracts. Contrac- companies could ‘‘voluntarily’’ impose mitted to consider race in making employ- tors hired minorities to guard against the quotas on themselves to avoid liability. ment decisions.’’ The Court ‘‘introduces into sin of ‘‘underutilization,’’ and racial propor- Pressured by OFCC affirmative-action re- Title VII a tolerance for the very evil that tionality became a precondition of govern- quirements and the need to forestall Title the law was intended to eradicate,’’ ment largesse. Arthur Fletcher estimated VII liability under Griggs, Kaiser Aluminum, Rehnquist said. Moreover, Brennan’s reading that the new quota regime covered ‘‘from like many other companies, had entered into of Section 703(j) was ‘‘outlandish’’ in the one-third to one-half of all U.S. workers.’’ a quota agreement with its union, the United light of Title VII’s other ‘‘flat prohibitions’’ The Section 703(j) prohibition of quotas in Steelworkers of America, in 1974. The agree- against racial discrimination and is ‘‘totally the Civil Rights Act remained in the law but ment stipulated that ‘‘not less than one mi- belied by the Act’s legislative history.’’ meant nothing. Reverse discrimination was nority employee will enter’’ apprentice and Rehnquist cited a congressional interpreta- in. When the liberal William O. Douglas, the craft training programs ‘‘for every non- tive memorandum clearly stating that only remaining member of the Brown Court, minority employee’’ until the percentage of ‘‘Title VII does not permit the ordering of ra- tried to get his Supreme Court colleagues to minority craft workers approximated the cial quotas in businesses or unions and does review the case of a white who was refused percentage of minorities in the regions sur- not permit interferences with seniority admission to the Arizona bar to make room rounding the percentage of minorities in the rights of employees or union members.’’ But for blacks with lower bar-exam scores, he ar- regions surrounding each Kaiser plant. Two Burger had set the stage for Weber with gued that ‘‘racial discrimination against a seniority lists were drawn up, one white and Griggs, and it was the pot calling the kettle white was as unconstitutional as racial dis- one black, and training openings were filled black when he accused Brennan of amending crimination against a black.’’ Douglas failed alternately from the two lists. the Civil Rights Act ‘‘to do precisely what to persuade his fellow Justices. He reports in Brian Weber, a 32-year-old white blue-col- both its sponsors and its opponents agreed his autobiography that Thurgood Marshall lar worker who had ten years’ seniority as an the statute was not intended to do.’’ replied: ‘‘You guys have been practicing dis- unskilled lab technician at Kaiser Alu- Having ruled in Weber that reverse dis- crimination for years. Now it is our turn.’’ minum’s plant in Gramercy, Louisiana, ap- crimination was ‘‘benign discrimination,’’ the Supreme Court upheld other quota THE SPREAD OF QUOTAS plied for a training-program slot but was de- nied in favor of two blacks with less senior- schemes in subsequent cases. In the 1980 case Although the phrase ‘‘federal contractor’’ ity. After his union denied his grievance, Fullilove v. Klutznick, the Court said a federal conjures up images of workers in hard hats Weber wrote the local EEOC office request- spending program setting aside 10 per cent of busy with construction projects or weapons ing a copy of the 1964 Civil Rights Act. When public-works money for minority businesses systems, colleges and universities are also the Civil Rights Act arrived in the mail, violated neither the Constitution’s guaran- federal contractors, receiving federal funds Weber read it through and found that it said tee of equal protection of the laws nor the through research grants and financial aid to ‘‘exactly what I thought. Everyone should be 1964 Civil Rights Act. students. Following the Labor Department’s In the 1987 case Johnson v. Transportation treated the same, regardless of race or sex.’’ lead, Nixon’s Department of Health, Edu- Agency Santa Clara County, the issue was the Encouraged by the statute’s words, he filed a cation, and Welfare soon required similar maleness rather than the whiteness of white class-action suit representing his plant’s ‘‘goals and timetables’’ for faculty hiring. males. The Court ruled that job discrimina- white workers and won before district and Before long the practice had spread to stu- tion against a white male in favor of a appellate courts. dent admissions as well. During Supreme Court oral arguments in woman with lower performance ratings was In 1974 Douglas tried to get the Court to United Steelworkers v. Weber Justice Potter perfectly legal under Title VII, even though address quotas in this area. Marco DeFunis Stewart quipped that the Justices had to de- the county’s transportation agency had no challenged the University of Washington termine whether employers may ‘‘discrimi- record of prior discrimination requiring rem- Law School’s 20 per cent quota for blacks. nate against some white people.’’ Justice edies. Rehnquist, Byron White, and Antonin The school had rejected DeFunis though his William Brennan’s answer, for a 5 to 2 major- Scalia didn’t like the decision. Scalia said, GPA and test scores surpassed those of 36 of ity, was an emphatic ‘‘yes.’’ Brennan said ‘‘We effectively replace the goal of a dis- the 37 admitted blacks. Using his powers as the meaning of the 1964 Civil Rights Act crimination-free society with the quite in- a Circuit Justice, Douglas stayed the Wash- could not be found in its statutory language compatible goal of proportionate representa- ington Supreme Court’s ruling against but resided in its spirit, which Brennan had tion by race and by sex in the workplace.’’ DeFunis and ordered his admission. divined. He asserted that the Act’s clear He noted that civil rights had become a cyni- By the time DeFunis’s case came before statutory language and the Dirksen, Tower, cal numbers game played by politicians, lob- the Supreme Court, however, he was about and Celler amendments conveyed a meaning byists, corporate executives, lawyers, and to receive his degree. This let the Court that was the opposite of what Congress had government bureaucrats. avoid the quota issue by declaring the case In 1989 there was a brief retrenchment really intended. A literal reading of Title moot. Douglas dissented on the mootness when the Supreme Court, with its Reagan VII, he said, would ‘‘bring about an end com- ruling and addressed the case’s merits. He appointees, confronted the quota implica- pletely at variance with the purpose of the viewed DeFunis just as he had Brown: ‘‘There tions of Griggs and the decisions that had fol- statute.’’ In enacting the Civil Rights Act, is no superior person by constitutional lowed it. In Wards Cove v. Atonio, the Court Brennan continued, ‘‘Congress’s primary standards. A DeFunis who is white is enti- ruled that statistical disparities were insuf- concern’’ was with the plight of the Negro in tled to no advantage by reason of that fact; ficient to establish a prima facie case of dis- our economy. Anything that helped minori- nor is he subject to any disability, no matter crimination. In this case, the racial minori- ties was broadly consistent with this pur- what his race or color. Whatever his race, he ties who made up a majority of the unskilled pose. This included racial quotas, as long as had a constitutional right to have his appli- work force at two Alaskan salmon canneries they were voluntarily adopted by companies cation consideration on its individual merits brought a discrimination lawsuit based on and not required by the Federal Government in a racially neutral manner.’’ the fact that whites held a majority of under Title VII. Brennan denied that Kai- But time had passed Douglas by. In Doug- skilled office positions. The suit claimed ser’s plan would lead to quotas: ‘‘The plan is las’s mind, discrimination was still con- that this constituted underutilization of pre- a temporary measure; it is not intended to nected with merit. DeFunis’s scores showed ferred minorities in office positions and was maintain racial balance, but simply to elimi- that he met a higher objective standard than evidence of racial discrimination. The major- nate a manifest racial imbalance.’’ those admitted in his place. But by this time ity opinion, written by Justice White, re- any standard that had disparate impact was BURGER HAS SECOND THOUGHTS jected the discrimination claim. White noted ipso facto discriminatory. In the eyes of Chief Justice Burger had created disparate- that: Douglas’s colleagues, DeFunis was simply a impact analysis in his Griggs opinion without ‘‘Any employer who had a segment of his beneficiary of a discriminatory standard. realizing its quota implications. Now that work force that was—for some reason—ra- Douglas, who had supported the Griggs deci- quotas were upon him, he found himself join- cially imbalanced, could be hauled into court sion, obviously did not comprehend its impli- ing in dissent with Justice William and forced to engage in the expensive and cations. Rehnquist. Brennan’s Weber opinion, they time-consuming task of defending the ‘busi- The quota issue re-emerged in 1978, when said, was ‘‘Orwellian.’’ In Griggs, the Court ness necessity’ of the methods used to select Allan Bakke, a white male refused admission had declared that ‘‘discriminatory pref- the other members of his work force. The to the University of California Medical erence for any group, minority or majority, only practicable option for many employers School, challenged the school’s policy of re- is precisely and only what Congress has pro- will be to adopt racial quotas, ensuring that serving 16 per cent of its slots for minorities. scribed.’’ But eight years had passed, and the no portion of his work force deviates in ra- Each of the accepted minorities had aca- Civil Rights Act had been fully recon- cial composition from the other portions January 21, 1997 CONGRESSIONAL RECORD — SENATE S413 thereof; this is a result that Congress ex- Reverse discrimination is now a fact of life. rights not accorded to most other pressly rejected in drafting Title VII.’’ Indeed, in strictly legal terms, the situation groups and individuals. A week after Wards Cove, the Court ruled for white males today is worse than the situ- The fact is, no other group in Amer- in Martin v. Wilks that victims of reverse dis- ation for blacks under Plessy v. Ferguson’s ica is given special rights based on its crimination due to consent decrees that im- separate-but-equal doctrine. In practice, sexual behavior. To grant special posed quotas had the right to challenge the blacks suffered unequal treatment under decrees in court. The Court noted that vic- Plessy, but the decision officially required rights to homosexuals would be redun- tims of reverse discrimination found their equal treatment, Under today’s civil-rights dant—the 1964 Civil Rights Act already rights affected by lawsuits to which they regime, by contrast, whites can be legally protects every American from dis- were not parties. Citing a long-standing legal discriminated against in university admis- crimination. tradition, the majority held that ‘‘a person sions, employment, and the allocation of Moreover, the Senate, on September cannot be deprived of his legal rights in a government contracts. 10, 1996, defeated attempts by Senator proceeding to which he is not a party.’’ In his famous dissent from Plessy, Justice KENNEDY and others to amend the Civil These rulings caused an uproar among John Marshall Harlan worried that the Lou- civil-rights activists, who charged that the Rights Act in order to extend special isiana law requiring racial segregation on rights to employees based exclusively new Reagan Court was racist. The illegal public transportation would allow class dis- privileges that had evolved in the 18 years tinctions to enter the legal system, since on the employees’ sexual preferences. since Griggs was decided had become a squat- blacks and whites were economically as well Mr. President, after Dr. Mertz’s ter’s right, and Congress and the Bush Ad- as racially distinct. Harlan was certain that plight was brought to light in 1994, my ministration were bullied into enacting the he wanted no status-based distinctions in the office began to hear from Federal Gov- new inequality into law. The 1991 Civil law. Our Constitution, he said, ‘‘is color- ernment employees throughout Wash- Rights Act in effect repealed the 1964 Act by blind, and neither knows nor tolerates class- ington and the country who were per- legalizing racial preferences as the core of es among citizens. In respect of civil rights, sonally concerned about the Adminis- civil-rights law. The new Act was designed to all citizens are equal before the law. The tration’s attempts to defend and pro- overturn the Wards Cove and Wilks rulings humblest is the peer of the most powerful.’’ mote special rights for homosexuals in and to codify the disparate-impact standard Today, civil-rights activists reject Harlan’s of Griggs. the workplace. color-blind views. Privilege before the law And we continue to hear from them. The statute also slammed shut the court- has replaced equality before the law. house doors on white male victims of reverse These are not hate-filled or mean-spir- discrimination. If statistical disparities or By Mr. HELMS: ited; they are understandably disturbed racial imbalance is proof of discrimination, S. 47. A bill to prohibit the executive by the government’s attempts to sanc- white males adversely affected by quotas can branch of the Federal Government tion and protect a lifestyle they—and have no standing in court. To give them many Americans—regard as immoral. standing would necessarily imperil the quota from establishing an additional class of individuals that is protected against Mr. President, let’s look at state- remedies for racial imbalance. You cannot ments issued by three of the Adminis- simultaneously declare that anything short discrimination in Federal employment, of proportional racial representation is dis- and for other purposes; read twice and tration’s cabinet members regarding crimination and recognize the adverse im- placed on the calendar. efforts by the Clinton Administration to confer special rights and protections pact of the ‘‘remedy’’ on white males. Under FREEDOM OF SPEECH ACT upon homosexuals and lesbians. the 1991 Civil Rights Act, white makes have Mr. HELMS. Mr. President, many no grounds for discrimination lawsuits until On April 15, 1993, then-Secretary of they are statistically underrepresented in readers of the Washington Times on Agriculture, Mike Espy, issued a Civil management and line positions. They have December 31, 1996, were offended when Rights Policy Statement in which he no claims to be statistically represented as they read an article, ‘‘Postal Inspec- stated that the USDA would ‘‘create a hirees, trainees, and promotees until pre- tors’ Bias Code Seen as Silencing Anti- work environment free of discrimina- ferred minorities are proportionately rep- Gay Views.’’ The article reported that tion and harassment based on gender resented in management and line positions. the U.S. Postal Service’s law enforce- Indeed,under Brennan’s interpretation of the or sexual orientation.’’ ment branch had recently issued a new On December 6, 1993, the Secretary of Civil Rights Act, which says that anything code of conduct forbidding employees that helps preferred minorities is broadly Health and Human Services, Donna consistent with the law, the disparate-im- from expressing their personal and reli- Shalala, issued her agency’s directive pact standard could one day be ruled inap- gious beliefs regarding homosexual- to celebrate cultural ‘‘diversity’’ in a plicable to whites. ity—even during off-duty hours. workplace free of discrimination The 1991 Civil Rights Act added the threat When asked about the Postal Serv- against gays and lesbians. of compensatory and punitive damages to ice’s decision, Robert Maginnis, an an- On August 30, 1994, Henry Cisneros, the pressure for quotas. In ‘‘Understanding alyst at the Family Research Council, the Secretary of the Department of the 1991 Civil Rights Act,’’ an article in The asserted correctly that ‘‘People who Practical Lawyer, Irving M. Geslewitz rec- Housing and Urban Development, like- ommended that corporations apply cost-ben- have deeply-held moral beliefs * * * wise informed all HUD employees that efit analysis to determine whether ‘‘they are need not apply for the Federal jobs. his department would not tolerate dis- safer in hiring and promoting by numbers re- Talk about discrimination! This is re- crimination on the basis of sexual ori- flecting the percentages in the surrounding verse discrimination of the worst entation. community than in risking disparate-impact kind.’’ In fact, Mr. President, Leonard lawsuits they are likely to lose,’’ To counter Mr. Maginnis was right on target: Hirsch, president of Gay, Lesbian and charges of ‘‘hostile work environments,’’ Freedom of speech is not permitted to Bisexual Employees of the Federal company lawyers want to be able to tell ju- those who deplore the favoritism Government (GLOBE), told the Wash- ries that their clients have many minority shown people who have the morals of and women employees at all levels. ington Times that every Cabinet-level The day after the Civil Rights Act of 1991 alley cats. I recall the 1994 episode in department, excluding the Pentagon, became law, a New York Times article, ‘‘Af- which the Senate came to the defense now has rules barring discrimination firmative Action Plans Are Part of Business of a faithful and longtime employee of based on sexual orientation. Life,’’ observed that quota policies are as the Department of Agriculture, Dr. Which brings us to the issue of ‘‘familiar to American businesses as tally Karl Mertz, whose freedom of speech whether the Federal Government in- sheets and bottom lines.’’ A 1991 Business was callously violated after he dared to tends to expand the definition of dis- Week article entitled ‘‘Race in the Work- stand up against sodomy. Dr. Mertz did crimination to include suppression of place: Is Affirmative Action Working?’’ re- ported that affirmative action is ‘‘deeply in- so on his own time, when he opposed the constitutional rights of its employ- grained in American corporation culture. his government’s giving special rights ees to voice personal and religious be- . . . The machinery hums along, nearly to homosexuals. liefs regarding homosexuality. The fact automatically, at the largest U.S. corpora- Mr. President, during the incident in- is, it is already happening. tions. They have turned affirmative action volving Dr. Mertz, it because abun- To the delight of the homosexual into a smoothly running assembly line, with dantly clear, at least to me, that the community, Federal employees are re- phalanxes of lawyers and affirmative-action Clinton Administration had conducted quired to leave their moral and spir- managers.’’ The 1964 Civil Rights Act, which undertook and continues to conduct a concerted itual views at home every morning to eliminate race and sex from private em- effort to give homosexuals special since Federal agencies and depart- ployment decisions, has instead been used to rights, privileges, and protections ments have unilaterally adopted a pol- make race and sex the determining factors. throughout the Federal agencies— icy to treat homosexuals as a special S414 CONGRESSIONAL RECORD — SENATE January 21, 1997 class protected under various titles of others, such depravity knows no only way Congress can stop the irre- the Civil Rights Act of 1964. bounds. The only religiously-oriented sponsible use of the taxpayers’ money Congress must not remain silent as ‘‘art’’ funded by the NEA were scur- by the NEA is to abolish it. the executive branch creates special rilous attacks on the Catholic church Moreover, there is much to be said protections for homosexuals without or blasphemous insults to the deity of for the priority to confront the exist- regard to the constitutional right of Jesus Christ. ing $5.3 trillion Federal debt and the ef- freedom of speech enjoyed by all Fed- More recently, The Washington fect that it will have on the futures of eral employees. That is the purpose of Times, in an article last June, reported today’s young people. The sky will not the legislation I offer today. that the National Endowment for the fall if the Congress votes to privatize Under this bill, no Federal depart- Arts had, in 1995, awarded $31,500 to a the NEA as the arts already swim in an ment or agency shall implement or en- lesbian film director for her production ocean of private funds—more than $9 force any policy creating a special of the film titled, ‘‘Watermelon billion annually. Bruce Fein wrote in class of individuals in Federal employ- Woman’’. In her description of the film his editorial, ‘‘Dollars for Depravity,’’ ment discrimination law. This bill will to the NEA, the film’s director boasted that ‘‘NEA funds are but a tiny frac- also prevent the Federal government that with the NEA’s support, she would tion of national art expenditures. Thus, from trampling the first amendment ‘‘be one of the first African American a denial of an NEA grant is far from rights of Federal employees to express lesbian film makers who promotes our tantamount to a professional death their moral and spiritual values in the rarely seen lifestyles.’’ sentence.’’ workplace. Mr. President, I will not waste the For these reasons, I today introduce Finally, this bill will turn back the Senate’s time further detailing the tide of the homosexual community in The National Endowment for the Arts outrageous abuse of Federal tax dollars Termination Act of 1997. The bill mir- its efforts to force Americans to ac- by the National Endowment for the cept, and even legitimize, moral per- rors the legislation offered in the Arts. But it continues, despite the ef- House of Representatives this year by version. forts by those in Congress to reform Mr. President, I ask unanimous con- Phil Crane, Sam Johnson, and Charlie the agency. Sadly, the real travesty is Norwood. sent that the text of this legislation be found in the efforts of a few misguided printed in the RECORD. This bill finally alleviates the bur- souls to defend requiring the American den, shouldered by the American tax- By Mr. HELMS: taxpayers to finance the attempted to payers, of allocating money every year S. 48. A bill to abolish the National glorify perversion and immorality. to an agency whose mission has been Endowment for the Arts and the Na- When I came to the Senate floor that sorely mistreated. The strings will be tional Council on the Arts; read twice day in 1989, I told Senators that the cut and the Federal government will no placed on the calendar. arts community and the media—be- longer be in the business of propping up THE NATIONAL ENDOWMENT OR THE ARTS cause they balked at any restriction on ‘‘artists’’ such as Robert Mapplethorpe TERMINATION ACT OF 1997 Federal funding—had left Congress and Andres Serrano. Furthermore, Mr. HELMS. Mr. President, some- with two choices: First, absolutely no Congress will rid itself of the annual thing more than 7 years ago, I first re- Federal presence in the arts; or second, fight to defend the cultural high ported to the Senate some evidence granting artists the absolute freedom ground against a group of people who that a war was then being waged to use tax dollars as they wish, regard- are in a lifelong crusade to destroy the against America’s standards of decency less of how vulgar, blasphemous, or Judeo-Christian foundations of this by some self-proclaimed ‘‘artists’’ despicable their works may be. I said country. at the time that if we indeed must funded by the national Endowment for Mr. President, this bill is the only so- make this choice, then the Federal the Arts. lution to end the irresponsible use of Government should get out of the arts. When I came to the Senate floor that the taxpayers’ money by this agency. But, I felt then that Congress could day, July 26, 1989, and suggested that Efforts to reform it have failed. It is make another choice—to clean up the Senators should examine some exam- time to put the National Endowment NEA, and merely prevent the use of ples of the material that the taxpayers for the Arts to rest. were being required to subsidize, and Federal funds to support the creation Mr. President, I ask unanimous con- that I had an amendment to put an end or production of vulgar or sacrilegious sent that the text of this bill be printed to it, the distinguished manager of the works. in the RECORD. bill took one look and said, ‘‘We’’ take Well, Mr. President, as Paul Harvey says, now you know the rest of the your amendment.’’ By Mr. STEVENS (for himself And that’s when the battle began. story. For more than 7 years, I offered and Mr. MURKOWSKI): Since that time some of the know-it- numerous amendments to put an end S. 49. A bill to amend the wetlands all media have tried in vain to make a to the taxpayer-subsidized obscenity regulatory program under the Federal silk purse out of the NEA’s sow’s ear. I’ve detailed today. But without fail, Water Pollution Control Act to provide They failed miserably to persuade the every year, the American people are credit for the low wetlands loss rate in American people that such so-called shocked to hear of another instance in Alaska and recognize the significant ‘‘art’’ deserved the taxpayers’ money which the NEA has given its blessing— extent of wetlands conservation in allocated to the arrogant artists whose and the taxpayers’ money—to an orga- Alaska, to protect Alaskan property minds belonged in the sewer. nization or individual determined to owners, and to ease the burden on over- The names of these self-proclaimed cross the lines of decency and moral- ly regulated Alaskan cities, boroughs, ‘‘artists’’ consist of a wide range of cu- ity. rious individuals who have no regard The last card was played out, Mr. municipalities, and villages; to the for decency—Annie Sprinkle, Holly President, when a liberal Federal ap- Committee on Environment and Public Hughes, and Karen Finley performing peals court, on November 5, 1996, Works. their live sex acts; Andres Serrano usurped the right of Congress to put THE ALASKA WETLANDS CONSERVATION ACT sticking a crucifix in a jar filled with any semblance of restrictions on the Mr. STEVENS. Mr. President, I am his urine, taking a picture of it, and way the NEA uses the money granted pleased to introduce the Alaska Wet- choosing for its title a mockery of to it by Congress. The U.S. 9th Circuit lands Conservation Act, a bill to con- Jesus Christ. Then there was Robert Court thumbed its nose at Congress— form wetlands protection to the unique Mapplethorpe, who became noted for and the American people—when it conditions found throughout Alaska. his filthy homosexual photographs; upheld the right of so-called ‘‘artists’’ My State contains more wetlands Joel-Peter Witken who used bodies of such as Karen Finley and Holly Hughes than all other States combined. Since dead men and women to produce stom- to continue to be subsidized for their 1780 we have developed less than 1/10 of ach-churning photographs; and many decadent acts. one percent of those wetlands. Accord- others. Mr. President, no more choices or ing to the United States Fish and Wild- From burning the American flag to compromises remain. I have concluded, life Service, about 170.2 million acres of flouting their own bodies and those of as have so many Americans, that the wetlands existed in Alaska in the 1780’s January 21, 1997 CONGRESSIONAL RECORD — SENATE S415 and about 170 million acres exist today. problem is larger than protecting our federal revenues above what would be That represents a negligible loss rate over abundance of wetlands. Wetlands collected if depletion allowances were over a period of 217 years. Furthermore policies conflict with other laws which limited to the actual costs in capital almost ninety percent of our wetlands were passed to promote the economic investments. are publicly owned, protected by strict self sufficiency of Alaskans. My bill These four allowances are only a few land use designations that guarantee would require approval of permit appli- of the percentage depletion allowances these wetlands will remain intact per- cations with reasonable safeguards for contained in the tax code for extracted manently. ‘‘economic base lands’’ meaning those fuel, minerals, metal and other mined We Alaskans have substantially con- lands conveyed under the Alaska Na- commodities—with a combined value, served our wetlands. Unfortunately tive Claims Settlement Act or Alaska according to 1994 estimates by the Federal policies established to protect Statehood Act, both acts intended to Joint Committee on Taxation, of $4.8 and restore wetlands in the southern provide the means for Alaskans to billion. forty-eight States do not recognize our achieve economic self sufficiency. Mr. President, unlike depreciation or unique circumstances nor do these The Alaska Wetlands Conservation cost depletion, the ability to use so- policies provide an appropriate level of Act is a common sense approach to called percentage depletion allows flexibility in managing the roughly one Alaska’s circumstances. It maintains companies to deduct far more than percent of land available for private or flexibility to protect wetlands without their actual costs. The result is a gen- commercial development in Alaska. hurting people. With respect to exist- erous loophole for the company, and an My bill continues to require Alas- ing activities related to airport safety, expensive subsidy for the taxpayer. kans who apply for discharge permits logging, mining, ice pads and roads, Historically, percentage depletion al- under section 404 of the Clean Water and snow removal or storage, the bill lowances were placed in the tax code to Act to avoid or minimize adverse im- prevents Alaskans from having to ob- reduce the effective tax rates in the pacts on wetlands, but it would elimi- tain section 404 permits to continue mineral and extraction industries far nate requirements to mitigate for un- those activities. The bill would also re- below tax rates on other industries, avoidable impacts. It also removes the quire the Army Corps of Engineers to providing incentives to increase invest- burden for an applicant to prove that approve general wetlands permits with ment, exploration and output. How- no alternative sites are available. Most reasonable safeguards for specific cat- ever, unlike cost depletion or even ac- of Alaska’s communities are sur- egories of activities if the general per- celerated depreciation, percentage de- rounded by literally millions of acres mit is requested by the State of Alas- pletion also makes it possible to re- of wetland. These areas are made ka. cover more than the amount of the unaccessible under the law for mitiga- There has been negligible benefit to original investment. As noted in the tion purposes since they are already the environment in Alaska as a result Budget Committee’s report on tax ex- protected. In Alaska, mitigation makes of the expansive wetlands regulations penditures, this makes percentage de- no sense except to extort compensatory issued by bureaucrats inside the belt- pletion essentially a mineral produc- concessions from applicants which way. On the other hand, the harm tion subsidy. would otherwise not be justified. caused by overzealous Federal wetlands There are two methods of calculating The threat of mitigation sends a police is documented in many examples a deduction to allow a mining compa- chilling message to potential investors of bureaucratic delay, expense and irra- nies to recover the costs of their cap- by artificially raising the costs of tional decision making. Ask the Mayor ital investment: cost depletion, and doing business in Alaska. In turn, this of Juneau how the Federal Government percentage depletion. Cost depletion contributes to unemployment and handled that city’s application for a allows for the recovery of the actual weakening the economic self suffi- general permit. It is a national dis- capital investment over the period ciency of our far flung communities. In grace simply because laws intended to which the reserve produces income. the long run, the current program protect scarce wetlands elsewhere were Using cost depletion, a company de- wastes taxpayer money in an ill ad- strictly applied in an area of abun- ducts a portion of their original capital vised attempt to protect abundant wet- dance. This bill restores rational deci- investment minus any previous deduc- lands that are already more than ade- sion making authority to those closest tions, in an amount that is equal to the quately protected in Alaska. The re- to the wetlands situation of Alaska. I fraction of the remaining recoverable sources at risk in Alaska are not our encourage my colleagues in the Senate reserves. Under this method, the total wetlands, they are our people. and the House to act expeditiously on deductions cannot exceed the original The blind application of legislation my proposed remedy. capital investment. written to protect wetlands elsewhere However, under percentage depletion, inhibits reasonable growth by our Na- By Mr. FEINGOLD: the deduction for recovery of a compa- tive villages and local governments. In S. 51. A bill to amend the Internal ny’s investment is a fixed percentage of effect, the section 404 program has a Revenue Code of 1986 to eliminate the ‘‘gross income’’—namely, sales reve- life threatening choke hold on Native percentage depletion allowance for cer- nue—from the sale of the mineral. Ac- Alaskans. It is difficult to place a tain minerals; to the Committee on Fi- cording to the Budget Committee’s stake in the ground in Alaska without nance. summary of tax expenditures, under impacting a wetland, let alone to build DEPLETION ALLOWANCES LEGISLATION this method, total deductions typically critical infrastructure. Compounding Mr. FEINGOLD. Mr. President, I am exceed the capital that the company the problem, we have recently seen the pleased to introduce legislation to invested. Administration begin to phase out na- eliminate percentage depletion allow- Mr. President, given the need to re- tionwide permits. This makes it in- ances for four mined substances—as- duce the deficit and balance the budg- creasingly difficult to address the huge bestos, lead, mercury, and uranium— et, there is just as clear a need to re- task facing our local and State offi- from the Federal tax code. This meas- view the spending done through the tax cials in providing safe drinking water, ure is based on language passed as part code as there is to scrutinize discre- sanitation systems, electric power and of the Energy Policy Act of 1992 by the tionary spending and entitlement pro- other critical services to far flung other body during the 102d Congress. grams. All of these forms of spending Alaskan communities. Without this Analysis by the Joint Committee on must be asked to justify themselves, bill, the Federal wetlands bureaucracy Taxation on the similar legislation and be weighed against each other in simply lacks the authority to apply that passed the House estimated that, seeking to reach the broader goal of a common sense. under that bill, income to the Federal balanced budget. Mr. President, many rural Alaskans treasury from the elimination of per- In the case of these particular tax ex- are trapped living under third world centage depletion allowances in just penditures, we must decide who should conditions by well-meaning outsiders these four mined commodities would bear the costs of exploration, develop- and bureaucrats narrowly focused on total $83 million over 5 years, $20 mil- ment, and production of natural re- environmental protection. Unfortu- lion in this year alone. These savings sources: all taxpayers, or the users and nately for Alaska, in this case the are calculated as the excess amount of producers of the resource. The current S416 CONGRESSIONAL RECORD — SENATE January 21, 1997 tax break provided to the users and cial taxpayer subsidies to particular in- sure that all persons who benefit from producers of these resources increases dustries that can no longer be justified. the dairy promotion and research pro- pressure on the budget deficit, and Finally, Mr. President, in conclusion gram contribute to the cost of the pro- shifts a greater tax burden onto other I want to pay tribute to several elected gram, and for other purposes; to the businesses and individuals to com- officials from Milwaukee, Mayor John Committee on Agriculture, Nutrition, pensate for the special treatment pro- Norquist and Milwaukee Alderman Mi- and Forestry. vided to the few. chael Murphy, who have brought to my DOMESTIC DAIRY POLICY LEGISLATION Mr. President, the measure I am in- attention the incongruity of the fed- Mr. FEINGOLD. Mr. President, today troducing is straightforward. It elimi- eral government continuing to provide I rise to introduce three bills which at- nates the percentage depletion allow- taxpayer subsidies for the production tempt to rectify three different prob- ance for asbestos, lead, mercury, and of toxic substances like lead while our lems with domestic dairy policy. My uranium while continuing to allow inner cities are struggling to remove State of Wisconsin is home to more companies to recover reasonable cost lead-based paint from older homes and than 26,000 dairy farmers. Over the past depletion. buildings where children may be ex- 4 years during the more than 288 listen- Even as a production subsidy, the posed to this hazardous material. I ing sessions I’ve held in Wisconsin percentage depletion tax loophole is in- deeply appreciate their support and en- counties, I have heard from many of efficient. As the Budget Committee couragement for my efforts in this those dairy farmers on the issues ad- summary of tax expenditures notes, it area. dressed by the legislation I am intro- encourages excessive development of Mr. President, I ask unanimous con- ducing today. existing properties rather than the ex- sent that a copy of the legislation be The first bill I am introducing today, ploration of new ones. printed in the RECORD. if enacted, will be a first step towards Moreover, Mr. President, the four There being no objection, the bill was rectifying the inequities in the Federal commodities covered by my bill are ordered to be printed in the RECORD, as Milk Marketing Order system. The follows: among some of the most environ- Federal Milk Marketing Order system, mentally adverse. The percentage de- S. 51 created 60 years ago, establishes mini- pletion allowance makes a mockery of Be it enacted by the Senate and House of Rep- mum prices for milk paid to producers conservation efforts. The subsidy effec- resentatives of the United States of America in Congress assembled, throughout various marketing areas in tively encourages mining regardless of SECTION 1. CERTAIN MINERALS NOT ELIGIBLE the United States. the true economic value of the re- FOR PERCENTAGE DEPLETION. My legislation is very simple. It iden- source. The effects of such mines on (a) IN GENERAL.—Section 613(b)(1) of the In- tifies the single most inequitable and U.S. lands, both public and private, has ternal Revenue Code of 1986 (relating to per- injurious provision in the current sys- been significant—with tailings piles, centage depletion rates) is amended— tem, and corrects it. That provision— scarred earth, toxic by-products, and (A) in subparagraph (A), by striking ‘‘and known as single basing point pricing— disturbed habitats to prove it. uranium’’; and is USDA’s practice of basing prices for (B) in subparagraph (B), by striking ‘‘as- Ironically, the more toxic the com- bestos,’’, ‘‘lead,’’, and ‘‘mercury,’’. fluid milk—Class I milk—in all mar- modity, the greater the percentage de- (b) CONFORMING AMENDMENTS.— keting areas east of the Rocky Moun- pletion received by the producer. Mer- (1) Section 613(b)(3)(A) of the Internal Rev- tains on the distance from Eau Claire, cury, lead, uranium, and asbestos re- enue Code of 1986 is amended by inserting WI, when there is little economic jus- ceive the highest percentage depletion ‘‘other than lead, mercury, or uranium’’ tification for doing so. allowance, while less toxic substances after ‘‘metal mines’’. In general, the price for fluid milk receive lower rates. (2) Section 613(b)(4) of such Code is amend- increases at a rate of 21 cents per 100 Mr. President, particularly in the ed by striking ‘‘asbestos (if paragraph (1)(B) miles from Eau Claire, WI. Fluid milk does not apply),’’. case of the four commodities covered (3) Section 613(b)(7) of such Code is amend- prices, as a result, are $2.98 cents high- by my bill, these tax breaks create ab- ed by striking ‘‘or’’ at the end of subpara- er in Florida than in Wisconsin, more surd contradictions in government pol- graph (B), by striking the period at the end than $2 higher in New England, and icy. While Federal public health and of subparagraph (C) and inserting ‘‘, or’’, and more than $1 higher in Texas. environmental agencies are struggling by inserting after subparagraph (C) the fol- While this system has been around to come to grips with a vast children’s lowing: since 1937, the practice of basing fluid health crisis caused by lead poisoning, ‘‘(D) mercury, uranium, lead, and asbes- milk price differentials on the distance spending millions each year to prevent tos.’’ from Eau Claire was formalized in the (4) Section 613(c)(4)(D) of such Code is 1960’s, when arguably the Upper Mid- lead poisoning, test young people, and amended by striking ‘‘lead,’’ and ‘‘ura- research solutions, the tax code is pro- nium,’’. west was the primary reserve for addi- viding a subsidy for lead production—a (c) EFFECTIVE DATE.—The amendments tional supplies of milk. The idea was to subsidy that is not provided for the made by this section apply to taxable years encourage local supplies of fluid milks lead recycling industry. beginning after December 31, 1996. in areas of the country that did not Asbestos, too, has posed massive pub- traditionally produce enough fluid lic health problems, and it is indefensi- By Mr. FEINGOLD: milk to meet their own needs. At that S. 52. A bill to amend the Agricul- ble that this commodity, the use of time, this was important because our tural Adjustment Act to prohibit the which the Federal Government will ef- transportation infrastructure made Secretary of Agriculture from basing fectively ban before the year 2000, con- long distance bulk shipments of milk minimum prices for Class I milk on the tinues to receive a massive tax subsidy. difficult. Thus, the only way to ensure distance or transportation costs from Mr. President, the time has come for consumers a fresh local supply of fluid any location that is not within a mar- the Federal Government to get out of milk was to provide dairy farmers in keting area, except under certain cir- the business of subsidizing business in those distant regions with a milk price cumstances, and for other purposes; to ways it can no longer afford—both fi- the Committee on Agriculture, Nutri- high enough to encourage local produc- nancially and for the health of its citi- tion, and Forestry. tion. Mr. President, the system worked zens. This legislation is one step in too well. Ultimately, it has worked to that direction. By Mr. FEINGOLD (for himself the disadvantage of the Upper Midwest, Mr. President, in 1992, I developed an and Mr. KOHL): and in particular, Wisconsin dairy 82+ plan to eliminate the Federal defi- S. 55. A bill to amend the Dairy Pro- farmers. cit and have continued to work on im- duction Stabilization Act of 1983 to The artificially inflated Class I prices plementation of the elements of that prohibit bloc voting by cooperative as- have provided production incentives plan since that time. Elimination of sociations of milk producers in connec- beyond those needed to ensure a local special tax preferences for mining com- tion with the program, and for other supply of fluid milk in some regions, panies was part of that 82+ point plan. purposes; to the Committee on Agri- leading to an increase in manufactured Just as we must cut direct spending culture, Nutrition, and Forestry. products in those marketing orders. programs, if we are to balance that S. 56. A bill to amend the Dairy Pro- Those manufactured products directly budget, we must also curtail these spe- duction Stabilization Act of 1983 to en- compete with Wisconsin’s processed January 21, 1997 CONGRESSIONAL RECORD — SENATE S417 products, eroding our markets and the magnitude of this program, it is gram for all dairy products imported at driving national prices down. critical that Congress take seriously the same rate as domestic dairy farm- Under the provisions of the 1996 farm the concerns producers have about ers. This is not an unusual proposal, bill, the U.S. Department of Agri- their promotion program. Mr. President. Many of our largest ge- culture is currently undergoing an in- Since participation in the checkoff is neric promotion programs in agri- formal rulemaking process to consoli- mandatory and producers are not al- culture already assess importers for date the number of Federal Milk Mar- lowed refunds, Congress required that their fair share of the program, includ- keting Orders from 32 to 10. USDA is producers vote in a referendum to ap- ing programs for pork, beef, and cot- also looking at how to set prices for prove the program after it was author- ton. milk in those consolidated orders. By ized. The problem is that Congress This legislation is particularly im- statute USDA is prohibited from bas- didn’t provide for a fair and equitable portant in light of the passage of the ing the new prices on the structure of voting process in the original act and General Agreement on Tariffs and the existing milk differentials set by it’s time to correct our mistake. My Trade which will result in greater im- the 1985 farm bill. The reforms must be bill does that by eliminating a process ports of dairy products over the next completed by spring, 1999. Secretary of known as bloc voting by dairy coopera- several years. An assessment of this Agriculture Dan Glickman will no tives. type on importers would also be al- doubt be pressured by many supporters Under current law, dairy coopera- lowed under the GATT since our own of the status quo to maintain the over- tives are allowed to cast votes in pro- milk producers are already paying the all price structure that has discrimi- ducer referenda en bloc for all of their same assessment. nated against Wisconsin farmers for so farmer-members, either in favor of or We have put our own producers at a many years. I will do everything I can against continuation of the National competitive disadvantage for far too to prevent that from happening. Wis- Dairy Board. While individual dissent- long. It’s high time importers paid for consin farmers need real Class I price ers from the cooperative’s position are their fair share of the program. reform that removes the artificial com- allowed to vote individually, many I am also pleased to be an original petitive advantages provided to other farmers and producer groups claim the cosponsor of the National Dairy Pro- regions to other regions of the country process stacks the deck against those motion Board Reform Act introduced and allows Upper Midwest farmers to seeking reform of the program. today by Senator KOHL. That bill fur- compete on a level playing field. Mr. President, the problem bloc vot- ther enhances producer representation The legislation that I am introducing ing creates is best illustrated by the re- on the National Dairy Board by provid- today identifies the one change that is sults of the August 1993 producer ref- ing for the direct election of National absolutely necessary in any outcome— erendum on continuation of the Na- Dairy Board members, rather than ap- the elimination of single basing point tional Dairy Promotion and Research pointment by the Secretary. That proc- pricing. It prohibits the Secretary of Board, called for by a petition of 16,000 ess will allow producers to elect mem- Agriculture from using distance or diary farmers. In that referendum, 59 bers to the board that represent their transportation costs from any location dairy cooperatives voting en bloc, cast views on promotion and eliminates the as the basis for pricing milk, unless 49,000 votes in favor of the program. divisive impact of the political ap- significant quantities of milk are actu- Seven thousand producers from those pointment process on the Dairy Board. ally transported from that location cooperatives went against co-op policy Direct producer election of board mem- into the recipient market. The Sec- and voted individually against continu- bers should also increase the account- retary will have to comply with the ing the program. ability to their fellow dairy farmers. statutory requirement that supply and While virtually all of the votes in I believe that these bills together demand factors be considered as speci- favor of the program were cast by coop- comprise a sound reform package for fied in the Agricultural Marketing erative bloc vote, nearly 100 percent of the National Dairy Promotion and Re- Agreement Act when setting milk the votes in opposition were cast by in- search Board by providing a stronger prices in marketing orders. dividuals. Bloc voting allows coopera- voice to dairy farmers. These reforms This legislation sends a very simple tives to cast votes for every indifferent will create a stronger, more effective message to the Secretary of Agri- or ambivalent producer in their mem- and more representative Dairy Board. I culture—that among all the Class I bership, drowning out the voices of dis- urge my colleagues to support this im- pricing reform options from which the senting producers. It biases the ref- portant legislation. Secretary must choose, he should in no erendum in favor of the Dairy Board’s Mr. President, I ask unanimous con- case select on option that either by in- supporters, whose votes should not sent that the text of all three bills be tent or effect sets prices based on dis- have greater weight than the dissent- printed in the RECORD. tance from a single location. I will ers. There being no objection, the bills work towards enactment of this legis- The inappropriate nature of bloc vot- were ordered to be printed in the lation prior to the completion the pro- ing in Dairy Board referendum is even RECORD, as follows: posed rule on Class I pricing reform. clearer given that none of the 17 other S. 52 Mr. President, my next two bills ad- commodity promotion programs allow Be it enacted by the Senate and House of Rep- dress inequities to dairy producers cooperatives to bloc vote despite the resentatives of the United States of America in throughout the country under the existence of marketing cooperatives Congress assembled, Dairy Promotion and Research Order— for many of those commodities. SECTION 1. LOCATION ADJUSTMENTS FOR MINI- also known as the dairy checkoff. I am Mr. President, it is time to give dairy MUM PRICES FOR CLASS I MILK. pleased to be joined by Senator KOHL farmers a fair voting process for their Section 8c(5) of the Agricultural Adjust- today on these two very important promotion program. I urge my col- ment Act (7 U.S.C. 608c(5)), reenacted with bills. leagues to support this very important amendments by the Agricultural Marketing The National Dairy Promotion and legislation. Agreement Act of 1937, is amended— My last bill, Mr. President, provides (1) in paragraph (A)— Research Program collect roughly $225 (A) in clause (3) of the second sentence, by million every year from dairy farmers equity to domestic producers who have inserting after ‘‘the locations’’ the following: each paying a mandatory 15 cents for been paying into the promotion pro- ‘‘within a marketing area subject to the every hundred pounds of milk they gram for over 10 years while importers order’’; and produce. The program is designed to have gotten a free ride. Since the Na- (B) by striking the last 2 sentences and in- promote dairy products to consumers tional Dairy Promotion and Research serting the following: ‘‘Notwithstanding sub- and to conduct research relating to Board conducts generic promotion and section (18) or any other provision of law, milk processing and marketing. general product research, domestic when fixing minimum prices for milk of the While 15 cents may appear to be a farmers and importers alike benefit highest use classification in a marketing area subject to an order under this sub- small amount of money, multiplied by from these actions. The Dairy Pro- section, the Secretary may not, directly or all the milk marketed in this country, motion Program Equity Act requires indirectly, base the prices on the distance it adds up to thousands of dollars each that all dairy product importers con- from, or all or part of the costs incurred to year for the average producer. Given tribute to the Dairy Promotion Pro- transport milk to or from, any location that S418 CONGRESSIONAL RECORD — SENATE January 21, 1997 is not within the marketing area subject to ‘‘(B) APPOINTMENT.—The importer rep- ball, like all other professional sports, the order, unless milk from the location con- resentatives shall be appointed by the Sec- is subject to our Nation’s antitrust stitutes at least 50 percent of the total sup- retary from nominations submitted by im- laws, except with regard to team relo- ply of milk of the highest use classification porters under such procedures as the Sec- cation, the minor leagues, and sports retary determines to be appropriate.’’. in the marketing area. The Secretary shall broadcasting. It overturns the Court’s report to the Committee on Agriculture of (2) ASSESSMENT.—Section 113(g) of the the House of Representatives and the Com- Dairy Production Stabilization Act of 1983 (7 mistaken premise that baseball is not a mittee on Agriculture, Nutrition, and For- U.S.C. 4504(g)) is amended— business involved in interstate com- estry of the Senate on the criteria that are (A) by designating the first through fifth merce, and it eliminates the unjustifi- used as the basis for the minimum prices re- sentences as paragraphs (1) through (5), re- able legal precedent that individuals ferred to in the preceding sentence, includ- spectively; and who play professional baseball should ing a certification that the minimum prices (B) by adding at the end of the following: ‘‘(6) IMPORTERS.— be treated differently from those who are made in accordance with the preceding ‘‘(A) IN GENERAL.—The order shall provide participate in other professional sentence.’’; and that each importer of imported dairy prod- sports. (2) in paragraph (B)(c), by inserting after ucts shall pay an assessment to the Board in In 1922, in Federal Baseball Club of ‘‘the locations’’ the following: ‘‘within a the manner prescribed by the order. marketing area subject to the order’’. Baltimore v. National League of Profes- ‘‘(B) RATE.—The rate of assessment on im- sional Baseball Clubs, 259 U.S. 200 (1922), ported dairy products shall be determined in S. 55 the Supreme Court ruled that profes- the same manner as the rate of assessment Be it enacted by the Senate and House of Rep- per hundredweight or the equivalent of milk. sional baseball was immune from the resentatives of the United States of America in ‘‘(C) VALUE OF PRODUCTS.—For the purpose reach of the Federal antitrust laws be- Congress assembled, of determining the assessment on imports cause baseball was not a business in SECTION 1. PROHIBITION ON BLOC VOTING. under subparagraph (B), the value to be interstate commerce. Obviously, the Section 117 of the Dairy Production Sta- placed on imported dairy products shall be Court at that time could not have bilization Act of 1983 (7 U.S.C. 4508) is amend- established by the Secretary in a fair and eq- imagined the modern game or a 1993 ed— uitable manner.’’. World Series where Canada’s Toronto (1) in the first sentence, by striking ‘‘Sec- (3) RECORDS.—The first sentence of section retary shall’’ and inserting ‘‘Secretary shall 113(k) of the Dairy Production Stabilization Blue Jays defeated the Philadelphia not’’; and Act of 1983 (7 U.S.C. 4504(k)) is amended by Phillies in games that were televised (2) by striking the second through fifth striking ‘‘person receiving’’ and inserting literally around the world. sentences. ‘‘importer of imported dairy products, each Fifty years after the Supreme person receiving’’. Court’s decision in Federal Baseball S. 56 (4) REFERENDUM.—Section 116 of the Dairy Club, the Court rendered its decision in Be it enacted by the Senate and House of Rep- Production Stabilization Act of 1983 (7 U.S.C. Flood v. Kuhn, which repudiated the resentatives of the United States of America in 4507) is amended by adding at the end the fol- legal basis of its prior decision as an Congress assembled, lowing: ‘‘anomaly’’ and ‘‘aberration confined to (d) REFERENDUM ON DAIRY PROMOTION EQ- SECTION 1. SHORT TITLE. baseball’’ but, because of its reluctance This Act may be cited as the ‘‘Dairy Pro- UITY ACT.— motion Equity Act’’. ‘‘(1) IN GENERAL.—On the request of a rep- to overturn long-standing decisions, resentative group comprising 10 percent or SEC. 2. FUNDING OF DAIRY PROMOTION AND RE- left the job of remedying its mistake to SEARCH PROGRAM. more of the number of producers subject to Congress. (a) DECLARATION OF POLICY.—The first sen- the order, the Secretary shall— Unfortunately, Congress has been re- tence of section 110(b) of the Dairy Produc- ‘‘(A) conduct a referendum to determine luctant to follow the Court’s instruc- tion Stabilization Act of 1983 (7 U.S.C. whether the producers favor suspension of tion. In the past, it has been argued 4501(b)) is amended— the application of the amendments made by section 2 of the Dairy Promotion Equity Act; that this issue was not ripe, that it (1) by inserting after ‘‘commercial use’’ the should not be considered too close to a following: ‘‘and on imported dairy products’’; and and ‘‘(B) suspend the application of the amend- labor dispute or, as was the case most (2) by striking ‘‘products produced in’’ and ments until the results of the referendum are recently, that it should not be dis- inserting ‘‘products produced in or imported known. cussed during a labor dispute. Fortu- into’’. ‘‘(2) CONTINUATION OF SUSPENSION.—The nately, that now infamous dispute, Secretary shall continue the suspension of (b) DEFINITIONS.—Section 111 of the Dairy which has done so much to tarnish the the application of the amendments referred Production Stabilization Act of 1983 (7 U.S.C. game, is resolved. The time has come 4502) is amended— to in paragraph (1)(A) only if the Secretary determines that suspension of the applica- to pass this legislation. (1) in subsection (k), by striking ‘‘and’’ at Moreover, for the first time, the pri- the end; tion of the amendments is favored by a ma- (2) in subsection (l), by striking the period jority of the producers voting in the referen- mary impediment to passage has been at the end and inserting a semicolon; and dum who, during a representative period (as eliminated. In the new collective bar- (3) by adding at the end the following: determined by the Secretary), have been en- gaining agreement the owners have ‘‘(m) the term ‘imported dairy product’ gaged in the production of milk for commer- pledged to work with the players to means any dairy product that is imported cial use.’’. pass legislation that makes clear that into the United States, including— professional baseball is subject to the ‘‘(1) milk and cream and fresh and dried By Mr. HATCH (for himself, Mr. antitrust laws with regard to labor re- dairy products; LEAHY, Mr. THURMOND, and Mr. MOY- ‘‘(2) butter and butterfat mixtures; lations. ‘‘(3) cheese; NIHAN): It is our hope that this year, Con- ‘‘(4) casein and mixtures; and S. 53. A bill to require the general ap- gress will finally rectify the Court’s ‘‘(5) other dairy products; and plication of the antitrust laws to major mistake and make clear once and for ‘‘(n) the term ‘importer’ means a person league baseball, and for other purposes; all that baseball no longer has any that imports an imported dairy product into to the Committee on the Judiciary. the United States.’’. claim to antitrust immunity. It has THE CURT FLOOD ACT OF 1997 (c) FUNDING.— been 25 years since Curt Flood jeopard- (1) REPRESENTATION ON BOARD.—Section Mr. HATCH. Mr. President, I am in- ized his career by unsuccessfully chal- 113(b) of the Dairy Production Stabilization troducing today, along with Senators lenging baseball’s reserve clause, a suit Act of 1983 (7 U.S.C. 4504(b)) is amended— LEAHY, THURMOND, and MOYNIHAN, the which resulted in the unfortunate deci- (A) by designating the first through ninth Curt Flood Act of 1997, clarifying the sion mentioned above. sentences as paragraphs (1) through (5) and applicability of antitrust law to major Yesterday, Curt Flood tragically died paragraphs (7) through (10), respectively; (B) in paragraph (1) (as so designated), by league baseball. This legislation, which of throat cancer at the age of 59. The striking ‘‘thirty-six’’ and inserting ‘‘38’’; is basically the same bill that was ap- hearts of baseball fans all over the (C) in paragraph (2) (as so designated), by proved by the Judiciary Committee country go out to Mr. Flood’s family. I striking ‘‘Members’’ and inserting ‘‘Of the last Congress, marks what I hope will join these fans in expressing my deep- members of the Board, 36 members’’; and be the final chapter in a long and, at est regrets to the Flood family, and let (D) by inserting after paragraph (5) (as so times, frustrating effort to correct a me suggest today that the time has designated) the following: ‘‘(6) IMPORTERS.— mistaken decision by the Supreme come to finish what Curt Flood so cou- ‘‘(A) IN GENERAL.—Of the members of the Court. rageously began. Board, 2 members shall be representatives of As was true before, the bill simply Let me emphasize that our bill does importers of imported dairy products. makes clear that major league base- not impose a big government solution January 21, 1997 CONGRESSIONAL RECORD — SENATE S419 to baseball’s problems. On the con- seek to change. In his 1972 Supreme baseball’s self-inflicted wounds, but we trary, it would get government out of Court case, Mr. Flood challenged base- can do this: We can pass legislation the way by eliminating a serious gov- ball’s reserve clause which bound play- that will declare that professional ernment-made obstacle to resolution of ers to teams for their entire careers. baseball can no longer operate above the labor difficulties in baseball. Base- Although unsuccessful because of the the law. ball’s antitrust immunity has distorted judicially-created antitrust exemption, Our antitrust laws protect competi- labor relations in major league base- Mr. Flood’s selfless actions paved the tion and benefit consumers. We are ball and has sheltered baseball from way for the success of other players faced with an anomalous situation the market forces that have allowed through arbitration. It is now time for where the Federal antitrust laws have the other professional sports, such as us to resolve the antitrust exemption. not applied to certain major league football and basketball, to thrive. The bill we are introducing today baseball functions and operations for I should note that comparable legis- eliminates baseball’s antitrust exemp- over 70 years. lation has been introduced in the other tion, with two exceptions. The legisla- I hope that we will, at long last, take body by Mr. CONYERS of Michigan, the tion maintains the status quo for fran- up the issue of major leagues baseball’s ranking member of the House Judici- chise location, and for the relationship antitrust exemption. The burden of ary Committee, whose bill bears Mr. with the minor leagues. It is important proof is on those who seek to justify Flood’s number. to protect the existing minor league re- this exemption from the law. No other Mr. President, I ask unanimous con- lationships in order to avoid disruption business or professional or amateur sent that the full text of our bill be of the more than 170 minor league sport is possessed of the exemption printed in the RECORD. teams which exist throughout our Na- from law that major league baseball There being no objection, the bill was tion. Continuing to shield franchise re- has enjoyed and abused. One of the players who testified at ordered to be printed in the RECORD, as location decisions from the antitrust follows: laws resolves the uncertainty facing our hearings last Congress asked a most perceptive question: If baseball S. 53 team owners in other professional were coming to Congress today to ask sports. Be it enacted by the Senate and House of Rep- us to provide a statutory exemption, resentatives of the United States of America in Mr. President, it is my belief that the Congress assembled, Congress should repeal the court-im- would such a bill be passed? I believe the answer to that question is a re- SECTION 1. SHORT TITLE. posed antitrust exemption and restore This Act may be cited as the ‘‘Curt Flood baseball to the same level playing field sounding no. In addition, there is and has been no Act of 1997’’. as other professional sports and un- independent commissioner who could SEC. 2. APPLICATION OF THE ANTITRUST LAWS regulated businesses. In the last Con- look out for the best interests of base- TO PROFESSIONAL MAJOR LEAGUE gress, we were successful in passing S. BASEBALL. ball and its fans. Despite repeated as- The Clayton Act (15 U.S.C. 12 et seq.) is 627 in the Antitrust, Business Rights, surances, there has been no action to amended by adding at the end the following and Competition Subcommittee and in restore a strong, independent commis- new section: the Committee on the Judiciary. In sioner to oversee the game and it has ‘‘SEC. 27. (a) Subject to subsection (b), the this Congress we should make a con- suffered the consequences. It is only antitrust laws shall apply to the business of certed effort to enact the Curt Flood professional major league baseball. now beginning to emerge from a 4-year Act. struggle without a labor-management ‘‘(b) Nothing in this section shall be con- Mr. LEAHY. Mr. President, I join strued to affect— agreement. I see that the owners last ‘‘(1) the applicability or nonapplicability of today in introducing the Curt Flood week authorized their executive com- the antitrust laws to the amateur draft of Act of 1997. Like the earlier version of mittee to begin a search for a new com- professional baseball, the minor league re- this legislation that I sponsored in the missioner. In my view baseball would serve clause, the agreement between profes- last Congress, this bill is intended to be well served by making a serious sional major league baseball teams and cut back on the unjustified, judicially teams of the National Association of Base- commitment to a strong, independent created exemption from the antitrust commissioner. Neither fans nor Con- ball, commonly known as the ‘Professional laws. In my view no one is or should be Baseball Agreement’, or any other matter re- gress will be inspired by delay, drift or lating to the minor leagues; above the law. lack of direction. ‘‘(2) the applicability or nonapplicability of Last Congress for the first time in In Vermont when I was growing up the antitrust laws to any restraint by profes- our history, the Senate Judiciary Com- virtually everyone was a Red Sox fan. sional baseball on franchise relocation; or mittee favorably reported language de- Now loyalties are split among teams ‘‘(3) the application of Public Law 87–331 signed to cut back baseball’s judicially and among various sports. We have a (15 U.S.C. 1291 et seq.) (commonly known as mandated and aberrational antitrust the ‘Sports Broadcasting Act of 1961’).’’. successful minor league team, the Ver- exemption. We did so with the support mont Expos, the champions of the New Mr. THURMOND. Mr. President, I of the Clinton administration and a bi- York-Penn League last season. We also rise today in support of the Curt Flood partisan coalition of Senators. This bill have businesses and jobs that depend Act of 1997, which I am cosponsoring reflects that language. on baseball and fans who have been with Senator HATCH, Senator LEAHY, The Senate refused to consider the hurt by its shortsightedness and mis- and others. Our legislation would re- measure over the last 2 years. In part management over the past several peal the antitrust exemption which that may be explained by the opposi- years. There is a strong public interest shields major league baseball from the tion from major league baseball team in baseball and it reverberates antitrust laws that apply to all other owners and perhaps by a feeling among throughout the country. sports and unregulated businesses in some that we should not legislate dur- I am concerned about the interests of our Nation. This bill is virtually iden- ing a time in which there was a labor- the public and, in particular, the inter- tical to S. 627 in the last Congress management impasse. Both those con- ests of baseball fans. To reiterate the which was the result of discussions be- cerns have now been removed with the words of baseball’s last commissioner, tween myself and Senators HATCH and recent, 5-year agreement between the Fay Vincent: ‘‘Baseball is more than LEAHY following the February 1995 major league baseball team owners and ownership of an ordinary business. hearing I chaired on this important the Major League Baseball Players As- Owners have a duty to take into con- issue. The bill is a compromise which sociation. Indeed, a provision in that sideration that they own a part of has been carefully drafted to ensure agreement calls for the owners to lobby America’s national pastime—in trust. that it achieves its purpose without Congress in support of the repeal of the This trust sometimes requires putting imposing any unnecessary hardship on antitrust exemption, at least to the ex- self-interest second.’’ Baseball’s fans major league baseball. tent it relates to labor-management re- feel that this trust had been violated It is fitting that this bill is named lations. over the last several years. after Curt Flood, who died yesterday, It is time to build on the progress we It is the public that is being short- for the Supreme Court denied Mr. made last year and long past time for changed by the policies and practices Flood the relief he sought by upholding the Senate to act. Congress may not be of major league baseball and by dis- the antitrust exemption which we now able to solve every problem or heal regard for the interests of the fans. I S420 CONGRESSIONAL RECORD — SENATE January 21, 1997 look forward to moving ahead thought- the Curt Flood Act of 1997, a bill draft- the cardinals to their World Series ti- fully to reconsider major league base- ed by the distinguished chairman of tles in 1964 and 1967. ball’s exemption from legal require- the Judiciary Committee, Senator After the 1969 season, however, at the ments to which all other businesses HATCH. age of 32, Curt Flood was traded to the must conform their behavior. Since the This bill is designed to be a partial Phillies. Mr. Flood did not want to multi-billion dollar businesses that repeal of major league baseball’s anti- move. St. Louis was his home (he had have grown from what was once our na- trust exemption. It would leave the ex- played for the Cardinals for 11 years) tional pastime are now being run ac- emption in place as it pertains to and he was concerned about the racial cordingly to a financial bottom line, a minor league baseball and the ability politics in Philadelphia at the time. He healthy injection of competition may of major league baseball to control the sent a letter to Commissioner Bowie be just what is needed. relocation of franchises. Kuhn asking him to nullify the trade, I want to be reassured, for example, In 1922, the Supreme Court of the but his request was denied. It was in that the minor league teams will not United States, in Federal Baseball Club response to this denial that Mr. Flood be abandoned or exploited by major v. National League, held that ‘‘exhibi- initiated his historic suit challenging league owners and that the negotia- tions of base ball’’ were not interstate baseball’s antitrust exemption. tions concerning the Professional Base- commerce and thus were exempt from Curt Flood put his career on the line ball Agreement proceed to a fair con- the antitrust laws. Fifty years later, in by sitting out the 1970 season as he clusion without being skewed by some Flood v. Kuhn in 1972, the Court con- challenged baseballs’ reserve clause— notion of antitrust exemption. I want cluded that the antitrust exemption rules that prohibited players from to consider whether there are measures was an ‘‘anomaly’’ and an ‘‘aberration choosing which teams they wished to we in Congress might take to strength- confined to baseball’’ and that ‘‘profes- play for. While he resumed playing in en the hands of cities, taxpayers and sion baseball is a business and it is en- 1971 after St. Louis and Philadelphia fans against the extortionate demands gaged in interstate commerce.’’ Even made a deal with the Washington Sen- for new stadiums at public expense. I so, the Court refused to reverse its 1922 ators, the year off hurt Mr. Flood. his want to revisit the issues of antitrust decision in Federal Baseball. Justice level of play was not the same and he immunity in connection with sports Blackmun, delivering the opinion of retired after playing only 13 games for broadcasting rights and restrictions on the Court in Food, wrote: the Senators. The head of the players’ viewers’ access to programming im- If there is any inconsistency or illogic in union, Don Fehr, called Mr. Flood ‘‘a posed by major league owners. If I had all this, it is an inconsistency and illogic of man of quiet dignity.’’ He added, ‘‘Curt my way, we would make progress in long standing that is to be remedied by the Flood conducted his life in a way that clarifying each of these matters. Congress and not by this Court. set an example for all who had the In an effort to act expeditiously, I am This decision clearly laid responsibil- privilege to know him. When it came cosponsoring this consensus measure. I ity for baseball’s antitrust exemption time to take a stand, at great personal look forward to our prompt hearings, on Congress. It also explicitly recog- risk and sacrifice, he proudly stood Committee and Senate consideration nized baseball’s evolution into a major firm for what he believe was right.’’ and to working with others to forge a industry. Clearly, baseball is a business I thank my friend from Utah for in- legal framework in which the public engaged in interstate commerce, and viting me to cosponsor this legislation, will be better served. should be subject to the antitrust laws and hope other Senators agree with us I am delighted and encouraged that to the same extent that all other busi- that the time has come to act. the ranking Democratic member of the nesses are. So now, in 1997, on the 75th House Judiciary Committee, Rep. JOHN anniversary of Federal Baseball, the By Mr. HATCH (for himself, Mrs. CONYERS, JR., also acted on the first time has come for Congress to act. FEINSTEIN, Mr. D’AMATO, Mr. day of legislative activity in the House On the first day of the 104th Con- HARKIN, and Mr. REID): to introduce H.R. 21, companion base- gress, I introduced my own legislation S. 54. A bill to reduce interstate ball antitrust legislation based on what on the subject. My bill, S. 15, the Na- street gang and organized crime activ- we reported last Congress. It is right tional Pastime Preservation Act of ity, and for other purposes; to the Com- and fitting that he chose Curt Flood’s 1995, would have applied the antitrust mittee on the Judiciary. number for this bill. laws to major league baseball without THE FEDERAL GANG VIOLENCE ACT OF 1997 Mr. Flood passed away yesterday. His the exceptions suggested by my friend Mr. HATCH. Mr. President, I rise contributions to the game of baseball from Utah. today to introduce the Federal Gang went well beyond his all star play and At this time, I am pleased to support Violence Act. I am pleased to be joined outstanding statistics. He was a criti- any efforts that will provide a more in this important effort by Senator cal part of championship teams during level playing field for baseball’s labor FEINSTEIN, as well as by Senators his years patrolling center field for the negotiations and that should help to D’AMATO, HARKIN, and REID. St. Louis Cardinals in the late 50’s and prevent future strikes like the one we Gang violence in many of our com- 60’s. He was an outstanding hitter, experienced in 1994 and 1995 from inter- munities is reaching frightening levels. fielder and all around player in an era rupting the fans enjoyment of the Last year, my hometown of Salt Lake of great players. game of baseball itself. While I am City was shocked by a particularly His part in baseball history has even happy that both the owners and the awful example. Asipeli Mohi, a 17-year- more to do with his resolve to stand up players agreed to support this limited old Utahn, was tried and convicted of for what he knew was the right thing repeal of baseball’s antitrust exemp- the gang-related beating and shooting and his legal challenge to the reserve tion, it is important to keep in mind death of another teenager, Aaron Chap- clause, which had bound players to that the players and owners do not man. Why was Aaron Chapman mur- teams for life. He was the plaintiff who write the labor laws, Congress does. dered? He was wearing red, apparently sacrificed his career and a place in It is most appropriate that this bill the color of a rival gang. Ironically, baseball’s Hall of Fame by taking the has been named in honor of Curt Flood, Mr. Chapman was on his way home matter all the way to the United the man responsible for the second sig- from attending an anti-gang benefit States Supreme Court where, in 1972, nificant challenge to baseball’s anti- concert when he was killed. Before the Court challenged Congress to cor- trust immunity. Curt Flood was a committing this murder, the killer had rect the aberration that baseball’s battler. Sadly, he lost a different battle racked up a record of five felonies and antitrust immunity represents in our yesterday, to throat cancer. He was fifteen misdemeanors in juvenile court. law. There would be no more fitting only 59. Sadly, this example of senseless gang tribute to Curt Flood’s courage than Mr. Flood hit over .300 six times violence is not an isolated incident in for this Congress finally to answer that playing for the St. Louis Cardinals and my State or elsewhere. It is a scene re- 25-year-old call to action. I hope that he finished his 15-year career with a played with disturbing frequency. we will do so without further delay. lifetime batting average of .293. he was Gang violence is now common even Mr. MOYNIHAN. Mr. President, I am also a seven-time Gold Glove winner, a in places where this would have been pleased to be an original cosponsor of three-time all-star, and he helped lead unthinkable several years ago. Indeed, January 21, 1997 CONGRESSIONAL RECORD — SENATE S421 many people find it hard to believe lence, and adds a new federal sentenc- means the commission of 2 or more predicate that Salt Lake City or Ogden could ing enhancement for the use of body gang crimes committed in connection with, have such a problem—gangs, they armor in the commission of a federal or in furtherance of, the activities of a think, are a problem in cities like New crime. criminal street gang— Finally, the legislation we introduce ‘‘(A) at least 1 of which was committed York, Chicago, and Los Angeles, but after the date of enactment of the Federal not in our smaller cities. today adds serious juvenile drug of- Gang Violence Act; However, reality is much grimmer. fenses to the list of predicates under ‘‘(B) the first of which was committed not Since 1992, gang activity in Salt Lake the federal Armed Career Criminal Act, more than 5 years before the commission of City has increased tremendously. For and authorizes $20 million over five another predicate gang crime; and instance, the number of identified years to hire federal prosecutors to ‘‘(C) that were committed on separate oc- gangs has increased fifty-five percent, crack down on criminal gangs. casions. from 185 to 288, and the number of gang Mr. President, these are common ‘‘(3) PREDICATE GANG CRIME.—The term sense, needed provisions. They’re ‘predicate gang crime’ means an offense, in- members has increased 146 percent, cluding an act of juvenile delinquency that, from 1,438 to 3,545. tough. We need to get tough with gangs who recruit kids with the lure of easy if committed by an adult, would be an of- The number of gang-related crimes fense that is— has increased a staggering 196 percent, money and glamour. This legislation is ‘‘(A) a Federal offense— from 1,741 in 1992 to 5,158 in the first not a panacea for our youth violence ‘‘(i) that is a crime of violence (as that eleven months of 1996. In 1995, there crisis. But it is a large and critical step term is defined in section 16) including were 174 gang-related drive-by in addressing this issue. I look forward carjacking, drive-by-shooting, shooting at an shootings, and in the first eleven to working with my colleagues on this unoccupied dwelling or motor vehicle, as- months of 1996, this dismaying statistic bill, and urge their support. sault with a deadly weapon, and homicide; There being no objection, the bill was ‘‘(ii) that involves a controlled substance increased to 207. (as that term is defined in section 102 of the Our problem is severe. Moreover, ordered to be printed in the RECORD, as follows: Controlled Substances Act (21 U.S.C. 802)) for there is a significant role the federal which the penalty is imprisonment for not government can play in fighting this S. 54 less than 5 years; battle. I am not one to advocate the Be it enacted by the Senate and House of Rep- ‘‘(iii) that is a violation of section 844, sec- unbridled extension of federal jurisdic- resentatives of the United States of America in tion 875 or 876 (relating to extortion and tion. Indeed, I often think that we have Congress assembled, threats), section 1084 (relating to gambling), SECTION 1. SHORT TITLE. federalized too many crimes. However, section 1955 (relating to gambling), chapter This Act may be cited as the ‘‘Federal 44 (relating to firearms), or chapter 73 (relat- in the case of criminal street gangs, Gang Violence Act’’. ing to obstruction of justice); which increasingly are moving inter- SEC. 2. INCREASE IN OFFENSE LEVEL FOR PAR- ‘‘(iv) that is a violation of section 1956 (re- state to commit crimes, there is a very TICIPATION IN CRIME AS A GANG lating to money laundering), insofar as the proper role for the federal government MEMBER. violation of such section is related to a Fed- to play. (a) DEFINITION.—In this section, the term eral or State offense involving a controlled This bill will strengthen the coordi- ‘‘criminal street gang’’ has the same mean- substance (as that term is defined in section ing as in section 521(a) of title 18, United 102 of the Controlled Substances Act (21 nated, cooperative response of federal, States Code, as amended by section 3 of this state, and local law enforcement to U.S.C. 802)); or Act. ‘‘(v) that is a violation of section criminal street gangs by providing (b) AMENDMENT OF SENTENCING GUIDE- 274(a)(1)(A), 277, or 278 of the Immigration LINES.—Pursuant to its authority under sec- more flexibility to the federal partners and Nationality Act (8 U.S.C. 1324(a)(1)(A), tion 994(p) of title 28, United States Code, the in this effort. It provides the federal 1327, or 1328) (relating to alien smuggling); United States Sentencing Commission shall prosecutorial tools needed to combat ‘‘(B) a State offense involving conduct that amend the Federal sentencing guidelines to gang violence. Violent crimes commit- would constitute an offense under subpara- provide an appropriate enhancement, in- graph (A) if Federal jurisdiction existed or ted by youth continue to be the fastest creasing the offense level by not less than 6 had been exercised; or growing type of crime. Indeed, even as levels, for any offense, if the offense was ‘‘(C) a conspiracy, attempt, or solicitation the general crime rate has leveled off, both committed in connection with, or in to commit an offense described in subpara- or even declined slightly over the last furtherance of, the activities of a criminal graph (A) or (B). street gang and the defendant was a member couple of years, violent youth crime, ‘‘(3) STATE.—The term ‘State’ includes a of the criminal street gang at the time of the much of it committed by gangs, has in- State of the United States, the District of offense. creased. As my colleagues know, the Columbia, Puerto Rico, Guam, the Virgin Is- (c) CONSTRUCTION WITH OTHER GUIDE- sophistication and the interstate na- lands, and any other territory of possession LINES.—The amendment made pursuant to ture of these gangs has increased as subsection (b) shall provide that the increase of the United States.’’; and well. in the offense level shall be in addition to (2) by striking subsections (b), (c), and (d) This bill puts teeth into the federal any other adjustment under chapter 3 of the and inserting the following: gang statute, by adding tough pen- Federal sentencing guidelines. ‘‘(b) CRIMINAL PENALTIES.—Any person who engages in a pattern of criminal gang activ- alties based on the existing Continuing SEC. 3. AMENDMENT OF TITLE 18 WITH RESPECT TO CRIMINAL STREET GANGS. ity— Criminal Enterprise statute in title 21 ‘‘(1) shall be sentenced to— [21 U.S.C. 848]. Federal prosecutors will (a) IN GENERAL.—Section 521 of title 18, United States Code, is amended— ‘‘(A) a term of imprisonment of not less be able to charge gang leaders or mem- (1) in subsection (a)— than 10 years and not more than life, fined in bers under this section if they engage (A) by striking ‘‘(a) DEFINITIONS.—’’ and in- accordance with this title, or both; and in two or more criminal gang offenses. serting the following: ‘‘(B) the forfeiture prescribed in section 413 These offenses include violent ‘‘(a) DEFINITIONS.—In this section:’’, and of the Controlled Substances Act (21 U.S.C. crimes, serious drug crimes, drug (B) by striking ‘‘ ‘conviction’’ and all that 853); and money laundering, extortion, and ob- follows through the end of the subsection ‘‘(2) if any person engages in such activity and inserting the following: after 1 or more prior convictions under this struction of justice—all offenses com- section have become final, shall be sentenced monly committed by gangs. ‘‘(1) CRIMINAL STREET GANG.—The term ‘criminal street gang’ means an ongoing to— Our bill adds a one to ten year sen- group, club, organization, or association of 3 ‘‘(A) a term of imprisonment of not less tence for the recruitment of persons or more persons, whether formal or infor- than 20 years and not more than life, fined in into a gang. Importantly, there are mal— accordance with this title, or both; and even tougher penalties for recruiting a ‘‘(A) a primary activity of which is the ‘‘(B) the forfeiture prescribed in section 412 minor into a gang, including a four commission of 1 or more predicate gang of the Controlled Substances Act (21 U.S.C. year mandatory minimum sentence. crimes; 853).’’. The bill adds the use of a minor in a ‘‘(B) any members of which engage, or have (b) CONFORMING AMENDMENT.—Section 3663(c)(4) of title 18, United States Code, is crime to the list of offenses for which a engaged during the 5-year period preceding the date in question, in a pattern of criminal amended by inserting before ‘‘chapter 46’’ person can be prosecuted under the fed- gang activity; and the following: ‘‘section 521 of this title,’’. eral racketeering laws, known as RICO. ‘‘(C) the activities of which affect inter- SEC. 4. INTERSTATE AND FOREIGN TRAVEL OR It enhances the penalties for trans- state or foreign commerce. TRANSPORTATION IN AID OF CRIMI- ferring a handgun to a minor, knowing ‘‘(2) PATTERN OF CRIMINAL GANG ACTIVITY.— NAL STREET GANGS. that it will be used in a crime of vio- The term ‘pattern of criminal gang activity’ (a) TRAVEL ACT AMENDMENTS.— S422 CONGRESSIONAL RECORD — SENATE January 21, 1997

(1) PROHIBITED CONDUCT AND PENALTIES.— criminal street gang or other unlawful activ- SEC. 7. PROHIBITIONS RELATING TO FIREARMS. Section 1952(a) of title 18, United States ity is increased to 12; and (a) PENALTIES.—Section 924(a)(6) of title 18, Code, is amended to read as follows: (B) the base offense level for the commis- United States Code, is amended— ‘‘(a) PROHIBITED CONDUCT AND PENALTIES.— sion of a crime of violence in aid of a crimi- (1) by striking subparagraph (A); ‘‘(1) IN GENERAL.—Any person who— nal street gang or other unlawful activity is (2) by redesignating subparagraph (B) as ‘‘(A) travels in interstate or foreign com- increased to 24. subparagraph (A); merce or uses the mail or any facility in (2) DEFINITIONS.—In this subsection— (3) in subparagraph (A), as redesignated— interstate or foreign commerce, with intent (A) the term ‘‘crime of violence’’ has the (A) by striking ‘‘(B) A person other than a to— same meaning as in section 16 of title 18, juvenile who knowingly’’ and inserting ‘‘(A) ‘‘(i) distribute the proceeds of any unlawful United States Code; A person who knowingly’’; activity; or (B) the term ‘‘criminal street gang’’ has (B) in clause (i), by striking ‘‘not more ‘‘(ii) otherwise promote, manage, establish, the same meaning as in 521(a) of title 18, than 1 year’’ and inserting ‘‘not less than 1 carry on, or facilitate the promotion, man- United States Code, as amended by section 3 year and not more than 5 years’’; and agement, establishment, or carrying on, of of this Act; and (C) in clause (ii), by inserting ‘‘not less any unlawful activity; and (C) the term ‘‘unlawful activity’’ has the than 1 year and’’ after ‘‘imprisoned’’; and ‘‘(B) after travel or use of the mail or any same meaning as in section 1952(b) of title 18, (4) by adding at the end the following: facility in interstate or foreign commerce United States Code, as amended by this sec- ‘‘(B) Notwithstanding subparagraph (A), no described in subparagraph (A), performs, at- tion. mandatory minimum sentence shall apply to tempts to perform, or conspires to perform SEC. 5. SOLICITATION OR RECRUITMENT OF PER- a juvenile who is less than 13 years of age.’’. an act described in clause (i) or (ii) of sub- SONS IN CRIMINAL GANG ACTIVITY. (b) SERIOUS JUVENILE DRUG OFFENSES AS paragraph (A), (a) PROHIBITED ACTS.—Chapter 26 of title ARMED CAREER CRIMINAL PREDICATES.—Sec- shall be fined under this title, imprisoned 18, United States Code, is amended by adding tion 924(e)(2)(A) of title 18, United States not more than 10 years, or both. at the end the following: Code, is amended— ‘‘(2) CRIMES OF VIOLENCE.—Any person ‘‘§ 522. Recruitment of persons to participate (1) in clause (i), by striking ‘‘or’’ at the who— in criminal street gang activity end; ‘‘(A) travels in interstate or foreign com- ‘‘(a) PROHIBITED ACT.—It shall be unlawful (2) in clause (ii), by adding ‘‘or’’ at the end; merce or uses the mail or any facility in for any person to— and interstate or foreign commerce, with intent ‘‘(1) use any facility in, or travel in, inter- (3) by adding at the end the following: to commit any crime of violence to further state or foreign commerce, or cause another ‘‘(iii) any act of juvenile delinquency that any unlawful activity; and to do so, to recruit, solicit, request, induce, if committed by an adult would be an offense ‘‘(B) after travel or use of the mail or any counsel, command, or cause another person described in clause (i) or (ii);’’. facility in interstate or foreign commerce to be a member of a criminal street gang, or (c) TRANSFER OF FIREARMS TO MINORS FOR described in subparagraph (A), commits, at- conspire to do so; or USE IN CRIME.—Section 924(h) of title 18, tempts to commit, or conspires to commit ‘‘(2) recruit, solicit, request, induce, coun- United States Code, is amended by striking any crime of violence to further any unlaw- sel, command, or cause another person to en- ‘‘10 years, fined in accordance with this title, ful activity, gage in a predicate gang crime for which or both’’ and inserting ‘‘10 years, and if the transferee is a person who is under 18 years shall be fined under this title, imprisoned for such person may be prosecuted in a court of of age, imprisoned for a term of not less than not more than 20 years, or both, and if death the United States, or conspire to do so. 3 years, fined in accordance with this title, results shall be sentenced to death or be im- ‘‘(b) PENALTIES.—A person who violates or both’’. prisoned for any term of years or for life.’’. subsection (a) shall— ‘‘(1) if the person recruited— (2) DEFINITIONS.—Section 1952(b) of title 18, SEC. 8. AMENDMENT OF SENTENCING GUIDE- United States Code, is amended to read as ‘‘(A) is a minor, be imprisoned for a term LINES WITH RESPECT TO BODY ARMOR. follows: of not less than 4 years and not more than 10 (a) DEFINITIONS.—In this section— ‘‘(b) DEFINITIONS.—In this section: years, fined in accordance with this title, or (1) the term ‘‘body armor’’ means any ‘‘(1) CONTROLLED SUBSTANCE.—The term both; or ‘controlled substance’ has the same meaning ‘‘(B) is not a minor, be imprisoned for a product sold or offered for sale as personal as in section 102(6) of the Controlled Sub- term of not less than 1 year and not more protective body covering intended to protect stances Act (21 U.S.C. 802(6)). than 10 years, fined in accordance with this against gunfire, regardless of whether the product is to be worn alone or is sold as a ‘‘(2) STATE.—The term ‘State’ includes a title, or both; and State of the United States, the District of ‘‘(2) be liable for any costs incurred by the complement to another product or garment; Columbia, and any commonwealth, territory, Federal Government or by any State or local and or possession of the United States. government for housing, maintaining, and (2) the term ‘‘law enforcement officer’’ means any officer, agent, or employee of the ‘‘(3) UNLAWFUL ACTIVITY.—The term ‘un- treating the minor until the minor reaches lawful activity’ means— the age of 18. United States, a State, or a political subdivi- ‘‘(A) predicate gang crime (as that term is ‘‘(c) DEFINITIONS.—In this section— sion of a State, authorized by law or by a defined in section 521); ‘‘(1) the terms ‘criminal street gang’ and government agency to engage in or supervise ‘‘(B) any business enterprise involving ‘predicate gang crime’ have the same mean- the prevention, detection, investigation, or gambling, liquor on which the Federal excise ings as in section 521; and prosecution of any violation of criminal law. (b) SENTENCING ENHANCEMENT.—The United tax has not been paid, narcotics or con- ‘‘(2) the term ‘minor’ means a person who States Sentencing Commission shall amend trolled substances, or prostitution offenses is younger than 18 years of age.’’. (b) SENTENCING GUIDELINES.—Pursuant to the Federal sentencing guidelines to provide in violation of the laws of the State in which its authority under section 994(p) of title 28, an appropriate sentencing enhancement, in- the offense is committed or of the United United States Code, the United States Sen- creasing the offense level not less than 2 lev- States; tencing Commission shall amend chapter 2 of els, for any crime in which the defendant ‘‘(C) extortion, bribery, arson, robbery, the Federal sentencing guidelines to provide used body armor. burglary, assault with a deadly weapon, re- an appropriate enhancement for any offense (c) APPLICABILITY.—No Federal sentencing taliation against or intimidation of wit- involving the recruitment of a minor to par- guideline amendment made pursuant to this nesses, victims, jurors, or informants, as- ticipate in a gang activity. section shall apply if the Federal crime in sault resulting in bodily injury, possession of (c) TECHNICAL AMENDMENT.—The chapter which the body armor is used constitutes a or trafficking in stolen property, illegally analysis for chapter 26 of title 18, United violation of, attempted violation of, or con- trafficking in firearms, kidnapping, alien States Code, is amended by adding at the end spiracy to violate the civil rights of a person smuggling, or shooting at an occupied dwell- the following: by a law enforcement officer acting under ing or motor vehicle, in each case, in viola- ‘‘522. Recruitment of persons to participate color of the authority of such law enforce- tion of the laws of the State in which the of- in criminal street gang activ- ment officer. fense is committed or of the United States; ity.’’. or SEC. 9. ADDITIONAL PROSECUTORS. SEC. 6. CRIMES INVOLVING THE RECRUITMENT ‘‘(D) any act that is indictable under sec- There are authorized to be appropriated OF PERSONS TO PARTICIPATE IN $20,000,000 for each of the fiscal years 1998, tion 1956 or 1957 of this title or under sub- CRIMINAL STREET GANGS AND FIRE- chapter II of chapter 53 of title 31.’’. ARMS OFFENSES AS RICO PREDI- 1999, 2000, 2001, and 2002 for the hiring of As- (b) AMENDMENT OF SENTENCING GUIDE- CATES. sistant United States Attorneys and attor- LINES.— Section 1961(1) of title 18, United States neys in the Criminal Division of the Depart- (1) IN GENERAL.—Pursuant to its authority Code, is amended— ment of Justice to prosecute juvenile crimi- under section 994(p) of title 28, United States (1) by striking ‘‘or’’ before ‘‘(F)’’; and nal street gangs (as that term is defined in Code, the United States Sentencing Commis- (2) by inserting before the semicolon at the section 521(a) of title 18, United States Code, sion shall amend chapter 2 of the Federal end the following: ‘‘, (G) an offense under as amended by section 3 of this Act). sentencing guidelines so that— section 522 of this title, or (H) an act or con- (A) the base offense level for traveling in spiracy to commit any violation of chapter By Mr. FEINGOLD (for himself interstate or foreign commerce in aid of a 44 of this title (relating to firearms)’’. and Mr. REID): January 21, 1997 CONGRESSIONAL RECORD — SENATE S423 S. 57. A bill to amend the Federal tions from their home states. I believe the 105th Congress. I believe that one Election Campaign Act of 1971 to pro- this focus upon raising money within day those who have opposed public fi- vide for a voluntary system of spending our home states is critical. General nancing will finally get the message limits and partial public financing of election candidates will become eligi- the voters are trying to send us and Senate primary and general election ble for public financing benefits equal there will be wider support within the campaigns, to limit contributions by to the general election spending limit Congress for this approach to cleaning multicandidate political committees, for their state. up election campaigns. to limit soft money of political party In addition to agreeing to limit their In the meantime, I do believe there committees, and for other purposes; to overall campaign spending, candidates are meaningful reforms that can be the Committee on Rules and Adminis- who receive the public benefits must considered and enacted with bipartisan tration. agree to not spend more than $25,000 of support. That is why I have joined with THE SENATE CAMPAIGN FINANCING AND their own money. a number of my colleagues on both SPENDING REFORM ACT Opponents of campaign finance re- sides of the aisle, including Senators form have often suggested that vol- Mr. FEINGOLD. Mr. President, I rise MCCAIN, THOMPSON, WELLSTONE and today to introduce the proposed Senate untary spending limits are unconstitu- others in co-authoring the first biparti- Campaign Financing and Spending Re- tional. That is unfounded. In fact, in san campaign finance reform proposal form Act of 1997, legislation that would the landmark Supreme Court decision offered in a decade. provide public financing for Senate in Buckley v. Valeo, the Court noted That legislation, strongly supported elections. that ‘‘Congress may engage in public by President Clinton, Common Cause, financing of election campaigns and The need for comprehensive cam- and numerous grassroots organizations may condition acceptance of public paign finance reform is unquestionable. and newspapers nationwide, would funds on an agreement by the can- Each election year continues to set begin the process of fundamentally didate to abide by specified expendi- new records for campaign spending by changing and reducing the role of ture limitations. Just as a candidate federal candidates, with 1996 campaign money in our political system. It also may voluntarily limit the size of the expenditures expected to surpass $1.6 encourages candidates to limit their contributions he chooses to accept, he billion. This explosion in campaign campaign spending, but instead of of- may decide to forego private fundrais- spending has alienated the American fering direct public financing it pro- ing and accept public funding.’’ people from the election process, dis- vides substantial discounts on broad- couraged thousands of qualified yet un- The legislation also bans so-called ‘‘soft money’’ that has allowed cor- cast media and postage rates to can- derfunded candidates from seeking porations, labor unions, and wealth in- didates who agree to limit their overall public office, and heightened public dividuals to contribute unlimited spending, who agree to limit their own disgust with the ways of Washington to funds, up to millions of dollars, to the personal spending, and who agree to levels not seen since the dark days of political parties outside the scope of raise 60 percent of their campaign Watergate. Federal election law. The legislation funds from their home States. I look I have long believed that we need to forward to working with my colleagues sever the nexus between money and restricts Political Action Committee (PAC) contributions to Federal can- on passing such meaningful reform, politics, and end as a prerequisite for didates, prohibits lawmakers from and will press for action in the first 100 elected office a candidate’s ability to sending out franked mass mailings dur- days of this new Congress. raise and spend millions of dollars. The ing the calendar year of an election, Mr. President, I ask unanimous con- most straight forward way to achieve bars lobbyists from contributing to sent that the text of the bill be printed that result is through a system of pub- elected officials they have lobbied in a in the RECORD. lic financing. There being no objection, the bill was The legislation I am introducing 12-month period, and codifies a recent ruling by the Federal Election Com- ordered to be printed in the RECORD, as today, which I also introduced at the mission that bars candidates from follows: outset of the 104th Congress, would pro- using campaign funds for personal pur- S. 57 vide qualified candidates with the poses, such as mortgage payments, Be it enacted by the Senate and House of Rep- means to run a credible, competitive country club memberships, and vaca- resentatives of the United States of America in and issue-based campaign without hav- tions. Congress assembled, ing to raise the average $5 million it Public financing of campaigns will SECTION 1. SHORT TITLE; TABLE OF CONTENTS. takes to win a Senate election. give challengers a legitimate oppor- (a) SHORT TITLE.—This Act may be cited as This bill will establish voluntary tunity to run a competitive campaign, the ‘‘Senate Campaign Financing and Spend- spending limits based on each state’s will allow incumbents to focus on their ing Reform Act’’. individual voting age population. With legislative responsibilities, and will (b) TABLE OF CONTENTS.— the cooperation of the candidates, this help to extinguish public perceptions Sec. 1. Short title; table of contents. will finally curtail the skyrocketing that the United States Congress is Sec. 2. Findings and eclarations of the Sen- spending that has plagued political under the control of the Washington ate. campaigns in recent years. Just as im- special interests. TITLE I—CONTROL OF CONGRESSIONAL portant, these spending limits will Public support for this sort of reform CAMPAIGN SPENDING allow members of Congress to focus on is strong. According to a recent poll by Subtitle A—Senate Election Campaign their duties and responsibilities as the Mellman Group, 59 percent of the Expenditure Limits and Benefits elected officials rather than spending American people—the highest level Sec. 101. Senate expenditure limits and ben- substantial amounts of time raising since Watergate—support full public fi- efits. money. For those candidates that do nancing for congressional campaigns. Sec. 102. Political action committees. Sec. 103. Reporting requirements. abide by the spending limits, there will Just 29 percent of the American people be matching funds in the primary elec- Sec. 104. Disclosure by candidates other oppose this proposal. The Mellman than eligible Senate candidates. tion for contributions under $250, once Group even found two out of every Subtitle B—General Provisions a candidate has raised 15 percent of three self-described Republicans sup- Sec. 131. Broadcast rates and preemption. that state’s spending limit in contribu- ported public financing. A Gallup poll tions of $250 or less, half of which must Sec. 132. Extension of reduced third-class found similar results, finding 64 per- mailing rates to eligible senate come from within the candidate’s cent overall support for a public fi- candidates. state. There will be a 100 percent nancing system. Sec. 133. Campaign advertising amendments. match for contributions under $100, and And perhaps most revealing, a very Sec. 134. Definitions. a 50 percent match for contributions recent Wall Street Journal/NBC News Sec. 135. Provisions relating to franked mass between $101 and $250. poll found 92 percent of the American mailings. These provisions, along with only people simply believe too much money TITLE II—INDEPENDENT EXPENDITURES providing matching funds for in-state is spent in Federal elections. Sec. 201. Definitions. contributions, will encourage can- I have no illusions that a public fi- Sec. 202. Reporting requirements for certain didates to focus on smaller contribu- nancing proposal would win approval in independent expenditures. S424 CONGRESSIONAL RECORD — SENATE January 21, 1997 TITLE III—EXPENDITURES tion, due to the time lost to raising funds for ‘‘(1) files a primary election eligibility cer- Subtitle A—Personal Funds; Credit campaigns; and tification and declaration under subsection (5) to prevent the appearance of undue in- (b) and is in compliance with the representa- Sec. 301. Contributions and loans from per- fluence and to restore public trust in the tions made in the certification and declara- sonal funds. Senate as an institution, it is necessary to Sec. 302. Extensions of credit. tion; and limit campaign expenditures, through a sys- ‘‘(2) files a general election eligibility cer- Subtitle B—Soft Money of Political Party tem which provides public benefits to can- tification and declaration under subsection Committees didates who agree to limit campaign expend- (c) and is in compliance with the representa- Sec. 311. Soft money of political party com- itures. tions made in the certification and declara- mittees. (b) NECESSITY FOR ATTRIBUTING COOPERA- tion. Sec. 312. Reporting requirements. TIVE EXPENDITURES TO CANDIDATES.—The ‘‘(b) PRIMARY ELECTION ELIGIBILITY CER- TITLE IV—CONTRIBUTIONS Senate finds and declares that— (1) public confidence and trust in the sys- TIFICATION AND DECLARATION.— Sec. 401. Contributions through tem of campaign finance would be under- ‘‘(1) IN GENERAL.—The requirements of this intermediaries and conduits; mined should any candidate be able to cir- subsection are met if the candidate files with prohibition on certain contribu- cumvent a system of caps on expenditures the Secretary of the Senate— tions by lobbyists. through cooperative expenditures with out- ‘‘(A) a certification, under pending of per- Sec. 402. Contributions by dependents not of side individuals, groups, or organizations; jury, that the candidate has met the thresh- voting age. (2) cooperative expenditures by candidates old contribution requirement of subsection Sec. 403. Contributions to candidates from with outside individuals, groups, or organiza- (e); and State and local committees of tions would severely undermine the effec- ‘‘(B) a declaration that the candidate and political parties to be aggre- tiveness of caps on campaign expenditures, the candidate’s authorized committees— gated. unless they are included within such caps; ‘‘(i)(I) will not exceed the primary election Sec. 404. Limited exclusion of advances by and expenditure limit or runoff election expendi- campaign workers from the def- (3) to maintain the integrity of the system ture limits; and inition of the term ‘‘contribu- of campaign finance, expenditures by any in- ‘‘(II) will accept only an amount of con- tion’’. dividual, group, or organization that have tributions for the primary election and any TITLE V—REPORTING REQUIREMENTS been made in cooperation with any can- runoff election that does not exceed the pri- Sec. 501. Change in certain reporting from a didate, authorized committee, or agent of mary election expenditure limit and, if there calendar year basis to an elec- any candidate must be attributed to that is a runoff election, the runoff election ex- tion cycle basis. candidate’s cap on campaign expenditures. penditure limit; Sec. 502. Personal and consulting services. TITLE I—CONTROL OF CONGRESSIONAL ‘‘(ii)(I) will not exceed the primary and Sec. 503. Contributions of $50 or more. CAMPAIGN SPENDING runoff election multicandidate political Sec. 504. Computerized indices of contribu- Subtitle A—Senate Election Campaign committee contribution limits of subsection tions. Expenditure Limits and Benefits (f); and TITLE VI—FEDERAL ELECTION SEC. 101. SENATE EXPENDITURE LIMITS AND ‘‘(II) will accept only an amount of con- COMMISSION BENEFITS. tributions for the primary election and any runoff election from multicandidate political Sec. 601. Use of candidates’ names. (a) AMENDMENT OF FECA.—Federal Elec- committees that does not exceed those lim- Sec. 602. Reporting requirements. tion Campaign Act of 1971 (2 U.S.C. 431 et its; Sec. 603. Provisions relating to the general seq.) is amended by adding at the end the fol- ‘‘(iii) will not accept contributions for the counsel of the Commission. lowing: primary or runoff election that would cause Sec. 604. Penalties. ‘‘TITLE V—EXPENDITURE LIMITS AND the candidate to exceed the limitation on Sec. 605. Random audits. BENEFITS FOR SENATE ELECTION CAM- contributions from out-of-State residents Sec. 606. Prohibition of false representation PAIGNS under subsection (g); to solicit contributions. ‘‘SEC. 501. DEFINITIONS. ‘‘(iv) will not exceed the personal funds ex- Sec. 607. Regulations relating to use of non- ‘‘In this title: penditure limit; and Federal money. ‘‘(1) ELIGIBLE SENATE CANDIDATE.—The ‘‘(v) will not exceed the general election Sec. 608. Filing of reports using computers term ‘eligible Senate candidate’ means a expenditure limit. and facsimile machines. candidate who is certified under section 505 ‘‘(2) DEADLINE FOR FILING DECLARATION.— as being eligible to receive benefits under TITLE VII—MISCELLANEOUS The declaration under paragraph (1) shall be this title. Sec. 701. Prohibition of leadership commit- filed not later than the date on which the ‘‘(2) EXCESS EXPENDITURE AMOUNT.—The tees. candidate files as a candidate for the pri- term ‘excess expenditure amount’, with re- Sec. 702. Polling data contributed to can- mary election. didates. spect to an eligible Senate candidate, means ‘‘(c) GENERAL ELECTION ELIGIBILITY CER- Sec. 703. Restrictions on use of campaign the amount applicable to the eligible Senate funds for personal purposes. candidate under section 504(c). TIFICATION AND DECLARATION.— ‘‘(3) EXPENDITURE.—The term ‘expenditure’ ‘‘(1) IN GENERAL.—The requirements of this TITLE VIII—EFFECTIVE DATES; has the meaning given in paragraph (9) of subsection are met if the candidate files with AUTHORIZATIONS section 301, excluding subparagraph (B)(ii) of the Secretary of the Senate— Sec. 801. Effective date. that paragraph. ‘‘(A) a certification, under penalty of per- Sec. 802. Severability. ‘‘(4) FUND.—The term ‘Fund’ means the jury, that— Sec. 803. Expedited review of constitutional Senate Election Campaign Fund established ‘‘(i) the candidate and the candidate’s au- issues. by section 509. thorized committees— SEC. 2. FINDINGS AND DECLARATIONS OF THE ‘‘(5) GENERAL ELECTION EXPENDITURE ‘‘(I) did not exceed the primary election ex- SENATE. LIMIT.—The term ‘general election expendi- penditure limit or runoff election expendi- (a) NECESSITY FOR SPENDING LIMITS.—The ture limit’, with respect to an eligible Sen- ture limit; Senate finds and declares that— ate candidate, means the limit applicable to ‘‘(II) did not accept contributions for the (1) the current system of campaign finance the eligible Senate candidate under section primary election or runoff election in excess has led to public perceptions that political 503(b). of the primary election expenditure limit or contributions and their solicitation have un- ‘‘(6) PERSONAL FUNDS EXPENDITURE LIMIT.— runoff election expenditure limit, reduced by duly influenced the official conduct of elect- The term ‘personal funds expenditure limit’ any amounts transferred to the current elec- ed officials; means the limit stated in section 503(a). tion cycle from a preceding election cycle; (2) permitting candidates for Federal office ‘‘(7) PRIMARY ELECTION EXPENDITURE ‘‘(III) did not accept contributions for the to raise and spend unlimited amounts of LIMIT.—The term ‘primary election expendi- primary or runoff election in excess of the money constitutes a fundamental flaw in the ture limit’, with respect to an eligible Sen- multicandidate political committee con- current system of campaign finance, and has ate candidate, means the limit applicable to tribution limits under subsection (f); undermined public respect for the Senate as the eligible Senate candidate under section ‘‘(IV) did not accept contributions for the an institution; 502(d)(1)(A). primary election or runoff election that (3) the failure to limit campaign expendi- ‘‘(8) RUNOFF ELECTION EXPENDITURE LIMIT.— caused the candidate to exceed the limita- tures has caused individuals elected to the The term ‘runoff election expenditure limit’, tion on contributions from out-of-State resi- Senate to spend an increasing proportion of with respect to an eligible Senate candidate, dents under subsection (g); and their time in office as elected officials rais- means the limit applicable to the eligible ‘‘(ii) at least 1 other candidate has quali- ing funds, interfering with the ability of the Senate candidate under section 502(d)(1)(B). fied for the same general election ballot Senate to carry out its constitutional re- ‘‘SEC. 502. ELIGIBLE SENATE CANDIDATES. under the law of the candidate’s State; and sponsibilities; ‘‘(a) IN GENERAL.—For purposes of this ‘‘(B) a declaration that the candidate and (4) the failure to limit campaign expendi- title, a candidate is an eligible Senate can- the authorized committees of the can- tures has damaged the Senate as an institu- didate if the candidate— didate— January 21, 1997 CONGRESSIONAL RECORD — SENATE S425

‘‘(i) except as otherwise provided by this ‘‘(ii) expenditures for the general election ‘‘(3) TIME FOR DETERMINATION.—A deter- title, will not make expenditures that exceed may be made from the excess amount of con- mination whether the requirements of para- the general election expenditure limit; tributions. graph (1) are met shall be made each time a ‘‘(ii) except as otherwise provided by this ‘‘(B) LIMITATION.—Subparagraph (A) shall candidate is required to file a report under title, will not accept any contribution for not apply to the extent that treatment of ex- section 304 and shall be made on an aggre- the general election to the extent that the cess contributions in accordance with sub- gate basis. contribution— paragraph (A)— ‘‘SEC. 503. LIMITS ON EXPENDITURES. ‘‘(I) would cause the aggregate amount of ‘‘(i) would result in the violation of any ‘‘(a) PERSONAL FUNDS EXPENDITURE contributions to exceed the sum of the limitation under section 315; or LIMIT.— amount of the general election expenditure ‘‘(ii) would cause the aggregate amount of ‘‘(1) IN GENERAL.—The aggregate amount of limit, reduced by any amounts transferred to contributions received for the general elec- expenditures that may be made during an the current election cycle from a previous tion to exceed the limits under subsection election cycle by an eligible Senate can- election cycle and not taken into account (c)(1)(D)(iii). didate or the candidate’s authorized commit- under subparagraph (A)(ii); ‘‘(e) THRESHOLD CONTRIBUTION REQUIRE- tees from the sources described in paragraph MENT.— ‘‘(II) would cause the candidate to exceed (2) shall not exceed $25,000. ‘‘(1) IN GENERAL.—The requirement of this the limitation on contributions from out-of- ‘‘(2) SOURCES.—A source is described in this subsection is met if the candidate and the State residents under subsection (g); paragraph if it is— candidate’s authorized committees have re- ‘‘(III) would be in violation of section 315; ‘‘(A) personal funds of the candidate or a ceived allowable contributions during the ‘‘(iii) will deposit all payments received member of the candidate’s immediate fam- applicable period in an amount at least equal under this title in an account insured by the ily; or to the lesser of— ‘‘(B) proceeds of indebtedness incurred by Federal Deposit Insurance Corporation from ‘‘(A) 10 percent of the general election ex- which funds may be withdrawn by check or the candidate or a member of the candidate’s penditure limit; or immediate family. similar means of payment to third parties; ‘‘(B) $250,000. ‘‘(vi) will furnish campaign records, evi- ‘‘(b) GENERAL ELECTION EXPENDITURE ‘‘(2) DEFINITIONS.—In this section and sub- LIMIT.— dence of contributions, and other appro- sections (b) and (c) of section 504: priate information to the Commission; and ‘‘(1) IN GENERAL.—Except as otherwise pro- ‘‘(A) ALLOWABLE CONTRIBUTION.— vided in this title, the aggregate amount of ‘‘(v) will cooperate in the case of any audit ‘‘(i) IN GENERAL.—The term ‘allowable con- and examination by the Commission under expenditures for a general election by an eli- tribution’ means a contribution that is made gible Senate candidate and the candidate’s section 506 and will pay any amounts re- as a gift of money by an individual pursuant quired to be paid under that section. authorized committees shall not exceed the to a written instrument identifying the indi- lesser of— ‘‘(2) DEADLINE FOR FILING DECLARATION AND vidual as the contributor. ‘‘(A) $5,500,000; or CERTIFICATION.—The declaration and certifi- ‘‘(ii) EXCLUSIONS.—The term ‘allowable ‘‘(B) the greater of— cation under paragraph (1) shall be filed not contribution’ does not include— ‘‘(i) $950,000; or later than 7 days after the earlier of— ‘‘(I) a contribution from any individual ‘‘(ii) $400,000; plus ‘‘(A) the date on which the candidate quali- during the applicable period to the extent ‘‘(I) 30 cents multiplied by the voting age fies for the general election ballot under that the aggregate amount of such contribu- population not in excess of 4,000,000; and State law; or tions from the individual exceeds $250; or ‘‘(II) 25 cents multiplied by the voting age ‘‘(B) if, under State law, a primary or run- ‘‘(II) a contribution from an individual re- population in excess of 4,000,000. off election to qualify for the general elec- siding outside the candidate’s State to the ‘‘(2) EXCEPTION.—In the case of an eligible tion ballot occurs after September 1, the extent that acceptance of the contribution Senate candidate in a State that has not date on which the candidate wins the pri- would bring a candidate out of compliance more than 1 transmitter for a commercial mary or runoff election. with subsection (g). Very High Frequency (VHF) television sta- ‘‘(d) PRIMARY AND RUNOFF ELECTION EX- ‘‘(iii) APPLICABILITY.—Items subclauses (I) tion licensed to operate in that State, para- and (II) of clause (ii) shall not apply for pur- PENDITURE LIMITS.— graph (1)(B)(ii) shall be applied by substitut- poses of section 504(a). ‘‘(1) IN GENERAL.—The requirements of this ing— subsection are met if— ‘‘(B) APPLICABLE PERIOD.—The term ‘appli- ‘‘(A) ‘80 cents’ for ‘30 cents’ in subclause ‘‘(A) the candidate or the candidate’s au- cable period’ means— (I); and thorized committees did not make expendi- ‘‘(i) the period beginning on January 1 of ‘‘(B) ‘70 cents’ for ‘25 cents’ in subclause the calendar year preceding the calendar tures for the primary election in excess of (II). year of a general election and ending on— the lesser of— ‘‘(3) INDEXING.—The amount otherwise de- ‘‘(I) the date on which the certification and ‘‘(i) 67 percent of the general election ex- termined under paragraph (1) for any cal- declaration under subsection (c) is filed by penditure limit; or endar year shall be increased by the same the candidate; or ‘‘(ii) $2,750,000; percentage as the percentage increase for the ‘‘(II) for purposes of subsection (a) of sec- ‘‘(B) the candidate and the candidate’s au- calendar year under section 502(d)(2). tion 503, the date of the general election; or thorized committees did not make expendi- ‘‘(c) PAYMENT OF TAXES ON EARNINGS.—The ‘‘(ii) in the case of a special election for tures for any runoff election in excess of 20 limitation under subsection (b) shall not the office of United States Senator, the pe- percent of the general election expenditure apply to any expenditure for Federal, State, riod beginning on the date on which the va- limit. or local income taxes on the earnings of a cancy in the office occurs and ending on the candidate’s authorized committees. ‘‘(2) INDEXING.—The $2,750,000 amount date of the general election. ‘‘(d) EXPENDITURES.—For purposes of this under paragraph (1)(A)(ii) shall be increased ‘‘(f) MULTICANDIDATE POLITICAL COMMITTEE title, the term ‘expenditure’ has the meaning as of the beginning of each calendar year CONTRIBUTION LIMITS.—The requirements of given such term by section 301(9), except based on the increase in the price index de- this subsection are met if the candidate and that in determining any expenditures made termined under section 315(c), except that, the candidate’s authorized committees have by, or on behalf of, a candidate or a can- for purposes of subsection (d)(1) and section accepted from multicandidate political com- didate’s authorized committees, section 503(b)(3), the base period shall be calendar mittees allowable contributions that do not 301(9)(B) shall be applied without regard to year 1996. exceed— clause (ii) or (vi). ‘‘(3) INCREASE.—The limitations under sub- ‘‘(1) during the primary election period, an ‘‘(e) EXPENDITURES IN RESPONSE TO INDE- paragraphs (A) and (B) of paragraph (1) with amount equal to 20 percent of the primary PENDENT EXPENDITURES..—If an eligible Sen- respect to any candidate shall be increased election spending limit; and ate candidate is notified by the Commission by the aggregate amount of independent ex- ‘‘(2) during the runoff election period, an under section 304(c)(4) that independent ex- penditures in opposition to, or on behalf of amount equal to 20 percent of the runoff penditures totaling $10,000 or more have been any opponent of, the candidate during the election spending limit. made in the same election in favor of an- primary or runoff election period, whichever ‘‘(g) LIMITATION ON OUT-OF-STATE CON- other candidate or against the eligible can- is applicable, that are required to be re- TRIBUTIONS.— didate, the eligible candidate shall be per- ported to the Secretary of the Senate or to ‘‘(1) REQUIREMENTS.—The requirements of mitted to spend an amount equal to the the Commission with respect to that period this subsection are met if at least 50 percent amount of the independent expenditures, and under section 304. of the total amount of contributions accept- any such expenditures shall not be subject to ‘‘(4) EXCESS AMOUNT OF CONTRIBUTIONS.— ed by the candidate and the candidate’s au- any limit applicable under this title to the ‘‘(A) IN GENERAL.—If the contributions re- thorized committees are from individuals eligible candidate for the election. ceived by a candidate or the candidate’s au- who are legal residents of the candidate’s ‘‘SEC. 504. BENEFITS FOR ELIGIBLE SENATE CAN- thorized committees for the primary elec- State. DIDATES. tion or runoff election exceed the expendi- ‘‘(2) PERSONAL FUNDS.—For purposes of ‘‘(a) IN GENERAL.—An eligible Senate can- tures for either election— paragraph (1), amounts consisting of funds didate shall be entitled to— ‘‘(i) the excess amount of contributions from sources described in section 503(a) shall ‘‘(1) the broadcast media rates provided shall be treated as contributions for the gen- be treated as contributions from individuals under section 315(b) of the Communications eral election; and residing outside the candidate’s State. Act of 1934; S426 CONGRESSIONAL RECORD — SENATE January 21, 1997 ‘‘(2) the mailing rates provided in section more than $100 but less than $251, up to 50 subparagraph (A) shall not exceed 100 per- 3626(e) of title 39, United States Code; and percent of the general election expenditure cent of the general election expenditure ‘‘(3) payments in an amount equal to— limit. limit. ‘‘(A) the public financing amount deter- ‘‘(c) EXCESS EXPENDITURE AMOUNT.— ‘‘(3) ACCEPTANCE OF CONTRIBUTION WITHOUT mined under subsection (b); ‘‘(1) DETERMINATION.—The excess expendi- REGARD TO SECTION 502(C)(1)(B)(IV).— ‘‘(B) the excess expenditure amount deter- ture amount is— ‘‘(A) A candidate who receives benefits mined under subsection (c); and ‘‘(A) in the case of a major party can- under this section may accept a contribution ‘‘(C) the independent expenditure amount didate, an amount equal to the sum of— for the general election without regard to determined under subsection (d). ‘‘(i) if the opponent’s excess is less than section 502(c)(1)(B)(iv) if— ‘‘(b) PUBLIC FINANCING AMOUNT.— 331⁄3 percent of the general election expendi- ‘‘(i) a major party candidate in the same ‘‘(1) DETERMINATION.—The public financing ture limit, an amount equal to one-third of general election is not an eligible Senate amount is— the general election expenditure limit; plus candidate; or ‘‘(A) in the case of an eligible candidate ‘‘(ii) if the opponent’s excess equals or ex- ‘‘(ii) any other candidate in the same gen- who is a major party candidate and has met ceeds 331⁄3 percent but is less than 662⁄3 per- eral election who is not an eligible Senate the threshold requirement of section 502(e)— cent of the general election expenditure candidate raises an amount of contributions ‘‘(i)(I) during the primary election period, limit, an amount equal to one-third of the or makes or becomes obligated to make an the public financing an amount equal to 100 general election expenditure limit; plus amount of expenditures for the general elec- percent of the amount of contributions re- ‘‘(iii) if the opponent’s excess equals or ex- tion that exceeds 75 percent of the general ceived during that period from individuals ceeds 662⁄3 percent of the general election ex- election expenditure limit applicable to such residing in the candidate’s State in the ag- penditure limit, an amount equal to one- other candidate. gregate amount of $100 or less; plus third of the general election expenditure ‘‘(B) LIMITATION.—The amount of contribu- ‘‘(II) an amount equal to 50 percent of the limit; and tions that may be received by reason of sub- amount of contributions received during ‘‘(B) in the case of an eligible Senate can- paragraph (A) shall not exceed 100 percent of that period from individuals residing in the didate who is not a major party candidate, the general election expenditure limit. candidate’s State in the aggregate amount of an amount equal to the least of— ‘‘(e) USE OF PAYMENTS.— more than $100 but less than $251, up to 50 ‘‘(i) the amount of allowable contributions ‘‘(1) PERMITTED USE.—Payments received percent of the primary election expenditure accepted by the eligible Senate candidate by an eligible Senate candidate under sub- limit; reduced by during the applicable period in excess of the section (a)(3) shall be used to make expendi- ‘‘(III) the threshold requirement under sec- threshold contribution requirement under tures with respect to the general election pe- tion 502(e); section 502(e); riod for the candidate. (ii)(I) during the runoff election period, an ‘‘(ii) 50 percent of the general election ex- ‘‘(2) PROHIBITED USE.—Payments received amount equal to 100 percent of the amount of penditure limit; or by an eligible Senate candidate under sub- contributions received during that period ‘‘(iii) the opponent’s excess. section (a)(3) shall not be used— from individuals residing in the candidate’s ‘‘(2) DEFINITION OF OPPONENT’S EXCESS.—In ‘‘(A) except as provided in subparagraph State in the aggregate amount of $100 or this subsection, the term ‘opponent’s excess’ (D), to make any payments, directly or indi- less; plus means the amount by which an opponent of rectly, to the candidate or to any member of ‘‘(II) an amount equal to 50 percent of the an eligible Senate candidate in the general the immediate family of the candidate; amount of contributions received during election accepts contributions or makes (or ‘‘(B) to make any expenditure other than that period from individuals residing in the obligates to make) expenditures for the elec- candidate’s State in the aggregate amount of an expenditure to further the general elec- tion in excess of the general election expend- tion of the candidate; more than $100 but less than $251, up to 10 iture limit. percent of the general election expenditure ‘‘(C) to make an expenditure the making of ‘‘(d) INDEPENDENT EXPENDITURE AMOUNT.— which constitutes a violation of any law of limit; and The independent expenditure amount is the ‘‘(III) during the general election period, the United States or of the State in which total amount of independent expenditures the expenditure is made; or an amount equal to the general election ex- made, or obligated to be made, during the ‘‘(D) subject to section 315(i), to repay any penditure limit; and general election period by 1 or more persons loan to any person except to the extent that ‘‘(B) in the case of an eligible candidate in opposition to, or on behalf of an opponent proceeds of the loan were used to further the who is not a major party candidate and who of, an eligible Senate candidate that are re- general election of the candidate. has met the threshold requirement of section quired to be reported by the persons under 502(e)— section 304(c) with respect to the general ‘‘SEC. 505. CERTIFICATION BY COMMISSION. ‘‘(i)(I) during the primary election period, election period and are certified by the Com- ‘‘(a) CERTIFICATION OF STATUS AS ELIGIBLE an amount equal to 100 percent of the mission under section 304(c). SENATE CANDIDATE.— amount of contributions received during ‘‘(e) WAIVER OF EXPENDITURE AND CON- ‘‘(1) IN GENERAL.—The Commission shall that period from individuals residing in the TRIBUTION LIMITS.— certify to any candidate meeting the re- candidate’s State in the aggregate amount of ‘‘(1) RECIPIENTS OF EXCESS EXPENDITURE quirements of section 502 that the candidate $100 or less; plus AMOUNT PAYMENTS AND INDEPENDENT EXPEND- is an eligible Senate candidate entitled to ‘‘(II) an amount equal to 50 percent of the ITURE AMOUNT PAYMENTS.— benefits under this title. amount of contributions received during ‘‘(A) IN GENERAL.—An eligible Senate can- ‘‘(2) REVOCATION.—The Commission shall that period from individuals residing in the didate who receives payments under sub- revoke a certification under paragraph (1) if candidate’s State in the aggregate amount of section (a)(3) that are allocable to the inde- the Commission determines that a candidate more than $100 but less than $251, up to 50 pendent expenditure or excess expenditure fails to continue to meet the requirements of percent of the primary election expenditure amounts described in subsections (c) and (d) section 502. limit; reduced by may make expenditures from the payments ‘‘(b) CERTIFICATION OF ELIGIBILITY TO RE- ‘‘(III) the threshold requirement under sec- for the general election without regard to CEIVE BENEFITS.— tion 502(e); the general election expenditure limit. ‘‘(1) IN GENERAL.—Not later than 7 business ‘‘(ii)(I) during the runoff election period, ‘‘(B) NONMAJOR PARTY CANDIDATES.—In the days after an eligible Senate candidate files an amount equal to 100 percent of the case of an eligible Senate candidate who is a request with the Secretary of the Senate to amount of contributions received during not a major party candidate, the general receive benefits under section 504, the Com- that period from individuals residing in the election expenditure limit shall be increased mission shall issue a certification stating candidate’s State in the aggregate amount of by the amount (if any) by which the excess whether the candidate is eligible for pay- $100 or less; plus, opponent expenditure amount exceeds the ments under this title and the amount of ‘‘(II) an amount equal to 50 percent of the amount determined under subsection such payments to which such candidate is amount of contributions received during (b)(2)(B) with respect to the candidate. entitled. that period from individuals residing in the ‘‘(2) ALL BENEFIT RECIPIENTS.— ‘‘(2) CONTENTS OF REQUEST.—A request candidate’s State in the aggregate amount of ‘‘(A) IN GENERAL.—An eligible Senate can- under paragraph (1) shall— more than $100 but less than $251, up to 10 didate who receives benefits under this sec- ‘‘(A) contain such information and be made percent of the general election expenditure tion may make expenditures for the general in accordance with such procedures as the limit; and election without regard to the personal funds Commission may provide by regulation; and ‘‘(iii)(I) during the general election period, expenditure limit or general election expend- ‘‘(B) contain a verification signed by the an amount equal to 100 percent of the iture limit if any 1 of the eligible Senate candidate and the treasurer of the principal amount of contributions received during candidate’s opponents who is not an eligible campaign committee of the candidate stat- that period from individuals residing in the Senate candidate raises an amount of con- ing that the information furnished in sup- candidate’s State in the aggregate amount of tributions or makes or becomes obligated to port of the request, to the best of their $100 or less, plus; make an amount of expenditures for the gen- knowledge, is correct and fully satisfies the ‘‘(II) an amount equal to 50 percent of the eral election that exceeds 200 percent of the requirements of this title. amount of contributions received during general election expenditure limit. ‘‘(c) DETERMINATIONS BY THE COMMISSION.— that period from individuals residing in the ‘‘(B) LIMITATION.—The amount of the ex- All determinations made by the Commission candidate’s State in the aggregate amount of penditures that may be made by reason of under this title (including certifications January 21, 1997 CONGRESSIONAL RECORD — SENATE S427

under subsections (a) and (b)) shall be final ‘‘(B) MEDIUM AMOUNT OF EXCESS EXPENDI- ‘‘(d) APPEALS.—The Commission, on behalf and conclusive, except to the extent that a TURES.—If the Commission determines that of the United States, may appeal from, and determination is subject to examination and an eligible Senate candidate made expendi- may petition the Supreme Court for certio- audit by the Commission under section 506 tures that exceeded by more than 2.5 percent rari to review, any judgment or decree en- and judicial review under section 507. and less than 5 percent the primary election tered with respect to actions in which the ‘‘SEC. 506. EXAMINATIONS AND AUDITS; REPAY- expenditure limit, the runoff election ex- Commission under this section. MENTS; CIVIL PENALTIES. penditure limit, or the general election ex- ‘‘SEC. 509. REPORTS TO CONGRESS; REGULA- ‘‘(a) EXAMINATIONS AND AUDITS.— penditure limit, the Commission shall assess TIONS. ‘‘(1) AFTER A GENERAL ELECTION.—After a civil penalty against the eligible Senate ‘‘(a) REPORTS.— each general election, the Commission shall candidate in an amount equal to 3 times the ‘‘(1) IN GENERAL.—As soon as practicable conduct an examination and audit of the amount of the excess expenditures. after each general election, the Commission campaign accounts of 10 percent of all can- ‘‘(C) LARGE AMOUNT OF EXCESS EXPENDI- shall submit a full report to the Senate set- didates for the office of United States in TURES.—If the Commission determines that ting forth— which there was an eligible Senate candidate an eligible Senate candidate made expendi- ‘‘(A) the expenditures (shown in such detail on the ballot, as designated by the Commis- tures that exceeded by 5 percent or more the as the Commission determines to be appro- sion through the use of an appropriate sta- primary election expenditure limit, the run- priate) made by each eligible Senate can- tistical method of random selection, to de- off election expenditure limit, or the general didate and the authorized committees of the termine whether the candidates have com- election expenditure limit, the Commission candidate; plied with the conditions of eligibility and shall assess a civil penalty against the eligi- ‘‘(B) the amounts certified by the Commis- other requirements of this title. If the Com- ble Senate candidate in an amount equal to sion under section 505 as benefits available mission selects a candidate, the Commission the sum of 3 times the amount of the excess to each eligible Senate candidate; shall examine and audit the campaign ac- expenditures plus an additional amount de- ‘‘(C) the amount of repayments, if any, re- counts of all other candidates in the general termined by the Commission. quired under section 506 and the reason why election for the office the selected candidate each repayment was required; and ‘‘(g) UNEXPENDED FUNDS.— is seeking. ‘‘(D) the balance in the senate Election ‘‘(1) RETENTION FOR PURPOSES OF LIQUIDA- ‘‘(2) WITH REASON TO BELIEVE THERE MAY Campaign Fund, and the balance in any ac- TION OF OBLIGATIONS.—An eligible Senate HAVE BEEN A VIOLATION.—The Commission candidate may retain for a period not ex- count maintained by the Fund. RINTING.—Each report under para- may conduct an examination and audit of ceeding 120 days after the date of a general ‘‘(2) P the campaign accounts of any eligible Sen- graph (1) shall be printed as a Senate docu- election any unexpended funds received ate candidate in a general election if the ment. under this title for the liquidation of all ob- Commission determines that there exists ‘‘(b) REGULATIONS.— ligations to pay expenditures for the general reason to believe that the eligible Senate ‘‘(1) IN GENERAL.—The Commission may election incurred during the general election candidate may have failed to comply with issue such regulations, conduct such exami- period. this title. nations and investigations, and require the ‘‘(2) REPAYMENT.—At the end of the 120-day ‘‘(b) EXCESS PAYMENT.—If the Commission keeping and submission of such books, determines any payment was made to an eli- period, any unexpended funds received under records, and information, as the Commission gible Senate candidate under this title in ex- this title shall be promptly repaid. considers necessary to carry out the func- cess of the aggregate amounts to which the ‘‘(h) LIMIT ON PERIOD FOR NOTIFICATION.— tions and duties of the Commission under eligible Senate candidate was entitled, the No notification shall be made by the Com- this title. mission under this section with respect to an Commission shall notify the eligible Senate ‘‘(2) STATEMENT TO SENATE.—Not less than candidate, and the eligible Senate candidate election more than 3 years after the date of 30 days before issuing a regulation under shall pay an amount equal to the excess. the election. paragraph (1), the Commission shall submit ‘‘(c) REVOCATION OF STATUS.—If the Com- ‘‘(i) DEPOSITS.—The Secretary shall deposit to the Senate a statement setting forth the mission revokes the certification of an eligi- all payments received under this section into proposed regulation and containing a de- ble Senate candidate as an eligible Senate the Senate Election Campaign Fund. tailed explanation and justification for the candidate under section 505(a)(1), the Com- ‘‘SEC. 507. JUDICIAL REVIEW. regulation. mission shall notify the eligible Senate can- ‘‘(a) JUDICIAL REVIEW.—Any agency action ‘‘SEC. 510. PAYMENTS TO ELIGIBLE CANDIDATES. didate, and the eligible Senate candidate by the Commission under this title shall be ‘‘(a) SENATE ELECTION CAMPAIGN FUND.— shall pay an amount equal to the payments subject to review by the United States Court ‘‘(1) ESTABLISHMENT OF CAMPAIGN FUND.— received under this title. of Appeals for the District of Columbia Cir- There is established on the books of the ‘‘(d) MISUSE OF BENEFIT.—If the Commis- cuit upon petition filed in that court within sion determines that any amount of any ben- Treasury of the United States a special fund 30 days after the date of the agency action. to be known as the ‘Senate Election Cam- efit made available to an eligible Senate can- ‘‘(b) APPLICATION OF TITLE 5, UNITED didate under this title was not used as pro- paign Fund’. STATES CODE.—Chapter 7 of title 5, United vided for in this title, the Commission shall ‘‘(2) APPROPRIATIONS.— States Code, shall apply to judicial review of (A) IN GENERAL.—There are appropriated to notify the eligible Senate candidate, and the any agency action by the Commission under eligible Senate candidate shall pay the the Fund for each fiscal year, out of amounts this title. amount of that benefit. in the general fund of the Treasury not oth- ‘‘(c) AGENCY ACTION.—For purposes of this ‘‘(e) EXCESS EXPENDITURES.—If the Com- erwise appropriated, amounts equal to— mission determines that an eligible Senate section, the term ‘agency action’ has the ‘‘(i) any contributions by persons which candidate who received benefits under this meaning given the term in section 551(13) of are specifically designated as being made to title made expenditures that in the aggre- title 5, United States Code. the Fund; gate exceed the primary election expendi- ‘‘SEC. 508. PARTICIPATION BY COMMISSION IN ‘‘(ii) amounts collected under section ture, the runoff election expenditure limit, JUDICIAL PROCEEDINGS. 506(i); and or the general election expenditure limit, ‘‘(a) APPEARANCES.—The Commission may ‘‘(iii) any other amounts that may be ap- the Commission shall notify the eligible Sen- appear in and defend against any action in- propriated to or deposited into the Fund ate candidate, and the eligible Senate can- stituted under this section and under section under this title. didate shall pay an amount equal to the 507 by attorneys employed in the office of ‘‘(B) TRANSFERS.—The Secretary of the amount of the excess expenditures. the Commission or by counsel whom it may Treasury shall, from time to time, transfer ‘‘(f) CIVIL PENALTIES.— appoint without regard to the provisions of to the Fund an amount not in excess of the ‘‘(1) MISUSE OF BENEFIT.—If the Commis- title 5, United States Code, governing ap- amounts described in subparagraph (A). sion determines that an eligible Senate can- pointments in the competitive service, and ‘‘(C) FISCAL YEAR.—Amounts in the Fund didate has committed a violation described whose compensation it may fix without re- shall remain available without fiscal year in subsection (d), the Commission may assess gard to chapter 51 and subchapter III of limitation. a civil penalty against the eligible Senate chapter 53 of that title. ‘‘(3) USE OF FUND.—Amounts in the Fund candidate in an amount not greater than 200 ‘‘(b) ACTIONS FOR RECOVERY OF AMOUNT OF shall be available only for the purposes of— percent of the amount of the benefit that BENEFITS.—The Commission, by attorneys ‘‘(A) making payments required under this was misused. and counsel described in subsection (a), may title; and ‘‘(2) EXCESS EXPENDITURES.— bring an action in United States district ‘‘(B) making expenditures in connection ‘‘(A) LOW AMOUNT OF EXCESS EXPENDI- court to recover any amounts determined with the administration of the Fund. TURES.—If the Commission determines that under this title to be payable to any entity ‘‘(4) FUND ACCOUNT.—The Secretary shall an eligible Senate candidate made expendi- that afforded a benefit to an eligible Senate maintain such accounts in the Fund as may tures that exceeded by 2.5 percent or less the candidate under this title. be required by this title or which the Sec- primary election expenditure limit, the run- ‘‘(c) ACTION FOR INJUNCTIVE RELIEF.—The retary determines to be necessary to carry off election expenditure limit, or the general Commission, by attorneys and counsel de- out the provisions of this title. election expenditure limit, the Commission scribed in subsection (a), may petition the ‘‘(b) PAYMENTS ON CERTIFICATION.—On re- shall assess a civil penalty against the eligi- courts of the United States for such injunc- ceipt of a certification from the Commission ble Senate candidate in an amount equal to tive relief as is appropriate in order to im- under section 505, except as provided in sub- the amount of the excess expenditures. plement any provision of this title. section (c), the Secretary shall, subject to S428 CONGRESSIONAL RECORD — SENATE January 21, 1997 the availability of appropriations, promptly be taken into account in determining wheth- (3) by redesignating subparagraphs (A), (B), pay the amount certified by the Commission er the contribution limit is met, except that and (C) as clauses (i), (ii), and (iii), respec- to the candidate out of the Senate Election there shall not be taken into account tively; and Campaign Fund. amounts used during the 60-day period begin- (4) by adding at the end the following: ‘‘(c) INSUFFICIENT FUNDS.— ning on January 1, 1999, to pay for expendi- ‘‘(B) CONTRIBUTIONS TO CANDIDATES.— Not- ‘‘(1) WITHHOLDING.—If, at the time of a cer- tures that were incurred (but unpaid) before withstanding subparagraph (A)(i) it shall be tification by the Commission under section that date. unlawful for a multicandidate political com- 505 for payment to an eligible Senate can- (c) EFFECT OF INVALIDITY ON OTHER PROVI- mittee to make a contribution to a can- didate, the Secretary determines that the SIONS OF TITLE.—If section 502, 503, or 504 of didate for election, or nomination for elec- monies in the Senate Election Campaign the Federal Election Campaign Act of 1971 tion, to the Senate or an authorized commit- Fund are not, or may not be, sufficient to (as added by subsection (a)) or any part of tee of a Senate candidate, or for a Senate satisfy the full entitlement of all eligible those sections is held to be invalid, this Act candidate to accept a contribution, to the candidates, the Secretary shall withhold and all amendments made by this Act shall extent that the making or accepting of the from the amount of the payment any be treated as invalid. contribution would cause the amount of con- amount that the Secretary determines to be (d) PROVISIONS TO FACILITATE VOLUNTARY tributions received by the candidate and the necessary to ensure that each eligible Senate CONTRIBUTIONS TO SENATE ELECTION CAM- candidate’s authorized committees from candidate will receive the same pro rata PAIGN FUND.— multicandidate political committees to ex- share of the candidate’s full entitlement. (1) GENERAL RULE.—Part VIII of sub- ceed the lesser of— ‘‘(2) SUBSEQUENT PAYMENT.—Amounts with- chapter A of chapter 61 of the Internal Reve- ‘‘(i) $825,000; or held under paragraph (1) shall be paid when nue Code of 1986 (relating to returns and ‘‘(ii) 20 percent of the primary election ex- the Secretary determines that there are suf- records) is amended by adding at the end the penditure limit, runoff election expenditure ficient monies in the Senate Election Cam- following: limit, or general election expenditure limit paign Fund to pay all or a portion of the ‘‘Subpart B—Designation of Additional (as those terms are defined in section 501) funds withheld from all eligible Senate can- Amounts to Senate Election Campaign Fund that is applicable (or, if the candidate were didates, but, if only a portion is to be paid, ‘‘Sec. 6097. Designation of additional an eligible Senate candidate (as defined in the portion shall be paid in such a manner amounts. section 501) would be applicable) to the can- that each eligible candidate receives an didate.’’. equal pro rata share. ‘‘SEC. 6097. DESIGNATION OF ADDITIONAL AMOUNTS. (b) INDEXING.—The $825,000 amount under ‘‘(3) NOTIFICATION OF ESTIMATED WITHHOLD- ‘‘(a) GENERAL RULE.—Every individual subparagraph (B) shall be increased as of the ING.— (other than a nonresident alien) who files an beginning of each calendar year based on the ‘‘(A) ADVANCE ESTIMATE OF AVAILABLE income tax return for any taxable year may increase in the price index determined under FUNDS AND PROJECTED COSTS.—Not later than designate an additional amount equal to $5 section 315(c) of the Federal Election Cam- December 31 of any calendar year preceding ($10 in the case of a joint return) to be paid paign Act of 1971 (2 U.S.C. 441a(c)), except a calendar year in which there is a regularly that for purposes of subparagraph (B), the scheduled general election, the Secretary, over to the Senate Election Campaign Fund. ‘‘(b) MANNER AND TIME OF DESIGNATION.—A base period shall be the calendar year 1996. after consultation with the Commission, designation under subsection (a) may be (c) RETURN OF EXCESS.—A candidate or au- shall make an estimate of— made for any taxable year only at the time thorized committee that receives a contribu- ‘‘(i) the amount of funds that will be avail- of filing the income tax return for the tax- tion from a multicandidate political com- able to make payments under this title in able year. Such designation shall be made on mittee in excess of the amount allowed the general election year; and the page bearing the taxpayer’s signature. under subparagraph (B) shall return the ‘‘(ii) the costs of implementing this title in ‘‘(c) TREATMENT OF ADDITIONAL AMOUNTS.— amount of the excess contribution to the the general election year. Any additional amount designated under contributor. ‘‘(B) NOTIFICATION.—If the Secretary deter- subsection (a) for any taxable year shall, for (d) LIMITATIONS ON MULTICANDIDATE COM- mines that there will be insufficient funds all purposes of law, be treated as an addi- MITTEE CONTRIBUTIONS TO POLITICAL COMMIT- under subparagraph (A) for any calendar tional income tax imposed by chapter 1 for TEES.—Paragraphs (1)(C) and (2)(A)(iii) of year, the Secretary shall notify by registered such taxable year. section 315(a) of the Federal Election Cam- mail each candidate for the Senate on Janu- ‘‘(d) INCOME TAX RETURN.—For purposes of paign Act of 1971 (2 U.S.C. 441a(a)), as amend- ary 1 of that year (or, if later, the date on this section, the term ‘income tax return’ ed by subsection (a), are amended by striking which an individual becomes such a can- means the return of the tax imposed by ‘‘$5,000’’ and inserting ‘‘$1,000’’. didate ) of the amount that the Secretary es- chapter 1.’’. (e) EFFECTIVE DATES.— timates will be the pro rata withholding (2) CONFORMING AMENDMENTS.—(A) Part (1) IN GENERAL.—Except as provided in from each eligible Senate candidate’s pay- VIII of subchapter A of chapter 61 of such paragraph (2), the amendments made by this ments under this subsection. Code is amended by striking the heading and section shall apply to elections (and the elec- ‘‘(C) INCREASE IN CONTRIBUTION LIMIT.—The inserting: tion cycles relating thereto) occurring after amount of an eligible candidate’s contribu- December 31, 1998. tion limit under section 502(c)(1)(B)(iv) shall ‘‘PART VIII—DESIGNATION OF AMOUNTS TO ELECTION CAMPAIGN FUNDS (2) APPLICABILITY.—In applying the amend- be increased by the amount of the estimated ments made by this section, there shall not ‘‘Subpart A. Presidential Election Campaign pro rata withholding under subparagraph be taken into account— Fund. (B). (A) a contribution made or received before ‘‘(4) NOTIFICATION OF ACTUAL WITHHOLD- ‘‘Subpart B. Designation of additional January 1, 1999; or ING.— amounts to Senate Election (B) a contribution made to, or received by, ‘‘(A) IN GENERAL.—The Secretary shall no- Campaign Fund. a candidate on or after January 1, 1999, to tify the Commission and each eligible Senate ‘‘Subpart A—Presidential Election Campaign the extent that the aggregate amount of candidate by registered mail of any actual Fund’’. such contributions made to or received by reduction in the amount of any payment by (B) The table of parts for subchapter A of the candidate is not greater than the excess reason of this subsection. chapter 61 of such Code is amended by strik- (if any) of— ‘‘(B) GREATER AMOUNT OF WITHHOLDING.—If ing the item relating to part VIII and insert- (i) the aggregate amount of such contribu- the amount of a withholding exceeds the ing: tions made to or received by any opponent of amount estimated under paragraph (3), an el- the candidate before January 1, 1999; over igible Senate candidate’s contribution limit (ii) the aggregate amount of such contribu- ‘‘Part VIII. Designation of amounts to elec- under section 502(c)(1)(B)(iv) shall be in- tions made to or received by the candidate tion campaign funds.’’ creased by the amount of the excess.’’. before January 1, 1999. (3) EFFECTIVE DATE.—The amendments (b) EFFECTIVE DATES.— SEC. 103. REPORTING REQUIREMENTS. (1) IN GENERAL.—Except as provided in this made by this section shall apply to taxable Title III of the Federal Election Campaign subsection, the amendment made by sub- years beginning after December 31, 1998. Act of 1971 (2 U.S.C. 431 et seq.) is amended section (a) shall apply to elections occurring SEC. 102. POLITICAL ACTION COMMITTEES. by inserting after section 304 the following: after December 31, 1998. (a) LIMITATIONS ON MULTICANDIDATE POLIT- ‘‘SEC. 304A. REPORTING REQUIREMENTS FOR (2) APPLICABILITY TO CONTRIBUTIONS AND ICAL COMMITTEE CONTRIBUTIONS TO CAN- SENATE CANDIDATES. EXPENDITURES.—For purposes of any expendi- DIDATES.—Section 315(a)(2) of the Federal ‘‘(a) MEANINGS OF TERMS.—Any term used ture or contribution limit imposed by the Election Campaign Act of 1971 (2 U.S.C. in this section that is used in title V shall amendment made by subsection (b)— 441a(a)(2)) is amended— have the same meaning as when used in title (A) no expenditure made before January 1, (1) by striking ‘‘(2) No multicandidate’’ and V. 1999, shall be taken into account, except that inserting the following: ‘‘(b) CANDIDATE OTHER THAN ELIGIBLE SEN- there shall be taken into account any such ‘‘(2) MULTICANDIDATE POLITICAL COMMIT- ATE CANDIDATE.— expenditure for goods or services to be pro- TEES.— ‘‘(1) DECLARATION OF INTENT.—A candidate vided after that date; and ‘‘(A) IN GENERAL.—No multicandidate’’; for the office of Senator who does not file a (B) all cash, cash items, and Government (2) in subparagraph (A) by striking ‘‘$5,000’’ certification with the Secretary of the Sen- securities on hand as of January 1, 1999, shall and inserting ‘‘$1,000’’; ate under section 502(c) shall, at the time January 21, 1997 CONGRESSIONAL RECORD — SENATE S429 provided in section 502(c)(2), file with the hours after expenditures have been made or didate in the general election for the office Secretary of the Senate a declaration as to loans incurred in excess of the personal funds of United States Senator who is not an eligi- whether the candidate intends to make ex- expenditure limit. ble Senate candidate, or the authorized com- penditures for the general election in excess ‘‘(2) NOTIFICATION OF ELIGIBLE SENATE CAN- mittee of such a candidate, shall contain the of the general election expenditure limit. DIDATES.—Within 24 hours after a report has following sentence: ‘This candidate has not ‘‘(2) REPORTS.— been filed under paragraph (1), the Commis- agreed to voluntary campaign spending lim- ‘‘(A) INITIAL REPORT.—A candidate for the sion shall notify each eligible Senate can- its.’.’’. Senate who qualifies for the ballot for a gen- didate in the general election of the filing of Subtitle B—General Provisions eral election— the report. SEC. 131. BROADCAST RATES AND PREEMPTION. ‘‘(i) who is not an eligible Senate candidate ‘‘(3) ACTION BY THE COMMISSION ABSENT RE- (a) BROADCAST RATES.—Section 315(b) of under section 502; and PORT.— the Communications Act of 1934 (47 U.S.C. ‘‘(ii) who receives contributions in an ag- ‘‘(A) IN GENERAL.—Notwithstanding the re- 315(b)) is amended— gregate amount or makes or obligates to porting requirements under this subsection, (1) by striking ‘‘(b) The charges’’ and in- make expenditures in an aggregate amount the Commission may make its own deter- serting the following: for the general election that exceeds 75 per- mination that a candidate for the Senate has ‘‘(b) BROADCAST MEDIA RATES.— cent of the general election expenditure made expenditures in excess of the amount ‘‘(1) IN GENERAL.—The charges’’; limit; under paragraph (1). (2) by redesignating paragraphs (1) and (2) shall file a report with the Secretary of the ‘‘(B) NOTIFICATION OF ELIGIBLE SENATE CAN- as subparagraphs (A) and (B), respectively, Senate within 24 hours after aggregate con- DIDATES.—Within 24 hours after making a de- and adjusting the margins accordingly; tributions have been received or aggregate termination under subparagraph (A), the (3) in paragraph (1)(A) (as redesignated by expenditures have been made or obligated to Commission shall notify each eligible Senate paragraph (2))— be made in that amount (or, if later, within candidate in the general election of the mak- (A) by striking ‘‘forty-five’’ and inserting 24 hours after the date of qualification for ing of the determination. ‘‘30’’; the general election ballot), setting forth the ‘‘(d) CANDIDATES FOR OTHER OFFICES.— (B) by striking ‘‘sixty’’ and inserting ‘‘45’’; candidate’s aggregate amount of contribu- ‘‘(1) FILING.—Each individual— and tions received and aggregate amount of ex- ‘‘(A) who becomes a candidate for the of- (C) by striking ‘‘lowest unit charge of the penditures made or obligated to be made for fice of United States Senator; station for the same class and amount of the election as of the date of the report. ‘‘(B) who, during the election cycle for that time for the same period’’ and inserting ‘‘(B) ADDITIONAL REPORTS.—After an initial office, held any other Federal, State, or local ‘‘lowest charge of the station for the same report is filed under subparagraph (A), the office or was a candidate for any such office; amount of time for the same period on the candidate shall file additional reports (until and same date’’; and the amount of such contributions or expendi- ‘‘(C) who expended any amount during the (4) by adding at the end the following: tures exceeds 200 percent of the general elec- election cycle before becoming a candidate ‘‘(2) ELIGIBLE SENATE CANDIDATES.—In the tion expenditure limit) with the Secretary of for the office of United States Senator that case of an eligible Senate candidate (as de- the Senate within 24 hours after each time would have been treated as an expenditure if scribed in section 501 of the Federal Election additional contributions are received, or ex- the individual had been such a candidate (in- Campaign Act), the charges for the use of a penditures are made or are obligated to be cluding amounts for activities to promote television broadcasting station during the made, that in the aggregate exceed an the image or name recognition of the indi- general election period (as defined in section amount equal to 10 percent of the general vidual); 301 of that Act) shall not exceed 50 percent of election expenditure limit and after the ag- shall, within 7 days after becoming a can- the lowest charge described in paragraph gregate amount of contributions or expendi- didate for the office of United States Sen- (1)(A). tures exceeds 1331⁄3, 1662⁄3, and 200 percent of ator, report to the Secretary of the Senate (b) PREEMPTION; ACCESS.—Section 315 of the general election expenditure limit. the amount and nature of such expenditures. the Communications Act of 1947 (47 U.S.C. ‘‘(3) NOTIFICATION OF OTHER CANDIDATES.— ‘‘(2) APPLICABILITY.—Paragraph (1) shall 315) is amended— The Commission— not apply to any expenditures in connection (1) by redesignating subsections (c) and (d) ‘‘(A) shall, within 24 hours after receipt of with a Federal, State, or local election that as subsections (e) and (f), respectively; and a declaration or report under paragraph (1) has been held before the individual becomes (2) by inserting after subsection (b) the fol- or (2), notify each eligible Senate candidate a candidate for the office of United States lowing: of the filing of the declaration or report; and Senator. ‘‘(c) PREEMPTION.— ‘‘(B) if an opposing candidate has received ‘‘(3) DETERMINATION.—The Commission ‘‘(1) IN GENERAL.—Except as provided in aggregate contributions, or made or obli- shall, as soon as practicable, make a deter- paragraph (2), a licensee shall not preempt gated to make aggregate expenditures, in ex- mination as to whether any amounts re- the use, during any period specified in sub- cess of the general election expenditure ported under paragraph (1) were made for section (b)(1), of a broadcasting station by a limit, shall certify, under subsection (e), the purposes of influencing the election of the legally qualified candidate for public office eligibility for payment of any amount to individual to the office of Senator. who has purchased and paid for such use pur- which an eligible Senate candidate in the ‘‘(d) BASIS OF CERTIFICATIONS.—Notwith- suant to subsection (b)(1). general election is entitled under section standing section 505(a), the certification re- ‘‘(2) CIRCUMSTANCES BEYOND CONTROL OF LI- 504(a). quired by this section shall be made by the CENSEE.—If a program to be broadcast by a ‘‘(4) ACTION BY THE COMMISSION ABSENT RE- Commission on the basis of reports filed in broadcasting station is preempted because of PORT.— accordance with this Act or on the basis of circumstances beyond the control of the ‘‘(A) IN GENERAL.—Notwithstanding the re- the Commission’s own investigation or de- broadcasting station, any candidate adver- porting requirements under this subsection, termination. tising spot scheduled to be broadcast during the Commission may make its own deter- ‘‘(e) COPIES OF REPORTS AND PUBLIC INSPEC- that program may also be preempted.’’. mination that a candidate in a general elec- TION.—The Secretary of the Senate shall— ‘‘(d) TIME FOR LEGALLY QUALIFIED SENATE tion who is not an eligible Senate candidate ‘‘(1) transmit a copy of any report or filing CANDIDATES.—In the case of a legally quali- has raised aggregate contributions, or made received under this section or under title V fied candidate for the United States Senate, or has obligated to make aggregate expendi- (whenever a 24 hour response is required of a licensee shall provide broadcast time with- tures, in the amounts that would require a the Commission) as soon as possible (but not out regard to the rates charged for the report under paragraph (2). later than 4 working hours of the Commis- time.’’. ‘‘(B) NOTIFICATION OF ELIGIBLE SENATE CAN- sion) after receipt of the report or filing; SEC. 132. EXTENSION OF REDUCED THIRD-CLASS DIDATES.—The Commission shall— ‘‘(2) make the report or filing available for MAILING RATES TO ELIGIBLE SEN- ‘‘(i) within 24 hours after making a deter- public inspection and copying in the same ATE CANDIDATES. mination under subparagraph (A), notify manner as the Commission under section Section 3626(e) of title 39, United States each eligible Senate candidate in the general 311(a)(4); and Code, is amended— election of the making of the determination; ‘‘(3) preserve the reports and filings in the (1) in paragraph (2)(A)— and same manner as the Commission under sec- (A) by striking ‘‘and the National’’ and in- ‘‘(ii) when the aggregate amount of con- tion 311(a)(5).’’. serting ‘‘the National’’; and (B) by striking ‘‘Committee;’’ and insert- tributions or expenditures exceeds the gen- SEC. 104. DISCLOSURE BY CANDIDATES OTHER eral election expenditure limit, certify under THAN ELIGIBLE SENATE CAN- ing ‘‘Committee, and, subject to paragraph subsection (e) an eligible Senate candidate’s DIDATES. (3), the principal campaign committee of an eligibility for payment of any amount under Section 318 of the Federal Election Cam- eligible House of Representatives or Senate section 504(a). paign Act of 1971 (2 U.S.C. 441d) (as amended candidate;’’; ‘‘(c) REPORTS ON PERSONAL FUNDS.— by section 133) is amended by adding at the (2) in paragraph (2)(B), by striking ‘‘and’’ ‘‘(1) FILING.—A candidate for the Senate end the following: after the semicolon; who, during an election cycle, expends more ‘‘(f) DISCLOSURE BY CANDIDATES OTHER (3) in paragraph (2)(C), by striking the pe- than the personal funds expenditure limit THAN ELIGIBLE SENATE CANDIDATES.—A riod and inserting ‘‘; and’’; during the election cycle shall file a report broadcast, cablecast, or other communica- (4) by adding after paragraph (2)(C) the fol- with the Secretary of the Senate within 24 tion that is paid for or authorized by a can- lowing new subparagraph: S430 CONGRESSIONAL RECORD — SENATE January 21, 1997 ‘‘(D) The terms ‘eligible Senate candidate’ ‘llllllllll is responsible for the ‘‘(28) The term ‘election cycle’ means— and ‘principal campaign committee’ have the content of this advertisement.’; ‘‘(A) in the case of a candidate or the au- meanings given those terms in section 301 of with the blank to be filled in with the name thorized committees of a candidate, the pe- the Federal Election Campaign Act of 1971.’’; of the political committee or other person riod beginning on the day after the date of and paying for the communication and the name the most recent general election for the spe- (5) by adding after paragraph (2) the follow- of any connected organization of the payor; cific office or seat that the candidate is seek- ing paragraph: and, if the communication is broadcast or ing and ending on the date of the next gen- ‘‘(3) The rate made available under this cablecast by means of television, the state- eral election for that office or seat; and subsection with respect to an eligible Senate ment shall also appear in a clearly readable ‘‘(B) in the case of all other persons, the candidate shall apply only to— manner with a reasonable degree of color period beginning on the first day following ‘‘(A) the general election period (as defined contrast between the background and the the date of the last general election and end- in section 301 of the Federal Election Cam- printed statement, for a period of at least 4 ing on the date of the next general elec- paign Act of 1971); and seconds.’’. tion.’’. ‘‘(B) that number of pieces of mail equal to SEC. 134. DEFINITIONS. ‘‘(29) The term ‘lobbyist’ means— the number of individuals in the voting age (a) IN GENERAL.—Section 301 of the Federal ‘‘(A) a person required to register under population (as certified under section 315(e) Election Campaign Act of 1971 (2 U.S.C. 431) the Lobbying Disclosure Act of 1995 (2 U.S.C. of such Act) of the congressional district or is amended by striking paragraph (19) and in- 1601 et seq.) or the Foreign Agents Registra- State, whichever is applicable.’’. serting the following: tion Act of 1938 (22 U.S.C. 611 et seq.); and SEC. 133. CAMPAIGN ADVERTISING AMEND- ‘‘(19) The term ‘general election’— ‘‘(B) a person who receives compensation MENTS. ‘‘(A) means an election that will directly in return for having contact with Congress Section 318 of the Federal Election Cam- result in the election of a person to a Federal on any legislative matter.’’. paign Act of 1971 (2 U.S.C. 441d) is amended— office; but (b) IDENTIFICATION.—Section 301(13) of the (1) in subsection (a)— ‘‘(B) does not include an open primary elec- Federal Election Campaign Act of 1971 (2 (A) by striking ‘‘Whenever’’ and inserting tion. U.S.C. 431(13)) is amended by striking ‘‘mail- the following: ‘‘(20) The term ‘general election period’ ing address’’ and inserting ‘‘permanent resi- means, with respect to a candidate, the pe- ‘‘(a) DISCLOSURE.—When a political com- dence address’’. riod beginning on the day after the date of mittee makes a disbursement for the purpose SEC. 135. PROVISIONS RELATING TO FRANKED the primary or runoff election for the spe- of financing any communication through MASS MAILINGS. cific office that the candidate is seeking, any broadcasting station, newspaper, maga- (a) MASS MAILINGS OF SENATORS.—Section whichever is later, and ending on the earlier zine, outdoor advertising facility, mailing, 3210(a)(6) of title 39, United States Code, is of— or any other type of general public political amended— ‘‘(A) the date of the general election; or advertising, or when’’; (1) in subparagraph (A), by striking ‘‘It is ‘‘(B) the date on which the candidate with- (B) by striking ‘‘an expenditure’’ and in- the intent of Congress that a Member of, or draws from the campaign or otherwise ceases a Member-elect to, Congress’’ and inserting serting ‘‘a disbursement’’; actively to seek election. (C) by striking ‘‘direct’’; and ‘‘A Member of, or Member-elect to, the ‘‘(21) The term ‘immediate family’ means— House’’; and (D) in paragraph (3), by inserting ‘‘and per- ‘‘(A) a candidate’s spouse; manent street address’’ after ‘‘name’’; (2) in subparagraph (C)— ‘‘(B) a child, stepchild, parent, grand- (A) by striking ‘‘if such mass mailing is (2) in subsection (b), by inserting ‘‘SAME parent, brother, half-brother, sister, or half- CHARGE AS CHARGE FOR COMPARABLE USE.—’’ postmarked fewer than 60 days immediately sister of the candidate or the candidate’s before the date’’ and inserting ‘‘if such mass before ‘‘No’’; and spouse; and (3) by adding at the end the following: mailing is postmarked during the calendar ‘‘(C) the spouse of any person described in year’’; and ‘‘(c) REQUIREMENTS FOR PRINTED COMMU- subparagraph (B). NICATIONS.—A printed communication de- (B) by inserting ‘‘or reelection’’ before the ‘‘(22) The term ‘major party’ has the mean- period. scribed in subsection (a) shall be— ing given the term in section 9002(6) of the ‘‘(1) of sufficient type size to be clearly (b) MASS MAILINGS OF HOUSE MEMBERS.— Internal Revenue Code of 1986, except that if Section 3210 of title 39, United States Code, readable by the recipient of the communica- a candidate qualified under State law for the tion; is amended— ballot in a general election in an open pri- (1) in subsection (a)(7) by striking ‘‘, except ‘‘(2) contained in a printed box set apart mary in which all the candidates for the of- from the other contents of the communica- that—’’ and all that follows through the end fice participated and which resulted in the of subparagraph (B) and inserting a period; tion; and candidate and at least 1 other candidate’s ‘‘(3) consist of a reasonable degree of color and qualifying for the ballot in the general elec- (2) in subsection (d)(1) by striking ‘‘deliv- contrast between the background and the tion, the candidate shall be treated as a can- printed statement. ery—’’ and all that follows through the end didate of a major party for purposes of title of subparagraph (B) and inserting ‘‘delivery ‘‘(d) REQUIREMENTS FOR BROADCAST AND CA- V. within that area constituting the congres- BLECAST COMMUNICATIONS.— ‘‘(23) The term ‘primary election’ means an sional district or State from which the Mem- ‘‘(1) PAID FOR OR AUTHORIZED BY THE CAN- election that may result in the selection of a ber was elected.’’. DIDATE.— candidate for the ballot in a general election (c) PROHIBITION ON USE OF OFFICIAL ‘‘(A) IN GENERAL.—A broadcast or cablecast for a Federal office. FUNDS.—The Committee on House Adminis- communication described in paragraph (1) or ‘‘(24) The term ‘primary election period’ tration of the House of Representatives may (2) of subsection (a) shall include, in addition means, with respect to a candidate, the pe- not approve any payment, nor may a Mem- to the requirements of those paragraphs, an riod beginning on the day following the date ber of the House of Representatives make audio statement by the candidate that iden- of the last election for the specific office any expenditure from, any allowance of the tifies the candidate and states that the can- that the candidate is seeking and ending on House of Representatives or any other offi- didate has approved the communication. the earlier of— cial funds if any portion of the payment or ‘‘(B) TELEVISED COMMUNICATIONS.—A broad- ‘‘(A) the date of the first primary election expenditure is for any cost related to a mass cast or cablecast communication described for that office following the last general mailing by a Member of the House of Rep- in paragraph (1) that is broadcast or cable- election for that office; or resentatives outside the congressional dis- cast by means of television shall include, in ‘‘(B) the date on which the candidate with- trict of the Member. addition to the audio statement under sub- draws from the election or otherwise ceases paragraph (A), a written statement— actively to seek election. TITLE II—INDEPENDENT EXPENDITURES ‘‘(i) that states: ‘I [name of candidate] am ‘‘(25) The term ‘runoff election’ means an SEC. 201. DEFINITIONS. a candidate for [the office the candidate is election held after a primary election that is (a) INDEPENDENT EXPENDITURE; EXPRESS seeking], and I have approved this message’; prescribed by applicable State law as the ADVOCACY.—Section 301 of the Federal Elec- ‘‘(ii) that appears at the end of the commu- means for deciding which candidate will be tion Campaign Act of 1971 (2 U.S.C. 431) is nication in a clearly readable manner with a on the ballot in the general election for a amended by striking paragraphs (17) and (18) reasonable degree of color contrast between Federal office. and inserting the following: the background and the printed statement, ‘‘(26) The term ‘runoff election period’ ‘‘(17) INDEPENDENT EXPENDITURE.— for a period of at least 4 seconds; and means, with respect to any candidate, the ‘‘(A) IN GENERAL.—The term ‘independent ‘‘(iii) that is accompanied by a clearly period beginning on the day following the expenditure’ means an expenditure for an ad- identifiable photographic or similar image of date of the last primary election for the spe- vertisement or other communication that— the candidate. cific office that the candidate is seeking and ‘‘(i) contains express advocacy; and ‘‘(2) NOT PAID FOR OR AUTHORIZED BY THE ending on the date of the runoff election for ‘‘(ii) is made without the participation or CANDIDATE.—A broadcast or cablecast com- that office. cooperation of, or without the consultation munication described in subsection (a)(3) ‘‘(27) The term ‘voting age population’ of, a candidate or a candidate’s representa- shall include, in addition to the require- means the number of residents of a State tive. ments of that paragraph, in a clearly spoken who are 18 years of age or older, as certified ‘‘(B) EXCLUSIONS.—The term ‘independent manner, the statement— under section 315(e). expenditure’ does not include the following: January 21, 1997 CONGRESSIONAL RECORD — SENATE S431 ‘‘(i) An expenditure made by— SEC. 202. REPORTING REQUIREMENTS FOR CER- Commission shall, within 2 business days, ‘‘(I) an authorized committee of a can- TAIN INDEPENDENT EXPENDITURES. notify the eligible candidate that such can- didate; or (a) IN GENERAL.—Section 304 of the Federal didate is entitled to an increase under sec- ‘‘(II) a political committee of a political Election Campaign Act of 1971 (2 U.S.C. 434) tion 503(e) in the candidate’s applicable elec- party. is amended by adding at the end the follow- tion limit in an amount equal to the amount ‘‘(ii) An expenditure if there is any ar- ing: of such independent expenditures.’’. ‘‘(d) TIME FOR REPORTING CERTAIN EXPEND- rangement, coordination, or direction with ITURES.— TITLE III—EXPENDITURES respect to the expenditure between the can- ‘‘(1) EXPENDITURES AGGREGATING $1,000.— Subtitle A—Personal Funds; Credit didate or the candidate’s representative and ‘‘(A) INITIAL REPORT.—A person (including the person making the expenditure. SEC. 301. CONTRIBUTIONS AND LOANS FROM a political committee) that makes independ- PERSONAL FUNDS. ‘‘(iii) An expenditure if, in the same elec- ent expenditures aggregating $1,000 or more Section 315 of the Federal Election Cam- tion cycle, the person making the expendi- after the 20th day, but more than 24 hours, paign Act of 1971 (2 U.S.C. 441a) is amended ture— before an election shall file a report describ- by adding at the end the following: ‘‘(I) is or has been authorized to raise or ing the expenditures within 24 hours after ‘‘(i) LIMITATIONS ON REPAYMENT OF LOANS expend funds on behalf of the candidate or that amount of independent expenditures has AND RETURN OF CONTRIBUTIONS FROM PER- the candidate’s authorized committees; or been made. SONAL FUNDS.— ‘‘(II) is serving or has served as a member, ‘‘(B) ADDITIONAL REPORTS.—After a person ‘‘(1) REPAYMENT OF LOANS.—If a candidate employee, or agent of the candidate’s au- files a report under subparagraph (A), the or a member of the candidate’s immediate thorized committees in an executive or pol- person filing the report shall file an addi- family made a loan to the candidate or to icymaking position. tional report each time that independent ex- the candidate’s authorized committees dur- ‘‘(iv) An expenditure if the person making penditures aggregating an additional $1,000 ing an election cycle, no contribution re- the expenditure has played a significant role are made with respect to the same election ceived after the date of the general election in advising or counseling the candidate or as that to which the initial report relates. for the election cycle may be used to repay the candidate’s agents at any time on the ‘‘(2) EXPENDITURES AGGREGATING $10,000.— the loan. candidate’s plans, projects, or needs relating ‘‘(A) INITIAL REPORT.—A person (including ‘‘(2) RETURN OF CONTRIBUTIONS.—No con- to the candidate’s pursuit of nomination for a political committee) that makes independ- tribution by a candidate or member of the election, or election, to Federal office, in the ent expenditures aggregating $10,000 or more candidate’s immediate family may be re- same election cycle, including any advice re- at any time up to and including the 20th day turned to the candidate or member other lating to the candidate’s decision to seek before an election shall file a report describ- than as part of a pro rata distribution of ex- Federal office. ing the expenditures within 48 hours that cess contributions to all contributors.’’. amount of independent expenditures has ‘‘(v) An expenditure if the person making SEC. 302. EXTENSIONS OF CREDIT. been made. the expenditure retains the professional Section 301(8)(A) of the Federal Election ‘‘(B) ADDITIONAL REPORTS.—After a person services of any individual or other person Campaign Act of 1971 (2 U.S.C. 431(8)(A)), as files a report under subparagraph (A), the also providing services in the same election amended by section 201(b), is amended— person filing the report shall file an addi- cycle to the candidate in connection with (1) by striking ‘‘or’’ at the end of clause tional report each time that independent ex- the candidate’s pursuit of nomination for (ii); penditures aggregating an additional $10,000 election, or election, to Federal office, in- (2) by striking the period at the end of are made with respect to the same election cluding any services relating to the can- clause (iii) and inserting ‘‘; or’’; and as that to which the initial report relates. didate’s decision to seek Federal office. (3) by inserting at the end the following: ‘‘(3) PLACE OF FILING; CONTENTS; TRANSMIT- ‘‘(C) DEFINITIONS.—For purposes of sub- ‘‘(iv) with respect to a candidate and the TAL.— paragraph (B)— candidate’s authorized committees, any ex- ‘‘(A) PLACE OF FILING; CONTENTS.—A report ‘‘(i) the person making the expenditure in- tension of credit for goods or services relat- under this subsection— cludes any officer, director, employee, or ing to advertising on a broadcasting station, ‘‘(i) shall be filed with the Commission; agent of a person; and in a newspaper or magazine, or by a mailing, and ‘‘(ii) the term ‘professional service’ in- or relating to other similar types of general ‘‘(ii) shall contain the information re- cludes any service (other than legal and ac- public political advertising, if the extension quired by subsection (b)(6)(B)(iii), including counting services for purposes of ensuring of credit is— whether each independent expenditure was compliance with this title) in support of a ‘‘(I) in an amount greater than $1,000; and made in support of, or in opposition to, a candidate’s pursuit of nomination for elec- ‘‘(II) for a period greater than the period, candidate. tion, or election, to Federal office. not in excess of 60 days, for which credit is ‘‘(B) TRANSMITTAL TO CANDIDATES.—In the ‘‘(18) EXPRESS ADVOCACY.— generally extended in the normal course of case of an election for United States Sen- ‘‘(A) IN GENERAL.—The term ‘express advo- business after the date on which the goods or ator, not later than 48 hours after receipt of cacy’ means a communication that is taken services are furnished or the date of a mail- a report under this subsection, the Commis- as a whole and with limited reference to ex- ing.’’. ternal events, makes an expression of sup- sion shall transmit a copy of the report to Subtitle B—Soft Money of Political Party port for or opposition to a specific candidate, each eligible candidate seeking nomination Committees to a specific group of candidates, or to can- for election to, or election to, the office in didates of a particular political party. question. SEC. 311. SOFT MONEY OF POLITICAL PARTY COMMITTEES. ‘‘(B) EXPRESSION OF SUPPORT FOR OR OPPO- ‘‘(4) OBLIGATION TO MAKE EXPENDITURE.— SITION TO.—In subparagraph (A), the term For purposes of this subsection, an expendi- (a) SOFT MONEY OF COMMITTEES OF POLITI- ‘expression of support for or opposition to’ ture shall be treated as being made when it CAL PARTIES.—Title III of the Federal Elec- includes a suggestion to take action with re- is made or obligated to be made. tion Campaign Act of 1971 (2 U.S.C. 431 et spect to an election, such as to vote for or ‘‘(5) DETERMINATIONS BY THE COMMISSION.— seq.) is amended by adding at the end the fol- against, make contributions to, or partici- ‘‘(A) IN GENERAL.—The Commission may, lowing: pate in campaign activity, or to refrain from upon a request of a candidate or on its own ‘‘SEC. 324. SOFT MONEY OF POLITICAL PARTY taking action.’’. initiative, make its own determination that COMMITTEES. ‘‘(C) VOTING RECORDS.—The term ‘express a person, including a political committee, ‘‘(a) NATIONAL COMMITTEES.—A national advocacy’ does not include the publication has made, or has incurred obligations to committee of a political party and the con- and distribution of a communication that is make, independent expenditures with respect gressional campaign committees of a politi- limited to providing information about votes to any candidate in any Federal election cal party (including a national congressional by elected officials on legislative matters that in the aggregate exceed the applicable campaign committee of a political party, an and that does not expressly advocate the amounts under paragraph (1) or (2). entity that is established, financed, main- election or defeat of a clearly identified can- ‘‘(B) NOTIFICATION.—In the case of a United tained, or controlled by the national com- didate.’’. States Senator, the Commission shall notify mittee, a national congressional campaign each candidate in the election of the making committee of a political party, and an officer (b) CONTRIBUTION DEFINITION AMEND- of the determination within 2 business days or agent of any such party or entity but not MENT.—Section 301(8)(A) of the Federal Elec- after making the determination. including an entity regulated under sub- tion Campaign Act of 1971 (2 U.S.C. 431(8)(A)) ‘‘(C) TIME TO COMPLY WITH REQUEST FOR DE- section (b)) shall not solicit or accept an is amended— TERMINATION.—A determination made at the amount or spend any funds, or solicit or ac- (1) by striking ‘‘or’’ at the end of clause (i); request of a candidate shall be made with 48 cept a transfer from another political com- (2) by striking the period at the end of hours of the request. mittee, that is not subject to the limita- clause (ii) and inserting ‘‘; or’’; and ‘‘(6) NOTIFICATION OF AN ALLOWABLE IN- tions, prohibitions, and reporting require- (3) by adding at the end the following: CREASE IN INDEPENDENT EXPENDITURE LIMIT.— ments of this Act. ‘‘(iii) any payment or other transaction re- When independent expenditures totaling in ‘‘(b) STATE, DISTRICT, AND LOCAL COMMIT- ferred to in paragraph (17)(A)(i) that is ex- the aggregate $10,000 have been made in the TEES.— cluded from the meaning of ‘independent ex- same election in favor of another candidate ‘‘(1) IN GENERAL.—Any amount that is ex- penditure’ under paragraph (17)(B).’’. or against an eligible Senate candidate, the pended or disbursed by a State, district, or S432 CONGRESSIONAL RECORD — SENATE January 21, 1997

local committee of a political party (includ- other than a Federal election unless the (1) AUTHORIZED COMMITTEES.—Section ing an entity that is established, financed, funds— 304(b)(4) of the Federal Election Campaign maintained, or controlled by a State, dis- ‘‘(i) are not in excess of the amounts per- Act of 1971 (2 U.S.C. 434(b)(4)) is amended— trict, or local committee of a political party mitted with respect to contributions to can- (A) by striking ‘‘and’’ at the end of sub- and an agent or officer of any such commit- didates and political committees under sec- paragraph (H); tee or entity) during a calendar year in tion 315(a) (1) and (2); and (B) by inserting ‘‘and’’ at the end of sub- which a Federal election is held, for any ac- ‘‘(ii) are not from sources prohibited by paragraph (I); and tivity that might affect the outcome of a this Act from making contributions with re- (C) by adding at the end the following: Federal election, including any voter reg- spect to an election for Federal office. ‘‘(J) in the case of an authorized commit- istration or get-out-the-vote activity, any ‘‘(2) EXCEPTION.—Paragraph (1) does not tee, disbursements for the primary election, generic campaign activity, and any commu- apply to the solicitation or receipt of funds the general election, and any other election nication that identifies a candidate (regard- by an individual who is a candidate for a in which the candidate participates;’’. less of whether a candidate for State or local State or local office if the solicitation or re- (2) NAMES AND ADDRESSES.—Section office is also mentioned or identified) shall ceipt of funds is permitted under State law 304(b)(5)(A) of the Federal Election Campaign be made from funds subject to the limita- for the individual’s State or local campaign Act of 1971 (2 U.S.C. 434(b)(5)(A)) is amend- tions, prohibitions, and reporting require- committee.’’. ed— ments of this Act. SEC. 312. REPORTING REQUIREMENTS. (A) by striking ‘‘within the calendar year’’; ‘‘(2) ACTIVITY EXCLUDED FROM PARAGRAPH (a) REPORTING REQUIREMENTS.—Section 304 and (1).— of the Federal Election Campaign Act of 1971 (B) by striking ‘‘such operating expendi- ‘‘(A) IN GENERAL.—Paragraph (1) shall not (2 U.S.C. 434) is amended by adding at the tures’’ and inserting ‘‘operating expenses, apply to an expenditure or disbursement end the following: and the election to which the operating ex- made by a State, district, or local committee ‘‘(d) POLITICAL COMMITTEES.— pense relates’’. of a political party for— ‘‘(1) NATIONAL AND CONGRESSIONAL POLITI- ‘‘(i) a contribution to a candidate for State CAL COMMITTEES.—The national committee of TITLE IV—CONTRIBUTIONS or local office if the contribution is not des- a political party, a congressional campaign ignated or otherwise earmarked to pay for SEC. 401. CONTRIBUTIONS THROUGH committee of a political party, and any sub- INTERMEDIARIES AND CONDUITS; an activity described in paragraph (1); ordinate committee of a national committee PROHIBITION ON CERTAIN CON- ‘‘(ii) the costs of a State, district, or local or congressional campaign committee of a TRIBUTIONS BY LOBBYISTS. political convention; political party, shall report all receipts and (a) CONTRIBUTIONS THROUGH ‘‘(iii) the non-Federal share of a State, dis- disbursements during the reporting period, trict, or local party committee’s administra- whether or not in connection with an elec- INTERMEDIARIES AND CONDUITS.—Section tive and overhead expenses (but not includ- tion for Federal office. 315(a)(8) of FECA (2 U.S.C. 441a(a)(8)) is ing the compensation in any month of any ‘‘(2) OTHER POLITICAL COMMITTEES TO WHICH amended by striking paragraph (8) and in- individual who spends more than 20 percent SECTION 324 APPLIES.—A political committee serting the following: of the individual’s time on activity during (not described in paragraph (1)) to which sec- ‘‘(8) INTERMEDIARIES AND CONDUITS.— the month that may affect the outcome of a tion 324 applies shall report all receipts and ‘‘(A) DEFINITIONS.—In this paragraph: Federal election) except that for purposes of disbursements. ‘‘(i) ACTING ON BEHALF OF THE ENTITY.—The this paragraph, the non-Federal share of a ‘‘(3) TRANSFERS.—A political committee to term ‘acting on behalf of the entity’ means party committee’s administrative and over- which section 324 applies shall— soliciting one or more contributions— head expenses shall be determined by apply- ‘‘(A) include in a report under paragraph ‘‘(I) in the name of an entity; ing the ratio of the non-Federal disburse- (1) or (2) the amount of any transfer de- ‘‘(II) using other than incidental resources ments to the total Federal expenditures and scribed in section 324(d)(2); and of an entity; or non-Federal disbursements made by the ‘‘(B) itemize those amounts to the extent ‘‘(III) by directing a significant portion of committee during the previous presidential required by section 304(b)(3)(A). the solicitations to other officers, employ- election year to the committee’s administra- ‘‘(4) OTHER POLITICAL COMMITTEES.—Any ees, agents, or members of an entity or their tive and overhead expenses in the election political committee to which paragraph (1) spouses, or by soliciting a significant portion year in question; or (2) does not apply shall report any re- of the other officers, employees, agents, or ‘‘(iv) the costs of grassroots campaign ma- ceipts or disbursements that are used in con- members of an entity or their spouses. terials, including buttons, bumper stickers, nection with a Federal election. ‘‘(ii) BUNDLER.—The term ‘bundler’ means and yard signs that name or depict only a ‘‘(5) ITEMIZATION.—If a political committee an intermediary or conduit that is any of the candidate for State or local office; and has receipts or disbursements to which this following persons or entities: (v) the cost of any campaign activity con- subsection applies from any person aggregat- ‘‘(I) A political committee (other than the ducted solely on behalf of a clearly identified ing in excess of $200 for any calendar year, authorized campaign committee of the can- candidate for State or local office, if the can- the political committee shall separately didate that receives contributions as de- didate activity is not an activity described itemize its reporting for the person in the scribed in subparagraph (B) or (C)). in paragraph (1). same manner as under paragraphs (3)(A), (5), ‘‘(II) Any officer, employee or agent of a ‘‘(B) FUNDRAISING COSTS.—Any amount and (6) of subsection (b). political committee described in subclause spent by a national, State, district, or local ‘‘(6) REPORTING PERIODS.—Reports required (I). committee, by an entity that is established, to be filed by this subsection shall be filed ‘‘(III) An entity. financed, maintained or controlled by a for the same time periods as reports are re- ‘‘(IV) Any officer, employee, or agent of an State, district, or local committee of a polit- quired for political committees under sub- entity who is acting on behalf of the entity. ical party, or by an agent or officer of any section (a).’’. ‘‘(V) A person required to be listed as a lob- such committee or entity to raise funds that (b) REPORT OF EXEMPT CONTRIBUTIONS.— byist on a registration or other report filed are used, in whole or in part, in connection Section 301(8) of the Federal Election Cam- pursuant to the Lobbying Disclosure Act of with an activity described in paragraph (1) paign Act of 1971 (2 U.S.C. 431(8)) is amended 1995 (2 U.S.C. 1601 et seq.) or any successor shall be made from funds subject to the limi- by adding at the end the following: law that requires reporting on the activities tations, prohibitions, and reporting require- ‘‘(C) REPORTING REQUIREMENT.—The exclu- of a person who is a lobbyist or foreign ments of this Act. sion provided in subparagraph (B)(viii) shall agent. ‘‘(c) TAX-EXEMPT ORGANIZATIONS.—No na- not apply for purposes of any requirement to ‘‘(iii) DELIVER.—The term ‘deliver’ means tional, State, district, or local committee of report contributions under this Act, and all to deliver contributions to a candidate by a political party shall solicit any funds for or such contributions aggregating in excess of any method of delivery used or suggested by make any donations to an organization that $200 shall be reported.’’. a bundler that communicates to the can- is exempt from Federal taxation under sec- (c) REPORTS BY STATE COMMITTEES.—Sec- didate (or to the person who receives the tion 501(c) of the Internal Revenue Code of tion 304 of the Federal Election Campaign contributions on behalf of the candidate) 1986. Act of 1971 (2 U.S.C. 434 (as amended by sub- that the bundler collected the contributions ‘‘(d) CANDIDATES.— section (a)) is amended by adding at the end for the candidate, including such methods ‘‘(1) IN GENERAL.—Except as provided in the following: as— paragraph (2), no candidate, individual hold- ‘‘(f) FILING OF STATE REPORTS.—In lieu of ‘‘(I) personal delivery; ing Federal office, or agent of a candidate or any report required to be filed under this ‘‘(II) United States mail or similar serv- individual holding Federal office may— Act, the Commission may allow a State com- ices; ‘‘(A) solicit or receive funds in connection mittee of a political party to file with the ‘‘(III) messenger service; and with an election for Federal office unless the Commission a report required to be filed ‘‘(IV) collection at an event or reception. funds are subject to the limitations, prohibi- under State law if the Commission deter- ‘‘(iv) ENTITY.—The term ‘entity’ means a tions, and reporting requirements of this mines that such a report contains substan- corporation, labor organization, or partner- Act; or tially the same information as a report re- ship. ‘‘(B) solicit or receive funds that are to be quired under this Act.’’. ‘‘(B) TREATMENT AS CONTRIBUTIONS FROM expended in connection with any election for (d) OTHER REPORTING REQUIREMENTS.— PERSONS BY WHOM MADE.— January 21, 1997 CONGRESSIONAL RECORD — SENATE S433

‘‘(i) IN GENERAL.—For purposes of the limi- ‘lobbying contact’, and ‘lobbyist’ have the within 10 days after the date on which the tations imposed by this section, all contribu- meanings given those terms in section 3 of advance is made, and the value of advances tions made by a person, either directly or in- the Federal Lobbying Disclosure Act of 1995 on behalf of a committee does not exceed directly, on behalf of a candidate, including (2 U.S.C. 1602), except that— $500 with respect to an election.’’. contributions that are in any way earmarked ‘‘(A) the term ‘lobbyist’ includes a person TITLE V—REPORTING REQUIREMENTS or otherwise directed through an required to register under the Foreign intermediary or conduit to the candidate, SEC. 501. CHANGE IN CERTAIN REPORTING FROM Agents Registration Act of 1938 (22 U.S.C. 611 A CALENDAR YEAR BASIS TO AN shall be treated as contributions from the et seq.); and ELECTION CYCLE BASIS. person to the candidate. ‘‘(B) for purposes of this subsection, a lob- Paragraphs (2) through (7) of section 304(b) ‘‘(ii) REPORTING.—The intermediary or con- byist shall be considered to make a lobbying of Federal Election Campaign Act of 1971 (2 duit through which a contribution is made contact or communication with a member of U.S.C. 434(b)(2)–(7)) are amended by inserting shall report the name of the original contrib- Congress if the lobbyist makes a lobbying after ‘‘calendar year’’ each place it appears utor and the intended recipient of the con- contact or communication with— the following: ‘‘(election cycle, in the case of tribution to the Commission and to the in- ‘‘(i) the member of Congress; an authorized committee of a candidate for tended recipient. ‘‘(ii) any person employed in the office of Federal office)’’. ‘‘(C) TREATMENT AS CONTRIBUTIONS FROM the member of Congress; or SEC. 502. PERSONAL AND CONSULTING SERV- THE BUNDLER.—Contributions that a bundler ‘‘(iii) any person employed by a commit- ICES. delivers to a candidate, agent of the can- tee, joint committee, or leadership office Section 304(b)(5)(A) of Federal Election didate, or the candidate’s authorized com- who, to the knowledge of the lobbyist, was Campaign Act of 1971 (2 U.S.C. 434(b)(5)(A)) is mittee shall be treated as contributions from employed at the request of or is employed at amended by adding before the semicolon at the bundler to the candidate as well as from the pleasure of, reports primarily to, rep- the original contributor. the end the following: ‘‘, except that if a per- resents, or acts as the agent of the member son to whom an expenditure is made is mere- ‘‘(D) NO LIMITATION ON OR PROHIBITION OF of Congress.’’. ly providing personal or consulting services CERTAIN ACTIVITIES.—This subsection does SEC. 402. CONTRIBUTIONS BY DEPENDENTS NOT not— and is in turn making expenditures to other OF VOTING AGE. persons (not including employees) who pro- ‘‘(i) limit fundraising efforts for the benefit Section 315 of the Federal Election Cam- of a candidate that are conducted by another vide goods or services to the candidate or his paign Act of 1971 (2 U.S.C. 441a) (as amended or her authorized committees, the name and candidate or Federal officeholder; or by section 401(c)) is amended by adding at address of such other person, together with ‘‘(ii) prohibit any individual described in the end the following: the date, amount and purpose of such ex- subparagraph (A)(ii)(IV) from soliciting, col- ‘‘(n) DEPENDENTS NOT OF VOTING AGE.— penditure shall also be disclosed’’. lecting, or delivering a contribution to a ‘‘(1) IN GENERAL.—For purposes of this sec- candidate, agent of the candidate, or the tion, any contribution by an individual SEC. 503. CONTRIBUTIONS OF $50 OR MORE. candidate’s authorized committee if the indi- who— Section 304(b)(2)(A) of Federal Election vidual is not acting on behalf of the entity.’’. ‘‘(A) is a dependent of another individual; Campaign Act of 1971 (2 U.S.C. 434(b)2)(A)) is (b) PROHIBITION OF CERTAIN CONTRIBUTIONS and amended by inserting ‘‘, including the name BY LOBBYISTS.—Section 315 of the Federal ‘‘(B) has not, as of the time of the making and address of each person who makes con- Election Campaign Act of 1971 (2 U.S.C. 441a) of the contribution, attained the legal age tributions aggregating at least $50 but not (as amended by section 314(b)) is amended by for voting in an election to Federal office in more than $200 during the calendar year’’ adding at the end the following: the State in which the individual resides; after ‘‘political committees’’. ‘‘(m) PROHIBITION OF CERTAIN CONTRIBU- shall be treated as having been made by the SEC. 504. COMPUTERIZED INDICES OF CONTRIBU- TIONS BY LOBBYISTS.— TIONS. other individual. ‘‘(1) IN GENERAL.—A lobbyist, or a political Section 311(a) of Federal Election Cam- ‘‘(2) ALLOCATION BETWEEN SPOUSES.—If such committee controlled by a lobbyist, shall not paign Act of 1971 (2 U.S.C. 438(a)) is amend- individual described in paragraph (1) is the make a contribution to or solicit contribu- ed— dependent of another individual and the indi- tions for or on behalf of— (1) by striking ‘‘and’’ at the end of para- vidual’s spouse, a the contribution described ‘‘(A) a Federal officeholder or candidate for graph (9); in paragraph (1) shall be allocated among Federal office if, during the preceding 12 (2) by striking the period at the end of such individuals in the manner determined months, the lobbyist has made a lobbying paragraph (10) and inserting ‘‘; and’’; and by them.’’. contact with the officeholder or candidate; (3) by adding at the end the following new or SEC. 403. CONTRIBUTIONS TO CANDIDATES FROM paragraph: STATE AND LOCAL COMMITTEES OF ‘‘(B) any authorized committee of the ‘‘(11) maintain computerized indices of President or Vice President of the United POLITICAL PARTIES TO BE AGGRE- GATED. contributions of $50 or more.’’. States if, during the preceding 12 months, Section 315(a) of the Federal Election Cam- TITLE VI—FEDERAL ELECTION the lobbyist has made a lobbying contact paign Act of 1971 (2 U.S.C. 441a(a)) is amend- COMMISSION with a covered executive branch official. ed by adding at the end the following: ‘‘(2) CONTRIBUTIONS TO MEMBER OF CON- SEC. 601. USE OF CANDIDATES’ NAMES. ‘‘(9) AGGREGATION OF CONTRIBUTIONS FROM GRESS OR CANDIDATE FOR CONGRESS.—A lobby- Section 302(e)(4) of Federal Election Cam- STATE AND LOCAL COMMITTEES OF POLITICAL ist who, or a lobbyist whose political com- paign Act of 1971 (2 U.S.C. 432(e)(4)) is amend- PARTIES.—Notwithstanding paragraph (5)(B), ed to read as follows: mittee, has made a contribution to a mem- a candidate may not accept, with respect to ‘‘(4) NAME OF POLITICAL COMMITTEE.— ber of Congress or candidate for Congress (or an election, any contribution from a State or any authorized committee of the President) (A) AUTHORIZED COMMITTEE.—The name of local committee of a political party (includ- each authorized committee shall include the shall not, during the 12 months following ing any subordinate committee of such a such contribution, make a lobbying contact name of the candidate who authorized the committee), if the contribution, when added committee under paragraph (1). with the member or candidate who becomes to the total of contributions previously ac- ‘‘(B) UNAUTHORIZED COMMITTEE.—A politi- a member of Congress or with a covered ex- cepted from all such committees of that po- ecutive branch official. cal committee that is not an authorized litical party, exceeds would cause the total committee shall not include the name of any ‘‘(3) SOLICITATION OF CONTRIBUTIONS.—If a amount of contributions to exceed a limita- lobbyist advises or otherwise suggests to a candidate in its name or use the name of any tion on contributions to a candidate under candidate in any activity on behalf of such client of the lobbyist (including a client that this section.’’. is the lobbyist’s regular employer), or to a committee in such a context as to suggest SEC. 404. LIMITED EXCLUSION OF ADVANCES BY that the committee is an authorized commit- political committee that is funded or admin- CAMPAIGN WORKERS FROM THE istered by such a client, that the client or DEFINITION OF THE TERM ‘‘CON- tee of the candidate or that the use of the political committee should make a contribu- TRIBUTION’’. candidate’s name has been authorized by the tion to or solicit a contribution for or on be- Section 301(8)(B) of the Federal Election candidate.’’. half of— Campaign Act of 1971 (2 U.S.C. 431(8)(B)) is SEC. 602. REPORTING REQUIREMENTS. ‘‘(A) a member of Congress or candidate for amended— (a) OPTION TO FILE MONTHLY REPORTS— Congress, the making or soliciting of such a (1) in clause (xiii), by striking ‘‘and’’ after Section 304(a)(2) of Federal Election Cam- contribution is prohibited if the lobbyist has the semicolon at the end; paign Act of 1971 (2 U.S.C. 434(a)(2)) is amend- made a lobbying contact with the member of (2) in clause (xiv), by striking the period at ed— Congress within the preceding 12 months; or the end and inserting: ‘‘; and’’; and (1) in subparagraph (A) by striking ‘‘and’’ ‘‘(B) an authorized committee of the Presi- (3) by adding at the end the following new at the end; dent or Vice President, the making or solic- clause: (2) in subparagraph (B) by striking the pe- iting of such a contribution shall be unlawful ‘‘(xv) any advance voluntarily made on be- riod at the end and inserting ‘‘; and’’; and if the lobbyist has made a lobbying contact half of an authorized committee of a can- (3) by inserting the following new subpara- with a covered executive branch official didate by an individual in the normal course graph at the end: within the preceding 12 months. of such individual’s responsibilities as a vol- ‘‘(C) in lieu of the reports required by sub- ‘‘(4) DEFINITIONS.—In this subsection, the unteer for, or employee of, the committee, if paragraphs (A) and (B), the treasurer may terms ‘covered executive branch official’, the advance is reimbursed by the committee file monthly reports in all calendar years, S434 CONGRESSIONAL RECORD — SENATE January 21, 1997 which shall be filed no later than the 15th ‘‘(i) not less than all contributions and ex- has reason to expect to have, aggregate con- day after the last day of the month and shall penditures involved in the violation; and tributions or expenditures in excess of a be complete as of the last day of the month, ‘‘(ii) not greater than 200 percent of all threshold amount determined by the Com- except that, in lieu of filing the reports oth- contributions and expenditures involved in mission; and erwise due in November and December of any the violation; ‘‘(ii) may maintain and file them in that year in which a regularly scheduled general upon a proper showing that the person in- manner if not required to do so under regula- election is held, a pre-primary election re- volved has committed, or is about to commit tions prescribed under clause (i). port and a pre-general election report shall (if the relief sought is a permanent or tem- ‘‘(B) The Commission, in consultation with be filed in accordance with subparagraph porary injunction or a restraining order), a the Secretary of the Senate, shall prescribe (A)(i), a post-general election report shall be violation of this Act or chapter 95 of chapter regulations which allow persons to file des- filed in accordance with subparagraph 96 of the Internal Revenue Code of 1986.’’. ignations, statements, and reports required (A)(ii), and a year end report shall be filed no (3) KNOWING AND WILLFUL VIOLATION PEN- by this Act through the use of facsimile ma- later than January 31 of the following cal- ALTY.—Section 309(a)(6)(C) of Federal Elec- chines. endar year.’’. tion Campaign Act of 1971 (29 U.S.C. ‘‘(C) In prescribing regulations under this (b) FILING DATE.—Section 304(a)(4)(B) of 437g(6)(C)) is amended by striking ‘‘a civil paragraph, the Commission shall provide Federal Election Campaign Act of 1971 (2 penalty’’ and all that follows and inserting methods (other than requiring a signature on U.S.C. 434(a)(4)(B)) is amended by striking ‘‘a civil penalty which is—’’ the document being filed) for verifying des- ‘‘20th’’ and inserting ‘‘15th’’. ‘‘(i) not less than 200 percent of all con- ignations, statements, and reports covered SEC. 603. PROVISIONS RELATING TO THE GEN- tributions and expenditures involved in the by the regulations. Any document verified ERAL COUNSEL OF THE COMMIS- violation; and under any of the methods shall be treated for SION. ‘‘(ii) not greater than 250 percent of all all purposes (including penalties for perjury) (a) VACANCY IN THE OFFICE OF GENERAL in the same manner as a document verified COUNSEL.—Section 306(f) of Federal Election contributions and expenditures involved in by signature. Campaign Act of 1971 (2 U.S.C. 437c(f)) is the violation.’’. ‘‘(D) The Secretary of the Senate and the amended by adding at the end the following: SEC. 605. RANDOM AUDITS. Clerk of the House of Representatives shall ‘‘(5) VACANCY.—In the event of a vacancy in Section 311(b) of Federal Election Cam- ensure that any computer or other system the office of general counsel, the next high- paign Act of 1971 (2 U.S.C. 438(b)) is amend- that they may develop and maintain to re- est ranking enforcement official in the gen- ed— ceive designations, statements, and reports eral counsel’s office shall serve as acting (1) by inserting ‘‘(1)’’ before ‘‘The Commis- in the forms required or permitted under this general counsel with full powers of the gen- sion’’; and paragraph is compatible with any such sys- eral counsel until a successor is appointed.’’. (2) by adding at the end the following new tem that the Commission may develop and (b) PAY OF THE GENERAL COUNSEL.—Section paragraph: 306(f)(1) of Federal Election Campaign Act of ‘‘(2) RANDOM AUDITS.— maintain.’’. 1971 (2 U.S.C. 437c(f)(1)) is amended— ‘‘(A) IN GENERAL.—Notwithstanding para- TITLE VII—MISCELLANEOUS (1) by inserting ‘‘and the general counsel’’ graph (1), the Commission may from time to after ‘‘staff director’’ in the second sentence; time conduct random audits and investiga- SEC. 701. PROHIBITION OF LEADERSHIP COMMIT- and tions to ensure voluntary compliance with TEES. this Act. (2) by striking the third sentence. (a) DEFINITIONS.—Section 301 of the Fed- SEC. 604. PENALTIES. ‘‘(B) SELECTION OF SUBJECTS.—The subjects eral Election Campaign Act of 1971 (2 U.S.C. of such audits and investigations shall be se- (a) PENALTIES PRESCRIBED IN CONCILIATION 431) is amended by adding at the end the fol- lected on the basis of criteria established by AGREEMENTS.— lowing: (1) CIVIL PENALTY FOR VIOLATION OF ACT.— vote of at least 4 members of the Commis- Section 309(a)(5)(A) of Federal Election Cam- sion to ensure impartiality in the selection (b) PROHIBITION.—Section 302(e) of the Fed- paign Act of 1971 (2 U.S.C. 437g(a)(5)(A)) is process. eral Election Campaign Act of 1971 (2 U.S.C. amended by striking ‘‘which does not exceed ‘‘(C) APPLICABILITY.—This paragraph does 432(e)) is amended— the greater of $5,000 or an amount equal to not apply to an authorized committee of an (1) by striking paragraph (3) and inserting any contribution or expenditure involved in eligible Senate candidate subject to audit the following: such violation’’ and inserting ‘‘which is— under section 505(a) or an authorized com- ‘‘(3) LIMITATIONS.—A political committee ‘‘(i) not less than 50 percent of all contribu- mittee of an eligible House of Representa- that supports or has supported more than 1 tions and expenditures involved in the viola- tives candidate subject to audit under sec- candidate shall not be designated as an au- tion (or such lesser amount as the Commis- tion 605(a).’’. thorized committee, except that— sion provides if necessary to ensure that the SEC. 606. PROHIBITION OF FALSE REPRESENTA- ‘‘(A) a candidate for the office of President penalty is not unjustly disproportionate to TION TO SOLICIT CONTRIBUTIONS. nominated by a political party may des- the violation); and Section 322 of Federal Election Campaign ignate the national committee of the politi- ‘‘(ii) not greater than all contributions and Act of 1971 (2 U.S.C. 441h) is amended— cal party as the candidate’s principal cam- expenditures involved in the violation’’. (1) by inserting after ‘‘SEC. 322.’’ the fol- paign committee if the national committee (2) PENALTY FOR KNOWING AND WILLFUL VIO- lowing: ‘‘(a)’’; and maintains separate books of account with re- LATION OF ACT.—Section 309(a)(5)(B) of Fed- (2) by adding at the end the following: spect to its functions as a principal cam- eral Election Campaign Act of 1971 (2 U.S.C. ‘‘(b) FALSE SOLICITATION OF CONTRIBU- paign committee; and 437g(a)(5)(B)) is amended by striking ‘‘which TIONS.—No person shall solicit contributions ‘‘(B) a candidate may designate a political does not exceed the greater of $10,000 or an by falsely representing himself as a can- committee established solely for the purpose amount equal to 200 percent of any contribu- didate or as a representative of a candidate, of joint fundraising by such candidates as an tion or expenditure involved in such viola- a political committee, or a political party.’’. authorized committee.’’; and tion’’ and inserting ‘‘which is— SEC. 607. REGULATIONS RELATING TO USE OF (2) by adding at the end the following: ‘‘(i) not less than all contributions and ex- NON-FEDERAL MONEY. ‘‘(6) PROHIBITION OF LEADERSHIP COMMIT- penditures involved in the violation; and Section 306 of Federal Election Campaign TEES.— ‘‘(ii) not greater than 150 percent of all Act of 1971 (2 U.S.C. 437c) is amended by add- ‘‘(A) IN GENERAL.— contributions and expenditures involved in ing at the end the following: ‘‘(i) PROHIBITION.—A candidate for Federal the violation’’. ‘‘(g) REGULATIONS.—The Commission shall office or an individual holding Federal office (b) PENALTIES WHEN VIOLATIONS ARE ADJU- promulgate regulations to prohibit devices shall not establish, finance, maintain, or DICATED IN COURT.— or arrangements which have the purpose or control any political committee or non-Fed- (1) COMMISSION PROCEEDINGS INSTITUTED effect of undermining or evading the provi- eral political committee other than a prin- FOR AN ORDER.—Section 309(a)(6)(A) of Fed- sions of this Act restricting the use of non- cipal campaign committee of the candidate, eral Election Campaign Act of 1971 (2 U.S.C. Federal money to affect Federal elections.’’. authorized committee, party committee, or 437g(a)(6)(A)) is amended by striking all that SEC. 608. FILING OF REPORTS USING COMPUT- other political committee designated in ac- follows ‘‘appropriate order’’ and inserting ‘‘, ERS AND FACSIMILE MACHINES. cordance with paragraph (3). including an order for a civil penalty in the Section 302(g) of the Federal Election Cam- ‘‘(ii) CANDIDATE FOR MORE THAN 1 OFFICE.— amount determined under subparagraph (A) paign Act of 1971 (2 U.S.C. 432(g)) is amended A candidate for more than 1 Federal office or (B) in the district court of the United by adding at the end the following new para- may designate a separate principal campaign States for the district in which the defend- graph: committee for the campaign for election to ant resides, transacts business, or may be ‘‘(6)(A) The Commission, in consultation each Federal office. found.’’. with the Secretary of the Senate, may pre- ‘‘(B) TRANSITION.— (2) COURT ORDERS.—Section 309(a)(6)(B) of scribe regulations under which persons re- ‘‘(i) CONTINUATION FOR 12 MONTHS.—For a Federal Election Campaign Act of 1971 (2 quired to file designations, statements, and period of 12 months after the effective date U.S.C. 437g(a)(6)(B)) is amended by striking reports under this Act— of this paragraph, any political committee all that follows ‘‘other order’’ and inserting ‘‘(i) are required to maintain and file them established before that date but that is pro- ‘‘, including an order for a civil penalty for any calendar year in electronic form ac- hibited under subparagraph (A) may con- which is— cessible by computers if the person has, or tinue to make contributions. January 21, 1997 CONGRESSIONAL RECORD — SENATE S435 ‘‘(ii) DISBURSEMENT AT THE END OF 1 YEAR.— SEC. 802. SEVERABILITY. home and community-based long-term At the end of that period the political com- Except as provided in section 101(c), if any care services was implemented briefly mittee shall disburse all funds by 1 or more provision of this Act (including any amend- in 1991, but was terminated because of ment made by this Act), or the application of of the following means: the significant problems experienced ‘‘(I) Making contributions a person de- any such provision to any person or cir- scribed in section 501(c)(3) of the Internal cumstance, is held invalid, the validity of with the home and Medicaid waiver Revenue Code of 1986 and exempt from tax- any other provision of this Act, or the appli- programs. Many cases were docu- ation under section 501(a) of the United cation of the provision to other persons and mented where individuals needing States Code. circumstances, shall not be affected thereby. long-term care refused community- ‘‘(II) Making a contribution to the Treas- SEC. 803. EXPEDITED REVIEW OF CONSTITU- based care because of their fear of es- ury of the United States. TIONAL ISSUES. tate recovery or the placement of a ‘‘(III) Contributing to the national, State, (a) DIRECT APPEAL TO SUPREME COURT.—An lien on their homes. appeal may be taken directly to the Supreme or local committee of a political party. One case in southwestern Wisconsin ‘‘(IV) Making a contribution of not to ex- Court of the United States from any inter- ceed $1,000 each to candidates or non-Federal locutory order or final judgment, decree, or involved an older woman who was suf- candidates.’’. order issued by any court ruling on the con- fering from congestive heart failure, SEC. 702. POLLING DATA CONTRIBUTED TO CAN- stitutionality of any provision of this Act or phlebitis, severe arthritis, and who had DIDATES. amendment made by this Act. difficulty just being able to move. She Section 301(8) of Federal Election Cam- (b) ACCEPTANCE AND EXPEDITION.—The Su- was being screened for the Medicaid paign Act of 1971 (2 U.S.C. 431(8)), as amended preme Court shall, if it has not previously version of Wisconsin’s model home and by section 314(b), is amended by inserting at ruled on the question addressed in the ruling community-based long-term care pro- the end the following: below, accept jurisdiction over, advance on the docket, and expedite the appeal to the gram, the Community Options Pro- ‘‘(D) VALUATION OF POLLING DATA AS A CON- greatest extent possible. gram, when the caseworker told her of TRIBUTION.—A contribution of polling data to the new law, and that a lien would be a candidate shall be valued at the fair mar- ket value of the data on the date the poll By Mr. FEINGOLD. put on the estate of the program’s cli- was completed, depreciated at a rate not S. 58. A bill to modify the estate re- ents. The caseworker reported that the more than 1 percent per day from such date covery provisions of the medicaid pro- older woman began to sob, and told the to the date on which the contribution was gram to give States the option to re- caseworker that she had worked hard made.’’. cover the costs of home and commu- all her life and paid taxes and could not SEC. 703. RESTRICTIONS ON USE OF CAMPAIGN nity-based services for individuals over understand why the things she had FUNDS FOR PERSONAL PURPOSES. age 55; to the Committee on Finance. worked for so hard would be taken (a) RESTRICTIONS ON USE OF CAMPAIGN MEDICAID BENEFICIARIES LEGISLATION from her family after her death. FUNDS.—Title III of Federal Election Cam- Mr. FEINGOLD. Mr. President, I am When asked if she would like to re- paign Act of 1971 (2 U.S.C. 431 et seq.) (as pleased to introduce legislation today ceive services, the client refused. As amended by section 311) is amended by add- ing at the end the following: to eliminate the current mandate on frail as this client was, the social States to place liens on the homes and worker noted that she preferred to ‘‘SEC. 325. RESTRICTIONS ON USE OF CAMPAIGN FUNDS FOR PERSONAL PURPOSES. estates of older Medicaid beneficiaries chance being on her own rather than ‘‘(a) DEFINITIONS.—In this section: receiving home and community-based endanger her meager estate by using ‘‘(1) CAMPAIGN EXPENSE.—The term ‘cam- long-term care services, and to provide Medicaid funded services. paign expense’ means an expense that is at- more than adequate funding for that In northeastern Wisconsin, a 96-year- tributable solely to a bona fide campaign change by establishing a certificate of old woman was being care for by her 73- purpose. need process to regulate the growth of year-old widowed daughter in their ‘‘(2) INHERENTLY PERSONAL PURPOSES.—The federally funded nursing home beds. home. The family was receiving some term ‘inherently personal purpose’ means a This legislation modifies the estate Medicaid long-term care services, in- purpose that, by its nature, confers a per- sonal benefit, including a home mortgage, recovery provisions of OBRA 93 to clar- cluding respite services for the elderly rent, or utility payment, clothing purchase, ify that States may pursue recovery of caregiver daughter, but the family dis- noncampaign automobile expense, country the cost of Medicaid home and commu- continued all services when they heard club membership, vacation, or trip of a non- nity-based long-term care services of the new law because the older campaign nature, household food items, tui- from the estate of beneficiaries, but daughter needed to count on the home tion payment, admission to a sporting event, that States are not required to do so. for security in her own old age. concert, theater or other form of entertain- Mr. President, slowing the growth of A 72-year-old man, who had 4 by-pass ment not associated with a campaign, dues, rising Medicaid costs is central to eas- surgeries and was paralyzed on one fees, or contributions to a health club or rec- ing pressure on both Federal and State reational facility, and any other inherently side, and his 66-year-old wife, who had personal living expense as determined under budgets, and addressing the long-term 3 by-pass surgeries and rheumatoid ar- the regulations promulgated pursuant to sec- care portion of those Medicaid budgets thritis, both needed some assistance to tion 301(b) of the Senate Campaign Financ- is a key to containing those costs. be able to live together at home. But ing and Spending Reform Act. Meaningful reform of our long-term when Medicaid was suggested, they re- ‘‘(b) PERMITTED AND PROHIBITED USES.—An care system is the ultimate solution to fused because of the new law. individual who receives contributions as a this problem, and I will introduce long- Mr. President, these examples are candidate for Federal office— term care reform legislation in the not unusual. Nor were many of the in- ‘‘(1) shall use the contributions only for le- near future that will outline the path dividuals and families who refused help gitimate and verifiable campaign expenses; and we need to follow—helping States pro- protecting vast estates. For many, the ‘‘(2) shall not use the contributions for any vide flexible, consumer-oriented and estates being put at risk were modest inherently personal purpose.’’. consumer-directed home and commu- at best. A couple in the Green Bay area (b) REGULATION.—Not later than 90 days nity-based long-term care services. of Wisconsin who lived in a mobile after the date of enactment of this Act, the In the meantime, however, we can home and had less than $20,000 in life Federal Election Commission shall issue a take a few important steps down the savings told the local benefit specialist regulation consistent with this Act to imple- path toward long-term care reform by that they would refuse Medicaid funded ment subsection (a). The regulation shall repealing the cumbersome mandate on services rather than risk not leaving apply to all contributions possessed by an in- States that they recover the cost of dividual on the date of enactment of this their small estate to their family mem- Act. some services by imposing liens on the bers. homes and estates of seniors using Leaving even a small bequest to a TITLE VIII—EFFECTIVE DATES; loved-one is a fundamental and deeply AUTHORIZATIONS home and community-based long-term care services. felt need of many seniors. Even the SEC. 801. EFFECTIVE DATE. Mr. President, in the past, States most modest home can represent a life- Except as otherwise provided in this Act have had the option of recovering pay- and the amendments made by this Act shall time’s work, and many are willing to take effect on the date of the enactment of ments for those services from the es- forego medical care they know they this Act but shall not apply with respect to tates of beneficiaries, but in some need to be able to leave a small legacy. activities in connection with any election cases, at least, have chosen not to do Mr. President, while the vision of occurring before January 1, 1999. so. In Wisconsin, estate recovery for this mandate on States from inside the S436 CONGRESSIONAL RECORD — SENATE January 21, 1997 Washington beltway may appear sim- natives. A recent study in Wisconsin rent long-term care system. In Wiscon- ple, the estate recovery requirements showed that two Medicaid waiver pro- sin, limiting nursing home bed growth are not so simple for program adminis- grams saved $17.6 million in 1992 by has been part of the success of the trators. States, counties, and nonprofit providing home and community-based long-term care reforms initiated in the agencies, administrators of Medicaid alternatives to institutional care. early 1980’s. While the rest of the coun- services, are ill-equipped to be real es- In that context, retaining the more try experienced a 46-percent increase in tate agents. expansive institutional care alter- Medicaid nursing home bed use be- Further, divestment concerns in the natives in the estate recovery mandate tween 1980 and 1993, Wisconsin saw Medicaid Program, already a problem, makes good sense, and my legislation Medicaid nursing home bed use decline could continue to grow as pressure to would not change that portion of the by 15 percent. utilize existing loopholes increases law. But it does not make sense to The certificate of need provision is with estate recovery mandated in this jeopardize a program that has produced far more modest than the absolute cap way. Worse, as the Coalition of Wiscon- many more times the savings in low- on nursing home beds adopted in Wis- sin Aging Groups has pointed out, chil- ered institutional costs than even the consin, and recognizes that there needs dren who feel ‘‘entitled to inheritance’’ overly optimistic estimates suggest to be some flexibility to recognize the might force transfers, constituting could be recovered from the estates of differences of long-term care services elder abuse in some cases. those receiving home and community- among States. It is also consistent Too, Mr. President, there is a very based long-term care. with the kind of long-term care reform real question of age discrimination All in all, the estate recovery provi- I will be proposing as separate legisla- with the estate recovery provisions of sions of OBRA 93 are likely to produce tion. OBRA 93. Only individuals over age 55 more expensive utilization of Medicaid Certainly, our ability to reform long- are subject to estate recovery. Such services, may cause an administrative term care will depend not only on es- age-based distinctions border on age nightmare for State and local govern- tablishing a consumer-oriented, discrimination and ought to be mini- ment, could aggravate the divestment consumer-directed home and commu- mized. problem, may result in increased elder nity-based services that are available Mr. President, because I am commit- abuse, and could well constitute age to the severely disabled of all ages, but ted to reducing the deficit and bal- discrimination. also on establishing a more balanced Though many long-term care experts ancing the budget, I firmly believe we and cost-effective allocation of public maintain that mandating estate recov- must find offsetting spending cuts to support of long-term care services by ery for home and community-based fully fund legislative proposals, even eliminating the current bias toward in- long-term care services will only lead when we might disagree with the cost stitutional care. to increased utilization of more expen- estimates for those proposals. For that Mr. President, taken together, the sive institutional alternatives, and reason, I have included provisions in change in the estate recovery provi- thus increased cost to Federal tax- this measure that have been scored by sions and the slowing of nursing home payers, the CBO estimated a revenue the Congressional Budget Office to bed growth, these two provisions will loss of $20 million in the first year and more than offset the officially esti- help shift the current distorted Federal $260 million over 5 years for this pro- mated loss in savings from the estate long-term care policy away from the posal. recovery mandate. Nevertheless, while As I noted above, it is important to institutional bias that currently exists this bill includes offsetting cuts to act responsibly to fund that formal and toward a more balanced approach fund the proposed change, I also believe cost estimate with offsetting spending that emphasizes home and community- that the savings ascribed to the exist- cuts. The additional savings I firmly based services. ing mandate are questionable. believe will be generated beyond the That is the direction that we will Prior to enacting estate recovery in scored amounts would then help reduce need to take if we are to achieve sig- Wisconsin, officials estimated $13.4 our Federal budget deficit. This meas- nificant long-term care reform. million a year could be recovered by ure includes a provision that more Mr. President, I ask unanimous con- the liens. Real collections fell far than offsets the official scored revenue sent that the text of the legislation be short. For fiscal year 1992, the State loss from eliminating the estate recov- printed in the RECORD. There being no objection, the bill was only realized a reported $1 million in ery mandate. That provision regulates collections. And for the period of Janu- the growth in the number of nursing ordered to be printed in the RECORD, as ary to July of 1993, even after officials home beds eligible for Federal funding follows: lowered their estimates, only $2.2 mil- through Medicaid, Medicare, or other S. 58 lion was realized of an expected $3.8 Federal programs by requiring provid- Be it enacted by the Senate and House of Rep- million in collections. ers to obtain a certificate of need resentatives of the United States of America in Congress assembled, In addition to lower than expected [CON] to operate additional beds. collections, the refusal to accept home For any specified area, States would SECTION 1. MEDICAID ESTATE RECOVERIES. and community-based long-term care Section 1917(b)(1)(B) of the Social Security issue a CON only if the ratio of the Act (42 U.S.C. 1396p(b)(1)(B)) is amended by because of the prospect of a lien on the number of nursing home beds to the estate could lead to the earlier and striking ‘‘consisting of—’’ and all that fol- population that is likely to need them lows through the period and inserting the more costly need for institutional care. falls below guidelines set by the State following: ‘‘consisting of— Such a result would not only undercut and subject to Federal approval. ‘‘(i) nursing facility services and related the questionable savings from the pro- This approach allows new nursing hospital and prescription drug services; and gram, but would be directly contrary home beds to operate where there is a ‘‘(ii) at the option of the State, any addi- to the Medicaid home and community- demonstrated need, while limiting the tional items or services under the State based waiver program,which is in- potential burden on the taxpayer where plan.’’. tended precisely to keep people out of no such need has been established. CBO SEC. 2. REQUIRING STATES TO REGULATE institutions and in their own homes GROWTH IN THE NUMBER OF NURS- has estimated that the proposed regu- ING FACILITY BEDS. and communities. lation of nursing home bed growth (a) IN GENERAL.—A nursing facility shall The brief experience we had in Wis- would generate savings of $35 million not receive reimbursement under the medi- consin led the State to limit estate re- in the first year, and $625 million over care program under title XVIII of the Social covery to nursing home care and relat- 5 years, more than offsetting the CBO Security Act, the medicaid program under ed services, where, as a practical mat- estimates for removing the State man- title XIX of such Act, or any other Federal ter, the potential for estate recovery date on estate recoveries sought in this program for services furnished with respect and liens on homes are much less of a bill. The net fiscal effect of this pro- to any beds first operated by such facility on barrier to services. Indeed, just as we or after the date of the enactment of this posal would be to generate about $15 Act unless a certificate of need is issued by should provide financial incentives to million in savings in the first year, and the State with respect to such beds. individuals to use more cost-effective $365 million over 5 years. (b) ISSUANCE OF CERTIFICATE.—A certificate care, so too should we consider finan- Slowing the growth of nursing home of need may be issued by a State with re- cial disincentives for more costly alter- beds is critical to reforming the cur- spect to a geographic area only if the ratio of January 21, 1997 CONGRESSIONAL RECORD — SENATE S437 the number of nursing facility beds in such mental and public health hazards asso- Project ELF is a perfect target for ter- area to the total population in such area ciated with it. While I have heard some mination. that is likely to need such beds is below the ELF supporters say there is no appar- Mr. President, I ask unanimous con- ratio included in guidelines that are estab- sent that the text of the bill be printed lished by the State and approved by the Sec- ent environmental impact of Project retary of Health and Human Services under ELF, we can only conclude that we do in the RECORD. subsection (c). not know that—in fact, we do not know There being no objection, the bill was (c) APPROVAL OF GUIDELINES.—The Sec- much about its impact at all. ordered to be printed in the RECORD, as retary of Health and Human Services shall The Navy itself had yet to conclude follows: promulgate regulations under which States definitively that operating Project S. 59 may submit proposed guidelines for the issu- ELF is safe for the residents living Be it enacted by the Senate and House of Rep- ance of certificates of need under subsection near the site. It you are a resident in resentatives of the United States of America in (b) for review and approval. Congress assembled, (d) DEFINITION OF NURSING FACILITY.—In Clam Lake, that is unsettling informa- SECTION 1. SHORT TITLE. this section, the term ‘‘nursing facility’’ has tion. For example, in 1992, a Swedish study found that children exposed to This Act may be cited as the ‘‘Extremely the meaning given the terms— Low Frequency Communication System Ter- (1) ‘‘skilled nursing facility’’, under the relatively weak magnetic fields from mination and Deficit Reduction Act of 1997’’. medicare program under title XVIII of the powerlines develop leukemia at almost SEC. 2. PROHIBITION OF FURTHER FUNDING OF Social Security Act; and four times the expected rate. We also THE EXTREMELY LOW FREQUENCY (2) ‘‘nursing facility’’, under the medicaid know that in 1984, a U.S. district court COMMUNICATION SYSTEM. program under title XIX of such Act. ruling on State of Wisconsin versus (a) PROHIBITION ON USE OF FUNDS.—Except Weinberger ordered Project ELF to be as provided in subsection (b), funds appro- By Mr. FEINGOLD (for himself priated on or after the date of enactment of and Mr. KOHL): shut down because the Navy paid inad- this Act to or for the use of the Department S. 59. A bill to terminate the Ex- equate attention to the system’s pos- of Defense may not be obligated or expended tremely Low Frequency Communica- sible health effects and violated the for the Extremely Low Frequency Commu- tion System of the Navy; to the Com- National Environmental Policy Act. nication System of the Navy. mittee on Armed Services. That decision was overturned on ap- (b) LIMITED EXCEPTION FOR TERMINATION peal, however, in a ruling that claimed COSTS.—Subsection (a) does not apply to ex- EXTREMELY LOW FREQUENCY COMMUNICATION penditures solely for termination of the Ex- SYSTEM TERMINATION AND DEFICIT REDUC- national security interests at the time tremely Low Frequency Communication TION ACT OF 1997 prevailed over environmental concerns. System. Mr. FEINGOLD. Mr. President, today More recent studies of the impact of I am introducing legislation for myself electromagnetic fields in general still By Mr. LOTT: and Senator KOHL, which we offered leave unanswered questions and con- S. 61. A bill to amend title 46, United during the 103d and 104th Congress to cerns. States Code, to extend eligibility for terminate the Extremely Low Fre- During the 103d Congress, I worked veterans’ burial benefits, funeral bene- quency Communications System, lo- with the Senator from Georgia, Sen- fits, and related benefits for veterans of cated in Clam Lake, WI, and Republic, ator NUNN to include an amendment in certain service in the United States MI. the National Defense Authorization merchant marine during World War II; This project has been opposed by Act for fiscal year 1994 requiring a re- to the Committee on Veterans Affairs. residents of Wisconsin since its incep- port by the Secretary of Defense on the THE MERCHANT MARINERS FAIRNESS ACT OF 1997 tion, but for years we were told that benefits and costs of continued oper- Mr. LOTT. Mr. President, today, it is the national security considerations of ation of Project ELF. The report issued my pleasure to introduce the Merchant the cold war outweighed our concerns by DOD was particularly disappointing Mariners Fairness Act. My bill would about this installation in our State. As because it basically argued that be- grant veterans status to American we continue our efforts to reduce the cause Project ELF may have a purpose merchant mariners who have been de- Federal budget deficit and as the De- during the cold war, it should continue nied this status. partment of Defense continues to to operate after the cold war as part of In 1988, the Secretary of the Air struggle to meet a tighter budget, it is the complete complement of command Force decided, for the purposes of clear that Project ELF should be and control links configured for the granting veterans benefits to merchant closed down. If enacted, my legislation cold war. seamen, that the cut-off date for serv- would save $9 to $20 million a year. Did Project ELF play a role in help- ice would be August 15, 1945, V–J Day, Project ELF was developed in the ing to minimize the Soviet threat? Per- rather than December 31, 1946, when late 1970’s as an added protection haps. Did it do so at risk to the com- hostilities were declared officially against the Soviet naval nuclear de- munity? Perhaps. Does it continue to ended. My bill would correct the 1988 ployment. It is an electromagnetic play a vital security role to the Na- decision and extend veterans benefits messenger system—otherwise known as tion? No. to merchant mariners who served from a bell ringer—used primarily to tell a Most of us in Wisconsin don’t want it August 15, 1945 to December 31, 1946. It deeply submerged Trident submarine anymore. Many of my constituents would extend eligibility for burial ben- that it needs to surface to retrieve a have opposed Project ELF since its in- efits and related veterans benefits for message. Because it communicates ception. Congressman DAVID OBEY has certain members of the U.S. Merchant through very primitive pulses, called consistently sought to terminate Marine during World War II. phonetic-letter-spelled-out [PLSO] Project ELF, and in fact, we have him I urge my distinguished colleagues to messages, ELF’s radiowaves transmit to thank in part for getting ELF scaled join me in supporting this important very limited messages. down from the large-scale project first legislation. With the end of the cold war, Project conceived by the Carter administra- ELF becomes harder and harder to jus- tion. I look forward to continue work- By Mr. CRAIG (for himself and tify. Trident submarines no longer ing with him on this issue in the 105th Mr. KEMPTHORNE): need to take that extra precaution Congress. S. 62. A bill to prohibit further exten- against Soviet nuclear forces. They can As we take up the budget for fiscal sion of establishment of any national now surface on a regular basis with less year 1998, the Department of Defense monument in Idaho without full public danger of detection or attack. They and the Armed Services Committee participation and an express Act of can also receive more complicated mes- will again be searching for programs Congress, and for other purposes; to sages through very low frequency that have outlived their intended pur- the Committee on Energy and National [VLF] radiowaves or lengthier mes- pose. I hope they will seriously con- Resources. sages through satellite systems, if it sider zeroing out the ELF transmitter THE IDAHO PROTECTION ACT OF 1997 can be done more cheaply. system, as I propose in this bill, and Mr. CRAIG. Mr. President, I rise Not only do Wisconsinites think the save the taxpayers $9 to $20 million a today to introduce legislation that has mission of Project ELF is unnecessary year. Given both its apparently dimin- been forced by recent events. I am and anachronistic, but they are also ished strategic value and potential en- talking about President Clinton’s proc- concerned about possible environ- vironmental and public health hazards, lamation of last fall declaring nearly S438 CONGRESSIONAL RECORD — SENATE January 21, 1997 two million acres of southern Utah a In my view, the President’s actions bitration allows employers to tell all national monument. are beyond the pale and for that rea- current and prospective employees in After the President’s announcement, son—to protect others from suffering a effect, ‘if you want to work for us, you Senator KEMPTHORNE and I introduced similar fate, I am cosponsoring this will have to check your rights as a the Idaho Protection Act of 1996. That bill. working American citizen at the door.’ bill would have required that the pub- In short, working men and women all lic and the Congress be included before By Mr. FEINGOLD: across this country are faced with the a national monument could be estab- S. 63. A bill to amend certain Federal tenuous choice of either accepting lished in Idaho. civil rights statutes to prevent the in- these mandatory limitations on their When we introduced that bill, I was voluntary application of arbitration to right to redress in the face of discrimi- immediately approached by other Sen- claims that arise from unlawful em- nation or placing at risk employment ators seeking the same protection. ployment discrimination based on race, opportunities or professional advance- What we see unfolding before us in color, religion, sex, national origin, ment. These requirements have been Utah ought to frighten all of us. With- age, or disability, and for other pur- referred to recently as ‘‘front door’’ out including Utah’s Governor, Sen- poses; to the Committee on Labor and contracts; that is, they require an em- ators, congressional delegation, the Human Resources. ployee to surrender certain rights up State legislature, county commis- THE CIVIL RIGHTS PROCEDURES PROTECTION ACT front in order to ‘‘get in the front sioners, or the people of Utah—Presi- OF 1997 door.’’ As a nation which values work dent Clinton set off-limits forever ap- Mr. FEINGOLD. Mr. President, I rise as well as deplores discrimination, we proximately 1.7 million acres of Utah. today to introduce the Civil Rights should not allow this situation to con- Under the 1906 Antiquities Act, Presi- Procedures Protection Act of 1997. The tinue. dent Clinton has the unilateral author- 105th Congress will mark the third suc- ity to create a national monument As I noted Mr. President, today cessive Congress that I have introduced marks the third successive Congress in where none existed before. And if he this legislation. Very simply Mr. Presi- can do it in the State of Utah, he can which this important legislation has dent, this legislation addresses the rap- been introduced. Given that much of do it in Idaho. In fact, since 1906, the idly growing and, in my opinion, trou- law has been used some 66 times to set the rhetoric coming out of Washington bling practice of employers condi- and this body in recent months, cer- lands aside. I would note—with very tioning employment or professional ad- few exceptions, these declarations oc- tainly during the most recent elec- vancement upon their employees will- tions, dealt with helping working fami- curred before enactment of the Na- ingness to submit claims of discrimina- tional Environmental Policy Act of lies, it is my hope that this legislation tion or harassment to arbitration, will receive consideration in the com- 1969 which recognized the need for pub- rather than pursuing them in the lic involvement in such issues and ing months. The practice of mandatory courts. In other words, employees rais- arbitration should be stopped now—if mandated public comment periods be- ing claims of harassment or discrimi- fore such decisions are made. people are being discriminated against, nation by their employers must submit they should retain all avenues of re- Just as 64 percent of the land in Utah the adjudication of those claims to ar- is owned by the Federal Government, dress provided for in the laws of this bitration, irrespective of what other Nation. This bill will help restore in- 62 percent of Idaho is owned by Uncle remedies may exist under the laws of Sam. What the President has done in tegrity in relations between hard work- this Nation. ing employees and their employers, but Utah, without public input, he could To address the growing incidents of more importantly, it will ensure that also do in Idaho or any or the States compulsory arbitration, the Civil the civil rights laws which we pass, where the Federal Government has a Rights Procedures Protection Act of will continue to protect all Americans. presence. 1997 amends seven civil rights statutes With Senator KEMPTHORNE as a co- Mr. President, I ask unanimous con- to ensure that those statutes remain sponsor, I am once again introducing sent that the text of the legislation be effective when claims of this nature the Idaho Protection Act. This bill printed in the RECORD at the conclu- arise. Specifically, this legislation af- would simply require that the public sion of my remarks. fects claims raised under Title VII of and the Congress be fully involved and the Civil Rights Act of 1965, Section 505 Mr. President, I also ask unanimous give approval before such a unilateral of the Rehabilitation Act of 1973, the consent that a newspaper article from Presidential declaration of a new na- Americans with Disabilities Act, Sec- the September 24, 1996 edition of the tional monument could be imposed on Boston Globe, entitled, ‘‘A cautionary Idaho. tion 1977 of the Revised Statutes, the Equal Pay Act, the Family and Medical tale about signing away right to sue,’’ The President’s action in Utah has be placed in the RECORD. been a wake-up call to people across Leave Act and the Federal Arbitration Act (FAA). In the context of the Fed- There being no objection, the mate- America. While we all want to preserve rial was ordered to be printed in the what is best in our States, people ev- eral Arbitration Act, the protections of RECORD, as follows: erywhere understand that much of this legislation are extended to claims their economic future is tied up in of unlawful discrimination arising S. 63 what happens on their public lands. under State or local law and other Fed- Be it enacted by the Senate and House of Rep- In the West, where public lands domi- eral laws that prohibit job discrimina- resentatives of the United States of America in nate the landscape, issues such as graz- tion. Congress assembled, ing, timber harvesting, water use, and Mr. President, I want to be clear that SECTION 1. SHORT TITLE. recreation access have all come under this legislation is in no way intended This Act may be cited as the ‘‘Civil Rights attack by this administration seem- to bar the use of arbitration, concilia- Procedures Protection Act of 1997’’. ingly bent upon kowtowing to a seg- tion, mediation or any other form of SEC. 2. AMENDMENT TO TITLE VII OF THE CIVIL ment of our population that wants adjudication short of litigation in re- RIGHTS ACT OF 1964. these uses kicked off our public lands. solving these claims. I have long been Title VII of the Civil Rights Act of 1964 (42 Everyone wants public lands deci- and will continue to be a strong sup- U.S.C. 2000e et seq.) is amended by adding at sions to be made in an open and inclu- porter of ‘‘voluntary’’ forms of alter- the end the following new section: sive process. No one wants the Presi- native dispute resolution. The key, ‘‘EXCLUSIVITY OF POWERS AND PROCEDURES dent, acting alone, to unilaterally lock however, is that the practices targeted ‘‘SEC. 719. Notwithstanding any Federal up enormous parts of any State. We by this bill are not voluntary. Rather statute of general applicability that would certainly don’t work that way in the they are imposed upon working men modify any of the powers and procedures ex- West. There is a recognition that with and women and are mandatory. Fur- pressly applicable to a claim arising under common sense, a balance can be struck thermore, the ability to be promoted, this title, such powers and procedures shall be the exclusive powers and procedures ap- that allows jobs to grow and families or in some cases, to be hired in the plicable to such claim unless after such to put down roots while at the same first place, is often conditioned upon claim arises the claimant voluntarily enters time protecting America’s great natu- the employee accepting this type of into an agreement to resolve such claim ral resources. mandatory arbitration. Mandatory ar- through arbitration or another procedure.’’. January 21, 1997 CONGRESSIONAL RECORD — SENATE S439 SEC. 3. AMENDMENT TO THE AGE DISCRIMINA- SEC. 8. AMENDMENT TO THE FAMILY AND MEDI- Thus far, two Massachusetts courts have TION IN EMPLOYMENT ACT OF 1967. CAL LEAVE ACT OF 1993. upheld Fidelity’s right to arbitration, and an The Age Discrimination in Employment Title IV of the Family and Medical Leave arbitration hearing is expected this year. Act of 1967 (29 U.S.C. 621 et seq.) is amend- Act of 1993 (29 U.S.C. 2601 et seq.) is amended The dispute may or may not end there. ed— by adding at the end the following new sec- Attorney Nancy Shilepsky, who represents (1) by redesignating sections 16 and 17 as tion: Lajoie, says the Massachusetts Court of Ap- sections 17 and 18, respectively; and ‘‘SEC. 406. EXCLUSIVITY OF REMEDIES. peals has acknowledged that her client may (2) by inserting after section 15 the follow- ‘‘Notwithstanding any Federal statute of have good grounds for an appeal. But the ing new section 16: general applicability that would modify any court also ruled the Lajoie must arbitrate ‘‘EXCLUSIVITY OF POWERS AND PROCEDURES of the procedures expressly applicable to a first and then, if unhappy with the findings, claim based on a right provided under this appeal. ‘‘SEC. 16. Notwithstanding any Federal Act or under an amendment made by this For employers, mandatory arbitration has statute of general applicability that would been a boon. Not only does it limit lengthy modify any of the powers and procedures ex- Act, such procedures shall be the exclusive procedures applicable to such claim unless and expensive court battles, but it also re- pressly applicable to a right or claim arising duces the kind of publicity that can seri- under this Act, such powers and procedures after such claim arises the claimant volun- tarily enters into an agreement to resolve ously damage a company’s image. In the five shall be the exclusive powers and procedures years since the US Supreme Court ruled that applicable to such right or such claim unless such claim through arbitration or another procedure.’’. U–4s were legal, scores of companies have after such right or such claim arises the sought to have sexual harassment, age, gen- claimant voluntarily enters into an agree- SEC. 9. AMENDMENT TO TITLE 9 OF THE UNITED STATES CODE. der and other discrimination claims moved ment to resolve such right or such claim from courts to the system of private justice through arbitration or another procedure.’’. Section 14 of title 9, United States Code, is amended— known as binding arbitration. In the securi- SEC. 4. AMENDMENT TO THE REHABILITATION (1) by inserting ‘‘(a)’’ before ‘‘This’’; and ties industry alone, about 500,000 Wall Street ACT OF 1973. (2) by adding at the end the following new employees are legally bound by arbitration Section 505 of the Rehabilitation Act of subsection: agreements. 1973 (29 U.S.C. 795) is amended by adding at ‘‘(b) This chapter shall not apply with re- Not surprisingly, the American Arbitra- the end the following new subsection: spect to a claim of unlawful discrimination tion Association reports that employment ‘‘(c) Notwithstanding any Federal statute in employment if such claim arises from dis- arbitration claims increased 70 percent be- of general applicability that would modify crimination based on race, color, religion, tween 1994 and 1995. any of the procedures expressly applicable to Criticism has kept pace with the trend. sex, national origin, age, or disability.’’. a claim based on right under section 501, Both the Equal Employment Opportunity such procedures shall be the exclusive proce- SEC. 10. APPLICATION OF AMENDMENTS. Commission and the National Labor Rela- The amendments made by this Act shall dures applicable to such claim unless after tions Board have denounced the increased apply with respect to claims arising on and such claim arises the claimant voluntarily use of mandatory arbitration forms. The Na- after the date of the enactment of this Act. enters into an agreement to resolve such tional Employment Lawyers Association has claim through arbitration or another proce- [From the Boston Globe, Sept. 24, 1996] an ongoing campaign against the agree- dure.’’. A CAUTIONARY TALE ABOUT SIGNING AWAY ments. SEC. 5. AMENDMENT TO THE AMERICANS WITH RIGHT TO SUE; ON THE JOB The critics argue that the agreements are DISABILITIES ACT OF 1990. (By Diane E. Lewis) generally signed at the time of hiring or in the course of a policy change at a company— Section 107 of the Americans with Disabil- Jane Lajoie thought she had an open-and- times when workers are concerned about ities Act of 1990 (42 U.S.C. 12117) is amended shut discrimination case against her em- by adding at the end the following new sub- making a good first impression or are prob- ployer. Instead, she now has a cautionary ably not focused on the consequences of com- section: tale for the growing number of American ‘‘(c) Notwithstanding any Federal statute pliance. workers whose employers have asked them Last year, the EEOC succeeded in enjoin- of general applicability that would modify to sign away their rights to have employ- ing an employer from requiring workers to any of the powers and procedures expressly ment complaints brought before a jury. sign mandatory arbitration forms and from applicable to a claim based on a violation de- Lajoie’s story begins in 1987 when, after re- firing those workers who refused. scribed in subsection (a), such powers and ceiving an MBA, she joined Fidelity Manage- This spring, the NLRB took a similar stand procedures shall be the exclusive powers and ment Research Corp. as a data analyst for when it issued a complaint against a luggage procedures applicable to such claim unless the publishing group’s Mutual Fund Guide. maker that fired an employee for refusing to after such claim arises the claimant volun- Over the next seven years, she took on more sign a form stating that all workplace dis- tarily enters into an agreement to resolve responsibilities, rising to managing editor putes would have to be arbitrated. such claim through arbitration or another and then publisher of the guide. ‘‘Nobody should be forced to use an em- procedure.’’. But the Marlborough woman says there ployer’s private justice system,’’ says Lewis SEC. 6. AMENDMENT TO SECTION 1977 OF THE was a dark cloud over what should have been Maltby, director of workplace rights at the REVISED STATUTES OF THE UNITED a successful career: She was convinced that American Civil Liberties Union in New York. STATES. she was not being compensated fairly, that Maltby, who sits on the board of the Amer- Section 1977 of the Revised Statutes (42 men in comparable posts had more pres- ican Arbitration Association, concedes that U.S.C. 1981) is amended by adding at the end tigious titles and were getting a lot more there are times when employees may be bet- the following new subsection: money for the same work. And she voiced ter off arbitrating a dispute than taking the ‘‘(d) Notwithstanding any Federal statute her concerns. matter to a backlogged court or a belea- of general applicability that would modify Lajoie, 51, alleges that not long after she guered government agency. any of the procedures expressly applicable to spoke up, a company lawyer asked her to In Boston, the Massachusetts Commission a right to make and enforce a contract of register as a principle with the New York Against Discrimination is hoping arbitration employment under this section, such proce- Stock Exchange and the National Associa- will help reduce a two-year backlog of cases. dures shall be the exclusive procedures appli- tion of Securities Dealers. Lajoie says she For those who opt for binding arbitration, cable to a claim based on such right unless agreed, think she was required to register. the dispute would be heard within 30 days after such claim arises the claimant volun- She admits that she didn’t read the fine after filing and decided in 60 days. Decisions tarily enters into an agreement to resolve print. would be binding on both sides. such claim through arbitration or another Today, Lajoie claims she was tricked into Still, MCAD Commissioner Michael Duffy procedure.’’. signing a so-called U–4 securities arbitration has drawn the line: His program will not me- SEC. 7. AMENDMENT TO THE EQUAL PAY RE- form stating that any dispute or claim diate any cases stemming from mandatory QUIREMENT UNDER THE FAIR against her employer must be submitted to arbitration agreements. LABOR STANDARDS ACT OF 1938. private arbitration. In a lawsuit filed in Nor- ‘‘We’re not against arbitration or medi- Section 6(d) of the Fair Labor Standards folk Superior Court, she alleges that she was ation,’’ said Duffy. ‘‘We think it’s fine when Act of 1938 (29 U.S.C. 206(d)) is amended by replaced by a younger woman and then fired all parties agree. But problems arise when adding at the end the following new para- after she signed the form. employees are told they must do it or are graph: Fidelity denies discriminating against made to feel they could lose a job, and then ‘‘(5) Notwithstanding any Federal statute Lajoie. ‘‘There was no discrimination. She they wind up giving up their right to a jury of general applicability that would modify was compensated properly and fairly. She trial.’’ any of the powers or procedures expressly ap- was also replaced by another woman,’’ said In the meantime, he and others advise plicable to a claim based on violation of this attorney Wilfred Benoit Jr., who represents what consumer advocates have been telling subsection, such powers and procedures shall the Boston firm. the public for years: Read the fine print be- be the exclusive procedures applicable to As for trickery, Benoit asserted: ‘‘Jane fore signing on the bottom line. such claim unless after such claim arises the Lajoie was not tricked into signing any- claimant voluntarily enters into an agree- thing. She signed a U–4 application as a prin- By Mr. LUGAR: ment to resolve such claim through arbitra- cipal in the securities industry and, as far as S. 64. A bill to state the national mis- tion or another procedure.’’. we know, she understood what it was.’’ sile defense policy of the United S440 CONGRESSIONAL RECORD — SENATE January 21, 1997 States; to the Committee on Armed fending against the much smaller and structive exchange on the subject of Services. relatively unsophisticated ICBM threat national missile defense. THE DEFEND THE UNITED STATES OF AMERICA that a rogue nation or terrorist group Mr. President, I ask unanimous con- ACT OF 1997 could mount anytime in the foresee- sent that additional material be print- Mr. LUGAR. Mr. President, as we able future as well as one capable of ed in the RECORD. commence the 105th Congress and take shooting down an unauthorized or acci- There being no objection, the mate- up, as we surely will, issues with re- dentally launched missile. rial was ordered to be printed in the gard to national missile defense and The critical difference between many RECORD, as follows: theater missile defense, a key question of the plans offered on the Hill and DEFEND THE UNITED STATES OF AMERICA ACT is whether continued adherence to the those proposed by the administration OF 1997—SECTION-BY-SECTION ANALYSIS ABM Treaty, in its original or a modi- has to do with timing. Some Congres- I. SHORT TITLE fied form, is compatible with the kind sional proposals would require selec- This act may be cited as the ‘‘Defend the of missile defense we need. tion of a missile defense system to be United States of America Act of 1997’’. Is this an ‘‘either/or’’ choice? made within a year, with deployment II. FINDINGS I hold the view that the ABM Treaty to begin within three years. The ad- Describes the linkages between U.S. mis- does have, or can be made to have, suf- ministration has argued for the need to sile defenses, the ABM Treaty, and continued ficient flexibility or elasticity to ac- develop a system, assess the threat in Russian adherences to other arms reduction commodate certain kinds of national three years, and make a deployment treaties like START I and START II. missile or theater missile defense sys- Describes the newly-emerging threats decision accordingly. posed by other kinds of weapons of mass de- tems. By the same token, I reject the It is the difference between the var- struction than nuclear weapons, and other notion that we can only achieve the ious plans over timing on system selec- delivery means than long-range ballistic types of theater missile defense or na- tion and deployment that holds prac- missiles. tional missile defense we need by out- tical implications for existing and po- Hearings over the last two years have right abrogation of the ABM Treaty. tential arms control agreements— shown the pervasive threat to the U.S. from I am struck more by the commonal- START II, the ABM Treaty, START chemical, biological, and radiological weap- ity than the differences between the III?—as well as the potential effective- ons, and the relative unpreparedness of U.S. prevailing views of some of my Repub- ness of the system deployed. The more governments at all levels to cope with such terrorist incidents. lican colleagues in the Senate and immediate the commitment to deploy Restates what DoD and Congress have views in the Administration on this a national defense system, the greater learned about major weapons system devel- subject. Much of the difference has to the risk of a Russian rejection of the opment, which emphasis on the necessity for do with timing, stemming in part from START II Treaty and of an outright thorough testing and careful systems cost-ef- different assessments of the intel- American rejection of the original fectiveness analysis prior to a commitment ligence information on the ballistic ABM Treaty. to deployment. missile threat facing the country. Ulti- Second, differences over timing have III. NATIONAL MISSILE DEFENSE POLICY mately, responsible policy makers been linked to the issue of the effec- Development for deployment not later must come to grips with the manage- tiveness of the system deployed by the than 2003 of a National Missile Defense sys- ment of the risk entailed by the threat United States. The administration has tem designed to defend against accidental, unauthorized, and limited attacks. and how much money we are willing to argued that selection of a system with- The initial National Missile Defense sys- spend, in a tight budget situation, for in the next year or so will limit the op- tem to be developed and deployed at the various levels of missile defense to tions to build a system that is better former Safeguard ABM site in compliance counter that threat. matched to the threat, and that the with the ABM Treaty, and to consist of: At this point in our debates, there real choice between various Congres- Fixed, guard-based battle management ra- seems to be general agreement that we sional plans and that of the adminis- dars; are not trying to protect the U.S. tration is between building an ad- Up to 100 ground-based interceptor mis- siles; against a massive nuclear strike from a vanced system to defeat an actual Space based adjuncts allowed by the ABM reconstituted Soviet Union or even a threat and a less capable system to de- Treaty; and general exchange with Russia. Nor, for feat a hypothetical threat. Large phased array radars on the periphery that matter, are we talking about pro- Mr. President, is there a middle of the U.S., facing outward, as necessary. tection against a deliberate, massive ground—one that satisfies neither the A requirement for a Presidential rec- Chinese nuclear attack on the United administration nor various Congres- ommendation in 2000 on whether or not to States. sional proponents fully but that does deploy the developed system, and a set of cri- A consensus between the prevailing teria that should be used by the Congress in move us in the direction of providing 2000 to aid in making a deployment decision. positions on the Hill and that of the the American people with a limited na- The criteria include: administration comes closer if there is tional defense system against the most The threat, as it exists in 2000 and is pro- an acceptance that this range of Rus- urgent ballistic missile threats? I be- jected over the next several years; sian or Chinese threats are beyond our lieve there is, and this legislation is an The projected cost and effectiveness of the technological and financial means in attempt to chart it. system, based on development and testing the near term and that our objective is Mr. President, I sense a greater will- results; one of defending America against a ingness in both branches to try to The projected cost and effectiveness of the National Missile Defense system if deploy- Third World, long-range ballistic mis- come together in the interest of provid- ment were deferred for one to three years, sile capability from a regime not sub- ing the American people with some while additional development occurs; ject to any rational laws of deterrence. form of limited, national defense sys- Arms control factors; and It is the prospect that rogue states tem against the most urgent form of Where the U.S. stands in preparedness for, will at some point obtain strategic bal- ballistic missile threat —to seek to and defenses against, all the other nuclear, listic missiles - ICBMs - that can reach bridge gaps rather than score debating chemical and biological threats to the U.S. American shores which propels us to points. The establishment of provisions to give the 106th Congress a vote on whether or not to consider the deployment of a national Moreover, with the passage of time, authorize deployment of the system, as a missile defense. A second prospect in- the differences over preferred dates of privileged motion under expedited proce- volves an unauthorized or accidental system selection and deployment have dures. launch of an ICBM from Russia or narrowed. This is a process that has been used by pre- China. With that in mind, and with a felt vious Congresses to insure an up-or-down The kind of national missile defense need to change the terms of reference vote in both Houses on the B–2 bomber, the system promoted both on the Hill and of previous ballistic missile defense de- MX missile, and on B–52s. in the administration would not be ca- bates by focusing on areas of com- In sum, this section establishes a process whereby Congress will vote in 2000 on wheth- pable of defending against thousands of monality between the administration’s er or not to deploy whatever National Mis- warheads being launched against the position and the various congressional sile Defense system may be ready to begin United States. Rather, both sides are plans, I offer this legislation as one of deployment at that time, and with better in- talking about a system capable of de- the starting points for a more con- formation than we have today. January 21, 1997 CONGRESSIONAL RECORD — SENATE S441 IV. NATIONAL MISSILE DEFENSE VS. ARMS dues and certainly should not be sub- Mr. President, it seems to me that CONTROL AGREEMENTS sidized by the taxpayers. the Clinton administration has twisted A statement that it is the United States’ Today, I am introducing legislation the law to favor their friends in union legal right to deploy such a National Missile that is designed to rectify this prob- leadership at the expense of the right Defense system, and that such a deployment lem. My bill is very simple. It requires to know for the rank and file. Let me does not threaten Russian or Chinese deter- tax-exempt membership organizations reiterate this point: the law says clear- rent capabilities. ly that tax-exempt organizations must A direction to the President to seek both to disclose to their members these po- further cooperation with Russia on a variety litical activities and organizational re- disclose their political and lobbying ac- of Theater Missile Defense issues, and the re- sources spent on them. In addition, tivities. It is only the IRS interpreta- laxation of the ABM Treaty to allow both this bill will give the members of these tion that enables unions to duck this sides to have two National Missile Defense tax-exempt organizations the oppor- disclosure requirement and still benefit sites. tunity to deduct the nonpolitical por- from tax-exempt status. This would greatly increase the effective- tion of their dues for income tax pur- Second, I find it outrageous that ness of our National Missile Defense systems poses without regard to the so-called union leadership are able to coerce against Third World missile attacks aimed ‘‘two percent limitation.’’ dues from workers in many states as a at targets on our distant borders, while not condition of employment. But, it adds posing a threat to Russia’s deterrent. First, let me discuss the issue of full This section also contains a provision re- disclosure. insult to injury that those dues can be quiring the President, if the ballistic missile Mr. President, in the Omnibus Budg- used for political purposes without the threat to the U.S. exceeds that which the et Reconciliation Act of 1993, Congress knowledge, let alone permission, of the initial National Missile Defense system is disallowed a deduction for expenses re- rank and file. capable of handling, to consult with the Con- lating to lobbying and political activi- The Supreme Court, in 1988, in Beck gress regarding the exercise of our right to ties. Lobbying is no longer a legitimate v. Communication Workers of America, withdraw from the ABM Treaty under Arti- deductible expense for American busi- declared that workers were entitled to cle XV. nesses. Since tax-exempt organizations know how much of their dues were V. DOD TO CONTINUE R&D ON NATIONAL MISSILE generally do not pay any income tax, being directed to political uses and to DEFENSE the law was amended to further dis- receive a refund for that portion of Directs the Secretary of Defense to con- allow an individual taxpayer a tax de- dues paid. This seems like a simple tinue a research and development program common sense solution to this viola- on advanced National Missile Defense tech- duction for the portion of annual dues paid to a tax-exempt organization that tion of free speech rights. However, in nologies while the initial site is developed one of his first acts upon taking office and deployed; this program would be con- is attributable to any lobbying or po- ducted in full compliance with the ABM litical activities of the organization. in 1993, President Clinton rescinded the Treaty. To assist association members in executive order enforcing this decision of the Supreme Court. VI. U.S. POLICY TOWARD OTHER WMD DELIVERY knowing what portion is and what por- Mr. President, in the Beck case, for THREATS tion is not deductible when paying example, it was found that only 21 per- Sets forth U.S. policy on reducing the their dues, the law requires organiza- cent of the dues collected by the Com- threat to the U.S. from weapons of mass de- tions to annually disclose to the IRS struction and associated delivery systems. It munications Workers of America went and to the individual members the for bargaining-related activities. This further directs the Administration to de- amount of money spent on political ac- velop a balanced comprehensive plan for re- meant that Harry Beck, the former tivities by the organization. ducing the threat to the U.S. from all weap- Maryland union shop steward who However, certain exceptions to the ons of mass destruction and all delivery spent 13 years fighting his case in the disclosure rules are provided in the tax means. courts, was entitled to get a substan- code and an organization is not re- VII. PRESIDENTIAL AND CONGRESSIONAL REVIEW tial rebate of his dues, plus interest. OF U.S. DEFENSES AGAINST ALL TYPES OF quired to disclose such information if Yet, this case is merely illustrative of WMD ATTACK (1) political activities do not exceed a widespread injustice. Where is the Requires a review, following the initial de- $2,000 a year; (2) the organization elects fairness in requiring a worker to con- ployment of a National Missile Defense, by to pay a proxy tax on the nondeduct- tribute to a political cause or a lobby- the President and the Congress to determine ible portion in order to avoid providing ing effort with which he or she does not the future course of U.S. defenses against all disclosure; or (3) substantially all of types of weapons of mass destruction. agree? the individual members do not deduct Forcing people to contribute portions VIII. REPORTING REQUIREMENTS their annual dues payments on their of their earnings to political causes Administration reporting requirements to tax returns as itemized deductions. they oppose violates their First Congress. In 1995, the IRS put forth an interpre- Amendment rights. In his Beck opinion, IX. LEGAL DEFINITIONS tation of this third exception and ex- Justice William Brennen cited Thomas The legal definitions of the treaties men- plained what they believe Congress Jefferson’s view that forcing people to tioned in the bill. meant by substantially all dues are not finance opinions they disagree with deductible. In Revenue Procedure 95–35, was ‘‘sinful and tyrannical.’’ By Mr. HATCH: the IRS let all but three categories of Mr. President, it is often a require- S. 65. A bill to amend the Internal tax-exempt organizations off the hook ment or a condition of employment for Revenue Code of 1986 to ensure that from the disclosure rules. The three workers to be members of a labor members of tax-exempt organizations that must comply are: section 501(c)(4) union. Yet, this requirement is often are notified of the portion of their dues organizations that are not veterans or- very costly. Union dues can run from used for political and lobbying activi- ganizations, 501(c)(5) agricultural and about $300 to over $1,000 a year. Now, I ties, and for other purposes; to the horticultural organizations, and am the first to acknowledge that Committee on Finance. 501(c)(6) organizations. unions play an important role in em- MEMBERSHIP DUES DISCLOSURE AND Interestingly, Mr. President, the IRS ployee-employer relations. I will wager DEDUCTIBILITY LEGISLATION. choose to grant labor unions, which are that I am one of the few members of Mr. HATCH. Mr. President, for many also 501(c)(5) organizations, a complete this body who was ever a member of a years, Congress has recognized that exemption from the lobbying disclo- union. And, that experience, perhaps, is private institutions can often provide sure rules. Thus, unions do not have to the reason I believe so strongly that better service in certain areas than the inform their members how much of the rank and file have rights that must government. In this regard, member- their dues are used for political pur- be protected. ship organizations that serve various poses. Citizens of a free country ought to be public needs are given tax-exempt I am sure that my colleagues see the free to spend their own money on the treatment. However, some tax-exempt obvious problems in this. It is simply political causes and candidates they membership organizations are involved not fair that the IRS would treat a wish to support. In 1992, union officials in political and lobbying activities. labor union preferentially. Why are admit to having spent at least $92 mil- These activities may or may not meet unions exempt and not, for example, lion on political contributions and ex- with the approval of those who pay farm cooperatives? penses. In-kind contributions could be S442 CONGRESSIONAL RECORD — SENATE January 21, 1997 3 to 5 times that amount. In other fees with all other sorts of business ex- gains measure that passed the House words, organized labor may have actu- penses and contributions to tax-exempt and Senate during the last Congress, ally spent from $300 million to $500 mil- organizations. our bill would allow individual tax- lion on political activities in 1992. Moreover, this deduction is a form of payers to deduct 50 percent of any net While some union members would ap- tax break that could put real money capital gain. This means that the top prove of these expenditures, some defi- back in the pockets of American work- capital gains tax rate for individuals nitely would not. ers. would be 19.8 percent. Also, it grants a But, I want to be absolutely clear Mr. President, to summarize, if my 25-percent maximum capital gains tax that the bill I am introducing today bill is enacted into law, tax-exempt or- rate for corporations. Our bill also in- does not affect any provision in the Na- ganizations would be required—really cludes an important provision that tional Labor Relations Act, the ability required—to disclose to their members would allow homeowners who sell their of unions to establish closed or agency the amount of their political and lob- personal residences at a loss to take a shops in any state where they are cur- bying activities. It goes further by al- capital gains deduction. rently permitted, or the ability of lowing full deductibility of member- A provision that is not in our bill is unions to assess dues or collect fees. ship dues to the extent they are used a provision for indexing assets. Many Those are debates for another day. for nonpolitical or lobbying activities. of our Senate colleagues have ex- Rather, this bill deals only with the Mr President, this proposal is a step pressed concern that indexing capital obligation of labor unions, as tax ex- in the direction of campaign finance assets would result in undue complex- empt organizations, to disclose politi- reform. One important objective of ity and possibly lead to a resurgence of cal and lobbying activities to their campaign finance reform should be to tax shelters. While I continue to sup- members. All union members deserve return political power to individual port the concept of indexing capital as- to know how their organizations spend citizens and to diminish the influence sets to prevent the taxation of infla- their money. Moreover, because these of large organizational special inter- tionary gains, I believe even more are tax-exempt organizations, the tax- ests. strongly that capital gains tax relief is payers deserve to know what they are Well, Mr. President, knowledge has essential for our long-term economic subsidizing. always been power. To return power to growth. Therefore, in an effort to While union members are certainly individual voters, they need to know streamline this bill and expedite its capable of reading a headline like, where their dollars are going. If my bill passage, we have omitted the indexing ‘‘Union leaders commit $35 million to is passed, workers will no longer be in provisions. I hope that some form of in- Democrats,’’ they may wish to have a the dark about their dues. At the same dexing can be developed that will more comprehensive disclosure of po- time they will be getting a tax break achieve the goals of indexing without litical and lobbying activity financed and possibly an increase in their take- adding undue complexity or the poten- with their dues—and I cannot blame home pay. I believe this is the fair and tial for abuse. them one bit. honest thing to do. I urge all my col- In addition to the broad-based provi- Mr. President, polling data suggests leagues to support and cosponsor this sions listed above, our bill also in- that union members would prefer that bill. cludes some extra capital gains incen- their unions not engage in partisan po- tives targeted to individuals and cor- litical campaign activities at all. But, By Mr. HATCH (for himself, Mr. porations who are willing to invest in by an overwhelming 84 percent to 9 per- LIEBERMAN, Mr. GRASSLEY, and small businesses. We see this add-on as cent margin, according to a survey by Mr. BREAUX): an inducement for investors to provide Luntz and Associates, union members S. 66. A bill to amend the Internal the capital needed to help small busi- want to force their union leaders to ex- Revenue Code of 1986 to encourage cap- nesses get established and to expand. plain what happens to their dues. They ital formation through reductions in Mr. President, this additional tar- simply want to know where the money taxes on capital gains, and for other geted incentive works as follows: If an is spent and why. This seems utterly purposes; to the Committee on Fi- investor buys newly issued stock of a reasonable and fair to me. nance. qualified small business, which is de- Furthermore, only 19 percent of THE CAPITAL FORMATION ACT OF 1997 fined as one with up to $100 million in union members know that they can re- Mr. HATCH. Mr. President, I am assets, and holds that stock for three quest a refund if they do not agree with pleased to be joined by Senators or more years, he or she can deduct 75 an ideological position and/or political LIEBERMAN, GRASSLEY, and BREAUX in percent of the gain on the sale of that position of their particular union. introducing the Capital Formation Act stock, rather than just the 50 percent When told that they have the right to of 1997. deduction provided for other capital a refund, 20 percent say they would Mr. President, reducing the high rate gains. ‘‘definitely’’ request their money back, on capital gains has long been a prior- In addition, any time after the end of and another 20 percent would be ‘‘very ity of mine. During the last Congress, I the 3 year period, if the investor de- likely’’ to request a refund. joined my good friend, the chairman of cides to sell the stock of one qualified Mr. President, let me turn to the the House Ways and Means Committee, small business and invest in another issue of deductibility. Bill Archer, in sponsoring the Archer- qualified small business, he or she can Currently, an individual union mem- Hatch capital gains bill. Then later in completely defer the gain on the sale of ber may deduct his union dues only if the session Senator Lieberman and I the first stock and not pay taxes on the the amount exceed two percent of his offered a bipartisan capital gains tax gain until the second stock is sold. In or her adjusted gross income [AGI]. For reduction bill. The Hatch/Lieberman essence, the investor is allowed to roll all intents and purposes, this means bill, S. 959, contained the same 50 per- over the gain into the new stock until that union dues and fees are not de- cent deduction for capital gains as well he or she sells the stock and cashes out ductible at all for most workers, even as an enhanced incentive for invest- the assets. We think that this addi- if such dues and fees are required as a ments in newly issued stock of small tional incentive will make a tremen- condition of employment. corporations. This measure was sup- dous amount of capital available for I believe that union dues and fees, es- ported by 45 senators, and we were new and expanding small businesses in pecially to the extent that so many pleased that its provisions were in- this country. workers are forced to pay them, ought cluded in the Balanced Budget Act of In particular, these special incen- to be fully deductible for those who 1995. tives should really make a difference in itemize deductions. Therefore, I am The bill we are introducing today is the electronics, biotechnology, and proposing this bill to remove the two substantially the same. Our bill com- other high tech industries that are so percent threshold and to permit union bines two important elements of cap- important to our economy and to our members and fee payers to deduct that ital gains relief with a broad based tax future. The software and medical de- portion of their dues and fees that is cut and a targeted incentive to give an vice industries in Utah are perfect ex- not used for political or lobbying ac- extra push for newly formed or expand- amples of how these industries have tivities. This conforms union dues and ing small businesses. Like the capital transformed our economy. While these January 21, 1997 CONGRESSIONAL RECORD — SENATE S443 provisions are not limited to high tech monetary worth. It is misleading to ican dream. For those Americans who companies by any means, these are the imply that only ‘‘the wealthy’’ would have planted seeds in small or large types of businesses that are most like- benefit from this bill. companies, family farms, or other in- ly to use them because it is so hard to I want to elaborate on this point, Mr. vestments, and who have been fortu- attract capital for these higher risk President. Current law already pro- nate enough and worked hard enough ventures. In addition, many start-up vides a sizeable differential between or- to see them grow, the capital gains tax companies have large research and de- dinary income tax rates and capital is a tax on success. It is an additional velopment needs. With the uncertainty gains tax rates for upper income tax- tax on the reward for taking risks. The of the R&E tax credit, this bill will payers. The wealthiest among us pay American dream is not dead; it’s just give investors an incentive to fund up to 39.6 percent on ordinary income that we have been taxing it away. high risk research companies that may but only 28 percent on capital gains. I urge my colleagues on both sides of be a Novell or Thiokol of tomorrow. We certainly believe that income tax the aisle to take a close look at this Mr. President, our economy is be- rates are too high. And, for middle-in- bill. We believe it offers a solid plan to coming more connected to the global come taxpayers in the 28 percent in- help us achieve our goal of a brighter marketplace every day. And, it is vital come tax bracket, there is no dif- future for our children and grand- for us to realize that capital flows ference between their capital gains children. When it comes down to it, across national boundaries very rap- rate and their ordinary income rate. jobs, economic growth, and entrepre- idly. Therefore, we need to be con- Thus, current law provides no tax in- neurship are not partisan issues. They cerned with how our trading partners centive for middle income taxpayers to are American issues. tax capital and investment income. invest assets that may have capital I ask unanimous consent that the Unfortunately, the U.S. has the high- gains. Our bill would correct this prob- text and a summary of the bill be lem and give the largest percentage est tax rate on individual capital gains printed in the RECORD. of all of the G–7 nations, except the rate reduction to the lowest income There being no objection, the mate- U.K. And, even in the U.K., individuals taxpayers. For example, the rate for rial was ordered to be printed in the high income earners would change can take advantage of indexing to alle- RECORD, as follows: viate capital gains caused solely by in- from 28 percent to 19.8 percent—a 8.2 percentage point reduction. Whereas, a S. 66 flation. For example, Germany totally Be it enacted by the Senate and House of Rep- exempts long-term capital gains on se- middle income taxpayer—who is get- ting no benefit under current law— resentatives of the United States of America in curities. In Japan, investors pay the Congress assembled, would be taxed at 14 percent—a 14 per- lesser of 1 percent of the sales price or SECTION 1. SHORT TITLE; AMENDMENT OF 1986 20 percent of the net gain. I think it is centage point reduction. CODE. Frankly, Mr. President, the introduc- no coincidence, Mr. President, that (a) SHORT TITLE.—This Act may be cited as tion of a bipartisan capital gains bill Germany’s saving rate is twice ours, the ‘‘Capital Formation Act of 1997’’. couldn’t come at a better time than (b) REFERENCE TO 1986 CODE.—Except as and Japan’s is three times as high as now. Congress is in the midst of formu- otherwise expressly provided, whenever in ours. In order to stay competitive in lating a plan to balance the federal this Act an amendment or repeal is ex- the world, it is vital that our tax laws budget. The elements of this plan will pressed in terms of an amendment to, or re- provide the proper incentive to attract have consequences far beyond this year peal of, a section or other provision, the ref- erence shall be considered to be made to a the capital we need here in the U.S. or even beyond 2002 when we hope to We are aware that some of the oppo- section or other provision of the Internal achieve our balanced budget goal. Cru- nents of capital gains tax reductions Revenue Code of 1986. cial to the achievement of a balanced have asserted that such changes would TITLE I—CAPITAL GAINS REFORM budget is the underlying growth and inordinately benefit the wealthy, leav- Subtitle A—Capital Gains Deduction for strength of our economy. Small Taxpayers Other Than Corporations ing little or no tax relief for the lower changes in the behavior of the economy and middle income classes. Nothing can make or break our ability to put SEC. 101. CAPITAL GAINS DEDUCTION. (a) IN GENERAL.—Part I of subchapter P of could be further from the truth. In our fiscal house in order. Thus, espe- fact, capital gains taxation affects chapter 1 (relating to treatment of capital cially now, we can ill afford to have gains) is amended by redesignating section every homeowner, every employee who our economy slow down and create an participates in a stock purchase plan, 1202 as section 1203 and by inserting after increased fear of future job insecurity. section 1201 the following: or every senior citizen who relies on in- Both Republicans and Democrats alike ‘‘SEC. 1202. CAPITAL GAINS DEDUCTION. come from mutual funds for their basic can agree that the creation of new and ‘‘(a) GENERAL RULE.—If for any taxable needs during retirement. A capital secure jobs is imperative for a vibrant year a taxpayer other than a corporation has gains tax cut is for everybody. and growing economy. a net capital gain, 50 percent of such gain It is interesting to note how the cur- This is where a reduction of the cap- shall be a deduction from gross income. rent treatment of capital gains only ital gains rate can be so important. By ‘‘(b) ESTATES AND TRUSTS.—In the case of gives preferential treatment to those stimulating the economy and spurring an estate or trust, the deduction shall be taxpayers whose incomes lie in the computed by excluding the portion (if any) of job creation, a cut in the capital gains the gains for the taxable year from sales or highest tax brackets. Under the Capital rate can stave off the downturn that Formation Act of 1997, the benefits will exchanges of capital assets which, under sec- may be on its way. tions 652 and 662 (relating to inclusions of tilt decidedly toward the middle-in- Many Americans have expressed con- amounts in gross income of beneficiaries of come taxpayer. A married couple with cern about the wisdom of a tax reduc- trusts), is includible by the income bene- $30,000 in taxable income who sells a tion while we are trying to balance the ficiaries as gain derived from the sale or ex- capital asset would, under our bill, pay budget. However, Mr. President, we see change of capital assets. only a 7.5-percent tax on the capital this bill as a change that will help us ‘‘(c) COORDINATION WITH TREATMENT OF gain. Further, this bill would slash the balance the budget. The evidence clear- CAPITAL GAIN UNDER LIMITATION ON INVEST- taxes retired seniors pay when they MENT INTEREST.—For purposes of this sec- ly shows that a cut in the capital gains tion, the net capital gain for any taxable sell the assets they have accumulated tax rate will increase, not decrease, year shall be reduced (but not below zero) by for income during retirement. revenue to the Treasury. During the the amount which the taxpayer takes into I also believe there is a period from 1978 to 1985, the tax rate on account as investment income under section misperception about the term ‘‘capital capital gains was cut from almost 50 163(d)(4)(B)(iii). asset.’’ We tend to think of capital as- percent to 20 percent. Over this same ‘‘(d) TRANSITIONAL RULE.— sets as something only wealthy persons period, however, tax receipts increased ‘‘(1) IN GENERAL.—In the case of a taxable have. In fact, a capital asset is a sav- from $9.1 billion to $26.5 billion. The year which includes January 1, 1997— ings account—which we should all opposite occurred after the 1986 Tax ‘‘(A) the amount taken into account as the have—a piece of land, a savings bond, net capital gain under subsection (a) shall Reform Act raised the capital gains tax not exceed the net capital gain determined some stock your grandmother gave rate. The higher rate resulted in less by only taking into account gains and losses you, a mutual fund share, your house, revenue. properly taken into account for the portion your farm, your 1964 Mustang convert- Mr. President, the capital gains tax of the taxable year on or after January 1, ible, or any number of things that have is really a tax on realizing the Amer- 1997, and S444 CONGRESSIONAL RECORD — SENATE January 21, 1997 ‘‘(B) if the net capital gain for such year (10)(A) Section 904(b)(2) is amended by shall apply (and paragraph (2) and section exceeds the amount taken into account striking subparagraph (A), by redesignating 1211(b) as in effect for taxable years begin- under subsection (a), the rate of tax imposed subparagraph (B) as subparagraph (A), and ning after December 31, 1997, shall not apply) by section 1 on such excess shall not exceed by inserting after subparagraph (A) (as so re- to the extent such amount exceeds the total 28 percent. designated) the following: of any capital gain net income (determined ‘‘(2) SPECIAL RULES FOR PASS-THRU ENTI- ‘‘(B) OTHER TAXPAYERS.—In the case of a without regard to this subsection) for tax- TIES.— taxpayer other than a corporation, taxable able years beginning after December 31, ‘‘(A) IN GENERAL.—In applying paragraph income from sources outside the United 1997.’’. (1) with respect to any pass-thru entity, the States shall include gain from the sale or ex- (13) Section 1402(i)(1) is amended by insert- determination of when gains and losses are change of capital assets only to the extent of ing ‘‘, and the deduction provided by section properly taken into account shall be made at foreign source capital gain net income.’’. 1202 and the exclusion provided by section the entity level. (B) Section 904(b)(2)(A), as so redesignated, 1203 shall not apply’’ before the period at the ‘‘(B) PASS-THRU ENTITY DEFINED.—For pur- is amended— end thereof. poses of subparagraph (A), the term ‘pass- (i) by striking all that precedes clause (i) (14) Section 1445(e) is amended— thru entity’ means— and inserting the following: (A) in paragraph (1), by striking ‘‘35 per- ‘‘(i) a regulated investment company, ‘‘(A) CORPORATIONS.—In the case of a cor- cent (or, to the extent provided in regula- ‘‘(ii) a real estate investment trust, poration—’’, and tions, 28 percent)’’ and inserting ‘‘25 percent ‘‘(iii) an S corporation, (ii) by striking in clause (i) ‘‘in lieu of ap- (or, to the extent provided in regulations, ‘‘(iv) a partnership, plying subparagraph (A),’’. 19.8 percent)’’; and ‘‘(v) an estate or trust, and (C) Section 904(b)(3) is amended by striking (B) in paragraph (2), by striking ‘‘35 per- ‘‘(vi) a common trust fund.’’. subparagraphs (D) and (E) and inserting the cent’’ and inserting ‘‘25 percent’’. following: (b) DEDUCTION ALLOWABLE IN COMPUTING (15)(A) The second sentence of section ‘‘(D) RATE DIFFERENTIAL PORTION.—The ADJUSTED GROSS INCOME.—Section 62(a) is 7518(g)(6)(A) is amended— amended by inserting after paragraph (15) rate differential portion of foreign source net (i) by striking ‘‘during a taxable year to the following: capital gain, net capital gain, or the excess which section 1(h) or 1201(a) applies’’; and of net capital gain from sources within the ‘‘(16) LONG-TERM CAPITAL GAINS.—The de- (ii) by striking ‘‘28 percent (34 percent’’ United States over net capital gain, as the duction allowed by section 1202.’’. and inserting ‘‘19.8 percent (25 percent’’. case may be, is the same proportion of such (c) CONFORMING AMENDMENTS.— (B) The second sentence of section amount as the excess of the highest rate of 607(h)(6)(A) of the Merchant Marine Act, 1936 (1) Section 1 is amended by striking sub- tax specified in section 11(b) over the alter- section (h). is amended— native rate of tax under section 1201(a) bears (i) by striking ‘‘during a taxable year to (2) Section 170(e)(1) is amended by striking to the highest rate of tax specified in section ‘‘the amount of gain’’ in the material follow- which section 1(h) or 1201(a) of such Code ap- 11(b).’’. plies’’; and ing subparagraph (B)(ii) and inserting ‘‘50 (D) Section 593(b)(2)(D)(v) is amended— percent (25⁄35 in the case of a corporation) of (ii) by striking ‘‘28 percent (34 percent’’ (i) by striking ‘‘if there is a capital gain and inserting ‘‘19.8 percent (25 percent’’. the amount of gain’’. rate differential (as defined in section (16) The table of sections for part I of sub- (3) Section 172(d)(2)(B) is amended to read 904(b)(3)(D)) for the taxable year,’’; and chapter P of chapter 1 is amended by strik- as follows: (ii) by striking ‘‘section 904(b)(3)(E)’’ and ing the item relating to section 1202 and by ‘‘(B) the deduction under section 1202 and inserting ‘‘section 904(b)(3)(D)’’. inserting after the item relating to section the exclusion under section 1203 shall not be (11) The last sentence of section 1044(d) is 1201 the following: allowed.’’. amended by striking ‘‘1202’’ and inserting (4) The last sentence of section 453A(c)(3) is ‘‘1203’’. ‘‘Sec. 1202. Capital gains deduction. amended by striking all that follows ‘‘long- (12)(A) Section 1211(b)(2) is amended to ‘‘Sec. 1203. 50-percent exclusion for gain term capital gain,’’ and inserting ‘‘the maxi- read as follows: from certain small business mum rate on net capital gain under section ‘‘(2) the sum of— stock.’’. 1201 or the deduction under section 1202 ‘‘(A) the excess of the net short-term cap- (e) EFFECTIVE DATES.— (whichever is appropriate) shall be taken ital loss over the net long-term capital gain, (1) IN GENERAL.—Except as otherwise pro- into account.’’. and vided in this subsection, the amendments (5) Section 642(c)(4) is amended to read as ‘‘(B) one-half of the excess of the net long- made by this section apply to taxable years follows: term capital loss over the net short-term ending after December 31, 1996. ‘‘(4) ADJUSTMENTS.—To the extent that the capital gain.’’. amount otherwise allowable as a deduction (B) So much of section 1212(b)(2) as pre- (2) CONTRIBUTIONS.—The amendment made under this subsection consists of gain from cedes subparagraph (B) thereof is amended to by subsection (c)(2) applies to contributions the sale or exchange of capital assets held read as follows: on or after January 1, 1997. (3) USE OF LONG-TERM LOSSES.—The amend- for more than 1 year or gain described in sec- ‘‘(2) SPECIAL RULES.— ments made by subsection (c)(12) apply to tion 1203(a), proper adjustment shall be made ‘‘(A) ADJUSTMENTS.— for any deduction allowable to the estate or ‘‘(i) For purposes of determining the excess taxable years beginning after December 31, trust under section 1202 (relating to deduc- referred to in paragraph (1)(A), there shall be 1997. tion for excess of capital gains over capital treated as short-term capital gain in the tax- (4) WITHHOLDING.—The amendments made losses) or for the exclusion allowable to the able year an amount equal to the lesser of— by subsection (c)(14) apply only to amounts estate or trust under section 1203 (relating to ‘‘(I) the amount allowed for the taxable paid after the date of enactment of this Act. exclusion for gain from certain small busi- year under paragraph (1) or (2) of section Subtitle B—Capital Gains Reduction for ness stock). In the case of a trust, the deduc- 1211(b), or Corporations tion allowed by this subsection shall be sub- ‘‘(II) the adjusted taxable income for such SEC. 111. REDUCTION OF ALTERNATIVE CAPITAL ject to section 681 (relating to unrelated taxable year. GAIN TAX FOR CORPORATIONS. business income).’’. ‘‘(ii) For purposes of determining the ex- (a) IN GENERAL.—Section 1201 is amended (6) The last sentence of section 643(a)(3) is cess referred to in paragraph (1)(B), there to read as follows: amended to read as follows: ‘‘The deduction shall be treated as short-term capital gain in ‘‘SEC. 1201. ALTERNATIVE TAX FOR CORPORA- under section 1202 (relating to deduction of the taxable year an amount equal to the sum TIONS. excess of capital gains over capital losses) of— ‘‘(a) GENERAL RULE.—If for any taxable and the exclusion under section 1203 (relat- ‘‘(I) the amount allowed for the taxable year a corporation has a net capital gain, ing to exclusion for gain from certain small year under paragraph (1) or (2) of section then, in lieu of the tax imposed by sections business stock) shall not be taken into ac- 1211(b) or the adjusted taxable income for 11, 511, and 831 (whichever is applicable), count.’’. such taxable year, whichever is the least, there is hereby imposed a tax (if such tax is (7) Section 643(a)(6)(C) is amended by in- plus less than the tax imposed by such sections) serting ‘‘(i)’’ before ‘‘there shall’’ and by in- ‘‘(II) the excess of the amount described in which shall consist of the sum of— serting before the period ‘‘, and (ii) the de- subclause (I) over the net short-term capital ‘‘(1) a tax computed on the taxable income duction under section 1202 (relating to cap- loss (determined without regard to this sub- reduced by the amount of the net capital ital gains deduction) and the exclusion under section) for such year.’’. gain, at the rates and in the manner as if section 1203 (relating to exclusion for gain (C) Section 1212(b) is amended by adding at this subsection had not been enacted, plus from certain small business stock) shall not the end the following: ‘‘(2) a tax of 25 percent of the net capital be taken into account’’. ‘‘(3) TRANSITIONAL RULE.—In the case of gain. (8) Section 691(c)(4) is amended by striking any amount which, under this subsection ‘‘(b) TRANSITIONAL RULE.— ‘‘sections 1(h), 1201, 1202, and 1211’’ and in- and section 1211(b) (as in effect for taxable ‘‘(1) IN GENERAL.—In the case of any tax- serting ‘‘sections 1201, 1202, 1203, and 1211’’. years beginning before January 1, 1998), is able year ending after December 31, 1996, and (9) The second sentence of section 871(a)(2) treated as a capital loss in the first taxable beginning before January 1, 1998, in applying is amended by inserting ‘‘or 1203’’ after ‘‘sec- year beginning after December 31, 1997, para- subsection (a), net capital gain for such tax- tion 1202’’. graph (2) and section 1211(b) (as so in effect) able year shall not exceed such net capital January 21, 1997 CONGRESSIONAL RECORD — SENATE S445

gain determined by taking into account only (d) REPEAL OF MINIMUM TAX PREFERENCE.— ‘‘(2) any portion of such cost previously gain or loss properly taken into account for (1) IN GENERAL.—Section 57(a) is amended taken into account under this section. the portion of the taxable year after Decem- by striking paragraph (7). This section shall not apply to any gain ber 31, 1996. (2) CONFORMING AMENDMENT.—Section which is treated as ordinary income for pur- ‘‘(2) SPECIAL RULE FOR PASS-THRU ENTI- 53(d)(1)(B)(ii)(II) is amended by striking ‘‘, poses of this title. TIES.—Section 1202(d)(2) shall apply for pur- (5), and (7)’’ and inserting ‘‘and (5)’’. ‘‘(b) DEFINITIONS AND SPECIAL RULES.—For poses of paragraph (1). (e) STOCK OF LARGER BUSINESSES ELIGIBLE purposes of this section— ‘‘(c) CROSS REFERENCES.— FOR EXCLUSION.— ‘‘(1) QUALIFIED SMALL BUSINESS STOCK.— ‘‘For computation of the alternative tax— (1) IN GENERAL.—Section 1203(d)(1), as re- The term ‘qualified small business stock’ has ‘‘(1) in the case of life insurance companies, designated by section 101, is amended by the meaning given such term by section see section 801(a)(2), striking ‘‘$50,000,000’’ each place it appears 1203(c). ‘‘(2) in the case of regulated investment and inserting ‘‘$100,000,000’’. ‘‘(2) ELIGIBLE GAIN.—The term ‘eligible companies and their shareholders, see sec- (2) INFLATION ADJUSTMENT.—Section gain’ means any gain from the sale or ex- tion 852(b)(3)(A) and (D), and 1203(d), as so redesignated, is amended by change of qualified small business stock held ‘‘(3) in the case of real estate investment adding at the end the following: for more than 5 years. trusts, see section 857(b)(3)(A).’’. ‘‘(4) INFLATION ADJUSTMENT OF ASSET LIMI- ‘‘(3) PURCHASE.—A taxpayer shall be treat- (b) CONFORMING AMENDMENT.—Section TATION.—In the case of stock issued in any ed as having purchased any property if, but 852(b)(3)(D)(iii) is amended by striking ‘‘65 calendar year after 1998, the $100,000,000 for paragraph (4), the unadjusted basis of percent’’ and inserting ‘‘75 percent’’. amount contained in paragraph (1) shall be such property in the hands of the taxpayer (c) EFFECTIVE DATE.—The amendments increased by an amount equal to— would be its cost (within the meaning of sec- made by this section apply to taxable years ‘‘(A) such dollar amount, multiplied by tion 1012). ending after December 31, 1996. ‘‘(B) the cost-of-living adjustment deter- ‘‘(4) BASIS ADJUSTMENTS.—If gain from any mined under section 1(f)(3) for the calendar Subtitle C—Capital Loss Deduction Allowed sale is not recognized by reason of subsection year in which the taxable year begins, deter- With Respect to Sale or Exchange of Prin- (a), such gain shall be applied to reduce (in mined by substituting ‘calendar year 1997’ cipal Residence the order acquired) the basis for determining for ‘calendar year 1992’ in subparagraph (B) gain or loss of any qualified small business SEC. 121. CAPITAL LOSS DEDUCTION ALLOWED thereof. stock which is purchased by the taxpayer WITH RESPECT TO SALE OR EX- CHANGE OF PRINCIPAL RESIDENCE. If any amount as adjusted under the preced- during the 60-day period described in sub- section (a). (a) IN GENERAL.—Section 165(c) (relating to ing sentence is not a multiple of $10,000, such limitation on losses of individuals) is amend- amount shall be rounded to the nearest mul- ‘‘(c) SPECIAL RULES FOR TREATMENT OF RE- ed by striking ‘‘and’’ at the end of paragraph tiple of $10,000.’’. PLACEMENT STOCK.— (2), by striking the period at the end of para- (f) REPEAL OF PER-ISSUER LIMITATION.— ‘‘(1) HOLDING PERIOD FOR ACCRUED GAIN.— graph (3) and inserting ‘‘; and’’, and by add- Section 1203, as redesignated by section 101, For purposes of this chapter, gain from the ing at the end the following: is amended by striking subsection (b). disposition of any replacement qualified ‘‘(4) losses arising from the sale or ex- (g) OTHER MODIFICATIONS.— small business stock shall be treated as gain change of the principal residence (within the (1) REPEAL OF WORKING CAPITAL LIMITA- from the sale or exchange of qualified small meaning of section 1034) of the taxpayer.’’. TION.—Section 1203(e)(6), as redesignated by business stock held more than 5 years to the (b) EFFECTIVE DATE.—The amendments section 101, is amended— extent that the amount of such gain does not made by subsection (a) apply to sales and ex- (A) in subparagraph (B), by striking ‘‘2 exceed the amount of the reduction in the changes after December 31, 1996, in taxable years’’ and inserting ‘‘5 years’’; and basis of such stock by reason of subsection years ending after such date. (B) by striking the last sentence. (b)(4). (2) EXCEPTION FROM REDEMPTION RULES ‘‘(2) TACKING OF HOLDING PERIOD FOR PUR- TITLE II—SMALL BUSINESS VENTURE WHERE BUSINESS PURPOSE.—Section 1203(c)(3), POSES OF DEFERRAL.—Solely for purposes of CAPITAL STOCK as so redesignated, is amended by adding at applying this section, if any replacement SEC. 201. MODIFICATIONS TO EXCLUSION OF the end the following: qualified small business stock is disposed of GAIN ON CERTAIN SMALL BUSINESS ‘‘(D) WAIVER WHERE BUSINESS PURPOSE.—A before the taxpayer has held such stock for STOCK. purchase of stock by the issuing corporation more than 5 years, gain from such stock (a) INCREASE IN EXCLUSION PERCENTAGE.— shall be disregarded for purposes of subpara- shall be treated eligible gain for purposes of (1) IN GENERAL.—Section 1203(a), as redesig- graph (B) if the issuing corporation estab- subsection (a). nated by section 101, is amended— lishes that there was a business purpose for ‘‘(3) REPLACEMENT QUALIFIED SMALL BUSI- (A) by striking ‘‘50 percent’’ and inserting such purchase and one of the principal pur- NESS STOCK.—For purposes of this subsection, ‘‘75 percent’’; and poses of the purchase was not to avoid the the term ‘replacement qualified small busi- (B) in the heading, by striking ‘‘50-PER- limitations of this section.’’. ness stock’ means any qualified small busi- CENT’’ and inserting ‘‘PARTIAL’’. (h) QUALIFIED TRADE OR BUSINESS.—Sec- ness stock the basis of which was reduced (2) CONFORMING AMENDMENTS.— tion 1203(e)(3), as redesignated by section 101, under subsection (b)(4).’’. (A) Section 1203, as so redesignated, is is amended by inserting ‘‘and’’ at the end of (b) CONFORMING AMENDMENTS.— amended by adding at the end the following: subparagraph (C), by striking ‘‘, and’’ at the (1) Section 1016(a)(23) is amended— ‘‘(l) CROSS REFERENCE.— end of subparagraph (D) and inserting a pe- (A) by striking ‘‘or 1044’’ and inserting ‘‘, ‘‘For treatment of eligible gain not ex- riod, and by striking subparagraph (E). 1044, or 1045’’; and cluded under subsection (a), see sections 1201 (i) EFFECTIVE DATES.— (B) by striking ‘‘or 1044(d)’’ and inserting ‘‘, and 1202.’’. (1) IN GENERAL.—Except as provided in 1044(d), or 1045(b)(4)’’. (B) The heading for section 1203, as so re- paragraph (2), the amendments made by this (2) The table of sections for part III of sub- designated, is amended by striking ‘‘50-PER- section apply to stock issued after the date chapter O of chapter 1 is amended by adding CENT’’ and inserting ‘‘PARTIAL’’. of enactment of this Act. at the end the following: (C) The table of sections for part I of sub- (2) SPECIAL RULE.—The amendments made ‘‘Sec. 1045. Rollover of gain from qualified chapter P of chapter 1, as amended by sec- by subsections (a), (c), (e), and (f) apply to small business stock to another tion 101(d), is amended by striking ‘‘50-per- stock issued after August 10, 1993. qualified small business cent’’ in the item relating to section 1203 and SEC. 202. ROLLOVER OF GAIN FROM SALE OF stock.’’. inserting ‘‘Partial’’. QUALIFIED STOCK. (b) REDUCTION IN HOLDING PERIOD.—Sub- (a) IN GENERAL.—Part III of subchapter O (c) EFFECTIVE DATE.—The amendments section (a) of section 1202 is amended by of chapter 1 is amended by adding at the end made by this section apply to stock sold or striking ‘‘5 years’’ and inserting ‘‘3 years’’. the following: exchanged after the date of enactment of this Act. (c) EXCLUSION AVAILABLE TO CORPORA- ‘‘SEC. 1045. ROLLOVER OF GAIN FROM QUALIFIED TIONS.— SMALL BUSINESS STOCK TO AN- (1) IN GENERAL.—Section 1203(a), as redesig- OTHER QUALIFIED SMALL BUSINESS SUMMARY OF CAPITAL FORMATION ACT OF 1997 nated by section 101, is amended by striking STOCK. The Capital Formation Act of 1997 would ‘‘other than a corporation’’. ‘‘(a) NONRECOGNITION OF GAIN.—In the case reduce the tax rate on capital gains and en- (2) CONFORMING AMENDMENT.—Section of any sale of qualified small business stock courage investment in new and growing busi- 1203(c), as so redesignated, is amended by with respect to which the taxpayer elects the ness enterprises through the following provi- adding at the end the following: application of this section, eligible gain from sions: ‘‘(4) STOCK HELD AMONG MEMBERS OF CON- such sale shall be recognized only to the ex- I. Broad-Based Tax Relief: TROLLED GROUP NOT ELIGIBLE.—Stock of a tent that the amount realized on such sale (1) Individual taxpayers would be allowed a member of a parent-subsidiary controlled exceeds— deduction of 50 percent of any net capital group (as defined in subsection (d)(3)) shall ‘‘(1) the cost of any qualified small busi- gain. The top effective rate on capital gains not be treated as qualified small business ness stock purchased by the taxpayer during would thus be 19.8 percent. stock while held by another member of such the 60-day period beginning on the date of (2) Corporations would have a maximum group.’’. such sale, reduced by capital gains tax rate of 25 percent. S446 CONGRESSIONAL RECORD — SENATE January 21, 1997 (3) Capital loss treatment would be allowed This bill gives people at all income Before I go any further, I must give with respect to the sale of a taxpayer’s prin- levels a reason to put their money in credit where credit is due. The targeted cipal residence. places where that money will help busi- provisions of this legislation build on (4) Indexing of capital assets would not be the fine work of Senator DALE BUMP- included. nesses start and grow and that means (5) Would be effective for taxable years more jobs for Americans and more eco- ERS, who has been a leader in providing ending after December 31, 1996. nomic prosperity for our country. The incentives for start-up businesses to at- II. Targeted Incentives to Invest in Small benefits of this capital gains cut will tract capital. He worked mightily to Business Enterprises: not flow just to people of wealth. Any- have a targeted incentive piece in- (1) Provides an exclusion of 75 percent of one who has stock, who has money in- cluded in the 1993 reconciliation bill capital gains from the sale of investments in vested in a mutual fund, who owns a and he succeeded. The legislation we qualified small business stock held for more than three years. home, who has a stock option plan at are introducing today builds on, and we (2) Allows 100 percent deferral of capital work, has a stake in capital gains tax hope, improves, on that targeted incen- gains tax, after the three year period, if pro- relief. This means millions and mil- tive. ceeds from the sale of qualified small busi- lions of middle-class American families I would also like to note that I am ness stock are rolled over within 60 days into stand to benefit from this legislation. I also joining Minority Leader DASCHLE another qualified small business stock. Gains often cite data on employee stock op- today as a cosponsor of his Targeted accrued after the rollover would qualify for a tions and stock purchase plans in talk- Investment Incentive and Economic 50 percent deduction if held for more than ing about stakeholders in a capital Growth Act of 1997. That proposal con- one year, 75 percent exclusion if held for tains a capital gains rollover provision more than another three years, or, at any gains cut. A recent count showed that time, could be rolled over yet again into an- over three hundred American compa- which contains features of a targeted other qualified small business stock for 100 nies with over seven million workers rollover piece I introduced in the last percent deferral. offered these plans. Each of those Congress, S. 1053, as well as features (3) Would be effective upon date of enact- workers and their spouses and their from the targeted section of the bill I ment. children stand to gain from this legis- am introducing with Senator HATCH Example: A taxpayer buys qualified small lation. today. Senator DASCHLE’s legislation is business stock in 1997 for $10,000. She sells This capital gains bill rewards those also very helpful insofar as he improves the stock in 2001 for $20,000. She would be al- lowed to exclude 75 percent of the gain, or people who are willing to invest their upon the targeted capital gains bill we $7,500, and then deduct 50 percent of the re- money and not spend it. It rewards peo- passed in 1993, much in the same way maining gain of $2,500. Thus, she would pay ple who put their money in places the broader capital gains bill being in- tax on only $1,250. Or, if she chose to roll where it will add to our national pool troduced today does. over the $20,000 proceed from the sale into of savings. Businesses can draw on this I am also delighted that Senator another qualified small business stock with- pool of savings to meet their capital DASCHLE’s bill incorporates a version of in 60 days, she would defer all tax until she needs, expand their businesses and hire a bill I introduced in June of 1993, The ultimately sold the second stock. more workers. The 1995 Nobel Prize Equity Expansion Act of 1993. That bill Qualified small business stock is defined as created a preferred type of stock op- newly issued stock of corporations with up winner in Economics, Robert Lucas, to $100 million in assets and is an expansion had this to say about capital gains tions for companies willing to offer of the current law targeted small business taxes in the fall of 1995: ‘‘When I left stock options to a wide cross section of capital gains exclusion added by the 1993 tax graduate school in 1963, I believed that their employees. Under current law, act. The changes in the targeted small busi- the single most desirable change in the taxpayers are taxed on a stock option ness stock incentive from current law would U.S. tax structure would be the tax- when they exercise their right to buy include: ation of gains as ordinary income. I stock, not when they sell that stock. (1) Allow corporations to participate. The perverse effect of taxing this paper (2) Remove the current law per-issuer limi- now believe that neither capital gains tation. nor any of the income from capital gain is that many people feel com- (3) Expand the working capital limitation. should be taxed at all.’’ Professor pelled to sell their stock when they ex- Mr. LIEBERMAN. Mr. President, I Lucas went on to say that his analysis ercise their option to buy it in order to pay the tax. The Equity Expansion Act am proud to join Senator HATCH is in- shows that even under conservative as- troducing this important capital gains sumptions, eliminating capital gains began with the premise that we ought legislation today. taxes would increase available capital to encourage people to hold their in- This bill is nearly identical to S. 959, in this country by about 35 percent. vestment in their company. It changed legislation that I introduced with Sen- While we reduce not eliminate the tax the taxable event from the date of ex- ator HATCH in the last Congress. Ulti- on capital in this country, we hope you ercise to the date of sale for a new mately that bill had over 40 cospon- will consider joining us in cosponsoring class of stock options known as per- sors. A variation of that bill was in- this important legislation. formance-based stock options [PSOs]. cluded in the broader budget and tax I would also like to point out that Under my bill, as under the bill being bill which was approved by the Con- this bill contains a targeted sweetener introduced by the Minority Leader, in gress in 1995 but failed to become law. for investments in qualified small busi- order to qualify for this new class of In addition, a version of S. 959 was in- nesses. This is an attempt to promote stock options, at least half of a compa- ny’s stock options would have to go to cluded in the Centrist Coalition budg- investments in small businesses, the non-highly compensated employees. et, a budget which was crafted by a firms that are driving job creation in In addition, 50 percent of any capital our economy. We expect these provi- group of 22 Senators evenly divided be- gain on these PSO’s would be exempt sions to be very helpful to the kinds of tween Republicans and Democrats. from tax if they are held by the tax- small businesses we need for our fu- That package was offered on the floor payer for more than two years. I hope ture, the high technology companies of the Senate in May of 1996 and re- this will prove a powerful incentive for that will be the source of new jobs in ceived a very respectable 46 votes. employees to buy and hold the invest- The capital gains bill we are intro- the next century. The bill provides a 75 ments they are making in their com- ducing today contains a broad-based percent exclusion of capital gains from pany. capital gains cut which would allow in- sales of investment in qualified small In closing, I applaud both Senator dividuals to deduct 50 percent of their business stock held more than three HATCH and Minority Leader DASCHLE, capital gains and a corporate rate of 25 years. In addition, it allows a 100 per- in their efforts to promote economic percent. It also has a targeted provi- cent deferral of capital gains, after the growth by changing the way we tax in- sion which provides a ‘‘sweetener’’ for three year period, if proceeds from the vestment in this country. They have investments in qualified small busi- sale of qualified small business stock done yeoman’s work on this issue and I nesses. In addition, it allows taxpayers are rolled over within 60 days into an- hope that we will be able to move for- to deduct losses on the sale of a prin- other qualified small business stock. If ward in a bipartisan way to make these cipal residence, something which is the taxpayer continues to roll into incentives a reality in the very near fu- very important in places like my home qualified stock, and holds that stock ture. state of Connecticut as well as in Cali- for at least a year, this deferral could fornia and Texas. continue indefinitely. By Ms. SNOWE: January 21, 1997 CONGRESSIONAL RECORD — SENATE S447 S. 67. A bill to amend the Public lives and health care dollars, and pre- percent of its income in taxes. That is Health Service Act to extend the pro- vent undue suffering in millions of more than it spends on food, clothing, gram of research on breast cancer; to American women and families. and shelter combined. People around the Committee on Labor and Human On behalf of the 2.6 million women the country are reacting to that heavy Resources. living with breast cancer, I urge my burden. The new faces in the House and THE BREAST CANCER RESEARCH EXTENSION ACT colleagues to support this important Senate in recent years have been those OF 1997 bill. of people pledging to oppose tax in- Ms. SNOWE. Mr. President, I am ex- creases and support tax cuts. President tremely pleased that one of the first By Mr. KYL: Clinton won reelection, promising to resolutions introduced in the 105th S. 68. A bill to establish a commis- support tax cuts. In some cases, people Congress by the Republican leadership sion to study the impact on voter turn- around the country have also placed will significantly increase biomedical out of making the deadline for filing limits on how much their state govern- research funding at NIH. I truly believe Federal income tax returns conform to ments can tax them. But advocates of that this is a momentous occasion the date of Federal elections; to the tax cuts, and tax limits themselves, which will reap enormous benefits for Committee on Rules and Administra- can only achieve their purpose if peo- all Americans. Building on this, I rise tion. ple are willing to go to the polls to sup- to introduce legislation which author- THE VOTER TURNOUT ENHANCEMENT STUDY port them. izes increased funding for breast cancer COMMISSION ACT With that in mind, one way to dem- research. Mr. KYL. Mr. President, I rise today onstrate to people that their choices at Over the past six years, Congress has to introduce the Voter Turnout En- the polls have a real effect on their demonstrated an increased commit- hancement Study (VoTES) Commission lives would be to move the deadline for ment to the fight against breast can- Act, a bill designed to promote fiscal filing income tax returns to Election cer. Back in 1991, less than $100 million responsibility while helping to moti- Day. That would give people a reason dollars was spent on breast cancer re- vate more Americans to get to the to vote by focusing their attention on search. Since then, Congress has stead- polls on Election Day. the role of government—and how much ily increased this allocation. These in- Mr. President, there are far too many it actually takes from them in taxes— creases have stimulated new and excit- people who, for one reason or another, on the day of the year that they have ing research that has begun to unravel choose not to exercise their right to the greatest opportunity to influence the mysteries of this devastating dis- vote. Although the reasons for their change. Moving Tax Day to Election ease and is moving us closer to a cure. non-participation are undoubtedly var- Day would probably result in more Today, we must send a message ied, I suspect that it comes down to a voter turnout and more change in through our authorization level to sci- perception that the choices they will Washington than anything else we entists and research policy makers make on the ballot will not make could do. And of course, maximizing that we are committed to continued enough of a difference. One person, ex- voter turnout is the best way to ensure funding for this important research. plaining why she chose not to partici- that government officials heed the will This increase in funding is necessary pate in last November’s election, told of the people and make sound public because breast cancer has reached cri- the Tucson Citizen that ‘‘it doesn’t policy. sis levels in America. In 1997, it is esti- make any difference in my life who’s The bill I am introducing today mated that 180,200 new cases of breast president.’’ This is a common enough would provide for a thoughtful and cancer will be diagnosed in this coun- sentiment that the election last fall thorough analysis of a change in the try, and 43,900 women will die from this posted one of the lowest voter turnout tax-filing deadline from April to No- disease. Breast cancer is the most com- rates this century. vember, its potential effect on voter mon form of cancer and the second The ‘‘Motor Voter’’ bill that Presi- turnout, as well as any economic im- leading cause of cancer deaths among dent Clinton championed a few years pact it might have. The bill explicitly American women. Today, over 2.6 mil- ago as a way to get out the vote appar- requires that an independent commis- lion American women are living with ently had little effect, other than to sion conduct a cost-benefit analysis—a this disease. In my home state of impose additional costs and mandates requirement that Congress would be Maine, it is the most commonly-diag- on state and local governments and wise to impose routinely on legislative nosed cancer among women, represent- their taxpayers. Although the bill did initiatives to separate the good ideas ing more than 30 percent of all new help increase voter registration, it did from the bad, and save taxpayers a lot cancers in Maine women. little, if anything, to motivate people of money in the process. A number of In addition to these enormous human to get to the polls. Like the woman in other cost-limiting provisions have costs, breast cancer also exacts a heavy Tucson, too many people did not be- been included to protect taxpayers’ in- financial toll—over $6 billion of our lieve they had enough of a stake in the terests. health care dollars are spent on breast outcome of the election to take the While just about every day of the cancer annually. time to vote. year is celebrated by special interest Today, however, there is cause for Of course, people do have a stake in groups around the country for the gov- hope. Recent scientific progress made the outcome of every election. For one ernment largesse they receive, the tax- in the fight to conquer breast cancer is thing, the candidates chosen determine payers—the silent majority—have only encouraging. Researchers have isolated how much and for what purpose citi- one day of the year to focus on what the genes responsible for inherited zens are taxed. Most people I hear from that largesse means to them—how breast cancer, and are beginning to un- say that is one area where the majority much it costs them—and that is Tax derstand the mechanism of the cancer of those elected in the past failed to Day. I believe that it ought to coincide cell itself. It is imperative that we cap- heed their concerns; they say their with Election Day. italize upon these advances by continu- taxes are far too high. I invite my colleagues to join me as ing to support the scientists inves- One survey, which was published in cosponsors of this initiative, and I ask tigating this disease and their innova- Reader’s Digest last year, found that unanimous consent that the text of the tive research. more than two-thirds of Americans felt bill be printed in the RECORD. For this reason, my bill increases the their own taxes were ‘‘too high.’’ Ac- There being no objection, the bill was FY98 funding authorization level for cording to the poll, the maximum tax ordered to be printed in the RECORD, as breast cancer research to $590 million. burden that Americans think a family follows: This level represents the funding level of four should bear is 25 percent of its S. 68 scientists believe is necessary to make total income, even if the family’s in- Be it enacted by the Senate and House of Rep- progress against this disease. This in- come is $200,000 per year. resentatives of the United States of America in creased funding will contribute sub- But the government takes far more Congress assembled, stantially toward solving the mysteries than that. The average family—whose SECTION 1. SHORT TITLE. surrounding breast cancer. Our contin- income is not $200,000, but something This Act may be cited as the ‘‘Voter Turn- ued investment will save countless far less than that—now pays nearly 40 out Enhancement Study Commission Act’’. S448 CONGRESSIONAL RECORD — SENATE January 21, 1997 SECTION 2. FINDINGS. with its recommendations for such legisla- a fixed interest rate between five per- (a) FINDINGS.—The Congress finds that: tion and administrative actions as it consid- cent and eight percent instead of the (1) The right of citizens of the United ers appropriate. floating 30-year Treasury rate. That States to vote is a fundamental right. SECTION 5. POWERS OF THE COMMISSION. will make it easier for employers to (2) It is the duty of federal, state, and local (a) HEARINGS.—The Commission may hold governments to promote the exercise of that plan for the required contributions, such hearings, sit and act at such times and and for employers and employees alike right to vote to the greatest extent possible. places, take such testimony, and receive (3) The power to tax is a power that citi- such information as the Commission consid- to understand what their lump-sum zens of the United States only guardedly ers advisable to carry out the purposes of benefits will ultimately be. vest in their elected representatives to the this Act. Mr. President, I invite my colleagues federal, state, and local governments. (b) INFORMATION TO BE GATHERED.—The to join me as cosponsors of this initia- (4) The only regular contacts most Ameri- Commission shall obtain information from tive. cans have with their government are the fil- sources as it deems appropriate, including, Mr. President, I ask unanimous con- ing of their personal income tax returns and but not limited to, taxpayers and their rep- sent that the text of the bill be printed their participation in federal, state, and resentatives, Governors, state and federal in the RECORD. local elections. election officials, and the Commissioner of (5) About 14 million individual income tax the Internal Revenue Service. There being no objection, the bill was returns were filed in 1996, but only about 92 ordered to be printed in the RECORD, as SECTION 6. TERMINATION OF THE COMMISSION. million Americans cast votes in that year’s The Commission shall terminate upon the follows: presidential election. submission of the report under section 4. S. 69 SECTION 3. ESTABLISHMENT OF COMMISSION. SECTION 7. AUTHORIZATION OF APPROPRIA- Be it enacted by the Senate and House of Rep- (a) ESTABLISHMENT.—There is established a TIONS resentatives of the United States of America in commission to be known as the Voter Turn- There is authorized to be appropriated Congress assembled, out Enhancement Study Commission (here- such sums as may be necessary to carry out SECTION 1. SHORT TITLE. after in this Act referred to as the ‘Commis- the purposes of this Act. This Act may be cited as the ‘‘Retirement sion’). Protection Act Amendments of 1997’’. (b) MEMBERSHIP.— By Mr. KYL: SECTION 2. INTEREST RATE FOR DETERMINA- (1) COMPOSITION.—The Commission shall be S. 69. A bill to amend the Internal TION OF PRESENT VALUE FOR PUR- composed of nine members of whom— POSES OF PENSION CASH-OUT RE- (A) 3 shall be appointed by the President; Revenue Code of 1986 to allow a one- time election of the interest rate to be STRICTIONS. (B) 3 shall be appointed by the Majority (a) IN GENERAL.—Subclause (II) of section Leader of the Senate, and used to determine present value for 417(e)(3)(A)(ii) of the Internal Revenue Code (C) 3 shall be appointed by the Speaker of purposes of pension cash-out restric- of 1986 (relating to determination of present the House of Representatives. tions, and for other purposes; to the value) is amended by inserting ‘‘, or, at the (c) PERIOD OF APPOINTMENT, VACANCIES.— Committee on Finance. irrevocable election of the plan, an annual Members shall be appointed no later than 30 THE RETIREMENT PROTECTION ACT AMENDMENT interest rate specified in the plan, which days after the date of the enactment of this may not be less than 5 percent nor more than Act, and serve for the life of the Commission. ACT OF 1997 Mr. KYL. Mr. President, today I am 8 percent’’ after ‘‘prescribe’’. Any vacancy in the Commission shall not af- (b) CONFORMING AMENDMENT.—Subclause fect its powers, but shall be filled in the introducing the Retirement Protection (II) of section 205(g)(3)(A)(ii) of the Employee same manner as the original appointment. Act Amendments of 1997, a bill that Retirement Income Security Act of 1974 (29 (d) COMPENSATION.— will make a small but very important U.S.C. 1055(g)(3)(A)(ii)) is amended by insert- (1) RATES OF PAY.—Except as provided in change in the pension-related provi- ing ‘‘, or, at the irrevocable election of the paragraph (2), members of the Commission sions of the 1994 Uruguay Round Agree- plan, an annual interest rate specified in the shall serve without pay. plan, which may not be less than 5 percent (2) TRAVEL EXPENSES.—Each member of the ments Act. Mr. President, the 1994 trade act nor more than 8 percent’’ after ‘‘perscribe’’. Commission shall receive travel expenses, in- (c) EFFECTIVE DATE.—The amendments clude per diem in lieu of subsistence, in ac- made some very significant changes in made by this section shall take effect as if cordance with sections 5702 and 5703 of title pension law, including a modification included in the enactment of the amend- 5, United States Code. in the interest rate used to calculate ments made by section 767 of the Uruguay (e) INITIAL MEETING.—No later than 30 days lump-sum distributions from defined Round Agreements Act. after the date on which all members of the benefit pension plans. The act required Commission have been appointed, the Com- such plans to use the interest rate on By Mrs. BOXER (for herself, Mr. mission shall hold its first meeting. CHAFEE, Mr. REED, and Mr. (f) MEETINGS.—After the initial meeting, 30-year Treasury securities, a rate that the Commission shall meet at the call of the is proving too volatile for many retire- DURBIN): Chairman. ment plans, particularly small plans. S. 70. A bill to apply the same quality (g) QUORUM.—A majority of the members of Bruce Tempkin, an actuary and and safety standards to domestically the Commission shall constitute a quorum, small business pension specialist at manufactured handguns that are cur- but a lesser number of members may hold Louis Kravitz & Associates, described rently applied to imported handguns; hearings. the effect of the change this way: ‘‘it is to the Committee on the Judiciary. (h) CHAIRMAN AND VICE CHAIRMAN.—The similar to taking out a variable-rate THE AMERICAN HANDGUN STANDARDS ACT Commission shall select a Chairman and Vice Chairman from among its members. mortgage with no cap.’’ You could find Mrs. BOXER. Mr. President, today I SECTION 4. DUTIES OF THE COMMISSION. yourself getting ready to retire and ex- am to introducing the American Hand- (a) STUDY.— pecting a lump-sum distribution of a gun Standards Act, a bill to require (1) IN GENERAL.—The Commission shall given amount, but being told that you that handguns made in the United conduct a thorough study of all matters re- will actually get a third less because States meet the same quality and safe- lating to the propriety of conforming the an- the government just mandated an in- ty standards currently required of im- nual filing date for federal income tax re- terest-rate change. That is not only ported handguns. I am joined in this ef- turns with the date for holding biennial fed- unfair, it discourages people from par- fort by Senators JOHN CHAFEE, JACK eral elections. ticipating in private pension plans at REED, and DICK DURBIN. (2) MATTERS STUDIED.—The matters studied the very time we need to be encourag- This bill is aimed at junk guns—the by the Commission shall include: (A) whether establishment of a single date ing more such planning. cheap, unsafe, and easily concealable on which individuals can fulfill their obliga- Recognizing the problem created by handguns that are the criminals’ clear tions of citizenship as both electors and tax- the 1994 law, legislators included lan- favorite. Under our bill, junk guns will payers would increase participation in fed- guage in the Small Business Job Pro- no longer be allowed to be manufac- eral, state, and local elections; and tection Act last year to delay the effec- tured or sold in the United States of (B) a cost-benefit analysis of any change in tive date of the change for plans adopt- America. tax filing deadlines. ed and in effect before December 8, Nearly 30 years ago, Congress (b) REPORT.—No later than 12 months after 1995. While I supported that delay, it is, thought it had solved the problem of the date of the enactment of this Act, the Commission shall submit a report to the at best, only a temporary solution. junk guns. Following the assassination President and the Congress which shall con- The bill I am introducing today pro- of Senator Robert Kennedy, Congress tain a detailed statement of the findings and poses a permanent solution. It would passed the Gun Control Act of 1968, conclusions of the Commission, together give plans a one-time option to choose which banned the importation of junk January 21, 1997 CONGRESSIONAL RECORD — SENATE S449 guns. At the time, virtually all junk S. 70 ‘‘(E) the manufacture, transfer, or posses- guns were imported, so restricting Be it enacted by the Senate and House of Rep- sion of a junk gun by a licensed manufac- their domestic manufacture was not resentatives of the United States of America in turer or licensed importer for the purposes of considered necessary. Congress assembled, testing or experimentation authorized by the Secretary.’’. To implement the new law, a quality SECTION 1. SHORT TITLE. This Act may be cited as the ‘‘American and safety test was designed to meas- By Mr. DASCHLE (for himself, ure a gun’s suitability for import. Any Handgun Standards Act of 1997’’. SEC. 2. FINDINGS. Mr. KERRY, Mr. LEAHY, Ms. MI- foreign-made firearm that fails this The Congress finds that— KULSKI, Mrs. MURRAY, Mr. REID, test is, by definition, a junk gun, and it (1) the Gun Control Act of 1968 prohibited Mr. WYDEN, Mrs. BOXER, Ms. cannot be imported into the United the importation of handguns that failed to MOSELEY-BRAUN, Mr. HARKIN, States. This bill would require that all meet minimum quality and safety standards; and Mr. LAUTENBERG): handguns made in the United States (2) the Gun Control Act of 1968 did not im- S. 71. A bill to amend the Fair Labor pass this common sense quality and pose any quality and safety standards on do- Standards Act of 1938 and the Civil safety test. mestically produced handguns; (3) domestically produced handguns are Rights Act of 1964 to provide more ef- The Gun Control Act of 1968 created a fective remedies to victims of discrimi- junk gun double standard. Imported specifically exempted from oversight by the Consumer Product Safety Commission and nation in the payment of wages on the handguns were subjected to rigorous are not required to meet any quality and basis of sex, and for other purposes; to quality and safety standards, but guns safety standards; the Committee on Labor and Human made in the United States were left to- (4) each year— Resources. tally unregulated. Even toy guns are (A) gunshots kill more than 35,000 Ameri- PAYCHECK FAIRNESS ACT subject to quality and safety stand- cans and wound approximately 250,000; (B) approximately 75,000 Americans are Mr. DASCHLE. Mr. President, I ask ards, but real handguns made in the unanimous consent that the text of the United States are not required to meet hospitalized for the treatment of gunshot bill be printed in the RECORD. even one. wounds; (C) Americans spend more than $20 billion There being no objection, the bill was The need for strong action is clear. for the medical treatment of gunshot ordered to be printed in the RECORD, as Gunshots are now the leading cause of wounds; and follows: death among children in California. A (D) gun violence costs the United States S. 71 child dies from gunfire every 92 min- economy a total of $135 billion; utes in the United States. A total of (5) the disparate treatment of imported By the Senate and House of Representatives of the United States of America in Congress as- 39,720 people died from gunshot wounds handguns and domestically produced hand- guns has led to the creation of a high-volume sembled, in 1994 and approximately 250,000 Amer- SECTION 1. SHORT TITLE. icans were injured. If we were in a war market for junk guns, defined as those hand- guns that fail to meet the quality and safety This Act may be cited as the ‘‘Paycheck with this many casualties, there would standards required of imported handguns; Fairness Act’’. be protests in the streets to end it. Let (6) traffic in junk guns constitutes a seri- SEC. 2. FINDINGS. us end now, end this junk gun war. ous threat to public welfare and to law en- Congress finds the following: For each person killed by gunfire, up forcement officers; (1) Women have entered the workforce in to 8 are wounded. Many survivors of (7) junk guns are used disproportionately record numbers. gun violence face debilitating injuries in the commission of crimes; and (2) Even in the 1990s, women earn signifi- that require constant medical atten- (8) the domestic manufacture, transfer, and cantly lower pay than men for work on jobs tion. The economic costs of gun vio- possession of junk guns should be restricted. that require equal skill, effort, and respon- SEC. 3. DEFINITION OF JUNK GUN. sibility and that are performed under similar lence are staggering. Direct medical working conditions. costs alone cost Americans more than Section 921(a) of title 18, United States Code, is amended by adding at the end the (3) The existence of such pay disparities— $20 billion. When indirect costs, such as following new paragraph: (A) depresses the wages of working families lost productivity, are considered, the ‘‘(33)(A) The term ‘junk gun’ means any who rely on the wages of all members of the total economic cost of gun injuries handgun that does not meet the standard im- family to make ends meet; soars to over $120 billion. posed on imported handguns as described in (B) prevents the optimum utilization of I first introduced junk gun legisla- section 925(d)(3), and any regulations issued available labor resources; tion less than a year ago. Since then, I under such section.’’. (C) has been spread and perpetuated, through commerce and the channels and in- have received support so strong that it SEC. 4. RESTRICTION ON MANUFACTURE, TRANS- FER, AND POSSESSION OF CERTAIN strumentalities of commerce, among the has surpassed even my most optimistic HANDGUNS. workers of the several States; hopes. More than two dozen California Section 922 of title 18, United States Code, (D) burdens commerce and the free flow of cities and counties have passed local is amended by adding at the end the follow- goods in commerce; ordinances banning junk gun sales, and ing new subsection: (E) constitutes an unfair method of com- my legislation has been endorsed by ‘‘(y)(1) It shall be unlawful for a person to petition in commerce; the California Police Chiefs Associa- manufacture, transfer, or possess a junk gun (F) leads to labor disputes burdening and tion and 36 individual police chiefs and that has been shipped or transported in obstructing commerce and the free flow of interstate or foreign commerce. goods in commerce; and sheriffs representing some of Califor- ‘‘(2) Paragraph (1) shall not apply to— (G) interferes with the orderly and fair nia’s largest cities, including Los An- ‘‘(A) the possession or transfer of a junk marketing of goods in commerce. geles, San Francisco, San Jose and gun otherwise lawfully possessed under Fed- (4)(A) Artificial barriers to the elimination Sacramento. eral law on the date of the enactment of the of discrimination in the payment of wages on This legislation has generated such American Handgun Standards Act of 1997; the basis of sex continue to exist more than strong support in the law enforcement ‘‘(B) a firearm or replica of a firearm that 3 decades after the enactment of the Fair community because police know the has been rendered permanently inoperative; Labor Standards Act of 1938 (29 U.S.C. 201 et danger of these junk guns first hand. ‘‘(C)(i) the manufacture for, transfer to, or seq.) and the Civil Rights Act of 1964 (42 They know that junk guns are the possession by, the United States or a State U.S.C. 2000a et seq.). or a department or agency of the United (B) Elimination of such barriers would criminals’ favorite firearms. States, or a State or a department, agency, have positive effects, including— Junk guns are 3.4 times as likely to or political subdivision of a State, of a junk (i) providing a solution to problems in the be used in crimes as are other firearms. gun; or economy created by unfair pay disparities; And newly compiled ATF data shows ‘‘(ii) the transfer to, or possession by, a law (ii) substantially reducing the number of that in 1996, the three firearms most enforcement officer employed by an entity working women earning unfairly low wages, frequently traced at crime scenes were referred to in clause (i) of a junk gun for law thereby reducing the dependence on public junk guns made in America. enforcement purposes (whether on or off- assistance; and I ask unanimous consent that the duty); (iii) promoting stable families by enabling ‘‘(D) the transfer to, or possession by, a all family members to earn a fair rate of pay. full text of the bill be printed in the rail police officer employed by a rail carrier (5) Only with increased information about RECORD. and certified or commissioned as a police of- the provisions added by the Equal Pay Act of There being no objection, the bill was ficer under the laws of a State of a junk gun 1963 and generalized wage data, along with ordered to be printed in the RECORD, as for purposes of law enforcement (whether on more effective remedies, will women recog- follows: or off-duty); or nize and enforce their rights to equal pay for S450 CONGRESSIONAL RECORD — SENATE January 21, 1997 work on jobs that require equal skill, effort, ‘‘(2) The third through fifth sentences of receipt of the award and use the award in its and responsibility and that are performed section 709(c) shall apply to employers, regu- advertising, if the business agrees to help under similar working conditions. lations, and records described in paragraph other United States businesses improve with (6) Certain employers have already made (1) in the same manner and to the same ex- respect to the elimination of pay disparities great strides in eradicating unfair pay dis- tent as the sentences apply to employers, between men and women. parities in the workplace and their achieve- regulations, and records described in such (d) BUSINESS.—For the purposes of this sec- ments should be recognized. section.’’. tion, the term ‘‘business’’ includes— SEC. 3. ENHANCED ENFORCEMENT OF EQUAL SEC. 5. TRAINING. (1)(A) a corporation, including a nonprofit PAY REQUIREMENTS. The Equal Employment Opportunity Com- corporation; (a) NONRETALIATION PROVISION.—Section mission, subject to the availability of funds (B) a partnership; 15(a)(3) of the Fair Labor Standards Act of appropriated under section 8(b), shall provide (C) a professional association; 1938 (29 U.S.C. 215(a)(3)) is amended— training to Commission employees and af- (D) a labor organization; and (1) by striking ‘‘or has’’ each place it ap- fected individuals and entities on matters in- (E) a business entity similar to an entity pears and inserting ‘‘has’’; and volving discrimination in the payment of described in any of subparagraphs (A) (2) by inserting before the semicolon the wages. through (D); following: ‘‘, or has inquired about, dis- SEC. 6. RESEARCH, EDUCATION, AND OUTREACH. (2) an entity carrying out an education re- cussed, or otherwise disclosed the wages of The Secretary of Labor shall conduct stud- ferral program, a training program, such as the employee or another employee’’. ies and provide information to employers, an apprenticeship or management training (b) ENHANCED PENALTIES.—Section 16(b) of labor organizations, and the general public program, or a similar program; and such Act (29 U.S.C. 216(b)) is amended— concerning the means available to eliminate (3) an entity carrying out a joint program, (1) by inserting after the first sentence the pay disparities between men and women, in- formed by a combination of any entities de- following: ‘‘Any employer who violates sec- cluding— scribed in paragraph (1) or (2). tion 6(d) shall additionally be liable for such (1) conducting and promoting research to SEC. 8. INCREASED RESOURCES FOR ENFORCE- compensatory or punitive damages as may develop the means to correct expeditiously MENT AND EDUCATION. be appropriate.’’; the conditions leading to the pay disparities; (a) GENERAL RESOURCES.—There is author- (2) in the sentence beginning ‘‘An action (2) publishing and otherwise making avail- ized to be appropriated to the Equal Employ- to’’, by striking ‘‘either of the preceding sen- able to employers, labor organizations, pro- ment Opportunity Commission, for necessary tences’’ and inserting ‘‘any of the preceding fessional associations, educational institu- expenses of the Commission in carrying out sentences of this subsection’’; tions, the media, and the general public the title VII of the Civil Rights Act of 1964 (42 (3) in the sentence beginning ‘‘No employ- findings resulting from studies and other U.S.C. 2000e et seq.), title I of the Americans ees shall’’, by striking ‘‘No employees’’ and materials, relating to eliminating the pay with Disabilities Act of 1990 (42 U.S.C. 12111 inserting ‘‘Except with respect to class ac- disparities; et seq.), the Age Discrimination in Employ- tions brought to enforce section 6(d), no em- (3) sponsoring and assisting State and com- ment Act of 1967 (29 U.S.C. 621 et seq.), and ployee’’; munity informational and educational pro- section 6(d) of the Fair Labor Standards Act (4) by inserting after such sentence the fol- grams; of 1938 (29 U.S.C. 206(d)), $36,000,000, in addi- lowing: ‘‘Notwithstanding any other provi- (4) providing information to employers, tion to sums otherwise appropriated for such sion of Federal law, any action brought to labor organizations, professional associa- expenses. Any amounts so appropriated shall enforce section 6(d) may be maintained as a tions, and other interested persons on the remain available until expended. class action as provided by the Federal Rules means of eliminating the pay disparities; (b) TARGETED RESOURCES.—There is au- of Civil Procedure.’’; and (5) recognizing and promoting the achieve- thorized to be appropriated to the Equal Em- (5) in the sentence beginning ‘‘The court ments of employers, labor organizations, and ployment Opportunity Commission to carry in’’— professional associations that have worked out section 5, $500,000, in addition to sums (A) by striking ‘‘in such action’’ and in- to eliminate the pay disparities; and otherwise appropriated for providing train- serting ‘‘in any action brought to recover (6) convening a national summit to discuss, ing described in such section. Any amounts the liability prescribed in any of the preced- and consider approaches for rectifying, the so appropriated shall remain available until ing sentences of this subsection’’; and pay disparities. expended. (c) RESEARCH, EDUCATION, OUTREACH, AND (B) by inserting before the period the fol- SEC. 7. ESTABLISHMENT OF THE NATIONAL NATIONAL AWARD.—There is authorized to be lowing: ‘‘, including expert fees’’. AWARD FOR PAY EQUITY IN THE appropriated to the Secretary of Labor to (c) ACTION BY SECRETARY.—Section 16(c) of WORKPLACE. carry out sections 6 and 7, $1,000,000. Any such Act (29 U.S.C. 216(c)) is amended— (a) IN GENERAL.—There is established the amounts so appropriated shall remain avail- (1) in the first sentence— Robert Reich National Award for Pay Equity able until expended. (A) by inserting ‘‘or, in the case of a viola- in the Workplace, which shall be evidenced tion of section 6(d), additional compensatory by a medal bearing the inscription ‘‘Robert Reich National Award for Pay Equity in the By Mr. KYL: or punitive damages,’’ before ‘‘and the agree- S. 72. A bill to amend the Internal ment’’; and Workplace’’. The medal shall be of such de- (B) by inserting before the period the fol- sign and materials, and bear such additional Revenue Code of 1986 to provide a re- lowing: ‘‘, or such compensatory or punitive inscriptions, as the Secretary may prescribe. duction in the capital gain rates for all damages, as appropriate’’; (b) CRITERIA FOR QUALIFICATION.—To qual- taxpayers, and for other purposes; to (2) in the second sentence, by inserting be- ify to receive an award under this section a the Committee on Finance. fore the period the following: ‘‘ and, in the business shall— S. 73. A bill to amend the Internal case of a violation of section 6(d), additional (1) submit a written application to the Sec- Revenue Code of 1986 to repeal the cor- compensatory or punitive damages’’; retary, at such time, in such manner, and porate alternative minimum tax; to containing such information as the Sec- (3) in the third sentence, by striking ‘‘the the Committee on Finance. first sentence’’ and inserting ‘‘the first or retary may require, including at a minimum information that demonstrates that the S. 74. A bill to amend the Internal second sentence’’; and Revenue Code of 1986 to limit the tax (4) in the last sentence, by inserting after business has made substantial effort to ‘‘in the complaint’’ the following: ‘‘or be- eliminate pay disparities between men and rate for certain small businesses, and comes a party plaintiff in a class action women, and deserves special recognition as a for other purposes; to the Committee brought to enforce section 6(d)’’. consequence; and on Finance. SEC. 4. COLLECTION OF PAY INFORMATION BY (2) meet such additional requirements and AGENDA FOR ECONOMIC GROWTH AND THE EQUAL EMPLOYMENT OPPOR- specifications as the Secretary determines to OPPORTUNITY TUNITY COMMISSION. be appropriate. Mr. KYL. Mr. President, I rise today Section 705 of the Civil Rights Act of 1964 (c) MAKING AND PRESENTATION OF AWARD.— (1) AWARD.—After receiving recommenda- to introduce a series of bills aimed at (42 U.S.C. 2000e–4) is amended by adding at improving our Nation’s rate of eco- the end the following new subsection: tions from the Secretary, the President or ‘‘(l)(1) The Commission shall, by regula- the designated representative of the Presi- nomic growth, encouraging investment tion, require each employer who has 100 or dent shall annually present the award de- in small businesses, enhancing wages of more employees for each working day in scribed in subsection (a) to businesses that American workers, and making our each of 20 or more calendar weeks in the cur- meet the qualifications described in sub- country more competitive in the global rent or preceding calendar year to maintain section (b). economy. The bills make up what I will payroll records and to prepare and submit to (2) PRESENTATION.—The President or the call the Agenda for Economic Growth the Commission reports containing informa- designated representative of the President and Opportunity. tion from the records. The reports shall con- shall present the award with such cere- tain pay information, analyzed by the race, monies as the President or the designated Mr. President, it was just over 34 sex, and national origin of the employees. representative of the President may deter- years ago that President John F. Ken- The reports shall not disclose the pay infor- mine to be appropriate. nedy made the following observation in mation of an employee in a manner that per- (3) PUBLICITY.—A business that receives an his State of the Union message—an ob- mits the identification of the employee. award under this section may publicize the servation that someone could just as January 21, 1997 CONGRESSIONAL RECORD — SENATE S451 easily make about today’s economy. He Let me answer then, beginning with treatment of capital gains and losses is said, ‘‘America has enjoyed 22 months another quotation from John Kennedy: both inequitable and a barrier to eco- of uninterrupted economic recovery’’. ‘‘[I]t is increasingly clear—to those in Gov- nomic growth’’, the President said. The current expansion, albeit one of ernment, business, and labor who are respon- ‘‘The tax on capital gains directly af- the weakest this century, has gone on sible for our economy’s success—that our ob- fects investment decisions, the mobil- a little longer. ‘‘But’’, President Ken- solete tax system exerts too heavy a drag on ity and flow of risk capital from static nedy went on to say, ‘‘recovery is not private purchasing power, profits, and em- to more dynamic situations, the ease enough. If we are to prevail in the long ployment. Designed to check inflation in earlier years, it now checks growth instead. or difficulty experienced by new ven- run, we must expand the long-run It discourages extra effort and risk. It dis- tures in obtaining capital, and thereby strength of our economy. We must torts use of resources. It invites recurrent the strength and potential for growth move along the path to a higher rate of recessions, depresses our Federal revenues, of the economy.’’ economic growth’’. and causes chronic budget deficits.’’ So, if we are concerned whether new Economic growth. Tracking it is the Mr. President, the agenda I am pro- jobs are being created, whether new domain of economists and statisti- posing attacks some of the most sig- technology is developed, whether work- cians, but what does it mean for the nificant deficiencies in our Nation’s ers have the tools they need to do a average American family, and why Tax Code that are inhibiting savings better, more efficient job, we should should policy-makers be so concerned and investment, and job creation—defi- support measures that reduce the cost about the slow rate of economic growth ciencies that are preventing us from of capital to facilitate the achievement during the last 4 years? reaching our potential as a Nation. I do of all these things. Remember, for Slow growth means fewer job oppor- not make these proposals as a sub- every employee, there is an employer tunities for young Americans just en- stitute for fundamental tax reform, who took risks, made investments, and tering the work force and for those which I believe is the ultimate solution created jobs. But that employer needed people seeking to free themselves from to the problem. But fundamental tax capital to start. the welfare rolls. It means stagnant reform is going to take some time to Also remember that the capital gains wages and salaries, and fewer opportu- accomplish, maybe several years. What tax represents a second tax on amounts nities for career advancement for those we need now are interim steps—things saved and invested. As a result, indi- who do have jobs. It means less invest- we can do quickly—to make sure our viduals and businesses that save and ment in new plant and equipment, and movement into the 21st century is invest end up paying more taxes over new technology—things needed to en- based on the bedrock of a strong and time than if all income is consumed hance workers’ productivity and ensure growing economy. and no saving takes place at all. To that American businesses can remain I believe these Tax Code changes will make matters even worse, the tax is competitive in the global marketplace. help strengthen the economy and, in applied to gains due solely to inflation. It means less revenue for the U.S. turn, produce more revenue for the Mr. President, it may come as a sur- Treasury, compared to what we could Federal Government to assist in deficit prise to some people, but experience collect with higher rates of economic reduction. Still, I recognize that under shows that lower capital gains tax growth, for the critical programs serv- existing budget rules which require rates have a positive effect on federal ing the American people. And it means static scoring of tax bills, there may be revenues. The most impressive evi- that interest rates are higher than a need to find offsetting spending cuts. dence, as noted in a recent report by they need to be because national debt With that in mind, I am asking the the American Council for Capital For- as a share of Gross Domestic Product is higher. As a result, we all pay more for Joint Committee on Taxation, as well mation, can be found in the period such things as home mortgages, college as the respected Institute for Policy In- from 1978 to 1985. During those years, loans, and car loans. novation, to estimate the economic im- the top marginal federal tax rate on For most of the 20th century, our Na- pact of these proposals, including the capital gains was cut by almost 45 per- tion enjoyed very strong rates of eco- effect on federal revenues. Should the cent—from 35 percent to 20 percent— nomic growth and the dividends that result of those analyses indicate that but total individual capital gains tax came with it. The 1920s saw annual eco- there will be some revenue loss—most receipts nearly tripled—from $9.1 bil- nomic growth above 5 percent. In the likely because of rules requiring static lion to $26.5 billion annually. 1950s, it was above 6 percent. Economic scoring—my intention would be to pro- Research by experts at the pres- growth during the Kennedy and John- pose some offsetting spending cuts. tigious National Bureau of Economic son years averaged 4.8 percent annu- Mr. President, the cuts I would iden- Research indicates that the maximiz- ally. During the decade before Presi- tify would come in so-called corporate ing capital gains tax rate—that is, the dent Clinton took office, the economy welfare programs. In other words, in rate that would bring in the most grew at an average rate of 3.2 percent a exchange for the targeted subsidies Treasury revenue—is somewhere be- year, according to data supplied by the from corporate welfare programs, we tween nine and 21 percent. The bill I Joint Economic Committee. would adopt broadly applicable tax in- am introducing today would set an ef- The Clinton years, by contrast, have centives to support activities vetted by fective top rate on capital gains earned seen the economy grow at an average the free market. That is what free en- by individuals, by virtue of the 70 per- rate of only about 2.3 percent. What terprise is all about. cent exclusion, at 11.88 percent. that means is that, while we may not THE CAPITAL GAINS REFORM ACT Mr. President, when capital gains tax exactly be hurting as a Nation, we are Mr. KYL. Mr. President, the first of rates are too high, people need only not becoming much better off, either. the five tax-related bills I am introduc- hold onto their assets to avoid the tax And we are certainly not leaving much ing is based upon President John Ken- indefinitely. No sale, no tax. But that of a legacy for our children and grand- nedy’s own growth package from three means less investment, fewer new busi- children to meet the needs of tomor- decades ago. Like the Kennedy plan, nesses and new jobs, and—as historical row. the legislation would reduce the per- records show—far less revenue to the So what do we do to enhance eco- centage of long-term capital gains in- Treasury than if capital gains taxes nomic growth—to ensure that jobs are cluded in individual income subject to were set at a lower level. Just as the available for those who want them, tax to 30 percent. It would reduce the Target store down the street does not that families can earn better wages, alternative tax on the capital gains of lose money on weekend sales—because and that American business maintains corporations to 22 percent. volume more than makes up for lower a dominant role in the global economy? I would note that Democratic Presi- prices—lower capital gains tax rates Those are, after all, the goals of the dent John Kennedy’s plan called for a can encourage more economic activity agenda I am laying out today—an deeper capital gains tax cut than the and, in turn, produce more revenue for agenda for economic growth and oppor- Republican-controlled Congress pro- the government. tunity for all Americans, for those posed last year. Capital gains reform will help the struggling to make ends meet today, There was a reason that John Ken- Treasury. A capital gains tax reduction and for our children when they enter nedy called for a significant cut in the would help unlock a sizable share of the work force tomorrow. capital gains tax. ‘‘The present tax the estimated $7 trillion of capital that S452 CONGRESSIONAL RECORD — SENATE January 21, 1997 is left virtually unused because of high a tax for which they are not liable, but The intent is to provide relief for tax rates. More importantly, it will which they are able to apply toward those small businesses that invest in- help the family that has a small plot of their future regular tax liability. come into their business operations, land it would like to sell, and the busi- I would also point out that most of thereby creating new jobs. In fact, suc- ness that could expand, buy new equip- the corporations paying the AMT are cessful small manufacturers have been ment and create new jobs. relatively small. The General Account- able to create three to four new jobs And evidence shows that most of the ing Office, in a 1995 report on the issue, for every additional $100,000 they retain benefits will go to Americans of mod- found that, in most years between 1987 in the business. est means. A special U.S. Treasury and 1992, more than 70 percent of cor- FAMILY HERITAGE PRESERVATION ACT study covering 1985 showed that nearly porations paying the AMT had less Mr. KYL. Mr. President, the fourth in half of all capital gains that year were than $10 million in assets. the series of economic growth incen- realized by taxpayers with wage and The AMT’s effect on the economy, tives is a bill to enhance the economic salary income of less than $50,000 a moreover, is disproportionate to the security of older Americans and small year. An update of the Treasury study small amount of revenue raised, due in businesses around the country, a bill by the Barents Group, a subsidiary of large part to its requirement that cor- known as the Family Heritage Preser- the public accounting firm of KPMG porations calculate their tax liability vation Act. It would repeal the onerous Peat Marwick, estimates that for 1995, under two separate but parallel income Federal estate and gift tax, and the tax middle-income wage and salary earners tax systems. Firms must calculate on generation-skipping transfers. A making $50,000 or less in inflation-ad- their AMT liability even if they end up companion bill will be introduced in justed dollars will continue to receive paying the regular tax. At a minimum, the House of Representatives by Con- almost half of all capital gains. that means that firms must maintain gressman CHRIS COX of California. President Clinton recognized the im- two sets of records for tax purposes. Mr. President, most Americans know portance of lessening the capital gains The compliance costs are substantial. the importance of planning ahead for tax burden by proposing to eliminate In 1992, for example, while only about retirement. Sometimes that means the tax on most gains earned on the 28,000 corporations paid the AMT, more buying a less expensive car, wearing sale of a home. I would support the than 400,000 corporations filed the AMT clothes a little longer, or foregoing a President’s proposal, but I would also form, and an even greater—but un- vacation or two. But by doing with a ask, if a capital gains tax cut is good known—number of firms performed the little less during one’s working years, for homeowners, is it not also good pol- calculations needed to determine their people know they can enjoy a better icy to apply a tax cut to other kinds of AMT liability. A 1993 analysis by the and more secure life during retirement, gains that help create new businesses Joint Committee on Taxation found and maybe even leave their children and new jobs? that the AMT added 16.9 percent to a and grandchildren a little better off I believe John Kennedy’s plan was far corporation’s total cost of complying when they are gone. superior—far more beneficial for the with federal income tax laws. Savings not only create more per- Nation’s economy—than the very lim- Mr. President, repealing the cor- sonal security, they help create new ited one Bill Clinton has proposed. porate AMT would help free up badly opportunities for others, too. Savings That is why I encourage the Senate to needed capital to assist in business ex- are really investments that help others take up the Capital Gains Reform Act, pansion and job creation. According to create new jobs in the community. which is based on the Kennedy plan, a study by DRI/McGraw-Hill, repeal of They make our country more competi- and which I am introducing today. the AMT would, over the 1996–2005 time tive. And ultimately they make a citi- CORPORATE TAX EQUITY ACT period, increase fixed investment by a zen’s retirement more secure by pro- Mr. KYL. Mr. President, the second total of 7.9 percent, raise Gross Domes- viding a return on the money invested in this series of bills is the Corporate tic Product by 1.6 percent, and increase during his or her working years. Tax Equity Act, a bill designed to help labor productivity by 1.6 percent. The So how does the government reward U.S. businesses make larger capital ex- study also projected repeal would all of this thrift and careful planning? penditures and thereby enhance pro- produce an additional 100,000 jobs a It imposes a hefty tax on the end result ductivity growth and job creation by year during the years 1998 to 2002. of such activity—up to 55 percent of a repealing the corporate Alternative SMALL BUSINESS INVESTMENT AND GROWTH ACT person’s estate. The respected liberal Minimum Tax (AMT). Mr. KYL. Mr. President, the third Professor of Law at the University of Mr. President, the original intent of bill in this package is the Small Busi- Southern California, Edward J. McCaf- the AMT was to make it harder for ness Investment and Growth Act, frey, observed that ‘‘polls and practices large, profitable corporations to avoid which would ensure that small busi- show that we like sin taxes, such as on paying any federal income tax. But the nesses do not pay a higher income tax alcohol and cigarettes.’’ ‘‘The estate way to have accomplished that objec- rate than large corporations. Congress- tax,’’ he went on to say, ‘‘is an anti-sin, tive was not, in my view, to impose an man PHIL CRANE of Illinois has pro- or a virtue, tax. It is a tax on work and AMT, but to identify and correct the moted similar legislation in the House savings without consumption, on provisions of law that allowed large of Representatives. thrift, on long term savings. There is companies to inappropriately lower Mr. President, the 1990 and 1993 in- no reason even a liberal populace need their federal tax liabilities to begin creases in the marginal income tax support it.’’ with. Ironically, the primary shelters rates applicable to individuals put a At one time, the estate tax was re- corporations were using to minimize tremendous strain on small businesses quired of only the wealthiest Ameri- their tax liability—that is, the acceler- organized as S corporations, because cans. Now inflation, a nice house, and a ated depreciation and safe harbor leas- they pay taxes at the individual rate. S good insurance policy can push people ing of the old Tax Code—were being corporations, facing 36 percent and 39.6 of even modest means into its grip. The corrected at the time the AMT was en- percent tax rates at the highest levels, estate tax is applied to all of the assets acted. are forced to compete against larger owned by an individual at the time of I would point out that the AMT is corporations, which pay a top rate of 34 death. The tax rate, which starts at 37 not a tax, per se. As indicated in an percent. percent, can quickly rise to a whopping April 3, 1996 report by the Congres- The bill I am introducing would es- 55 percent—the highest estate tax rate sional Research Service, the AMT is tablish 34 percent as the top rate that in the world. merely intended to serve as a prepay- small businesses must pay. Taxable It is true that each person has a ment of the regular corporate income small business income would be limited $600,000 exemption, but that does not tax, not a permanent increase in over- to income from the trade or business of provide as much relief as one might ex- all corporate tax liability. What that certain eligible small businesses, spe- pect. Unless a couple goes through ex- means in practical terms is that busi- cifically excluding passive income. To pensive estate planning so that trusts nesses are forced to make interest-free benefit from the maximum 34 percent are written into their wills and at least loans to the federal government under rate, businesses must reinvest their $600,000 of the assets are owned by each the guise of the AMT. Corporations pay after-tax income into the business. spouse—that is, not held jointly—the January 21, 1997 CONGRESSIONAL RECORD — SENATE S453 couple will end up with only one nual revenue, but it consumes eight ing the Joint Tax Committee and the $600,000 exemption. Many people do not percent of each year’s private savings. Institute for Policy Innovation to ana- realize that literally every asset they That is about $15 billion sidelined from lyze the economic and revenue effects own, including the face value of life in- the Nation’s economy. Economists cal- of this economic growth package. It is surance policies, all retirement plan culate that if the money paid in estate my intention that, if there is a revenue assets, including Individual Retire- taxes since 1971 had been invested in- loss to the Treasury associated with it, ment Accounts, is counted toward the stead, total savings in 1991 would have the loss could at least partially be off- $600,000 limit. been $399 billion higher, the economy set by reductions in corporate welfare As detrimental as the tax is for cou- would have been $46 billion larger, and spending. ples, it is even more harmful to small we would have 262,000 more jobs. Obvi- Mr. President, the Agenda for Eco- businesses, including those owned by ously, the income and payroll taxes nomic Growth and Opportunity will women and minorities. The tax is im- that would have been paid on these help improve the standard of living for posed on a family business when it is gains would have topped the amount all Americans. It will help eliminate least able to afford the payment—upon collected by the government in estate from the federal budget much of the the death of the person with the great- taxes. largesse the government showers on a est practical and institutional knowl- There have been nine attempts to re- select group of business enterprises edge of that business’s operations. It form the estate tax during the last 50 through corporate welfare. should come as no surprise then that a years. Few would contend that it has I invite my colleagues’ support for 1993 study by Prince and Associates—a been made any fairer or more efficient. this very important initiative. Stratford, Connecticut research and The only thing that has really changed consulting firm—found that nine out of is that lobbyists and estate planners By Mr. BREAUX: 10 family businesses that failed within have gotten a little wealthier. Prob- S. 77. A bill to provide for one addi- three years of the principal owner’s ably the best thing we could do is re- tional Federal judge for the middle dis- death attributed their companies’ de- peal the estate tax altogether. That is trict of Louisiana by transferring one mise to trouble paying estate taxes. what I am proposing in the Family Federal judge from the eastern district Six out of 10 family-owned businesses Heritage Preservation Act. of Louisiana; to the Committee on the fail to make it to the second genera- Mr. President, the National Commis- Judiciary. tion. Nine out of 10 never make it to sion on Economic Growth and Tax Re- LOUISIANA JUDICIAL DISTRICTS LEGISLATION the third generation. The estate tax is form, which studied ways to make the Mr. BREAUX. Mr. President, I rise a major reason why. tax code simpler, looked at the estate today to offer legislation that will cor- Think of what that means to women tax during the course of its delibera- rect a serious inequity in Louisiana’s and minority-owned businesses. In- tions just over a year ago. The Com- judicial districts. stead of passing a hard-earned and suc- mission concluded that ‘‘[i]t makes lit- My legislation adds an additional cessful business on to the next genera- tle sense and is patently unfair to im- judge to the middle district of Louisi- tion, many families have to sell the pose extra taxes on people who choose ana, based in Baton Rouge. U.S. Dis- company in order to pay the estate tax. to pass their assets on to their children trict Judges John Parker and Frank The upward mobility of such families is and grandchildren instead of spending Polozola, the two Baton Rouge, judges, stopped in its tracks. The proponents them lavishly on themselves.’’ It went each have almost 2,000 cased pending. of this tax say they want to hinder on to endorse repeal of the estate tax. The national average for federal judges ‘‘concentrations of wealth.’’ What the INVEST MORE IN AMERICA ACT is 400 cased pending. Case filings in the tax really hinders is new American suc- Mr. KYL. Mr. President, the last in Middle District have totaled more than cess stories. the series of bills that make up what I four times the national average. The With that in mind, the 1995 White call the Agenda for Economic Growth Baton Rouge district also ranks first House Conference on Small Business and Opportunity is the Invest More in among the Nation’s 97 federal court identified the estate tax as one of small America Act, a bill that would allow districts in total filings, civil filings, business’s top concerns. Delegates to small businesses to fully deduct the weighted filings and in the percent the conference voted overwhelming to first $250,000 they invest in equipment change in total filings last year. endorse its repeal. in the year it is purchased. The bill is Louisiana’s Middle District is com- Obviously, there is a great deal of based on another recommendation posed of nine parishes. The state cap- peril to small businesses when they fail made by the White House Conference ital and many of the State’s adult and to plan ahead for estate taxes. So many on Small Business in 1995. juvenile prisons and forensic facilities small business owners try to find legal Mr. President, Congress last year ap- are located in this district. The Court means of avoiding the tax or preparing proved legislation to phase in an in- is regularly required to hear most of for it, but that, too, comes at a signifi- crease in the expensing limit to $25,000 the litigation challenging the constitu- cant cost. Some people simply slow the by the year 2003. That is a step in the tionality of State laws and the actions growth of their businesses to limit right direction, but it is not nearly of State agencies and officials. The their estate tax burden. Of course, that enough. District now has several reapportion- means less investment in our commu- Businesses investing more than the ment and election cases pending on the nities and fewer jobs created. Others annual expensing allowance must re- docket which generally require the im- divert money they would have spent on cover the cost of their investments mediate attention of the court. Addi- new equipment or new hires to insur- over several years using the current de- tionally, because numerous chemical, ance policies designed to cover estate preciation system. Inflation, however, oil, and industrial plants and hazard- tax costs. Still others spend millions erodes the present value of their depre- ous waste sites are located in the Mid- on lawyers, accountants, and other ad- ciation deductions taken in future dle District, the Court has in the past visors for estate tax planning purposes. years. Moreover, many businesses are and will continue to handle complex But that leaves fewer resources to in- required to make significant capital in- mass tort cases. One environmental vest in the company, start up new busi- vestments to comply with various gov- case alone, involving over 7,000 plain- nesses, hire additional people, or pay ernment regulations, including envi- tiffs and numerous defendants, is being better wages. ronmental regulations, yet in many handled by a judge from another dis- The inefficiencies surrounding the cases are unable to immediately ex- trict because both of the Middle Dis- tax can best be illustrated by the find- pense such costs. trict’s judges were recused. ings of a 1994 study published in the The increased expensing allowance Since 1984, the Middle District has Seton Hall Law Review. That study provided by the Invest More in Amer- sought an additional judge because of found that compliance costs totalled a ica Act would spur additional invest- its concern that its caseload would whopping $7.5 billion in 1992, a year ment in business assets and lead to in- continue to rise despite the fact that when the estate tax raised only $11 bil- creased productivity and more jobs. its judges’ termination rate exceeded lion. CONCLUSION that national average and ranked The estate tax raises only about one Mr. KYL. Mr. President, as I said at among the highest in numerical stand- percent of the federal government’s an- the beginning of my remarks, I am ask- ing within the United States and the S454 CONGRESSIONAL RECORD — SENATE January 21, 1997 Fifth Circuit. Both the Judicial Con- states for the same act or conduct, as damages for the same act in every ference and the Judicial Council of the our system currently permits. Exorbi- other state in which it sold one of its Fifth Circuit have approved the Middle tant and out-of-control punitive dam- vehicles. In fact, the very same plain- District’s request for an additional age awards also have the effect of pun- tiffs’ attorney who filed the BMW v. judgeship after each biennial survey ishing innocent people: employees, con- Gore case filed numerous similar law- from 1984 through 1994. sumers, shareholders, and others who suits against BMW. Mr. President, I know that my col- ultimately pay the price of these out- Defendants and consumers are not leagues will agree with me that the rageous awards. the only ones hurt by excessive, mul- clear solution to this obvious inequity This is not a hypothetical problem. tiple punitive damage awards. Iron- is to assign an additional judge to Lou- Last Term, the Supreme Court consid- ically, other victims can be those the isiana’s Middle District. I look forward ered a case, BMW v. Gore, in which a system is intended to benefit—the in- to the Senate’s resolution of this im- state court let stand a multimillion jured parties themselves. Funds that portant matter. dollar punitive damage award against might otherwise be available to com- an automobile distributor who failed to pensate later victims can be wiped out By Mr. HATCH (for himself and inform a buyer that his new vehicle at any early stage by excessive puni- Mr. THOMAS): had been refinished to cure superficial tive damage awards. S. 78. A bill to provide a fair and bal- paint damage. The defendant in that The imposition of multiple punitive anced resolution to the problem of case could be exposed to thousands of damage awards in different states for the same act is an issue that can be ad- multiple imposition of punitive dam- claims based on the same conduct. ages, and for other purposes; to the The plaintiff, a purchaser of a $40,000 dressed only through federal legisla- Committee on the Judiciary. BMW automobile, learned nine months tion. If only one state limits such awards, other states still remain free THE MULTIPLE PUNITIVE DAMAGES FAIRNESS after his purchase that his vehicle to impose multiple punitive damages. ACT OF 1997 might have been partially refinished. The fact is that a federal response in Mr. HATCH. Mr. President, I rise As a result of the discovery, he sued today to introduce legislation which this area is the only viable solution. the automobile dealer, the North This bill provides that response by will at last deal with one of the most American distributor, and the manu- generally prohibiting the award of mul- unfair aspects of our civil justice sys- facturer for fraud and breach of con- tiple punitive damages. With one ex- tem—the availability of multiple tract. He also sought an award for pu- ception, the bill prevents courts from awards of punitive damages for the nitive damages. He won a ridiculously awarding punitive damages based on same wrongful act. I introduced iden- high award of punitive damages. the same act or course of conduct for tical legislation last Congress, in the At trial, the jury was allowed to as- which punitive damages have already form of S. 671, and I hope that we can sess damages for each of the partially been awarded against the same defend- move this bill in the 105th Congress. refinished vehicles that had been sold ant. Under the exception, an additional While there are countless abuses and throughout the United States over a award of punitive damages may be per- excesses in our civil justice system, the period of ten years. As sought by the mitted if the court determines that the fact that one defendant may face re- plaintiff’s attorney, the jury returned a claimant will offer new and substantial peated punishment for the same con- verdict of $4,000 in compensatory dam- evidence of previously undiscovered, duct is one of the most egregious and ages and $4,000,000 in punitive damages. wrongful behavior on the part of the unconscionable. This can happen in a On appeal to the state supreme court, defendant. In those circumstances, the variety of ways, but in any case is un- the punitive damage award was re- court must make specific findings of just and unfair. A defendant might, for duced to $2 million, applicable to the fact to support the award, must reduce example, be sued by a different plain- North American distributor. the amount of punitive damages award- tiff for essentially the same action, or On reviewing the BMW v. Gore case, ed by the amounts of prior punitive might be sued by the same parties in a the United States Supreme Court rec- damages based on the same acts, and different state based on essentially the ognized that excessive punitive dam- may not disclose to the jury the same conduct. The only effective ages ‘‘implicate the federal interest in court’s determination and action under means of addressing these problems is preventing individual states from im- the provisions. The provisions would through a nationwide solution, which posing undue burdens on interstate not apply to any action brought under the legislation I introduce today would commerce.’’ While that decision for the a federal or state statute that specifi- provide. first time recognizes some outside lim- cally mandates the amount of punitive Significantly, this legislation will its on punitive damage awards, the damages to be awarded. not affect the compensatory damages Court’s decision leaves ample room for This legislation is needed to correct a that injured parties will be entitled to legislative action. Legislative reforms glaring injustice. I hope my colleagues receive. Even in cases of multiple law- are now—more than ever before—des- will join me in supporting it, and I ask suits based on the same conduct, under perately needed to set up the appro- unanimous consent that the full text of this legislation injured parties will be priate boundaries. the bill be printed in the RECORD. entitled to receive full compensatory In the 5–4 decision, the Supreme There being no objection, the bill was damages when they are wrongfully Court held that the $2 million punitive ordered to be printed in the RECORD, as harmed. My legislation deals only with damages award was grossly excessive follows: punitive damages. Punitive damages and therefore violated the due process S. 78 are not intended to compensate injured clause of the Fourteenth Amendment. Be it enacted by the Senate and House of Rep- plaintiffs or make them whole, but The Court remanded the case, and the resentatives of the United States of America in rather constitute punishment and an majority opinion set out three guide- Congress assembled, effort to deter future egregious mis- posts for assessing the excessiveness of SECTION 1. SHORT TITLE. conduct. Punitive damages reform is a punitive damages award: the This Act may be cited as the ‘‘Multiple Pu- nitive Damages Fairness Act of 1997’’. not about shielding wrongdoers from li- reprehensibility of the conduct being SEC. 2. DEFINITIONS. ability, nor does such reform prevent punished, the ratio between compen- For purposes of this Act: victims of wrongdoing from being satory and punitive damages, and the (1) CLAIMANT.—The term ‘‘claimant’’ rightfully compensated for their dam- difference between the punitive award means any person who brings a civil action ages. It is about ensuring that wrong- and criminal or civil sanctions that and any person on whose behalf such an ac- doers do not face excessive and unfair could be imposed for comparable con- tion is brought. If such an action is brought punishments. duct. through or on behalf of an estate, the term I certainly do not argue that a person Unfortunately, even under the Su- includes the claimant’s decedent. If such ac- or company that acts maliciously preme Court’s decision, this same de- tion is brought through or on behalf of a minor or incompetent, the term includes the should not be subject to punitive dam- fendant can be sued again and again for claimant’s legal guardian. ages. But it is neither just nor fair for punitive damages by every owner of a (2) HARM.—The term ‘‘harm’’ means any le- a defendant to face the repeated impo- partially refinished vehicle. The com- gally cognizable wrong or injury for which sition of punitive damages in several pany could still be sued for punitive punitive damages may be imposed. January 21, 1997 CONGRESSIONAL RECORD — SENATE S455 (3) DEFENDANT.—The term ‘‘defendant’’ (d) LIMITATIONS ON AWARD.—A court tion reform. Product liability reform means any individual, corporation, company, awarding punitive damages pursuant to sub- remains badly needed, as do the more association, firm, partnership, society, joint section (c) shall— comprehensive reforms of the civil liti- stock company, or any other entity (includ- (1) make specific findings of fact on the gation system embodied in my civil ing any governmental entity). record to support the award; (4) PUNITIVE DAMAGES.—The term ‘‘puni- (2) reduce the amount of the punitive por- justice reform bill, the Civil Justice tive damages’’ means damages awarded tion of the damage award by the sum of the Fairness Act of 1997. against any person or entity to punish or amounts of punitive damages previously paid Americans in Utah and every other deter such person or entity, or others, from by the defendant in prior actions based on State overwhelmingly agree that there engaging in similar behavior in the future. the same act or course of conduct; and is a crying need for reform of our civil (5) SPECIFIC FINDINGS OF FACT.—The term (3) prohibit disclosure to the jury of the justice system. They are sick and tired ‘‘specific findings of fact’’ means findings in court’s determination and action under this of the abuses of our system, and are fed written form focusing on specific behavior of subsection. up with million dollar awards for a defendant. (e) APPLICABILITY AND PREEMPTION.— scratched paint jobs, spilled coffee, and (6) STATE.—The term ‘‘State’’ means any (1) IN GENERAL.—Except as provided in State of the United States, the District of paragraph (3), this section shall apply to— other minor harms. The system fails to Columbia, Puerto Rico, the Northern Mari- (A) any civil action brought on any theory deliver justice in far too many cases. ana Islands, the Virgin Islands, Guam, Amer- where punitive damages are sought based on Success for plaintiffs can depend more ican Samoa, and any other territory or pos- the same act or course of conduct for which on chance than the merits of the case, session of the United States, or any political punitive damages have already been sought and defendants may find themselves subdivision thereof. or awarded against the defendant; and forced to settle for significant sums in SEC. 3. MULTIPLE PUNITIVE DAMAGES FAIR- (B) all civil actions in which the trial has circumstances in which they have done NESS. not commenced before the effective date of (a) FINDINGS.—The Congress finds the fol- this Act. little or no wrong, simply due to the lowing: (2) APPLICABILITY.—Except as provided in high litigation costs involved in de- (1) Multiple or repetitive imposition of pu- paragraph (3), this section shall apply to all fending against a weak or frivolous nitive damages for harms arising out of a civil actions in which the trial has not com- lawsuit. single act or course of conduct may deprive menced before the effective date of this Act. I have gone through the litany of a defendant of all the assets or insurance (3) NONAPPLICABILITY.—This section shall problems with our civil justice system coverage of the defendant, and may endanger not apply to any civil action involving dam- time and time again. They continue to the ability of future claimants to receive ages awarded under any Federal or State include excessive legal fees and costs, compensation for basic out-of-pocket ex- statute that prescribes the precise amount of dilatory and sometimes abusive litiga- penses and damages for pain and suffering. punitive damages to be awarded. tion practices, the increasing use of (2) The detrimental impact of multiple pu- (4) EXCEPTION.—This section shall not pre- nitive damages exists even in cases that are empt or supersede any existing Federal or ‘‘junk science’’ as evidence, and the settled, rather than tried, because the threat State law limiting or otherwise restricting risk of unduly large punitive damage of punitive damages being awarded results in the recovery for punitive damages to the ex- awards. a higher settlement than would ordinarily be tent that such law is inconsistent with the The problems with our current civil obtained. To the extent this premium ex- provisions of this section. justice system have resulted in several ceeds what would otherwise be a fair and rea- SEC. 4. EFFECT ON OTHER LAW. perverse effects. First, all too often the sonable settlement for compensatory dam- Nothing in this Act shall be construed to— system fails to accomplish its most im- ages, assets that could be available for satis- (1) waive or affect any defense of sovereign faction of future compensatory claims are portant function—to compensate de- immunity asserted by any State under any serving plaintiffs adequately. Second, dissipated. law; (3) Fundamental unfairness results when (2) supersede any Federal law; it imposes unnecessarily high litiga- anyone is punished repeatedly for what is es- (3) waive or affect any defense of sovereign tion costs on all parties. Those costs sentially the same conduct. immunity asserted by the United States; are passed along to consumers—in ef- (4) Federal and State appellate and trial (4) affect the applicability of any provision fect, to each and every American—in judges, and well-respected commentators, of chapter 97 of title 28, United States Code; the form of higher prices for products have expressed concern that multiple impo- (5) preempt State choice-of-law rules with sition of punitive damages may violate con- and services we buy. Those costs can respect to claims brought by a foreign nation even harm our nation’s competitive- stitutionally protected due process rights. or a citizen of a foreign nation; (5) Multiple imposition of punitive dam- ness in the global economy. (6) affect the right of any court to transfer Congress must face these problems ages may be a significant obstacle to com- venue or to apply the law of a foreign nation prehensive settlement negotiations in repet- or to dismiss a claim of a foreign nation or and enact meaningful legislation re- itive litigation. of a citizen of a foreign nation on the ground forming our civil justice system. Re- (6) Limiting the imposition of multiple pu- of inconvenient forum; or forms are needed to eliminate abuses nitive damages awards would facilitate reso- (7) create a cause of action for punitive and procedural problems in litigation, lution of mass tort claims involving thou- damages. and to restore to the American people sands of injured claimants. a civil justice system deserving of their (7) Federal and State trial courts have not By Mr. HATCH (for himself, Mr. provided adequate solutions to problems trust, confidence and support. To KYL, and Mr. THOMAS): caused by the multiple imposition of puni- achieve this goal, I am introducing tive damages because of a concern that such S. 79. A bill to provide a fair and bal- civil justice reform legislation. This courts lack the power or authority to pro- anced resolution to the problem of bill will correct some of the more seri- hibit subsequent awards in other courts. multiple imposition of punitive dam- ous abuses in our present civil justice (8) Individual State legislatures can create ages, and for the reform of the civil system through a number of provi- only a partial remedy to address problems justice system; to the Committee on sions. caused by the multiple imposition of puni- the Judiciary. The legislation will address the prob- tive damages, because each State lacks the THE CIVIL JUSTICE FAIRNESS ACT OF 1997 power to control the imposition of punitive lems of excessive punitive damage damages in other States. Mr. HATCH. Mr. President, today I awards and of multiple punitive dam- (b) GENERAL RULE.—Except as provided in introduce the Civil Justice Fairness age awards. We all know that punitive subsection (c), punitive damages shall be Act of 1997. Last Congress, I introduced damage awards are out of control in prohibited in any civil action in any State or a similar bill that, had it been enacted, this country. Further, the imposition Federal court in which such damages are would have granted significant relief of multiple punitive damages for the sought against a defendant based on the same act or course of conduct for which pu- from litigation abuses to individuals, same wrongful act raises particular nitive damages have already been sought or consumers, small businesses and oth- concerns about the fairness of punitive awarded against such defendant. ers. Unfortunately, given President damages and their ability to serve the (c) CIRCUMSTANCES FOR AWARD.—If the Clinton’s repeated vetoes of litigation purposes of punishment and deterrence court determines in a pretrial hearing that reform measures in the 104th Congress, for which they are intended. the claimant will offer new and substantial it was clear that we would be unable to The Supreme Court, legal scholars, evidence of previously undiscovered, addi- tional wrongful behavior on the part of the enact more broad-reaching civil justice practicing litigators, and others have defendant, other than the injury to the reform. acknowledged for years that punitive claimant, the court may award punitive This Congress, I urge my colleagues damages may raise serious constitu- damages in accordance with subsection (d). to revisit the important issue of litiga- tional issues. A decision from the U.S. S456 CONGRESSIONAL RECORD — SENATE January 21, 1997 Supreme Court last term finally held of its vehicles, be sued for punitive attorneys to disclose fully to clients that in certain circumstances a puni- damages for the same act. the hours worked and fees paid in all tive damage award may violate due Multiple punitive damage awards can contingency fee cases. The bill calls process and provided guidance as to hurt not only defendants but also in- upon the Attorney General to draft when that would occur. jured parties. Funds that would other- model State legislation requiring such In the case, BMW versus Gore, the wise be available to compensate later disclosure to clients. It also requires Supreme Court acknowledged that ex- victims can be wiped out at any early the Attorney General to study possible cessive punitive damages ‘‘implicate stage by excessive punitive damage abuses in the area of contingency fees the federal interest in preventing indi- awards. A Federal response is critical: and, where such abuses are found, to vidual states from imposing undue bur- if only the one State limits such draft model State legislation specifi- dens on interstate commerce.’’ The de- awards, other States still remain free cally addressing those problems. cision for the fist time recognizes some to impose multiple punitive damages. This legislation restricts the use of outside limits on punitive damage An important provision in my bill lim- so-called ‘‘junk science’’ in the court- awards. The Court’s decision leaves its these multiple punitive damage room. This long overdue reform will plenty of room for legislative action, awards. I am also today introducing improve the reliability of expert sci- and legislative reforms are now needed separate legislation that would deal entific evidence and permit juries to more than ever to set up the appro- only with the multiple punitive dam- consider only scientific evidence that priate boundaries. ages problem. is objectively reliable. The decision also highlights some of In addition to reforming multiple pu- This legislation includes a provision the extreme abuses in our civil justice nitive damage awards, my broad civil for health care liability reform. It lim- system. The BMW versus Gore case was justice reform legislation addresses its, in any health care liability action, brought by a doctor who had purchased general abuses of punitive damages the maximum amount of non-economic a BMW automobile for $40,000 and later litigation. It includes a heightened damages that may be awarded to a discovered that the car had been par- standard of proof to ensure that puni- claimant of $250,000. This limit would tially refinished prior to sale. He sued tive damages are awarded only if there apply regardless of the number of par- the manufacturer in Alabama State is clear and convincing evidence that ties against whom the action is court on a theory of fraud, seeking the harm suffered was the result of brought, and regardless of the number compensatory and punitive damages. conduct either specifically intended to of claims or actions brought. To avoid The jury found BMW liable for $4,000 in cause that harm, or carried out with prejudice to any parties, the jury compensatory damages and $4 million conscious, flagrant indifference to the would not be informed about the limi- in punitive damages. On appeal, the right or the safety of the claimant. tations on non-economic damages. Alabama Supreme Court reduced the The bill also provides that punitive This legislation would also establish punitive damages award to $2 million— damages may not be awarded against a reasonable, uniform statute of limi- which still represents an astonishing the seller of a drug or medical device tations for the bringing of health care award for such inconsequential harm. that received pre-market approval liability actions. Further, if damages In its 5 to 4 decision, the Supreme from the Food and Drug Administra- for losses incurred after the date of Court held that the $2 million punitive tion. judgment exceed $100,000, the Court damages award was grossly excessive Additionally, this legislation would shall allow the parties to have 60 days and therefore violated the due process allow a bifurcated trial, at the defend- in which to negotiate an agreement clause of the 14th amendment. The ant’s request, on the issue of punitive providing for the payment of such dam- court remanded the case for further damages and limits the amount of the ages in a lump sum, periodic payments, proceedings. The majority opinion set award to either $250,000 or three times or a combination of both. If no agree- out three guideposts for courts to em- the economic damages suffered by the ment is reached, a defendant may elect ploy in assessing the constitutional ex- claimant, whichever is greater. The to pay the damages on a periodic basis. cessiveness of a punitive damages bill provides a special limit in the Periodic payments for future damages award: the reprehensibility of the con- cases of small business or individuals; would terminate in the event of the duct being punished, the ratio between in those cases, punitive damages will claimant’s return to work, or upon the compensatory and punitive damages, be limited to the lesser of $250,000 or claimant’s death. This is an exception and the difference between the punitive three times economic damages. for the portion of such payments allo- award and criminal or civil sanctions The legislation would also limit a de- cable to future earnings, which shall be that could be imposed for comparable fendant’s joint liability for non-eco- paid to any individual to whom the conduct. nomic damages. In any civil case for claimant owed a duty of support imme- Justice Breyer, in a concurring opin- personal injury, wrongful death, or diately prior to death, to the extent re- ion joined by Justices O’Connor and based upon the principles of compara- quired by law at the time of the claim- Souter, emphasized that, although con- tive fault, a defendant’s liability for ant’s death. stitutional due process protections non-economic loss shall be several only This legislation also allows states generally cover purely procedural pro- and shall not be joint. The trier of fact the freedom to experiment with alter- tections, the narrow circumstances of will determine the proportional liabil- native patient compensation systems the case justified added protections to ity of each person, whether or not a based upon no-fault principles. The ensure that legal standards providing party to the action, and enter separate Secretary of Health and Human Serv- for discretion are adequately enforced judgments against each defendant. ices would award grants based on appli- so as to provide for the ‘‘application of Another provision of this bill would cations by interested states according law, rather than a decisionmaker’s ca- shift costs and attorneys fees in cir- to enumerated criteria and subject to price.’’ Congress has a similar respon- cumstances in which a party has re- enumerated reporting requirements. sibility to ensure fairness in the litiga- jected a settlement offer, forcing the Persons or entities participating in tion system and the application of law litigation to proceed, and then obtain a such experimental systems may obtain in that system. It is high time for Con- less favorable judgment. This provision from the Secretary a waiver from the gress to provide specific guidance to encourages parties to act reasonably, provisions of this legislation for the courts on the appropriate level of dam- rather than pursue lengthy and costly duration of the experiment. The Sec- age awards, and to address other issues litigation. It allows a plaintiff or a de- retary would collect information re- in the civil litigation system. fendant to be compensated for their garding these experiments and submit The BMW case also illustrates the reasonable attorneys fees and costs an annual report to Congress, including potential abuses of the system that can from the point at which the other an assessment of the feasibility of im- occur through the availability of mul- party rejects a reasonable settlement plementing no-fault systems, and legis- tiple awards of punitive damages for offer. lative recommendations, if any. essentially the same conduct. Under Another widely reported problem in I urge my colleagues to take a seri- current law, the company can still, in our civil justice system is abuse in con- ous look at these problems within our every other state in which it sold one tingency fee cases. This bill encourages civil justice system. I believe this bill January 21, 1997 CONGRESSIONAL RECORD — SENATE S457 addresses these issues in a common This provision shall be applied by the court ney’s fees, but rather a narrower attorney sense way, and I hope my colleagues and shall not be disclosed to the jury. (7) A fee and cost-shifting idea applicable only will join me in supporting this legisla- special rule applies to small businesses and when a party has made an offer of settlement tion. individuals. In any action against an individ- or judgment. This section also significantly I ask for unanimous consent that a ual whose net worth does not exceed $500,000, expands the definition of recoverable costs. or a business or organization having 25 or Currently, costs are narrowly defined and do section-by-section description of the fewer employees, punitive damages may not not create enough of a financial incentive for bill be printed in the RECORD. exceed the lesser of $250,000 or 3 times the a party to make an offer that allows judg- There being no objection, the mate- amount awarded for economic loss. ment to be entered. Finally, this section also rial was ordered to be printed in the Sec. 104. Effect on Other Law.—This sec- allows a party to make an offer of judgment RECORD, as follows: tion specifies that certain state and federal after liability has already been determined SECTION-BY-SECTION DESCRIPTION OF THE laws are not superseded or affected by this but before the amount or extent has been ad- CIVIL JUSTICE FAIRNESS ACT OF 1997 legislation. Choice-of-law and forum judged. nonconveniens rules are similarly unaf- TITLE I—PUNITIVE DAMAGES REFORM TITLE IV—HEALTH CARE LIABILITY REFORM fected. Sec. 101. Definitions.—This section defines Sec. 401. Definitions.—This section sets up TITLE II—JOINT AND SEVERAL LIABILITY various terms used in Title I of the bill. definitions for various terms used in Title IV Sec. 102. Multiple Punitive Damages Fair- REFORM of the bill. ness.—This section generally prohibits the Sec. 201. Several Liability for Non-Eco- Sec. 402. Limitations on Noneconomic award of multiple punitive damages. With nomic Loss.—This section limits a defend- Damages.—In any health care liability ac- one exception, it prevents courts from ant’s joint liability for non-economic dam- tion the maximum amount of noneconomic awarding punitive damages based on the ages. In any civil case, a defendant’s liability damages that may be awarded to a claimant same act or course of conduct for which pu- for non-economic loss shall be several only is $250,000. This limit shall apply regardless nitive damages have already been awarded and shall not be joint. The trier of fact will of the number of parties against whom the against the same defendant. Under the ex- determine the proportional liability of each action is brought, and regardless of the num- ception, an additional award of punitive defendant and enter separate judgments ber of claims or actions brought. The jury damages may be permitted if the court de- against each defendant. shall not be informed about the limitations on non-economic damages. termines in a pretrial hearing that the TITLE III—CIVIL PROCEDURAL REFORM Sec. 403. Statute of Limitations.—This sec- claimant will offer new and substantial evi- Sec. 301. Trial Lawyer Accountability.— tion provides a reasonable uniform statute of dence of previously undiscovered, additional This section contains two major provisions. limitations for health care liability actions, wrongful behavior on the part of the defend- The first provides that it is the sense of the with one exception for minors. The general ant, other than injury to the claimant. In Congress that each State should require at- rule is that an action must be brought with- those circumstances, the court must make torneys who enter into contingent fee agree- in two years from the date the injury and its specific findings of fact to support the award, ments to disclose to their clients the actual cause was or reasonably should have been must reduce the amount of punitive damages services performed and hours expended in discovered, but in no event can an action be awarded by the amounts of prior punitive connection with such agreements. The sec- brought more than six years after the al- damages based on the same acts, and may ond provision directs the Attorney General leged date of injury. This section also allows not disclose to the jury the court’s deter- to study and evaluate contingent fee awards an exception for young children. The rule for mination and action under the section. This and their abuses in State and Federal court; children under six years of age is that an ac- section would not apply to any action to develop model legislation to require attor- tion must be brought within two years from brought under a federal or state statute that neys who enter into contingency fee agree- the date the injury and its cause was or rea- specifically mandates the amount of puni- ments to disclose to clients the actual serv- sonably should have been discovered, but in tive damages to be awarded. ices performed and hours expended, and to no event can an action be brought more than Sec. 103. Uniform Standards for Award of curb abuses in contingency fee awards based six years after the alleged date of injury or Punitive Damages.—This section sets the on the study; and to report the Attorney the date on which the child attains 12 years following uniform standards for the award of General’s findings and recommendations to of age, whichever is later. punitive damages in any State or Federal Congress within one year of enactment. Sec. 404. Periodic Payment of Future Dam- Court action: (1) In general, punitive dam- Sec. 302. Honesty in Evidence.—This sec- ages.—This section allows for the periodic ages may be awarded only if the claimant es- tion amends Federal Rule of Evidence 702 to payment of large awards for losses accruing tablishes by clear and convincing evidence reform the rules regarding the use of expert in the future. If damages for losses incurred that the conduct causing the harm was ei- testimony. It clarifies that courts retain after the date of judgment exceed $100,000, ther specifically intended to cause harm or substantial discretion to determine whether the court shall allow the parties to have 60 carried out with conscious, flagrant indiffer- the testimony of an expert witness that is days in which to negotiate an agreement ence to the rights or the safety of the claim- premised on scientific, technical, or medical providing for the payment of such damages ant. (2) Punitive damages may not be award- knowledge is based on scientifically valid in a lump sum, periodic installments, or a ed in the absence of an award of compen- reasoning, is sufficiently reliable, and is suf- combination of both. If no agreement is satory damages exceeding nominal damages. ficiently established to have gained general reached within those 60 days, a defendant (3) Punitive damages may not be awarded acceptance in the particular field in which it may elect to pay the damages on a periodic against a manufacturer or product seller of a belongs. The section follows the standard for basis. The court will determine the amount drug or medical device which was the subject admissibility of expert testimony enunciated and periods for such payments, reducing of pre-market approval by the Food and in Daubert v. Merrell Dow Pharmaceuticals, amounts to present value for purposes of de- Drug Administration (FDA). This FDA ex- Inc., 113 S. Ct. 2786 (1993). It also mirrors the termining the funding obligations of the in- emption is not applicable where a party has common law Frye rule that requires that sci- dividual making the payments. Periodic pay- withheld or misrepresented relevant infor- entific evidence have ‘‘general acceptance’’ ments for future damages terminate in the mation to the FDA. (4) Punitive damages in the relevant scientific community to be event of the claimant’s recovery or return to may not be pleaded in a complaint. Instead, admissible. This section further clarifies work; or upon the claimant’s death, except a party must establish at a pretrial hearing that expert witnesses have expertise in the for the portion of the payments allocable to that it has a reasonable likelihood of proving particular field on which they are testifying. future earnings which shall be paid to any facts at trial sufficient to support an award Finally, this section mandates that the tes- individual to whom the claimant owed a of punitive damages, and may then amend timony of an expert retained on a contin- duty of support immediately prior to death the pleading to include a prayer for relief gency fee basis is inadmissible. to the extent required by law at the time of seeking punitive damages. (5) At the defend- Sec. 303. Fair Shifting of Costs and Reason- death. Such payments shall expire upon the ant’s request, the trier of fact shall consider able Attorney Fees.—This section modifies death of the last person to whom a duty of in separate proceedings whether punitive Federal Rule of Civil Procedure 68 to allow support is owed or the expiration of the obli- damages are warranted and, if so, the either party, not just the defendant, to make gation pursuant to the judgment for periodic amount of such damages. If a defendant re- a written offer of settlement or to allow a payments. quests bifurcated proceedings, evidence rel- judgment to be entered against the offering Sec. 405. State No-Fault Demonstration evant only to the claim for punitive damages party. It expands the time period during Projects.—This section allows states to ex- may not be introduced in the proceeding on which an offer can be made from 10 days be- periment with alternative patient compensa- compensatory damages. Evidence of the de- fore trial to any time during the litigation. tion systems based upon no-fault principles. fendant’s profits from his misconduct, if any, If within 21 days the offer is accepted, a judg- Grants shall be awarded by the Secretary of is admissible, but evidence of the defendant’s ment may be entered by the court. If, how- Health and Human Services based on appli- overall wealth is inadmissible in the pro- ever, a final judgment is not more favorable cations made by interested states according ceeding on punitive damages. (6) In any civil to an offeree than the offer, the offeree must to enumerated criteria and subject to enu- action where the plaintiff seeks punitive pay attorney fees and costs incurred after merated reporting requirements. Persons or damages under this title, the amount award- the time expired for acceptance of the offer. entities involved in the demonstrations in- ed shall not exceed three times the economic Thus, this is not a true ‘‘loser pays’’ provi- volved may obtain a waiver from the Sec- damages or $250,000, whichever is greater. sion where a loser pays the winner’s attor- retary from the provisions of this Title for S458 CONGRESSIONAL RECORD — SENATE January 21, 1997 the duration of the experiment, which shall farmers tend to rely on the sale of ment to, or repeal of, a section or other pro- be not greater than five years. The Secretary their accumulated capital assets, such vision, the reference shall be considered to shall collect information regarding these ex- as real estate, livestock, and machin- be made to a section or other provision of periments and submit an annual report to ery, in order to provide the income to the Internal Revenue Code of 1986. Congress including an assessment of the fea- sibility of implementing no-fault systems sustain them during retirement. All SEC. 2. ROLLOVER OF GAIN FROM SALE OF FARM and legislative recommendations, if any. too often, farmers are finding that the ASSETS TO INDIVIDUAL RETIRE- MENT PLANS. TITLE V—MISCELLANEOUS PROVISIONS lump-sum payments of capital gains Sec. 501. Federal Cause of Action Pre- taxes levied on those assets leave little (a) IN GENERAL.—Part III of subchapter O cluded.—This section provides that the bill for retirement. of chapter 1 (relating to common nontaxable does not provide any new basis for federal The legislation that I am reintroduc- exchanges) is amended by inserting after sec- court jurisdiction. The resolution of punitive ing today would provide retiring farm- tion 1034 the following new section: damages claims is left to state courts or to ers the opportunity to rollover the pro- ‘‘SEC. 1034A. ROLLOVER OF GAIN ON SALE OF federal courts that currently have jurisdic- ceeds from the sale of their farms into tion over those claims. FARM ASSETS INTO ASSET ROLL- Sec. 502. Effective Date.—This section a tax-deferred retirement account. In- OVER ACCOUNT. states that the bill, except as otherwise pro- stead of paying a large lump-sum cap- ‘‘(a) NONRECOGNITION OF GAIN.—Subject to vided, shall be effective 30 days after the ital gains tax at the point of sale, the the limits of subsection (c), if for any taxable date of enactment and apply to all civil ac- income from the sale of a farm would year a taxpayer has qualified net farm gain tions commenced on or after such date, in- be taxed only as it is withdrawn from from the sale of qualified farm assets, then, cluding those in which the harm, or harm- the retirement account. Such a change at the election of the taxpayer, such gain causing conduct, predates the bill’s enact- in method of taxation would help pre- shall be recognized only to the extent it ex- ment. vent the financial distress that many ceeds the contributions to 1 or more asset By Mr. KOHL: farmers now face upon retirement. rollover accounts of the taxpayer for the tax- S. 80. A bill to amend the Internal Another concern that I have about able year in which such sale occurs. Revenue Code of 1986 to provide for the rural America is the diminishing inter- ‘‘(b) ASSET ROLLOVER ACCOUNT.— rollover of gain from the sale of farm est of our younger rural citizens in ‘‘(1) GENERAL RULE.—Except as provided in assets into an individual retirement ac- continuing in farming. Because this this section, an asset rollover account shall count; to the Committee on Finance. legislation will facilitate the transi- be treated for purposes of this title in the FAMILY FARM RETIREMENT EQUITY ACT OF 1997 tion of our older farmers into a suc- same manner as an individual retirement Mr. KOHL. Mr. President, I rise cessful retirement, the Family Farm plan. today to introduce the Family Farm Retirement Equity Act will also pave ‘‘(2) ASSET ROLLOVER ACCOUNT.—For pur- poses of this title, the term ‘asset rollover Retirement Equity Act of 1995, a bill to the way for a more graceful transition account’ means an individual retirement help improve the retirement security of our younger farmers toward farm plan which is designated at the time of the of our nation’s farmers. ownership. While low prices and low establishment of the plan as an asset roll- As we begin the 105th Congress, we profits in farming will continue to take over account. Such designation shall be can anticipate legislative action deal- their toll on our younger farmers, I be- made in such manner as the Secretary may ing with pension reform and the tax lieve that this will be one tool we can prescribe. treatment of retirement savings. In his use to make farming more viable for ‘‘(c) CONTRIBUTION RULES.— 1996 State of the Union address, Presi- the next generation. ‘‘(1) NO DEDUCTION ALLOWED.—No deduction dent Clinton mentioned his concerns This proposal is supported by farmers shall be allowed under section 219 for a con- about the retirement security of farm- and farm organizations throughout the tribution to an asset rollover account. ers and ranchers, and many of us in country. It has been endorsed by the ‘‘(2) AGGREGATE CONTRIBUTION LIMITA- Congress have sought to address this American Farm Bureau Federation, TION.—Except in the case of rollover con- tributions, the aggregate amount for all tax- concern, as well. the American Sheep Industry Associa- Last year, Congress passed the 1996 able years which may be contributed to all tion, the American Sugar Beet Associa- asset rollover accounts established on behalf farm bill, bringing sweeping changes to tion, the National Association of of an individual shall not exceed— the traditional farm support programs, Wheat Growers, the National Cattle- ‘‘(A) $500,000 ($250,000 in the case of a sepa- and greatly affecting the income side man’s Beef Association, the National rate return by a married individual), reduced of the average farmer’s financial sheet. Corn Growers Association, National by But it is equally important that we ad- Pork Producers Council, and the ‘‘(B) the amount by which the aggregate dress the other side of the farmers’ fi- Southwestern Peanut Growers Associa- value of the assets held by the individual nancial equation—the cost side. And tion. (and spouse) in individual retirement plans some of the biggest costs that farmers Further, I am very pleased that a (other than asset rollover accounts) exceeds $100,000. face are the costs associated with re- modified version of this legislation has tirement planning. In fact, those costs also been included in the Targeted In- The determination under subparagraph (B) are sometimes so monumental that shall be made as of the close of the taxable vestment Incentive and Economic year for which the determination is being farmers reach retirement age without Growth Act of 1997, as introduced today made. having made the appropriate provisions by Minority Leader DASCHLE and other ‘‘(3) ANNUAL CONTRIBUTION LIMITATIONS.— for their security. Senators. I look forward to swift action ‘‘(A) GENERAL RULE.—The aggregate con- In the last Congress, efforts were on that legislation, so that the work- tribution which may be made in any taxable made to address the financial concerns ing families and small businesses tar- year to all asset rollover accounts shall not of retiring farmers and ranchers. In geted for assistance can enjoy tax re- exceed the lesser of— fact, the Senate version of the 1995 lief as soon as possible. ‘‘(i) the qualified net farm gain for the tax- Budget Reconciliation Act included the I ask unanimous consent that the able year, or legislation that I am reintroducing full text of the bill and a summary be ‘‘(ii) an amount determined by multiplying today, the Family Farm Retirement the number of years the taxpayer is a quali- included in the RECORD. fied farmer by $10,000. Equity Act. Unfortunately, that impor- There being no objection, the mate- ‘‘(B) SPOUSE.—In the case of a married cou- tant provision did not survive the con- rial was ordered to be printed in the ple filing a joint return under section 6013 for ference negotiations between House RECORD, as follows: the taxable year, subparagraph (A) shall be and Senate budget leaders. It is my S. 80 applied by substituting ‘$20,000’ for ‘$10,000’ hope that we will be able to revisit this Be it enacted by the Senate and House of for each year the taxpayer’s spouse is a matter this year, and address this Representatives of the United States of America qualified farmer. growing concern in rural America. in Congress assembled, ‘‘(4) TIME WHEN CONTRIBUTION DEEMED Farming is a highly capital-intensive SECTION 1. SHORT TITLE; REFERENCE TO INTER- MADE.—For purposes of this section, a tax- business. To the extent that the aver- NAL REVENUE CODE. payer shall be deemed to have made a con- age farmer reaps any profits from his (a) SHORT TITLE.—This Act may be cited as tribution to an asset rollover account on the or her farming operation, much of that the ‘‘Family Farm Retirement Equity Act of last day of the preceding taxable year if the 1997’’. contribution is made on account of such tax- income is directly reinvested into the (b) REFERENCE TO INTERNAL REVENUE CODE able year and is made not later than the farm. Rarely are there opportunities OF 1986.—Except as otherwise expressly pro- time prescribed by law for filing the return for farmers to put money aside in indi- vided, whenever in this Act an amendment for such taxable year (not including exten- vidual retirement accounts. Instead, or repeal is expressed in terms of an amend- sions thereof). January 21, 1997 CONGRESSIONAL RECORD — SENATE S459 ‘‘(d) QUALIFIED NET FARM GAIN; ETC.—For (B) The heading for section 4973 is amended no taxation without representation. purposes of this section— by inserting ‘‘ASSET ROLLOVER AC- But the dairy farmers of this nation ‘‘(1) QUALIFIED NET FARM GAIN.—The term COUNTS,’’ after ‘‘CONTRACTS’’. know all too well that taxation with- ‘qualified net farm gain’ means the lesser (C) The table of sections for chapter 43 is out representation continues today. of— amended by inserting ‘‘asset rollover ac- ‘‘(A) the net capital gain of the taxpayer counts,’’ after ‘‘contracts’’ in the item relat- They live with that reality in their for the taxable year, or ing to section 4973. businesses every day. ‘‘(B) the net capital gain for the taxable (d) TECHNICAL AMENDMENTS.— Dairy farmers are required to pay a year determined by only taking into account (1) Section 408(a)(1) (defining individual re- 15 cent tax, in the form of an assess- gain (or loss) in connection with dispositions tirement account) is amended by inserting ment, on every hundred pounds of milk ‘‘or a qualified contribution under section of qualified farm assets. that they sell. This tax goes to fund ‘‘(2) QUALIFIED FARM ASSET.—The term 1034A,’’ before ‘‘no contribution’’. ‘qualified farm asset’ means an asset used by (2) Section 408(d)(5)(A) is amended by in- dairy promotion activities, such as a qualified farmer in the active conduct of serting ‘‘or qualified contributions under those conducted by the National Dairy the trade or business of farming (as defined section 1034A’’ after ‘‘rollover contribu- Promotion and Research Board, com- in section 2032A(e)). tions’’. monly known as the National Dairy ‘‘(3) QUALIFIED FARMER.— (3)(A) Section 6693(b)(1)(A) is amended by Board. Yet these same farmers that ‘‘(A) IN GENERAL.—The term ‘qualified inserting ‘‘or 1034A(f)(1)’’ after ‘‘408(o)(4)’’. pay hundreds, or in some cases thou- farmer’ means a taxpayer who— (B) Section 6693(b)(2) is amended by insert- sands, of dollars every year for these ing ‘‘or 1034A(f)(1)’’ after ‘‘408(o)(4)’’. ‘‘(i) during the 5-year period ending on the mandatory promotion activities have date of the disposition of a qualified farm (4) The table of sections for part III of sub- asset materially participated in the trade or chapter O of chapter 1 is amended by insert- no direct say over who represents them business of farming, and ing after the item relating to section 1034 the on that Board. ‘‘(ii) owned (or who with the taxpayer’s following new item: In the summer of 1993, a national ref- spouse owned) 50 percent or more of such ‘‘Sec. 1034A. Rollover of gain on sale of farm erendum was held giving dairy produc- trade or business during such 5-year period. assets into asset rollover ac- ers the opportunity to vote on whether ‘‘(B) MATERIAL PARTICIPATION.—For pur- count.’’. or not the National Dairy Board should poses of this paragraph, a taxpayer shall be treated as materially participating in a (e) EFFECTIVE DATE.—The amendments continue. The referendum was held trade or business if the taxpayer meets the made by this section shall apply to sales and after 16,000 dairy producers, more than requirements of section 2032A(e)(6). exchanges after the date of the enactment of 10 percent of dairy farmers nationwide, this Act. ‘‘(4) ROLLOVER CONTRIBUTIONS.—Rollover signed a petition to the Secretary of contributions to an asset rollover account FAMILY FARM RETIREMENT EQUITY ACT OF 1997 Agriculture calling for the referendum. may be made only from other asset rollover Allows retiring farmers to roll over Farmers signed this petition for a accounts. up to $500,000 from the sale of their number of reasons. Some felt they ‘‘(e) DISTRIBUTION RULES.—For purposes of farm assets into a tax-deferred individ- this title, the rules of paragraphs (1) and (2) could no longer afford the promotion ual retirement account, called an Asset assessment that is taken out of their of section 408(d) shall apply to any distribu- Rollover Account [ARA]. In this man- tion from an asset rollover account. milk checks every month. Others were ner, they avoid paying lump-sum cap- ‘‘(f) INDIVIDUAL REQUIRED TO REPORT frustrated with what they perceived to ital gains, and instead pay taxes only QUALIFIED CONTRIBUTIONS.— be a lack of clear benefits from the pro- ‘‘(1) IN GENERAL.—Any individual who— as they withdraw the funds from the motion activities. And still others were ‘‘(A) makes a contribution to any asset retirement account. alarmed by certain promotion activi- rollover account for any taxable year, or Each farmer would be allowed to roll- ties undertaken by the Board with ‘‘(B) receives any amount from any asset over an amount equal to $10,000—$20,000 which they did not agree. But over- rollover account for any taxable year, for a couple—for each year that he or riding all of these concerns was the shall include on the return of tax imposed by she was a ‘‘qualified farmer,’’ with a fact that dairy farmers have no direct chapter 1 for such taxable year and any suc- maximum contribution of $250,000—or power over the promotion activities ceeding taxable year (or on such other form $500,000 per farm couple. as the Secretary may prescribe) information The maximum allowed contribution which they fund from their own pock- described in paragraph (2). to the ARA would be reduced by any ets. ‘‘(2) INFORMATION REQUIRED TO BE SUP- amount in excess of $100,000 that the When the outcome of the referendum PLIED.—The information described in this on continuing the National Dairy paragraph is information required by the qualified farmer and spouse already Secretary which is similar to the informa- have in a separate IRA. Board was announced, it had passed tion described in section 408(o)(4)(B). A qualified farmer is a farmer who: overwhelmingly. But because nearly 90 ‘‘(3) PENALTIES.—For penalties relating to For the 5-year period ending on the percent of all votes cast in favor of reports under this paragraph, see section date of sale of the farm, was materially continuing the Board were cast by 6693(b).’’. participating in the business of the bloc-voting cooperatives, there has (b) CONTRIBUTIONS NOT DEDUCTIBLE.—Sec- farm. A farmer is determined to be ma- been skepticism among dairy farmers tion 219(d) (relating to other limitations and about the validity of the vote. restrictions) is amended by adding at the end terially participating in the farm oper- the following new paragraph: ation if they meet the requirements of While I believe that dairy promotion ‘‘(5) CONTRIBUTIONS TO ASSET ROLLOVER AC- section 2032A individually, or jointly in activities are important for enhancing COUNTS.—No deduction shall be allowed the case of a couple, owns at least 50 markets for dairy products, it matters under this section with respect to a con- percent of the farm asset during the 5- more what dairy farmers believe. After tribution under section 1034A.’’. year period. all, they are the ones who pay hundreds (c) EXCESS CONTRIBUTIONS.— or thousands of dollars every year for (1) IN GENERAL.—Section 4973 (relating to By Mr. KOHL (for himself and these promotion activities. And they tax on excess contributions to individual re- Mr. FEINGOLD): tirement accounts, certain section 403(b) are the ones who have no direct say S. 81. A bill to amend the Dairy Pro- over who represents them on that contracts, and certain individual retirement duction Stabilization Act of 1983 to re- annuities) is amended by adding at the end Board. quire that members of the National the following new subsection: It is for this reason that I rise today ‘‘(e) ASSET ROLLOVER ACCOUNTS.—For pur- Dairy Promotion and Research Board be elected by milk producers and to to reintroduce the National Dairy Pro- poses of this section, in the case of an asset motion Reform Act of 1997. rollover account referred to in subsection prohibit bloc voting by cooperative as- (a)(1), the term ‘excess contribution’ means sociations of milk producers in the Some in the dairy industry have ar- the excess (if any) of the amount contributed election of the producers, and for other gued that this issue is dead, and that to for the taxable year to such account over the purposes; to the Committee on Agri- reintroduce such legislation will only amount which may be contributed under sec- culture, Nutrition, and Forestry. reopen old wounds. But I must respect- tion 1034A.’’. NATIONAL DAIRY PROMOTION REFORM ACT OF fully disagree. (2) CONFORMING AMENDMENTS.— (A) Section 4973(a)(1) is amended by strik- 1997 The intent of this legislation is not ing ‘‘or’’ and inserting ‘‘an asset rollover ac- Mr. KOHL. Mr. President, one of the to rehash the referendum debate, which count (within the meaning of section 1034A), basic tenets upon which this Nation was a contentious one. Instead, the in- or’’. was founded was that there should be tent is to look forward. S460 CONGRESSIONAL RECORD — SENATE January 21, 1997 Farmers in my state have tradition- S. 81 S. 82. A bill to amend the Internal ally been strong supporters of the coop- Be it enacted by the Senate and House of Rep- Revenue Code of 1986 to provide a cred- erative movement, because the cooper- resentatives of the United States of America in it against tax for employers who pro- ative business structure has given Congress assembled, vide child care assistance for depend- them the opportunity to be equal part- SECTION 1. SHORT TITLE. ents of their employees, and for other ners in the businesses that market This Act may be cited as the ‘‘National purposes; to the Committee on Fi- Dairy Promotion Reform Act of 1997’’. their products and supply their farms. nance. SEC. 2. DAIRY VOTING REFORM. I have been a strong supporter of the Section 113(b) of the Dairy Production Sta- CHILD CARE INFRASTRUCTURE ACT cooperative movement for the same bilization Act of 1983 (7 U.S.C. 4504(b)) is Mr. KOHL. Mr. President, today I reason. amended— rise to introduce the Child Care Infra- But there is a growing dissention (1) by designating the first and second sen- structure Act. This legislation is de- among farmers that I believe is dan- tences as paragraphs (1) and (2), respectively; signed to give incentives to private gerous to the long-term viability of ag- (2) by designating the third through fifth companies to get involved in the provi- ricultural cooperatives. As I talk to sentences as paragraph (3); sion of quality child care. I introduced farmers around Wisconsin, I hear a (3) by designating the sixth sentence as the bill as S. 2088 late last year, and I paragraph (4); growing concern that their voices are (4) by designating the seventh and eighth intend to make its passage this year not being heard by their cooperatives. sentences as paragraph (5); one of my highest priorities. They frequently cite the 1993 National (5) by designating the ninth sentence as My bill responds to the challenges Dairy Board referendum as an example. paragraph (6); presented by the landmark welfare leg- The bill that I am reintroducing today (6) in paragraph (1) (as so designated), by islation enacted last Congress. And it seeks to address one small part of that striking ‘‘and appointment’’; responds to the fundamental changes concern, by giving dairy farmers a (7) by striking paragraph (2) (as so des- in the American economy that have led more direct role in the selection of ignated) and inserting the following: to parents entering the work force in ‘‘(2) QUALIFICATIONS, NOMINATION, AND their representatives on the National record numbers. ELECTION OF MEMBERS.— The Child Care Infrastructure Act Dairy Board. Whereas current law re- ‘‘(A) QUALIFICATIONS AND ELECTION.— quires that members of the National ‘‘(i) IN GENERAL.—Subject to clause (ii), creates a tax credit for employers who Dairy Board be appointed by the Sec- each member of the Board shall be a milk get involved in increasing the supply of retary of Agriculture, this legislation producer nominated in accordance with sub- quality child care. The credit is limited would require that the Board be an paragraph (B) and elected by a vote of pro- to 50 percent of $150,000 per company elected body. ducers through a process established by the per year. The credit will sunset after 3 Further, although the legislation Secretary. years. The credit goes to employers ‘‘(ii) BLOC VOTING.—In carrying out clause would continue the right of farmer co- who engage in activities like: Building (i), the Secretary shall not permit an organi- and subsidizing an entire child care operatives to nominate individual zation certified under section 114 to vote on members to be on the ballot, bloc vot- behalf of the members of the organization. center on the site of a company or near ing by cooperatives would be prohib- ‘‘(B) NOMINATIONS.— it; participating, along with other busi- ited for the purposes of the election it- ‘‘(i) SOURCE.—Nominations shall be sub- nesses, in setting up and running a self. There are many issues for which mitted by organizations certified under sec- child care center jointly; contracting the cooperatives can and should rep- tion 114, or, if the Secretary determines that with a child care facility to provide a resent their members. But on this a substantial number of milk producers are set number of places to employees— not members of, or the interests of the pro- issue, farmers ought to speak for them- this gives existing centers the steady ducers are not represented by, a certified or- cash flow they need to survive, or it selves. ganization, from nominations submitted by It is my hope that this legislation the producers in the manner authorized by can give a startup center the steady in- will help restore the confidence of the the Secretary. come it needs to get off the ground; U.S. dairy farmer in dairy promotion. ‘‘(ii) CONSULTATION WITH MEMBERS.—In sub- contracting with a resource and refer- To achieve that confidence, farmers mitting nominations, each certified organi- ral agency to provide services such as need to know that they have direct zation shall demonstrate to the satisfaction placement or the design of a network power over their representatives on the of the Secretary that the milk producers of local child care providers. Board. This bill gives them that power. who are members of the organization have This legislation responds to a great been fully consulted in the nomination proc- I welcome my colleague from Wiscon- need, a great challenge, and a great op- ess.’’; portunity. The need is to provide a safe sin, Senator FEINGOLD, as an original (8) in the first sentence of paragraph (3) (as cosponsor of this bill, and I am also so designated), by striking ‘‘In making such and stimulating place for our youngest pleased to join today as an original co- appointments,’’ and inserting ‘‘In establish- children to spend their time while their sponsor of two pieces of legislation ing the process for the election of members parents are at work. The challenge is that he is introducing today, as well. of the Board,’’; and to make the American workplace more Senator FEINGOLD’s two bills would (9) in paragraph (4) (as so designated)— productive by making it more respon- make other needed improvements in (A) by striking ‘‘appointment’’ and insert- sive to the needs of the American fam- the national dairy promotion program. ing ‘‘election’’; and ily. And the opportunity is to take (B) by striking ‘‘appointments’’ and insert- what we are learning about the impor- Specifically, one bill would require ing ‘‘elections’’. that imported dairy products be sub- tance of early childhood education and ject to the same dairy promotion as- National Dairy Promotion Reform Act of use it to help our children become the sessment as are paid on domestic dairy 1997 best educated adults of the 21st cen- products today. The other would pro- SUMMARY OF THE BILL tury. hibit the practice of bloc voting by co- The bill would amend the Dairy Produc- The need for quality child care is cer- operatives for the purpose of any fu- tion Stabilization Act of 1983 to require that tainly apparent. As real wages have ture farmer referenda regarding the future members of the National Dairy Board stagnated over the last decade, many National Dairy Board. be elected directly by dairy producers, and families have adapted by having two I thank my colleague Senator not appointed by the Secretary of Agri- wage earners per family. Also, over the culture as they are currently. FEINGOLD for his efforts on these mat- The bill would also prohibit the practice of same period, the number of children ters, and I believe that our three bills bloc voting of members by producer coopera- living in mother-only families has in- provide dairy promotion program re- tives for the purposes of the Board elections. creased—in 1950, 6 percent of all chil- forms that are both complementary However, cooperatives could continue to dren lived in mother-only families; in and necessary. nominate members to be on the ballot, as 1994, that number was 24 percent. In my I ask unanimous consent that the long as they adequately consult with their home State of Wisconsin, 67 percent of full text of the bill and summary be in- membership in the nomination process. women with children under 6 years old The explicit details of the election process cluded in the RECORD. would be developed by the Secretary of Agri- are in the work force according to Chil- There being no objection, the mate- culture. dren’s Defense Fund. And in Milwaukee rial was ordered to be printed in the County, about 56 percent of children RECORD, as follows: By Mr. KOHL: under the age of 6 have both parents in January 21, 1997 CONGRESSIONAL RECORD — SENATE S461 the work force or their sole parent in is to try to encourage private busi- Revenue Code of 1986 (relating to business re- the work force. That translates into nesses to undertake activities that lated credits) is amended by adding at the about 67,600 children under the age of 6 would increase the supply of quality end the following new section: in that county who right now are al- child care. ‘‘SEC. 45D. EMPLOYER-PROVIDED CHILD CARE ready in need of or in child care. The legislation gives flexibility to CREDIT. With the passage of the welfare re- businesses that want to get involved in ‘‘(a) IN GENERAL.—For purposes of section 38, the employer-provided child care credit form law, and the implementation of providing child care for their employ- determined under this section for the taxable W–2, Wisconsin’s welfare reform State ee’s dependents. Though the shortage year is an amount equal to 50 percent of the plan, the need for child care will be- of quality child care is definitely a na- qualified child care expenditures of the tax- come even greater. A recent report tional problem, it does have uniquely payer for such taxable year. done for the Community Coordinated local solutions. What sort of child care ‘‘(b) DOLLAR LIMITATION.—The credit al- Child Care of Milwaukee found that the infrastructure works best in a commu- lowable under subsection (a) for any taxable implementation of W–2 will lead to the nity is going to depend on the sort of year shall not exceed $150,000. need for over 8,000 new full-time child work that community does—whether ‘‘(c) DEFINITIONS.—For purposes of this sec- tion— care slots in Milwaukee County alone. there are many part-time or odd hour ‘‘(1) QUALIFIED CHILD CARE EXPENDITURE.— Wisconsin is not unique in facing this shifts, whether the local economy has a The term ‘qualified child care expenditure’ overwhelming shortage of child care few very large employers or a lot of means any amount paid or incurred— slots. Across the Nation, States and small employers, or some mix. My leg- ‘‘(A) to acquire, construct, rehabilitate, or communities are facing the same issue. islation includes a tax incentive that expand property— Where are our youngest children going would allow many different kinds of ‘‘(i) which is to be used as part of a quali- to spend the day while their parents businesses to take advantage of it—and fied child care facility of the taxpayer, are at work? that would allow them to be as cre- ‘‘(ii) with respect to which a deduction for This is not the sort of market short- depreciation (or amortization in lieu of de- ative as possible. preciation) is allowable, and age we can or should address hap- The 21st century economy will be one ‘‘(iii) which does not constitute part of the hazardly. There is nothing less at stake in which more of us are working, and principal residence (within the meaning of than the welfare of our children. Study more of us are trying to balance work section 1034) of the taxpayer or any employee after study has found the enormous im- and family. How well we adjust to that of the taxpayer, portance of early childhood education balance will determine how strong we ‘‘(B) for the operating costs of a qualified and care—and by early education, the are as an economy and as a Nation of child care facility of the taxpayer, including experts mean the education of 0 to 4 families. My legislation is an attempt costs related to the training of employees, to year olds. One University of Chicago to encourage businesses to play an ac- scholarship programs, and to the providing of increased compensation to employees with researcher has claimed that intel- tive role in this deeply important tran- higher levels of child care training, ligence appears to develop as much sition. ‘‘(C) under a contract with a qualified child during the years 0 to 4 as it does from In the 1950’s, Federal, State, local care facility to provide child care services to the years 4 to 18. governments, communities, and busi- employees of the taxpayer, or If we are simply warehousing kids in nesses banded together to build a high- ‘‘(D) under a contract to provide child care these early years, we are going to not way system that is the most impres- resource and referral services to employees only hamper their ability to develop sive in the world. Those roads allowed of the taxpayer. fulfilling and productive lives, but we our economy to flourish and our people ‘‘(2) QUALIFIED CHILD CARE FACILITY.— are hurting ourselves. We are resigning ‘‘(A) IN GENERAL.—The term ‘qualified to move safely and quickly to work. In child care facility’ means a facility— ourselves to trying to solve edu- the 1990’s, we need the same sort of na- ‘‘(i) the principal use of which is to provide cational and developmental problems— tional, comprehensive effort to build child care assistance, and at great expense—for the rest of these safe and affordable child care for our ‘‘(ii) which meets the requirements of all children’s lives. children. As more and more parents—of applicable laws and regulations of the State As obvious as this point may seem, all income levels—move into the work or local government in which it is located, the desperate need for quality early force, they need access to quality child including, but not limited to, the licensing of child care is not a problem that this care just as much as their parents the facility as a child care facility. Nation has addressed. As a Nation—and Clause (i) shall not apply to a facility which needed quality highways to drive to is the principal residence (within the mean- I mean Federal, State, local, and pri- work. And if we are successful—and I ing of section 1034) of the operator of the fa- vate resources—over the last 10 years, plan to be successful—in the 21st cen- cility. we have doubled our expenditures on tury excellent child care will be as ‘‘(B) SPECIAL RULES WITH RESPECT TO A TAX- educating 5 to 25 year olds to $500 bil- common as interstate highways. PAYER.—A facility shall not be treated as a lion. Contrast that with the mere $4 Child care is an investment that is qualified child care facility with respect to a billion we are spending on Head Start, good for children, good for business, taxpayer unless— and 95 percent of that is on children 3, good for our States, and good for the ‘‘(i) enrollment in the facility is open to 4, and 5 years old. Only $100 million out Nation. We need to involve every level employees of the taxpayer during the taxable year, of $500 billion is spent on the period of government—and private commu- ‘‘(ii) the facility is not the principal trade when the most significant development nities and private businesses—in build- or business of the taxpayer unless at least 30 takes place—that’s one-fifth of one ing a child care infrastructure that is percent of the enrollees of such facility are thousandth of what we spend on ages 5 the best in the world. My legislation is dependents of employees of the taxpayer, and through 25. a first, essential step toward this end. ‘‘(iii) the use of such facility (or the eligi- Obviously, our investment in chil- Mr. President, I ask unanimous con- bility to use such facility) does not discrimi- dren has not kept up with what we now sent that the text of the bill be printed nate in favor of employees of the taxpayer know about how children learn and de- in the RECORD. who are highly compensated employees velop in their earliest year. There being no objection, the bill was (within the meaning of section 414(q)). ‘‘(d) RECAPTURE OF ACQUISITION AND CON- There is another reason to care about ordered to be printed in the RECORD, as STRUCTION CREDIT.— the supply of quality child care—espe- follows: ‘‘(1) IN GENERAL.—If, as of the close of any cially for businesses to care about S. 82 taxable year, there is a recapture event with quality child care. Employees who are Be it enacted by the Senate and House of respect to any qualified child care facility of happy with their child care situations Representatives of the United States of America the taxpayer, then the tax of the taxpayer are better employees. They are more in Congress assembled, under this chapter for such taxable year productive, have less absenteeism, and SECTION 1. SHORT TITLE. shall be increased by an amount equal to the are more loyal to their company. This Act may be cited as the ‘‘Child Care product of— Clearly, there is a shortage of quality Infrastructure Act of 1997’’. ‘‘(A) the applicable recapture percentage, and child care, and equally clearly, there is SEC. 2. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD CARE ASSIST- ‘‘(B) the aggregate decrease in the credits a benefit to the private sector if they ANCE. allowed under section 38 for all prior taxable are involved in solving that shortage. (a) IN GENERAL.—Subpart D of part IV of years which would have resulted if the quali- The approach I take in my legislation subchapter A of chapter 1 of the Internal fied child care expenditures of the taxpayer S462 CONGRESSIONAL RECORD — SENATE January 21, 1997 described in subsection (c)(1)(A) with respect ‘‘(A) IN GENERAL.—If a credit is determined upon for authority. It is difficult to ex- to such facility had been zero. under this section with respect to any prop- plain to the public why some appar- ‘‘(2) APPLICABLE RECAPTURE PERCENTAGE.— erty by reason of expenditures described in ently similar situations have to be ‘‘(A) IN GENERAL.—For purposes of this sub- subsection (c)(1)(A), the basis of such prop- treated differently because different section, the applicable recapture percentage erty shall be reduced by the amount of the shall be determined from the following table: credit so determined. authorities are involved.’’ A 1993 report issued by the Office of The applicable ‘‘(B) CERTAIN DISPOSITIONS.—If during any taxable year there is a recapture amount de- Technology Assessment reached the recapture same conclusion. The OTA found that ‘‘If the recapture event percentage is: termined with respect to any property the occurs in: basis of which was reduced under subpara- Federal and State statutes, regula- Years 1–3 ...... 100 graph (A), the basis of such property (imme- tions, and programs are not keeping Year 4 ...... 85 diately before the event resulting in such re- pace with new and spreading alien Year 5 ...... 70 capture) shall be increased by an amount pests. Year 6 ...... 55 equal to such recapture amount. For pur- The Plant Protection Act will ad- Year 7 ...... 40 poses of the preceding sentence, the term ‘re- dress many of these problems. The bill Year 8 ...... 25 capture amount’ means any increase in tax I introduced today will enhance the Years 9 and 10 ...... 10 (or adjustment in carrybacks or carryovers) determined under subsection (d). Federal Government’s ability to com- Years 11 and thereafter 0. bat weeds, plant pests, and diseases, ‘‘(B) YEARS.—For purposes of subparagraph ‘‘(2) OTHER DEDUCTIONS AND CREDITS.—No (A), year 1 shall begin on the first day of the deduction or credit shall be allowed under and protect our farms, environment, taxable year in which the qualified child any other provision of this chapter with re- and economy from the harm they care facility is placed in service by the tax- spect to the amount of the credit determined cause. payer. under this section. Plant pests are a problem of monu- ‘‘(3) RECAPTURE EVENT DEFINED.—For pur- ‘‘(g) TERMINATION.—This section shall not mental proportions. Insects such as poses of this subsection, the term ‘recapture apply to taxable years beginning after De- Mediterranean fruit fly, fire ant, and event’ means— cember 31, 1999.’’ (b) CONFORMING AMENDMENTS.— gypsy moth plague America’s farmers ‘‘(A) CESSATION OF OPERATION.—The ces- (1) Section 38(b) of the Internal Revenue and cause billions of dollars in crop sation of the operation of the facility as a losses annually. Destructive plant dis- qualified child care facility. Code of 1986 is amended— (A) by striking out ‘‘plus’’ at the end of eases include chestnut blight, which ‘‘(B) CHANGE IN OWNERSHIP.— paragraph (11), ‘‘(i) IN GENERAL.—Except as provided in wiped out the most common tree of our clause (ii), the disposition of a taxpayer’s in- (B) by striking out the period at the end of Appalachian forests, elm blight, which terest in a qualified child care facility with paragraph (12), and inserting a comma and destroyed many splendid trees respect to which the credit described in sub- ‘‘plus’’, and throughout our towns and cities, and section (a) was allowable. (C) by adding at the end the following new the white pine blister rust, which paragraph: ‘‘(ii) AGREEMENT TO ASSUME RECAPTURE LI- ‘‘(13) the employer-provided child care eliminated western white pine as a ABILITY.—Clause (i) shall not apply if the source of timber for several decades. person acquiring such interest in the facility credit determined under section 45D.’’ (2) The table of sections for subpart D of Alien weeds also cause havoc, and no- agrees in writing to assume the recapture li- where is this problem more apparent ability of the person disposing of such inter- part IV of subchapter A of chapter 1 is est in effect immediately before such disposi- amended by adding at the end the following than in Hawaii. Because our climate is tion. In the event of such an assumption, the new item: so accommodating, Hawaii is heaven- person acquiring the interest in the facility ‘‘Sec. 45D. Employer-provided child care credit.’’ on-earth for weeds. Weeds such as shall be treated as the taxpayer for purposes (c) EFFECTIVE DATE.—The amendments gorse, ivy gourd, miconia, and banana of assessing any recapture liability (com- made by this section shall apply to taxable poka are ravaging our tropical and sub- puted as if there had been no change in own- years beginning after December 31, 1996. tropical landscape. ership). Invasive noxious weeds do more than ‘‘(4) SPECIAL RULES.— Mr. AKAKA: just compete with domestic species. ‘‘(A) TAX BENEFIT RULE.—The tax for the S. 83. A bill to consolidate and revise They transform the landscape, change taxable year shall be increased under para- the authority of the Secretary of Agri- the rules by which native plants and graph (1) only with respect to credits allowed culture relating to plant protection animals live, and undermine the eco- by reason of this section which were used to and quarantine, and for other purposes; reduce tax liability. In the case of credits nomic and environmental health of the to the Committee on Agriculture, Nu- areas they infest. not so used to reduce tax liability, the trition, and Forestry. carryforwards and carrybacks under section Alien weeds fuel grass and forest 39 shall be appropriately adjusted. PLANT PROTECTION ACT fires, promote soil erosion, and destroy ‘‘(B) NO CREDITS AGAINST TAX.—Any in- Mr. AKAKA. critical water resources. They signifi- crease in tax under this subsection shall not Mr. President, today I am introduc- cantly increase the cost of farming and be treated as a tax imposed by this chapter ing the Plant Protection Act, a com- ranching. Noxious weeds destroy or for purposes of determining the amount of prehensive consolidation of Federal alter natural habitat, damage water- any credit under subpart A, B, or D of this laws governing plant pests and dis- ways and powerlines, and depress prop- part. eases, noxious weeds, and the plant erty values. Some are toxic to humans, ‘‘(C) NO RECAPTURE BY REASON OF CASUALTY products that harbor pests and weeds. LOSS.—The increase in tax under this sub- livestock, and wildlife. section shall not apply to a cessation of op- During the past century, numerous Alien weeds are biological pollution, eration of the facility as a qualified child Federal laws were enacted to address pure and simple. Due to the worldwide care facility by reason of a casualty loss to problems caused by plant pests and growth in trade and travel we are wit- the extent such loss is restored by recon- noxious weeds. While some of these nessing an explosion in the number of struction or replacement within a reasonable laws continue to protect agriculture foreign weeds that plague our Nation. period established by the Secretary. and the environment, others are am- Just how big is this problem? Let me ‘‘(e) SPECIAL RULES.—For purposes of this biguous, outmoded, or difficult to en- offer an example. Last year, on Federal section— force. The Nation’s agricultural com- lands alone, we lost 4,500 acres each ‘‘(1) AGGREGATION RULES.—All persons which are treated as a single employer under munity, as well as private, state, and day to noxious weeds. That’s a million- subsections (a) and (b) of section 52 shall be Federal land managers, cannot afford and-a-half acres a year, or an area the treated as a single taxpayer. the continuing uncertainty caused by size of Delaware. By comparison, forest ‘‘(2) PASS-THRU IN THE CASE OF ESTATES AND the hodgepodge of Federal plant pest fires—one of the most fearsome natural TRUSTS.—Under regulations prescribed by laws, some of which were enacted be- disasters—claimed only half as many the Secretary, rules similar to the rules of fore World War I. Legislation to revise Federal acres as weeds. subsection (d) of section 52 shall apply. and consolidate federal plant pest laws Noxious weeds have also been called ‘‘(3) ALLOCATION IN THE CASE OF PARTNER- is urgently needed and long overdue. biological wildfire, and for good reason. SHIPS.—In the case of partnerships, the cred- Agriculture Secretary Dan Glickman Forests, national parks, recreation it shall be allocated among partners under regulations prescribed by the Secretary. highlighted the problem created by fed- areas, urban landscapes, wilderness, ‘‘(f) NO DOUBLE BENEFIT.— eral plant protection laws when he told grasslands, waterways, farm and range ‘‘(1) REDUCTION IN BASIS.—For purposes of Congress that ‘‘in some instances, it is land across the Nation are overrun by this subtitle— unclear which statutes should be relied noxious weeds. January 21, 1997 CONGRESSIONAL RECORD — SENATE S463 Farmers experience the greatest eco- SECTION 1. SHORT TITLE. (C) within the District of Columbia, Guam, nomic impact of this problem. The Of- This Act may be cited as the ‘‘Plant Pro- the Virgin Islands of the United States, or fice of Technology Assessment esti- tection Act’’. any other territory or possession of the Unit- mates that exotic weeds cost U.S. SEC. 2. FINDINGS. ed States. Congress finds that— farmers $3.6 to $5.4 billion annually due (12) MEANS OF CONVEYANCE.—The term (1) the detection, control, eradication, sup- ‘‘means of conveyance’’ means any personal to reduced yields, crops of poor quality, pression, prevention, and retardation of the property or means used for or intended for increased herbicide use, and other weed spread of plant pests and noxious weeds is use for the movement of any other personal control costs. Noxious weeds are a sig- necessary for the protection of the agri- property. nificant drain on farm productivity. culture, environment, and economy of the (13) MOVE.—The term ‘‘move’’ means to— Despite the magnitude of this prob- United States; (A) carry, enter, import, mail, ship, or lem, few people get alarmed about (2) biological control— transport; weeds. The issue certainly doesn’t ap- (A) is often a desirable, low-risk means of (B) aid, abet, cause, or induce the carrying, pear on the cover of Time or News- ridding crops and other plants of plant pests entering, importing, mailing, shipping, or and noxious weeds; and transporting; week. Perhaps if kudzu, a weed known (B) should be facilitated by the Secretary as the ‘‘vine that ate the South,’’ at- (C) offer to carry, enter, import, mail, ship, of Agriculture, Federal agencies, and States, or transport; tacked the Capitol grounds, weeds whenever feasible; (D) receive to carry, enter, import, mail, would finally get the attention they (3) markets could be severely impacted by ship, or transport; or deserve. the introduction or spread of pests or nox- (E) allow any of the activities referred to Several of these foreign weeds are ious weeds into or within the United States; this paragraph. truly the King Kong of plants. Some (4) the unregulated movement of plant (14) NOXIOUS WEED.—The term ‘‘noxious are 50 feet tall. Others have 4 inch pests, noxious weeds, plants, biological con- weed’’ means a plant, seed, reproductive thorns. Some have roots 25 feet deep, trol organisms, plant products, and articles part, or propagative part of a plant that— and others produce 20 million seeds capable of harboring plant pests or noxious (A) can directly or indirectly injure or weeds would present an unacceptable risk of cause damage to a crop, other useful plant, each year. introducing or spreading plant pests or nox- My least-favorite weed is the tropical plant product, livestock, poultry, or other ious weeds; interest of agriculture (including irrigation), soda apple, a thorny plant with a (5) the existence on any premises in the sweet-sounding name. It bears small navigation, public health, or natural re- United States of a plant pest or noxious weed sources or environment of the United States; yellow and green fruit. But, like fruit new to or not known to be widely prevalent and from the forbidden tree, tropical soda in or distributed within and throughout the (B) belongs to a species that is not indige- apples are a source of great strife. United States could threaten crops, other nous to the geographic area or ecosystem in This import from Brazil has inch- plants, plant products, and the natural re- which it is causing injury or damage. sources and environment of the United long spikes covering its stems and (15) PERMIT.—The term ‘‘permit’’ means a States and burden interstate commerce or leaves. The fruit is a favorite among written or oral authorization (including elec- foreign commerce; and tronic authorization) by the Secretary to cattle, and when they pass the seeds in (6) all plant pests, noxious weeds, plants, move a plant, plant product, biological con- their manure new weeds quickly plant products, or articles capable of harbor- trol organism, plant pest, noxious weed, or sprout. As cattle are shipped from ing plant pests or noxious weeds regulated article under conditions prescribed by the state to state with soda apple seeds in under this Act are in or affect interstate Secretary. their stomachs you can easily imagine commerce or foreign commerce. (16) PERSON.—The term ‘‘person’’ means an how the problem rapidly spreads. Trop- SEC. 3. DEFINITIONS. individual, partnership, corporation, associa- In this Act: ical soda apple is a weed control night- tion, joint venture, or other legal entity. (1) ARTICLE.—The term ‘‘article’’ means mare. (17) PLANT.—The term ‘‘plant’’ means a any material or tangible object that could The saga of tropical soda apple plant or plant part for or capable of propaga- harbor a pest, disease, or noxious weed. prompted me to introduce S. 690, the tion, including a tree, shrub, vine, bulb, root, (2) BIOLOGICAL CONTROL ORGANISM.—The pollen, seed, tissue culture, plantlet culture, Federal Noxious Weed Improvement term ‘‘biological control organism’’ means a Act during the 104th Congress. S. 690 biological entity, as defined by the Sec- cutting, graft, scion, and bud. would grant the Secretary of Agri- retary, that suppresses or decreases the pop- (18) PLANT PEST.—The term ‘‘plant pest’’ culture emergency powers to restrict ulation of another biological entity. means— (A) a living stage of a protozoan, animal, the entry of a foreign weed until for- (3) ENTER.—The term ‘‘enter’’ means to bacteria, fungus, virus, viroid, infection mal action can be taken to place it on move into the commerce of the United States. agent, or parasitic plant that can directly or the noxious weed list. This legislation indirectly injure or cause damage to, or would prevent future tropical soda ap- (4) ENTRY.—The term ‘‘entry’’ means the act of movement into the commerce of the cause disease in, a plant or plant product; or ples from taking root. (B) an article that is similar to or allied I have incorporated the text of S. 690 United States. (5) EXPORT.—The term ‘‘export’’ means to with an article referred to in subparagraph into section 4 of the Plant Protection move from the United States to any place (A). Act. Other provisions of the legislation outside the United States. (19) PLANT PRODUCT.—The term ‘‘plant I have introduced today are drawn (6) EXPORTATION.—The term ‘‘exportation’’ product’’ means a flower, fruit, vegetable, from USDA recommendations for con- means the act of movement from the United root, bulb, seed, or other plant part that is solidating weed and plant pest authori- States to any place outside the United not considered a plant or a manufactured or ties. States. processed plant or plant part. Because the U.S. Department of Agri- (7) IMPORT.—The term ‘‘import’’ means to (20) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Agriculture. culture’s authority over plant pests move into the territorial limits of the United (21) STATE.—The term ‘‘State’’ means each and noxious weeds is dispersed States. (8) IMPORTATION.—The term ‘‘importation’’ of the several States of the United States, throughout many statutes, Federal ef- means the act of movement into the terri- the District of Columbia, the Commonwealth forts to protect agriculture, forestry, torial limits of the United States. of Puerto Rico, the Virgin Islands, Guam, and our environment are seriously hin- (9) INDIGENOUS.—The term ‘‘indigenous’’ American Samoa, the Commonwealth of the dered. To enable the Department to re- means a plant species found naturally as Northern Mariana Islands, and any other ter- spond more efficiently to this chal- part of a natural habitat in a geographic ritory or possession of the United States. lenge, the Plant Protection Act will area in the United States. (22) UNITED STATES.—The term ‘‘United consolidate these authorities into a (10) INTERSTATE.—The term ‘‘interstate’’ States’’, when used in a geographical sense, single statute. means from 1 State into or through any means all of the States. I ask unanimous consent that the other State, or within the District of Colum- SEC. 4. RESTRICTIONS ON MOVEMENT OF text of the Plant Protection Act be bia, Guam, the Virgin Islands of the United PLANTS, PLANT PRODUCTS, BIO- States, or any other territory or possession LOGICAL CONTROL ORGANISMS, printed in the RECORD. PLANT PESTS, NOXIOUS WEEDS, AR- There being no objection, the mate- of the United States. (11) INTERSTATE COMMERCE.—The term TICLES, AND MEANS OF CONVEY- rial was ordered to be printed in the ‘‘interstate commerce’’ means trade, traffic, ANCE. RECORD, as follows: movement, or other commerce— (a) IN GENERAL.—The Secretary may pro- S. 83 (A) between a place in a State and a point hibit or restrict the importation, entry, ex- Be it enacted by the Senate and House of Rep- in another State; portation, or movement in interstate com- resentatives of the United States of America in (B) between points within the same State merce of a plant, plant product, biological Congress assembled, but through any place outside the State; or control organism, plant pest, noxious weed, S464 CONGRESSIONAL RECORD — SENATE January 21, 1997

article, or means of conveyance if the Sec- (D) INCLUSION ON LIST.—To include a plant from paragraph (1), pursuant to such regula- retary determines that the prohibition or re- species on the list, the Secretary must deter- tions as the Secretary may issue. striction is necessary to prevent the intro- mine that— (b) NOTIFICATION BY RESPONSIBLE PER- duction into the United States or the inter- (i) the plant species is nonindigenous to SON.—The person responsible for a plant, state dissemination of a plant pest or nox- the geographic region or ecosystem in which plant product, biological control organism, ious weed. the species is spreading and causing injury; plant pest, noxious weed, article, or means of conveyance subject to subsection (a) shall (b) MAIL.— and promptly, on arrival at the port of entry and (1) IN GENERAL.—No person shall convey in (ii) the dissemination of the plant in the before the plant, plant product, biological the mail, or deliver from a post office or by United States may reasonably be expected to control organism, plant pest, noxious weed, a mail carrier, a letter or package contain- interfere with natural resources, agriculture, article, or means of conveyance is moved ing a plant pest, biological control organism, forestry, or a native ecosystem of a geo- from the port of entry, notify the Secretary or noxious weed unless it is mailed in accord- graphic region, or management of an eco- or, at the Secretary’s direction, the proper ance with such regulations as the Secretary system, or cause injury to the public health. official of the State to which the plant, plant may issue to prevent the introduction into (f) CONFORMING AMENDMENTS.— (1) Section 102 of the Act of September 21, product, biological control organism, plant the United States, or interstate dissemina- pest, noxious weed, article, or means of con- tion, of plant pests or noxious weeds. 1944 (58 Stat. 735, chapter 412; 7 U.S.C. 147a) is amended by striking ‘‘(a)’’ in subsection veyance is destined, or both, as the Sec- (2) POSTAL EMPLOYEES.—This subsection retary may prescribe, of— shall not apply to an employee of the United (a) and all that follows through ‘‘(2)’’ in sub- section (f)(2). (1) the name and address of the consignee; States in the performance of the duties of (2) the nature and quantity of the plant, the employee in handling the mail. (2) The matter under the heading ‘‘EN- FORCEMENT OF THE PLANT-QUARANTINE ACT:’’ plant product, biological control organism, (3) POSTAL LAWS AND REGULATIONS.—Noth- under the heading ‘‘MISCELLANEOUS’’ of the plant pest, noxious weed, article, or means of ing in this subsection authorizes a person to conveyance proposed to be moved; and open a mailed letter or other mailed sealed Act of March 4, 1915 (commonly known as the ‘‘Terminal Inspection Act’’) (38 Stat. (3) the country and locality where the matter except in accordance with the postal plant, plant product, biological control orga- laws and regulations. 1113, chapter 144; 7 U.S.C. 166) is amended— (A) in the second paragraph— nism, plant pest, noxious weed, article, or (c) STATE RESTRICTIONS ON NOXIOUS (i) by striking ‘‘plants and plant products’’ means of conveyance was grown, produced, WEEDS.—No person shall move into a State, each place it appears and inserting ‘‘plants, or located. or sell or offer for sale in the State, a plant plant products, animals, and other orga- (c) NO MOVEMENT WITHOUT INSPECTION AND species the sale of which is prohibited by the nisms’’; AUTHORIZATION.—No person shall move from State because the plant species is designated (ii) by striking ‘‘plants or plant products’’ the port of entry or interstate an imported as a noxious weed or has a similar designa- each place it appears and inserting ‘‘plants, plant, plant product, biological control orga- tion. plant products, animals, or other orga- nism, plant pest, noxious weed, article, or means of conveyance unless the imported (d) ADMINISTRATION.—The Secretary may nisms’’; issue regulations to carry out this section, (iii) by striking ‘‘plant-quarantine law or plant, plant product, biological control orga- including regulations requiring that a plant, plant-quarantine regulation’’ each place it nism, plant pest, noxious weed, article, or plant product, biological control organism, appears and inserting ‘‘plant-quarantine or means of conveyance has been inspected and authorized for entry into or transit move- plant pest, noxious weed, article, or means of other law or plant-quarantine regulation’’; ment through the United States, or other- conveyance imported, entered, to be ex- (iv) in the second sentence— wise released by the Secretary. ported, or moved in interstate commerce— (I) by striking ‘‘Upon his approval of said (1) be accompanied by a permit issued by list, in whole or in part, the Secretary of Ag- SEC. 6. REMEDIAL MEASURES OR DISPOSAL FOR PLANT PESTS OR NOXIOUS WEEDS; the Secretary prior to the importation, riculture’’ and inserting ‘‘On the receipt of EXTRAORDINARY EMERGENCY. entry, exportation, or movement in inter- the list by the Secretary of Agriculture, the (a) REMEDIAL MEASURES OR DISPOSAL FOR state commerce; Secretary’’; and PLANT PESTS OR NOXIOUS WEEDS.— (2) be accompanied by a certificate of in- (II) by striking ‘‘said approved lists’’ and (1) IN GENERAL.—Except as provided in sub- spection issued in a manner and form re- inserting ‘‘the lists’’; section (c), if the Secretary considers it nec- quired by the Secretary or by an appropriate (v) by inserting after the second sentence essary to prevent the dissemination of a official of the country or State from which the following: ‘‘On the request of a rep- plant pest or noxious weed new to or not the plant, plant product, biological control resentative of a State, a Federal agency known to be widely prevalent or distributed organism, plant pest, noxious weed, article, shall act on behalf of the State to obtain a within and throughout the United States, or means of conveyance is to be moved; warrant to inspect mail to carry out this the Secretary may hold, seize, quarantine, (3) be subject to remedial measures the paragraph.’’; and treat, apply other remedial measures to, de- Secretary determines to be necessary to pre- (vi) in the last sentence, by striking ‘‘be stroy, or otherwise dispose of— vent the spread of plant pests; and forward’’ and inserting ‘‘be forwarded’’; and (A) a plant, plant product, biological con- (4) in the case of a plant or biological con- (B) in the third paragraph, by striking trol organism, plant pest, noxious weed, arti- trol organism, be grown or handled under ‘‘plant or plant product’’ and inserting cle, or means of conveyance that is moving post-entry quarantine conditions by or under ‘‘plant, plant product, animal, or other orga- into or through the United States or inter- the supervision of the Secretary for the pur- nism’’. state and that the Secretary has reason to pose of determining whether the plant or bi- SEC. 5. NOTIFICATION OF ARRIVAL AND INSPEC- believe is infested with the plant pest or nox- ological control organism may be infested TION BEFORE MOVEMENT OF ious weed; PLANTS, PLANT PRODUCTS, BIO- with a plant pest or noxious weed, or may be (B) a plant, plant product, biological con- a plant pest or noxious weed. LOGICAL CONTROL ORGANISMS, PLANT PESTS, NOXIOUS WEEDS, AR- trol organism, plant pest, noxious weed, arti- (e) LIST OF RESTRICTED NOXIOUS WEEDS.— TICLES, AND MEANS OF CONVEY- cle, or means of conveyance that has moved (1) PUBLICATION.—The Secretary may pub- ANCE. into the United States or interstate and that lish, by regulation, a list of noxious weeds (a) NOTIFICATION AND HOLDING BY SEC- the Secretary has reason to believe was in- that are prohibited or restricted from enter- RETARY OF THE TREASURY.— fested with the plant pest or noxious weed at ing the United States or that are subject to (1) IN GENERAL.—Except as provided in the time of the movement; restrictions on interstate movement within paragraph (2), the Secretary of the Treasury (C) a plant, plant product, biological con- the United States. shall— trol organism, plant pest, noxious weed, arti- (2) PETITIONS TO ADD OR REMOVE PLANT SPE- (A) promptly notify the Secretary of the cle, or means of conveyance that is moving CIES.— arrival of a plant, plant product, biological into or through the United States or inter- (A) IN GENERAL.—A person may petition control organism, plant pest, noxious weed, state, or has moved into the United States or the Secretary to add or remove a plant spe- article, or means of conveyance at a port of interstate, in violation of this Act; cies from the list required under paragraph entry; and (D) a plant, plant product, biological con- (1). (B) hold the plant, plant product, biologi- trol organism, plant pest, noxious weed, arti- (B) ACTION ON PETITION.—The Secretary cal control organism, plant pest, noxious cle, or means of conveyance that has not shall— weed, article, or means of conveyance until been maintained in compliance with a post- (i) act on a petition not later than 1 year inspected and authorized for entry into or entry quarantine requirement; after receipt of the petition by the Sec- transit movement through the United (E) a progeny of a plant, plant product, bi- retary; and States, or otherwise released by the Sec- ological control organism, plant pest, or nox- (ii) notify the petitioner of the final action retary. ious weed that is moving into or through the the Secretary takes on the petition. (2) APPLICATION.—Paragraph (1) shall not United States or interstate, or has moved (C) BASIS FOR DETERMINATION.—The Sec- apply to a plant, plant product, biological into the United States or interstate, in vio- retary’s determination on the petition shall control organism, plant pest, noxious weed, lation of this Act; or be based on sound science, available data and article, or means of conveyance that is im- (F) a plant, plant product, biological con- technology, and information received from ported from a country or region of countries trol organism, plant pest, noxious weed, arti- public comment. that the Secretary designates as exempt cle, or means of conveyance that is infested January 21, 1997 CONGRESSIONAL RECORD — SENATE S465 with a plant pest or noxious weed that the (B) quarantine, treat, or apply other reme- Court of the District of Columbia, not later Secretary has reason to believe was moved dial measures to a premises, including a than 1 year after the destruction or disposal, into the United States or in interstate com- plant, plant product, biological control orga- and recover just compensation for the de- merce. nism, article, or means of conveyance on the struction or disposal of the plant, plant prod- (2) ORDERING TREATMENT OR DISPOSAL BY premises, that the Secretary has reason to uct, biological control organism, article, or THE OWNER.—Except as provided in sub- believe is infested with the plant pest or nox- means of conveyance (not including com- section (c), the Secretary may order the ious weed; pensation for loss due to delays incident to owner of a plant, plant product, biological (C) quarantine a State or portion of a determining eligibility for importation, control organism, plant pest, noxious weed, State in which the Secretary finds the plant entry, exportation, movement in interstate article, or means of conveyance subject to pest or noxious weed, or a plant, plant prod- commerce, or release into the environment) disposal under paragraph (1), or the owner’s uct, biological control organism, article, or if the owner establishes that the destruction agent, to treat, apply other remedial meas- means of conveyance that the Secretary has or disposal was not authorized under this ures to, destroy, or otherwise dispose of the reason to believe is infested with the plant Act. plant, plant product, biological control orga- pest or noxious weed; or (2) SOURCE FOR PAYMENTS.—A judgment nism, plant pest, noxious weed, article, or (D) prohibit or restrict the movement rendered in favor of the owner shall be paid means of conveyance, without cost to the within a State of a plant, plant product, bio- out of the money in the Treasury appro- Federal Government and in a manner the logical control organism, article, or means priated for plant pest control activities of Secretary considers appropriate. of conveyance if the Secretary determines the Department of Agriculture. (3) CLASSIFICATION SYSTEM FOR NOXIOUS that the prohibition or restriction is nec- SEC. 7. INSPECTIONS, SEIZURES, AND WARRANTS. WEEDS.— essary to prevent the dissemination of the (a) IN GENERAL.—Consistent with guide- (A) IN GENERAL.—To facilitate control of plant pest or noxious weed or to eradicate lines approved by the Attorney General, the noxious weeds, the Secretary shall develop a the plant pest or noxious weed. Secretary may— classification system to describe the status (2) REQUIREMENTS FOR ACTION.— (1) stop and inspect, without a warrant, a and action levels for noxious weeds. (A) INADEQUATE STATE MEASURES.—After person or means of conveyance moving into (B) CATEGORIES.—The classification system review and consultation with the Governor the United States to determine whether the shall differentiate between— or other appropriate official of the State, the person or means of conveyance is carrying a (i) noxious weeds that are not known to be Secretary may take action under this sub- plant, plant product, biological control orga- introduced into the United States; section only on a finding that the measures nism, or article regulated under this Act or (ii) noxious weeds that are not known to be being taken by the State are inadequate to is moving subject to this Act; widely disseminated within the United eradicate the plant pest or noxious weed. (2) stop and inspect, without a warrant, a States; (B) NOTICE TO STATE AND PUBLIC.—Before person or means of conveyance moving in (iii) noxious weeds that are widely distrib- taking any action in a State under this sub- interstate commerce on probable cause to uted within the United States; and section, the Secretary shall— believe that the person or means of convey- (iv) noxious weeds that are not indigenous, (i) notify the Governor or another appro- ance is carrying a plant, plant product, bio- including native plant species that are priate official of the State; logical control organism, or article regu- invasive in limited geographic areas within (ii) issue a public announcement; and lated under this Act or is moving subject to the United States. (iii) except as provided in subparagraph this Act; (C) OTHER CATEGORIES.—In addition to the (C), publish in the Federal Register a state- (3) stop and inspect, without a warrant, a categories required under subparagraph (B), ment of— person or means of conveyance moving in the Secretary may establish other categories (I) the Secretary’s findings; interstate commerce from or within a State, of noxious weeds for the system. (II) the action the Secretary intends to portion of a State, or premises quarantined (D) VARYING LEVELS OF REGULATION AND take; under section 6(b) on probable cause to be- CONTROL.—The Secretary shall develop vary- (III) the reason for the intended action; lieve that the person or means of conveyance ing levels of regulation and control appro- and is carrying any plant, plant product, biologi- priate to each of the categories of the sys- (IV) if practicable, an estimate of the an- cal control organism, or article regulated tem. ticipated duration of the extraordinary under this Act or is moving subject to this (E) APPLICATION OF REGULATIONS.—The reg- emergency. Act; and ulations issued to carry out this paragraph (C) NOTICE AFTER ACTION.—If it is not prac- (4) enter, with a warrant, a premises in the shall apply, as the Secretary considers ap- ticable to publish a statement in the Federal United States for the purpose of making in- propriate, to— Register under subparagraph (B) prior to spections and seizures under this Act. (i) exclude a noxious weed; taking an action under this subsection, the (b) WARRANTS.— (ii) prevent further dissemination of a nox- Secretary shall publish the statement in the (1) IN GENERAL.—A United States judge, a ious weed through movement or commerce; Federal Register within a reasonable period judge of a court of record in the United (iii) establish mandatory controls for a of time, not to exceed 10 business days, after States, or a United States magistrate judge noxious weed; or commencement of the action. may, within the judge’s or magistrate’s ju- (iv) designate a noxious weed as warrant- (3) COMPENSATION.— risdiction, on proper oath or affirmation ing control efforts. (A) IN GENERAL.—The Secretary may pay showing probable cause to believe that there (F) REVISIONS.—The Secretary shall revise compensation to a person for economic is on certain premises a plant, plant product, the classification system, and the placement losses incurred by the person as a result of biological control organism, article, facility, of individual noxious weeds within the sys- action taken by the Secretary under para- or means of conveyance regulated under this tem, in response to changing circumstances. graph (1). Act, issue a warrant for entry on the prem- (G) INTEGRATED MANAGEMENT PLANS.—In (B) FINAL DETERMINATION.—The determina- ises to make an inspection or seizure under conjunction with the classification system, tion by the Secretary of the amount of any this Act. the Secretary may develop an integrated compensation paid under this subsection (2) EXECUTION.—The warrant may be exe- management plan for a noxious weed for the shall be final and shall not be subject to judi- cuted by the Secretary or a United States geographic region or ecological range of the cial review. Marshal. United States where the noxious weed is (c) LEAST DRASTIC ACTION TO PREVENT DIS- SEC. 8. COOPERATION. found or to which the noxious weed may SEMINATION.—No plant, plant product, bio- (a) IN GENERAL.—To carry out this Act, the spread. logical control organism, article, or means Secretary may cooperate with— (b) EXTRAORDINARY EMERGENCIES.— of conveyance shall be destroyed, exported, (1) other Federal agencies; (1) IN GENERAL.—Subject to paragraph (2), or returned to the shipping point of origin, (2) States or political subdivisions of if the Secretary determines that an extraor- or ordered to be destroyed, exported, or re- States; dinary emergency exists because of the pres- turned to the shipping point of origin under (3) national, State, or local associations; ence of a plant pest or noxious weed new to this section unless, in the opinion of the Sec- (4) national governments; or not known to be widely prevalent in or retary, there is no less drastic action that is (5) local governments of other nations; distributed within and throughout the Unit- feasible, and that would be adequate, to pre- (6) international organizations; ed States and that the presence of the plant vent the dissemination of a plant pest or (7) international associations; and pest or noxious weed threatens a crop, other noxious weed new to or not known to be (8) other persons. plant, plant product, or the natural re- widely prevalent or distributed within and (b) RESPONSIBILITY.—The individual or en- sources or environment of the United States, throughout the United States. tity cooperating with the Secretary shall be the Secretary may— (d) COMPENSATION OF OWNER FOR UNAU- responsible for conducting the operations or (A) hold, seize, quarantine, treat, apply THORIZED DISPOSAL.— taking measures on all land and property other remedial measures to, destroy, or oth- (1) IN GENERAL.—The owner of a plant, within the foreign country or State, other erwise dispose of, a plant, plant product, bio- plant product, biological control organism, than land and property owned or controlled logical control organism, plant pest, noxious article, or means of conveyance destroyed or by the United States, and for other facilities weed, article, or means of conveyance that otherwise disposed of by the Secretary under and means determined by the Secretary. the Secretary has reason to believe is in- this section may bring an action against the (c) TRANSFER OF BIOLOGICAL CONTROL fested with the plant pest or noxious weed; United States in the United States District METHODS.—At the request of a Federal or S466 CONGRESSIONAL RECORD — SENATE January 21, 1997

State land management agency, the Sec- (3) ACCOUNT.—A late payment penalty and may be required from any place in the Unit- retary may transfer to the agency biological accrued interest shall be credited to the ac- ed States at any designated place of hearing. control methods utilizing biological control count that incurs the costs and shall remain (C) NONCOMPLIANCE WITH SUBPOENA.—If a organisms against plant pests or noxious available until expended without fiscal year person disobeys a subpoena, the Secretary weeds. limitation. may request the Attorney General to invoke (d) IMPROVEMENT OF PLANTS, PLANT PROD- SEC. l2. VIOLATIONS; PENALTIES. the aid of a court of the United States within UCTS, AND BIOLOGICAL CONTROL ORGANISMS.— (a) CRIMINAL PENALTIES.—A person who the jurisdiction in which the investigation is The Secretary may cooperate with State au- knowingly violates this Act, or who know- conducted, or where the person resides, is thorities in the administration of regula- ingly forges, counterfeits, or, without au- found, transacts business, is licensed to do tions for the improvement of plants, plant thority from the Secretary, uses, alters, de- business, or is incorporated to require the at- products, and biological control organisms. faces, or destroys a certificate, permit, or tendance and testimony of a witness and the SEC. 9. PHYTOSANITARY CERTIFICATE FOR EX- other document provided under this Act production of documentary evidence. PORTS. shall be guilty of a misdemeanor, and, on (D) ORDER.—If a person disobeys a sub- The Secretary may certify a plant, plant conviction, shall be fined in accordance with poena, the court may order the person to ap- product, or biological control organism as title 18, United States Code, or imprisoned pear before the Secretary and give evidence free from plant pests and noxious weeds, and for not more than 1 year, or both. concerning the matter in question or to exposure to plant pests and noxious weeds, (b) CIVIL PENALTIES.— produce documentary evidence. according to the phytosanitary requirements (1) IN GENERAL.—A person who violates this (E) NONCOMPLIANCE WITH ORDER.—A failure of the country to which the plant, plant Act, or who forges, counterfeits, or, without to obey the court’s order may be punished by product, or biological control organism may authority from the Secretary, uses, alters, the court as a contempt of the court. be exported. defaces, or destroys a certificate, permit, or (F) FEES AND MILEAGE.— SEC. 10. ADMINISTRATION. other document provided under this Act (i) IN GENERAL.—A witness summoned by may, after notice and opportunity for a hear- the Secretary shall be paid the same fees and (a) IN GENERAL.—The Secretary may ac- quire and maintain such real or personal ing on the record, be assessed a civil penalty reimbursement for mileage that is paid to a property, employ such persons, make such by the Secretary of not more than $25,000 for witness in the courts of the United States. grants, and enter into such contracts, coop- each violation. (ii) DEPOSITIONS.—A witness whose deposi- erative agreements, memoranda of under- (2) FINAL ORDER.—The order of the Sec- tion is taken, and the person taking the dep- standing, or other agreements as are nec- retary assessing a civil penalty shall be osition, shall be entitled to the same fees essary to carry out this Act. treated as a final order that is reviewable that are paid for similar services in a court (b) PERSONNEL OF USER FEE SERVICES.— under chapter 158 of title 28, United States of the United States. (b) ATTORNEY GENERAL.—The Attorney Notwithstanding any other law, the Sec- Code. General may— retary shall provide adequate personnel for (3) VALIDITY OF ORDER.—The validity of an (1) prosecute, in the name of the United services provided under this Act that are order of the Secretary may not be reviewed States, a criminal violation of this Act that funded by user fees. in an action to collect the civil penalty. is referred to the Attorney General by the (c) TORT CLAIMS.— (4) INTEREST.—A civil penalty not paid in Secretary or is brought to the notice of the (1) IN GENERAL.—The Secretary may pay a full when due under an order assessing the tort claim (in the manner authorized in the civil penalty shall (after the due date) accrue Attorney General by a person; first paragraph of section 2672 of title 28, interest until paid at the rate of interest ap- (2) bring an action to enjoin the violation United States Code) if the claim arises out- plicable to a civil judgment of a court of the of or to compel compliance with this Act, or side the United States in connection with an United States. to enjoin any interference by a person with activity authorized under this Act. (c) PECUNIARY GAINS OR LOSSES.—If a per- the Secretary in carrying out this Act, if the son derives pecuniary gain from an offense Secretary has reason to believe that the per- (2) TIME LIMITATION.—A claim may not be allowed under paragraph (1) unless the claim described in subsection (a) or (b), or if the of- son has violated or is about to violate this fense results in pecuniary loss to a person is presented in writing to the Secretary not Act, or has interfered, or is about to inter- other than the defendant, the defendant may later than 2 years after the claim accrues. fere, with the Secretary; and be fined not more than an amount that is the (3) bring an action for the recovery of any SEC. 11. REIMBURSABLE AGREEMENTS. greater of twice the gross gain or twice the unpaid civil penalty, funds under a reimburs- (a) PRECLEARANCE.— gross loss, unless imposition of a fine under able agreement, late payment penalty, or in- (1) IN GENERAL.—The Secretary may enter this subsection would unduly complicate or terest assessed under this Act. into a reimbursable fee agreement with a prolong the imposition of a fine or sentence (c) JURISDICTION.— person for preclearance (at a location out- under subsection (a) or (b). (1) IN GENERAL.—Except as provided in sec- side the United States) of plants, plant prod- (d) AGENTS.—For purposes of this Act, the tion 12(b), a United States district court, the ucts, and articles for movement into the act, omission, or failure of an officer, agent, District Court of Guam, the District Court of United States. or person acting for or employed by any the Virgin Islands, the highest court of (2) ACCOUNT.—All funds collected under other person within the scope of the employ- American Samoa, and the United States this subsection shall be credited to an ac- ment or office of the other person shall be courts of other territories and possessions count that may be established by the Sec- considered also to be the act, omission, or shall have jurisdiction over all cases arising retary and remain available until expended failure of the other person. under this Act. without fiscal year limitation. (e) CIVIL PENALTIES OR NOTICE IN LIEU OF (2) VENUE.—Except as provided in sub- (b) OVERTIME.— PROSECUTION.—The Secretary shall coordi- section (b), an action arising under this Act (1) IN GENERAL.—Notwithstanding any nate with the Attorney General to establish may be brought, and process may be served, other law, the Secretary may pay an em- guidelines to determine under what cir- in the judicial district where a violation or ployee of the Department of Agriculture per- cumstances the Secretary may issue a civil interference occurred or is about to occur, or forming services under this Act relating to penalty or suitable notice of warning in lieu where the person charged with the violation, imports into and exports from the United of prosecution by the Attorney General of a interference, impending violation, impending States, for all overtime, night, or holiday violation of this Act. interference, or failure to pay resides, is work performed by the employee, at a rate of SEC. 13. ENFORCEMENT. found, transacts business, is licensed to do pay determined by the Secretary. (a) INVESTIGATIONS, EVIDENCE, AND SUBPOE- business, or is incorporated. (2) REIMBURSEMENT OF SECRETARY.—The NAS.— (3) SUBPOENAS.—A subpoena for a witness Secretary may require a person for whom (1) INVESTIGATIONS.—The Secretary may to attend court in a judicial district or to the services are performed to reimburse the gather and compile information and conduct testify or produce evidence at an administra- Secretary for any funds paid by the Sec- any investigations the Secretary considers tive hearing in a judicial district in an ac- retary for the services. necessary for the administration and en- tion or proceeding arising under this Act (3) ACCOUNT.—All funds collected under forcement of this Act. may apply to any other judicial district. VIDENCE this subsection shall be credited to the ac- (2) E .—The Secretary shall at all SEC. 14. PREEMPTION. reasonable times have the right to examine count that incurs the costs and remain avail- (a) IN GENERAL.—Except as provided in able until expended without fiscal year limi- and copy any documentary evidence of a per- subsection (b), no State or political subdivi- tation. son being investigated or proceeded against. sion of a State may regulate any article, (c) LATE PAYMENT PENALTY AND INTER- (3) SUBPOENAS.— means of conveyance, plant, biological con- EST.— (A) IN GENERAL.—The Secretary shall have trol organism, plant pest, noxious weed, or (1) PENALTY.—On failure of a person to re- power to require by subpoena the attendance plant product in foreign commerce to con- imburse the Secretary in accordance with and testimony of any witness and the pro- trol a plant pest or noxious weed, eradicate this section, the Secretary may assess a late duction of all documentary evidence relating a plant pest or noxious weed, or prevent the payment penalty against the person. to the administration or enforcement of this introduction or dissemination of a biological (2) INTEREST.—Overdue funds due the Sec- Act or any matter under investigation in control organism, plant pest, or noxious retary under this section shall accrue inter- connection with this Act. weed. est in accordance with section 3717 of title (B) LOCATION.—The attendance of a witness (b) STATE NOXIOUS WEED LAWS.—This Act 31, United States Code. and production of documentary evidence shall not invalidate the law of any State or January 21, 1997 CONGRESSIONAL RECORD — SENATE S467 political subdivision of a State relating to tural production of the United States, the Fortunately, we have resisted inces- noxious weeds, except that a State or politi- Secretary may transfer (from other appro- sant cries to model our economic and cal subdivision of a State may not permit priations or funds available to an agency or trade policies after those of Japan, any action that is prohibited under this Act. corporation of the Department of Agri- Germany, and others, and we have out- culture) such funds as the Secretary consid- SEC. 15. REGULATIONS AND ORDERS. performed them in every respect. Late- The Secretary may issue such regulations ers necessary for the arrest, control, eradi- and orders as the Secretary considers nec- cation, and prevention of the spread of the ly, one does not hear much talk about essary to carry out this Act, including (at plant pest or noxious weed and for related the Japanese economic miracle, and the option of the Secretary) regulations and expenses. Germany’s double-digit unemployment orders relating to— (2) AVAILABILITY.—Any funds transferred rate finds few admirers. Instead, what (1) notification of arrival of plants, plant under this subsection shall remain available Pericles said of ancient Athens in the products, biological control organisms, plant to carry out paragraph (1) without fiscal days of that city’s glory may without pests, noxious weeds, articles, or means of year limitation. fear be said of us. ‘‘The magnitude of conveyance; SEC. 17. REPEALS. our city draws the produce of the world (2) prohibition or restriction of or on the The following provisions of law are re- importation, entry, exportation, or move- pealed: into our harbor, so that to the Athe- ment in interstate commerce of plants, plant (1) Public Law 97–46 (7 U.S.C. 147b). nian the fruits of other countries are as products, biological control organisms, plant (2) The Joint Resolution of April 6, 1937 (50 familiar a luxury as those of his own.’’ pests, noxious weeds, articles, or means of Stat. 57, chapter 69; 7 U.S.C. 148 et seq.). In fact, successful economic and conveyance; (3) Section 1773 of the Food Security Act of trade policies have resulted in the ad- (3) holding, seizure of, quarantine of, treat- 1985 (7 U.S.C. 148f). dition of 18 million jobs to the Nation ment of, application of remedial measures (4) The Act of January 31, 1942 (56 Stat. 40, since 1985, 6 million jobs more than the to, destruction of, or disposal of plants, plant chapter 31; 7 U.S.C. 149). total job creation for Japan and the na- products, biological control organisms, plant (5) The Golden Nematode Act (7 U.S.C. 150 tions of the European Community com- pests, noxious weeds, articles, premises, or et seq.). means of conveyance; (6) The Federal Plant Pest Act (7 U.S.C. bined. (4) in the case of an extraordinary emer- 150aa et seq.). We must not forget that the most gency, prohibition or restriction on the (7) The Act of August 20, 1912 (commonly valuable products of trade are high- movement of plants, plant products, biologi- known as the ‘‘Plant Quarantine Act’’) (37 wage jobs. An export-related job in cal control organisms, plant pests, noxious Stat. 315, chapter 308; 7 U.S.C. 151 et seq.). America pays better, 15 percent better, weeds, articles, or means of conveyance; (8) The Halogeton Glomeratus Control Act than the average pay in the Nation. (5) payment of compensation; (7 U.S.C. 1651 et seq.). Today, America exports over $26,000 in (6) cooperation with other Federal agen- (9) The Act of August 28, 1950 (64 Stat. 561, manufactured goods for every man and chapter 815; 7 U.S.C. 2260). cies, States, political subdivisions of States, woman employed in manufacturing. national governments, local governments of (10) The Federal Noxious Weed Act of 1974 other countries, international organizations, (7 U.S.C. 2801 et seq.), other than the first In January 1988, President Reagan international associations, and other per- section of the Act (Public Law 93–629; 7 gave his final State of the Union ad- sons, entities, and individuals; U.S.C. 2801 note) and section 15 of the Act (7 dress. As a veteran of those trade bat- (7) transfer of biological control methods U.S.C. 2814). tles, President Reagan warned us all: for plant pests or noxious weeds; ‘‘A creative, competitive America is (8) negotiation and execution of agree- By Mr. GRAMM: the answer to a changing world, not ments; S. 84. A bill to authorize negotiation trade wars that would close doors, cre- (9) acquisition and maintenance of real and of free trade agreements with the coun- ate great barriers, and destroy millions personal property; tries of the Americas, and for other of jobs. We should always remember: (10) issuance of letters of warning; purposes; to the Committee on Fi- (11) compilation of information; protectionism is destructionism.’’ (12) conduct of investigations; nance. Mr. President, on May 21, 1986, I in- (13) transfer of funds for emergencies; S. 85. A bill to authorize negotiation troduced legislation to begin negotia- (14) approval of facilities and means of con- for the accession of Chile to the North tions for a free trade agreement with veyance; American Free Trade Agreement, and Mexico. On February 26, 1987, I intro- (15) denial of approval of facilities and for other purposes; to the Committee duced a bill that laid out a framework means of conveyance; on Finance. for negotiating a North American free (16) suspension and revocation of approval AMERICAS FREE TRADE ACT AND NAFTA trade area, and on June 26 of that same of facilities and means of conveyance; ACCESSION ACT (17) inspection, testing, and certification; year the Senate adopted an amendment (18) cleaning and disinfection; Mr. GRAMM. Mr. President, when that I offered to the omnibus trade bill, (19) designation of ports of entry; America trades, America wins. The authorizing the negotiation of a North (20) imposition and collection of fees, pen- United States of America is the great- American Free Trade Agreement. alties, and interest; est trading Nation the world has ever On February 7, 1989, I once again in- (21) recordkeeping, marking, and identi- known. From beef to computers to en- troduced trade legislation and called fication; gineering, last year American workers for a free trade agreement encompass- (22) issuance of permits and phytosanitary exported more than $830 billion in ing the entire Western Hemisphere. I certificates; goods and services. No other country (23) establishment of quarantines, post-im- have introduced similar legislation in portation conditions, and post-entry quar- even came close. the 103d and the 104th Congress, provid- antine conditions; Over the last decade, America’s ex- ing authority for negotiation of a free (24) establishment of conditions for transit ports in goods of all kinds grew by 131 trade agreement with the nations of movement through the United States; and percent. By comparison, Europe’s ex- the Americas. (25) treatment of land for the prevention, ports of goods grew by 55 percent, and Today I am introducing two pieces of suppression, or control of plant pests or nox- Japan’s total grew less than half the legislation to extend free trade from ious weeds. rate of Europe’s by 24 percent. The U.S. Point Barrow, AK, to Cape Horn at the SEC. 16. AUTHORIZATION OF APPROPRIATIONS; trade expansion involved virtually tip of South America. The first bill, the TRANSFERS. every sector of the economy, but it was Americas Free Trade Act, will provide (a) AUTHORIZATION OF APPROPRIATIONS.— (1) IN GENERAL.—There are authorized to be particularly pronounced in the export fast track authority for consideration appropriated such sums as are necessary to of manufactured goods. From 1985 to of free trade agreements with any or carry out this Act. 1995, U.S. exports of manufactured all of the nations of the Western Hemi- (2) INDEMNITIES.—Except as specifically au- goods grew by over 180 percent. That sphere. thorized by law, no part of the money made growth rate was six times the rate for While renewing fast track authority, available under paragraph (1) shall be used to Germany and almost nine times Ja- the legislation provides two very im- pay an indemnity for property injured or de- pan’s export growth. portant reforms made necessary by the stroyed by or at the direction of the Sec- In short, trade is our game. American abuse of the fast track authority in the retary. (b) TRANSFERS.— workers, businesses, and farms are most recent trade agreement. First of (1) IN GENERAL.—In connection with an more competitive and far more suc- all, the legislation explicitly excludes emergency in which a plant pest or noxious cessful than the merchants of fear and labor and environmental provisions weeds threatens any segment of the agricul- defeatism advertise. from the fast track approval process. S468 CONGRESSIONAL RECORD — SENATE January 21, 1997 These are important issues to be ad- out the Western Hemisphere and undermines SEC. 5. INTRODUCTION AND FAST-TRACK CON- dressed in our relations with other na- civil liberty and constitutionally limited SIDERATION OF IMPLEMENTING government. BILLS. tions, but the Senate must not surren- (a) INTRODUCTION IN HOUSE AND SENATE.— der its constitutional treaty review re- (4) The successful establishment of a North American Free Trade Area sets the pattern When the President submits to Congress a sponsibilities over these important for the reduction of trade barriers through- bill to implement a trade agreement de- matters. out the Western Hemisphere, enhancing scribed in section 3, the bill shall be intro- duced (by request) in the House and the Sen- The legislation also deals with the prosperity in place of the cycle of increasing ate as described in section 151(c) of the Trade problem of unrelated matters being in- trade barriers and deepening poverty that re- Act of 1974 (19 U.S.C. 2191(c)). cluded in a bill implementing a trade sults from a resort to protectionism and (b) RESTRICTIONS ON CONTENT.—A bill to agreement. Similar to the Byrd Rule trade retaliation. implement a trade agreement described in that excludes extraneous matter from (5) The reduction of government inter- section 3— reconciliation legislation, this bill will ference in the foreign and domestic sectors (1) shall contain only provisions that are permit a point of order to be raised of a nation’s economy and the concomitant necessary to implement the trade agree- promotion of economic opportunity and free- against any provision in an implement- ment; and doms promote civil liberty and constitu- (2) may not contain any provision that es- ing bill that is not necessary to carry tionally limited government. out the provisions of the trade agree- tablishes (or requires or authorizes the es- (6) Countries that observe a consistent pol- tablishment of) a labor or environmental ment. This point of order, as with the icy of free trade, the promotion of free enter- protection standard or amends (or requires Byrd Rule, would strike the offending prise and other economic freedoms (includ- or authorizes an amendment of) any labor or provision from the bill rather than ing effective protection of private property environmental protection standard set forth cause the entire bill to fail. rights), and the removal of barriers to for- in law or regulation. As with legislation that I have intro- eign direct investment, in the context of (c) POINT OF ORDER IN SENATE.— duced in the past, this bill provides constitutionally limited government and (1) APPLICABILITY TO ALL LEGISLATIVE minimal interference in the economy, will FORMS OF IMPLEMENTING BILL.—For the pur- special procedures for trade agree- follow the surest and most effective prescrip- ments with Cuba. In short, Fidel Cas- poses of this subsection, the term ‘‘imple- tion to alleviate poverty and provide for eco- menting bill’’ means the following: tro’s Cuba would not be eligible, but a nomic, social, and political development. (A) THE BILL.—A bill described in sub- free trade agreement with a free Cuba SEC. 3. FREE TRADE AREA FOR THE WESTERN section (a), without regard to whether that would be made a national priority. HEMISPHERE. bill originated in the Senate or the House of I am also introducing today legisla- (a) IN GENERAL.—The President shall take Representatives. tion to provide for Chile to join the action to initiate negotiations to obtain (B) AMENDMENT.—An amendment to a bill North American Free Trade Agree- trade agreements with the sovereign coun- referred to in subparagraph (A). ment. While I would prefer the exten- tries located in the Western Hemisphere, the (C) CONFERENCE REPORT.—A conference re- sion of fast track authority for free terms of which provide for the reduction and port on a bill referred to in subparagraph trade agreements for any nation of the ultimate elimination of tariffs and other (A). nontariff barriers to trade, for the purpose of (D) AMENDMENT BETWEEN HOUSES.—An Western Hemisphere, as the Americas amendment between the houses of Congress Free Trade Act would do, I do not be- promoting the eventual establishment of a free trade area for the entire Western Hemi- in relation to a bill referred to in subpara- lieve that we should delay the process sphere. graph (A). of including Chile in NAFTA, or hold (E) MOTION.—A motion in relation to an (b) RECIPROCAL BASIS.—An agreement en- Chile hostage to that process, should a item referred to in subparagraph (A), (B), (C), tered into under subsection (a) shall be recip- or (D). broader trade bill require more time to rocal and provide mutual reductions in trade (2) MAKING OF POINT OF ORDER.— be enacted. I believe that a free trade barriers to promote trade, economic growth, agreement with Chile could and should (A) AGAINST SINGLE ITEM.—When the Sen- and employment. ate is considering an implementing bill, a be concluded this year, and I am eager (c) BILATERAL OR MULTILATERAL BASIS.— Senator may make a point of order against to see the progress toward lower bar- Agreements may be entered into under sub- any part of the implementing bill that con- riers to trade and economic growth section (a) on a bilateral basis with any for- tains material in violation of a restriction move forward. eign country described in that subsection or under subsection (b). We are the best competitor the world on a multilateral basis with all of such coun- (B) AGAINST SEVERAL ITEMS.—Notwith- has ever known, and we have the big- tries or any group of such countries. standing any other provision of law or rule gest stake. Trade and expanding eco- SEC. 4. FREE TRADE WITH FREE CUBA. of the Senate, when the Senate is consider- ing an implementing bill, it shall be in order nomic opportunity power America’s en- (a) RESTRICTIONS PRIOR TO RESTORATION OF for a Senator to raise a single point of order FREEDOM IN CUBA.—The provisions of this gines of economic growth and prosper- that several provisions of the implementing Act shall not apply to Cuba unless the Presi- ity. Let us embrace them, not destroy bill violate subsection (b). The Presiding Of- dent certifies to Congress that— them. ficer may sustain the point of order as to (1) freedom has been restored in Cuba; and Mr. President, I ask unanimous con- some or all of the provisions against which (2) the claims of United States citizens for sent that the text of the Americas Free the Senator raised the point of order. compensation for expropriated property have Trade Act and the NAFTA Accession (3) EFFECT OF SUSTAINMENT OF POINT OF been appropriately addressed. Act, together with an outline of each ORDER.— (b) STANDARDS FOR THE RESTORATION OF bill, be included in the RECORD. (A) AGAINST SINGLE ITEM.—If a point of FREEDOM IN CUBA.—The President shall not order made against a part of an implement- There being no objection, the mate- make the certification that freedom has rials were ordered to be printed in the ing bill under paragraph (2)(A) is sustained been restored in Cuba, for purpose of sub- by the Presiding Officer, the part of the im- RECORD, as follows: section (a), unless the President determines plementing bill against which the point of S. 84 that— order is sustained shall be deemed stricken. Be it enacted by the Senate and House of Rep- (1) a constitutionally guaranteed demo- (B) AGAINST SEVERAL ITEMS.—In the case of resentatives of the United States of America in cratic government has been established in a point of order made under paragraph (2)(B) Congress assembled, Cuba with leaders chosen through free and against several provisions of an implement- SECTION 1. SHORT TITLE. fair elections; ing bill, only those provisions against which This Act may be cited as the ‘‘Americas (2) the rights of individuals to private the Presiding Officer sustains the point of Free Trade Act’’. property have been restored and are effec- order shall be deemed stricken. SEC. 2. FINDINGS. tively protected and broadly exercised in (C) STRICKEN MATTER NOT IN ORDER AS Congress makes the following findings: Cuba; AMENDMENT.—Matter stricken from an im- (1) The countries of the Western Hemi- (3) Cuba has a currency that is fully con- plementing bill under this paragraph may sphere have enjoyed more success in the vertible domestically and internationally; not be offered as an amendment to the im- twentieth century in the peaceful conduct of (4) all political prisoners have been re- plementing bill (in any of its forms described their relations among themselves than have leased in Cuba; and in paragraph (1)) from the floor. the countries in the rest of the world. (5) the rights of free speech and freedom of (4) WAIVERS AND APPEALS.— (2) The economic prosperity of the United the press in Cuba are effectively guaranteed. (A) WAIVERS.—Before the Presiding Officer States and its trading partners in the West- (c) PRIORITY FOR FREE TRADE WITH FREE rules on a point of order under this sub- ern Hemisphere is increased by the reduction CUBA.—Upon making the certification de- section, any Senator may move to waive the of trade barriers. scribed in subsection (a), the President shall point of order as it applies to some or all of (3) Trade protection endangers economic give priority to the negotiation of a free the provisions against which the point of prosperity in the United States and through- trade agreement with Cuba. order is raised. Such a motion to waive is January 21, 1997 CONGRESSIONAL RECORD — SENATE S469 amendable in accordance with the rules and does not meet the ‘‘necessary’’ standard is bill violate subsection (b). The Presiding Of- precedents of the Senate. subject to a point of order which, if sus- ficer may sustain the point of order as to (B) APPEALS.—After the Presiding Officer tained, causes the offending provisions to be some or all of the provisions against which rules on a point of order under this sub- stricken from the bill (rather than the whole the Senator raised the point of order. section, any Senator may appeal the ruling bill falling), and this point of order can be (3) EFFECT OF SUSTAINMENT OF POINT OF of the Presiding Officer on the point of order overruled only by a vote of three-fifths of the ORDER.— as it applies to some or all of the provisions members duly sworn. (A) AGAINST SINGLE ITEM.—If a point of on which the Presiding Officer ruled. V. Labor and environmental standards order made against a part of an implement- (C) THREE-FIFTHS MAJORITY REQUIRED.— may not be included as elements of an imple- ing bill under paragraph (2)(A) is sustained (i) WAIVERS.—A point of order under this menting bill. by the Presiding Officer, the part of the im- subsection is waived only by the affirmative plementing bill against which the point of vote of at least the requisite majority. S. 85 order is sustained shall be deemed stricken. (ii) APPEALS.—A ruling of the Presiding Of- Be it enacted by the Senate and House of Rep- (B) AGAINST SEVERAL ITEMS.—In the case of ficer on a point of order under this sub- resentatives of the United States of America in a point of order made under paragraph (2)(B) section is sustained unless at least the req- Congress assembled, against several provisions of an implement- uisite majority votes not to sustain the rul- SECTION 1. SHORT TITLE. ing bill, only those provisions against which ing. This Act may be cited as the ‘‘NAFTA Ac- the Presiding Officer sustains the point of (iii) REQUISITE MAJORITY.—For purposes of cession Act’’. order shall be deemed stricken. clauses (i) and (ii), the requisite majority is (C) STRICKEN MATTER NOT IN ORDER AS SEC. 2. ACCESSION OF CHILE TO THE NORTH three-fifths of the Members of the Senate, AMENDMENT.—Matter stricken from an im- AMERICAN FREE TRADE AGREE- duly chosen and sworn. MENT. plementing bill under this paragraph may (c) APPLICABILITY OF FAST TRACK PROCE- Subject to section 3, the President is au- not be offered as an amendment to the im- DURES.—Section 151 of the Trade Act of 1974 thorized to enter into an agreement which plementing bill (in any of its forms described (19 U.S.C. 2191) is amended— provides for the accession of Chile to the in paragraph (1)) from the floor. (1) in subsection (b)(1)— North American Free Trade Agreement and (4) WAIVERS AND APPEALS.— (A) by inserting ‘‘section 5 of the Americas the provisions of section 151(c) of the Trade (A) WAIVERS.—Before the Presiding Officer Free Trade Act,’’ after ‘‘the Omnibus Trade Act of 1974 (19 U.S.C. 2191(c)) shall apply with rules on a point of order under this sub- and Competitiveness Act of 1988,’’; and respect to a bill to implement such agree- section, any Senator may move to waive the (B) by amending subparagraph (C) to read ment if such agreement is entered into on or point of order as it applies to some or all of as follows: before December 31, 1998. the provisions against which the point of ‘‘(C) if changes in existing laws or new order is raised. Such a motion to waive is SEC. 3. INTRODUCTION AND FAST-TRACK CON- statutory authority is required to implement SIDERATION OF IMPLEMENTING amendable in accordance with the rules and such trade agreement or agreements or such BILL. precedents of the Senate. extension, provisions, necessary to imple- (a) INTRODUCTION IN HOUSE AND SENATE.— (B) APPEALS.—After the Presiding Officer ment such trade agreement or agreements or When the President submits to Congress a rules on a point of order under this sub- such extension, either repealing or amending bill to implement a trade agreement de- section, any Senator may appeal the ruling existing laws or providing new statutory au- scribed in section 2, the bill shall be intro- of the Presiding Officer on the point of order thority.’’; and duced (by request) in the House and the Sen- as it applies to some or all of the provisions (2) in subsection (c)(1), by inserting ‘‘or ate as described in section 151(c) of the Trade on which the Presiding Officer ruled. under section 5 of the Americas Free Trade Act of 1974 (19 U.S.C. 2191(c)). (C) THREE-FIFTHS MAJORITY REQUIRED.— Act,’’ after ‘‘the Uruguay Round Agreements (b) RESTRICTIONS ON CONTENT.—A bill to (i) WAIVERS.—A point of order under this Act,’’. implement a trade agreement described in subsection is waived only by the affirmative THE AMERICAS FREE TRADE ACT—SUMMARY section 2— vote of at least the requisite majority. I. The President is directed to undertake (1) shall contain only provisions that are (ii) APPEALS.—A ruling of the Presiding Of- negotiations to establish free trade agree- necessary to implement the trade agree- ficer on a point of order under this sub- ments between the United States and coun- ment; and section is sustained unless at least the req- tries of the Western Hemisphere (including (2) may not contain any provision that es- uisite majority votes not to sustain the rul- North and South America and the Carib- tablishes (or requires or authorizes the es- ing. bean). Agreements may be bilateral or mul- tablishment of) a labor or environmental (iii) REQUISITE MAJORITY.—For purposes of tilateral. protection standard or amends (or requires clauses (i) and (ii), the requisite majority is II. The President, before seeking a free or authorizes an amendment of) any labor or three-fifths of the Members of the Senate, trade agreement with Cuba under the Act, environmental protection standard set forth duly chosen and sworn. would have to certify (1) that freedom has in law or regulation. (c) APPLICABILITY OF FAST TRACK PROCE- been restored in Cuba, and (2) that the (c) POINT OF ORDER IN SENATE.— DURES.—Section 151 of the Trade Act of 1974 claims of U.S. citizens for compensation for (1) APPLICABILITY TO ALL LEGISLATIVE (19 U.S.C. 2191) is amended— expropriated property have been appro- FORMS OF IMPLEMENTING BILL.—For the pur- (1) in subsection (b)(1)— priately addressed. The President could poses of this subsection, the term ‘‘imple- (A) by inserting ‘‘section 3 of the NAFTA make the certification that freedom has menting bill’’ means the following: Accession Act,’’ after ‘‘the Omnibus Trade been restored to Cuba only if he determines (A) THE BILL.—A bill described in sub- and Competitiveness Act of 1988,’’; and that— section (a), without regard to whether that (B) by amending subparagraph (C) to read A. constitutionally guaranteed democratic bill originated in the Senate or the House of as follows: government has been established in Cuba, Representatives. ‘‘(C) if changes in existing laws or new with leaders freely and fairly elected; (B) AMENDMENT.—An amendment to a bill statutory authority is required to implement B. private property rights have been re- referred to in subparagraph (A). such trade agreement or agreements or such stored and are effectively protected and (C) CONFERENCE REPORT.—A conference re- extension, provisions, necessary to imple- broadly exercised; port on a bill referred to in subparagraph ment such trade agreement or agreements or C. Cuba has a convertible currency; (A). such extension, either repealing or amending D. all political prisoners have been re- (D) AMENDMENT BETWEEN HOUSES.—An existing laws or providing new statutory au- leased; and amendment between the houses of Congress thority.’’; and E. free speech and freedom of the press are in relation to a bill referred to in subpara- (2) in subsection (c)(1), by inserting ‘‘or effectively guaranteed. graph (A). under section 3 of the NAFTA Accession If the President certifies that freedom has (E) MOTION.—A motion in relation to an Act,’’ after ‘‘the Uruguay Round Agreements been restored to Cuba, priority will be given item referred to in subparagraph (A), (B), (C), Act,’’. to the negotiation of a free trade agreement or (D). with Cuba. (2) MAKING OF POINT OF ORDER.— THE NAFTA ACCESSION ACT—SUMMARY III. Congressional fast track procedures for (A) AGAINST SINGLE ITEM.—When the Sen- I. The President is directed to undertake consideration of any such agreement (i.e. ex- ate is considering an implementing bill, a negotiations for the accession of Chile to the pedited consideration, no amendments), are Senator may make a point of order against North American Free Trade Agreement. extended permanently. any part of the implementing bill that con- II. Congressional fast track procedures for IV. Fast track procedures are amended to tains material in violation of a restriction consideration of any such agreement (i.e., provide that they apply to an implementing under subsection (b). expedited consideration, no amendments), bill only if such bill contains legislation that (B) AGAINST SEVERAL ITEMS.—Notwith- are extended through December 31, 1998. is ‘‘necessary’’ to implement the trade agree- standing any other provision of law or rule III. Fast track procedures are amended to ment. Also, such bills will be subject in the of the Senate, when the Senate is consider- provide that they apply to an implementing Senate to a procedure like the Byrd Rule ing an implementing bill, it shall be in order bill only if such bill contains legislation that that applies to extraneous provisions in rec- for a Senator to raise a single point of order is ‘‘necessary’’ to implement the trade agree- onciliation bills. That is, any provision that that several provisions of the implementing ment. Also, such bill will be subject in the S470 CONGRESSIONAL RECORD — SENATE January 21, 1997 Senate to a procedure like the Byrd rule that tance of ensuring that both genders Our first priority in the fight against applies to extraneous provisions in reconcili- benefit equally from medical research breast cancer must be to maintain and ation bills. That is, any provision that does and health care services. Unfortu- strengthen our commitment to discov- not meet the ‘‘necessary’’ standard is subject nately, equity does not yet exist in ering new treatments for this deadly to a point of order which, if sustained, causes the offending provision to be stricken from health care, and we have a long way to disease. As the Federal Government the bill (rather than the whole bill falling), go. Knowledge about appropriate continues to fund breast cancer re- and this point of order can be overruled only courses of treatment for women lags search, we also must ensure that fund- by a vote of three-fifths of the members duly far behind that for men for many dis- ing goes to those projects which vic- sworn. eases. For years, research into diseases tims of breast cancer believe are im- IV. Labor and environmental standards that predominantly affect women, such portant and meaningful to them in may not be included as elements of an imple- as breast cancer, went grossly under- their fight against this disease. menting bill. funded. And many women do not have Over the past three years, the De- By Ms. SNOWE (for herself and access to reproductive and other vital partment of Defense has included lay breast cancer advocates in breast can- Mr. LEAHY): health services. S. 86. A bill to amend the Public Throughout my tenure in the House cer research decision making. The in- Health Service Act to provide, with re- and Senate, I have worked hard to ex- volvement of these breast cancer advo- spect to research on breast cancer, for pose and eliminate this health care cates has helped foster new and innova- the increased involvement of advocates gender gap and improve women’s ac- tive breast cancer research funding de- in decision making at the National cess to affordable, quality health serv- signs and research projects. While Cancer Institute; to the Committee on ices. As co-chairs of the Congressional maintaining the highest level of qual- Labor and Human Resources. Caucus for Women’s Issues (CCWI), ity assurance through peer review, Representative Pat Schroeder and I, breast cancer advocates have helped to By Ms. SNOWE (for herself and along with Representative Henry Wax- ensure that all breast cancer research Mrs. FEINSTEIN): man, called for a GAO investigation reflects the experiences and wisdom of S. 87. A bill to amend the Public into the inclusion of women and mi- the individuals who have lived with the Health Service Act to provide a one- norities in medical research at the Na- disease. In addition, breast cancer ad- vocates provide a vital educational stop shopping information service for tional Institutes of Health. This study link between the scientific and lay individuals with serious or life-threat- documented the widespread exclusion communities. ening diseases; to the Committee on of women from medical research, and Labor and Human Resources. The first bill I am introducing today, spurred the Caucus to introduce the which I am introducing with my col- first Women’s Health Equity Act By Ms. SNOWE: league from Vermont, Senator LEAHY, S. 88. A bill to permit individuals to (WHEA) in 1990. This comprehensive urges the National Institutes of Health continue health plan coverage of serv- legislation provided Congress with its to follow the DOD’s lead. This bill, the ices while participating in approved first broad, forward looking health Consumer Involvement in Breast Can- clinical studies; to the Committee on agenda designed to redress the histori- cer Research Act, urges NIH to include Labor and Human Resources. cal inequities that face women in medi- breast cancer advocates in breast can- S. 89. A bill to prohibit discrimina- cal research, prevention and services. cer research decision making, and to tion against individuals and their fam- Since the initial introduction of report on progress that the Institute is ily members on the basis of genetic in- WHEA, we have made important making next year. formation, or a request for genetic strides on behalf of women’s health. But funding new research alone is services; to the Committee on Labor Legislation from that first package be- not enough—we must ensure that peo- and Human Resources. came law in June 1993, mandating the ple who are suffering from deadly dis- S. 90. A bill to require studies and inclusion of women and minorities in eases such as breast cancer have access guidelines for breast cancer screening clinical trials at NIH. We secured dra- to information about the latest, most- for women ages 40–49, and for other matic funding increases for research innovative therapies which are fre- purposes; to the Committee on Labor into breast cancer, osteoporosis, and quently available only through experi- and Human Resources. cervical cancer, and my legislation es- mental drug trials. At a breast cancer S. 91. A bill to establish an Office on tablished the Office of Research on hearing which I sponsored last year Women’s Health within the Depart- Women’s Health at NIH. And last year with my colleagues, Senators CONNIE ment of Health and Human Services; to the Mothers’ and Newborns’ Health MACK and DIANNE FEINSTEIN, we heard the Committee on Labor and Human Protection Act, which I cosponsored, testimony from breast cancer advo- Resources. became law. This Act will end the prac- cates on the difficulty patients and WOMEN’S HEALTH LEGISLATION tice of ‘‘drive-thru deliveries’’, where physicians face in learning about ongo- Ms. SNOWE. Mr. President, I rise hospitals discharge mothers and their ing clinical trials. The second bill I in- today to introduce a package of six newborns too soon after delivery. troduce today addresses this knowledge bills designed to improve the health of Despite these achievements, women gap, by establishing a data bank of in- countless women across America. By remain at a stark and singular dis- formation on clinical trials and experi- introducing these bills during the open- advantage in our health care system mental treatments for all serious or ing days of the 105th Congress, I hope and in health research. Equality in life-threatening illnesses. to convey that women’s health is one women’s health remains a goal, not a This ‘‘one-stop shopping information of my top legislative priorities for this completed task. Legislators must build service’’ will include a registry of all Congress, and that I will do everything on the gains that we have made on be- privately and publicly funded clinical I can to ensure that it is a priority for half of women’s health to take the next trials, and will contain information de- the 105th Congress as well. crucial steps toward achieving equity. I scribing the purpose of the trial, eligi- For too many years, women’s health believe that the package of bills which bility criteria for participating in the care needs were ignored or poorly un- I am introducing today provides this trial, as well as the location of the derstood, and women were systemati- framework for progress. trial. The database will also contain in- cally excluded from important health Several of the bills I am introducing formation on the results of completed research. One famous medical study on today target one of the major public clinical trials, enabling patients to breast cancer examined hundreds of health crises facing this nation—breast make fully informed decisions about men. Another federally-funded study cancer. This year alone, 180,000 new medical treatments. The bill would examined the ability of aspirin to pre- cases of breast cancer will be diagnosed allow people with a serious or life- vent heart attacks in 20,000 medical in this country, and more than 44,000 threatening illness, or the doctor of a doctors, all of whom were men, despite women will die from the disease. family member, to call a toll-free num- the fact that heart disease is the lead- Breast cancer is the most common ber to access this critical information ing cause of death among women. form of cancer and the second leading so they could locate a clinical trial Today, members of Congress and the cause of cancer deaths among Amer- near them that may offer hope by ex- American public understand the impor- ican women. tending their lives or alleviating their January 21, 1997 CONGRESSIONAL RECORD — SENATE S471 suffering. I am pleased that my col- nation has equally harmful con- disease prevention, health promotion, league from California, Senator FEIN- sequences for consumers and for sci- delivery of health services and sci- STEIN, is joining me in introducing this entific research. For example, many entific research concerning women. important bill. women who might take extra pre- The bill also creates a clearinghouse Providing people with information cautions if they knew they had the for information on women’s health. about clinical trials is only the first breast cancer gene may not seek test- By statutorily creating Offices of step in increasing access to experi- ing because they fear losing their Women’s Health, the Deputy Assistant mental treatments—we must also en- health insurance. Patients may be un- Secretary for Women’s Health will be sure that they have adequate insurance willing to disclose information about able to better monitor various Public coverage to cover costs associated with their genetic status to their physicians Health Service agencies and advise clinical trials. While pharmaceutical out of fear, hindering treatment or pre- them on scientific, legal, ethical and companies typically cover the costs of ventive efforts. And people may be un- policy issues. Agencies would establish the experimental treatment, insurance willing to participate in potentially a Coordinating Committee on Women’s companies are expected to cover the ground breaking research because they Health to identify and prioritize which costs of non-experimental services. Yet do not want to reveal information women’s health projects should be con- many insurance companies deny cov- about their genetic status. ducted. This will also provide a mecha- erage for these non-experimental serv- The Kassebaum/Kennedy Health Care nism for coordination within and ices when a patient is enrolled in an ex- Reform Act took the first step in pro- across these agencies, and with the pri- perimental trial. tecting Americans in group health vate sector. But most importantly, this As a result, many patients who could plans from genetic discrimination by bill will ensure the presence of endur- benefit from these potentially life-sav- preventing discrimination in health in- ing offices dedicated to addressing the ing investigational treatments do not surance based on a pre-exiting genetic ongoing needs and gaps in research pol- have access to them because their in- condition. My bill, the Genetic Infor- icy, programs, and education and train- surance will not cover these associated mation Nondiscrimination in Health ing in women’shealth. costs. Denying reimbursement for Insurance Act of 1997, takes the next Improving the health of American these services also impedes the ability crucial steps to prohibit genetic dis- women requires a far greater under- of scientists to conduct important re- crimination. My bill prevents insurers standing of women’s health needs and search, by reducing the number of pa- from charging higher premiums based conditions, and ongoing evaluation in tients who are eligible to participate in on genetic information, prohibits in- the areas of research, education, pre- clinical trials. surers from requiring or requesting a vention, treatment and the delivery of The third bill I am introducing genetic test as a condition of coverage, services. I believe that passage of these today, the Improved Patient Access to requires informed written consent be- important bills will help ensure that Clinical Studies Act of 1997, addresses fore an insurance company can disclose women’s health will never again be a this problem. This bill would prohibit genetic information to a third party, missing page in America’s medical insurance companies from denying cov- and extends these important protec- textbook. erage for services provided to individ- tions to Medigap. Mrs. FEINSTEIN. Mr. President, uals participating in clinical trials, if While there is much that we still do today Senator SNOWE and I are intro- those services would otherwise be cov- not know in the fight against breast ducing S. 87, a bill to set up a toll-free ered by the plan. This bill would also cancer, we do know that mammograms service so that people with life-threat- prevent health plans from discriminat- are currently the most effective weap- ening diseases and the medical commu- ing against enrollees who choose to on we have in the fight against breast nity can find out about research participate in clinical trials. cancer. Yet experts still disagree about projects on new treatments. Another form of discrimination in the effectiveness of mammograms for There are thousands of serious and health insurance we see today is based women in their forties. In fact, the Na- life-threatening diseases, diseases for on genetic information. This is a par- tional Cancer Institute (NCI) in 1993 re- which we have no cure. For genetic dis- ticular concern to women who inherit versed its position on the effectiveness eases alone, there are 3,000 to 4,000. We or may have inherited a mutated form of mammograms for women in their are familiar with diseases like cancer, of the breast cancer gene [BRCA1 or forties, producing widespread confusion Alzheimer’s disease and multiple scle- BRCA2]. Women who inherit either of in women and their doctors. To assure rosis. But there are thousands of others these mutated genes have an 85 percent that American women have clear guid- that are not so common, like risk of developing breast cancer in ance from their government on when to cystinosis, Tay-Sachs disease, Wilson’s their lifetime, and a 50 percent chance have a mammogram, I am reintroduc- disease, and Sjogren’s syndrome. In- of developing ovarian cancer. Although ing my bill, the Breast Cancer Screen- deed, there are over 5,000 known rare there is no known treatment to ensure ing Act of 1997, directing NCI to reissue diseases, diseases most of us have never that women who carry the mutated its guidelines recommending mammo- heard of, affecting between 10 and 20 gene do not develop breast cancer, ge- grams for women in this age group. million Americans. netic testing makes it possible for car- This legislation is particularly crucial Cancer kills half a million Americans riers of these mutated genes to take in light of recent studies that show a per year. Diabetes afflicts 15 million extra precautions in order to detect reduced death rate for women in their Americans per year, half of whom do cancer at its earliest stages—pre- forties who seek mammograms. In fact, not know they have it. Arthritis af- cautions such as mammograms and one Swedish study of 150,000 women fects 40 million Americans every year. self-examinations. conducted in 1996 showed a 25 percent 15,000 American children die every The tremendous promise of genetic lower death rate for women who ob- year. Among children, the rates of testing, however, is significantly tained mammograms beginning in chronic respiratory diseases (asthma, threatened when insurance companies their forties. bronchitis and sinusitis), heart mur- use the results of genetic testing to Finally, the sixth bill I am introduc- murs, migraine headaches, anemia, epi- deny or limit coverage to consumers on ing is the Women’s Health Office Act of lepsy and diabetes are increasing. Few the basis of genetic information. Yet 1997. This bill creates or codifies offices families escape illness today. Every this practice is relatively common of women’s health at various federal family fears it. today. In fact, a recent survey of indi- agencies, including the Office of the THE BILL viduals with a known genetic condition Assistant Secretary at HHS, the Cen- Our bill requires the Secretary of in the family revealed that 22 percent ters for Disease Control, the Agency Health and Human Services to estab- had been denied health insurance cov- for Health Care Policy and Research, lish a ‘‘one-stop shopping’’ database, erage because of genetic information. the Health Resources and Services Ad- including a toll-free telephone number, In addition to the potentially dev- ministration and the Food and Drug so that patients and physicians can astating consequences of being denied Administration. This bill provides for conveniently find out what clinical re- health insurance on the basis of ge- short and long-range goals and coordi- search trials are being conducted on netic information, the fear of discrimi- nation of all activities that related to experimental treatments. By accessing S472 CONGRESSIONAL RECORD — SENATE January 21, 1997 this database, users would be able to can think of. Getting information on The restoration of this protection is find out the purpose of the study, eligi- health research projects should not re- no small matter. For many religiously bility requirements, research loca- quire a ‘‘fishing expedition’’ of futiile observant Americans the greatest peril tions, and a contact person. Informa- calls, ‘‘good connections’’ or the in- to their ability to carry out their reli- tion would have to be presented in volvement of elected officials. gious faiths on a day-to-day basis may ‘‘plain English,’’ not ‘‘medicalese,’’ so In 1988, Congress directed HHS to es- come from employers. I have heard ac- that the average person could under- tablish an AIDS Clinical Trials Infor- counts from around the country about stand it. mation Services. It is now operational a small minority of employers who will Our bill is endorsed by the American (1–800–TRIALS-A) so that patients, pro- not make reasonable accommodation Cancer Society, the National Organiza- viders and their families can find out for employees to observe the Sabbath tion for Rare Disorders, AIDS Action about AIDS clinical trials. All calls are and other holy days or for employees and the Alzheimer’s Association. confidential and experienced profes- who must wear religiously-required sionals at the service can help people. A CONSTITUENT SUGGESTION garb, such as a yarmulke, or for em- IMPROVING HEALTH, RESEARCH The need for this information center ployees to wear clothing that meets re- Facilitating access to information came from my constituent, Nancy ligious modesty requirements. can also strengthen our health re- Evans, of San Francisco’s Breast Can- search effort. With a national database The refusal of an employer, absent cer Action, in a June 13, 1996 hearing of enabling people to find research trials, undue hardship, to provide reasonable the Senate cancer coalition, which I more people could be available to par- accommodation of a religious practice co-chair with Senator MACK. She de- ticipate in research. This can help re- should be seen as a form of religious scribed the difficulty that cancer pa- searchers broaden their pool of re- discrimination, as originally intended tients have in trying to find out what search participants. by Congress in 1972. And religious dis- experimental treatments might be crimination should be treated fully as MODEST HELP FOR THE ILL available, research trials sponsored by The bill we introduce does not guar- seriously as any other form of discrimi- the federal government and by private antee that anyone can participate in a nation that stands between Americans companies. Most of them are desperate; clinical research trial. Researchers and equal employment opportunities. most have tried everything. She would still control who participates Enactment of the ‘‘Workplace Reli- testfied that the National Cancer Insti- and set the requirements for the re- gious Freedom Act’’ will constitute an tute has established 1–800–4–CANCER, search. But for people who cling to important step towards ensuring that but the NCI information is incomplete. hopes for a cure, for people who want all members of society, whatever their It does not include all trials and the in- to live longer, for people who want to religious beliefs and practices, will be formation is often difficult for the lay feel better, this database can offer a protected from an invidious form of person to understand. little help. discrimination. In addition, the National Kidney If you have a life-threatening illness, It is important to recognize that, in Cancer Association has called for a you should not have to have political addition to protecting the religious central database. or other connections, computer sophis- freedom of employees, this legislation PEOPLE IN SERIOUS NEED tication or access to top-flight univer- protects employers from an undue bur- It is helpful to think about the plight sity medical schools to find out about den. Employees would be allowed to of the individuals that this bill could research on treatments of disease take time off only if their doing so does help. These are people who have a ter- I hope this bill will offer some hope not pose a significant difficulty or ex- minal illness; their physicians have to the millions who are suffering pense for the employer. This common tried every treatment they can find. today. sense definition of ‘‘undue hardship’’ is Cancer patients, for example, have used in the Americans with Disabilities By Mr. KERRY: probably had several rounds of chemo- Act and has worked well in that con- therapy, which has left them, debili- S. 92. A bill to amend title VII of the Civil Rights Act of 1964 to establish text. tated, virtually lifeless. These patients provisions with respect to religious ac- I believe this bill should receive bi- cling to slim hopes. They are desperate commodation in employment, and for partisan support. The same bill was en- to try anything. But step one is finding other purposes; to the Committee on dorsed in the last session by a wide out what is available, even if it is still Labor and Human Resources. range of organizations including the in the experimental stage. WORKPLACE RELIGIOUS FREEDOM ACT American Jewish Committee, the Bap- One survey found that a majority of tist Joint Committee on Public Affairs, patients and families are willing to use Mr. KERRY. Mr. President, I am proud today to introduce the Work- the Christian Legal Society, and the investigational drugs (drugs being re- place Religious Freedom Act of 1997. Jewish Community Relations Council searched but not approved for sale), but This bill would protect workers from of Greater Boston. find it difficult to locate information on-the-job discrimination. It rep- on research projects. A similar survey I urge this body to pass this legisla- resents a milestone in the protection of of physicians found that 42 percent of tion so that all American workers can religious liberty, assuring that all physicians are unable to find printed both be assured of equal employment workers have equal employment oppor- information about rare illnesses. opportunities and the ability to prac- tunities. tice their religion. HELP FOR PHYSICIANS In 1972, Congress amended the Civil Mr. President, I ask unanimous con- Physicians, no matter how com- Rights Act of 1964 to require employers sent that the text of the bill be printed petent and well trained, also cannot be to reasonably accommodate an em- in the RECORD. knowledgeable about experimental ployee’s religious practice or observ- treatments being researched. And most ance unless doing so would impose an There being no objection, the bill was Americans do not have sophisticated undue hardship on the employer. This ordered to be printed in the RECORD, as computers hookups that provide them 1972 amendment, although completely follows: instant access to the latest informa- appropriate, has been interpreted by S. 92 tion. Our witness, Nancy Evans, testi- the courts so narrowly as to place lit- fied that she can find out more about a tle restraint on an employer’s refusal Be it enacted by the Senate and House of Rep- resentatives of the United States of America in company’s clinical trials by calling her to provide religious accommodation. Congress assembled, stockbroker than by calling existing The ‘‘Workplace Religious Freedom data services. Act’’ will restore to the religious ac- SECTION 1. SHORT TITLE. Many desperate families have called commodation provision the weight This Act may be cited as the ‘‘Workplace me, their U.S. Senator, seeking help. that Congress originally intended and Religious Freedom Act of 1997’’. Others have lodged their pleas at the help assure that employers have a SEC. 2. AMENDMENT. White House. Others call lawyers, 911, meaningful obligation to reasonably (a) DEFINITIONS.—Section 701(j) of the Civil the local medical society, the local accommodate their employees’ reli- Rights Act of 1964 (42 U.S.C. 2000e(j)) is Chamber of Commerce, anything they gious practices. amended— January 21, 1997 CONGRESSIONAL RECORD — SENATE S473 (1) by inserting ‘‘(1)’’ after ‘‘(j)’’; with respect to conduct occurring before the care funding by $1 billion per year. In (2) by inserting ‘‘, after initiating and en- date of enactment of this Act. my home State of Massachusetts, this gaging in an affirmative and bona fide ef- would result in more than 5,000 fami- fort,’’ after ‘‘unable’’; and By Mr. KERRY: lies receiving child care help which (3) by adding at the end the following: S. 93. A bill to increase funding for ‘‘(2) As used in this subsection, the term otherwise would not receive it. child care under the temporary assist- Working parents face an extraor- ‘undue hardship’ means an accommodation ance for needy families program; to the requiring significant difficulty or expense. dinary uphill battle in trying to make Committee on Finance. For purposes of determining whether an ac- ends meet and cover the high cost of commodation requires significant difficulty WORKING FAMILIES CHILD CARE ASSISTANCE ACT child care. Well over half the women in or expense, the factors to be considered shall Mr. KERRY. Mr. President, today I the work force are parents of preschool include— am introducing the ‘‘Working Fami- children, and they need access to af- ‘‘(A) the identifiable cost of the accommo- lies’ Child Care Assistance Act’’ to help dation in relation to the size and operating fordable, quality child care they can the many working families who face trust. This bill provides real help to cost of the employer; and great struggles to find affordable, good- ‘‘(B) the number of individuals who will working families and hopefully will need a particular accommodation to a reli- quality child care. send a strong signal that their work gious observance or practice.’’. Mr. President, we no longer live in an and their efforts to provide reliable (b) EMPLOYMENT PRACTICES.—Section 703 of era when one parent generally stays at child care for their children are valued such Act (42 U.S.C. 2000e–2) is amended by home full time to take care of the chil- and supported. adding at the end the following: dren. Today, 60 percent of women with ‘‘(o)(1) As used in this subsection: Mr. President, I ask unanimous con- children younger than six are in the sent that the text of the bill be printed ‘‘(A) The term ‘employee’ includes a pro- labor force. The result is that approxi- spective employee. in the RECORD. ‘‘(B) The term ‘undue hardship’ has the mately seven million children of work- There being no objection, the bill was meaning given the term in section 701(j)(2). ing parents are cared for each month ordered to be printed in the RECORD, as ‘‘(2) For purposes of determining whether by someone other than a parent. And follows: an employer has committed an unlawful em- most of these children spend 30 hours S. 93 ployment practice under this title by failing or more each week in child care, ac- to provide a reasonable accommodation to Be it enacted by the Senate and House of Rep- cording to the National Research Coun- resentatives of the United States of America in the religious observance or practice of an cil. employee, an accommodation by the em- Congress assembled, ployer shall not be deemed to be reasonable New research also confirms that our SECTION 1. INCREASED FUNDING FOR CHILD if— current social reality has placed enor- CARE. ‘‘(A) such accommodation does not remove mous strains on working families’ (a) IN GENERAL.—Section 418(a) of the So- the conflict between employment require- budgets because many families must cial Security Act (42 U.S.C. 618(a)) is amend- ments and the religious observance or prac- pay for child care. According to a new ed by striking paragraph (3) and inserting tice of the employee; or study of 100 child care centers entitled the following: ‘‘(B)(i) the employee demonstrates to the ‘‘(3) APPROPRIATION.—For grants under this ‘‘Cost, Quality, and Child Outcomes in section, there are appropriated— employer the availability of an alternative Child Care Centers,’’ families spend an accommodation less onerous to the employee ‘‘(A) $2,967,000,000 for fiscal year 1997; that may be made by the employer without average of $4,940 per year to provide ‘‘(B) $3,067,000,000 for fiscal year 1998; undue hardship on the conduct of the em- services for each enrolled child. Annual ‘‘(C) $3,167,000,000 for fiscal year 1999; ployer’s business; and child care costs of this size represent a ‘‘(D) $3,367,000,000 for fiscal year 2000; ‘‘(ii) the employer refuses to make such ac- whopping 28 percent of $17,481, which is ‘‘(E) $3,567,000,000 for fiscal year 2001; and commodation. the yearly income of an average family ‘‘(F) $3,717,000,000 for fiscal year 2002.’’. ‘‘(3) It shall not be a defense to a claim of in the bottom two-fifths of the income (b) EFFECTIVE DATE.—The amendment unlawful employment practice under this made by subsection (a) shall take effect as if scale. enacted on August 22, 1996. title for failure to provide a reasonable ac- But even for families who can afford commodation to a religious observance or practice of an employee that such accommo- the cost of child care, in some commu- By Mr. DORGAN: dation would be in violation of a bona fide nities child care continues to be hard S. 95. A bill to provide for Federal seniority system if, in order for the employer to obtain at any cost. In 1994, 36 States campaign finance reform, and for other to reasonably accommodate to such observ- reported State child care assistance purposes; to the Committee on Rules ance or practice— waiting lists, according to the Chil- and Administration. ‘‘(A) an adjustment would be made in the dren’s Defense Fund. Eight States had CAMPAIGN FINANCE REFORM LEGISLATION employee’s work hours (including an adjust- at least 10,000 children waiting for as- Mr. DORGAN. Mr President, the current ment that requires the employee to work sistance. Georgia’s list was the longest overtime in order to avoid working at a time system of electing Members of Congress is that abstention from work is necessary to with 41,000, while in Texas the list had badly in need of reform. Elections are too satisfy religious requirements), shift, or job 36,000 names and a wait of about 2 long, too negative and too expensive; incum- assignment, that would not be available to years. In Massachusetts, the statewide bents have a decided advantage over chal- any employee but for such accommodation; waiting list contains the names of 4,000 lengers, voter participation continues to de- or working families. Additionally, a 1995 cline, and 30-second political attack ads are ‘‘(B) the employee and any other employee U.S. General Accounting Office (GAO) polluting the airways. The American people would voluntarily exchange shifts or job as- want us to fix the system, and they want us study found that shortages of child to do it now. It is my view that campaign fi- signments, or voluntarily make some other care for infants, sick children, children arrangement between the employees. nance reform, along with balancing the ‘‘(4)(A) An employer shall not be required with special needs, and school-age chil- budget, should be the highest priorities on to pay premium wages for work performed dren before and after school pose dif- the Senate agenda in the 105th Congress. during hours to which such premium wages ficulties for many families. Successive Supreme court decisions have would ordinarily be applicable, if work is I believe the child care situation may made it increasingly difficult to control performed during such hours only to accom- worsen because of a provision to which campaign spending. In its review of the Fed- modate religious requirements of an em- I was opposed in last year’s welfare re- eral Election Campaign Act (FECA) of 1971, the Court, in Buckley v. Valeo, stuck down ployee. form bill which cuts the Title XX So- ‘‘(B) As used in this paragraph, the term the mandatory spending limits in that law as ‘premium wages’ includes overtime pay and cial Services Block Grant by 15 per- an infringement of First Amendment rights. compensatory time off, pay for night, week- cent. Many States use Title XX fund- The Court stated unequivocally: ‘‘In the free end, or holiday work, and pay for standby or ing to pay for child care for working society ordained by our Constitution, it is irregular duty.’’. families; unfortunately, this cut will not the government, but the people—individ- SEC. 3. EFFECTIVE DATE; APPLICATION OF result in even more families needing uals as citizens and candidates and collec- AMENDMENTS. child care assistance. tively as associations and political commit- (a) EFFECTIVE DATE.—Except as provided in Mr. President, it is time to provide tees—who must retain control over the quan- tity and range of debate on public issues in subsection (b), this Act and the amendments help to working families to afford qual- made by section 2 take effect on the date of a political campaign.’’ The Court at that enactment of this Act. ity child care. My bill would double the time did, however, retain the section of (b) APPLICATION OF AMENDMENTS.—The funding through the Child Care Devel- FECA which limited contributions to politi- amendments made by section 2 do not apply opment Block Grant, increasing child cal candidates because of the Court’s stated S474 CONGRESSIONAL RECORD — SENATE January 21, 1997 concern that unlimited gifts to candidates money.’’ Only money raised and spent ac- federal communications law, television were a recipe for corruption. Simply put, the cording to the requirements and restrictions broadcasters are required to provide political Courts have prohibited mandatory spending of federal law can be used to ‘‘expressly ad- candidates with their lowest unit rate—the limits while preserving contribution limits. vocate’’ the election or defeat of a federal rate they charge their best customers—for In the long run, it seems to me that we will candidate. This is called ‘‘hard money.’’ political ads run in the 45 days prior to a pri- have to pass a constitutional amendment to However, unlimited amounts of soft money mary election and 60 days prior to a general get a handle on the spending side of the cam- are being raised by the national parties and election. Unfortunately, oftentimes the can- paign equation, and I intend to cosponsor congressional campaign committees, outside didate never appears in the ad. My bill would just such a measure. the constraints of federal election law, os- require broadcasters to provide this reduced Nevertheless, there are short term solu- tensibly to support state and local can- rate only for ads which are at least one tions that can and should be addressed, in- didates as well as federal candidates to the minute in length and in which the candidate cluding voluntary spending limits. The sys- extent that they do not directly advocate appears at least 75 percent of the time. tem is awash in money, and the public is dis- the election or defeat of that candidate. In 5. NON-CITIZENS gusted with the ever increasing amounts of practice, however, soft money is being raised It is my strong view that people who are money flowing into congressional campaign and spent on federal elections because of a not citizens of the United States should not coffers. Whether we like it or not, the public loophole in federal election law. be able to influence our election process in believes the money is tainted. They know Soft money is raised from unions and cor- any way. Therefore, my bill prohibits non- that money flows towards power, and are porations, which are prohibited from con- citizens from raising funds for or contribut- convinced that large campaign contributions tributing to federal elections except through ing to federal elections. buy influence. To put their concerns in some their PACs, and from individuals who have 6. VOTER PARTICIPATION perspective, one need only look at the statis- reached the aggregate federal contribution I am extremely disheartened by the lack of tics. The average cost of winning a Senate limits of $25,000 a year. In a nutshell, soft individual involvement in the political proc- seat rose from $609,100 in 1976 to $3.6 million money contributions are unlimited and un- ess and the every increasing decline in voter in the 1996 election cycle, and incumbents on regulated. participation numbers. Between 1948–1968, average have a spending advantage of more It is this pot of soft money which has dra- voter turnout for presidential elections was matically increased in recent election cy- than 2–1 over challengers. 60.43 percent. Between 1972–1992, it fell to There is simply no way to justify these es- cles. The Republican national committees 53.21 percent. Last year, it fell below 50 per- calating expenditures. No wonder the Amer- raised $141.2 million in soft money in the 1996 cent. These statistics are a national disgrace ican people have grown cynical of public in- election cycle, a 183 percent increase over Certainly, there must be something that can stitutions and officials, and no wonder tal- the $49.2 raised in 1992. The Democratic be done to increase voter participation. Un- ented people in our communities do not want party committees raised $122 million in 1996, fortunately, past initiatives have had little to run for elective office. If we hope to re- a 237 percent increase over their 1992 level of or marginal impact on increasing the num- verse public attitudes and restore confidence $36.5 million. A substantial portion of soft ber of voters who choose to fulfill their civic in our government officials and institutions, money spending by party campaign commit- responsibility to vote. I believe we need a we should begin with campaign finance re- tees has gone to finance the generic issue ads comprehensive analysis of what has worked, form. We have a unique opportunity this we have come to know as attack ads. The what has not worked or what we might try year to pass meaningful and bipartisan re- figures above illustrate the problem. My bill to change public attitudes, educate voters form, something that has eluded us for more would eliminate it by preventing national and improve participation. Early voting, ex- than a decade. I hope we will seize the mo- committees from raising or spending soft tended polling hours and weekend voting are ment. money which does not comply with the areas that ought to be researched. My bill While I intend to support comprehensive source and dollar restrictions in federal cam- provides $150,000 for the Federal Election reform efforts as I have in the past, I am in- paign finance law. Commission to conduct such a study and to troducing legislation today to address what I 3. EXPRESS ADVOCACY make recommendations to Congress. This is perceive to be the most serious problems in As mentioned above, only money raised a small amount of money to invest in an in- the system now. My bill includes the follow- under the restrictions and prohibitions of creasingly serious public problem. ing provisions which I will describe briefly: federal election law can be used to advocate 7. TAX CREDIT 1. VOLUNTARY SPENDING LIMITS/LIMITATION ON the election or defeat of a candidate for fed- If we want to encourage participation by PERSONAL FUNDS/FEE ON NON-COMPLYING eral office. As currently defined in FEC regu- ordinary citizens, I believe it is in our na- CANDIDATES lations, only communications which use tional interest to restore a tax credit for As a result of the Supreme Court decisions such words as ‘‘vote for’’, ‘‘elect’’, ‘‘support’’, small contributors similar to what existed mentioned above, the only way to control ‘‘defeat’’, ‘‘reject’’ or ‘‘Smith for Congress’’ between 1972 and 1986. My bill does that by spending in the short term is through vol- are considered express advocacy which must providing an annual 100% tax credit for the untary spending limits. My bill contains vol- be paid for with money raised under federal first $100 ($200 for joint returns) of contribu- untary limits which are based on a percent- election law restraints, i.e., hard money. tions to congressional campaigns. It is my age of the voting age population in each This overly narrow definition of what con- belief that many people who want to partici- state. These are the same limits that were stitutes express advocacy has created a giant pate financially in the political process sim- contained in the campaign finance reform loophole for attack ads. Simply by avoiding ply cannot afford to do so. These voters be- bill that passed the Senate in the 103rd Con- the magic words mentioned above, political lieve they have no power or influence. They gress and which have been the basis of com- parties, corporations, unions and other spe- are increasingly frustrated, disgusted and prehensive reform proposals in the 104th cial interest groups can pay for brutal at- disengaged. My bill will afford them the op- Congress. In addition, my bill would limit tack ads which certainly have the intent of portunity to participate in the process. the amount of personal or family money that influencing the outcome of federal elec- The American public and the voters in my a candidate can contribute to his or her cam- tions—and they can do it without having to state of North Dakota are clearly appalled paign to $25,000. I don’t believe any candidate disclose it to the FEC. by the amount of money involved in electing should be able to spend unlimited personal My bill would expand the current express federal officials. They are adamant that we funds in an attempt to buy a seat in the U.S. advocacy standard to include both the con- clean up the system—NOW. If we don’t, we Senate. tent and intent of such ads. It would not pro- do so at our personal and collective peril. Unlike other bills, however, my proposal hibit such ads; it would simply ensure—as I want the people of North Dakota and the imposes a fee on candidates who choose not Congress intended—that such ads are paid Members of this body to know that I intend to comply with the spending limits. Under for with money which is subject to regula- to support and to work as hard as I can to my legislation, non-complying candidates tion and disclosure. Any political ads that enact comprehensive campaign finance legis- would be charged a fee of 50 percent on all clearly identify a candidate(s) and which are lation this year. I think is in all our best in- expenditures exceeding the spending limits. broadcast within 60 days prior to an election terests to do so, and I hope my bill will stim- The fee would be due and payable at the time (or 90 days prior to a general election with ulate debate and be incorporated in the final candidates are currently required to submit respect to a candidate for Vice President or reform package. quarterly and other reports to the Federal President) will be considered express advo- Election Commission. The proceeds from the cacy and, therefore, will be subject to the re- By Mr. INOUYE: fee would be distributed by the FEC on a fair strictions and limitations of federal election S. 96. A bill to require the Secretary and equitable basis among complying can- law. The bottom line is that you would have of the Army to determine the validity didates for the same federal office. It is my to pay for these ads with hard money which of the claims of certain Filipinos that hope that this fee will provide a strong in- is more difficult to raise and which requires ducement for candidates to comply with the full disclosure to the FEC. they performed military service on be- half of the United States during World voluntary spending limits. 4. POLITICAL ADVERTISING 2. SOFT MONEY I have long thought that the 30-second po- War II; to the Committee on Armed My bill prohibits national political parties litical attack ad does little, if anything, to Services. and congressional campaign committees advance the cause of public debate. They MILITARY SERVICE LEGISLATION from raising or spending so-called ‘‘soft tend to be hit-and-run ads. Under current Mr. INOUYE. Mr. President, I am January 21, 1997 CONGRESSIONAL RECORD — SENATE S475 reintroducing legislation today that SEC. 7. RESPONSIBILITIES OF THE SECRETARY Mr. President, it is also evident that would direct the Secretary of the Army OF VETERANS AFFAIRS. better child support enforcement can Any entitlement of a person to receive vet- to determine whether certain nationals erans’ benefits by reason of this Act shall be produce a lot more money for children. of the Philippine Islands performed administered by the Department of Veterans A 1994 study by the Urban Institute es- military service on behalf of the Unit- Affairs pursuant to regulations issued by the timates that if child support orders ed States during World War II. Secretary of Veterans Affairs. were established for all children with a Mr. President, our Filipino veterans SEC. 8. DEFINITIONS. living non-custodial father and these fought side by side and sacrificed their In this Act: orders were fully enforced, aggregate lives on behalf of the United States. (1) The term ‘‘Secretary’’ means the Sec- child support payments would have This legislation would confirm the va- retary of the Army. been $47.6 billion dollars in 1990—nearly (2) The term ‘‘World War II’’ means the pe- three times the amount of child sup- lidity of their claims and further allow riod beginning on December 7, 1941, and end- qualified individuals the opportunity ing on December 31, 1946. port actually paid in this country. to apply for military and veterans ben- Unfortunately, this country has efits that, I believe, they are entitled By Mr. KERRY: made all too little progress in tackling to. As this population becomes older, it S. 97. A bill to amend the Internal the child support problem, and this has is important for our nation to extend Revenue Code of 1986 and the Social Se- been true under both Democratic and its firm commitment to the Filipino curity Act to require the Internal Rev- Republican Administrations. Over the veterans and their families who par- enue Service to collect child support past decade, the average child support ticipated in making us the great nation through wage withholding and to payment due to all women with a child that we are today. eliminate State enforcement of child support award, the average amount re- I ask unanimous consent that the support obligations other than medical ceived by those women, as well as the text of my bill be printed in the support obligations; to the Committee percentage of women with awards have RECORD. on Finance. remained virtually unchanged (adjust- There being no objection, the bill was THE UNIFORM CHILD SUPPORT ENFORCEMENT ing for inflation). Similarly, the state ordered to be printed in the RECORD, as ACT OF 1997 child support enforcement system that follows: Mr. KERRY. Mr. President, I am in- serves welfare families and non-welfare S. 129 troducing legislation today to help en- families who ask for help has made Be it enacted by the Senate and House of Rep- sure that children across this country progress in paternity establishment, resentatives of the United States of America in get the economic support they need but little progress overall. Over half a Congress assembled, and deserve from both parents in order million children had their paternity es- SECTION 1. DETERMINATIONS BY THE SEC- to have a wholesome childhood, grow tablished by state agencies in FY 1994— RETARY OF THE ARMY. up healthy, and thrive. a fifty percent increase from five years (a) IN GENERAL.—Upon the written applica- Mr. President, child support reform earlier. But fewer than one out of every tion of any person who is a national of the is an urgent public issue because it af- five cases served by state agencies had Philippine Islands, the Secretary of the fects so many children. In 1994, one out any child support paid in FY 1994—a Army shall determine whether such person performed any military service in the Phil- of every four children lived in a family figure that has risen only slightly since ippine Islands in aid of the Armed Forces of with only one parent present in the FY 1990. Mr. President, it is an intoler- the United States during World War II which home. Half of all the 18.7 million chil- able situation for our nation’s children qualifies such person to receive any mili- dren living in single-parent families in when state child support agencies are tary, veterans’, or other benefits under the 1994 were poor, compared with only making absolutely no collection in 80 laws of the United States. slightly more than one out of every ten percent of their cases. (b) INFORMATION TO BE CONSIDERED.—In children in two-parent families. Clear- My bill will help make sure that we making a determination for the purpose of ly the payment of child support by the achieve real progress for children. Last subsection (a), the Secretary shall consider year, Congress passed some important all information and evidence (relating to absent parent is an important deter- service referred to in subsection (a)) avail- minant of the economic status of these improvements in the child support sys- able to the Secretary, including information children. tem in the welfare reform bill that be- and evidence submitted by the applicant, if Unfortunately, the failure to pay came law. My bill would give states a any. child support is extraordinarily wide- chance to implement these new SEC. 2. CERTIFICATE OF SERVICE. spread, cutting across income and ra- changes and then assess their success (A) ISSUANCE OF CERTIFICATE OF SERVICE.— cial lines. Of the 10 million women or failure. If these reforms succeed in The Secretary shall issue a certificate of raising children with an absent parent, dramatically improving the perform- service to each person determined by the over 4 million had no support awarded. ance of state child support offices, then Secretary to have performed military service Of those 5.4 million women who were this bill would not tinker with success. described in section 1(a). (b) EFFECT OF CERTIFICATE OF SERVICE.—A due support, slightly over half received If, however, we do not see dramatic im- certificate of service issued to any person the full amount due, while a quarter provement in collections within the under subsection (a) shall, for the purpose of received partial payment and a quarter next three years, this bill would ensure any law of the United States, conclusively received nothing at all. Let me repeat that we take bold steps to help chil- establish the period, nature, and character of that, Mr. President—more than half of dren. This bill would leave establish- the military service described in the certifi- the women with child support orders ment of paternity and child support or- cate. received no support or less than the ders at the state level but move collec- SEC. 3. APPLICATIONS BY SURVIVORS. full amount. tion of support to the national level An application submitted by a surviving Mr. President, common sense will where we can more aggressively pursue spouse, child, or parent of a deceased person tell you that children are hurt when described in section 1(a) shall be treated as interstate cases and send a message to an application submitted by such person. parents do not pay support. But per- all parents obligated to pay support haps some evidence will make the SEC. 4. LIMITATION PERIOD. that making full and timely support The Secretary may not consider for the point even clearer. A recent survey of payments is an obligation as serious as purpose of this Act any application received single parents in Georgia, Oregon, making full and timely payment of by the Secretary more than two years after Ohio, and New York documents the taxes. If more than half the states do the date of enactment of this Act. real harm children suffer when child not achieve a 75 percent collection rate SEC. 5. PROSPECTIVE APPLICATION OF DETER- support is not paid: during the first in their child support cases, then the MINATIONS BY THE SECRETARY OF year after the parent left the home, system of collection would be federal- THE ARMY. more than half the families surveyed No benefits shall accrue to any person for ized to ensure that children get the any period prior to the date of enactment of faced a serious housing crisis. Nearly a support they need and deserve. this Act as a result of the enactment of this third reported that their children went Mr. President, it has been 13 years Act. hungry at some point during the year. since this Congress passed the first SEC. 6. REGULATIONS. And over a third reported that their major child support legislation. De- The Secretary shall issue regulations to children lacked appropriate clothing spite this legislative effort and addi- carry out sections 1, 3, and 4. such as a winter coat. tional reforms in 1988, according to a S476 CONGRESSIONAL RECORD — SENATE January 21, 1997 recent study there is a higher default (3) The dollar amount of child support re- ‘‘(c) EMPLOYER OBLIGATIONS.— rate on child support payments than on quired to be paid on a monthly basis under ‘‘(1) REQUIREMENT TO DEDUCT AND WITH- used car loans. I believe that every sin- the order. HOLD.— gle member of this body will agree with (4) The date the order was issued or most ‘‘(A) IN GENERAL.—Every employer who re- recently modified, and each date the order is ceives a certificate under subsection (a) that me that this is wrong. If, under the required or scheduled to be reviewed by a specifies that the employee has a child sup- newly revised federal law, states can court or an administrative process estab- port obligation for any month shall deduct rectify this situation, we can all take lished under State law. and withhold from the wages (as defined in pleasure and satisfaction from watch- (5) Any orders superseded by the order. section 3401(a)) paid by such employer to ing them do it. If they cannot, we must (6) Such other information as the Sec- such employee during each month that such take action. I urge my colleagues to retary of the Treasury, in consultation with certificate is in effect an additional amount support this bill so that America’s chil- the Secretary of Health and Human Services, equal to the amount of such obligation or shall, by regulation require. such other amount as may be specified by dren of every income level will be as- the Secretary under subsection (d). sured of the support they need and de- SEC. 4. CERTAIN STATUTORILY PRESCRIBED PROCEDURES REQUIRED AS A CON- ‘‘(B) LIMITATION ON AGGREGATE WITHHOLD- serve. DITION OF RECEIVING FEDERAL ING.—In no event shall an employer deduct Mr. President, I ask unanimous con- CHILD SUPPORT FUNDS. and withhold under this section from a pay- sent that the full text of the bill be Section 466(a) of the Social Security Act ment of wages an amount in excess of the printed in the RECORD. (42 U.S.C. 666(a)) is amended by inserting amount of such payment which would be per- There being no objection, the bill was after paragraph (19) the following: mitted to be garnished under section 303(b) ‘‘(20)(A) Procedures which require any of the Consumer Credit Protection Act. ordered to be printed in the RECORD, as State court or administrative agency that is- ‘‘(2) NOTICE TO SECRETARY.— follows: sues or modifies (or has issued or modified) a ‘‘(A) IN GENERAL.—Every employer who re- S. 97 child support order to transmit an abstract ceives a withholding certificate shall, within Be it enacted by the Senate and House of Rep- of the order to the Internal Revenue Service 30 business days after such receipt, submit a resentatives of the United States of America in on the later of— copy of such certificate to the Secretary. Congress assembled, ‘‘(i) the date the order is issued or modi- ‘‘(B) EXCEPTION.—Subparagraph (A) shall SECTION 1. SHORT TITLE. fied; or not apply to any withholding certificate if— This Act may be cited as the ‘‘Uniform ‘‘(ii) the effective date of this paragraph. ‘‘(i) a previous withholding certificate is in Child Support Enforcement Act of 1997’’. ‘‘(B) Procedures which— effect with the employer, and ‘‘(i) require any individual with the right ‘‘(ii) the information shown on the new SEC. 2. EFFECTIVE DATE; AMENDMENTS. certificate with respect to child support is (a) IN GENERAL.—This Act and the amend- to collect child support pursuant to an order issued or modified in the State (whether be- the same as the information with respect to ments made by this Act shall take effect on child support shown on the certificate in ef- the first day of the first calendar month that fore or after the effective date of this para- graph) to be presumed to have assigned to fect. begins after the 3-year period that begins ‘‘(3) WHEN WITHHOLDING OBLIGATION TAKES with the date of the enactment of this Act, the Internal Revenue Service the right to collect such support, unless the individual EFFECT.—Any withholding obligation with if the Secretary of Health and Human Serv- respect to a child support obligation of an ices certifies to the Congress that on such affirmatively elects to retain such right at any time; and employee shall commence with the first pay- first day more than 50 percent of the States ment of wages after the certificate is fur- have not achieved a 75 percent collection ‘‘(ii) allow any individual who has made the election referred to in clause (i) to re- nished. rate in child support cases in which child ‘‘(d) SECRETARY TO VERIFY AMOUNT OF scind or revive such election at any time.’’. support is awarded and due under the juris- CHILD SUPPORT OBLIGATION.— diction of such States pursuant to part D of SEC. 5. COLLECTION OF CHILD SUPPORT BY IN- ‘‘(1) VERIFICATION OF INFORMATION SPECI- TERNAL REVENUE SERVICE. title IV of the Social Security Act (42 U.S.C. FIED ON WITHHOLDING CERTIFICATES.—Within 651 et seq.). (a) IN GENERAL.—Chapter 77 of the Internal 45 business days after receiving a withhold- (b) ELIMINATION OF PROVISIONS OF LAW RE- Revenue Code of 1986 (relating to miscellane- ing certificate of any employee, or a notice LATING TO STATE ENFORCEMENT OF CHILD ous provisions) is amended by adding at the from any person claiming that an employee SUPPORT OBLIGATIONS OTHER THAN MEDICAL end the following new section: is delinquent in making any payment pursu- SUPPORT OBLIGATIONS.—Not later than 90 ‘‘SEC. 7525. COLLECTION OF CHILD SUPPORT. ant to a child support obligation, the Sec- days after the effective date of this Act and ‘‘(a) EMPLOYEE TO NOTIFY EMPLOYER OF retary shall determine whether the informa- the amendments made by this Act, the Sec- CHILD SUPPORT OBLIGATION.— tion available to the Secretary under section retary of Health and Human Services shall ‘‘(1) IN GENERAL.—Each employee shall 3 of the Uniform Child Support Enforcement submit to the appropriate committees of the specify, on each withholding certificate fur- Act of 1996 indicates that such employee has Congress a legislative proposal proposing nished to such employee’s employer— a child support obligation. such technical and conforming amendments ‘‘(A) the monthly amount (if any) of each ‘‘(2) EMPLOYER NOTIFIED IF INCREASED WITH- as are necessary to eliminate State enforce- child support obligation of such employee, HOLDING IS REQUIRED.—If the Secretary deter- ment of child support obligations other than and mines that an employee’s child support obli- medical support obligations and to bring the ‘‘(B) the TIN of the individual to whom gation is greater than the amount (if any) law into conformity with the policy em- each such obligation is owed. shown on the withholding certificate in ef- bodied in this Act. ‘‘(2) WHEN CERTIFICATE FILED.—In addition fect with respect to such employee, the Sec- SEC. 3. NATIONAL CHILD SUPPORT ORDER REG- to the other required times for filing a with- retary shall, within 45 business days after ISTRY. holding certificate, a new withholding cer- such determination, notify the employer to (a) ESTABLISHMENT.— tificate shall be filed within 30 days after the whom such certificate was furnished of the (1) IN GENERAL.—The Secretary of the date of any change in the information speci- correct amount of such obligation, and such Treasury shall establish in the Internal Rev- fied under paragraph (1). amount shall apply in lieu of the amount (if enue Service a national registry of abstracts ‘‘(3) PERIOD CERTIFICATE IN EFFECT.—Any any) specified by the employee with respect of child support orders. specification under paragraph (1) shall con- to payments of wages by the employer after (2) CHILD SUPPORT ORDER DEFINED.—As used tinue in effect until another withholding cer- the date the employer receives such notice. in this section, the term ‘‘child support tificate takes effect which specifies a change ‘‘(3) DETERMINATION OF CORRECT AMOUNT.— order’’ means an order, issued or modified by in the information specified under paragraph In making the determination under para- a State court or an administrative process (1). graph (2), the Secretary shall take into ac- established under State law, that requires an ‘‘(4) AUTHORITY TO SPECIFY SMALLER CHILD count whether the employee is an employee individual to make payments for support and SUPPORT AMOUNT.—In the case of an em- of more than 1 employer and shall appro- maintenance of a child or of a child and the ployee who is employed by more than 1 em- priately adjust the amount of the required parent with whom the child is living. ployer for any period, such employee may withholding from each such employer. (b) CONTENTS OF ABSTRACTS.—The abstract specify less than the monthly amount de- ‘‘(e) CHILD SUPPORT OBLIGATIONS REQUIRED of a child support order shall contain the fol- scribed in paragraph (1)(A) to each such em- TO BE PAID WITH INCOME TAX RETURN.— lowing information: ployer so long as the total of the amounts ‘‘(1) IN GENERAL.—The child support obliga- (1) The names, addresses, and social secu- specified to all such employers is not less tion of any individual for months ending rity account numbers of each individual with than such monthly amount. with or within any taxable year shall be rights or obligations under the order, to the ‘‘(b) CERTAIN OBLIGATIONS EXEMPT.—This paid— extent that the authority that issued the section shall not apply to a child support ob- ‘‘(A) not later than the last date (deter- order has not prohibited the release of such ligation for any month if the individual to mined without regard to extensions) pre- information. whom such obligation is owed has so notified scribed for filing his return of tax imposed (2) The name and date of birth of any child the Secretary and the individual owing such by chapter 1 for such taxable year, and with respect to whom payments are to be obligation more than 30 business days before ‘‘(B)(i) if such return is filed not later than made under the order. the beginning of such month. such date, with such return, or January 21, 1997 CONGRESSIONAL RECORD — SENATE S477

‘‘(ii) in any case not described in clause (i), spect to whom an assignment of child sup- (3) CREDIT FOR WITHHELD AMOUNTS, ETC.— in such manner as the Secretary may by reg- port payments to a State is in effect— Subsection (g) of section 6654 of such Code is ulations prescribe. ‘‘(A) of the amounts collected which rep- amended by adding at the end the following ‘‘(2) CREDIT FOR AMOUNT PREVIOUSLY PAID.— resent monthly support payments, the first new paragraph: The amount required to be paid by an indi- $50 of any payments for a month shall be ‘‘(3) CHILD SUPPORT OBLIGATIONS.—For pur- vidual under paragraph (1) shall be reduced paid to such individual and shall not be con- poses of applying this section, the amounts by the sum of— sidered as income for purposes of calculating collected under section 7525 shall be deemed ‘‘(A) the amount collected under this sec- amounts of State assistance, and to be a payment of the amount described in tion with respect to periods during the tax- ‘‘(B) all other amounts shall be paid to subsection (f)(3) on the date such amounts able year, plus such State pursuant to such assignment. were actually withheld or paid, as the case ‘‘(B) the amount (if any) paid by such indi- ‘‘(j) TREATMENT OF ARREARAGES UNDER may be.’’ vidual under section 6654 by reason of sub- CHILD SUPPORT OBLIGATIONS NOT SUBJECT TO (d) PENALTY FOR FALSE INFORMATION ON section (f)(3) thereof for such taxable year. SECTION FOR PRIOR PERIOD.—If— WITHHOLDING CERTIFICATE.—Section 7205 of ‘‘(f) FAILURE TO PAY AMOUNT OWING.—If an ‘‘(1) this section did not apply to any child such Code (relating to fraudulent withhold- individual fails to pay the full amount re- support obligation by reason of subsection ing exemption certificate or failure to supply quired to be paid under subsection (e) on or (b) for any prior period, and information) is amended by adding at the before due date for such payment, the Sec- ‘‘(2) there is a legally enforceable past-due end the following new subsection: retary shall assess and collect the unpaid amount under such obligation for such pe- ‘‘(c) WITHHOLDING OF CHILD SUPPORT OBLI- amount in the same manner, with the same riod, GATIONS.—If any individual willfully makes a powers, and subject to the same limitations then such past-due amount shall be treated false statement under section 7525(a), then applicable to a tax imposed by subtitle C the for purposes of this section as owed (until such individual shall, in addition to any collection of which would be jeopardized by paid) for each month that this section ap- other penalty provided by law, upon convic- delay. plies to such obligation. tion thereof, be fined not more than $1,000, or ‘‘(g) CREDIT OR REFUND FOR WITHHELD ‘‘(k) DEFINITIONS AND SPECIAL RULES.— imprisoned not more than 1 year, or both.’’ CHILD SUPPORT IN EXCESS OF ACTUAL OBLIGA- ‘‘(1) DEFINITIONS.—For purposes of this sec- (e) NEW WITHHOLDING CERTIFICATE RE- TION.—There shall be allowed as a credit tion— QUIRED.—Not later than 90 days after the against the taxes imposed by subtitle A for ‘‘(A) WITHHOLDING CERTIFICATE.—The term date this Act takes effect, each employee the taxable year an amount equal to the ex- ‘withholding certificate’ means the with- who has a child support obligation to which cess (if any) of— holding exemption certificate used for pur- section 7525 of the Internal Revenue Code of ‘‘(1) the aggregate of the amounts de- poses of chapter 24. 1986 (as added by this section) applies shall scribed in subparagraphs (A) and (B) of sub- ‘‘(B) BUSINESS DAY.—The term ‘business furnish a new withholding certificate to each section (e)(2), over day’ means any day other than a Saturday, of such employee’s employers. A certificate ‘‘(2) the actual child support obligation of Sunday, or legal holiday (as defined in sec- required under the preceding sentence shall the taxpayer for such taxable year. tion 7503). be treated as required under such section The credit allowed by this subsection shall ‘‘(2) TIMELY MAILING.—Any notice under 7525. be treated for purposes of this title as al- subsection (c)(2) or (d)(2) which is delivered (f) REPEAL OF OFFSET OF PAST-DUE SUP- lowed by subpart C of part IV of subchapter by United States mail shall be treated as PORT AGAINST OVERPAYMENTS.— A of chapter 1. (1) Section 6402 of such Code, as amended ‘‘(h) CHILD SUPPORT TREATED AS TAXES.— given on the date of the United States post- by section 110(l)(7) of the Personal Respon- ‘‘(1) IN GENERAL.—For purposes of penalties mark stamped on the cover in which such sibility and Work Opportunity Reconcili- and interest related to failure to deduct and notice is mailed. ation Act of 1996, is amended by striking sub- withhold taxes, amounts required to be de- ‘‘(l) REGULATIONS.—The Secretary shall sections (c) and (h) and by redesignating sub- ducted and withheld under this section shall prescribe such regulations as may be nec- sections (d), (e), (f), (g), (i), and (j) as sub- be treated as taxes imposed by chapter 24. essary or appropriate to carry out the pur- poses of this section.’’ sections (c), (d), (e), (f), (g), and (h), respec- ‘‘(2) OTHER RULES.—Rules similar to the (b) WITHHELD CHILD SUPPORT TO BE SHOWN tively. rules of sections 3403, 3404, 3501, 3502, 3504, ON W–2.—Subsection (a) of section 6051 of and 3505 shall apply with respect to child (2) Subsection (a) of section 6402 of such such Code, as amended by section 310(c)(3) of support obligations required to be deducted Code, as so amended, is amended by striking the Health Insurance Portability and Ac- and withheld. ‘‘(c), (d), and (e)’’ and inserting ‘‘(c) and (d)’’. countability Act of 1996, is amended by strik- (3) Subsection (c) of section 6402 of such ‘‘(3) SPECIAL RULE FOR COLLECTIONS.—For ing ‘‘and’’ at the end of paragraph (10), by purposes of collecting any unpaid amount Code (as redesignated by paragraph (1)) is striking the period at the end of paragraph which is required to be paid under this sec- amended— tion— (11) and inserting ‘‘, and’’, and by inserting (A) by striking ‘‘(other than past-due sup- ‘‘(A) paragraphs (4), (6), and (8) of section after paragraph (11) the following new para- port subject to the provisions of subsection 6334(a) (relating to property exempt from graph: (c))’’ in paragraph (1), levy) shall not apply, and ‘‘(12) the total amount deducted and with- (B) by striking ‘‘after such overpayment is ‘‘(B) there shall be exempt from levy so held as a child support obligation under sec- reduced pursuant to subsection (c) with re- much of the salary, wages, or other income tion 7525(c).’’ spect to past-due support collected pursuant (c) APPLICATION OF ESTIMATED TAX.— of an individual as is being withheld there- to an assignment under section 402(a)(26) of (1) IN GENERAL.—Subsection (f) of section from in garnishment pursuant to a judgment the Social Security Act and’’ in paragraph 6654 of such Code (relating to failure by indi- entered by a court of competent jurisdiction (2). for the support of his minor children. vidual to pay estimated income tax) is (4) Subsection (d) of section 6402 of such ‘‘(i) COLLECTIONS DISPERSED TO INDIVIDUAL amended by striking ‘‘minus’’ at the end of Code (as redesignated by paragraph (1)) is OWED OBLIGATION.— paragraph (2) and inserting ‘‘plus’’, by redes- amended by striking ‘‘or (d)’’. ‘‘(1) IN GENERAL.—Payments received by ignating paragraph (3) as paragraph (4), and (g) REPEAL OF COLLECTION OF PAST-DUE the Secretary pursuant to this section or by by inserting after paragraph (2) the following SUPPORT.—Section 6305 of such Code is here- reason of section 6654(f)(3) which are attrib- new paragraph: by repealed. utable to a child support obligation payable ‘‘(3) the aggregate amount of the child sup- (h) CLERICAL AMENDMENTS.— for any month shall be paid (to the extent port obligations of the taxpayer for months (1) The table of sections for subchapter A such payments do not exceed the amount of ending with or within the taxable year of chapter 64 of such Code is amended by such obligation for such month) to the indi- (other than such an obligation for any striking the item relating to section 6305. vidual to whom such obligation is owed as month for which section 7525 does not apply (2) The table of sections for chapter 77 of quickly as possible. Any penalties and inter- to such obligation), minus’’. such Code is amended by adding at the end est collected with respect to such payments (2) Paragraph (1) of section 6654(d) of such thereof the following new item: also shall be paid to such individual. Code is amended by adding at the end the ‘‘Sec. 7525. Collection of child support.’’ following new subparagraph: ‘‘(2) SHORTFALLS IN PAYMENTS MADE BY (h) USE OF PARENT LOCATOR SERVICE.—Sec- OTHER WITHHELD AMOUNTS.—If the amount ‘‘(D) DETERMINATION OF REQUIRED ANNUAL tion 453(a) of the Social Security Act (42 payable under a child support obligation for PAYMENT FOR TAXPAYERS REQUIRED TO PAY U.S.C. 653(a)) is amended by inserting ‘‘or any month exceeds the payments (referred in CHILD SUPPORT.—In the case of a taxpayer the Internal Revenue Service’’ before ‘‘infor- paragraph (1)) received with respect to such who is required under section 7525 to pay a mation as’’. obligation for such month, such excess shall child support obligation (as defined in sec- be paid from other amounts received under tion 7525) for any month ending with or with- By Mr. GRAMS (for himself, Mr. subtitle C or section 6654 with respect to the in the taxable year, the required annual pay- HUTCHINSON, Mr. NICKLES, Mr. individual owing such obligation. The treas- ment shall be the sum of— ury of the United States shall be reimbursed ‘‘(i) the amount determined under subpara- KYL, and Mr. COATS): for such other amounts from collections graph (B) without regard to subsection (f)(3), S. 98. A bill to amend the Internal from the individual owing such obligation. plus Revenue Code of 1986 to provide a fam- ‘‘(3) FAMILIES RECEIVING STATE ASSIST- ‘‘(ii) the aggregate amount described in ily tax credit; to the Committee on Fi- ANCE.—In the case of an individual with re- subsection (f)(3).’’ nance. S478 CONGRESSIONAL RECORD — SENATE January 21, 1997 THE FAMILY TAX FAIRNESS ACT OF 1997 concerns missed a very important part. 104th Congress, so now in the 105th it is Mr. GRAMS. Madam President, I The budget will never be balanced or time that we put aside politics and de- thank my colleague from Oklahoma for stay balanced until we decide that it is liver on the promise. helping us in supporting this bill. the people who should prosper under it So I ask that S. 9 be introduced and Madam President, I rise today to in- and not the Government. properly referred. troduce legislation, together with Sen- Recent economic data reveal that de- The PRESIDING OFFICER. The bill ator Hutchinson, my distinguished col- spite a shrinking Federal deficit, the will be appropriately referred. league from Arkansas, a bill to provide Government is in fact getting bigger, Mr. GRAMS. Thank you very much, the $500 per child tax credit for Ameri- not smaller. Government spending and Madam President. ca’s working families. We are pleased, taxes continue to soar, and total tax- Mr. HUTCHINSON. Madam Presi- as I said, to be joined by Senator NICK- ation now claims the largest bite in the dent, I rise today in support of Ameri- LES, along with Senators KYL and Nation’s income in history. Without ca’s families. It is with a deep sense of COATS, in introducing this bill. significant policy changes, the deficit honor that I stand for the first time be- The November election sends us a will begin climbing again in fiscal year fore this great deliberative body. As very clear message that the American 1998 and reach over $200 billion by the the first Republican Senator to be pop- people want us to work together, to year 2002. ularly elected from the great state of work together in a bipartisan manner, By enacting the $500-per-child tax Arkansas, I believe it is fitting that my to balance the Federal budget, control credit we can begin turning back the first legislative initiative be on behalf the growth of Government, and to re- decades of abuse which taxpayers have of those whom we hold most dear—the store its accountability. While we see suffered at the hands of their own Gov- children of America’s families. It is the tax burden increase on the middle ernment, a Government often eager to doubly fitting that I join my dear class, working families need our help, spend the taxpayers’ money with reck- friend from our days in the House of and it is time that Congress and the less regard. The $500-per-child tax cred- Representatives and now Senate col- President come together to deliver it. it is the right solution because it takes league, ROD GRAMS, in cosponsorship of Since the opening days of the 105th power out of the hands of Washington’s the Family Tax Fairness Act of 1997. My career of public service has been Congress, a renewed spirit of coopera- big spenders and puts it back where it grounded in principles of faith, preser- tion has settled in over Washington. can do the most good, and that is in vation of the family and honest but Instead of the partisan politics that the hands of families. less intrusive government. These te- have often and too often exploited our Nobody outside of Washington’s insu- nets will be my guide post as I serve disagreements, the talk from the Cap- lated fantasy world really thinks the the good people of Arkansas in the itol Building to the White House has Government can spend the family’s United States Senate. centered on creating consensus. Just dollars more efficiently than the fam- In my lifetime, I have observed the yesterday in his inaugural address the ily would. By leaving that money in precipitous decline of the economic and President affirmed this commitment the family bank accounts, taxpayers moral health of the American family. when he said, ‘‘The American people are then empowered to use it to di- This decline is attributable to many returned to office a President of one rectly benefit their own household. causes not the least of which is the ris- party and a Congress of another. Sure- They can make the best decisions on ing tax burden. As a member of the ly they did not do this to advance the how to spend those dollars. Beyond the baby boomer generation, I, like all of politics of petty bickering and par- direct benefits, families’ tax relief can you, have watched our 2% tax rate of tisanship, which they plainly deplore.’’ have a substantial and a positive im- the 1950’s grow to 25%, nearly a 300% While a sign of that new commit- pact on the economy as a whole. increase since World War II. This ment, I believe, is the strongest and It was John F. Kennedy who observed means that America’s families send the most compassionate statement this that ‘‘an economy hampered with high one out of every four dollars to Wash- Congress and this President can make tax rates will never introduce enough ington. In real terms, the average in 1997 on behalf of working families is revenue to balance the budget, just as American family pays more in federal to cut their taxes and to leave them a it will never produce enough output taxes than it spends on food, clothing, little bit more of their own money at and enough jobs.’’ President Kennedy transportation, insurance, and recre- the end of the day, the extensive de- was able to put these theories to work ation combined. bate that we have undertaken in the in the early 1960’s when he enacted sig- What is the payback for millions of past 2 years over fiscal policy has nificant tax cuts that sparked one of hardworking American families? It is helped us to understand that working the few periods of sustained growth increased crime rates, failing edu- families are indeed overtaxed. that we have experienced in the last cational systems, intrusive govern- The child tax credit is appropriate half century. ment, and a very real threat to our and necessary to stimulate economic It was 20 years later when President overall quality of life by the shrinking growth and to allow families to make Ronald Reagan cut taxes once again of America’s backbone—the middle more of their own spending decisions. that reinvigorated the economy, which class. It is my belief that over taxation The people of Minnesota sent me to responded enthusiastically with 19 mil- is slowly destroying the middle class Washington with their instructions to lion new jobs that were created, and American family. Families are working make the $500-per-child tax credit a top take-home pay grew 13 percent between harder and harder and taking home priority. Like struggling men and 1982 and 1996. It is now President Clin- less and less. Measured by average women nationwide, Minnesotans have ton who has the opportunity to work after-tax per capita income, families seen what our outrageous tax burden alongside Congress as we cut taxes and with children are now the lowest in- has done to their families over the past generate a new era of growth in the come group in America. Their average 40 years. It is far from merely being a economy and prosperity for American after-tax income is below that of elder- fact of life. Taxes today dominate the families. I am encouraged by his public ly households. It is below that of single family budget. cause for family tax relief, and in par- individuals, and it is below that of cou- There is no better argument for tax ticular his words in support of the $500- ples without children. The shrinking relief than to consider that taxpayers per-child tax credit. family paycheck because of ever-higher today are spending more to feed their With the President truly committed taxes forces families with children to Government than they are spending to to working with us, there is every rea- spend more time at work and less time feed, clothe, and shelter their families. son to believe that a plan that will bal- at home. Less family time translates When we debated the $500-per-child tax ance the budget and reduce the tax into children with less parental super- credit in the last Congress, some of my load for working families will pass this vision with all of its attendant prob- colleagues expressed their concern that Congress and be signed into law this lems. any tax relief now would jeopardize year. We made a promise to middle The Family Tax Fairness Act of 1997 their efforts to balance the Federal class Americans that we would cut with a $500 tax credit for every child budget. Balance the budget first, they their taxes. We laid the groundwork for under the age of 18, provides the stimu- said, and then cut taxes later. Their the $500-per-child tax credit in the lus to keep our families strong. It January 21, 1997 CONGRESSIONAL RECORD — SENATE S479 translates into over $25 billion of tax THE COMPUTER DONATION INCENTIVE ACT OF 1997 Mr. President, I ask unanimous con- relief each year, of which over 78 per- Mrs. BOXER. Mr. President, in sent that this bill be printed in the cent would directly benefit working March 1996 scores of volunteers RECORD. and middle class families. I am con- throughout California helped make There being no objection, the bill was vinced that parents, not government, NetDay 96 one of the most successful can best decide how to allocate re- one-day public projects in history. At ordered to be printed in the RECORD, as sources. Under this proposal, a family the time, we all noted that this elec- follows: with two children would receive $1,000 tronic barn-raising could be a turning S. 99 to pay for clothes, college, or health in- point in educational history—but only surance for the children. The Family if we followed through with other steps Be it enacted by the Senate and House of Rep- resentatives of the United States of America in Tax Fairness Act of 1997 is a statement to help our children travel the informa- Congress assembled, by our government and our society tion superhighway. I would like to take that all our families and all of our chil- one step by introducing the Computer SECTION 1. CHARITABLE CONTRIBUTIONS OF dren are valuable. Donation Incentive Act of 1997. SCIENTIFIC EQUIPMENT TO ELE- The successful education of Ameri- MENTARY AND SECONDARY In closing, I am reminded of the SCHOOLS. words of William Sumner in his speech, ca’s children is closely linked to the (a) IN GENERAL.—Subparagraph (B) of sec- The Forgotten Man. use of innovative educational tech- tion 170(e)(4) of the Internal Revenue Code of ‘‘The Forgotten Man . . . delving nologies, particularly computer-based instruction and research. Unfortu- 1986 is amended to read as follows: away in patient industry supporting ‘‘(B) QUALIFIED RESEARCH OR EDUCATION his family, paying his taxes, casting nately, however, far too many public elementary and secondary school class- CONTRIBUTION.—For purposes of this para- his vote, supporting the church and graph, the term ‘qualified research or edu- school . . . but he is the only one for rooms lack the computers they need to cation contribution’ means a charitable con- whom there is no provision in the great take advantage of these new edu- tribution by a corporation of tangible per- scramble and the big divide. Such is cational technologies. sonal property (including computer soft- The Computer Donation Incentive the Forgotten Man. He works, he votes, ware), but only if— Act will help get our students those generally he prays—but his chief busi- ‘‘(i) the contribution is to— computers. Current law allows com- ‘‘(I) an educational organization described ness in life is to pay . . . Who and puter manufacturers to receive a great- in subsection (b)(1)(A)(ii), where is the Forgotten Man in this er deduction for donations of comput- ‘‘(II) a governmental unit described in sub- case? Who will have to pay for it all?’’ ers to college and universities, for sci- section (c)(1), or Sadly, the Forgotten Man is a meta- ‘‘(III) an organization described in section entific and research purposes, than for phor for today’s American family. So, 41(e)(6)(B), donations made to elementary and sec- while I urge support for the repeal of ‘‘(ii) the contribution is made not later ondary schools for education purposes. the death tax—the inheritance tax— than 3 years after the date the taxpayer ac- That limitation may have made sense that killer of the American dream . . . quired the property (or in the case of prop- when this provision was enacted, before erty constructed by the taxpayer, the date and while I urge support for dramati- the personal computer boom, but not the construction of the property is substan- cally cutting the capital gains tax rate, in the era of the Information Super- tially completed), which both economists and experience highway, such a limitation is unrea- ‘‘(iii) the property is scientific equipment teach will actually increase federal sonable. or apparatus substantially all of the use of revenues, let us not forget the Amer- The Computer Donation Incentive which by the donee is for— ‘‘(I) research or experimentation (within ican family. Act provides computer manufacturers I urge my colleagues to join Senator the meaning of section 174), or for research the same enhanced deduction for do- training, in the United States in physical or GRAMS and myself in support of the nating computers for educational pur- biological sciences, or Family Tax Fairness Act of 1997. poses that they currently receive for ‘‘(II) in the case of an organization de- I thank the chair and yield the floor. donating computers to colleges and scribed in clause (i) (I) or (II), use within the Mr. NICKLES. Madam President, universities for scientific purposes. United States for educational purposes relat- Senator GRAMS and Senator Hutchin- Similarly, the bill will allow nonmanu- ed to the purpose or function of the organiza- son will be introducing legislation facturers to receive a deduction for do- tion, dealing with the $500 tax credit per nating computers to elementary and ‘‘(iv) the original use of the property began child. I compliment them on this legis- with the taxpayer (or in the case of property secondary schools for educational use. constructed by the taxpayer, with the lation. I am happy to cosponsor it with The Boxer-Chafee bill will provide a them. It is outstanding legislation that donee), reasonable incentive for businesses to ‘‘(v) the property is not transferred by the will restore individual families the op- donate computer to the schools. I donee in exchange for money, other prop- portunity to keep more of their own would like to emphasize the donated erty, or services, and money. I might mention that the defi- computers must be nearly new; those ‘‘(vi) the taxpayer receives from the donee nition of ‘‘child’’ in the legislation donated by manufacturers must be no a written statement representing that its which we are introducing includes chil- more than 2 year old, and those do- use and disposition of the property will be in dren up to age 18 in contrast to that in- nated by nonmanufacturers must be no accordance with the provisions of clauses troduced by the President which is up more than 3 year old. (iv) and (v).’’ to age 12, a big difference. It is a very Along with computers and software, (b) DONATIONS TO CHARITY FOR REFURBISH- profamily, very positive protaxpayer businesses should also donate their ex- ING.—Section 170(e)(4) of the Internal Reve- piece of legislation of which I am very pertise, providing the training required nue Code of 1986 is amended by adding at the happy to cosponsor. And I compliment to bring our schools fully on-line—and end the following new subparagraph: my colleagues from Minnesota and Ar- we challenge them to do so. Teachers ‘‘(D) DONATIONS TO CHARITY FOR REFURBISH- and students both need such training in ING.—For purposes of this paragraph, a chari- kansas for their leadership on this table contribution by a corporation shall be issue. order to integrate computer-based les- treated as a qualified research or education I yield the floor. sons into their basic curriculum. contribution if— Mr. GRAMS addressed the Chair. Alone, neither NetDay nor an adjust- ‘‘(i) such contribution is a contribution of The PRESIDING OFFICER. The Sen- ment to the Tax Code can solve all our property described in subparagraph (B)(iii) ator from Minnesota. educational problems or even make to an organization described in section every student computer literate for the 501(c)(3) and exempt from taxation under sec- By Mrs. BOXER: next century. But together, each ini- tion 501(a), S. 99. A bill to amend the Internal tiative we take will help provide our ‘‘(ii) such organization repairs and refur- Revenue Code of 1986 to allow compa- students with the tools they need to bishes the property and donates the property nies to donate scientific equipment to to an organization described in subparagraph drive on the information Superhighway (B)(i), and elementary and secondary schools for and compete in a global information- ‘‘(iii) the taxpayer receives from the orga- use in their educational programs, and based marketplace. Such initiatives nization to whom the taxpayer contributed for other purposes; to the Committee are investments in the futures of our the property a written statement represent- on Finance. children. ing that its use of the property (and any use S480 CONGRESSIONAL RECORD — SENATE January 21, 1997 by the organization to which it donates the The act also protects airlines from ‘‘(i) filing of the complaint; property) meets the requirements of this frivolous complaints by establishing a ‘‘(ii) allegations contained in the com- paragraph.’’ fine which will be imposed on an em- plaint; (c) CONFORMING AMENDMENTS.— ‘‘(iii) substance of evidence supporting the (1) Paragraph (4)(A) of section 170(e) of the ployee who files a complaint if the De- partment of Labor determines that complaint; and Internal Revenue Code of 1986 is amended by ‘‘(iv) opportunities that are afforded to the striking ‘‘qualified research contribution’’ there is no merit to the complaint. air carrier, contractor, or subcontractor each place it appears and inserting ‘‘quali- I want to acknowledge the leadership under paragraph (2). fied research or education contribution’’. of Representative JAMES CLYBURN who ‘‘(2) INVESTIGATION; PRELIMINARY ORDER.— (2) The heading for section 170(e)(4) of such will introduce the bill in the House of ‘‘(A) IN GENERAL.—Not later than 60 days Code is amended by inserting ‘‘OR EDU- Representatives. I am pleased to intro- after receiving a complaint under paragraph CATION’’ after ‘‘RESEARCH’’. duce the companion legislation in the (1), and after affording the air carrier, con- (d) EFFECTIVE DATE.—The amendments tractor, or subcontractor named in the com- made by this section shall apply to taxable Senate. plaint the opportunities specified in subpara- years beginning after December 31, 1996. This bill will provide important pro- tections to aviation workers and the graph (B), the Secretary of Labor shall con- By Mr. KERRY: general public. I urge my colleagues to duct an investigation to determine whether S. 100. A bill to amend title 49, Unit- join me in supporting it. there is reasonable cause to believe that a ed States Code, to provide protection Mr. President, I ask unanimous con- complaint submitted under this subsection has merit. for airline employees who provide cer- sent that the text of the bill be printed ‘‘(B) OPPORTUNITY FOR RESPONSE.—Before tain air safety information, and for in the RECORD. the date specified in subparagraph (A), the other purposes; to the Committee on There being no objection, the bill was Secretary of Labor shall afford the air car- Labor and Human Resources. ordered to be printed in the RECORD, as rier, contractor, or subcontractor named in AVIATION SAFETY PROTECTION ACT follows: the complaint an opportunity to— Mr. KERRY. Mr. President, in an ef- S. 100 ‘‘(i) submit to the Secretary of Labor a fort to increase overall safety of the Be it enacted by the Senate and House of Rep- written response to the complaint; and airline industry, I am introducing the resentatives of the United States of America in ‘‘(ii) meet with a representative of the Sec- ‘‘Aviation Safety Protection Act of Congress assembled, retary of Labor to present statements from witnesses. 1997,’’ which would establish whistle SECTION 1. SHORT TITLE. This Act may be cited as the ‘‘Aviation ‘‘(C) NOTIFICATION.—Upon completion of an blower protection for aviation workers. investigation under subparagraph (A), the The worker protections contained in Safety Protection Act of 1997’’. SEC. 2. PROTECTION OF EMPLOYEES PROVIDING Secretary of Labor shall notify the com- the Occupational Safety and Health AIR SAFETY INFORMATION. plainant and the air carrier, contractor, or Act [OSHA] are very important to (a) GENERAL RULE.—Chapter 421 of title 49, subcontractor alleged to have committed a American workers. OSHA properly pro- United States Code, is amended by adding at violation of subsection (a) of the findings of tects both private and Federal Govern- the end the following new subchapter: the investigation. ment employees who report health and ‘‘SUBCHAPTER III—WHISTLEBLOWER ‘‘(D) ORDERS.—If, on the basis of the inves- safety violations from reprisal by their PROTECTION PROGRAM tigation conducted under this paragraph, the Secretary of Labor concludes that there is a employers. However, because of a loop- ‘‘§ 42121. Protection of employees providing reasonable cause to believe that a violation air safety information hole, aviation employees are not cov- of subsection (a) has occurred, the Secretary ered by these protections. Flight at- ‘‘(a) DISCRIMINATION AGAINST AIRLINE EM- shall— tendants and other airline employees PLOYEES.—No air carrier or contractor or ‘‘(i) issue a preliminary order providing the are in the best position to recognize subcontractor of an air carrier may dis- relief prescribed by paragraph (3)(B); and breaches in safety regulations and can charge an employee of the air carrier or the ‘‘(ii) provide a copy of the order to the par- contractor or subcontractor of an air carrier ties specified in subparagraph (C). be the critical link in ensuring safer or otherwise discriminate against any such ‘‘(E) OBJECTIONS.—Not later than 30 days air travel. Currently, those employees employee with respect to compensation, after receiving a notification under subpara- who work for unscrupulous airlines terms, conditions, or privileges of employ- graph (C), the air carrier, contractor, or sub- face the possibility of harassment, neg- ment because the employee (or any person contractor alleged to have committed a vio- acting pursuant to a request of the em- ative disciplinary action, and even ter- lation in a complaint filed under this sub- ployee)— mination if they report work viola- section or the complainant may file an ob- ‘‘(1) provided, caused to be provided, or is tions. jection to the findings of an investigation about to provide or cause to be provided to Aviation employees perform an im- conducted under this paragraph or a prelimi- the Federal Government information relat- portant public service when they nary order issued under this paragraph and ing to air safety under this subtitle or any request a hearing on the record. The filing of choose to report safety concerns. No other law of the United States; an objection under this subparagraph shall employee should be put in the position ‘‘(2) has filed, caused to be filed, or is about of having to choose between his or her to file or cause to be filed a proceeding relat- not operate to stay any reinstatement rem- job and reporting violations that ing to air carrier safety under this subtitle edy contained in a preliminary order issued under this paragraph. threaten the safety of passengers and or any other law of the United States; ‘‘(F) HEARINGS.—A hearing requested under crew. For that reason, we need a strong ‘‘(3) testified or is about to testify in such a proceeding; or this paragraph shall be conducted expedi- whistle blower law to protect aviation tiously. employees from retaliation by their ‘‘(4) assisted or participated or is about to assist or participate in such a proceeding. ‘‘(G) FINAL ORDER.—If no hearing is re- employers when reporting incidents to ‘‘(b) DEPARTMENT OF LABOR COMPLAINT quested by the date specified in subpara- Federal authorities. Americans who PROCEDURE.— graph (E), a preliminary order shall be con- travel on commercial airlines deserve ‘‘(1) FILING AND NOTIFICATION.— sidered to be a final order that is not subject the safeguards that exist when flight ‘‘(A) IN GENERAL.—In accordance with this to judicial review. attendants and other airline employees paragraph, a person may file (or have a per- ‘‘(3) FINAL ORDER.— ‘‘(A) DEADLINE FOR ISSUANCE; SETTLEMENT can step forward to help Federal au- son file on behalf of that person) a complaint with the Secretary of Labor if that person AGREEMENTS.— thorities enforce safety laws. ‘‘(i) IN GENERAL.—Not later than 120 days This bill would close the loophole in believes that an air carrier or contractor or subcontractor of an air carrier discharged or after conclusion of a hearing under para- OSHA law and provide the necessary otherwise discriminated against that person graph (2), the Secretary of Labor shall issue protections for aviation employees who in violation of subsection (a). a final order that— provide safety violation information to ‘‘(B) REQUIREMENTS FOR FILING COM- ‘‘(I) provides relief in accordance with this Federal authorities or testify about or PLAINTS.—A complaint referred to in sub- paragraph; or assist in disclosure of safety violations. paragraph (A) may be filed not later than 180 ‘‘(II) denies the complaint. The act provides a Department of days after an alleged violation occurs. The ‘‘(ii) SETTLEMENT AGREEMENT.—At any Labor complaint procedure for employ- complaint shall state the alleged violation. time before issuance of a final order under this paragraph, a proceeding under this sub- ees who experience employer reprisal ‘‘(C) NOTIFICATION.—Upon receipt of a com- plaint submitted under subparagraph (A), section may be terminated on the basis of a for reporting such violations, and the Secretary of Labor shall notify the air settlement agreement entered into by the assures that there are strong enforce- carrier, contractor, or subcontractor named Secretary of Labor, the complainant, and the ment and judicial review provisions for in the complaint and the Administrator of air carrier, contractor, or subcontractor al- fair implementation of the protections. the Federal Aviation Administration of the— leged to have committed the violation. January 21, 1997 CONGRESSIONAL RECORD — SENATE S481 ‘‘(B) REMEDY.—If, in response to a com- party if the court determines that the professional schools which provide sig- plaint filed under paragraph (1), the Sec- awarding of those costs is appropriate. nificant training in domestic violence. retary of Labor determines that a violation ‘‘(c) MANDAMUS.—Any nondiscretionary It defines significant training to in- of subsection (a) has occurred, the Secretary duty imposed by this section shall be en- clude identifying victims of domestic of Labor shall order the air carrier, contrac- forceable in a mandamus proceeding brought violence and maintaining complete tor, or subcontractor that the Secretary of under section 1361 of title 28. Labor determines to have committed the ‘‘(d) NONAPPLICABILITY TO DELIBERATE VIO- medical records, providing medical ad- violation to— LATIONS.—Subsection (a) shall not apply with vice regarding the dynamics and na- ‘‘(i) take action to abate the violation; respect to an employee of an air carrier, or ture of domestic violence, and referring ‘‘(ii) reinstate the complainant to the contractor or subcontractor of an air carrier victims to appropriate public and non- former position of the complainant and en- who, acting without direction from the air profit entities for assistance. sure the payment of compensation (including carrier (or an agent, contractor, or sub- The bill also defines domestic vio- back pay) and the restoration of terms, con- contractor of the air carrier), deliberately lence in the broadest terms, to include ditions, and privileges associated with the causes a violation of any requirement relat- battering, child abuse and elder abuse. employment; and ing to air carrier safety under this subtitle I hope my colleagues agree that this ‘‘(iii) provide compensatory damages to or any other law of the United States.’’. the complainant. legislation is a critical next step in the (b) CONFORMING AMENDMENT.—The chapter fight to bring the brutality of domestic ‘‘(C) COSTS OF COMPLAINT.—If the Secretary analysis for chapter 421 of title 49, United of Labor issues a final order that provides for States Code, is amended by adding at the end violence out in the open. It mobilizes relief in accordance with this paragraph, the the following: our Nation’s health care providers to Secretary of Labor, at the request of the recognize and treat its victims—and complainant, shall assess against the air car- ‘‘SUBCHAPTER III—WHISTLEBLOWER will ultimately save lives by helping to rier, contractor, or subcontractor named in PROTECTION PROGRAM break the cycle of violence. the order an amount equal to the aggregate ‘‘42121. Protection of employees providing air Mr. President, I ask unanimous con- amount of all costs and expenses (including safety information.’’. sent that the text of the bill be printed attorney and expert witness fees) reasonably SEC. 3. CIVIL PENALTY. in the RECORD. incurred by the complainant (as determined Section 46301(a)(1)(A) of title 49, United There being no objection, the bill was by the Secretary of Labor) for, or in connec- States Code, is amended by striking ‘‘sub- tion with, the bringing of the complaint that ordered to be printed in the RECORD, as chapter II of chapter 421’’ and inserting ‘‘sub- follows: resulted in the issuance of the order. chapter II or III of chapter 421’’. ‘‘(D) FRIVOLOUS COMPLAINTS.—If the Sec- S. 101 retary of Labor finds that a complaint By Mrs. BOXER: Be it enacted by the Senate and House of Rep- brought under paragraph (1) is frivolous or S. 101. A bill to amend the Public resentatives of the United States of America in was brought in bad faith, the Secretary of Health Service Act to provide for the Congress assembled, Labor may award to the prevailing employer SECTION 1. SHORT TITLE. a reasonable attorney fee in an amount not training of health professions students This Act may be cited as the ‘‘Domestic to exceed $5,000. with respect to the identification and Violence Identification and Referral Act of ‘‘(4) REVIEW.— referral of victims of domestic vio- 1997’’. ‘‘(A) APPEAL TO COURT OF APPEALS.— lence; to the Committee on Labor and SEC. 2. ESTABLISHMENT, FOR CERTAIN HEALTH ‘‘(i) IN GENERAL.—Not later than 60 days Human Resources. PROFESSIONS PROGRAMS, OF PRO- after a final order is issued under paragraph VISIONS REGARDING DOMESTIC VIO- (3), a person adversely affected or aggrieved THE DOMESTIC VIOLENCE IDENTIFICATION AND LENCE. by that order may obtain review of the order REFERRAL ACT (a) TITLE VII PROGRAMS; PREFERENCES IN in the United States court of appeals for the Mrs. BOXER. Mr. President, I rise FINANCIAL AWARDS.—Section 791 of the Pub- circuit in which the violation allegedly oc- today to introduce the Domestic Vio- lic Health Service Act (42 U.S.C. 295j) is curred or the circuit in which the complain- lence Identification and Referral Act. amended by adding at the end the following: ant resided on the date of that violation. Spousal abuse, child abuse, and elder ‘‘(c) PREFERENCES REGARDING TRAINING IN IDENTIFICATION AND REFERRAL OF VICTIMS OF ‘‘(ii) REQUIREMENTS FOR JUDICIAL REVIEW.— abuse injures millions of Americans A review conducted under this paragraph DOMESTIC VIOLENCE.— shall be conducted in accordance with chap- each year, and is growing at an alarm- ‘‘(1) IN GENERAL.—In the case of a health ter 7 of title 5. The commencement of pro- ing rate. An estimated 2 to 4 million professions entity specified in paragraph (2), ceedings under this subparagraph shall not, women are beaten by their spouses or the Secretary shall, in making awards of unless ordered by the court, operate as a former spouses each year. In 1993, 2.9 grants or contracts under this title, give stay of the order that is the subject of the re- million children were reported abused preference to any such entity (if otherwise a view. or neglected, about triple the number qualified applicant for the award involved) ‘‘(B) LIMITATION ON COLLATERAL ATTACK.— reported in 1980. Studies also showed that has in effect the requirement that, as a An order referred to in subparagraph (A) condition of receiving a degree or certificate shall not be subject to judicial review in any that spouse abuse and child abuse often (as applicable) from the entity, each student criminal or other civil proceeding. go hand-in-hand. have had significant training in carrying out ‘‘(5) ENFORCEMENT OF ORDER BY SECRETARY Doctors, nurses, and other health the following functions as a provider of OF LABOR.— care professionals are on the front lines health care: ‘‘(A) IN GENERAL.—If an air carrier, con- of this abuse, but they cannot stop ‘‘(A) Identifying victims of domestic vio- tractor, or subcontractor named in an order what they have been trained to see or lence, and maintaining complete medical issued under paragraph (3) fails to comply talk about. The Domestic Violence records that include documentation of the with the order, the Secretary of Labor may Identification and Referral Act ad- examination, treatment given, and referrals file a civil action in the United States dis- made, and recording the location and nature trict court for the district in which the vio- dresses this need by encouraging medi- of the victim’s injuries. lation occurred to enforce that order. cal schools to incorporate training on ‘‘(B) Examining and treating such victims, ‘‘(B) RELIEF.—In any action brought under domestic violence into their curricu- within the scope of the health professional’s this paragraph, the district court shall have lums. discipline, training, and practice, including, jurisdiction to grant any appropriate form of There is a need for this legislation. at a minimum, providing medical advice re- relief, including injunctive relief and com- While many medical specialities, hos- garding the dynamics and nature of domestic pensatory damages. pitals, and other organizations have violence. ‘‘(6) ENFORCEMENT OF ORDER BY PARTIES.— made education about domestic vio- ‘‘(C) Referring the victims to public and ‘‘(A) COMMENCEMENT OF ACTION.—A person nonprofit private entities that provide serv- on whose behalf an order is issued under lence a priority, this instruction typi- ices for such victims. paragraph (3) may commence a civil action cally occurs on the job or as part of a ‘‘(2) RELEVANT HEALTH PROFESSIONS ENTI- against the air carrier, contractor, or sub- continuing medical education program. TIES.—For purposes of paragraph (1), a health contractor named in the order to require A 1994 survey by the Association of professions entity specified in this paragraph compliance with the order. The appropriate American Medical Colleges [AAMC] is any entity that is a school of medicine, a United States district court shall have juris- found that 60 percent of medical school school of osteopathic medicine, a graduate diction, without regard to the amount in graduates rated the time devoted to in- program in mental health practice, a school controversy or the citizenship of the parties, struction in domestic violence as inad- of nursing (as defined in section 853), a pro- to enforce the order. gram for the training of physician assist- ‘‘(B) ATTORNEY FEES.—In issuing any final equate. ants, or a program for the training of allied order under this paragraph, the court may The bill I am introducing today health professionals. award costs of litigation (including reason- would give preference in Federal fund- ‘‘(3) REPORT TO CONGRESS.—Not later than 2 able attorney and expert witness fees) to any ing to those medical and other health years after the date of the enactment of the S482 CONGRESSIONAL RECORD — SENATE January 21, 1997

Domestic Violence Identification and Refer- FORDS, Mr. LEAHY, Mr. INOUYE, retary of Health and Human Services ral Act of 1997, the Secretary shall submit to Ms. MIKULSKI, and Mr. REID): to do two things: First, to develop and the Committee on Commerce of the House of S. 102. A bill to amend title XVIII of implement payment amounts for out- Representatives, and the Committee on the Social Security Act to improve patient diabetes education programs; Labor and Human Resources of the Senate, a report specifying the health professions enti- medicare treatment and education for and second, to adopt quality standards ties that are receiving preference under beneficiaries with diabetes by provid- for outpatient education programs. paragraph (1); the number of hours of train- ing coverage of diabetes outpatient Only qualified programs would be eligi- ing required by the entities for purposes of self-management training services and ble to receive Medicare reimbursement. such paragraph; the extent of clinical experi- uniform coverage of blood-testing Furthermore, this legislation would ence so required; and the types of courses strips for individuals with diabetes; to mandate test strip coverage for all dia- through which the training is being pro- the Committee on Finance. betics. vided. Mr. BREAUX. Mr. President, diabe- This preventive measure is a sensible ‘‘(4) DEFINITIONS.—For purposes of this sub- tes is the fourth leading cause of death section, the term ‘domestic violence’ in- one that will show savings for the Med- cludes behavior commonly referred to as do- from diseases in the United States. icare Program in the long run. I en- mestic violence, sexual assault, spousal Deaths accountable to diabetes or re- courage my colleagues to join me in abuse, woman battering, partner abuse, child sulting complications number about supporting its passage this Congress. abuse, elder abuse, and acquaintance rape.’’. 250,000 per year. Diabetes also results (b) TITLE VIII PROGRAMS; PREFERENCES IN in about 12,000 new cases of blindness By Mr. MURKOWSKI (for him- FINANCIAL AWARDS.—Section 860 of the Pub- each year and greatly increases an in- self, Mr. CRAIG, Mr. GRAMS, Mr. lic Health Service Act (42 U.S.C. 298b–7) is dividual’s chance of heart disease, kid- KEMPTHORNE, Mr. ABRAHAM, amended by adding at the end the following: ney failure, and stroke. Mr. HELMS, Mr. THURMOND, Mr. ‘‘(f) PREFERENCES REGARDING TRAINING IN The terrible irony, Mr. President, is KYL, Mr. HOLLINGS, Mr. MACK, IDENTIFICATION AND REFERRAL OF VICTIMS OF that diabetes is largely a treatable con- Mr. FAIRCLOTH, Mr. HATCH, Mr. DOMESTIC VIOLENCE.— dition. While there is no known cure, WARNER, Mr. BOND, Mr. SMITH, ‘‘(1) IN GENERAL.—In the case of a health individuals who have diabetes can lead Mr. ROBERTS, Mr. SANTORUM, professions entity specified in paragraph (2), completely normal, active lives so long Mr. LOTT, and Mr. JEFFORDS): the Secretary shall, in making awards of as they stick to a proper diet, carefully S. 104. A bill to amend the Nuclear grants or contracts under this title, give Waste Policy Act of 1982; to the Com- preference to any such entity (if otherwise a monitor the amount of sugar in their qualified applicant for the award involved) blood, and take their medicine, which mittee on Energy and Natural Re- that has in effect the requirement that, as a may or may not include insulin. In sources. condition of receiving a degree or certificate order to take proper care of them- THE NUCLEAR WASTE POLICY ACT OF 1997 (as applicable) from the entity, each student selves, diabetics need to take self- Mr. MURKOWSKI. Mr. President, have had significant training in carrying out maintenance education programs—at last summer, the U.S. Court of Appeals the following functions as a provider of least once when they are diagnosed issued a ruling that confirmed some- health care: thing that many of us already under- ‘‘(A) Identifying victims of domestic vio- with the disease and then periodically lence, and maintaining complete medical after that to keep up with the latest stood: the Federal Government has an records that include documentation of the treatments and any changes in their obligation to provide a safe, central- examination, treatment given, and referrals own condition. ized storage place for our Nation’s made, and recording the location and nature Appropriate preventive education spent nuclear fuel and nuclear waste, of the victim’s injuries. services for diabetics have the poten- beginning less than 1 year from today. ‘‘(B) Examining and treating such victims, tial to save a great deal of money that This is a commitment that Congress, within the scope of the health professional’s would otherwise go for hospitalizations and the Department of Energy, made 15 discipline, training, and practice, including, and other acute care costs—not to years ago. We’ve collected $12 billion at a minimum, providing medical advice re- garding the dynamics and nature of domestic mention a great deal of unnecessary from America’s ratepayers for this pur- violence. pain and suffering. CBO projects that pose. But after spending 6 billion of ‘‘(C) Referring the victims to public and this proposal would save Medicare those dollars, the Federal Government nonprofit private entities that provide serv- money in the long-run. is still not prepared to deliver on its ices for such victims. Medicare currently covers diabetes promise to take and safely dispose of ‘‘(2) RELEVANT HEALTH PROFESSIONS ENTI- self-maintenance education services in our Nation’s nuclear waste by 1998. TIES.—For purposes of paragraph (1), a health inpatient or hospital-based settings Hardworking Americans have paid for professions entity specified in this paragraph and in limited outpatient settings, spe- this as part of their monthly electric is any entity that is a school of nursing or other public or nonprofit private entity that cifically hospital outpatient depart- bill. But they haven’t gotten results. is eligible to receive an award described in ments or rural health clinics. Medicare So a lawsuit was filed, and the court such paragraph. does not cover education services if confirmed that there is a legal obliga- ‘‘(3) REPORT TO CONGRESS.—Not later than 2 they are given in any other outpatient tion, as well as a moral one. We have years after the date of the enactment of the setting, such as a doctor’s office. Even reached a crossroads. The job of fixing Domestic Violence Identification and Refer- the limited coverage of outpatient set- this program is ours. The time for fix- ral Act of 1997, the Secretary shall submit to tings that is currently permitted under ing the program is now. the Committee on Commerce of the House of Medicare is subject to State-by-State Today, high-level nuclear waste and Representatives, and the Committee on highly radioactive used nuclear fuel is Labor and Human Resources of the Senate, a variation according to fiscal report specifying the health professions enti- intermediaries’ interpretation. accumulating at over 80 sites in 41 ties that are receiving preference under Medicare also covers the cost of the States, including waste stored at DOE paragraph (1); the number of hours of train- paper test strips that are used to mon- weapons facilities. It is stored in popu- ing required by the entities for purposes of itor the sugar levels in the blood—but lated areas, near our neighborhoods such paragraph; the extent of clinical experi- only for diabetics who require insulin and schools, on the shores of our lakes ence so required; and the types of courses to control their disease. All noninsulin and rivers, in the backyard of constitu- through which the training is being pro- dependent diabetics must purchase ents young and old all across this land. vided. these test strips at their own expense. Used nuclear fuel is being stored near ‘‘(4) DEFINITIONS.—For purposes of this sub- section, the term ‘domestic violence’ in- Today, I am introducing the Medi- the east and west coasts, where most cludes behavior commonly referred to as do- care Diabetes Education and Supplies Americans live. It may be in your mestic violence, sexual assault, spousal Amendments of 1997. This legislation town. Near your neighborhood. abuse, woman battering, partner abuse, child would provide Medicare coverage for Unfortunately, used fuel is being abuse, elder abuse, and acquaintance rape.’’. outpatient education on a consistent stored in pools that were not designed equitable basis throughout the coun- for long-term storage. Some of this fuel By Mr. BREAUX (for himself, Mr. try. The bill would extend Medicare is already over 30 years old. Each year AKAKA, Mr. BINGAMAN, Mr. coverage of outpatient programs be- that goes by, our ability to continue CHAFEE, Mr. COCHRAN, Mr. yond hospital-based programs and storage of this used fuel at each of CRAIG, Mr. GLENN, Mr. JEF- rural health clinics and direct the Sec- these sites in a safe and responsible January 21, 1997 CONGRESSIONAL RECORD — SENATE S483 way diminishes. It is irresponsible to also requires that the Secretary de- him, the President determines, in his let this situation continue. It is unsafe velop, in consultation with the Sec- discretion, that Yucca Mountain is not to let this dangerous radioactive mate- retary of Transportation, a comprehen- suitable for development as a reposi- rial continue to accumulate at more sive management plan that ensures the tory, then the Secretary shall cease than 80 sites all across the country. It safe transportation of these materials. work on both the interim and perma- is unwise to block the safe storage of Transportation requirements.—The nent repository programs at the Yucca this used fuel in a remote area, away bill contains language clarifying that Mountain site. The bill further pro- from high populations. This is a na- transportation of spent fuel under the vides that, if the President makes such tional problem that requires a coordi- Nuclear Waste Policy Act shall be gov- a determination, he shall have 18 nated, national solution. erned by all requirements of Federal, months to designate an interim storage Today, on behalf of myself, Mr. State, and local governments and In- facility site. If the President fails to CRAIG, Mr. GRAMS, Mr. KEMPTHORNE, dian tribes to the same extent that any designate a site, or if a site he has des- Mr. ABRAHAM, Mr. HELMS, Mr. THUR- person engaging in transportation in ignated has not be approved by Con- MOND, Mr. KYL, Mr. HOLLINGS, Mr. interstate commerce must comply with gress within 2 years of his determina- MACK, Mr. FAIRCLOTH, Mr. HATCH, Mr. those requirements, as provided by the tion, the Secretary is instructed to WARNER, Mr. BOND, Mr. ROBERT SMITH, Hazardous Materials Transportation construct an interim storage facility at Mr. ROBERTS, Mr. SANTORUM, Mr. LOTT, Act. The bill also requires the Sec- the Yucca Mountain site. This provi- and Mr. JEFFORDS, I introduce the text retary to provide technical assistance sion ensures that the construction of of S. 1936, from the 104th Congress, as and funds for training to unions with an interim storage facility at the the Nuclear Waste Policy Act of 1997. experience with safety training for Yucca Mountain site will not occur be- This legislation, which was passed by transportation workers. In addition, fore the President and Congress have the Senate last summer by a 63-to-37 the bill clarifies that existing em- had an ample opportunity to review vote, sets forth a program that will ployee protections in title 49 of the the technical assessment of the suit- allow the Department of Energy to United States Code concerning the re- ability of the Yucca Mountain site for meet its obligation as soon as possible. fusal to work in hazardous conditions a permanent repository and to des- The bill provides for an integrated sys- apply to transportation under this act. ignate an alternative site for interim tem to manage used fuel from commer- Finally, S. 1936 provides authority for storage based upon that technical in- cial nuclear powerplants and high-level the Secretary of Transportation to es- formation. However, this provision also radioactive waste from DOE’s nuclear tablish training standards, as nec- ensures that, ultimately, an interim weapons facilities. The integrated sys- essary, for workers engaged in the storage facility site will be chosen. tem includes construction and oper- transportation of spent fuel and high- Without this assurance, we leave open ation of a temporary storage center, a level waste. the possibility we will find in 1998 that safe transportation network to transfer Interim storage facility.—In order to we have no interim storage, no perma- these byproducts, and continuing sci- ensure that the size and scope of the nent repository program and, after entific studies at Yucca Mountain, NV, interim storage facility is manageable more than 15 years and $6 billion spent, to determine if it is a suitable reposi- in the context of the overall nuclear that we are back to where we started tory site. waste program, and yet adequate to ad- in 1982 when we passed the first version During floor consideration of S. 1936 dress the Nation’s immediate spent of the Nuclear Waste Policy Act. last year, we received many construc- fuel storage needs, the bill would limit During the debate that will unfold, tive suggestions for improving the bill. the size of phase I of the interim stor- we will have the Senators from Nevada The final version of S. 1936 passed by age facility to 15,000 metric tons of oppose the bill with all the arguments the Senate incorporated many of these spent fuel and the size of phase II of that they can muster. That’s under- changes. The most important provi- the facility to 40,000 metric tons. Phase standable. They are merely doing what sions of the bill include: II of the facility would be expandable Nevadans have asked them to do. No- Role for EPA.—The bill provides that to 60,000 metric tons if the Secretary body wants nuclear waste in their the Environmental Protection Agency fails to meet his projected goals with State, but it has to go somewhere. shall issue standards for the protection regard to licensing of the permanent Both Senators from Nevada are friends of the public from releases of radio- repository site. of mine. We’ve talked about this issue active materials from a permanent nu- Preemption of other laws.—The bill at length. They are doing what they feel they must do to satisfy Nevadans. clear waste repository. The Nuclear provides that, if any law does not con- But as U.S. Senators, we must some- Regulatory Commission is required to flict with the provisions of the Nuclear times take a national perspective. We base its licensing determination on Waste Policy Act and the Atomic En- must do what’s best for the country as whether the repository can be operated ergy Act, that law will govern. State a whole. and local laws are preempted only if in accordance with EPA’s radiation No one can continue to pretend that protection standards. those laws are inconsistent with or du- there is an unlimited amount of time National Environmental Policy Act plicative of the Nuclear Waste Policy to deal with this problem. The Federal [NEPA].—The bill complies fully with Act or the Atomic Energy Act. This Government must act—and act now— NEPA by requiring two full environ- language is consistent with the pre- to ensure that there is a safe and se- mental impact statements, one in ad- emption authority found in the exist- cure place to put radioactive waste it vance of operation of the temporary ing Hazardous Materials Transpor- is obligated to accept. Although the storage facility and one in advance of tation Act. court did not address the issue of rem- repository licensing by the Nuclear Finally, the bill contains bipartisan edies, the court was very clear that Regulatory Commission. The bill pro- language that was drafted to address DOE has an obligation to take spent vides that where Congress has statu- the administration’s objections to the nuclear fuel in 1998, whether or not a torily determined need, location, and siting of an interim facility at the Ne- repository is ready. size of the facilities, these issues need vada test site before the viability as- So far, DOE’s only response to the not be reconsidered. sessment of the Yucca Mountain per- court’s decision has been to send out a Transportation routing.—The bill in- manent repository site was available.— letter asking for suggestions on how it cludes language of an amendment of- The language provides that construc- can meet its obligation to take spent fered by Senator MOSELEY-BRAUN, tion shall not begin on an interim stor- fuel in 1998. Finally, it is clear that we which provides that, in order to ensure age facility at Yucca Mountain before all agree on the question. Now is the that spent nuclear fuel and high-level December 31, 1998. The bill provides for time for answers. nuclear waste is transported safely, the the delivery of an assessment of the vi- We have a clear and simple choice. Secretary of Energy will use transpor- ability of the Yucca Mountain site to We can choose to have one remote, tation routes that minimize, to the the President and Congress by the Sec- safe, and secure nuclear waste storage maximum practicable extent, transpor- retary 6 months before the construc- facility. Or through inaction and delay, tation through populated and sensitive tion can begin on the interim facility. we can face an uncertain judicial rem- environmental areas. The language If, based upon the information before edy which will almost certainly be S484 CONGRESSIONAL RECORD — SENATE January 21, 1997 costly, and which is unlikely to actu- dressing the concerns that were raised tion Act which requires preparation of ally move waste out of America’s back- prior to and during floor debate in the an environmental impact statement yards. 104th Congress. This is legislation that before operation of the interim storage It is not morally right to shirk our will allow a solution for nuclear waste facility can begin. The Craig-Murkow- responsibility to protect the environ- disposal. Let us move forward to enact ski bill also directs that all shipments ment and the future of our children it into law. I encourage the administra- to the interim storage facility must and grandchildren. We cannot wait tion to work with us to make that a re- comply with existing transportation until 1998 to decide whether the De- ality. laws and standards. partment of Energy will store this nu- This bill provides a clear and simple The Nuclear Waste Policy Act offers clear waste. We have received letters choice. We can choose to have one, re- justice to the rate payers and electric from 23 State Governors and attorneys mote, safe, and secure nuclear waste utilities who have paid into the nuclear general, including Arizona, Arkansas, storage facility. Or, through inaction waste fund and gotten little if any ben- Delaware, Florida, Georgia, Illinois, and delay, we can perpetuate the sta- efit from those fees. After collecting Iowa, Kentucky, Maryland, Massachu- tus quo and have 80 such sites spread billions in fees, the Craig-Murkowski setts, Michigan, Minnesota, Mis- across the Nation. The courts have bill will force the Federal Government sissippi, New Mexico, North Carolina, made clear the Department of Energy to provide the storage facility prom- Ohio, Oregon, Pennsylvania, Rhode Is- must act to dispose of this material in ised to those currently storing spent land, South Carolina, Vermont, Vir- 1998. It is irresponsible to shirk our re- nuclear fuel. ginia, and Wisconsin, urging the Con- sponsibility to protect the environ- Mr. President, this is a very good bill gress to pass, and the President to sign, ment and the future for our children which solves a vexing nation problem. a bill that provides for an interim stor- and grandchildren. This Nation needs The Craig-Murkowski bill will make age site in Nevada. Congress must to confront its nuclear waste problem important progress in the way the speak now and provide the means to now. I urge my colleagues to support United States stores radioactive nu- build one, safe and monitored facility the Nuclear Waste Policy Act of 1997. clear waste. The bill will show the citi- at the Nevada test site, a unique site so Mr. KEMPTHORNE. Mr. President, I zens of this country that this Congress remote that the Government used it to rise in support of the Nuclear Waste will solve tough problems in a fair and explode nuclear weapons for 50 years, Policy Act of 1997 introduced today by rational manner. or another site designated by the Presi- my good friends Senator CRAIG and I urge my colleagues to support the dent and Congress. Senator MURKOWSKI, the chairman of Nuclear Waste Policy Act of 1997 and I The time is now—the Nuclear Waste the Senate Energy and Natural Re- want to thank Senators CRAIG and Policy Act of 1997 is the answer. source Committee. This important bill MURKOWSKI for their tenacious deter- Mr. CRAIG. Mr. President, today we will make substantial, necessary and mination to solve this national prob- begin a new Congress and an urgent en- meaningful progress in our Nation’s ef- lem. vironmental problem remains unre- fort to deal with the problem of radio- Mr. ABRAHAM. Mr. President, today solved. Today I am reintroducing legis- active nuclear waste. The bill is simi- I join several of my colleagues in co- lation to address the problem that con- lar to the Nuclear Waste Policy Act of sponsoring the Nuclear Waste Policy tinues to vex us—that is, how to ad- 1996 which passed the Senate by a 2-to- Act of 1997. This bill, a replica of the dress our Nation’s high-level nuclear 1 ratio last year. legislation that was passed by the Sen- waste disposal. The Nuclear Waste Pol- The Nuclear Waste Policy Act of 1997, ate during the 104th Congress, is vital icy Act of 1997 that is introduced today which I am proud to cosponsor, will es- to securing this Nation’s commercial answers this problem and is respon- tablish an interim storage facility for waste at a single, safe facility. sible, fair, environmentally friendly, spent nuclear fuel and high-level radio- I believe an agreement for the con- and supported by Members of both par- active waste at the Nevada test site. solidation of this Nation’s commercial ties. The interim storage site will address nuclear waste is long overdue. Today, Today, high-level nuclear waste and our near-term problem of safely storing old fuel is stored at over 100 facilities highly radioactive used nuclear fuel spent nuclear fuel and high-level waste around the country. In 1980, the De- continues to accumulate at more than while the characterization, permitting partment of Energy [DOE] recognized 80 sites in 41 States. Each year, as and construction of the permanent re- the danger of such a system and en- more and more fuel accumulates and pository at Yucca Mountain proceeds. tered into an agreement with much of our ability to continue to store this My State of Idaho currently stores a the nuclear power industry to fund the used fuel at each of these sites in a safe wide variety of Department of Energy, research and development of a central, and responsible way diminishes. The Navy and commercial reactor spent nu- permanent facility. DOE was to be re- only responsible choice is to support clear fuel at the Idaho National Engi- sponsible for collecting and storing the legislation that solves this problem by neering Laboratory. This spent nuclear fuel starting in 1988. Since 1980, the safely moving this used fuel to a safe, fuel is stored in temporary facilities DOE has collected over $11 billion of monitored facility in the remote Ne- that are reaching the end of their de- the taxpayers’ dollars for this perma- vada desert. This answer will lead us to sign life. This phenomenon is happen- nent facility. Last year, however, the a safer future for all Americans. ing across the country as temporary DOE announced that it will not be able To facilitate our consideration of storage facilities are used beyond their to begin storing waste from commer- such legislation, Senator MURKOWSKI design life because our Nation has not cial reactors until at least the year and I along with 16 other cosponsors developed a comprehensive policy of 2010. are introducing a bill to amend the Nu- dealing with nuclear waste. Instead of In my opinion, Michigan cannot wait clear Waste Policy Act of 1982. This dealing with this difficult issue, for far that long. Michigan has four nuclear legislation is identical to S. 1936 that too long our Government, under Demo- plants in operation today. All four passed the Senate toward the end of cratic and Republican leadership, has were designed with some storage capac- the past Congress. Unfortunately, that kicked the hard decisions down the ity, but none are capable of storing legislation was not acted upon by the road. The Craig-Murkowski bill will used fuel for an extended period of other body nor signed into law. It is my tackle this difficult problem and it de- time. Indeed, the Palisades plant in intent to assure that is not the fate of serves the support of the Congress and Southaven, MI, has already run out of this legislation. The Senate Energy the administration. used fuel storage space. The plant now and Natural Resources Committee will The Nuclear Waste Policy Act of 1997 stores its nuclear waste in steel casks hold a hearing on this bill on February directs the Environmental Protection which sit on a platform about 100 yards 5 and will move to a speedy markup. I Agency’s role to determine the appro- from Lake Michigan. This storage ar- encourage the Senate and House to act priate radiation protection standards rangement illustrates the need for a quickly and to send it to the President for the interim storage facility. The new national storage policy. for his signature. language directing establishment of an Mr. President, Michigan needs a na- This bill contains all of the impor- interim storage facility complies with tional storage facility for nuclear tant clarifications and changes ad- the National Environmental Protec- waste. I am pleased to be a cosponsor January 21, 1997 CONGRESSIONAL RECORD — SENATE S485 of the Nuclear Waste Policy Act and would choose habeas corpus every your resolve, and your duty under the con- hope that both the House and Senate time. To say again, this is one of the stitution, to prevent the enactment of such will move quickly to pass this legisla- fundamental civil liberties on which unconstitutional legislation and the con- tion and present it to the President. every democratic society of the world sequent disruption of so critical of part of our criminal punishment system. has built political liberties that have The constitutional infirmities reside in By Mr. MOYNIHAN: come subsequently. S. 105. A bill to repeal the habeas cor- three provisions of the legislation: one re- I make the point that the abuse of quiring federal courts to defer to erroneous pus requirement that a Federal court habeas corpus—appeals of capital sen- state court rulings on federal constitutional defer to State court judgments and up- tences—is hugely overstated. A 1995 matters, one imposing time limits which hold a conviction regardless of whether study by the Department of Justice’s could operate to completely bar any federal the Federal court believes that the Bureau of Justice Statistics deter- habeas corpus review at all, and one prevent State court erroneously interpreted mined that habeas corpus appeals by the federal courts from hearing the evidence Constitutional law, except in cases death row inmates constitute 1 percent necessary to decide a federal courts from hearing the evidence necessary to decide a where the Federal court believes the of all Federal habeas filings. Total ha- State court acted in an unreasonable federal constitutional question. They violate beas filings make up 4 percent of the the Habeas Corpus Suspension Clause, the ju- manner; to the Committee on the Judi- caseload of Federal district courts. And dicial powers of Article III, and due process. ciary. most Federal habeas petitions are dis- None of these provisions appeared in the bill HABEAS CORPUS LEGISLATION posed of in less than 1 year. The serious that you and Senator Biden worked out in Mr. MOYNIHAN. Mr. President, I in- delays occur in State courts, which the last Congress together with representa- troduce this bill to repeal an unprece- take an average of 5 years to dispose of tives of prosecutors’ organizations. dented provision—unprecedented until habeas petitions. If there is delay, the The deference requirement would bar any the 104th Congress—to tamper with the federal court from granting habeas corpus delay is with the State courts. relief where a state court has misapplied the constitutional protection of habeas It is troubling that Congress has un- United States Constitution, unless the con- corpus. dertaken to tamper with the Great stitutional error rose to a level of The provision reads: Writ in a bill designed to respond to ‘‘unreasonableness.’’ The time-limits provi- (d) An application for writ of habeas corpus the tragic circumstances of the Okla- sions set a single period of the filing of both on behalf of a person in custody pursuant to homa City bombing last year. Habeas state and federal post-conviction petitions the judgment of State court shall not be corpus has little to do with terrorism. (six months in a capital case and one year in granted with respect to any claim that was The Oklahoma City bombing was a other cases), commencing with the date a state conviction become final on direct re- adjudicated on the merits in State court pro- Federal crime and will be tried in Fed- ceedings unless the adjudication of the view. Under these provisions, the entire pe- claim— eral courts. riod could be consumed in the state process, (1) resulted in a decision that was contrary Nothing in our present circumstance through no fault of the prisoner or counsel, to, or involved an unreasonable application requires the suspension of habeas cor- thus creating an absolute bar to the filing of of, clearly established Federal law, as deter- pus, which was the practical effect of federal habeas corpus petition. Indeed, the mined by the Supreme Court of the United the provision in that bill. To require a period could be consumed before counsel had States; or Federal court to defer to a State even been appointed in the state process, so (2) resulted in a decision that was based on court’s judgment unless the State that the inmate would have no notice of the an unreasonable determination of the facts court’s decision is ‘‘unreasonably time limit or the fatal consequences of con- in light of the evidence presented in the suming all of it before filing a state petition. State court proceeding. wrong’’ effectively precludes Federal Both of these provisions, by flatly barring review. I find this disorienting. Last year we enacted a statute which federal habeas corpus review under certain Anthony Lewis has written of the ha- holds that constitutional protections circumstances, violate the Constitution’s beas provision in that bill: ‘‘It is a new do not exist unless they have been un- Suspension Clause, which provides: ‘‘The and remarkable concept in law: that privilege of the Writ of Habeas Corpus shall reasonably violated, an idea that would mere wrongness in a constitutional de- not be suspended, unless when in the case of have confounded the framers. Thus, we cision is not to be noticed.’’ We have rebellion or invasion the public safety may introduced a virus that will surely agreed to this; to what will we be require it’’ (Art. I, Sec. 9, cl. 1). Any doubt as spread throughout our system of laws. to whether this guarantee applies to persons agreeing next? I restate Mr. Lewis’ ob- Article I, section 9, clause 2 of the held in state as well as federal custody was servation, a person of great experience, Constitution stipulates, ‘‘The Privilege removed by the passage of the Fourteenth long a student of the courts, ‘‘It is a of the Writ of Habeas Corpus shall not Amendment and by the amendment’s fram- new and remarkable concept in law: be suspended, unless when in Cases of ers’ frequent mention of habeas corpus as that mere wrongness in a constitu- one of the privileges and immunities so pro- Rebellion or Invasion the public Safety tional decision is not to be noticed.’’ tected. may require it.’’ Backward reels the mind. The preclusion of access to habeas corpus We are mightily and properly con- On December 8, 1995, four former U.S. also violates Due Process. A measure is sub- cerned about the public safety, which Attorneys General, two Republicans ject to proscription under the due process is why we enacted the clause if it ‘‘offends some principle of justice and two Democrats, all persons with counterterrorism bill. But we have not so rooted in the traditions and conscience of whom I have the honor to be ac- been invaded, Mr. President, and the our people as to be ranked as fundamental,’’ quainted, Benjamin R. Civiletti, Jr., only rebellion at hand appears to be as viewed by ‘‘historical practice.’’ Medina v. Edward H. Levi, Nicholas Katzenbach, against the Constitution itself. We are California, 112 S.Ct. 2572, 2577 (1992). Inde- and Elliot Richardson—I served in ad- pendent federal court review of the constitu- dealing here, sir, with a fundamental ministrations with Mr. Levi, Mr. Katz- tionality of state criminal judgments has ex- provision of law, one of those essential enbach, Mr. Richardson; I have the isted since the founding of the Nation, first civil liberties which precede and are deepest regard for them—wrote Presi- by writ of error, and since 1867 by writ of ha- the basis of political liberties. beas corpus. Nothing else is more deeply dent Clinton. I ask unanimous consent The writ of habeas corpus is often re- rooted in America’s legal traditions and con- that the full text be printed in the ferred to as the ‘‘Great Writ of Lib- science. There is no case in which ‘‘a state RECORD as follows: erty.’’ William Blackstone (1723–80) court’s incorrect legal determination has called it ‘‘the most celebrated writ in December 8, 1995. ever been allowed to stand because it was reasonable,’’ Justice O’Connor found in English law, and the great and effica- Hon. WILLIAM J. CLINTON, The White House, Wright v. West, 112 S.Ct. 2482, 2497; ‘‘We have cious writ in all manner of illegal im- Washington, DC. always held that federal courts, even on ha- prisonment.’’ DEAR MR. PRESIDENT: The habeas corpus beas, have an independent obligation to say * * * * * provisions in the Senate terrorism bill, what the law is.’’ Indeed, Alexander Hamil- I repeat what I have said previously which the House will soon take up, are un- ton argued, in The Federalist No. 84, that the existence of just two protections—habeas here on the Senate floor: If I had to constitutional. Though intended in large part to expedite the death penalty review corpus and the prohibition against ex post choose between living in a country process, the litigation and constitutional facto laws—obviated the need to add a Bill of with habeas corpus but without free rulings will in fact delay and frustrate the Rights to the Constitution. elections, or a country with free elec- imposition of the death penalty. We strongly The deference requirement may also vio- tions but without habeas corpus, I urge you to communicate to the Congress late the powers granted to the judiciary S486 CONGRESSIONAL RECORD — SENATE January 21, 1997 under Article III. By stripping the federal matter so vital to the future of the Republic on habeas, have an independent obliga- courts of authority to exercise independent and the liberties we all hold dear. tion to say what the law is.’’ judgment and forcing them to defer to pre- Sincerely, Mr. President, we can fix this now. vious judgments made by state courts, the BENJAMIN R. CIVILETTI, Jr.,- Or, as the Attorneys General state, we provision runs afoul of the oldest constitu- Baltimore, MD. can ‘‘wait through several years of liti- tional mission of the federal courts: ‘‘the EDWARD H. LEVI, duty . . . to say what the law is.’’ Marbury v. Chicago, IL. gation and confusion before being sent Madison, 5 U.S. (1 Cranch) 137, 177 (1803). Al- NICHOLAS DEB. back to the drawing board.’’ I fear that though Congress is free to alter the federal KATZENBACH,- we will not fix it now. courts’ jurisdiction, it cannot order them Princeton, NJ. We Americans think of ourselves as a how to interpret the Constitution, or dictate ELLIOT L. RICHARDSON, new nation. We are not. Of the coun- any outcome on the merits. United States v. Washington, DC. tries that existed in 1914, there are Klein, 80 U.S. (13 Wall.) 128 (1871). In 1996, the Let me read excerpts from the letter: only eight which have not had their Supreme Court reiterated that Congress has form of government changed by vio- no power to assign ‘‘rubber stamp work’’ to ‘‘The habeas corpus provisions in the Sen- an Article III court. ‘‘Congress may be free ate bill . . . are unconstitutional. Though in- lence since then. Only the United King- to establish a . . . scheme that operates tended in large part to expedite the death dom goes back to 1787 when the dele- without court participation,’’ the Court said, penalty review process, the litigation and gates who drafted our Constitution es- ‘‘but that is a matter quite different from in- constitutional rulings will in fact delay and tablished this Nation, which continues frustrate the imposition of the death structing a court automatically to enter a to exist. In those other nations, sir, a judgment pursuant to a decision the court penalty . . . The constitutional infirmities . . . violate compelling struggle took place, from has not authority to evaluate.’’ Gutierrez de the middle of the 18th century until Martinez v. Lamagno, 115 S. Ct 2227, 2234. the Habeas Corpus Suspension Clause, the ju- Finally, in prohibiting evidentiary hear- dicial powers of Article III, and due the middle of the 19th century, and be- ings where the constitutional issue raised process . . . yond into the 20th, and even to the end does not go to guilt or innocence, the legisla- . . . A measure is subject to proscription of the 20th in some countries, to estab- tion again violates Due Process. A violation under the due process clause if it ‘‘offends lish those basic civil liberties which some principle of justice so rooted in the tra- of constitutional rights cannot be judged in are the foundation of political liberties a vacuum. The determination of the facts as- ditions and conscience of our people as to be ranked as fundamental,’’ as viewed by ‘‘his- and, of those, none is so precious as ha- sumes ‘‘and importance fully as great as the beas corpus, the ‘‘Great Writ.’’ validity of the substantive rule of law to be torical practice.’’ applied.’’ Wingo v. Wedding, 418 U.S. 461, 474 That language is Medina versus Cali- Here we are trivializing this treasure, (1974). fornia, a 1992 decision. To continue, putting in jeopardy a tradition of pro- Prior to 1996, the last time habeas corpus Independent federal court review of the tection of individual rights by Federal legislation was debated at length in con- constitutionality of state criminal judg- courts that goes back to our earliest stitutional terms was in 1968. A bill substan- ments has existed since the founding of the foundation. And the virus will spread. tially eliminating federal habeas corpus re- Nation, first by writ of error, and since 1867 Why are we in such a rush to amend view for state prisoners was defeated be- by writ of habeas corpus. our Constitution? Why do we tamper cause, as Republican Senator Hugh Scott put Nothing else is more deeply rooted in it at the end of debate, ‘‘if Congress tampers America’s legal traditions and conscience. with provisions as profound to our tra- with the great writ, its action would have There is no clause in which ‘‘a state court’s ditions and liberty as habeas corpus? about as much chance of being held constitu- incorrect legal determination has ever been The Federal courts do not complain. It tional as the celebrated celluloid dog chasing allowed to stand because it was reasonable.’’ may be that because we have enacted the asbestos cat through hell.’’ That is Justice O’Connor, in Wright this, there will be some prisoners who In more recent years, the habeas reform are executed sooner than they other- debate has been viewed as a mere adjunct of versus West. She goes on, as the attor- the debate over the death penalty. But when neys general quote. ‘‘We have always wise would have been. You may take the Senate took up the terrorism bill this held that federal courts, even on ha- satisfaction in that or not, as you year, Senator Moynihan sought to reconnect beas, have an independent obligation to choose, but we have begun to weaken a with the large framework of constitutional say what the law is.’’ tenet of justice at the very base of our liberties: ‘‘If I had to live in a country which If I may interpolate, she is repeating liberties. The virus will spread. had habeas corpus but not free elections,’’ he the famous injunction of Justice Mar- This is new. It is profoundly disturb- said, ‘‘I would take habeas corpus every shall in Marbury versus Madison. ing. It is terribly dangerous. If I may time.’’ Senator Chafee noted that his uncle, The attorneys general go on to say, have the presumption to join in the a Harvard law scholar, has called habeas cor- judgment of four Attorneys Generals, pus ‘‘the most important human rights pro- Indeed, Alexander Hamilton argued, in The vision in the Constitution.’’ With the debate Federalist No. 84, that the existence of just Mr. Civiletti, Mr. Levi, Mr. Katzen- back on constitutional grounds, Senator two protections—habeas corpus and the pro- bach, and Mr. Richardson—and I repeat Biden’s amendment to delete the deference hibition against ex post facto laws—obviated that I have served in administrations requirement nearly passed, with 46 votes. the need to add a Bill of Rights to the Con- with three of them—this matter is un- We respectfully ask that you insist, first stitution. constitutional and should be repealed and foremost, on the preservation of inde- The letter from the Attorneys Gen- from law. pendent federal review, i.e., on the rejection eral continues, but that is the gist of Fifteen years ago, June 6, 1982, to be of any requirement that federal courts defer it. I might point out that there was, precise, I gave the commencement ad- to state court judgments on federal constitu- tional questions. We also urge that separate originally, an objection to ratification dress at St. John University Law time limits be set for filing federal and state of the Constitution, with those object- School in Brooklyn. I spoke of the pro- habeas corpus petitions—a modest change ing arguing that there had to be a Bill liferation of court-curbing bills at that which need not interfere with the setting of of Rights added. Madison wisely added time. I remarked: strict time limits—and that they begin to one during the first session of the first * * * some people—indeed, a great many run only upon the appointment of competent Congress. But he and Hamilton and people—have decided that they do not agree counsel. And we urge that evidentiary hear- Jay, as authors of The ‘‘Federalist Pa- with the Supreme Court and that they are ings be permitted wherever the factual pers,’’ argued that with habeas corpus not satisfied to Debate, Legislate, Litigate. record is deficient on an important constitu- They have embarked upon an altogether tional issue. Congress can either fix the con- and the prohibition against ex post new and I believe quite dangerous course of stitutional flaws now, or wait through sev- facto laws in the Constitution, there action. A new triumvirate hierarchy has eral years of litigation and confusion before would be no need even for a Bill of emerged. Convene (meaning the calling of a being sent back to the drawing board. Ulti- Rights. We are glad that, in the end, we constitutional convention), Overrule (the mately, it is the public’s interest in the do have one. But their case was surely passage of legislation designed to overrule a prompt and fair disposition of criminal cases strong, and it was so felt by the fram- particular Court ruling, when the Court’s which will suffer. The passage of an uncon- ers. ruling was based on an interpretation of the stitutional bill helps no one. To cite Justice O’Connor again: ‘‘A Constitution), and Restrict (to restrict the We respectfully urge you, as both Presi- state court’s incorrect legal determina- jurisdiction of certain courts to decide par- dent and a former professor of constitutional ticular kinds of cases). law, to call upon Congress to remedy these tion has never been allowed to stand Perhaps the most pernicious of these is the flaws before sending the terrorism bill to because it was reasonable.’’ attempt to restrict courts’ jurisdictions, for your desk. We request an opportunity to Justice O’Connor went on: ‘‘We have it is * * * profoundly at odds with our Na- meet with you personally to discuss this always held that Federal courts, even tion’s customs and political philosophy. January 21, 1997 CONGRESSIONAL RECORD — SENATE S487 It is a commonplace that our democracy is the constitutionality of his trial or sentence. The Clinton years have seen, among other characterized by majority rule and minority In many previous cases of prisoners eventu- things, a series of measures stripping the rights. Our Constitution vests majority rule ally freed after years of waiting to be exe- courts of their power to protect individuals in the Congress and the President while the cuted, proof of their innocence has been dis- from official abuse—the power that has been courts protect the rights of the minority. covered long after the present one year the key to American freedom. There has While the legislature makes the laws, and limit. been nothing like it since the Radical Repub- the executive enforces them, it is the courts Moreover, the Clinton administration is— licans, after the Civil War, acted to keep the that tell us what the laws say and whether as the ACLU’s Laura Murphy recently told courts from holding the occupation of the they conform to the Constitution. the National Law Journal—‘‘the most wire- South to constitutional standards. This notion of judicial review has been tap-friendly administration in history.’’ The Republican Congress of the last two part of our heritage for nearly two hundred And Clinton ordered the Justice Depart- years initiated some of the attacks on the years. There is not a more famous case in ment to appeal a unanimous 3rd circuit courts. But President Clinton did not resist American jurisprudence than Marbury v. Court of Appeals decision declaring uncon- them as other Presidents have. And he pro- Madison and few more famous dicta than stitutional the Communications Decency posed some of the measures trampling on Chief Justice Marshall’s that Act censoring the Internet, which he signed constitutional protections. ‘‘It is emphatically the province and the into law. Much of the worst has happened this duty of the judicial department to say what There is a chilling insouciance in Clinton’s year. President Clinton sponsored a the law is.’’ elbowing the Constitution out of the way. He counterterrorism bill that became law with a But in order for the court to interpret the blithely, for instance, has stripped the courts number of repressive features in it. One had law, it must decide cases. If it cannot hear of their power to hear certain kinds of cases. nothing to do with terrorism: a provision certain cases, then it cannot protect certain As Anthony Lewis points out in the New gutting the power of Federal courts to exam- rights. York Times, Clinton has denied many people ine state criminal convictions, on writs of habeas corpus, to make sure there was no We need to deal resolutely with ter- their day in court. For one example, says Lewis. ‘‘The new im- violation of constitutional rights. rorism. And we have. But the guise of The Senate might well have moderated the combating terrorism, we have dimin- migration law * * * takes away the rights of thousands of aliens who may be entitled to habeas corpus provision if the President had put up a fight. But he broke a promise and ished the fundamental civil liberties legalize their situation under a 1986 statute gave way. that Americans have enjoyed for two giving amnesty to illegal aliens.’’ Cases in- centuries; therefore the terrorists will The counterterrorism law also allows the volving as many as 300,000 people who may Government to deport a legally admitted have won. still qualify for amnesty have been waiting alien, on the ground that he is suspected of My bill will repeal this dreadful, un- to be decided. All have now been thrown out a connection to terrorism, without letting constitutional provision now in public of court by the new immigration law. him see or challenge the evidence. And it law. I ask unanimous consent that the There have been other Clinton revisions of goes back to the McCarthy period by letting article entitled ‘‘First in Damage to the Constitution, but in sum—as David Boaz the Government designate organizations as of the Cato Institute has accurately put it— Constitutional Liberties,’’ by Nat ‘‘terrorist’’—a designation that could have Clinton has shown ‘‘a breathtaking view of included Nelson Mandela’s African National Hentoff from the Washington Post of the power of the Federal government, a view November 16, 1996; and the article enti- Congress before apartheid gave way to de- directly opposite the meaning of ‘civil lib- mocracy in South Africa. tled ‘‘Clinton’s Sorriest Record’’ from ertarian.’ ’’ The immigration bill just passed by Con- the New York Times of October 14, 1996; During the campaign there was no mention gress has many sections prohibiting review be printed in the Record at the conclu- at all of this breathtaking exercise of federal by the courts of decisions by the Immigra- sion of my remarks. power over constitutional liberties. None by tion and Naturalization Service or the Attor- There being no objection, the articles former senator Bob Dole who has largely ney General. Some of those provisions have been in agreement with this big government were ordered to be printed in the drastic retroactive consequences. approach to constitutional ‘‘guarantees.’’ For example, Congress in 1986 passed an RECORD, as follows: Nor did the press ask the candidates about amnesty bill that allowed many undocu- [From the Washington Post, Nov. 16, 1996] the Constitution. mented aliens to legalize their presence in FIRST IN DAMAGE TO CONSTITUTIONAL Laura Murphy concludes that ‘‘both Clin- this country. They had to file by a certain LIBERTIES ton and Dole are indicative of how far the date, but a large number said they failed to (By Nat Hentoff) American people have slipped away from the do so because improper I.N.S. regulations notions embodied in the Bill of Rights.’’ She discouraged them. There have been American presidents to omitted the role of the press, which seems The Supreme Court held that those who whom the Constitution has been a nuisance focused primarily on that part of the First could show they were entitled to amnesty to be overruled by an means necessary. In Amendment that protects the press. but were put off by the I.N.S. rules could file 1798, only seven years after the Bill of Rights Particularly revealing were the endorse- late. Lawsuits involving thousands of people was ratified, John Adams triumphantly led ments of Clinton by the New York Times, are pending. But the new immigration law Congress in the passage of the Alien and Se- The Washington Post and the New Republic, throws all those cases—and individuals—out dition Acts, which imprisoned a number of among others. In none of them was the presi- of court. journalists and others for bringing the presi- dent’s civil liberties record probed. (The Post Another case, in the courts for years, dent or Congress into ‘‘contempt or disre- did mention the FBI files at the White stems from an attempt to deport a group of pute.’’ So much for the First Amendment. House.) Other ethical problems were cited, Palestinians. Their lawyer sued to block the During the Civil War, Abraham Lincoln ac- but nothing was mentioned about habeas deportation action; a Federal district judge, tually suspended the writ of habeas corpus. corpus, court-stripping, lowering the content Stephen V. Wilson, a Reagan appointee, Alleged constitutional guarantees of peace- of the Internet to material suitable for chil- found that it was an unlawful selective pro- ful dissent were swept away during the First dren and the Clinton administration’s de- ceeding against people for exercising their World War—with the approval of Woodrow cided lack of concern for privacy protections constitutional right of free speech. The new Wilson. For example, there were more than of the individual against increasingly ad- immigration law says the courts may not 1,900 prosecutions for anti-war books, news- vanced government technology. hear such cases. paper articles, pamphlets and speeches. And A revealing footnote to the electorate’s ig- The immigration law protects the I.N.S. Richard Nixon seemed to regard the Bill of norance of this subverting of the Constitu- from judicial scrutiny in a broader way. Over Rights as primarily a devilish source of aid tion is a statement by N. Don Wycliff, edi- the years the courts have barred the service to his enemy. torial page editor of the Chicago Tribune. He from deliberately discriminatory policies, No American president, however, has done tells Newsweek that ‘‘people are not engaged for example the practice of disallowing vir- so much damage to constitutional liberties in the [political] process because there are tually all asylum claims by people fleeing as Bill Clinton—often with the consent of no compelling issues driving them to partici- persecution in certain countries. The law Republicans in Congress. But it has been pate. It would be different if we didn’t have bars all lawsuits of that kind. Clinton who had the power and the will to peace and prosperity.’’ Those are just a few examples of recent in- seriously weaken our binding document in What more could we possibly want? cursions on due process of law and other con- ways that were almost entirely ignored by stitutional guarantees. A compelling piece the electorate and the press during the cam- [From the New York Times, Oct. 14, 1996] by John Heilemann in this month’s issue of paign. Wired, the magazine on the social con- ABROAD AT HOME; CLINTON’S SORRIEST Unlike Lincoln, for example, Clinton did a sequences of the computer revolution, con- RECORD lot more than temporarily suspend habeas cludes that Mr. Clinton’s record on individ- corpus. One of his bills that has been enacted (By Anthony Lewis) ual rights is ‘‘breathtaking in its awfulness.’’ into law guts the rights that Thomas Jeffer- Bill Clinton has not been called to account He may be, Mr. Heilemann says, ‘‘the worst son insisted be included in the Constitution. in this campaign for the worst aspect of his civil liberties President since Richard A state prisoner on death row now has only Presidency. That is his appalling record on Nixon.’’ And even President Nixon did not a year to petition a federal court to review constitutional rights. leave a legacy of court-stripping statutes. S488 CONGRESSIONAL RECORD — SENATE January 21, 1997 It is by no means clear that Bob Dole cent of its assets invested in Carter women because women’s jobs are less would do better. He supported some of the Hawley Hale stock. As a result of the often covered by a pension plan. worst legislation in the Senate, as the Ging- bankruptcy, the stock lost 92 percent Women need better pension survivor rich Republicans did in the House. of its value. Many employees lost a benefits because three out of four mar- Why? The Soviet threat, which used to be the excuse for shoving the Constitution pension and a job simultaneously. riages they outlive their husbands aside, is gone. Even in the worst days of the The 401(k) Pension Protection Act is The Pension Benefits Fairness Act Red Scare we did not strip the courts of their designed to prevent situations such as would correct this problem by requir- protective power. Why are we legislating in Color Tile and Carter Hawley Hale ing that pension plans treat spouses panic now? Why, especially, is a lawyer from reoccurring. The act would pre- equally with regard to benefits and dis- President indifferent to constitutional rights vent a company from requiring that closure of benefit options. and their protection by the courts? more than 10 percent of employee con- The act imposes no additional pen- tributions to a 401(k) plan, contribu- sion costs on plans, employers, or par- By Mrs. BOXER. tions known as salary deferrals, be in- ticipants. The act would increase the S. 106. A bill to require that employ- vested in the employer stock or em- benefits paid to the many surviving ees who participate in cash or deferred ployer real estate. spouses while resulting in no material arrangements are free to determine The act exempts a certain type of reduction in the pension paid to a typi- whether to be invested in employer 401(k) plan from the 10 percent limit— cal couple. real property and employer securities, where employees are free to direct how III. THE SMALL 401(K) PENSION PLAN DISCLOSURE and if not, to protect such employees their contributions are invested and to ACT OF 1997 by applying the same prohibited trans- move their investments in the 401(k) The third pension bill that I intro- action rules that apply to traditional with reasonable frequency. In such sit- duce today is the Small 401(k) Pension defined benefit pension plans, and for uations, the 10 percent limitation does Plan Disclosure Act of 1997. other purposes; to the Committee on not apply and employees are free to as- Current Federal law requires that Finance. sume the risk of undiversified invest- pension plans file an annual invest- S. 107. A bill to require the offer in ment in their employer. ment report with the Department of every defined benefit plan of a joint The 401(k) Pension Protection Act Treasury and make the report avail- 2 and ⁄3 survivor benefit annuity option would protect 23 million employees in able if a participant asks for it. Par- and to require comparative disclosure 401(k) plans investing more than 675 ticipants in small 401(k)s should not be of all benefit options to both spouses; million dollars in assets. required to ask where their pension to the Committee on Finance. All 401(k) members need the 401(k) contributions are invested. Partici- S. 108. A bill to require annual, de- Pension Protection Act. Unlike tradi- pants in small 401(k)s are often hesi- tailed investment reports by plans with tional pension plans, companies spon- tant to request the information for fear qualified cash or deferred arrange- soring 401(k)s do not guarantee that in- of being identified as questioning their ments, and for other purposes; to the vestments will provide the promised employer’s handling of a 401(k). Par- Committee on Labor and Human Re- pension. Instead, 401(k) participants ticipants in large plans, where there is sources. bear all risk of undiversified invest- greater anonymity, are less hesitant. LEGISLATION TO PROTECT AMERICAN PENSION ment in the employer. Participants in 401(k)s should know FUNDS Participants in 401(k)s also need the where their plan is invested. Unlike Mrs. BOXER. Mr. President, today I protections of the act because—unlike traditional, defined pension plan par- am introducing three bills designed to traditional pension plans—401(k)s are ticipants, 401(k) participants have nei- protect Americans’ pension funds. not insured against bankruptcy of the ther a plan sponsor’s guarantee nor I. THE 401(K) PENSION PLAN PROTECTION ACT plan sponsor by the Pension Benefit PBGC insurance against poor invest- The first bill, the ‘‘401(k) Pension Guaranty Corp., or PBGC. ment return. Participants bear the risk themselves. Plan Protection Act of 1997’’, would II. THE PENSION BENEFITS FAIRNESS ACT OF 1997 It is only fair that 401(k) participants give employees who participate in a The second bill that I offer today is be informed how their money is in- 401(k) plan the assurance that their the Pension Benefits Fairness Act of employer cannot force them to invest vested. 1997. The act would require that tradi- The Small 401(k) Pension Plan Dis- their employee contributions in the tional pension plans offer equal survi- closure Act of 1997 eliminates the need company. vor retirement benefits to both The 401(k) Pension Protection Act to ask. It requires that the Secretary spouses. of Labor issue regulations requiring will increase employees’ investment Current Federal law requires an un- that small 401(k)s to provide each par- freedom and protect employees against equal survivors retirement benefit op- ticipant with an annual investment re- low yielding and undiversified 401(k) tion. Unless they voluntarily offer a port. The details of the report are left investments in their employer. It al- better benefit, traditional pension to the Secretary, but certain details lows employees to protect themselves plans are required to offer a benefit op- against loss of jobs and pensions if are suggested as a guide. tion that pays one spouse double the The act also encourages the Sec- their employer becomes bankrupt. amount paid to other spouse, when one retary to provide for the delivery of re- Unfortunately, such losses have al- spouse dies. Many plans do not volun- ports through company e-mail. This ready occurred. A year ago, Color Tile, tarily offer an equal benefit. should help minimize the cost of pro- –Inc., a nationwide retailer of floor and Current law also requires that only viding reports. counter coverings, filed bankruptcy. one spouse be given a description of the The act exempts 401(k) accounts Color Tile had one pension plan, a retirement benefit option or options of- where participants direct their invest- 401(k) plan. The 401(k) allowed employ- fered by the plan. This leaves one ments because current law already re- ees no choice of investments. All in- spouse in a marriage uninformed of a quires that those participants receive vestment decisions were made by Color decision that affects their income for investment descriptions and reports. Tile. the rest of their life. It is doubly im- Mr. President, these bills increase At the time of bankruptcy, 83 percent portant that they understand the deci- the retirement security of the Amer- of the 401(k)’s investments were in 44 sion to accept a particular benefit be- ican work force, diversify 401(k) invest- Color Tile stores. Many of those stores cause they can never change their deci- ments, require equal benefits for hus- were closed in the bankruptcy. Those sion. band and wife, and inform employees in investments—and the employees retire- Under current law, the spouse who small 401(k) plans where their money is ment savings—are now at risk of a gets the required description is also the invested. large, possibly total loss. spouse who gets a survivor benefit that In 1991, in my own State, another is twice as large. By Mr. INOUYE (for himself and bankruptcy resulted in a substantial The preferred spouse is the spouse Mr. AKAKA): loss to a 401(k) plan enrolling 10,000 em- who participated in the retirement S. 109. A bill to provide Federal hous- ployees. Carter Hawley Hales stores plan. This means that the unequal ing assistance to Native Hawaiians; to went bankrupt with more than 50 per- treatment disproportionately impacts the Committee on Indian Affairs. January 21, 1997 CONGRESSIONAL RECORD — SENATE S489 THE NATIVE HAWAIIAN HOUSING ASSISTANCE Government played in facilitating such most grateful. However, I would be the ACT OF 1997 a decline, the Congress enacted The first to admit that much more remains Mr. INOUYE. Mr. President, I rise Hawaiian Homes Commission Act to be done. today to introduce the native Hawaiian [HHCA], which set aside 200,000 acres of When the National Commission of Housing Assistance Act of 1997—a CEDED public lands for homesteading American Indian, Alaska Native, and measure which seeks to provide hous- by native Hawaiians. As then Sec- Native Hawaiian Housing issued its re- ing assistance to those families most in retary of the Interior Franklin K. Lane port, after full consideration of the de- need, both nationally and in my home was quoted in the committee report to plorable housing conditions native Ha- state of Hawaii—native Hawaiians. the HHCA as saying: ‘‘One thing that waiian families face, they submitted Less than 2 years ago, in 1995, the impressed me—was the fact that the the following recommendation: That U.S. Department of Housing and Urban natives of the islands who are our Congress enact a ‘‘Native Hawaiian Development released a report enti- wards, I should say, and for whom in a Housing and Infrastructure Assistance tled, ‘‘Housing Problems and Needs of sense we are trustees, are falling off Program’’ to alleviate and address the Native Hawaiians.’’ This report found, rapidly in numbers, and many are in severe housing needs of native Hawai- astoundingly, that native Hawaiians poverty.’’ Congress thus sought to re- ians by extending to them the same experience the highest percentage of turn the Hawaiian people to the land, Federal housing assistance available to housing problems in the Nation—49 thereby revitalizing a dying race. American Indians and Alaska Natives. percent—higher than even that of And yet, despite what arguably were This, Mr. President, is exactly what American Indians and Alaska Natives good intentions, the Congress subse- this bill is designed to accomplish. It residing on reservation—44 percent— quently and systematically failed to amends the Native American Housing and substantially higher than that of appropriate sufficient funds for the ad- and Self-Determination Act of 1996 by all U.S. households—27 percent. ministration of the HHCA. Faced with creating a separate title to establish a These findings, taken in conjunction no means of securing the necessary parallel housing program for native with those of two other reports: The funding which would enable the devel- Hawaiians. This program would not final report of the National Commis- opment of infrastructure or housing, benefit all native Hawaiians, but is sion on American Indian, Alaska Na- the administrators were forced to lease limited in scope to those most in need tive, and native Hawaiian Housing, large tracts of the homelands to non- because this Government has consist- ‘‘Building the Future: a Blueprint for Hawaiians for commercial and other ently denied them access to existing Change’’ (1992) and the State Depart- purposes in order to generate revenue housing programs—those native Hawai- ment of Hawaiian home lands report, to administer and operate the program. ians eligible to reside on the home ‘‘Department of Hawaiian Homelands Hawaiians were thereby denied the lands. Beneficiary Needs Study’’ (1995), docu- benefits of residing on those very lands This bill would provide funding, in ment that: set aside for their survival as the indig- the form of a block grant, to the de- Native Hawaiians have the worst enous inhabitants of Hawaii. partment of Hawaiian Home Lands, to housing conditions in the State of Ha- Over the years, I am sad to report, carry out affordable housing activities waii and are seriously overrepresented this Government has taken the anoma- which are identical to those activities in the Stat’s homeless population, rep- lous legal position that native Hawai- authorized under the Native American resenting over 30 percent of the home- ians residing on these home lands must Housing Assistance and Self-Deter- less population. be excluded from access to existing mination Act. The bill provides that, Among the native Hawaiian popu- Federal Housing and Infrastructure De- to the extent practicable, the Depart- lation, the needs of the native Hawai- velopment programs because the ex- ment shall employ private nonprofit ians eligible to reside on lands set aside penditure of Federal funds to benefit organizations experienced in the plan- under the Hawaiian Homes Commission these lands was somehow deemed un- ning and development of affordable Act are the most severe. Ninety-five constitutional. housing for native Hawaiians. In addi- percent of the current applicants, ap- While the Clinton administration has tion, the bill authorizes the Secretary proximately 13,000 native Hawaiians, reversed this position—arguing before to adopt modifications which are are in need of housing, with one half of the Ninth Circuit Court of Appeals that deemed necessary in order to meet the those applicant households facing over- the home lands were not set aside ex- unique needs of native Hawaiians. crowding and one third paying more clusively for native Hawaiians—there Finally, an additional section of the than 30 percent of their income for are those who nonetheless seem to bill creates a loan guarantee program shelter; and under the Department of want it both ways. They want to deny similar to that which exists for Amer- Housing and Urban Development [HUD] that any Federal responsibility flows ican Indians. Neither of these programs guidelines, 70.8 percent of the Depart- from the provisions of a Federal law, would tap into existing tribal monies, ment of Hawaiian Home Lands (DHHL) and yet they want to bar native people but instead would authorize a separate lessees and applicants fall below the from their rights of access to existing funding stream. HUD median family income, with more Federal housing programs. Mr. President, this is a bill whose than half having incomes below 30 per- It is this reverse discrimination that foundation is a dual one—one based on cent. I find repugnant and unacceptable. It is need, on statistics which show that na- Mr. President, I find these statistics a mentality that enables the Federal tive Hawaiians face the highest inci- deplorable and unconscionable. They Government to set aside lands for na- dence of housing needs in the nation, are the direct result of a pattern of tive Hawaiians, retain certain powers and that among the native Hawaiian purposeful neglect on the part of our over the administration of these lands, population, those native Hawaiians eli- Federal Government. and then deny those native Hawaiians gible to reside on the home lands are At the time of the arrival of Captain residing on these lands access to pro- the most in need, and one based on the Cook to Hawaii’s shores in 1778, there grams made available to all others, in- special historical relationship between was a thriving community of nearly 1 cluding Indians residing on reserva- the United States and the native Ha- million indigenous inhabitants. But tions, on the basis that the lands set waiian people. over time, introduced diseases and the aside by the United States only benefit While history has shown that the devastating physical, cultural, social, native Hawaiians. Congress has fallen far short of its and spiritual effects of Western contact I am happy to report that, with the commitment to provide sufficient fund- nearly decimated the native Hawaiian assistance of outgoing HUD Secretary ing for the administration of the Ha- population. In 1826, less than 50 years Cisneros, we have worked to identify waiian Homes Commission Act, let his- later, the native Hawaiian population and remove some barriers which have tory also reflect, that in this, the 105th had decreased to an estimated 142,650, prevented native Hawaiians residing on Congress, we sought to finally, balance and by 1919, this number had dropped the home lands, from securing access the scales, by creating housing oppor- to 22,600. to existing federally-assisted housing tunities for native Hawaiians similar In recognition of this catastrophic programs. For his understanding of and to those provided to other native decline, and of the role the Federal dedication toward these matters, I am Americans. S490 CONGRESSIONAL RECORD — SENATE January 21, 1997 Mr. President, I thank you for your rights and privileges accorded to American SEC. 3. HOUSING ASSISTANCE. consideration of this most important Indians and Alaska Natives under the Native The Native American Housing Assistance measure and ask unanimous consent American Programs Act of 1974, the Amer- and Self-Determination Act of 1996 (Public ican Indian Religious Freedom Act, the Na- Law 104–330) is amended by adding at the end that the bill be printed in the RECORD tional Museum of the American Indian Act, the following new title: in its entirety. I urge my colleagues to the Native American Graves Protection and ‘‘TITLE VIII—HOUSING ASSISTANCE FOR act favorably and expeditiously on this Repatriation Act, the National Historic NATIVE HAWAIIANS measure. Preservation Act, the Native American Lan- ‘‘SEC. 801. DEFINITIONS. There being no objection, the bill was guages Act, the American Indian, Alaska Na- ‘‘In this title— ordered to be printed in the RECORD, as tive and Native Hawaiian Culture and Arts ‘‘(1) the term ‘Department of Hawaiian follows: Development Act, the Job Training and Home Lands’ means the department of the Partnership Act, and the Older Americans S. 109 State of Hawaii that is responsible for the Act of 1965. administration of the Hawaiian Homes Com- Be it enacted by the Senate and House of Rep- (7) The special relationship has been recog- mission Act, 1920; resentatives of the United States of America in nized and reaffirmed by the United States in ‘‘(2) the term ‘Hawaiian Home Lands’ Congress assembled, the area of housing— means those lands set aside by the United SECTION 1. SHORT TITLE. (A) through the authorization of mortgage States for homesteading by Native Hawai- This Act may be cited as the ‘‘Native Ha- loans insured by the Federal Housing Admin- ians under the Hawaiian Homes Commission waiian Housing Assistance Act of 1997’’. istration for the purchase, construction, or Act, 1920, and any other lands acquired pur- refinancing of homes on Hawaiian Home SEC. 2. FINDINGS AND PURPOSES. suant to that Act; and Lands under the National Housing Act; (a) FINDINGS.—Congress makes the follow- ‘‘(3) the term ‘Native Hawaiian’ has the (B) by mandating Native Hawaiian rep- ing findings: same meaning as in section 201 of the Hawai- resentation on the National Commission on (1) The Federal Government has a respon- ian Homes Commission Act, 1920. American Indian, Alaska Native, and Native sibility to promote the general welfare of the ‘‘SEC. 802. BLOCK GRANTS FOR AFFORDABLE Hawaiian Housing; Nation by employing its resources to remedy HOUSING ACTIVITIES. (C) by the inclusion of Native Hawaiians in the unsafe and unsanitary housing condi- ‘‘(a) AUTHORITY.—For each fiscal year, the the Native American Veterans’ Home Loan Secretary shall (to the extent amounts are tions and the acute shortage of decent, safe, Equity Act; and and sanitary dwellings for families of lower made available to carry out this title) make (D) by enactment of the Hawaiian Home grants under this section on behalf of Native income and by developing effective partner- Lands Recovery Act, which establishes a ships with governmental and private entities Hawaiian families to carry out affordable process that enables the Federal Government housing activities in the State of Hawaii. to accomplish these objectives. to convey lands to the Department of Hawai- (2) Based upon the status of the Kingdom Under such a grant, the Secretary shall pro- ian Home Lands equivalent in value to lands vide the grant amounts directly to the De- of Hawaii as an internationally recognized acquired by the Federal Government. partment of Hawaiian Home Lands. The De- and independent sovereign and the unique (b) PURPOSES.—The purposes of this Act partment of Hawaiian Home Lands shall, to historical and political relationship between are as follows: the maximum extent practicable, employ the United States and Native Hawaiians, the (1) To implement the recommendation of private nonprofit organizations experienced Native Hawaiian people have a continuing the National Commission on American In- in the planning and development of afford- right to local autonomy in traditional and dian, Alaska Native, and Native Hawaiian able housing for Native Hawaiians, in order cultural affairs and an ongoing right of self- Housing (in this Act referred to as the ‘‘Com- to carry out such activities. determination and self-governance that has mission’’) that Congress establish a Native ‘‘(b) APPLICABILITY OF OTHER PROVISIONS.— never been extinguished. Hawaiian Housing and Infrastructure Assist- ‘‘(1) IN GENERAL.—Subject to paragraph (2), (3) The authority of Congress under the ance Program to alleviate and address the titles I through IV apply to assistance pro- Constitution of the United States to legis- severe housing needs of Native Hawaiians by vided under this section in the same manner late and address matters affecting the rights extending to them the same Federal housing as titles I through IV apply to assistance of indigenous peoples of the United States assistance available to American Indians and provided on behalf of an Indian tribe under includes the authority to legislate in mat- Alaska Natives. title I. ters affecting Native Hawaiians. (2) To address the following needs of the ‘‘(2) EXCEPTION.—The Secretary may by (4) In 1921, in recognition of the severe de- Native Hawaiian population, as documented regulation provide for such modifications to cline in the Native Hawaiian population, in the Final Report of the Commission, the applicability of titles I through IV to as- Congress enacted the Hawaiian Homes Com- ‘‘Building the Future: A Blueprint for sistance provided under this section as the mission Act, 1920, which set aside approxi- Change’’ (1992); the United States Depart- Secretary determines to be necessary to mately 200,000 acres of the ceded public lands ment of Housing and Urban Development re- meet the unique housing needs of Native Ha- for homesteading by Native Hawaiians, port, ‘‘Housing Problems and Needs of Native waiians. thereby affirming the special relationship Hawaiians (1995);’’ and the State Department ‘‘SEC. 803. AUTHORIZATION OF APPROPRIATIONS. between the United States and the Native of Hawaiian Home Lands report ‘‘Depart- ‘‘There are authorized to be appropriated Hawaiians. ment of Hawaiian Home Lands Beneficiary such sums as may be necessary to carry out (5) In 1959, under the Act entitled ‘‘An Act Needs Study’’ (1995): this title for each of fiscal years 1997, 1998, to provide for the admission of the State of (A) Native Hawaiians experience the high- 1999, 2000, and 2001.’’. Hawaii into the Union’’, approved March 18, est percentage of housing problems in the SEC. 4. LOAN GUARANTEES FOR NATIVE HAWAI- 1959 (73 Stat. 4), the United States reaffirmed Nation: 49 percent, compared to 44 percent IAN HOUSING. the special relationship between the United for American Indian and Alaska Native Section 184 of the Housing and Community States and the Native Hawaiian people— households in tribal areas, and 27 percent for Development Act of 1992 (12 U.S.C. 1715z–13a) (A) by transferring what the United States all United States households, particularly in is amended— deemed to be a trust responsibility for the the area of overcrowding (27 percent versus 3 (1) in subsection (k), by adding at the end administration of the Hawaiian Home Lands percent nationally) with 36 percent of Hawai- the following new paragraphs: to the State of Hawaii, but continuing Fed- ian homelands households experiencing over- ‘‘(10) The term ‘Hawaiian Home Lands’ eral superintendence by retaining the power crowding. means those lands set aside by the United to enforce the trust, including the exclusive (B) Native Hawaiians have the worst hous- States for homesteading by Native Hawai- right of the United States to consent to land ing conditions in the State of Hawaii and are ians under the Hawaiian Homes Commission exchanges and any amendments to the Ha- seriously over represented in the State’s Act, 1920, and any other lands acquired pur- waiian Homes Commission Act, 1920, enacted homeless population, representing over 30 suant to that Act. by the legislature of the State of Hawaii af- percent. ‘‘(11) The term ‘Native Hawaiian’ has the fecting the rights of beneficiaries under such (C) Among the Native Hawaiian popu- same meaning as in section 201 of the Hawai- Act; and lation, the needs of the native Hawaiians eli- ian Homes Commission Act, 1920. (B) by ceding to the State of Hawaii title gible for Hawaiian homelands are the most ‘‘(12) The term ‘Native Hawaiian housing to the public lands formerly held by the severe. 95 percent of the current applicants, authority’ means any public body (or agency United States, mandating that such lands be approximately 13,000 Native Hawaiians, are or instrumentality thereof) established held ‘‘in public trust’’ for ‘‘the betterment of in need of housing, with one-half of those ap- under the laws of the State of Hawaii, that is the conditions of Native Hawaiians, as de- plicant households facing overcrowding and authorized to engage in or assist in the de- fined in the Hawaiian Homes Commission one-third paying more than 30 percent of velopment or operation of low-income hous- Act, 1920’’, and continuing Federal super- their income for shelter. Under Department ing for Native Hawaiians, and includes the intendence by retaining the exclusive legal of Housing and Urban Development guide- Department of Hawaiian Home Lands and responsibility to enforce this public trust. lines, 70.8 percent of Department of Hawaiian the Office of Hawaiian Affairs.’’; and (6) In recognition of the special relation- Homelands lessees and applicants fall below (2) by adding at the end the following new ship that exists between the United States the Department of Housing and Urban Devel- subsection: and the Native Hawaiian people, Congress opment median family income, with more ‘‘(l) APPLICABILITY TO NATIVE HAWAIIAN has extended to Native Hawaiians the same than half having incomes below 30 percent. HOUSING.— January 21, 1997 CONGRESSIONAL RECORD — SENATE S491 ‘‘(1) IN GENERAL.—Subject to paragraphs (2) discovered and intentionally excavated with proper treatment when they are and (3), subsections (a) through (k) apply to from Federal or tribal lands. disturbed from sacred burial sites. Native Hawaiian families, Native Hawaiian In the years since the enactment of Mr. President, I thank you for this housing authorities, and private nonprofit NAGPRA, native Hawaiians have been time today, and I urge my colleagues organizations experienced in the planning to support this bill when it comes be- and development of affordable housing for at the forefront in the repatriation of Native Hawaiians, in the same manner as ancestral remains and the treatment of fore the Senate for consideration. those subsections apply to Indian families ancestral remains inadvertently dis- Mr. President, I ask unanimous con- and to Indian housing authorities, respec- covered on Federal lands. sent that the test of the bill be printed tively. Hundreds of native Hawaiian in the RECORD. ‘‘(2) EXCEPTION.—The Secretary may by kupuna—ancestors—have been re- There being no objection, the bill was regulation provide for such modifications to turned to Hawaii—released from the ordered to be printed in the RECORD, as the applicability of subsections (a) through confines of more than 25 museums in follows: (k) to Native Hawaiian families, Native Ha- the Untied States, Canada, Switzer- S. 110 waiian housing authorities, and private non- Be it enacted by the Senate and House of Rep- profit organizations experienced in the plan- land, and Austrialia—and returned to the land of their birth. resentatives of the United States of America in ning and development of affordable housing Congress assembled, Despite these accomplishments, na- for Native Hawaiians as the Secretary deter- SECTION 1. AMENDMENTS TO THE NATIVE AMER- mines to be necessary to meet the unique tive Hawaiian organizations have expe- ICAN GRAVES PROTECTION AND RE- housing needs of Native Hawaiians. rienced difficulty in ensuring the im- PATRIATION ACT. ‘‘(3) LIMITATION.—Any assistance provided plementation of the act—ironically, (a) WRITTEN CONSENT REQUIRED IF NATIVE under this subsection, including any assist- not abroad, but in Hawaii. AMERICAN REMAINS ARE EXCAVATED OR RE- ance provided to Native Hawaiians not resid- In written testimony submitted to MOVED FOR PURPOSES OF STUDY.—Section 3(c) of the Native American Graves Protection ing on the Hawaiian Home Lands, shall be the Committee on Indian Affairs by limited to the State of Hawaii. and Repatriation Act (25 U.S.C. 3002(c)) is ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.— Hui Malama I Na Kupuna O Hawaii amended— There are authorized to be appropriated such Nei, a native Hawaiian organization (1) in paragraph (3), by striking ‘‘and’’ at sums as may be necessary to carry out this recognized under NAGRPA, for a De- the end of the paragraph; subsection.’’. cember 9, 1995 oversight hearing on the (2) in paragraph (4), by striking the period act, a number of concerns were raised— and inserting ‘‘; and’’; and By Mr. INOUYE (for himself and concerns which this bill seeks to ad- (3) by adding at the end the following: ‘‘(5) in the case of any intentional exca- Mr. AKAKA): dress, namely: The lack of written con- S. 110. A bill to amend the Native vation or removal of Native American sent where native American remains human remains for purposes of study, such American Graves Protection and Repa- are excavated or removed from Federal remains are excavated or removed after writ- triation Act to provide for improved lands for purposes of study; following ten consent is obtained from— notification and consent, and for other an inadvertent discovery of Native ‘‘(A) lineal descendants, if known or read- purposes; to the Committee on Indian American remains, the lack of assur- ily ascertainable; or Affairs. ances that the process for removal ‘‘(B) each appropriate Indian tribe or Na- THE NATIVE AMERICAN GRAVES PROTECTION complies with the requirements that tive Hawaiian organization. AND REPATRIATION ACT AMENDMENT ACT OF 1997 The requirement under paragraph (1) shall are associated with an intentional ex- not be interpreted as allowing or requiring, Mr. INOUYE. Mr. President, I rise cavation; and the lack of required noti- in the absence of the consent of each appro- today to introduce a bill to amend the fication to native Hawaiian organiza- priate Indian tribe or Native Hawaiian orga- Native American Graves Protection tions when inadvertent discoveries of nization, any recordation or analysis that is and Repatriation Act to clarify certain Native American human remains are in addition to any recordation or analysis provisions of that act as they pertain made on Federal lands. that is otherwise allowed or required under to Indian tribes and native Hawaiian In addition to amendments which ad- this Act.’’. (b) REQUIREMENTS FOR INADVERTENT DIS- organizations. This bill is similar to dress these concerns, this bill also in- COVERIES.—Section 3(d) of the Native Amer- the bill I introduced in the last session corporates two technical amendments ican Graves Protection and Repatriation Act of the Congress—a bill which passed requested by the administration: a pro- (25 U.S.C. 3002(d)) is amended— this body by unanimous consent on vision expanding the responsibility of (1) in paragraph (1)— September 13, 1996. Unfortunately, the the NAGPRA Review Committee to in- (A) in the first sentence, by striking ‘‘with House of Representatives failed to act clude associated funerary objects in respect to Federal lands’’ and inserting on the measure prior to the adjourn- ‘‘with respect to those Federal lands’’; the compilation of an inventory of cul- (B) by inserting after the first sentence the ment of the 104th Congress. turally unidentifiable human remains; following: ‘‘In any case in which a Federal In 1990, the Congress enacted the Na- and provisions providing the Secretary agency or instrumentality receives notice of tive American Graves Protection and of The Interior with authority to use a discovery of Native American cultural Repatriation Act [NAGPRA] to address fines collected to supplement the cost items on lands with respect to which the the growing concern among Indian of enforcement-related activities. Federal agency or instrumentality has man- tribes, Alaska Native villages, and na- As one of the original sponsors of the agement authority, the appropriate official tive Hawaiian organizations regarding act, it is my view that these amend- of the Federal agency or instrumentality the proper disposition of thousands of ments are consistent with the original shall notify each appropriate Indian tribe or Native Hawaiian organization. The notifica- Native American human remains and purpose, spirit, and intent of NAGPRA, tion required under the preceding sentence sacred objects in the possession and and are necessary to clarify the exist- shall be provided not later than 3 business control of museums and Federal agen- ing law. days after the date on which the Federal cies. It is my expectation that if adopted, agency or instrumentality receives notifica- NAGPRA requires museums and Fed- these amendments will ensure better tion of the discovery.’’; and eral agencies to compile summaries cooperation by Federal agencies in the (C) in the last sentence, by inserting ‘‘, and inventories of human remains, as- implementation of the act in the State and, in the case of Federal lands, the appro- sociated and unassociated funerary ob- of Hawaii and the rest of the United priate official of the Federal agency or in- jects, sacred objects, and cultural pat- strumentality with management authority States. For while these amendments over those lands notified each appropriate rimony, to notify an Indian tribe or na- address concerns raised by the native Indian tribe or Native Hawaiian organization tive Hawaiian organization that have Hawaiian people, they will also serve by the date specified in this paragraph,’’ an ownership or possessory interest in to benefit Indian country. after ‘‘that notification has been received,’’; the remains, objects or patrimony, and, The responsibility borne by those and upon request, to repatriate those re- who choose, or who are called upon to (2) in paragraph (2), by adding at the end mains or cultural items to the appro- care for the remains of their ancestors the following new sentence: ‘‘Any person or priate Indian tribe or native Hawaiian is a heavy one. By acting favorably on entity that disposes of, or controls, a cul- organization. this measure, I hope that we can assist tural item referred to in the preceding sen- tence shall comply with the applicable re- NAGPRA further provides a process these individuals and organizations as quirements of subsection (c).’’. governing the treatment of human re- they continue in their efforts to bring (c) REVIEW COMMITTEE.—Section 8(c)(5) of mains or cultural items inadvertently their ancestors home and provide them the Native American Graves Protection and S492 CONGRESSIONAL RECORD — SENATE January 21, 1997 Repatriation Act (25 U.S.C. 3006(c)(5)) is Although the Philippines and Japan eral to develop a uniform ballistics test amended— were not considered war zones from to determine with precision whether (1) by inserting ‘‘and associated funerary 1950 to 1982, the extent and nature of ammunition is capable of penetrating objects’’ after ‘‘culturally unidentifiable U.S. military involvement in both police body armor. The bill also pro- human remains’’; and (2) by striking ‘‘for developing a process for countries are not dissimilar to U.S. hibits the manufacture and sale of any disposition of such remains’’ and inserting military involvement in other Asian handgun ammunition determined by ‘‘for developing a process for the disposition countries during the Korean and Viet- the Secretary of the Treasury and the of the remains and associated funerary ob- nam conflicts. The role of the Phil- Attorney General to have armor-pierc- jects’’. ippines and Japan as vital supply and ing capability. (c) ENFORCEMENT.—Section 9 of the Native stationing bases brought tens of thou- I am encouraged that, on behalf of its American Graves Protection and Repatri- sands of U.S. military personnel to 277,000 members, the Fraternal Order of ation Act (25 U.S.C. 3007) is amended by add- ing at the end the following: these countries. As a result, interracial Police has decided to support this bill. ‘‘(e) ENFORCEMENT.— relations in both countries were com- In addition the Law Enforcement ‘‘(1) IN GENERAL.—Subject to paragraph (2), mon, leading to a significant number of Steering Committee, which represents the amounts collected by the Secretary as Amerasian children being fathered by eight of the largest Associations of law penalties under this section shall be used to U.S. citizens. There are now over 50,000 enforcement officers, has also indi- supplement the amounts made available by Amerasian children in the Philippines. cated that they are in support of this appropriations for conducting enforcement According to the Embassy of Japan, bill. activities related to this section. I am also pleased that President Clin- ‘‘(2) AUTHORITY OF SECRETARY.—In carry- there are 6,000 Amerasian children in ing out enforcement activities related to Japan born between 1987 and 1992. ton has taken an avid interest in this this section, the Secretary may— Public Law 97–359 was passed in the subject. In a statement similar to re- ‘‘(A) pay any person who furnishes infor- hope of redressing the situation of marks he made many times at cam- mation that leads to the assessment of a Amerasian children in Korea, Laos, paign appearances around the country, civil penalty under this section (other than Kampuchea, Thailand, and Vietnam President Clinton said to an audience an officer or employee of the Federal Gov- who, due to their illegitimate or mixed in Cincinnati, Ohio on September 16, ernment or a State or local government (in- ethnic make-up, their lack of a father 1996: cluding a tribal government) who furnishes or who renders service in the performance of or stable mother figure, or impover- So that’s my program for the future—do official duties) the lesser of— ished state, have little hope of escaping more to break the gangs, ban those cop kill- ‘‘(i) half of the amount of the civil penalty; their plight. It became the ethical and er bullets, drug testing for parolees, improve or social obligation of the United States the opportunities for community-based ‘‘(ii) $1,000; and to care for these children. strategies that lower crime and give our kids ‘‘(B) reduce the amount of a civil penalty The stigmatization and ostracism something to say yes to. that would otherwise be assessed under this felt by Amerasian children in those Mr. President, it has been fifteen section if the violator against whom the civil countries covered by the Amerasian years since I first introduced legisla- penalty is assessed agrees to pay to the ag- Immigration Act also is felt by tion in the Senate to outlaw armor- grieved parties involved an aggregate Amerasian children in the Philippines piercing, or ‘‘cop-killer,’’ bullets. In amount of restitution not to exceed the 1982, Phil Caruso of the Patrolman’s amount of the reduction.’’. and Japan. These children of American citizens deserve the same viable oppor- Benevolent Association of New York By Mr. INOUYE: tunities of employment, education, and City alerted me to the existence of a S. 111. A bill to amend the Immigra- family life that is afforded their coun- Teflon-coated bullet capable of pene- tion and Nationality Act to facilitate terparts from Korea, Laos, Kampuchea, trating the soft body armor police offi- the immigration to the United States Thailand, and Vietnam. cers were then beginning to wear. of certain aliens born in the Phil- Mr. President, I ask unanimous con- Shortly thereafter, I introduced the ippines or Japan who were fathered by sent that the text of my bill be printed Law Enforcement Officers Protection United States citizens; to the Commit- in the RECORD. Act of 1982 to prohibit the manufac- tee on the Judiciary. There being no objection, the bill was ture, importation, and sale of such am- THE AMERASIAN IMMIGRATION ACT AMENDMENT ordered to be printed in the RECORD, as munition. ACT OF 1997 follows: At that time, armor-piercing bul- Mr. INOUYE. Mr. President, today, I S. 111 lets—most notably the infamous rise to introduce legislation which Be it enacted by the Senate and House of Rep- ‘‘Green Hornet’’—were manufactured amends Public Law 97–359, the resentatives of the United States of America in with a solid steel core. Unlike the soft- Amerasian Immigration Act, to include Congress assembled, That section 204(f)(2)(A) er lead composition of most other am- Amerasian children from the Phil- of the Immigration and Nationality Act (8 munition, this hard steel core pre- ippines and Japan as eligible appli- U.S.C. 1154(f)(2)(A)) is amended— vented these rounds from deforming at cants. This legislation also expands the (1) by inserting ‘‘(I)’’ after ‘‘born’’; and the point of impact—thus permitting eligibility period for the Philippines to (2) by inserting after ‘‘subsection,’’ the fol- the rounds to penetrate the 18 layers of lowing: ‘‘(II) in the Philippines after 1950 and November 24, 1992, the date of the last before November 24, 1992, or (III) in Japan Kevlar in a standard-issue police vest United States military base closure after 1950 and before the date of enactment or ‘‘flak-jacket.’’ These bullets could and the date of enactment of the pro- of this subclause,’’. go through a bullet-proof vest like a posed legislation for Japan. hot knife through butter. My legisla- Under the Amerasian Immigration By Mr. MOYNIHAN: tion simply banned any handgun am- Act (Public Law 97–359) children born S. 112. A bill to amend title 18, Unit- munition made with a core of steel or in Korea, Laos, Kampuchea, Thailand, ed States Code, to regulate the manu- other hard metals. and Vietnam after December 31, 1950, facture, importation, and sale of am- Despite the strong support of the law and before October 22, 1982, who were munition capable of piercing police enforcement community, it took four fathered by United States citizens, are body armor; to the Committee on the years before this seemingly non-con- allowed to immigrate to the United Judiciary. troversial legislation was enacted into States. The initial legislation intro- LAW ENFORCEMENT OFFICERS PROTECTION ACT law. The National Rifle Association duced in the 97th Congress included OF 1997 initially opposed it—that is, until the Amerasians born in the Philippines and Mr. MOYNIHAN. Mr. President, I am NRA realized that a large number of its Japan with no time limits concerning introducing legislation today to amend members were themselves police offi- their births. The final version as en- Title 18 of the United States Code to cers who strongly supported banning acted by the Congress included only strengthen the existing prohibition on these insidious bullets. Only then did those areas where the U.S. had engaged handgun ammunition capable of pene- the NRA lend its grudging support. The in active military combat from the trating policy body armor, commonly bill passed the Senate on March 6, 1986 Korea War onward. Consequently, referred to as bullet-proof vests. This by a vote of 97–1, and was signed by Amerasians from the Philippines and provision would require the Secretary President Reagan on August 8, 1986 Japan were excluded from eligibility. of the Treasury and the Attorney Gen- (Public Law 99–408). January 21, 1997 CONGRESSIONAL RECORD — SENATE S493 That 1986 Act served us in good stead National Institute of Standards and Again, thank you for continued concern for 7 years. To the best of my knowl- Technology wrote a report describing and support for the safety and protection of edge, not a single law enforcement offi- the methodology for just such a armor- America’s law enforcement officers. cer was shot with an armor-piercing piercing bullet performance test. The Sincerely, bullet. Unfortunately, the ammunition GILBERT G. GALLEGOS, report concluded that a test to deter- National President. manufacturers eventually found a way mine armor-piercing capability could around the 1986 law. By 1993, a new be developed within six months. By Mr. INOUYE: Swedish-made armor-piercing round, So we know it can be done, if only S. 113. A bill to amend title VII of the the M39B, had appeared. This per- the agencies responsible for enforcing Public Health Service Act to establish nicious bullet evaded the 1986 statute’s the relevant laws have the will. The a psychology post-doctoral fellowship prohibition because of its unique com- legislation I am introducing requires program, and for other purposes; to the position. Like most common ammuni- the Secretary of the Treasury, in con- Committee on Labor and Human Re- tion, it had a soft lead core, thus ex- sultation with the Attorney General, sources. empting it from the 1986 law. But this to establish performance standards for core was surrounded by a heavy steel THE PUBLIC HEALTH SERVICE ACT AMENDMENT the uniform testing of handgun ammu- ACT OF 1997 jacket, solid enough to allow the bullet nition. Such an objective standard will to penetrate body armor. Once again, Mr. INOUYE. Mr. President, I am in- ensure that no rounds capable of pene- troducing legislation today to amend our nation’s law enforcement officers trating police body armor, regardless were at risk. Immediately upon learn- Title VII of the Public Health Service of their composition, will ever be avail- Act to establish a psychology post-doc- ing of the existence of the new Swedish able to those who would use them round, I introduced a bill to ban it. toral program. against our law enforcement officers. Another protracted series of negotia- Psychologists have made a unique I wish to assure the Senate that this tions ensued before we were able to up- contribution in serving the Nation’s measure would in no way infringe upon date the 1986 statute to cover the M39B. medically undeserved populations. Ex- the rights of legitimate hunters and We did it with the support of law en- pertise in behavorial science is useful sportsmen. It would not affect legiti- forcement organizations, and with in addressing many of our most dis- mate sporting ammunition used in ri- technical assistance from the Bureau tressing concerns such as violence, ad- fles. It would only restrict the avail- of Alcohol, Tobacco and Firearms. In diction, mental illness, children’s be- ability of armor-piercing rounds, for particular, James O. Pasco, Jr., then havior disorders, and family disrup- which no one can seriously claim there the Assistant Director of Congressional tion. Establishment of a psychology is a genuine sporting use. These cop- Affairs at BATF, worked closely with post-doctoral program could be most killer rounds have no legitimate uses, me and may staff to get it done. The effective in finding solutions to these and they have no business being in the bill passed the Senate by unanimous pressing societal issues. arsenals of criminals. They are de- consent on November 19, 1993 as an Similar programs supporting addi- signed for one purpose: to kill police amendment to the 1994 Crime Bill. tional, specialized training in tradi- officers. Despite these legislative successes, it tionally undeserved settings or with The 1986 and 1993 cop-killer bullet was becoming evident that continuing specific undeserved populations have laws I sponsored kept us one step ahead ‘‘innovations’’ in bullet design would been demonstrated to be successful in of the designers of new armor-piercing result in new armor-piercing rounds ca- providing services to those same rounds. When the legislation I have in- pable of evading the ban. It was at this undeserved populations during the troduced today is enacted—and I hope time that some of us began to explore years following the training experi- it will be early in the 105th Congress— in earnest the idea of developing a new ence. That is, mental health profes- it will put them out of the cop-killer approach to banning these bullets sionals who have participated in these bullet business permanently. based on their performance, rather specialized federally funded programs Mr. President, I ask unanimous con- than their physical characteristics. have tended not only to meet their sent that the letter of support from the Mind, this concept was not entirely payback obligations, but have contin- Fraternal Order of Police be printed in new; the idea had been discussed during ued to work in the public sector or the RECORD. our efforts in 1986, but the NRA had with the undeserved populations with There being no objection, the letter been immovable on the subject. The whom they have been trained to work. NRA’s leaders, and their constituent was ordered to be printed in the While the doctorate in psychology ammunition manufacturers, felt that RECORD, as follows: provides broad-based knowledge and any such broad-based ban based on a JANUARY 16, 1997. mastery in a wide variety of clinical bullet ‘‘performance standard’’ would Hon. DANIEL P. MOYNIHAN, skills, the specialized post-doctoral fel- inevitably lead to the outlawing of ad- U.S. Senate, lowship programs provide particular di- ditional classes of ammunition. They Washington, DC. DEAR SENATOR MOYNIHAN: On behalf of the agnostic and treatment skills required viewed it as a slippery slope, much as 277,000 members of the Fraternal Order of to effectively respond to these under- they have regarded the assault weap- Police, I am writing to advise you of our sup- ons ban as a slippery slope. The NRA served populations. For example, what port of legislation which you plan to intro- looks like severe depression in an el- had agreed to the 1986 and 1993 laws duce banning ‘‘cop-killer’’ bullets. only because they were narrowly drawn Continuing innovations in the construc- derly person might be a withdrawal re- to cover individual types of bullets. tion of ammunition place the vest-wearing lated to hearing loss, or what looks And so in 1993 I asked the ATF for police officer in jeopardy. Your bill requiring like poor academic motivation in a the technical assistance necessary to performance-based evaluations in order to child recently relocated from South- write into law an armor-piercing bullet restrict the availability of armor-piercing east Asia might be reflective of a cul- ‘‘performance standard.’’ At the time, bullets for hand-guns will secure a greater tural value of reserve rather than a dis- measure of safety for all of America’s law en- however, the experts at the ATF in- interest in academic learning. Each Of forcement officers. And though no bill or these situations requires very different formed us that this could not be done. piece of legislation can protect them fully They argued that it was simply too dif- from the dangers inherent to police work, interventions, of course, and special- ficult to control for the many variables your bill will enhance the value of the body ized assessment skills. that contribute to a bullet’s capability armor, which, sometimes, is all that stands Domestic violence is not just a prob- to penetrate police body armor. We between life and death. lem for the criminal justice system, it were told that it might be possible in The F.O.P. supports this effort to quantify is a significant public health problem. the future to develop a performance- and identify ‘‘cop-killer’’ bullets for hand- A single aspect of the issue, domestic based test for armor-piercing capabil- guns based on their ability to penetrate body violence against women results in al- armor, to prevent them from being used most 100,000 days of hospitalization, ity, but at the time we had to be con- against law enforcement officers. If I can be tent with the existing content-based of assistance in working to pass this legisla- 30,000 emergency room visits, and 40,000 approach. tion, please do not hesitate to contact me, or visits to physicians each year. Rates of Well. Two years passed and the Office Executive Director Jim Pasco, at (202) 547– child and spouse abuse in rural areas of Law Enforcement Standards of the 8189. are particularly high as are the rates of S494 CONGRESSIONAL RECORD — SENATE January 21, 1997 alcohol abuse and depression in adoles- ship programs established with such funds; percent since the beginning of 1994. cents. A post-doctoral fellowship pro- and Owner Joey Fasano reduced his staff gram in the psychology of rural popu- ‘‘(D) will provide any other information or from 50 to 35 employees. lations could be of special benefit in assurance as the Secretary determines ap- The Boca in Middlesex County, New propriate. addressing these problems. ‘‘(c) CONTINUED PROVISION OF SERVICES.— Jersey, averaged 40 to 60 lunches per Given the changing demographics of Any individual who receives a grant or fel- day prior to 1994. The restaurant now the Nation—the increasing life span lowship under this section shall certify to serves between 5 to 15 lunches per day. and numbers of the elderly, the rising the Secretary that such individual will con- Owner Robert Campione reduced his percentage of minority populations tinue to provide the type of services for staff from 18 to 14 employees. within the country, as well as an in- which such grant or fellowship is awarded for The 37th Street Hideaway Restaurant creased recognition on the long-term at least 1 year after the term of the grant or in New York City did 150 lunches a day sequel of violence and abuse—and given fellowship has expired. prior to 1994. Owner Van Panopoulos ‘‘(d) REGULATIONS.—Not later than 180 days the demonstrated success and effec- after the date of enactment of this section, now serves 40 lunches and his dinner tiveness of these kinds of specialized the Secretary shall promulgate regulations business has dropped 30 to 40 percent. training programs, it is incumbent necessary to carry out this section, includ- Mr. Panopoulos reduced his staff from upon us to encourage participation in ing regulations necessary to carry out this 20 to 10 employees. post-doctoral fellowship programs that section, including regulations that define the Bianco’s in Denver, Colorado, closed respond to the needs of the Nation’s terms ‘medically underserved areas’ or its lunch service in April 1994 because underserved. ‘medically unserved populations’. of the decline in business. Owner Fred ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.— White reduced his staff from 26 to 15 Mr. President, I ask unanimous con- There are authorized to be appropriated to sent that the text of this bill be printed carry out this section, $5,000,000 for each of employees. in the RECORD. the fiscal years 1998 through 2000.’’. Edward’s at Kanoloa in Hawaii has There being no objection, the bill was seen its revenues decline by 15 percent ordered to be printed in the RECORD as By Mr. INOUYE (for himself, Mr. since 1994. Owner Edward Frady at- follows: THOMAS, Mr. COCHRAN, and Mr. tributes the decline in his business to S. 113 STEVENS): the reduction in business meals and en- Be it enacted by the Senate and House of Rep- S. 114. A bill to repeal the reduction tertainment expense deduction. resentatives of the United States of America in in the deductible portion of expenses I sincerely hope that the business Congress assembled, for business meals and entertainment; meals reduction to 50 percent does not SECTION 1. GRANTS FOR FELLOWSHIPS IN PSY- to the Committee on Finance. become a Luxury Tax Two, in which CHOLOGY. Mr. INOUYE. Mr. President, I rise to the Congress moves toward restoration Part E of title VII of the Public Health introduce legislation to restore the only after the damage has been done Service Act (42 U.S.C. 294o) is amended by business meals and entertainment tax and huge job losses have occurred. Ac- adding at the end thereof the the following: deduction to 80 percent. I am joined by cordingly, I urge my colleagues to join ‘‘SEC. 779. GRANTS FOR FELLOWSHIPS IN PSY- CHOLOGY. Senators THOMAS, COCHRAN, AND STE- me in cosponsoring this important leg- ‘‘(a) IN GENERAL.—The Secretary shall es- VENS. Restoration of this deduction is islation. tablish a psychology post-doctoral fellowship essential to the livelihood of the food Mr. President, I ask unanimous con- program to make grants to and enter into service, travel and tourism, and enter- sent that the bill text be printed in the contracts with eligible entities to encourage tainment industries throughout the RECORD. the provision of psychological training and United States. These industries are S. 114 services in underserved treatment areas. being economically harmed as a result Be it enacted by the Senate and House of Rep- ‘‘(b) ELIGIBLE ENTITIES.— resentatives of the United States of America in ‘‘(1) INDIVIDUALS.—In order to receive a of this reduction. All are major indus- grant under this section an individual shall tries which employ millions of people. Congress assembled, submit an application to the Secretary at many of whom are already feeling the SECTION 1. REPEAL OF REDUCTION IN BUSINESS such time, in such form, and containing such effects of the reduction. MEALS AND ENTERTAINMENT TAX DEDUCTION. information as the Secretary shall require, The deduction for business meals and (a) IN GENERAL.—Paragraph (1) of section including a certification that such individ- entertainment was reduced from 80 to 274(n) of the Internal Revenue Code of 1986 ual— 50 percent under the Omnibus budget (relating to only 50 percent of meal and en- ‘‘(A) has received a doctoral degree Reconciliation Act of 1993, and went tertainment expenses allowed as deduction) through a graduate program in psychology is amended by striking ‘‘50 percent’’ and in- provided by an accredited institution at the into effect on January 1, 1994. Many serting ‘‘80 percent’’. time such grant is awarded; companies, small and large, have (b) CONFORMING AMENDMENT.—The heading ‘‘(B) will provide services in a medically changed their policies and guidelines for section 274(n) is amended by striking underserved population during the period of on travel and entertainment expenses ‘‘50’’ and inserting ‘‘80’’. such grant; as a result of the tax reduction in the (c) EFFECTIVE DATE.—The amendments ‘‘(C) will comply with the provisions of business meals and entertainment ex- made by this section shall apply to taxable subsection (c); and penses deduction. Businesses have also years beginning after December, 31, 1996. ‘‘(D) will provide any other information or been forced to curtail company reim- assurances as the Secretary determines ap- bursement policies because of the re- By Mr. INOUYE: propriate. S. 115. A bill to increase the role of ‘‘(2) INSTITUTIONS.—In order to receive a duction in the business meals and en- grant or contract under this section, an in- tertainment expenses deduction. In the Secretary of Transportation in ad- stitution shall submit an application to the some cases, businesses have eliminated ministering section 901 of the Merchant Secretary at such time, in such form, and their expense accounts. Consequently, Marine Act, 1936, and for other pur- containing such information as the Sec- restaurant establishments, which have poses; to the Committee on Commerce, retary shall require, including a certification replied heavily on business lunch and Science, and Transportation. that such institution— dinner services, are being adversely af- MERCHANT MARINE LEGISLATION ‘‘(A) is an entity, approved by the State, Mr. INOUYE. Mr. President, the leg- that provides psychological services in medi- fected by the reduction in business cally underserved areas or to medically un- meals. For example: islation I am introducing today would derserved populations (including entities Jay’s Restaurant in Dayton, Ohio, centralize the authority in the Sec- that care for the mentally retarded, mental closed its lunch service on July 14, 1994, retary of Transportation for admin- health institutions, and prisons); following a 15 percent decrease in lunch istering our cargo preference laws. The ‘‘(B) will use amounts provided to such in- business. This decision was based on background of these laws, the need for stitution under this section to provide finan- 2,000 fewer lunch customers from Janu- them, and the problems with, in my cial assistance in the form of fellowships to ary through June 1994 as compared to view, necessitate the legislation, are qualified individuals who meet the require- succinctly stated in a Journal of Com- ments of subparagraphs (A) through (C) of the same period in 1993. paragraph (2); The Wall Street Restaurant in Des merce article dated November 18, 1988. ‘‘(C) will not use in excess of 10 percent of Moines, Iowa, an upscale restaurant While the printing of this article was amounts provided under this section to pay serving American and Continental cui- several years ago, the background it for the administrative costs of any fellow- sine, has seen its revenues decline 40 provides and the light it sheds on our January 21, 1997 CONGRESSIONAL RECORD — SENATE S495 present needs are still pertinent. I ask ried that year. As an industry, the revenue Day; to the Committee on the Judici- unanimous consent that the text of the amounted to about $502 million. ary. bill and the article be printed in the Necessity for Preference: Preference stat- utes are formally predicated on the need for MEMORIAL DAY LEGISLATION RECORD. assured cargoes to encourage the existence Mr. INOUYE. Mr. President, in our There being no objection, the items of a U.S.-flag merchant fleet to act as a mili- effort to accommodate many Ameri- were ordered to be printed in the tary auxiliary in times of national emer- cans by making the last Monday in RECORD, as follows: gencies. May, Memorial Day, we have lost sight S. 115 Past efforts to apply preference to com- of the significance of this day to our Be in enacted by the Senate and House mercial cargoes have failed, reflecting U.S. nation. My bill would restore Memorial of Representatives of the United States of governmental sensitivity to objections by this country’s trading partners as well as Day to May 30 and authorize our flag to America in Congress assembled, stern opposition form U.S. exporters, import- fly at half mast on that day. In addi- SECTION 1. TRANSPORTATION IN AMERICAN VES- ers and agricultural interests. The availabil- tion, this legislation would authorize SELS OF GOVERNMENT PERSONNEL ity of preference cargoes has unquestionably the President to issue a proclamation AND CERTAIN CARGOES. kept some U.S. carriers in business but crit- Section 901(b)(2) of the Merchant Marine designating Memorial Day and Veter- ics argue that preference has encouraged Act, 1936 (46 U.S.C. App. 1241 (b)(2)), is ans Day as days for prayer and cere- keeping obsolete vessels in operation long amended to read as follows: monies. This legislation would help re- after they should have been scrapped. ‘‘(2)(A) The Secretary of Transportation Extent of Program: The Defense Depart- store the recognition our veterans de- shall have the sole responsibility for deter- ment, the Agriculture Department and the serve for the sacrifices they have made mining and designating the programs that Agency for International Development are on behalf of our nation. are subject to the requirements of this sub- the agencies most heavily involved in utiliz- Mr. President, I ask unanimous con- section. Each department or agency that has ing shipping and observing cargo preference. sent that the text of the bill be printed responsibility for a program that is des- But there are at least 10 others with the ignated by the Secretary of Transportation in the RECORD. same cargo preference responsibilities al- There being no objection, the bill was pursuant to the preceding sentence shall, for though smaller volumes. The Export-Import ordered to be printed in the RECORD, as the purposes of this subsection, administer Bank in 1987 reported an unusually high, 91 such program pursuant to regulations pro- percent rate of U.S.-flag vessel use. It follows: mulgated by such Secretary. brought participating carriers some $14.5 S. 116 ‘‘(B) The Secretary of Transportation million in revenue. Be it enacted by the Senate and House of Rep- shall— Problems: The Maritime Administration is ‘‘(i) review the administration of the pro- resentatives of the United States of America in responsible for monitoring other government Congress assembled, grams referred to in subparagraph (A); and agencies to try to make sure they live up to ‘‘(ii) on an annual basis, submit a report to SECTION 1. RESTORATION OF TRADITIONAL DAY preference requirements. In fiscal year 1987, Congress concerning the administration of OF OBSERVANCE OF MEMORIAL those agencies met the cargo share mini- such programs.’’. DAY. mums for the most part. Among the excep- (a) IN GENERAL.—Section 6103(a) of title 5, tions were cases in which the cargo origins [From the Journal of Commerce, November United States Code, is amended in the item and destinations were such that U.S.-flag 18, 1988] relating to Memorial Day by striking out vessels were simply not available. ‘‘the last Monday in May.’’ and inserting in CARGO PREFERENCE Despite Reagan administration pledges to lieu thereof ‘‘May 30.’’. What It Is: A series of statutes, going back honor cargo preference requirements, the (b) DISPLAY OF FLAG.—Section 2(d) of the to 1904, intended to assure U.S.-flag ships a Navy and the Agriculture Department have joint resolution entitled ‘‘An Act to codify minimum share of cargoes produced by U.S. had a number of preference fights with the and emphasize existing rules and customs government programs. It is the oldest U.S. maritime industry. pertaining to the display and use of the flag maritime promotional program and while One produced an agreement by which the of the United States of America’’, approved subsidies and financing aids have shrunk carriers agreed to forgo preference claims on June 22, 1942 (36 U.S.C. 174(d)), is amended by over the years, preference has survived. new Agriculture Department-supported ex- striking out ‘‘the last Monday in May;’’ and Background: The preference laws began by port programs with commercial-like terms inserting in lieu thereof ‘‘May 30;’’. tracking this country’s extension of its mili- in return for increasing to 75 percent their (c) PROCLAMATION.—The President is au- tary and naval power, starting with the share of giveaway relief food shipments. thorized and requested to issue a proclama- Spanish-American War. More recently, they In another such dispute, the Navy and the tion calling upon the people of the United have come to reflect the expansion of gov- U.S. State Department were forced to nego- States to observe Memorial Day as a day for ernment programs extending U.S. economic tiate a cargo-sharing agreement with Iceland prayer and ceremonies showing respect for power and interest abroad. for military shipments there. Iceland threat- American veterans of wars and other mili- The Military Transportation Act of 1904 ened the future of U.S. bases in that country tary conflicts. was the first of the preference statutes and if the United States didn’t agree to a depar- its requirement for U.S.-flag vessel use, 100 ture from 100 percent U.S.-flag carriage of By Mr. INOUYE: percent, is the highest. defense shipments. S. 117. A bill to amend the Internal In 1934 Congress adopted Public Resolution There have been other, largely budget-driv- 17 to require that half of the exports fi- en attempts to bypass preference, but car- Revenue Code of 1986 to provide for the nanced by the Reconstruction Finance Corp. riers and their supporters in Congress gen- tax treatment of residential ground were to move in U.S.-flag vessels. Later that erally have managed to forestall them. rents, and for other purposes; to the resolution was made to apply to financing of Comment: Budgetary austerity and the De- Committee on Finance. fense Department’s strict insistence of com- the Export-Import Bank, established origi- RESIDENTIAL GROUND RENTS LEGISLATION nally to facilitate trade with the Soviet petitive procurement have combined to Mr. INOUYE. Mr. President, I rise Union. make for increasing carrier dissatisfaction, In the early postwar period, Congress acted especially with the Navy’s Military Sealift today to speak on an issue of great im- each year to apply the resolution’s 50 per- Command. portance to Hawaii’s leasehold home- cent U.S.-flag share to foreign aid shipments. Efforts already are under way to change owners. In fiscal year 1992, at my re- It permanently inserted the requirements the competitive procurement system the quest, the Congress appropriated into the 1954 Agricultural Trade Develop- command uses. Carriers hope generally, to $400,000 to study the feasibility of re- ment and Assistance Act, better known as end the pressures they believe force rates forming the Internal Revenue Code to downward to depressed levels. Food for Peace and PL–480. address ground lease rent payments Public Law 664 in 1961 made clear that The presidentially appointed Commission preference should benefit and protect all on Merchant Marine and Defense has rec- and to determine what role, if any, the U.S.-flag vessels, not just liners, and that all ommended that all U.S.-flag preference re- Federal Government should play in en- U.S. programs, including those where non- quirements programs be raised to 100 percent couraging lease to fee conversions. The military agencies procured equipment, mate- but the tight budget and such interests as nationwide study was conducted by the rials or commodities for themselves or for- farmers and traders will work against such a Hawaii Real Estate and Research Cen- eign governments, had to use U.S. flags to step. Agricultural interests have tried unsuc- ter. the extent of 50 percent. cessfully to have existing preference re- The legislation I am introducing moved from government programs in the be- Importance to Carriers: In the last year for today is based on the recommendations which statistics are available, calendar 1986, lief that they inhibit U.S. farm exports. U.S.-flag carriers hauled more than 33 mil- of this study. The bill would: First, lion metric tons of ****preference**** By Mr. INOUYE: provide a mortgage interest deduction ****cargo****, somewhat more than the 28.5 S. 116. A bill to restore the tradi- for residential leasehold properties by million tons of commercial shipments car- tional day of observance of Memorial allowing the nonredeemable ground S496 CONGRESSIONAL RECORD — SENATE January 21, 1997 lease rents to be claimed as an interest there are approximately 4,600 single- (2) DEFINITION.—Section 1055 of such Code deduction; and second, include a tax family homes remaining in residential is amended by redesignating subsection (d) credit for up to $5,000 for certain trans- leaseholds. However, resolution over as subsection (e) and by inserting after sub- action costs on the transfer of certain condominium leasehold reform remains section (c) the following new subsection: ‘‘(d) QUALIFIED NON-REDEEMABLE GROUND residential leasehold land for a 5-year uncertain. In 1990, the Honolulu City RENT.—For purposes of this subtitle, the period, ending on December 31, 2001. Council enacted legislation that would term ‘qualified non-redeemable ground rent’ Transaction costs include closing cap lease rent increases. The constitu- means a ground rent with respect to which— costs, attorneys’ fees, surveys and ap- tionality of the law as challenged in ‘‘(1) there is a lease of land which is for a praisals, and telephone, office, and U.S. District Court, District of Hawaii. term in excess of 15 years, travel expenses. The court found the law unconstitu- ‘‘(2) no portion of any payment is allocable In most private home ownership situ- tional because the formula it used to to the use of any property other than the ations in this country, a homeowner arrive at permitted lease rent was il- land surface, owns both the building and land. Under ‘‘(3) the lessor’s interest in the land is pri- logical. marily a security interest to protect the a leasehold arrangement a homeowner In 1991, due to the Hawaii State Leg- rental payments to which the lessor is enti- owns the building—single-family home, islature’s unwillingness to address the tled under the lease, and condominium, or cooperative apart- leasehold problems, the Honolulu City ‘‘(4) the leased property must be used as ment—on leased land. The research Council again enacted a mandatory the taxpayer’s principal residence (within conducted under the leasehold study leasehold conversion law for leasehold the meaning of section 1034).’’ shows that residential leaseholds are condominiums, Ordinance 01–95. The (3) CONFORMING AMENDMENTS.— not uncommon in other parts of the constitutionality of this law is cur- (A) The heading for section 1055 of such United States and elsewhere in the Code is amended by striking ‘‘redeemable’’. rently being challenged in the Federal (B) The item relating to section 1055 in the world. Residential leaseholds exist in court. Another bill which linked lease table of sections for part IV of subchapter O places such as Baltimore, MD, Irvine, rent increases with the Consumer Price of chapter 1 of subtitle A of such Code is CA, native American lands in Palm Index and the level of disposable in- amended by striking ‘‘Redeemable ground’’ Springs, CA, Fairhope, AL, Pearl River come available to condominium owners and inserting ‘‘Ground’’. Basin, MS, and New York, NY. was also considered. This bill, similar (c) EFFECTIVE DATE.—The amendments The study further indicates that to the one enacted in 1990, was found to made by this section shall take effect on the there are few States that regulate resi- be unconstitutional. date of the enactment of this Act, with re- dential leaseholds. Of those that do, spect to taxable years ending after such The uncertainty in the residential date. the most common requirement applies leasehold market continues to create SEC. 2. CREDIT FOR TRANSACTION COSTS ON only to condominium or time share economic and emotional distress for THE TRANSFER OF LAND SUBJECT units and is one requiring adequate dis- the leasehold residents of Hawaii. Vol- TO CERTAIN GROUND RENTS. closure of the lease terms. For the untary conversion has helped to ease (a) IN GENERAL.—Subpart B of part IV of most part, States are unaware of any the situation and substantially reduce subchapter A of chapter 1 of the Internal leasehold problems in their jurisdic- the stock of leasehold residential units Revenue Code of 1986 (relating to foreign tax tions. However, residential leaseholds in Hawaii. Yet, voluntary conversion is credit, etc.) is amended by inserting after section 30A the following new section: have proven to be problematic for the not enough to resolve the residential State of Hawaii. leasehold problems. ‘‘SEC. 30B. CREDIT FOR TRANSACTION COSTS. ‘‘(a) ALLOWANCE OF CREDIT.— The formation of Hawaii’s land ten- My legislation will help reduce the ure system can be traced back to 1778 ‘‘(1) IN GENERAL.—At the election of the economic hardship due to the uncer- taxpayer, there shall be allowed as a credit when British Capt. James Cook made tainty in Hawaii’s residential leasehold against the tax imposed by this chapter for his first contact with the Hawaiian civ- system. The leasehold study contains the taxable year an amount equal to the ilization. Leasing was the preferred an analysis of the tax revenue effects transaction costs relating to any sale or ex- system to maintain control and retain of this legislation by allowing individ- change of land subject to ground rents with a portfolio asset value. Residential ual tax deductions for residential respect to which immediately after and for leaseholds were first developed on the ground rent. The analysis suggests that at least 1 year prior to such sale or ex- change— Island of Oahu after World War II. Pop- there are potential revenues to the ulation increases created a demand for ‘‘(A) the transferee is the lessee who owns Federal Government if this legislation a dwelling unit on the land being trans- housing and other types of real estate is enacted into law. ferred, and development. Federal income tax pol- Mr. President, I ask unanimous con- ‘‘(B) the transferor is the lessor. icy encouraged the retention of land to sent that the text of my bill be printed ‘‘(2) CREDIT ALLOWED TO BOTH TRANSFEROR avoid payment of large capital gains in the RECORD. AND TRANSFEREE.—The credit allowed under taxes. There being no objection, the bill was paragraph (1) shall be allowed to both the transferor and the transferee. Hawaii’s land tenure system is now ordered to be printed in the RECORD, as ‘‘(b) LIMITATIONS.— anomalous to the rest of the United follows: ‘‘(1) LIMITATION PER DWELLING UNIT.—The States because of the concentration of S. 117 land in the hands of government, large amount of the credit allowed to a taxpayer Be it enacted by the Senate and House of Rep- under subsection (a) for any taxable year charitable trusts, large agriculturally resentatives of the United States of America in shall not exceed the lesser of— based companies and owners of small Congress assembled, ‘‘(A) $5,000 per dwelling unit, or parcels or urban properties. High land SECTION 1. MORTGAGE INTEREST DEDUCTION ‘‘(B) 10 percent of the sale price of the land. prices and high renegotiated rents con- FOR QUALIFIED NON-REDEEMABLE ‘‘(2) LIMITATION BASED ON TAXABLE IN- tinue to create instability in Hawaii’s GROUND RENTS. COME.—The amount of the credit allowed to residential leasehold system. In 1967, (a) IN GENERAL.—Section 163(c) of the In- a taxpayer under subsection (a) for any tax- the Hawaii State Legislature enacted a ternal Revenue Code of 1986 is amended to able year shall not exceed the sum of— Land Reform Act which did not become read as follows: ‘‘(A) 20 percent of the regular tax for the ‘‘(c) GROUND RENTS.—For purposes of this taxable year reduced by the sum of the cred- effective until the U.S. Supreme Court subtitle, any annual or periodic rental under its allowable under subpart A and sections issued its 1984 decision in Hawaii Hous- a redeemable ground rent (excluding 27, 28, 29, 30, and 30A plus ing Authority v. Midkiff, 104 S. Ct. 231 amounts in redemption thereof) or a quali- ‘‘(B) the alternative minimum tax imposed (1984). The act and the Supreme Court fied non-redeemable ground rent shall be by section 55. decision basically divided the market treated as interest on an indebtedness se- ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For into a ‘‘single-family home market in cured by a mortgage.’’ purposes of this section— which leaseholds were subject to man- (b) TREATMENT OF QUALIFIED NON-REDEEM- ‘‘(1) TRANSACTION COSTS.— datory conversion, and a leasehold con- ABLE GROUND RENTS.— ‘‘(A) IN GENERAL.—The term ‘transaction (1) IN GENERAL.—Subsections (a), (b), and costs’ means any expenditure directly associ- dominium market which did not come (d) of section 1055 of the Internal Revenue ated with a transaction, the purpose of within the scope of the law.’’ Code of 1986 (relating to redeemable ground which is to convey to the lessee, by the les- Mandatory conversions on the single- rents) are amended by inserting ‘‘or qualified sor, land subject to ground rents. family home market occurred from non-redeemable’’ after ‘‘redeemable’’ each ‘‘(B) SPECIFIC EXPENDITURES.—Such term 1979 to 1982, and 1986 to 1990. As of 1992, place it appears. includes closing costs, attorney fees, surveys January 21, 1997 CONGRESSIONAL RECORD — SENATE S497 and appraisals, and telephone, office, and ralization Service [INS] with the au- ‘‘(ii) in the case of an applicant claiming to travel expenses incurred in negotiations with thority to naturalize applicants in the have served in a recognized guerrilla unit, respect to such transaction. Philippines was to relieve the unneces- the United States Department of the Army ‘‘(C) LOST RENTS NOT INCLUDED.—Such term sary hardships that section 405 appli- or, in the event the Department of the Army does not include lost rents due to the pre- has no record of military service of such ap- mature termination of an existing lease. cants would encounter by having to plicant, the General Headquarters of the ‘‘(2) DWELLING UNIT.—A dwelling unit shall travel to the United States for an Armed Forces of the Philippines; or include any structure or portion of any interview and naturalization cere- ‘‘(iii) in the case of an applicant claiming structure which serves as the principal resi- mony, since many are elderly and have to have served in the Philippine Scouts or dence (within the meaning of section 1034) no relatives in the United States. The any other component of the United States for the lessee. initial period for filing an application Armed Forces in the Far East (other than a ‘‘(3) REDUCTION IN BASIS.—The basis of under this provision was from Novem- component described in clause (i) or (ii)) at property acquired in a transaction to which ber 29, 1990 to November 30, 1992. Sec- any time during the period beginning Sep- tember 1, 1939, and ending December 31, 1946, this section applies shall be reduced by the tion 113 further extended the filing pe- amount of credit allowed under subsection the United States executive department (or (a). riod to February 3, 1995. successor thereto) that exercised supervision Unfortunately, the authority to nat- ‘‘(4) ELECTION.—This section shall apply to over such component. any taxpayer for the taxable year only if uralize applicants in the Philippines ‘‘(B) An executive department specified in such taxpayer elects to have this section so has now expired. The legislation I am subparagraph (A) may not make a deter- apply. introducing today would immediately mination under the second sentence of sec- ‘‘(d) CARRYOVER OF CREDIT.— restore, for a 5-year period, the author- tion 329(a) with respect to the service or sep- ‘‘(1) CARRYOVER PERIOD.—If the credit al- ity for the U.S. Embassy in Manila to aration from service of a person described in lowed to the taxpayer under subsection (a) paragraph (1) except pursuant to a request complete the naturalization process of from the Service.’’; and for any taxable year exceeds the amount of approximately 12,000 remaining appli- the limitation imposed by subsection (b)(2) (3) by adding at the end the following new for such taxable year (hereafter in this sub- cations which were properly filed under subsection: section referred to as the ‘unused credit section 405 of the 1990 Act. The legisla- ‘‘(d) IMPLEMENTATION.—(1) Notwithstand- year’), such excess shall be a carryover to tion does not extend the application ing any other provision of law, for purposes each of the 5 succeeding taxable years. period. The legislation also makes of the naturalization of natives of the Phil- ippines under this section— ‘‘(2) AMOUNT CARRIED TO EACH YEAR.— clear that naturalization is available ‘‘(A) the processing of applications for nat- ‘‘(A) ENTIRE AMOUNT CARRIED TO FIRST only to those applicants who were uralization, filed in accordance with the pro- YEAR.—The entire amount of the unused found by the Recovered Personnel Divi- visions of this section, including necessary credit for an unused credit year shall be car- sion of the U.S. Army and the Guerrilla interviews, shall be conducted in the Phil- ried to the earliest of the 5 taxable years to Affairs Division of the U.S. Army to ippines by employees of the Service des- which (by reason of paragraph (1)) such cred- ignated pursuant to section 335(b) of the Im- it may be carried. deserve benefits from the U.S. Govern- migration and Nationality Act; and ‘‘(B) AMOUNT CARRIED TO OTHER 4 YEARS.— ment. ‘‘(B) oaths of allegiance for applications The amount of unused credit for the unused Mr. President, I ask unanimous con- for naturalization under this section shall be credit year shall be carried to each of the re- sent that the bill text be printed in the administered in the Philippines by employ- maining 4 taxable years to the extent that RECORD. There being no objection, the bill was ees of the Service designated pursuant to such unused credit may not be taken into ac- section 335(b) of that Act. count for a prior taxable year because of the ordered to be printed in the RECORD, as ‘‘(2) Notwithstanding paragraph (1), appli- limitation imposed by subsection (b)(2). follows: cations for naturalization, including nec- ‘‘(e) TERMINATION.—This section shall not S. 118 essary interviews, may continue to be proc- apply to any transaction cost paid or in- Be it enacted by the Senate and House of Rep- essed, and oaths of allegiance may continue curred in taxable years beginning after De- resentatives of the United States of America in to be taken in the United States.’’. cember 31, 2001.’’ Congress assembled, (b) REPEAL.—Section 113 of the Depart- (b) CLERICAL AMENDMENT.—The table of ments of Commerce, Justice, and State, the SEC. ll. COMPLETION OF THE NATURALIZA- sections for such subpart B is amended by in- Judiciary, and Related Agencies Appropria- serting after the item relating to section 30A TION PROCESS FOR CERTAIN NA- TIONALS OF THE PHILIPPINES. tions Act, 1993 (8 U.S.C. 1440 note), is re- the following new item: (a) IN GENERAL.—Section 405 of the Immi- pealed. gration and Nationality Act of 1990 (8 U.S.C. (c) EFFECTIVE DATE; TERMINATION DATE.— ‘‘Sec. 30B. Credit for transaction costs on 1440 note) is amended— (1) APPLICATION TO PENDING APPLICA- the transfer of land subject to (1) by striking subparagraph (B) of sub- TIONS.—The amendment made by subsection certain ground rents.’’ section (a)(1) and inserting the following: (a) shall apply to applications filed before February 3, 1995. (c) EFFECTIVE DATE.—The amendments ‘‘(B) who— (2) TERMINATION DATE.—The authority pro- made by this section shall apply to expendi- ‘‘(i) is listed on the final roster prepared by vided by the amendment made by subsection tures paid or incurred in taxable years begin- the Recovered Personnel Division of the (a) shall expire February 3, 2001. ning after December 31, 1996. United States Army of those who served hon- orably in an active duty status within the Philippine Army during the World War II oc- By Mr. INOUYE: By Mr. INOUYE: S. 119. A bill to amend title VII of the S. 118. A bill to provide for the com- cupation and liberation of the Philippines, ‘‘(ii) is listed on the final roster prepared Public Health Service Act to ensure pletion of the naturalization process that social work students or social for certain nationals of the Philippines; by the Guerrilla Affairs Division of the United States Army of those who received work schools are eligible for support to the Committee on the Judiciary. recognition as having served honorably in an under the Health Careers Opportunity FILIPINO NATURALIZATION LEGISLATION active duty status within a recognized guer- Program, the Minority Centers of Ex- Mr. INOUYE. rilla unit during the World War II occupation cellence Program, and programs of Mr. President, section 405 of the Im- and liberation of the Philippines, or grants for training projects in geri- migration Act of 1990 was enacted to ‘‘(iii) served honorably in an active duty atrics, and to establish a social work make naturalization under section 329 status within the Philippine Scouts or with- training program; to the Committee on of the Immigration and Nationality in any other component of the United States Armed Forces in the Far East (other than a Labor and Human Resources. Act available to those Filipino World component described in clause (i) or (ii)) at PUBLIC HEALTH SERVICE ACT AMENDMENTS War II veterans whose military service any time during the period beginning Sep- Mr. INOUYE. Mr. President, on be- during the liberation of the Philippines tember 1, 1939, and ending December 31, half of our Nation’s clinical social makes them deserving of United States 1946;’’; workers, I am introducing legislation citizenship. The naturalization author- (2) by adding at the end of subsection (a) to amend the Public Health Service ity to allow the veterans to be natural- the following new paragraph: Act. This legislation will: First, estab- ized in the Philippines was first grant- ‘‘(3)(A) For purposes of the second sentence lish a new social work training pro- ed under Section 113 of the fiscal year of section 329(a) and section 329(b)(3) of the gram; second, ensure that social work Immigration and Nationality Act, the execu- 1993 Departments of Commerce, Jus- tive department under which a person served students are eligible for support under tice, State, Judiciary and related agen- shall be— the Health Careers Opportunity Pro- cies appropriations bill. ‘‘(i) in the case of an applicant claiming to gram and that social work schools are The original intent of Congress in have served in the Philippine Army, the eligible for support under the Minority providing the Immigration and Natu- United States Department of the Army; Centers for Excellence programs; S498 CONGRESSIONAL RECORD — SENATE January 21, 1997 Third, permit schools offering degrees 293b(a)(3)) is amended by striking ‘‘offering ‘‘(d) FUNDING.— in social work to obtain grants for graduate programs in clinical psychology’’ ‘‘(1) AUTHORIZATION OF APPROPRIATIONS.— training projects in geriatrics; and and inserting ‘‘offering graduate programs in For the purpose of carrying out this section, fourth, ensure that social work is rec- clinical psychology, graduate programs in there is authorized to be appropriated clinical social work, or programs in social $10,000,000 for each of the fiscal years 1998 ognized as a profession under the Pub- work’’. through 2000. lic Health Maintenance Organization (c) HEALTH PROFESSIONS SCHOOL.—Section ‘‘(2) ALLOCATION.—Of the amounts appro- [HMO] Act. 739(h)(1)(A) of the Public Health Service Act priated under paragraph (1) for a fiscal year, Despite the impressive range of serv- (42 U.S.C. 293c(h)(1)(A)) is amended by strik- the Secretary shall make available not less ices social workers provide to the peo- ing ‘‘or a school of pharmacy’’ and inserting than 20 percent for awards of grants and con- ple of this Nation, particularly our el- ‘‘a school of pharmacy, or a school offering tracts under subsection (b).’’. graduate programs in clinical social work, or derly, disadvantaged, and minority SEC. 4. CLINICAL SOCIAL WORKER SERVICES. populations, few Federal programs programs in social work’’. Section 1302 of the Public Health Service exist to provide opportunities for social (d) HEALTH CAREERS OPPORTUNITIES PRO- GRAM.—Section 740(a)(1) of the Public Health Act (42 U.S.C. 300e–1) is amended— work training in health and mental Service Act (42 U.S.C. 293d(a)(1)) is amended (1) in paragraphs (1) and (2), by inserting health care. This legislation builds on by striking ‘‘which offer graduate programs ‘‘clinical social worker,’’ after ‘‘psycholo- the health professions education legis- in clinical psychology’’ and inserting ‘‘offer- gist,’’ each place it appears; lation enacted by the 102d Congress en- ing graduate programs in clinical psychology (2) in paragraph (4)(A), by striking ‘‘and abling schools of social work to apply or programs in social work’’. psychologists’’ and inserting ‘‘psychologists, for AIDS training funding and re- SEC. 2. GERIATRICS TRAINING PROJECTS. and clinical social workers’’; and sources to establish collaborative rela- Section 777(b)(1) of the Public Health Serv- (3) in paragraph (5), by inserting ‘‘clinical tionships with rural health care provid- ice Act (42 U.S.C. 294o(b)(1)) is amended by social work,’’ after ‘‘psychology,’’. ers and schools of medicine or osteo- inserting ‘‘schools offering degrees in social pathic medicine. This bill provides work,’’ after ‘‘teaching hospitals,’’. By Mr. INOUYE: funding for traineeships and fellow- SEC. 3. SOCIAL WORK TRAINING PROGRAM. S. 120. A bill to amend title VII of the ships for individuals who plan to spe- Part E of title VII of the Public Health Public Health Service Act to make cer- Service Act (42 U.S.C. 294n et seq.) is amend- tain graduate programs in clinical psy- cialize in, practice, or teach social ed by adding at the end the following: chology eligible to participate in var- work, or for operating approved social ‘‘SEC. 779. SOCIAL WORK TRAINING PROGRAM. ious health professions loan programs; work training programs; it assists dis- ‘‘(a) TRAINING GENERALLY.—The Secretary advantaged students to earn graduate may make grants to, or enter into contracts to the Committee on Labor and Human degrees in social work with concentra- with, any public or nonprofit private hos- Resources. tions in health or mental health; it pital, school offering programs in social PUBLIC HEALTH SERVICE ACT AMENDMENTS provides new resources and opportuni- work, or to or with a public or private non- ties in social work training for minori- profit entity (which the Secretary has deter- Mr. INOUYE. Mr. President, I am in- ties; and it encourages schools of social mined is capable of carrying out such grant troducing legislation today to modify work to expand programs in geriatrics. or contract)— Title VII of the U.S. Public Health ‘‘(1) to plan, develop, and operate, or par- Service Act in order to provide stu- Finally, the recognition of social work ticipate in, an approved social work training as a profession merely codifies current dents enrolled in graduate psychology program (including an approved residency or programs with the opportunity to par- social work practice and reflects the internship program) for students, interns, modifications made by the Medicare residents, or practicing physicians; ticipate in various health professions HMO legislation. ‘‘(2) to provide financial assistance (in the loan programs. I believe it is important to ensure form of traineeships and fellowships) to stu- Providing students enrolled in grad- that the special expertise and skills so- dents, interns, residents, practicing physi- uate psychology programs with eligi- cial workers possess continue to be cians, or other individuals, who are in need bility for financial assistance in the available to the citizens of this Nation. thereof, who are participants in any such form of loans, loan guarantees, and program, and who plan to specialize or work scholarships will facilitate a much This legislation, by providing financial in the practice of social work; assistance to schools of social work ‘‘(3) to plan, develop, and operate a pro- needed infusion of behavioral science and social work students, recognizes gram for the training of individuals who plan expertise into our public health efforts. the long history and critical impor- to teach in social work training programs; There is a growing recognition of the tance of the services provided by social and valuable contribution that is being work professionals. In addition since ‘‘(4) to provide financial assistance (in the made by our nation’s psychologists to- social workers have provided quality form of traineeships and fellowships) to indi- ward solving some of our Nation’s most mental health services to our citizens viduals who are participants in any such pro- distressing problems such as domestic for a long time and continue to be at gram and who plan to teach in a social work violence, addictions, occupational training program. the forefront of establishing innovative ‘‘(b) ACADEMIC ADMINISTRATIVE UNITS.— stress, child abuse, and depression. programs to serve our disadvantaged ‘‘(1) IN GENERAL.—The Secretary may make The participation of students of all populations, I believe that it is time to grants to or enter into contracts with kinds is vital to the success of health provide them with the proper recogni- schools offering programs in social work to care training. The Title VII programs tion of their profession that they have meet the costs of projects to establish, main- play a significant role in providing fi- clearly earned and deserve. tain, or improve academic administrative units (which may be departments, divisions, nancial support for the recruitment of Mr. President, I ask unanimous con- minorities, women, and individuals sent that the text of this bill be printed or other units) to provide clinical instruc- tion in social work. from economically disadvantaged in the CONGRESSION RECORD. There being no objection, the bill was ‘‘(2) PREFERENCE IN MAKING AWARDS.—In backgrounds. Minority therapists, for making awards of grants and contracts example, have an advantage in the pro- ordered to be printed in the RECORD, as under paragraph (1), the Secretary shall give follows: vision of critical services to minority preference to any qualified applicant for populations because they are more S. 119 such an award that agrees to expend the likely to understand or, perhaps, share Be it enacted by the Senate and House of Rep- award for the purpose of— resentatives of the United States of America in ‘‘(A) establishing an academic administra- the cultural background of their cli- Congress assembled, tive unit for programs in social work; or ents and are often able to communicate SECTION 1. SOCIAL WORK STUDENTS. ‘‘(B) substantially expanding the programs to them in their own language. Also (a) SCHOLARSHIPS, GENERALLY.—Section of such a unit. significant is the fact that, when com- 737(a)(3) of the Public Health Service Act (42 ‘‘(c) DURATION OF AWARD.—The period dur- pared with non-minority graduates, U.S.C. 293a(a)(3)) is amended by striking ‘‘of- ing which payments are made to an entity ethnic minority graduates are less fering graduate programs in clinical psychol- from an award of a grant or contract under likely to work in private practice and ogy’’ and inserting ‘‘offering graduate pro- subsection (a) may not exceed 5 years. The more likely to work in community or provision of such payments shall be subject grams in clinical psychology, graduate pro- non-profit settings, where ethnic mi- grams in clinical social work, or programs in to annual approval by the Secretary of the social work’’. payments and subject to the availability of nority and economically disadvantaged (b) FACULTY POSITIONS.—Section 738(a)(3) appropriations for the fiscal year involved to individuals are more likely to seek of the Public Health Service Act (42 U.S.C. make the payments. care. January 21, 1997 CONGRESSIONAL RECORD — SENATE S499 It is important that a continued em- The first bill, the Higher Education By removing the ‘‘private activity’’ phasis be placed on the needy popu- Bond Parity Act of 1997, has been intro- label, this legislation will restore the lations of our nation and that contin- duced several times previously by this parity of treatment of private non- ued support be provided for the train- Senator, with several of my distin- profit institutions and their public ing of individuals who are most likely guished colleagues as cosponsors. It counterparts, and reinstate proper rec- to provide services in underserved would undo what ought never have ognition in the tax code of the essen- areas. been done. It would remove the ‘‘pri- tial public purposes served by such pri- Mr. President, I ask unanimous con- vate activity’’ label from the tax-ex- vate institutions. sent that the text of this bill be printed empt bonds of private, nonprofits high- The capital needs of private colleges in the CONGRESSIONAL RECORD. er education institutions and other or- and universities merit the close atten- There being no objection, the bill was ganizations, and thereby eliminate the tion of this body. The cost of these ordered to be printed in the RECORD, as arbitrary $150 million cap on the changes is modest, given their impor- follows: amount of tax-exempt bonds that such tance. The staff of the Joint Commit- S. 120 as institution may have outstanding. tee on Taxation has estimated the rev- The Tax Reform Act of 1986 imposed enue loss previously at $308 million Be it enacted by the Senate and House of Rep- the ‘‘private activity’’ label (and a $150 resentatives of the United States of America in over 5 years. The Senate has twice Congress assembled, million cap) on bonds issued on behalf passed legislation to remove the ‘‘pri- on nonprofit institutions, collectively SECTION 1. PARTICIPATION IN VARIOUS HEALTH vate activity’’ label and the $150 mil- PROFESSIONS LOAN PROGRAMS. known as section 501(c)(3) organiza- lion bond cap—in the Family Tax Fair- (a) LOAN AGREEMENTS.—Section 721 of the tions. This was a serious error. The cap ness, Economic Growth, and Health Public Health Service Act (42 U.S.C. 292q) is has relegated private, higher education Care Access Act of 1992 (H.R. 4210) and institutions to a diminished, restricted amended— the Revenue Act of 1992 (H.R. 11)—only (1) in subsection (a), by inserting ‘‘, or any status, relative to their public counter- to have both bills vetoed for other rea- public or nonprofit schools that offer grad- parts. uate programs in clinical psychology’’ after Already, this has caused observable, sons by President Bush. We should cor- ‘‘veterinary medicine’’; harmful effects on many of our Na- rect this error before it is too late. (2) in subsection (b)(4), by striking ‘‘or doc- tion’s leading colleges and universities. Otherwise, we will soon look up and tor of veterinary medicine or an equivalent Thirty-four of them presently are at or find that we do not recognize the high- degree’’ and inserting ‘‘doctor of veterinary near the $150 million cap, and unlike er education sector. medicine or an equivalent degree, or a grad- Mr. President, the second tax bill I uate degree in clinical psychology’’; and their public counterparts are precluded from using tax-exempt to finance class- introduce today—the Stop Tax-exempt (3) in subsection (c)(1), by inserting ‘‘, or Arena Debt Issuance Act (or STADIA schools that offer graduate programs in clin- rooms, libraries, research laboratories, ical psychology’’ after ‘‘veterinary medi- and the like. A few years ago, as the for short)—was introduced by this Sen- cine’’. $150 million cap was bargaining to take ator for the first time last summer. (b) LOAN PROVISIONS.—Section 722 of the effect, 19 of the universities that Since that time, the bill has attracted Public Health Service Act (42 U.S.C. 292r) is ranked in the top 50 in research under- the close scrutiny of bond counsel and amended— taking were private institutions. their clients and has received much at- (1) in subsection (b)(1), by striking ‘‘or doc- Today, only 14 of those 19 private insti- tention in the press almost all of which tor of veterinary medicine or an equivalent has been favorable. degree’’ and inserting ‘‘doctor of veterinary tutions remain in the top 50, and all but one are foreclosed form tax-exempt Mr. Keith Olbermann, anchor of medicine or an equivalent degree, or a grad- ESPN’s Sportscenter program, even de- uate degree in clinical psychology’’; and financing as a result of the $150 million (2) in subsection (k)— per institution limit. clared that the introduction of the bill (A) in the matter preceding paragraph (1), We must act soon to restore the ac- was ‘‘paramount among all other by striking ‘‘or podiatry’’ and inserting ‘‘po- cess of private colleges and universities sports stories’’ last year. Mr. diatry, or clinical psychology’’; and to tax-exempt financing equal to that Olbermann’s support for this legisla- (B) in paragraph (4), by striking ‘‘or of their pubic counterparts. Otherwise, tion is so emphatic that he compared podiatric medicine’’ and inserting ‘‘podiatric the vitality of our private institutions its author to Dr. Jonas Salk. Passage medicine, or clinical psychology’’. in higher education and research will of the bill, Mr. Olbermann says, is ‘‘the vaccine that * * * could conceivably at By Mr. MOYNIHAN (for himself, be at risk. And we will lose a distin- least towards the cure, if not cure im- Mr. CHAFEE, Mr. KENNEDY, guishing feature of American society of mediately, almost all the ills of and Ms. MOSELEY-BRAUN): inestimable value—the singular degree to which we maintain an independent sports.’’ S. 121. A bill to amend the Internal Mr. Olbermann is far too generous to Revenue Code of 1986 to provide for sector—‘‘private universit[ies] in the public service,’’ to paraphrase the this Senator, but he is right about the 501(c)(3) bonds a tax treatment similar importance of this bill, both to sports to governmental bonds, and for other motto of New York University. This is no longer so in most of the democratic fans and to taxpayers. This bill closes a purposes; to the Committee on Fi- big loophole, a loophole that ulti- nance. world; it never was so in the rest. It is a treasure and a phenomenon that has mately injures State and local govern- THE HIGHER EDUCATION BOND PARITY ACT clearly produced excellence—indeed, ments and other issuers of tax-exempt S. 122. A bill to amend the Internal the envy of the world—and it must be bonds, that provides an unintended Revenue Code of 1986 to correct the sustained. Federal subsidy (in fact, contravenes treatment of tax-exempt financing of The practical effect of the $150 mil- Congressional intent), that underwrites professional sports facilities; to the lion cap is to deny tax-exempt financ- bidding wars among cities battling for Committee on Finance. ing to large, private, research-oriented professional sports franchises, and that THE STOP TAX-EXEMPT ARENA DEBT ISSUANCE educational institutions most in need contributes to the enrichment of per- ACT of capital to carry out their research sons who need no Federal assistance Mr. MOYNIHAN. Mr. President, I rise mission. This will have a predictable whatsoever. today to introduce two tax bills which impact over a generation: the distribu- A decade ago, I was much involved in I introduced together for the first time tion of major research in this country the drafting of the Tax Reform Act of last summer. The two bills are both will inevitably shift to public institu- 1986. A major objective of that legisla- significant in their own rights. Yet, tions. If I may use California as an ex- tion was to simplify the Tax Code by when taken together, they correct a se- ample, we could look up one day and eliminating a large number of loop- rious misallocation of our limited re- find Stanford to be still an institution holes that had come to be viewed as sources under present law: a tax sub- of the greatest quality as an under- unfair because they primarily bene- sidy that inures largely to the benefit graduate teaching facility—with a fine fited small groups of taxpayers. One of of wealthy sports franchise owners and law school and excellent liberal arts the loopholes we sought to close in 1986 their players would be replaced with degree program—but with all the big was one that permitted builders of pro- increased for higher education and re- science projects at Berkeley, the State fessional sports facilities to use tax-ex- search. institution. empt bonds. Mind, we had nothing S500 CONGRESSIONAL RECORD — SENATE January 21, 1997 against new stadium construction, but To cite a case in point, Mr. Art How do taxpayers benefit from all we made the judgment that scarce Fed- Modell recently moved the Cleveland this? They don’t. Tickets prices go way eral resources could surely be used in Browns professional football team from up—and stay up—after a new stadium ways that would better serve the public Cleveland to Baltimore to become the opens. So while fans are asked to foot good. The increasing proliferation of Ravens. Prior to relocating, Mr. Modell the bills through tax subsides, many no tax-exempt bonds had driven up inter- had said, ‘‘I am not about to rape the longer can afford the price of admis- est costs for financing roads, schools, city [of Cleveland] as others in my sion. A study of Newsday recently libraries, and other governmental pur- league have done. You will never hear found that tickets prices rose by 32 per- poses, led to mounting revenue losses me say ‘if I don’t get this I’m moving.’ cent in five new baseball stadiums, as to the U.S. Treasury, caused an ineffi- You can go to press on that one. I compared to a major league average of cient allocation of capital, and allowed couldn’t live with myself if I did that.’’ 8 percent. Not to mention the refresh- wealthy taxpayers to shield a growing Obviously, Mr. Modell changed his ments and other concessions, which amount of their investment income mind. And why? An extraordinary sta- also cost more in the new venues. from income tax by purchasing tax-ex- dium deal with the State of Maryland. According to Barron’s the projects empt bonds. Thus, we expressly forbade The State of Maryland (and the local ‘‘cater largely to well-heeled fans, use of ‘‘private activity’’ bonds for sports authority) provided the land on meaning the folks who can afford to sports facilities, intending to eliminate which the stadium is located, issued $87 pay for seats in glassed-in luxury tax-exempt financing of these facilities million in tax-exempt bonds (yielding boxes. While the suit-and-cell-phone altogether. interest savings of approximately $60 crowd get all the best seats, the aver- Unfortunately, our effort in 1986 million over a 30 year period as com- age taxpayer is consigned to ‘cheap backfired. Team owners, with help pared to taxable bonds), and contrib- seats’ in nosebleed land or, more often, from clever tax counsel, soon recog- uted $30 million in cash and $64 million for following his favorite team on tele- nized that the change could work to in state lottery revenues toward con- vision.’’ their advantage. As columnist Neal R. struction of the stadium. Mr. Modell Nor do these new stadiums provide Pierce wrote recently, team owners agreed to contribute $24 million toward much, if any, economic benefit to their ‘‘were not checkmated for long. They the project and, in return, receives local communities. Professor Baade were soon exhibiting the gall to ask rent-free use of the stadium (the fran- studied new stadiums in 30 metropoli- mayors to finance their stadiums with chise pays only for the operating and tan areas. He found no discernible posi- [governmental] purpose bonds.’’ Con- maintenance costs), $65 million in sales gress did not anticipate this. After all, tive impact on economic development of rights to purchase season tickets (so in 27 of the areas, and a negative im- by law, governmental bonds used to called ‘‘personal seat licenses’’), all build stadiums would be tax-exempt pact in the other 3. revenues from selling the right to Any job growth that does result is ex- only if no more than 10 percent of the name the stadium luxury suites, pre- debt service is derived from stadium tremely expensive. The Congressional mium seats, in-park advertising, and Research Service [CRS] reports that revenue sources. In other words, non- concessions, and 50 percent of all reve- stadium governmental revenues (i.e., the new $177 million football stadium nues from stadium events other than for the Baltimore Ravens is expected to tax revenues, lottery proceeds, and the Ravens’ games (with the right to con- like) must be used to repay the bulk of cost $127,000 per job created. By con- trol the booking of those events). trast, the cost per job generated by the debt, freeing team owners to pock- Financial World reports that the et stadium revenues. Who would have Maryland’s economic development pro- value of the Baltimore Ravens’ fran- gram is just $6,250. Another recent thought that local officials, in order to chise increased from $165 million in keep or get a team, would capitulate to study in New York found that a pro- 1992 (i.e., before the move from Cleve- posed $1 billion stadium for the Yan- team owners—granting concessionary land) to an estimated $250 million, stadium leases and committing limited kees would cost over $500,000 for every after its first season in the new sta- job created. government revenues to repay stadium dium. It’s little wonder that Mr. debt, thereby hindering their own abil- Finally, Federal taxpayers receive Modell recently stated: ‘‘The pride and absolutely no economic benefit for pro- ity to provide schools, roads and other presence of a professional football public investments? viding this subsidy. As CRS points out, team is far more important than 30 li- ‘‘Almost all stadium spending is spend- The result has been a stadium con- braries, and I say that with all due re- struction boom unlike anything we ing that would have been made on spect to the learning process.’’ other activities within the United have ever seen. In the last 6 years Meanwhile, the City of Cleveland has States, which means that benefits to alone, over $4 billion has been spent on agreed to construct a new, $225 million the nation as a whole are near zero.’’ building 30 professional sports stadi- stadium to house an expansion football After all, these teams will invariably ums. According to Prof. Robert Baade, team. When Mr. Modell decided to locate somewhere in the United States, an economist at Lake Forest College in move his team to Baltimore, the NFL it is just a matter of where. And should Illinois and a stadium finance expert, agreed to create a new Cleveland foot- the Federal taxpayers in the team’s that amount could ‘‘completely refur- ball team with the same name: the current home town be forced to pay for bish the physical plants of the nation’s Cleveland Browns. Most cities are not public elementary and secondary as fortunate when a team leaves. the team’s new stadium in the new schools.’’ An additional $7 billion of We are even reaching a point at city? The answer is unmistakably no. stadiums are in the planning stages, which stadiums are being abandoned The STADIA bill would save about and no end is in sight. before they have been used for 10 or 15 $50 million a year now spent to sub- What is driving the demand for new years. A recent article in Barron’s re- sidize professional sports stadiums. So stadiums? Mainly, team owners’ bot- ports that this owner-perceived ‘‘eco- I ask you once again this year, should tom lines and rising player salaries. Al- nomic obsolescence’’ has doomed even we subsidize the commercial pursuits though our existing stadiums are gen- recently-built venues: of wealthy team owners, encourage es- erally quite serviceable, team owners The eight-year-old Miami Arena is facing a calating player salaries, and under- can generate greater income, increase future without its two major tenants, the write bidding wars among cities seek- their franchise values dramatically, Florida Panthers hockey team and the ing (or fighting to keep) professional and compete for high-priced free agents Miami Heat basketball franchise, because of sports teams, or, would our scarce re- with new tax-subsidized, single-purpose inadequate seating capacity and a paucity of sources be put to better use for public stadiums equipped with luxury luxury suites. The Panthers have already cut needs, like higher education and re- skyboxes, club seats and the like. a deal to move to a new facility that nearby search? To my mind, this is not a dif- Thus, using their monopoly power, Broward County is building for them at a ficult choice. cost of around $200 million. Plans call for Mr. President, I ask unanimous con- owners threaten to move, forcing bid- Dade County to build a new $210 million ding wars among cities. End result: arena before the end of the decade, despite sent that the two bills be printed in the new, tax-subsidized stadiums with the fact that the move will leave local tax- RECORD, along with explanatory state- fancy amenities and sweetheart lease payers stuck with servicing the debt on two ments. I also ask unanimous consent deals. Miami arenas rather than just one. that the following articles be printed January 21, 1997 CONGRESSIONAL RECORD — SENATE S501

in the RECORD following the bills and of the net proceeds of the issue are to be used (C) by striking ‘‘Paragraph (4)’’ and insert- explanatory statements. (directly or indirectly) by an exempt person ing ‘‘Paragraph (3)’’. There being no objection, the items described in section 150(a)(2)(A)(ii) to provide (11) The heading of section 146(k)(3) of such were ordered to be printed in the residential rental property for family units. Code is amended by striking ‘‘GOVERN- This paragraph shall not apply if the bond MENTAL’’ and inserting ‘‘EXEMPT PERSON’’. RECORD, as follows: would not be a private activity bond if the (12) The heading of section 146(m) of such S. 121 section 501(c)(3) organization were not an ex- Code is amended by striking ‘‘GOVERNMENT’’ Be it enacted by the Senate and House of Rep- empt person. and inserting ‘‘EXEMPT PERSON’’. resentatives of the United States of America in ‘‘(2) EXCEPTION FOR BONDS USED TO PROVIDE (13) Section 147(b) of such Code is amended Congress assembled, QUALIFIED RESIDENTIAL RENTAL PROJECTS.— by striking paragraph (4) and by redesignat- SECTION 1. SHORT TITLE. Paragraph (1) shall not apply to any bond is- ing paragraph (5) as paragraph (4). This Act may be cited as the ‘‘Higher Edu- sued as part of an issue if the portion of such (14) Section 147(h) of such Code is amended cation Bond Parity Act’’. issue which is to be used as described in to read as follows: paragraph (1) is to be used to provide— ‘‘(h) CERTAIN RULES NOT TO APPLY TO SEC. 2. TAX TREATMENT OF 501(c)(3) BONDS SIMI- ‘‘(A) a residential rental property for fam- MORTGAGE REVENUE BONDS AND QUALIFIED LAR TO GOVERNMENTAL BONDS. ily units if the first use of such property is STUDENT LOAN BONDS.—Subsections (a), (b), (a) IN GENERAL.—Section 150(a) of the In- pursuant to such issue, (c), and (d) shall not apply to any qualified ternal Revenue Code of 1986 (relating to defi- ‘‘(B) qualified residential rental projects mortgage bond, qualified veterans’ mortgage nitions and special rules) is amended by (as defined in section 142(d)), or bond, or qualified student loan bond.’’. striking paragraphs (2) and (4), by redesig- ‘‘(C) property which is to be substantially (15) Section 148(d)(3)(F) of such Code is nating paragraphs (5) and (6) as paragraphs rehabilitated in a rehabilitation beginning amended— (4) and (5), respectively, and by inserting within the 2-year period ending 1 year after (A) by striking ‘‘or which is a qualified after paragraph (1) the following: the date of the acquisition of such property. 501(c)(3) bond’’; and ‘‘(2) EXEMPT PERSON.— ‘‘(3) SUBSTANTIAL REHABILITATION.— (B) in the heading thereof, by striking ‘‘(A) IN GENERAL.—The term ‘exempt per- ‘‘(A) IN GENERAL.—Except as provided in ‘‘GOVERNMENTAL USE BONDS AND QUALIFIED son’ means— subparagraph (B), rules similar to the rules 501(c)(3)’’ and inserting ‘‘EXEMPT PERSON’’. ‘‘(i) a governmental unit, or of section 47(c)(1)(C) shall apply in determin- (16) Section 148(f)(4)(B)(ii)(II) of such Code ‘‘(ii) a 501(c)(3) organization, but only with ing for purposes of paragraph (2)(C) whether is amended by striking ‘‘(other than a quali- respect to its activities which do not con- property is substantially rehabilitated. fied 501(c)(3) bond)’’. stitute unrelated trades or businesses as de- ‘‘(B) EXCEPTION.—For purposes of subpara- (17) Section 148(f)(4)(C)(iv) of such Code is termined by applying section 513(a). graph (A), clause (ii) of section 47(c)(1)(C) amended— ‘‘(B) GOVERNMENTAL UNIT NOT TO INCLUDE shall not apply, but the Secretary may ex- (A) by striking ‘‘a governmental unit or a FEDERAL GOVERNMENT.—The term ‘govern- tend the 24-month period in section 501(c)(3) organization’’ both places it appears mental unit’ does not include the United 47(c)(1)(C)(i) where appropriate due to cir- and inserting ‘‘an exempt person’’; States or any agency or instrumentality cumstances not within the control of the (B) by striking ‘‘qualified 501(c)(3) bonds,’’; thereof. owner. and ‘‘(C) 501(c)(3) ORGANIZATION.—The term ‘‘(4) CERTAIN PROPERTY TREATED AS NEW (C) by striking the comma after ‘‘private ‘501(c)(3) organization’ means any organiza- PROPERTY.—Solely for purposes of determin- activity bonds’’ the first place it appears. tion described in section 501(c)(3) and exempt ing under paragraph (2)(A) whether the 1st (18) Section 148(f)(7)(A) of such Code is from tax under section 501(a).’’. use of property is pursuant to tax-exempt fi- amended by striking ‘‘(other than a qualified (b) REPEAL OF QUALIFIED 501(c)(3) BOND nancing— 501(c)(3) bond)’’. DESIGNATION.—Section 145 of the Internal ‘‘(A) IN GENERAL.—If— (19) Section 149(d)(2) of such Code is amend- Revenue Code of 1986 (relating to qualified ‘‘(i) the 1st use of property is pursuant to ed— 501(c)(3) bonds) is repealed. taxable financing, (A) by striking ‘‘(other than a qualified (c) CONFORMING AMENDMENTS.— ‘‘(ii) there was a reasonable expectation (at 501(c)(3) bond)’’; and (1) Section 141(b)(3) of the Internal Reve- the time such taxable financing was pro- (B) in the heading thereof, by striking nue Code of 1986 is amended— vided) that such financing would be replaced ‘‘CERTAIN PRIVATE’’ and inserting ‘‘PRIVATE’’. (A) in subparagraphs (A)(ii)(I) and (B)(ii), by tax-exempt financing, and (20) Section 149(e)(2) of such Code is amend- by striking ‘‘government use’’ and inserting ‘‘(iii) the taxable financing is in fact so re- ed— ‘‘exempt person use’’; placed within a reasonable period after the (A) in the second sentence, by striking (B) in subparagraph (B), by striking ‘‘a taxable financing was provided, ‘‘which is not a private activity bond’’ and government use’’ and inserting ‘‘an exempt then the 1st use of such property shall be inserting ‘‘which is a bond issued for an ex- person use’’; treated as being pursuant to the tax-exempt empt person described in section (C) in subparagraphs (A)(ii)(II) and (B), by financing. 150(a)(2)(A)(i)’’; and striking ‘‘related business use’’ and inserting ‘‘(B) SPECIAL RULE WHERE NO OPERATING (B) by adding at the end the following: ‘‘related private business use’’; STATE OR LOCAL PROGRAM FOR TAX-EXEMPT FI- ‘‘Subparagraph (D) shall not apply to any (D) in the heading of subparagraph (B), by NANCING.—If, at the time of the 1st use of bond which is not a private activity bond but striking ‘‘RELATED BUSINESS USE’’ and insert- property, there was no operating State or which would be such a bond if the 501(c)(3) ing ‘‘RELATED PRIVATE BUSINESS USE’’; and local program for tax-exempt financing of organization using the proceeds thereof were (E) in the heading thereof, by striking the property, the 1st use of the property not an exempt person.’’. ‘‘GOVERNMENT USE’’ and inserting ‘‘EXEMPT shall be treated as pursuant to the 1st tax- (21) The heading of section 150(b) of such PERSON USE’’. exempt financing of the property. Code is amended by striking ‘‘TAX-EXEMPT (2) Section 141(b)(6)(A) of such Code is ‘‘(C) DEFINITIONS.—For purposes of this PRIVATE ACTIVITY BONDS’’ and inserting amended by striking ‘‘a governmental unit’’ paragraph— ‘‘CERTAIN TAX-EXEMPT BONDS’’. and inserting ‘‘an exempt person’’. ‘‘(i) TAX-EXEMPT FINANCING.—The term (22) Section 150(b)(3) of such Code is amend- (3) Section 141(b)(7) of such Code is amend- ‘tax-exempt financing’ means financing pro- ed— ed— vided by tax-exempt bonds. (A) in subparagraph (A), by inserting (A) by striking ‘‘government use’’ and in- ‘‘(ii) TAXABLE FINANCING.—The term ‘tax- ‘‘owned by a 501(c)(3) organization’’ after serting ‘‘exempt person use’’; and able financing’ means financing which is not ‘‘any facility’’; (B) in the heading thereof, by striking tax-exempt financing.’’. (B) in subparagraph (A), by striking ‘‘any ‘‘GOVERNMENT USE’’ and inserting ‘‘EXEMPT (7) Section 141(f) of such Code, as redesig- private activity bond which, when issued, PERSON USE’’. nated by paragraph (6), is amended— purported to be a tax-exempt qualified (4) Section 141(b) of such Code is amended (A) at the end of subparagraph (E), by add- 501(c)(3) bond’’ and inserting ‘‘any bond by striking paragraph (9). ing ‘‘or’’; which, when issued, purported to be a tax-ex- (5) Section 141(c)(1) of such Code is amend- (B) at the end of subparagraph (F), by empt bond, and which would be a private ac- ed by striking ‘‘governmental units’’ and in- striking ‘‘, or’’ and inserting a period; and tivity bond if the 501(c)(3) organization using serting ‘‘exempt persons’’. (C) by striking subparagraph (G). the proceeds thereof were not an exempt per- (6) Section 141 of such Code is amended by (8) The last sentence of section 144(b)(1) of son’’; and redesignating subsection (e) as subsection (f) such Code is amended by striking ‘‘(deter- (C) by striking the heading thereof and in- and by inserting after subsection (d) the fol- mined’’ and all that follows to the period. serting ‘‘BONDS FOR EXEMPT PERSONS OTHER lowing: (9) Section 144(c)(2)(C)(ii) of such Code is THAN GOVERNMENTAL UNITS.—’’. ‘‘(e) CERTAIN ISSUES USED TO PROVIDE RES- amended by striking ‘‘a governmental unit’’ (23) Section 150(b)(5) of such Code is amend- IDENTIAL RENTAL HOUSING FOR FAMILY and inserting ‘‘an exempt person’’. ed— UNITS.— (10) Section 146(g) of such Code is amend- (A) in subparagraph (A), by striking ‘‘pri- ‘‘(1) IN GENERAL.—Except as provided in ed— vate activity’’; paragraph (2), for purposes of this title, the (A) by striking paragraph (2); (B) in subparagraph (A), by inserting ‘‘and term ‘private activity bond’ includes any (B) by redesignating paragraphs (3) and (4) which would be a private activity bond if the bond issued as part of an issue if any portion as paragraphs (2) and (3), respectively; and 501(c)(3) organization using the proceeds S502 CONGRESSIONAL RECORD — SENATE January 21, 1997 thereof were not an exempt person’’ after without regard to any exemption from such Legislation enacted in 1988 imposed low-in- ‘‘tax-exempt bond’’; definition other than section 103(o)(2)(A)).’’; come tenant occupancy restrictions on exist- (C) by striking subparagraph (B) and in- and ing residential rental property that is ac- serting the following: (B) in subparagraph (C)(ii)(I), by striking quired by section 501(c)(3) organizations in ‘‘(B) such facility is required to be owned ‘‘(other than a qualified 501(c)(3) bond, as de- tax-exempt-bond-financed transactions. by an exempt person, and’’; and fined in section 145)’’. These restrictions required that a minimum (D) in the heading thereof, by striking (d) EFFECTIVE DATES.— number of the housing units comprising the ‘‘GOVERNMENTAL UNITS OR 501(c)(3) ORGANIZA- (1) IN GENERAL.—Except as provided in property be continuously occupied by ten- TIONS’’ and inserting ‘‘EXEMPT PERSONS’’. paragraph (2), the amendments made by this ants having a family incomes of 50 percent (24) Section 150 of such Code is amended by section shall apply to bonds (including re- (60 percent in certain cases) of area median adding at the end the following: funding bonds) issued with respect to capital income for periods of up to 15 years. These ‘‘(f) CERTAIN RULES TO APPLY TO BONDS expenditures made on or after the date of the same low-income tenant occupancy require- FOR EXEMPT PERSONS OTHER THAN GOVERN- enactment of this Act. ments apply to for-profit developers receiv- MENTAL UNITS.— (2) EXCEPTION.—The amendments made by ing tax-exempt private activity bond financ- ‘‘(1) IN GENERAL.—Nothing in section 103(a) this section shall not apply to bonds issued ing. or any other provision of law shall be con- before January 1, 1997, for purposes of apply- Other restrictions strued to provide an exemption from Federal ing section 148(f)(4)(D) of the Internal Reve- Several restrictions are imposed on private income tax for interest on any bond which nue Code of 1986. would be a private activity bond if the activity bonds generally that do not apply to bonds used to finance State and local govern- 501(c)(3) organization using the proceeds HIGHER EDUCATION BOND PARITY ACT OF 1997 ment activities. Many of these restrictions thereof were not an exempt person unless PRESENT LAW such bond satisfies the requirements of sub- also apply to qualified 501(c)(3) bonds. No Interest on State and local governmental more than two percent of the proceeds of a sections (b) and (f) of section 147. bonds generally is excluded from income if ‘‘(2) SPECIAL RULE FOR POOLED FINANCING OF bond issue may be used to finance the costs the bonds are issued to finance direct activi- of issuing the bonds, and these monies are 501(c)(3) ORGANIZATION.— ties of these governments (sec. 103). Interest ‘‘(A) IN GENERAL.—At the election of the is- not counted in determining whether the on bonds issued by these governments to fi- bonds satisfy the requirement that at least suer, a bond described in paragraph (1) shall nance activities of other persons, e.g., pri- be treated as meeting the requirements of 95 percent of the net proceeds of each bond vate activity bonds, is taxable unless a spe- issue be used for the exempt activities quali- section 147(b) if such bond meets the require- cific exception is included in the Code. One ments of subparagraph (B). fying the bonds for tax-exemption. such exception is for private activity bonds The weighted average maturity of a bond ‘‘(B) REQUIREMENTS.—A bond meets the re- issued to finance activities of private, chari- quirements of this subparagraph if— issue may not exceed 120 percent of the aver- table organizations described in Code section age economic life of the property financed ‘‘(i) 95 percent or more of the net proceeds 501(c)(3) (‘‘section 501(c)(3) organizations’’) of the issue of which such bond is a part are with the proceeds. A public hearing must be when the activities do not constitute an un- held and an elected public official must ap- to be used to make or finance loans to 2 or related trade business (sec. 141(e)(1)(G)). more 501(c)(3) organizations or governmental prove the bonds before they are issued (or units for acquisition of property to be used Classification of section 501(c)(3) organization the bonds must be approved by voter referen- by such organizations, bonds as private activity bonds dum). ‘‘(ii) each loan described in clause (i) satis- Before enactment of the Tax Reform Act of If property financed with private activity fies the requirements of section 147(b) (deter- 1986, States and local governments and sec- bonds is converted to use not qualifying for mined by treating each loan as a separate tion 501(c)(3) organizations were defined as tax-exempt financing, certain loan interest issue), ‘‘exempt persons,’’ under the Code bond pro- penalties are imposed. ‘‘(iii) before such bond is issued, a demand visions. As exempt persons, section 501(c)(3) Both governmental and private activity survey was conducted which shows a demand organizations were not treated as ‘’private’’ bonds are subject to numerous other Code re- for financing greater than an amount equal persons, and their bonds were not ‘‘industrial strictions, including the following: to 120 percent of the lendable proceeds of development bonds’’ or ‘‘private loan bonds’’ 1. The amount of arbitrage profits that such issue, and (the predecessor categories to current pri- may be earned on tax-exempt bonds is strict- ‘‘(iv) 95 percent or more of the net proceeds vate activity bonds). Under present law, a ly limited, and most such profits must be re- of such issue are to be loaned to 501(c)(3) or- bond is a private activity bond if its proceeds bated to the Federal Government; ganizations or governmental units within 1 are used in a manner violating either (a) a 2. Banks may not deduct interest they pay year of issuance and, to the extent there are private business test or (b) a private loan to the extent of their investments in most any unspent proceeds after such 1-year pe- test. The private business test is a conjunc- tax-exempt bonds; and riod, bonds issued as part of such issue are to tive two-pronged test. First, the test limits 3. Interest on private activity bonds, other be redeemed as soon as possible thereafter private business use of governmental bonds than qualified 501(c)(3) bonds, is a preference (and in no event later than 18 months after to no more than 10 percent of the proceeds.1 item in calculating the alternative minimum issuance). Second, no more than 10 percent of the debt tax. A bond shall not meet the requirements of service on the bonds may be secured by or REASONS FOR CHANGE this subparagraph if the maturity date of derived from private business users of the A distinguishing feature of American soci- any bond issued as part of such issue is more proceeds. The private loan test limits to the ety is the singular degree to which the Unit- than 30 years after the date on which the lesser of 5 percent or $5 million the amount ed States maintains a private, non-profit bond was issued (or, in the case of a refund- of governmental bond proceeds that may be sector of private higher education, health ing or series of refundings, the date on which used to finance loans to persons other than care, and other charitable institutions in the the original bond was issued).’’. governmental units. public service. It is important to assist these (25) Section 1302 of the Tax Reform Act of Special restrictions on tax-exemption for section private institutions in their advancement of 1986 is repealed. 501(c)(3) organization bonds the public good. The restrictions of present (26) Section 57(a)(5)(C) of such Code is Present law treats section 501(c)(3) organi- law place these section 501(c)(3) organiza- amended by striking clause (ii) and by redes- zations as private persons; thus, bonds for tions at a financial disadvantage relative to ignating clauses (iii) and (iv) as clauses (ii) their use may only be issued as private ac- substantially identical governmental insti- and (iii), respectively. tivity ‘‘qualified 501(c)(3) bonds,’’ subject to tutions, and are particularly inappropriate. (27) Section 103(b)(3) of such Code is amend- the restrictions of Code section 145. The For example, private, non-profit research ed by inserting ‘‘and section 150(f)’’ after most significant of these restrictions limits universities are subject to the $150 million ‘‘section 149’’. the amount of outstanding bonds from which limitation on outstanding bonds, whereas (28) Section 265(b)(3) of such Code is amend- a section 501(c)(3) organization may benefit State-sponsored universities competing for ed— to $150 million. In applying this ‘‘$150 million the same research projects do not operate (A) in subparagraph (B), by striking clause limit,’’ all section 501(c)(3) organizations under a comparable restriction. A public hos- (ii) and inserting the following: under common management or control are pital generally has unlimited access to tax- ‘‘(ii) CERTAIN BONDS NOT TREATED AS PRI- treated as a single organization. The limit exempt bond financing, while a private, non- VATE ACTIVITY BONDS.—For purposes of does not apply to bonds for hospital facili- profit hospital is subject to a $150 million clause (i)(II), there shall not be treated as a ties, defined to include only acute care, pri- limitation on outstanding bonds to the ex- private activity bond any obligation issued marily impatient, organizations. A second tent the bonds finance health care facilities to refund (or which is part of a series of obli- restriction limits to no more than five per- that do not qualify under the present-law gations issued to refund) an obligation issued cent the amount of the net proceeds of a definition of hospital. These and other re- before August 8, 1986, which was not an in- bond issue that may be used to finance any strictions inhibit the ability of America’s dustrial development bond (as defined in sec- activities (including all costs of issuing the private, non-profit institutions to modernize tion 103(b)(2) as in effect on the day before bonds) other than the exempt purposes of the their health care facilities and to build the date of the enactment of the Tax Reform section 501(c)(3) organization. state-of-the-art research facilities for the ad- Act of 1986) or a private loan bond (as defined vancement of science, medicine, and other in section 103(o)(2)(A), as so in effect, but Footnotes at end of article. educational endeavors. January 21, 1997 CONGRESSIONAL RECORD — SENATE S503 Inhibiting the access of private, non-profit empt bond preference, or the provisions gen- amendments made by this section shall not research institutions to sources of capital fi- erally disallowing interest paid by banks on apply to bonds— nancing, in relation to their public counter- monies used to acquire or carry tax-exempt (A) the proceeds of which are used for— parts, distorts the distribution of major re- bonds. (i) the construction or rehabilitation of a search among the leading institutions, and EFFECTIVE DATE facility— over time will lead to the decline of research The provision is generally effective for (I) if such construction or rehabilitation undertakings by private, non-profit univer- bonds issued with respect to capital expendi- began before June 14, 1996, and was com- sities. The tax-exempt bond rules should re- tures made after the date of enactment. The pleted on or after such date, or duce these distortions by treating more provision does not apply to bonds issued (II) if a State or political subdivision equally State and local governments and prior to January 1, 1997 for the purposes of thereof has entered into a binding contract those private organizations which are en- applying the rebate requirements under Sec- before June 14, 1996, that requires the incur- gaged in similar actions advancing the pub- tion 148(f)(4)(D). rence of significant expenditures for such lic good. construction or rehabilitation, and some of FOOTNOTES EXPLANATION OF PROVISION such expenditures are incurred on or after 1 No more than 5 percent of bond proceeds may be The bill amends the tax-exempt bond pro- such date; or used in a private business use that is unrelated to (ii) the acquisition of a facility pursuant to visions of the Code to conform generally the the governmental purpose of the bond issue. the 10- treatment of bonds for section 501(c)(3) orga- percent debt service test, described below, likewise a binding contract entered into by a State or nizations to that provided for bonds issued to is reduced to 5 percent in the case of such ‘‘dis- political subdivision thereof before June 14, finance direct State or local government ac- proportionate’’ private business use. 1996, and 2 tivities, including construction of public This limit would be reduced to 5 percent in the (B) which are the subject of an official ac- case of disproportionate private use as under the hospitals and university facilities. Certain tion taken by relevant government officials present-law governmental bond disproportionate before June 14, 1996— restrictions, described below, that have been private use limit. imposed on qualified 501(c)(3) bonds (but not (i) approving the issuance of such bonds, or on governmental bonds) since 1986, and that S. 122 (ii) approving the submission of the ap- address specialized policy concerns, are re- proval of such issuance to a voter referen- Be it enacted by the Senate and House of Rep- dum. tained. resentatives of the United States of America in (3) EXCEPTION FOR FINAL BOND RESOLU- Repeal of private activity bond classification for Congress assembled, TIONS.—The amendments made by this sec- bonds for section 501(c)(3) organizations SECTION 1. SHORT TITLE. tion shall not apply to bonds the proceeds of The concept of an ‘‘exempt person’’ that This Act may be cited as the ‘‘Stop Tax- which are used for the construction or reha- existed under the Code bond provisions be- Exempt Arena Debt Issuance Act’’. bilitation of a facility if a State or political fore 1986, is reenacted. An exempt person is SEC. 2. TREATMENT OF TAX-EXEMPT FINANCING subdivision thereof has completed all nec- defined as (a) a State or local governmental OF PROFESSIONAL SPORTS FACILI- essary governmental approvals for the issu- TIES. unit or (b) a section 501(c)(3) organization, ance of such bonds before June 14, 1996. when carrying out its exempt activities (a) IN GENERAL.—Section 141 of the Inter- nal Revenue Code of 1986 (defining private (4) SIGNIFICANT EXPENDITURES.—For pur- under Code section 501(a). Thus, bonds for poses of paragraph (2)(A)(i)(II), the term section 501(c)(3) organizations are generally activity bond and qualified bond) is amended by redesignating subsection (e) as subsection ‘‘significant expenditures’’ means expendi- no longer classified as private activity tures equal to or exceeding 10 percent of the bonds. Financing for unrelated business ac- (f) and by inserting after subsection (d) the following new subsection: reasonably anticipated cost of the construc- tivities of such organizations continue to be tion or rehabilitation of the facility in- treated as a private activity for which tax- ‘‘(e) CERTAIN ISSUES USED FOR PROFES- SIONAL SPORTS FACILITIES TREATED AS PRI- volved. exempt financing is not authorized. (5) EXCEPTION FOR CERTAIN CURRENT As exempt persons, section 501(c)(3) organi- VATE ACTIVITY BONDS.— REFUNDINGS.— zations are subject to the same limits as ‘‘(1) IN GENERAL.—For purposes of this (A) IN GENERAL.—The amendments made States and local governments on using their title, the term ‘private activity bond’ in- cludes any bond issued as part of an issue if by this section shall not apply to any bond bond proceeds to finance private business ac- the proceeds of which are used exclusively to tivities or to make private loans. Thus, gen- the amount of the proceeds of the issue which are to be used (directly or indirectly) refund a qualified bond (or a bond which is a erally no more than 10 percent of the bond part of a series of refundings of a qualified 2 to provide professional sports facilities ex- proceeds can be used in a business use of a bond) if— person other than an exempt person if the ceeds the lesser of— ‘‘(A) 5 percent of such proceeds, or (i) the amount of the refunding bond does Code private payment test is satisfied, and not exceed the outstanding principal amount no more than 5 percent ($5 million if less) ‘‘(B) $5,000,000. ‘‘(2) BOND NOT TREATED AS A QUALIFIED of the refunded bond, can be used to make loans to such ‘‘non- (ii) the average maturity date of the issue exempt’’ persons. BOND.—For purposes of this title, any bond described in paragraph (1) shall not be a of which the refunding bond is a part is not Repeal of most additional special restrictions on qualified bond. later than the average maturity date of the section 501(c)(3) organization bonds ‘‘(3) PROFESSIONAL SPORTS FACILITIES.—For bonds to be refunded by such issue, and Persent Code section 145, which establishes purposes of this subsection— (iii) the net proceeds of the refunding bond additional restrictions on qualified 501(c)(3) ‘‘(A) IN GENERAL.—The term ‘professional are used to redeem the refunded bond not bonds, is repealed, along with the restriction sports facilities’ means real property or re- later than 90 days after the date of the issu- on bond-financed costs of issuance for sec- lated improvements used for professional ance of the refunding bond. tion 501(c)(3) organization bonds (sec. 147(h)). sports exhibitions, games, or training, re- For purposes of clause (ii), average maturity This eliminates the $150 million limit on gardless if the admission of the public or shall be determined in accordance with sec- non-hospital bonds for section 501(c)(3) orga- press is allowed or paid. tion 147(b)(2)(A) of the Internal Revenue nizations. ‘‘(B) USE FOR PROFESSIONAL SPORTS.—Any Code of 1986. Retention of certain specialized requirements for use of facilities which generates a direct or (B) QUALIFIED BOND.—For purposes of sub- section 501(c)(3) organization bonds indirect monetary benefit (other than reim- paragraph (A), the term ‘‘qualified bond’’ The bill retains certain specialized restric- bursement for out-of pocket expenses) for a means any tax-exempt bond to finance a pro- tions on bonds for section 501(c)(3) organiza- person who uses such facilities for profes- fessional sports facility (as defined in section tions. First, the bill retains the requirement sional sports exhibitions, games, or training 141(e)(3) of such Code, as added by subsection that existing residential rental property ac- shall be treated as a use described in sub- (a)) issued before the first date of committee quired by a section 501(c)(3) organization in a paragraph (A). action. tax-exempt-bond-financed transaction sat- ‘‘(4) ANTI-ABUSE REGULATIONS.—The Sec- THE STOP TAX-EXEMPT ARENA DEBT ISSUANCE isfy the same low-income tenant require- retary shall prescribe such regulations as ACT ments as similar housing financing for for- may be appropriate to carry out the purposes PRESENT LAW profit developers. Second, the bill retains the of this subsection, including such regula- Interest on State and local governmental present-law maturity limitations applicable tions as may be appropriate to prevent bonds generally is excluded from income if to bonds for section 501(c)(3) organizations, avoidance of such purposes through related the bonds are issued to finance direct activi- and the public approval requirements appli- persons, use of related facilities or multiuse ties of these governments (sec. 103). Interest cable generally to private activity bonds. complexes, or otherwise.’’ on bonds issued by these governments to fi- Third, the bill continues to apply the pen- (b) EFFECTIVE DATE.— nance activities of other persons, e.g., pri- alties on changes in use of tax-exempt-bond- (1) IN GENERAL.—Except as provided in vate activity bonds, is taxable unless the financed section 501(c)(3) organization prop- paragraphs (2), (3), and (5), the amendments bonds satisfy certain requirements. Private erty to a use not qualified for such financing. made by this section shall apply to bonds is- activity bonds must be within certain state- Finally, the bill makes no amendments, sued on or after the first date of committee wide volume limitations, must not violate other than technical conforming amend- action. the arbitrage and other applicable restric- ments, to the tax-exempt arbitrage restric- (2) EXCEPTION FOR CONSTRUCTION, BINDING tions, and must finance activities within one tions, the alternative minimum tax tax-ex- AGREEMENTS, OR APPROVED PROJECTS.—The of the categories specified in the Code. The S504 CONGRESSIONAL RECORD — SENATE January 21, 1997 Tax Reform Act of 1986 repealed the private vert the indirect Federal subsidy for tradi- backing to projects that will cater largely to activity bond category for sports facilities; tional governmental uses inherent in tax-ex- well-heeled fans, meaning the folks who can therefore no private activity bonds may be empt bonds for the benefit of professional afford to pay for seats in glassed-in luxury issued for this purpose. sports facilities or professional sports teams. boxes. While the suit-and-cell-phone crowd Bonds issued by State and local govern- It is intended that no tax-exempt bond pro- get all the best seats for corporate entertain- ments are considered to be government use ceeds may finance a ball park used for pro- ing, the average taxpayer is consigned to bonds, unless the bonds are classified as pri- fessional sports exhibitions, even if the ball ‘‘cheap’’ seats in nosebleed land or, more vate activity bonds. Bonds are deemed to be park is made a part of a larger multi-use often, to following his favorite team on cable private activity bonds if both the (i) private complex used 365 days a year for other pur- television. business use test and (ii) private security or poses. In addition, it is intended that recip- But voters don’t seem to mind. In Cin- payment test are met. The private business rocal usage of sports facilities by profes- cinnati last March they decided to raise use test is met if more than 10 percent of the sional sports franchises that divide their Hamilton County’s sales tax to 6% from bond proceeds, including facilities financed usage among several facilities in order to 5.5%, to help pay for a $540 million plan to with the bond proceeds, is used in a non- avoid the 5% use test be aggregated for pur- eventually raze the city’s Riverfront Sta- governmental trade or business. The private poses of this provision. dium and replace it with separate, state-of- security or payment test is met if more than No inference is intended regarding the the-art edifices for the Bengals football 10 percent of the bond repayments is secured rules under present law regarding the issu- squad and the Reds baseball team. by privately used property, or is derived ance or holding of, or interest paid or ac- And even in places where referenda have from the payments of private business users. crued on, any bonds issued prior to the effec- failed, local politicians leap into the fray to Additionally, bonds are deemed to be private tive date of this bill to finance sports facili- rescue beleaguered projects. Example: When activity bonds if more than five percent of ties. a proposal to use proceeds from a statewide the bond proceeds or $5 million are used to EFFECTIVE DATE lottery to fund a new ballpark for the Mil- waukee Brewers went down to defeat, the finance loans to persons other than govern- The bill is effective with respect to bonds Wisconsin State Legislature gave the ven- mental units. issued on or after the first date of committee ture new life by approving a hike in the sales REASONS FOR CHANGE action. tax in the five-county area around Milwau- The use of tax-exempt financing for profes- The bill does not apply to bonds issued to kee to finance the bulk of the proposed $250 sional sports facilities provides an indirect finance a professional sports facility if ac- million project. Likewise, two defeats for and inefficient federal tax subsidy. Congress tual construction or rehabilitation of the fa- stadium referenda in Seattle were insuffi- intended to eliminate this subsidy for profes- cility began prior to June 14, 1996 (or a State cient to keep the Washington State Legisla- sional sports facilities in the Tax Reform or political subdivision thereof had entered ture from meeting in emergency session to Act of 1986, by repealing the private activity into a binding contract prior to that date to approve a financial package clearing the way bond category for sports facilities. Congress construct, rehabilitate or acquire the facil- for a new $300 million baseball stadium for did not intend to continue the subsidy by al- ity) and such bonds are the subject of appro- the Seattle Mariners, complete with a re- lowing the use of tax-exempt bonds to fi- priate official action approving the bonds or tractable roof. nance the identical underlying private busi- submitting approval to a voter referendum. Even privately financed facilities, of which ness use through alternative financing ar- In addition, the bill does not apply to bonds there are a handful, typically benefit from rangements. issued to finance a professional sports facil- public subsidies in the form of land dona- In addition, the use of tax-exempt bonds to ity if a State or policical subdivision thereof tions and free infrastructure improvements. finance professional sports facilities is par- has completed all necessary governmental The Carolina Panthers’ new $170 million ticularly inappropriate where the facilities approvals for the issuance of such bonds. Ericsson Stadium in Charlotte, for instance, to be built are used to entice professional The bill does not apply to the issuance of received plenty of such goodies, as will a pro- sports franchises to relocate. certain current refunding bonds, where the posed $250 million downtown baseball sta- refunded bonds are qualified bonds issued EXPLANATION OF PROVISION dium for San Francisco’s Giants. The bill would provide that bonds issued to prior to the first date of committee action, Perhaps more bizarre, many of the stadi- finance professional sports facilities are pri- the average maturity and outstanding prin- ums that have already been demolished or vate activity bonds, and that such bonds are cipal amount of the refunding bonds do not are slated for abandonment are relatively not qualified bonds. Therefore, professional exceed that of the refunded bonds, the pro- new and in good condition. The days may be sports facilities will not qualify for tax-ex- ceeds of the refunding bonds are used to re- numbered, for example, for the multi-use empt bond financing. deem the refunded bonds within 90 days, and ovals built in the early ’Seventies such as A professional sports facility is defined to the refunding bonds are otherwise permis- Veterans Stadium in Philadelphia and Three include real property and related improve- sible under applicable provisions of the Code. Rivers Stadium in Pittsburgh. Both of these ments which are used for professional sports [From Barron’s, August 19, 1996] facilities will likely lose their baseball and exhibitions, games, or training, whether or FOUL PLAY? football teams. Such stadiums simply lack not admission of the public or press is al- TEAM OWNERS GET SPORTS PALACES AND FAT the skyboxes and other revenue-producing lowed or paid. In addition, a facility that is CONCESSION DEALS. ‘‘fan amenities’’ demanded by today’s team used for a purpose other than professional owners. TAXPAYERS GET STUCK WITH THE TAB. sports will nevertheless be treated as being So-called ‘‘economic obsolesence’’ may used for professional sports if the facility (By Jonathan R. Laing) also doom venues of even newer vintage. The generates a direct or indirect monetary ben- Sports stadiums have come to play an al- eight-year-old Miami Arena is facing a fu- efit (other than reimbursement for out-of- most religious role in American culture, a ture without its two major tenants, the Flor- pocket expenses) for a person who uses the fact noted by observers as varied as famed ida Panthers hockey team and the Miami facility for professional sports. These bene- architect Philip Johnson and best-selling au- Heat basketball franchise, because of inad- fits are intended to include an interest in thor James Michener. Like cathedrals of equate seating capacity and a paucity of lux- revenues from parking fees, food and bev- yore, today’s towering sports venues often ury suites. erage sales, advertising and sports facility dazzle the masses with their immense size The Panthers have already cut a deal to naming rights, television rights, ticket sales, and evoke fervent emotions with their ritual move to a new facility that nearby Broward private suites and club seats, and conces- events. And for some fans, cheering along County is building for them at a cost of sions. with a crowd of 60,000 people is about as close around $200 million. Plans call for Dade Public use infrastructure improvements to a religious experience as they’ll ever get. County to build a new $210 million arena for that connect to larger public-use systems, This facet of American life is worth con- the Heat before the end of the decade, de- such as highway access ramps and sewer and templating, if for no other reason than, in spite the fact that the move will leave local water connections, are not intended to be the 1990s alone, 30 professional sports palaces taxpayers stuck with servicing the debt on subject to the bill. Thus, bonds issued to fi- have been built in the U.S., at a total cost of two Miami arenas rather than just one. nance such improvements could still qualify over $4 billion. And the trend shows no signs ‘‘The shelf life on sports facilities seems to for tax-exempt status., if such bonds other- of stopping. Over the next five to seven be ever-compressing as teams force local au- wise qualify for such status under applicable years, according to Fitch Investors Services, thorities and municipalities to build them tax-exempt bond rules. Improvements which some 40 more major-league teams are likely new venues so that every conceivable source generate a direct or indirect monetary bene- to get new homes. Total price tag: an added of revenue they can identify can be engi- fit for a person who uses the facility for pro- $7 billion. neered into the new structure,’’ observes fessional sports are meant to be covered by The surge of building activity is mind-bog- Robert Baade, an economist at Lake Forest the bill. For example, if a professional sports gling on a number of counts. To begin with, College in Illinois. ‘‘The situation of the team owner receives revenues from the use it is being financed mainly by state and local Miami Arena and other modern facilities of a parking garage, the garage is not eligi- governments in spite of the fact that budgets that are being scrapped is crazy. For the ble for tax-exempt financing under the bill. are tight everywhere, leaving schools and so- more than $4 billion that has so far been The Secretary of the Treasury is author- cial programs facing deep cutbacks. Yet in spent on new stadiums, we could completely ized to issue anti-abuse regulations to pre- referendum after referendum, voters regu- refurbish the physical plants of the nation’s vent transactions intended to improperly di- larly approve large dollops of city and state public elementary and secondary schools.’’ January 21, 1997 CONGRESSIONAL RECORD — SENATE S505 The new stadiums befit the crass commer- Team owner Jerry Jones was lucky to in- ets. The team will be responsible only for cialism and endless cross-marketing of the herit a stadium already loaded with covering operating and maintenance ex- current business era. The games themselves skyboxes in 1988 to which he added some 80 penses of the facility. are almost submerged in a sea of collateral suites. In addition, he has inked stadium The Ravens will be able to keep all sta- activity, including food courts, sports bars, sponsorship agreements with the likes of dium revenues from the luxury suites, pre- interactive game rooms, private clubs and Nike, PepsiCo. American Express and AT&T. mium seats, concessions and in-park adver- sports-merchandise stores. Inside the arenas, As a result, Financial World estimates that tising, plus it will garner 50% from all reve- there are intrusive Jumbotron video systems the Cowboys earned revenues of nearly $40 nues at the stadium from non-football and lavish corporate entertainment in million on their stadium, compared with a events. No wonder S&P described the deal skyboxes, which run as high as $250,000 a league average of just $6.2 million. Such cooked up by Ravens owner Art Modell as year at Boston’s Fleet Arena, where the riches gave Jones the bucks to exploit loop- ‘‘Maryland throws the bomb.’’ Celtics and Bruins now play. holes in the salary cap, enabling him to Financial World estimates that after its No possible revenue source goes untapped. carry a payroll some 50% larger than the first season in the new stadium (1998), the Corporations like United Airlines, BancOne NFL average. Ravens’ franchise value will appreciate some and Coors buy the rights to put their names In Jones’ case, he financed his own sta- 50%, to around $250 million, and could be sec- on stadiums for more than $1 million a year dium improvements. But in the main, it’s ond only to the Dallas Cowboys’. in some instances. The sensory overload of the taxpayer who ends up subsidizing the In the stadium game, spin, bargaining advertising signage is distracting, to say the stadiums that shower such wealth on the ploys and fancy dancing are difficult to sepa- least. No area is sacrosanct, including the owners. And these days, teams seem to hold rate from concrete developments. Proposed wall behind homeplate. Teams in the Na- all the cards in their negotiations with local new stadium packages are leaked to the tional Basketball Association are now mint- politicians. For the demand for professional local press only to go through myriad ing advertising revenues by selling ads that franchises from cities wanting the cachet of changes before ground is broken and financ- silently scroll on computer-controlled sign- being ‘‘big league’’ far exceeds the supply of ing is in place. George Steinbrenner wants out of the boards at courtside. teams, even with the big leagues’ steady ex- The Portland Trail Blazers, owned by pansion efforts. ‘‘No city can take its teams Bronx. One month he is rumored to be look- Microsoft billionaire Paul Allen, have taken for granted or they will find another locale ing at suburban New Jersey for his Yankees, high-tech amenities to an as-yet-unsurpassed in which to realize team value,’’ explains the next he’s said to be considering a pro- level in their new Rose Garden arena. Some Reinsdorf, who cynically played of the state posal by New York City to build a facility on Manhattan’s West Side that would cost $1 of its club seats feature fiber-optic wiring al- of Illinois against St. Petersburg, Fla, to win billion. Not to be outdone, the Mets are said lowing spectators to play music, order food a $150 million in tax-exempt funding to build to be angling for a new stadium next to Shea or punch up replays on their own video the New Comiskey Park in 1991. that would cost around $450 million and, per- screens. The arena also plans to experiment Observers are still agog at the deal the haps, include a theme park in the complex. with online kiosks that will hawk computer former Los Angeles Rams football team ne- gotiated to move to St. Louis last year. The Rick Horrow, a Miami-based stadium de- hardware and software. velopment consultant to the NFL, ticks off Team owners argue that enhanced reve- city, state and St. Louis County incurred the names of 12 football teams that have un- nues are essential for acquiring or retaining some $262 million in debt to provide the team settled stadium situations and are likely to top athletes in the high-stakes world of pro- with the 70,000-seat Trans World Dome. Then move to new facilities in the years ahead: fessional sports. But there is another factor the city sold instruments called ‘‘personal the Minnesota Vikings, Chicago Bears, seat licenses,’’ requiring football-crazy fans at work. Unlike fees paid by television net- Tampa Bay Buccaneers, San Francisco 49ers, to pay as much as $4,500 just for the privilege works and general-admission revenues, a sta- Seattle Seahawks, Denver Broncos, Arizona of buying season tickets for the stadium’s dium’s income from premium seats, conces- Cardinals, Philadelphia Eagles, Pittsburgh best 45,000 seats. The $70 million or so in pro- sions, stadium advertising, parking and the Steelers, Washington Redskins, Detroit ceeds from these licenses didn’t go toward like generally doesn’t have to be shared with Lions and New England Patriots. One pro- the constructions costs of the new stadium, other teams in the league. posal calls for the Pats to move from Fox- Yet both the NFL and NBA have attempted however, Instead, the Rams were allowed to boro, Mass., to a domed stadium in down- to institute some controls on players’ sala- use the funds to defray some $20 million in town Boston that would be part of a $750 mil- ries by establishing league-wide team salary moving costs, build a $10 million practice fa- lion convention-center megaplex. caps. And scant linkage has been established cility and clean up some debts in their old These NFL teams should be able to exert between the size of team payrolls and per- home in Anaheim. plenty of leverage over their local politi- formance in baseball and hockey. Otherwise, And that’s not all. The Rams were able to cians. According to Horrow, cities such as the New York Yankees of the past two dec- lock in an annual rent over a 30-year lease Houston, Los Angeles, Memphis, Orlando, ades, with their bloated salary structure, period of just $250,000, the fifth-lowest rent Sacramento, Toronto and Mexico City all might have enjoyed the dominance of the rate in the NFL. Yet the Rams will receive hunger for an NFL franchise. Various subur- Yankee dynasties of yore. 100% of the revenues from the stadium’s 100 ban locations also beckon. Even so, a veritable stadium arms race luxury suites and 6,250 club seats. On top of Likewise, such arenas as the L.A. Forum, seems only to be intensifying. Even teams in that, the team got the option to add 20 more Houston’s Summit Arena, Dallas’s Reunion leagues with salary caps claim to need addi- luxury boxes and convert 4,500 more seats to Arena, Charlotte Coliseum and tional stadium revenues because the teams club status, plus a guarantee that 85% of all Indianapolis’s Market Square Arena are all with the highest revenues keep driving up suites and club seats will be sold over the likely to lose their NBA tenants despite the the averages upon which the caps are based. next 15 years. The team also gets all conces- recent vintage of many of these facilities. ‘‘This is certainly true in the NBA, where sion revenues generated by the stadium, $4.5 The Detroit Pistons’ Palace at Auburn Hills, top-grossing teams like the Bulls, the Knicks million of the first $6 million received in sta- with its rows of skyboxes encircling the and the Lakers are creating problems for the dium advertising and 90% of any ad revenues arena, changed the entire economics of in- rest of the league,’’ Jerry Reinsdorf, control- over $6 million. The Rams also get to pocket door venues following its opening in 1988. ling partner of the Chicago Bulls and White the $1.3 million a year that Trans World Air- Some obstacles could block this torrent of Sox, explains. ‘‘All I can say is that I’m glad lines is paying for the stadium naming prospective stadium deals. Of greatest mo- I have two new stadiums [the United Center rights. Lastly, St. Louis agreed to build a ment, perhaps, is a bill that was introduced and New Comiskey Park] with strong in- store for the Rams to sell team merchandise. two months ago by Sen. Daniel Patrick Moy- park revenues.’’ The total package of the stadium construc- nihan (D.–N.Y.) that would outlaw tax-ex- What’s indisputable, though, is that new tion costs, debt-service expense and other empt bond financing for professional sports venues enrich team owners by fattening the goodies doled out by St. Louis will end up facilities. He argues that such financing in teams’ bottom lines and franchise values. costing area taxpayers more than $700 mil- effect constitutes a subsidy by federal tax- It’s no accident, for example, that four of the lion, according to a reckoning by a St. Louis payers that largely enriches team owners top 10 most valuable baseball franchises in public-interest group. A consultant who rep- and serves no legitimate public purpose. Financial World magazine’s latest annual resented the Rams was heard to crow, ‘‘This Even Moynihan concedes that the proposal survey—the Baltimore Orioles, Toronto blue will be the best stadium deal ever in the has no chance of passing in the current ses- Jays, Texas Rangers and Colorado Rockies— NFL, except for the next one.’’ sion of Congress. Nor are the bill’s prospects boast new stadiums, which give them the fi- Truer words were never spoken, for the very bright next year. The U.S. Council of nancial heft to compete with teams in larger new Baltimore Ravens (formerly the Cleve- Mayors and other lobbying organizations advertising markets such as New York, Chi- land Browns) won an extraordinary deal on have already mounted a jihad against the cago and Los Angeles. Likewise, new stadi- their $200 million stadium currently under measure. And it doesn’t hurt that profes- ums have helped the Phoenix Suns, Detroit construction in the shadow of Oriole Park at sional sports has the stature of organized re- Pistons and Chicago Bulls push the New Camden Yards. The new stadium will be fi- ligion these days. York Knicks for the top spot among basket- nanced by state lottery proceeds and revenue Nonetheless, the bill has temporarily cast ball franchises on Financial World’s list. bonds. In addition to being able to keep the a pall over certain stadium plans that are And in all of professional sports, no team $65 million in personal seat license fees, the being considered. The fear is that the bill comes close to the Dallas Cowboys franchise, Ravens will be charged no rent over their 30- might someday pass in its current form. Par- with its estimated value of $272 million. year lease other than a 10% tax on all tick- ticularly vulnerable would be new football S506 CONGRESSIONAL RECORD — SENATE January 21, 1997 and baseball stadiums. They almost always virtually all their income anyway. This ton, Texas, aren’t packing in fans they way require some tax-exempt financing because ‘‘substitution effect’’ means that stadiums they did only a few years ago, despite the of their high price tags—$200 million and up. may actually represent very little, if any, fact that both stadiums have baseball teams John Gillespie, a managing director of net economic gain to local businesses. that are very much in contention for the Bear Stearns’s sports facility banking team, The studies also play games with the mul- pennant. estimates that at current spreads, the cost of tiplier or ripple effect of fan spending. They Resistance to the stadium-building boom the typical stadium proposal would rise by assume that all the munificence earned by does seem to be mounting. Several politi- 15%–20% if public authorities were forced to the players, owners and concessionaires is cians have been forced to walk the plank re- switch from the tax-exempt to the taxable repatriated to the local economy. Lake For- cently for backing sales-tax increases to public-debt market. Says Gillespie: ‘‘Clearly, est College economist Robert Baade argues fund new baseball stadiums. Among the ban- a number of stadium deals wouldn’t fly that the money frequently doesn’t stay put ished were a Maricopa County commissioner under these circumstances because even on a and that this ‘‘leakage’’ can actually have a from Arizona’s Sun City and a Wisconsin tax-exempt basis they were pushing the en- negative impact. He has, in fact, developed state senator from Racine, one of the five velope on a feasibility basis. I don’t think econometric models indicating that in some counties that will contribute tax revenues the bill has a prayer of passing, but then, I’m 36 instances new stadiums had a nonexistent for the Milwaukee Brewers’ new stadium. prejudiced.’’ or even negative impact on local job and in- Nonetheless, new stadium projects seem to Ironically, past attempts by Congress to come growth. have a dynamic that defies all consider- curb the use of tax-exempt financing for Few stadium projects have been as ations of economic prudence and taxpayer sports stadiums have only exacerbated the trumpeted as the Gateway Development in unrest. For when all else fails, public offi- problem. The Tax Reform Act of 1986, for ex- Cleveland. The site encompasses two new fa- cials invariable justify their reflexive resort ample, declared that public financings of sta- cilities, including the Indians’ Jacobs Field, to the public purse by prattling on about pro diums would lose their tax-exemption if with its retro charm, and the Cavaliers’ sports’ positive impact on civic pride and more than 10% of the revenues earned by the sleek Gund Arena. The two new venues draw quality of life. facility were subsequently used to service sellout crowds totaling five million fans a Perhaps new stadiums appeal to some the construction debt. year, and they are credited with having deeply-rooted edifice complex-the plaque on Rather than quashing such activity, the sparked a revival in the once-sagging for- the wall of the venue conferring a measure of stricture left municipalities even more at tunes of downtown Cleveland. But as the In- immortality to the politicians who built it. the mercy of team owners. To retain local dians streak toward their second straight Maybe it’s true that without a vibrant pro franchises or attract new teams, public offi- pennant, the project’s finances continue to sports scene, major corporation won’t put cials were compelled to tap revenue streams deteriorate. The problem lies in construction their headquarters in certain cities. Or possi- other than the stadium to back construction cost overruns incurred by both facilities and bility the local citizenry walk just a little debt. Today’s stadium bonds are backed by the fact that Gateway Development Corp., taller in burgs that are genuinely big-league. general revenue sources as diverse as state the quasi-public authority that owns both ‘‘Psychic reward,’’ as economists call it. lotteries, sales taxes, hotel and motel occu- venues, isn’t getting enough from its leases Whatever the case, the surge in popularity pancy imposts, car-rental fees and alcohol with the Indians and Cavs to pay the debt of pro sports is a worldwide phenomenon. So- and tobacco taxes. service on some $120 million in bonds that cial scientists advance in all kinds of theo- The balance of power has shifted so dra- helped finance the Gund project. ries to explain the boom. Increasing job spe- matically in recent years that public sta- As a result, Cuyahoga County, which guar- cialization is deemed to have robbed modern dium authorities consider themselves fortu- anteed the debt, has had to ante up some $23 man of satisfaction in his workaday world, nate if pro sports teams pay enough rent to million to cover Gateway’s arrears, and will forcing him to turn to sports for tangibility cover the operating costs of the facility, let likely to be forced to lay out at least $70 mil- of results. Others commentators claim that alone contribute anything to debt service. lion more over the next 16 years. At that pro athletes have become proxies for acting ‘‘The new structure is inequitable in that point, Gateway will have the opportunity to out the aggressions of increasingly alienated it forces broad categories of people in a given renegotiate the Indians’ lease and perhaps populations around the globe. area to finance a facility that only benefits have a prayer of meeting its obligations. Rand Araskog, chairman of ITT Corp., ob- fans, team owners and athletes,’’ asserted Meantime, the city of Cleveland is taking viously believes in a bright future for pro Dennis Zimmerman, an economist at the Li- a bath on some $40 million in bonds it sold to sports and franchise values. ITT teamed up brary of Congress’s Congressional Research build two parking garages for the Gateway with Cablevision in 1994 to buy Madison Service, whose study on the subject of tax- complex. The city is having to subsidize the Square Garden, the New York Knicks and exempt stadium financing helped spur the debt service on the bonds because of lower- the Rangers from Viacom for $1 billion. The Moynihan bill. ‘‘Certainly federal taxpayers than-projected parking revenues. operation’s cash flow has burgeoned since. receive no benefits for granting this sub- ‘‘The facilities are beautiful, the teams are According to Araskog and ITT President sidy.’’ minting money, and the county and city tax- Robert Bowman, a myriad of factors will Cities try to make new stadiums more pal- payers are left holding the bag,’’ grouses propel the pro sports boom. More and more atable to their electorates by offering up Steve Letsky, Cuyahoga County’s director of media and entertainment companies are ‘‘economic impact’’ studies showing the accounting. ‘‘We’re paying a hell of a price buying pro sport franchises because they af- gains in regional income and employment for downtown economic redevelopment.’’ ford relatively cheap and compellingly dra- that the project will produce. The financial Even more gruesome was the bloodletting matic programming. ComCast and Walt Dis- benefits trumpeted in such studies are so the Province of Ontario took on Toronto’s ney are merely the most recent corporate en- humongous that he multimillion-dollar cost Skydome, a combination stadium, hotel and trants. Women are increasingly hooked on of the sport palaces seems almost trivial by entertainment complex that opened in 1989. pro sports as a result of federal laws that re- comparison. Ontario got stuck with the huge cost over- quire schools to spend equal amounts of The University of Cincinnati Center for runs, and by late 1991 the province ended up men’s and women’s sports. Economic Education concluded last January, taking a nearly $200 million loss when it As for international interest, the National for example, that the $540 million project to dumped its controlling interest in the Basketball Association is just the first pro build a new football stadium and a new base- project for $110 million. league in the U.S. to catch the worldwide ball stadium in Cincinnati would generate Even with that writedown, the Skydome’s tidal wave. Others will follow. And finally, more than $1.1 billion in economic activity. financial future is by no means secure. At- technology, with its proliferation of sports In subsequent years, the study said the Cin- tendance has waned from the halcyon days of delivery mechanisms and its promise of cinnati area could count on $73 million annu- the early ’Nineties as the Blue Jays have eventually bringing the playing field into ally in added spending by local consumers, sunk in the standings. The all-important the living room, will only enhance the ap- $4.4 million a year in taxes and $28 million leases on the stadium’s luxury suites are due peal. per year in local spending by out-of-town to expire in two years, and revenues could Bear Stearns’s Gillespie goes so far as to fans. take a tumble. predict that pro sports franchises will double But such impact studies are often flawed. With deals like this going down, it’s little in value in the next five to six years. One can Stanford University economist Roger Noll wonder that the halo effect of having a new only hope he’s right. Maybe then team own- points out that the majority of fans attend- stadium seems to be diminishing. Brian ers will stop hitting up taxpayers for new ing games come from within a 20-mile radius McGough, a J.P. Morgan investment banker stadiums and pay the freight themselves. of the venue. Any money they end up drop- involved in stadium deals, reports that a re- ping at the ballpark would likely have been cent study shows that new venues seem to COSTLY BUILDING BOOM spent on other modes of local recreation or spur attendance for just about three years. More than $4 billion has been spent on entertainment. Americans, after all, spend Comiskey Park and the Ballpark at Arling- sports arenas, with $7 billion more expected.

Approx total Facility Team cost in mil- Opened Debt type lions

Skydome ...... Toronto Blue Jays ...... $600 1989 P/P January 21, 1997 CONGRESSIONAL RECORD — SENATE S507

Approx total Facility Team cost in mil- Opened Debt type lions

TWA Dome at America’s Center ...... St. Louis Rams ...... 290 1995 Public Molson Centre ...... Montreal Canadians ...... 230 1996 Private Coors Field ...... Colorado Rockies ...... 215 1995 Public Georgia Dome ...... Atlanta Falcons ...... 214 1992 Public CoreStates Center ...... Philadelphia Flyers/76ers ...... 210 1996 Private Orioles Park at Camden Yards ...... Baltimore Orioles ...... 210 1992 Public Corel Center (Palladium ...... Ottawa Senators ...... 200 1996 P/P Ballpark of Arlington ...... Texas Rangers ...... 191 1994 P/P Alamodome ...... San Antonio Spurs ...... 186 1993 Public GM Place ...... Vancouver Canucks/Grizzlies ...... 180 1995 Private United Center ...... Chicago Blackhawks/Bulls ...... 180 1994 Private Jacobs Field ...... Cleveland Indians ...... 168 1994 P/P San Jose Arena ...... San Jose Sharks ...... 163 1993 P/P Fleet Center ...... Boston Celtics/Bruins ...... 160 1995 Private Gund Arena ...... Cleveland Cavaliers ...... 155 1994 P/P Comiskey Park ...... Chicago White Sox ...... 150 1991 Public Rose Garden ...... Portland Trail Blazers ...... 145 1995 P/P Gator Bowl ...... Jacksonville Jaguars ...... 136 1995 Public Marine Midland Arena ...... Buffalo Sabres ...... 128 1996 P/P Arrowhead Pond of Anaheim ...... Anaheim Mighty Ducks ...... 120 1993 P/P Ice Palace ...... Tampa Bay Lightning ...... 120 1996 P/P Target Center ...... Minnesota Timberwolves ...... 104 1990 P/P America West Arena ...... Phoenix Suns ...... 101 1992 P/P Orlando Arena ...... Orlando Magic/Solar Bears ...... 100 1989 P/P Kiel Center ...... St. Louis Blues ...... 99 1994 Private Bradley Center ...... Milwaukee Bucks ...... 80 1988 Private Ericsson Stadium ...... Carolina Panthers ...... 70 1996 Private Palace of Auburn Hills ...... Detroit Pistons ...... 70 1988 Private Charlotte Coliseum ...... Charlotte Hornets ...... 58 1988 Public Delta Center ...... Utah Jazz ...... 55 1991 Private Miami Arena ...... Miami Heat/Florida Panthers ...... 52 1988 P/P Arco Arena ...... Sacramento Kings ...... 40 1988 Private

[From the New York Times, July 27, 1996] That effort, however, backfired. With team back into the arms of team owners. It was a PICKING UP THE TAB FOR FIELDS OF DREAMS owners precluded from tapping the public sea change difference.’’ The effect of these changes has been to TAXPAYERS BUILD STADIUMS; OWNERS CASH IN bond markets and reluctant to use more costly taxable debt, sports-starved cities give team owners more financial leverage in (By Leslie Wayne) stepped in to build and own the stadiums bargaining with local governments. And ex- WASHINGTON.—In Baltimore, the Ravens, themselves, using municipal bonds. perts say the new-found riches from stadium formerly the Cleveland Browns, are coming And since the 1986 tax act prevents sta- deals, television contracts and other sources to a $200 million football stadium to be built dium revenues from being used to pay off have been an important factor in the escalat- on their behalf. Nashville has lured the Oil- any tax-free, stadium-related debt, a bizarre ing salaries in professional sports. When ers from Houston with the promise of a spar- situation has developed. The municipality is some team owners have more cash in hand, kling new $389 million stadium. In New often forced to pay with its own dollars for they bid up everyone’s prices for top play- York, there is talk of a new ball-park for the all of the borrowings, but the team owner ers—witness the $98 million, seven-year con- Yankees, while discussion continues about virtually alone gets the revenues from the tract for the basketball player Juwan How- replacing venerable Tiger Stadium in De- stadium. Under the tax code, only a small ard to join the Miami Heat or the $121 mil- troit and Fenway Park in Boston, both now portion of the stadium revenues and lease lion, seven-year contract for Shaquille celebrating their 84th anniversaries. payments—less than 10 percent—can be O’Neal to move to the Los Angeles Lakers. But even as multimillion-dollar sports drawn on by municipalities to repay tax-free ‘‘A lot of these financial benefits flow to places are being proposed for assorted Bears, stadium debt. the talent because talent is key, especially Bengals, Hawks, Vikings and other profes- Some of the newest, and most stylish, sta- in basketball,’’ said Mr. Richard, the Chicago sional teams, a lot of people in Washington diums rely exclusively on public debt: Cam- lawyer. ‘‘Look at the Chicago Bulls. You are would like to clamp down on lucrative public den Yards and Ravens Stadium in Baltimore seeing a $25 million raise for Micheal Jordan subsidies that they contend do much more to and the new Comiskey Park in Chicago are and millions for others. They say that this is help already-wealthy professional sports just a few of many. To pay off this debt, creating the necessity for a new stadium be- team owners than the communities that sup- local governments have had to raise taxes, cause they need the skybox revenues to pay port the teams. tap lottery proceeds or use other public reve- for the players. When you see all these sala- Senator Daniel Patrick Moynihan, a New nues. Other stadiums, like the indoor Amer- ries and the new stadiums, what is the cause York Democrat, has fired the opening shot ica West Arena in Phoenix, were built as and what is the effect?’’ by introducing legislation to end the use of public-private partnerships, with some con- More troubling to critics is the evidence tax-free dollars to build sports stadiums. struction costs footed by the team owner; it that the money spent on sports stadiums But, retreating under a hail of lobbying fire, all depends on the bargain struck. In all, $3.9 provides few economic benefits to the sur- Mr. Moynihan admits his measure has no billion in public debt for stadiums has been rounding community. Indeed, several studies indicate that communities could benefit chance of being enacted this year. Still, that issued since 1990. has not stopped him from vigorously arguing Teams owners, to bring their franchise to more if these investments, which cost tax- payers hundreds of millions of dollars a year, that Federal tax dollars would be better de- town or to be persuaded to stay put, are de- were spent on other forms of economic devel- voted to public needs like higher education manding not just new and bigger stadiums, opment. but more ways to make money from them: than subsidizing the current stadium build- ‘‘The economic research on whether these ing boom. luxury skyboxes that rent for $50,000 to stadiums provide benefits for state and local ‘‘Building new professional sports facilities $200,000 a year; ‘‘personal seat licenses,’’ taxpayers suggest that they do not,’’ said is fine by me,’’ Mr. Moynihan said. ‘‘Let the which are options bought by ticket holders Dennis Zimmerman, author of a Congres- new stadiums be built. But, please, do not to insure season tickets in perpetuity; new sional Research Service report on stadium fi- ask the American taxpayer to pay for them.’’ tiers of ‘‘club seats’’ that cost more than nancing. ‘‘There are a lot more productive With an estimated $6 billion of new sports regular seats. And then there are ‘‘pouring things that state and local governments stadiums and arenas on the drawing boards, rights,’’ which are paid by beverage compa- could have done with this money.’’ the mere introduction of a bill that would nies to peddle their beers and soda; more Mr. Zimmerman, using data the State of prevent local governments from tapping the ‘‘totem’’ space to sell advertising, and bigger Maryland offered in making the case for tax-exempt municipal bond market for such car-parking concessions. building the Ravens’ new stadium, found projects is sending shock waves through the ‘‘We thought we shut down public financ- that more jobs could be created by investing world of sports finance. ‘‘The Moynihan bill ing to private sports stadiums in 1986,’’ said the same $177 million in the state’s ‘‘Sunny has had an immediate, horrendous impact,’’ Senator Byron L. Dorgan, a Democrat from Day’’ economic development fund. He also said Howard Richard, a lawyer at Katten North Dakota who is a supporter of the Moy- concluded that in many cases the money Muchin & Zavis in Chicago. ‘‘There’s intense nihan measure. ‘‘Now a decade later, we see local governments saved by issuing tax-free lobbying. No one believes this bill will pass, that the only remaining healthy public hous- municipal bonds to build these stadiums but it is wreaking havoc with the market’’. ing is in sports stadiums for wealthy team ended up costing Federal taxpayers more The controversy over stadium financing owners. We thought we closed a loophole and than the local benefit. dates back to the 1988 Tax Reform Act, they found a way through it.’’ ‘‘It would be cheaper for the Federal Gov- which was though to have eliminated the Brian McGough, who specializes in stadium ernment to just give a subsidy for these sta- public subsidies by forcing team owners to fi- financing for J.P. Morgan & Company, ex- diums,’’ Mr. Zimmerman said. nance stadiums with taxable, rather than plained the unintended consequences of the Robert Baade, an economist at Lake For- tax-free dollars. legislation; ‘‘Congress forced public officials est College, is one of the strongest critics of S508 CONGRESSIONAL RECORD — SENATE January 21, 1997 the present system. ‘‘The distribution of in- chise Free Agency,’’ stop the merry-go-round and Rear Admiral (upper half) in the come and benefits is skewed: The owners and of teams blackmailing cities and cities United States Navy. Our military Chief the players get the lion’s share,’’ Mr. Baade bribing teams with public funds, and restore Nurses have an awesome responsibil- said, ‘‘If I’ve raised taxes to finance a sta- a little sanity to the ever decreasingly sane ity—a degree of responsibility that is dium, I can’t argue that every dollar of that world of sports. absolutely deserving of this change in stadium is a boon to the economy.’’ The ‘‘Stop Tax-Exempt Arena Debt Issu- Opponents of Mr. Moynihan’s measure ance Act,’’ sponsored by Sen. Daniel Patrick grade. argue that eliminating tax-free dollars for Moynihan, D-N.Y., would make it illegal for You might be surprised at how big sports stadiums would take decision-making states, counties or cities to try to float tax- their scope of duties actually is. For away from local officials and increase the free bonds to build new sports stadiums and example, the Chiefs are responsible for costs to municipalities by forcing them to arenas. It’s what we’ve been crying for here both peacetime and wartime health borrow in the taxable markets. Indeed, the for months, and as pathetic as most of our care doctrine, standards and policy for only way some of these stadiums can be politicians are, I am ready to nominate Sen. all nursing personnel within their re- built, they say, is with lower-cost public Moynihan for Deity. spective branches. In fact, the Chief debt. Football stadiums, in particular, could A Congressional Research Service report Nurses are responsible for more than become endangered, since they often cost as recently concluded that the most frequently- 80,000 Army, 5,200 Navy, and 26,000 Air much as $200 million, yet may be used for used justification for building a new park for only eight to 10 games a year, making it a ballclub, that the ancillary financial bene- Force nursing personnel. This includes hard to generate enough revenues to repay fits created by such a new facility more than officer and enlisted nursing specialties the debts. make up for the huge expense, is a falsehood. in the active, reserve and guard compo- ‘‘A stadium is not conceptually different Just as Stanford economist Roger Moll nents of the military. This level of re- from a lot of other public projects,’’ said pointed out several months ago: if stadiums sponsibility certainly supports the Micah Green, the Washington lobbyist for really made money, the teams would build need to change the grade for the Chief the Public Securities Association, a trade them themselves, wouldn’t they? Nurses which would insure that they group representing the municipal bond in- If passed, the measure would virtually stop have a seat at the corporate table of dustry. ‘‘If cities and states decide to raise the kind of rapacious marriages of glory- policy and decision making. taxes to pay for these stadiums, then that’s hungry politicians and money-hungry own- There has been much discussion O.K. That makes it a governmental bond. ers that greased the skids for the Cleveland The local decision of the electorate is the Browns move to Baltimore. The Brewers about the so-called glass ceilings that best test.’’ need a new stadium in Milwaukee? Have a unfairly impact the ability of women (Sometimes, however, local sentiment has lovely time building it, Bud. Oh, you’ll move to achieve the same status as their to be swayed. The Ravens Stadium proposal to Charlotte instead: Have a lovely time get- male counterparts. While I do not want passed by only two votes amid controversy ting a business loan to build Selig Stadium to make this a gender-discrimination in the Maryland Senate. Cincinnati voters there. No more endless threats from George issue, the reality is that military approved two new stadiums to replace Steinbrenner to move the Yankees to New nurses hit two glass ceilings: one as a Riverfront Stadium only after a hard-fought Jersey. No more repeat winners in Owner nurse in a physician-dominated health campaign by downtown boosters. In Nash- Blackmail like the Seattle Mariners. No care system and one as a woman in a ville, opponents forced the city’s first-ever more publicly-funded white elephants like male-dominated military system. The bond referendum before the new Oilers sta- ThunderDome in St. Petersburg or the dium won approval.) Alamodome in San Antonio. simple fact is that organizations are Six local government organizations, in- Enactment of this law might go even fur- best served when the leadership is com- cluding the United States Conference of ther toward righting the sports ship. If own- posed of a mix of specialty and gender Mayors and the National League of Cities, ers couldn’t count on government to pull groups—of equal rank—who bring their sent a letter to Mr. Moynihan arguing their chestnuts out of the financial fire, they unique talents to the corporate table. against his proposal. ‘‘It is simply not good could not possibly continue to permit sala- For military nurses, the two-star level public policy to constrain local flexibility in ries to spiral upward. They could not pos- of general officer Chief Nurse will in- deciding what projects to undertake on a sibly continue to jack ticket prices upward sure that nurses indeed get to the cor- tax-exempt basis,’’ the letter said. as a prerequisite to not moving elsewhere porate executive table. Cathy Spain, the Washington lobbyist for (see ‘‘Whalers, Hartford’’). Some of the less I strongly believe that it is very im- the Government Finance Officers Associa- economically-skilled owners might even sell tion, said her group opposes the strict re- out, and might find that the only corpora- portant, and past time, that we recog- strictions that preclude the use of stadium- tions willing to take the franchise off their nize the extensive scope and level of re- related revenues from repaying municipal hands would be the same kind of community- sponsibility the military Chief Nurses debt. Ms. Spain said the association’s based, almost not-for-profit group that owns have and make sure that future mili- warnings to Congress about the problem the Green Bay Packers—a team that if tary health care organizations will went unheeded when the tax act was changed owned by a Bill Bidwill or a Georgia continue to benefit from their exper- in 1986. Now, she said, her group would like Frontiere would have moved out 20 years tise and unique contributions. to allow, say, 25 percent of stadium revenues ago. Mr. President, I request unanimous to be diverted to municipalities instead of In short, this is genius—and, though I consent that the text of this bill be team owners. swore I’d never say anything like this about printed in the CONGRESSIONAL RECORD. Stadium financing experts say that regard- any issue: let your congressman or senator There being no objection, the bill was less of the economics, the lure of profes- know how you feel. We’ll keep you posted on ordered to be printed in the RECORD, as sional sports is so strong that politicians and the progress of Sen. Moynihan’s measure in communities will still seek to attract and this cyberspace. follows: keep the limited number of sports teams S. 123 available. By Mr. INOUYE: Be it enacted by the Senate and House of Rep- And what about cities that just say no? S. 123. A bill to amend title 10, Unit- resentatives of the United States of America in They may be better off in purely economic ed States Code, to increase the grade Congress assembled, terms, but still left with an empty feeling. provided for the heads of the nurse SECTION 1. INCREASED GRADE FOR HEADS OF ‘‘St. Louis lost the football Cardinals to NURSE CORPS. Phoenix because they refused to build a new corps of the Armed Forces; to the Com- (a) ARMY.—Section 3069(b) of title 10, Unit- stadium,’’ said James Gray, assistant direc- mittee on Armed Services. ed States Code, is amended by striking out tor at the National Sports Law Institute in THE U.S. MILITARY CHIEF NURSE CORPS ‘‘brigadier general’’ in the second sentence Milwaukee. ‘‘Now they are paying triple to AMENDMENT ACT OF 1997 and inserting in lieu thereof ‘‘major gen- lure the Rams from Los Angeles. Being part Mr. INOUYE. Mr. President, I rise eral’’. of a major league is something unique in our (b) NAVY.—The first sentence of section today to introduce an amendment that 5150(c) of such title is amended— society. Lots of people believe it’s a worth- would change existing law regarding while investment and will do anything to (1) by inserting ‘‘rear admiral (upper half) keep a team there.’’ the designated position and grade for in the case of an officer in the Nurse Corps the Chief Nurses of the United States or’’ after ‘‘for promotion to the grade of’’; [From ESPNET Sports Zone, ESPN Studios] Army, the United States Navy, and the and (2) by inserting ‘‘in the case of an officer in YOUR TAX DOLLARS IN ACTION—FOR REAL United States Air Force. Currently the the Medical Service Corps’’ after ‘‘rear admi- (By Keith Olbermann) Chief Nurses of the three branches of the military are one-star level general ral (lower half)’’. The biggest sports story of the week got (c) AIR FORCE.—Section 8069(b) of such title about as little publicity as possible. officer grades; this law would change is amended by striking out ‘‘brigadier gen- Legislation has been introduced in the U.S. the current grade to Major General in eral’’ in the second sentence and inserting in Senate that would cripple so-called ‘‘Fran- the United States Army and Air Force lieu thereof ‘‘major general’’. January 21, 1997 CONGRESSIONAL RECORD — SENATE S509

By Mr. GRAMM (for himself, Mr. mula for determining the Federal Med- Meaning that a State with a FMAP of MACK and Mrs. HUTCHINSON): ical Assistance Percentage. 50 percent puts up 50 percent of the S. 124. A bill to invest in the future of Medicaid services and associated ad- money and the Federal government the United States by doubling the ministrative costs are financed jointly puts up 50 percent of the money. A amount authorized for basic science by the Federal government and the State with a FMAP of 80 percent puts and medical research; to the Commit- States. The formula for the Federal up 20 percent of the funds with a Fed- tee on Labor and Human Resources. share of a State’s payments for serv- eral match of 80 percent. This inequity THE NATIONAL RESEARCH INVESTMENT ACT OF ices, known as the Federal Medical As- has existed for over 50 years. It is time 1997 sistance Percentage [FMAP], was es- for change. Mr. GRAMM. Mr. President, in 1965, tablished when Medicaid was created as The bill I introduce today would 5.7 percent of the federal budget was part of the Social Security Amend- change the minimum FMAP from 50 spent on non-defense research and de- ments of 1965. The Federal share of ad- percent to 60 percent. A modest pro- velopment. Thirty-two years later, ministrative costs is 50 percent for all posal. As I mentioned before, there are that figure has dropped by two-thirds States, though higher rates are appli- 11 States and the District of Columbia to 1.9 percent. In no year since 1970 has cable for specific items. which receive 50 percent. An additional the United States spent as large a per- The FMAP is an exotic creature, de- 14 States have an FMAP between 50 centage of its GDP on non-defense re- rived from the Hill-Burton Hospital and 60 percent. All other States get search and development as Japan or Survey and Construction Act of 1946, more. Germany. Unfortunately, recent signs specifically designed to provide a high- The Finance Committee passed this point to this situation becoming worse er Federal matching rate for states measure as part of its Budget Rec- rather than better. From 1992 through with lower per capita income. Rather onciliation Recommendations in 1995 1995, for the first time in 25 years, real than comparing per capita income di- but it never became law. federal spending on research declined rectly, the HILL-BURTON formula is This legislation gives high cost for 4 straight years. If we don’t restore designed to exaggerate the differences States such as New York the flexibility the high priority once afforded science between States’ per capita income. A to realize savings without cost to the and technology in the federal budget Senate colleague once described it to Federal government. It does not pro- and increase federal investment in re- me as the South’s revenge for the war pose to change the amount of Federal search, it will be impossible to main- between the States. funds such States receive. With an tain the United States’ position as the The Federal government’s share de- FMAP of 50 percent, a State receiving technological leader of the world. pends upon the square of the ratio of $1000 in Federal funds would be re- As a nation, we have an interest in state per capita income to national per quired to match it with $1000. With a 60 the research funding decisions of the capita income. Per capita income is percent FMAP, the same State would private sector. Investing in basic only a proxy but not the only proxy for still receive $1000 in Federal funds but science and medical research can pro- measuring the States’ relative fiscal would only be required to put up $667, vide much needed help to all our tech- capacity. In March 1982, the Advisory a one-third reduction in the amount of nology companies without giving any Commission on Intergovernmental Re- state money required. single company a special advantage lations stated that, Allocation formulas are designed to over its competitors. Our goal should * * * the use of a single index, resident per target Federal funds to States accord- be to raise all the boats in the harbor, capita income, to measure fiscal capacity, ing to need. The FMAP does not. The not just the ones belonging to the po- seriously misrepresents the actual ability of savings realized by a 60 percent mini- litically well-connected. many governments to raise revenue. Because mum would provide some relief for The United States simply does not states tax a wide range of economic activi- States with low matching rates and spend enough on basic research. This ties other than the income of their residents, would make the FMAP a bit less re- the per capita income measure fails to ac- bill would double the amount spent by count for sources of revenue to which income gressive. Adjusted for the cost-of-liv- the federal government on non-defense is only related in part. This misrepresenta- ing, New York has the fifth highest research over ten years in a dozen tion results in the systematic over and un- poverty rate in the nation. Yet it has agencies, programs, and activities, derstatement of the ability of many states to an FMAP of 50 percent. Arkansas has from $32.5 billion in FY 1997 to $65 bil- raise revenue. In addition, the recent evi- the 24th highest poverty rate, yet has lion in FY 2007, making sure that with- dence suggests that per capita income has an FMAP of 73.29. Our current formula in that amount the funding for the Na- deteriorated as a measure of capacity. is a regressive one that needs repair. tional Institutes of Health would dou- Sqaring the ratio of state per capita I urge my colleagues to support this ble from $12.75 billion to $25.5 billion. income to national per capita income measure. At the same time, in order to be sure exaggerates the differences between the increase in funding is spent wisely, States with regard to this incomplete By Mr. INOUYE: the bill gives priority to investments proxy. Suppose my income is $1 and S. 126. A bill to amend title VII of the in basic science and medical research your income $2. The difference we have Public Health Service Act to revise and in order to develop new scientific to make up is $1. If we compare extend certain programs relating to knowledge which will be available in squares, the difference we have to the education of individuals as health the public domain. The legislation does make up is $3. professionals, and for other purposes; not allow funds to be used for the com- I proposed a change to the HILL- to the Committee on Labor and Human mercialization of technologies, and al- BURTON formula in June of 1977—at a Resources. locates funds using a peer review sys- commencement address at PHYSICAL THERAPY AND OCCUPATION THERAPY tem. Expanding the nations’s commit- Kingsborough Community College in EDUCATION ACT OF 1997 ment to basic research in science and Brooklyn, New York—to compare Mr. INOUYE. Mr. President, today, I medicine is a critically important in- square roots. Going back to our exam- am introducing The Physical Therapy vestment in the future of our Nation. ple, if we were to compare square roots, and Occupational Therapy Education the difference would only be 59 cents— Act of 1997. This legislation will assist By Mr. MOYNIHAN (for himself and better than $3. Nonetheless, the idea in educating physical therapy and oc- Mr. D’AMATO): has not caught on. cupational therapy practitioners to S. 125. A bill to provide that the Fed- Current law stipulates that no State meet the growing demand for the valu- eral medical assistance percentage for may have an FMAP lower than 50 per- able services they provide in our com- any State or territory shall not be less cent or higher than 83 percent. In Fis- munities. than 60 percent; to the Committee on cal Year 1997, 11 States and the District In its most recent report, the Depart- Finance. of Columbia receive the minimum 50 ment of Labor’s Bureau of Labor Sta- FEDERAL MEDICAL ASSISTANCE LEGISLATION percent FMAP while Mississippi re- tistics projected that the demand for Mr. MOYNIHAN. Mr. President, I rise ceives the highest FMAP of 77.22 per- services provided by physical therapy today to introduce a bill, cosponsored cent. States are responsible for the practitioners will increase dramati- by Senator D’Amoto, to revise the for- nonfederal share of Medicaid costs. cally over the next decade. According S510 CONGRESSIONAL RECORD — SENATE January 21, 1997 to the Bureau, between 1994 and 2005 certified occupational therapists who ‘‘(b) PREFERENCE IN MAKING GRANTS.—In the increase in demand will create a are foreign graduates has risen from 3 making grants under subsection (a), the Sec- need for 81,000 additional physical percent in 1985 to more than 20 percent retary shall give preference to qualified ap- therapists, an 80 percent increase over in 1995. plicants that seek to educate physical thera- The legislation I introduce today pists or occupational therapists in rural or 1994 figures. Demand for physical ther- urban medically underserved communities, apist assistants is expected to grow at would provide necessary assistance to or to expand post-professional programs for an even faster rate, experiencing an 83 physical therapy and occupational the advanced education of physical therapy percent increase over the same time therapy programs throughout the or occupational therapy practitioners. period. country to meet the health care de- ‘‘(c) PEER REVIEW.—Each peer review group The Bureau also predicts increasing mands of the 21st century. In awarding under section 798(a) that is reviewing propos- demand for practitioners in the field of grants, preference would be given to als for grants or contracts under subsection occupational therapy. Between 1994 and those applicants that seek to educate (a) shall include not fewer than 2 physical therapists or occupational therapists. 2005 the increase in demand will create and train practitioners at clinical sites ‘‘(d) REPORT TO CONGRESS.— in either rural or urban medically un- a need for 39,000 occupational thera- ‘‘(1) IN GENERAL.—The Secretary shall pre- pists, a 72 percent increase over 1994 derserved communities. pare a report that— figures. Demand for occupational ther- In addition to a shortage of practi- ‘‘(A) summarizes the applications submit- apist assistants is projected to experi- tioners, the present shortage of phys- ted to the Secretary for grants or contracts ence an 82 percent increase over the ical therapy and occupational therapy under subsection (a); same time period. faculty impedes the expansion of estab- ‘‘(B) specifies the identity of entities re- Several factors contribute to the lished programs. The critical shortage ceiving the grants or contracts; and present need for Federal support in this of doctoral-prepared physical thera- ‘‘(C) evaluates the effectiveness of the pro- gram based upon the objectives established area. The rapid aging of our nation’s pists and occupational therapists has resulted in an almost nonexistent pool by the entities receiving the grants or con- population, the demands of the AIDS tracts. of potential faculty. Presently, there crisis, increasing emphasis on health ‘‘(2) DATE CERTAIN FOR SUBMISSION.—Not promotion and disease prevention, and exist 117 faculty vacancies among the later than February 1, 2001, the Secretary the growth of home health care have 131 accredited, professional-level phys- shall submit the report prepared under para- out paced our ability to educate an ical therapy programs in the U.S. Simi- graph (1) to the Committee on Commerce adequate number of physical therapy larly, during the ’93-’94 academic year and the Committee on Appropriations of the and occupational therapy practition- there existed 51 faculty vacancies House of Representatives, the Committee on Labor and Human Resources and the Com- ers. In addition, technological ad- among the 85 accredited, professional- level occupational therapy programs. mittee on Appropriations of the Senate. vances are allowing injured and dis- ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.— abled individuals to survive conditions The legislation I introduce today would For the purpose of carrying out this section, that in the past would have proven assist in the development of a pool of there is authorized to be appropriated fatal. qualified faculty by giving preference $3,000,000 for each of the fiscal years 1997 America’s inability to educate an to those grant applicants seeking to through 2000.’’. adequate number of physical therapists develop and expand post-professional and occupational therapists has led to programs for the advanced training of Mr. MOYNIHAN (for himself, Mr. an increased reliance on foreign-edu- physical therapists and occupational ROTH, Mr. CHAFEE, Mr. BAUCUS, cated, non-immigrant temporary work- therapists. Mr. BINGAMAN, Mrs. BOXER, Mr. ers (H–1B visa holders). The U.S. Com- The investment we make through BRYAN, Mr. CRAIG, Mr. mission on Immigration Reform has passage of The Physical Therapy and D’AMATO, Mr. FORD, Mr. GLENN, identified the physical therapy and oc- Occupational Therapy Education Act Mr. GRASSLEY, Mr. HATCH, Mr. cupational therapy fields as having of 1997 will help reduce America’s de- KENNEDY, Mr. KERRY, Mr. KYL, among the highest number of H–1B visa pendence on foreign labor and help cre- Mr. LEAHY, Mr. LIEBERMAN, Mr. holders in the U.S., second only to ate high-skilled, high-wage employ- MCCONNELL, Ms. MOSELEY- computer specialists. ment opportunities for American citi- BRAUN, Mrs. MURRAY, Mr. ROBB, According to the Immigration and zens. I look forward to working with Mr. ROCKEFELLER, Mr. SHELBY, Naturalization Service (INS), we know my colleagues in the Congress to enact Mr. TORRICELLI, and Mr. that 1,389 H–1B visa holders sought em- this important legislation. WYDEN): ployment as physical therapists in 1994. Mr. President, I ask unanimous con- S. 127. A bill to amend the Internal This number represents 5.9 percent of sent that the text of this bill be printed Revenue Code of 1986 to make perma- the 23,500 arrivals for which the INS in the CONGRESSIONAL RECORD. nent the exclusion for employer-pro- can verify their known occupation. An There being no objection, the bill was vided educational assistance programs, additional 82,399 holders of H–1B visas ordered to be printed in the RECORD, as and for other purposes; to the Commit- were reported to have entered the U.S. follows: tee on Finance. in 1994 for which the INS does not have S. 126 THE EMPLOYEE EDUCATIONAL ASSISTANCE ACT occupation data. If we assume that the Be it enacted by the Senate and House of Rep- Mr. MOYNIHAN. Mr. President, I rise same percentage of H–1B visa holders resentatives of the United States of America in today to introduce legislation that will Congress assembled, are seeking employment in physical make permanent the tax exclusion for SECTION 1. SHORT TITLE. therapy as in the known-occupation This Act may be cited as the ‘‘Physical employer-provided educational assist- pool, we can calculate that an addi- Therapy and Occupational Therapy Edu- ance under section 127 of the Internal tional 4,861 foreign-educated physical cation Act of 1997’’. Revenue Code. This bill, which is co- therapists were also seeking employ- SEC. 2. PHYSICAL THERAPY AND OCCUPATIONAL sponsored by the distinguished chair- ment (5.9 percent of 82,399 aliens). THERAPY. man of the Committee on Finance, Thus, the total number of foreign-edu- Subpart II of part D of title VII of the Pub- Senator ROTH, and by Senators BAU- lic Health Service Act (42 U.S.C. 294d et seq.) cated physical therapists seeking em- CUS, BOXER, BRYAN, CHAFEE, CRAIG, is amended by adding at the end the follow- ployment in the U.S. during 1994 was ing: D’AMATO, FORD, GLENN, GRASSLEY, ATCH ENNEDY ERRY YL EAHY approximately 6,250. In comparison, ‘‘SEC. 768. PHYSICAL THERAPY AND OCCUPA- H , K , K , K , L , U.S. programs of physical therapy TIONAL THERAPY. LIEBERMAN, MCCONNELL, MOSELEY- graduated a total of 5,846 physical ‘‘(a) IN GENERAL.—The Secretary may BRAUN, MURRAY, ROBB, ROCKEFELLER, therapists from 141 institutions nation- make grants to, and enter into contracts SARBANES, SHELBY, TORRICELLI, wide in the same year. with, programs of physical therapy and occu- WYDEN, AND BINGAMAN ensures that While the INS does not categorize oc- pational therapy for the purpose of planning employees may receive up to $5,250 an- cupational therapy as a separate pro- and implementing projects to recruit and re- nually in tuition reimbursements or tain faculty and students, develop curricu- fession when tracking H–1B visa en- lum, support the distribution of physical similar educational benefits for both trants, the National Board for Certifi- therapy and occupational therapy practi- undergraduate and graduate education cation in Occupational Therapy docu- tioners in underserved areas, or support the from their employers on a tax-free ments that the percentage of newly continuing development of these professions. basis. January 21, 1997 CONGRESSIONAL RECORD — SENATE S511 Section 127 is one of the most suc- strengthen American industry’s com- It is important to note that em- cessful education programs that the petitive position. Section 127 has an ployer-provided educational assistance Federal Government has ever under- important, perhaps vital, role to play is not an extravagant benefit for highly taken. A million persons benefit from in this regard. It permits employees to paid executives. It largely benefits low- this provision every year. And they adapt and retrain without incurring and moderate-income employees seek- benefit in the most auspicious of cir- additional tax liabilities and a reduc- ing access to higher education and fur- cumstances. An employer recognizes tion in take-home pay. By removing ther job training. A study published by that the worker is capable of doing the tax burden from workers seeking the National Association of Independ- work at higher levels and skills and education and retraining, section 127 ent Colleges and Universities in De- says, ‘‘Will you go to school and get a helps to maintain American workers as cember, 1995 found that 85 percent of degree so we can put you in a higher the most productive in the industri- section 127 recipients in the 1992–93 position than you have now—and with alized and developing world. academic year earned less than $50,000, better compensation?’’ Unlike so many Section 127 has also helped to im- with the average recipient earning less of our job training programs that have prove the quality of America’s public than $33,000. An earlier Coopers & depended on the hope that in the after- education system, at a fraction of the Lybrand study indicated that over 70 math of the training there will be a cost of direct-aid programs. A survey percent of recipients of section 127 ben- job, here you have a situation where by the National Education Association efits in 1986 were earning less than the worker already has a job and the a few years ago found that almost half $30,000, and that participation rates de- employer agrees that the worker of all American public school systems cline as salary levels increase. should enlarge his or her situation in a provide tuition assistance to teachers I hope that Congress will recognize manner that is beneficial to all con- seeking advanced training and degrees. the importance of this provision, and cerned. This has enabled thousands of public enact it permanently. Our on-again, This is a program that works. Yet, school teachers to obtain advanced de- off-again approach to section 127 cre- outside the organizations involved, not grees, augmenting the quality of in- ates great practical difficulties for the many people know of this program. It struction in our schools. intended beneficiaries. Workers cannot Our most recent extension of section administers itself. It has no bureauc- plan sensibly for their educational 127 last year excluded expenses of pur- goals, not knowing the extent to which racy—there is no bureau in the Depart- suing graduate level education for accepting educational assistance may ment of Education for employer-pro- courses beginning after June 30, 1996. reduce their take-home pay. As for em- vided educational assistance, no titles, This was a serious mistake. Histori- ployers, the fits and starts of the legis- no confirmations, no assistant sec- cally, one quarter of the individuals lative history of section 127 have been retaries. There is nothing except indi- who have used section 127 went to grad- a serious administrative nuisance: vidual contracts, employee and em- uate schools. Ask major employer there have been 8 retroactive exten- ployer, with a great value-added. about their training systems, and they sions of this provision since 1978. If sec- Since its inception in 1978, section 127 will say nothing is more helpful than tion 127 is in force, then there is no has enabled millions of workers to ad- being able to send a promising young need to withhold taxes on educational vance their education and improve person, or middle management person, benefits provided; if not, the job-relat- their job skills without incurring addi- to a graduate school to learn a new edness of the educational assistance tional taxes and a reduction in take- field that has developed since that per- must be ascertained, a value assigned, home pay. Without section 127, workers son had his education. and withholding adjusted accordingly. will find that the additional taxes or When we eliminate graduate level Uncertainty about the program’s con- reduction in take-home pay impose a education from section 127, we impose tinuance magnifies this burden, and significant, even prohibitive, financial a tax increase on many citizens who discourages employers from providing obstacle to further education. For ex- work and go to graduate school at the educational benefits. ample, an unmarried clerical worker same time. But not all of them. Only For example, section 127 expired for a pursuing a college diploma who has in- the ones whose education does not di- time after 1994. During 1995, employers come of $21,000 in 1997 and who receives rectly relate to their current jobs. For did not know whether to withhold tuition reimbursement for two semes- these unlucky persons, we have erected taxes or curtail their educational as- ters of night courses—worth approxi- a barrier to their upward mobility. sistance programs. Workers did not mately $4,000—would owe additional Who are these people? The engineer know whether they would face large Federal income and payroll taxes of seeking a masters degree in geology to tax bills, and possible penalties and in- $866 on this educational assistance. If enter the field of environmental terest, and thus faced considerable risk the worker has children and was re- science. The bank teller seeking an in planning for their education. Some ceiving the earned income tax credit, MBA in finance or an MPA in account- of my constituents who called my of- the worker would owe additional ing. The production line worker seek- fice reported that they were taking taxes—including loss of the EITC bene- ing an MBA in management. fewer courses—or no courses—due to fits—of up to $1,708. Simple equity among taxpayers de- this uncertainty. And when we failed Section 127 makes an important con- mands that section 127 be made perma- to extend the provision by the end of tribution to simplicity in the tax law. nent. Contrast each of the above exam- 1995, employers had to guess as to how Absent section 127, a worker receiving ples with the following: The environ- to report their worker’s incomes on the educational benefits from an employer mental geologist seeking a masters in W–2 tax statements, and employees had is taxed on the value of the education geology, the bank accountant seeking to guess whether to pay tax on the ben- received, unless the education is di- an MPA, and the management trainee efits they received. In the Small Busi- rectly related to the worker’s current seeking an MBA each qualify for tax- ness Job Protection Act of 1996 enacted job. Permanent reinstatement of sec- free education. There is no justifica- last August, we finally extended the tion 127 will allow workers to receive tion for this difference in tax treat- provision retroactively to the begin- employer-provided educational assist- ment. ning of 1995. As a result, we had to in- ance on a tax-free basis, without the Thus, section 127 removes a tax bias struct the IRS to expeditiously issue need to consult a tax advisor to deter- against lesser-skilled workers. The tax guidance to employers and workers on mine whether the education is directly bias arises because lesser-skilled work- how to obtain refunds. related to their current job. ers have narrower job descriptions, and The provision expires after June 30, A well-trained and educated work a correspondingly greater difficulty 1997. Will we subject our constituents, force is a key to our Nation’s competi- proving that educational expenses di- once again, to similar confusion? The tiveness in the global economy of the rectly relate to their current jobs. legislation I introduce today would re- 21st century. Pressures from inter- Less-skilled workers are in greater store certainty to section 127 by ex- national competition and technological need of remedial and basic education. tending it retroactively—from July 1, change require constant adjustment by And they are the ones least able to af- 1996—for graduate level education, and our work force. Education and retrain- ford the imposition of tax on their edu- maintaining it on a permanent basis ing will be necessary to maintain and cational benefits. for all education. S512 CONGRESSIONAL RECORD — SENATE January 21, 1997 Thomas Jefferson, as ever, was right and for other purposes; to the Commit- vided by trained mental health care to observe that American liberty de- tee on Labor and Human Resources. professionals. pends on an educated electorate. In HEALTH CARE TRAINING ACT OF 1997 Interdisciplinary team prevention 1816, the year in which the Senate Mr. INOUYE. Mr. President, I rise training will facilitate both health and Committee on Finance was founded, today to introduce the Rural Preven- mental health clinics sharing single Jefferson warned ‘‘If a nation expects tive Health Care Training Act of 1997, a service sites and routine consultation to be ignorant and free, in a state of bill that responds to the dire situation between groups. Social workers, psy- civilization, it expects what never was our rural communities face in obtain- chologists, clinical psychiatric nurse and never will be.’’ ing quality health care and disease pre- specialists, and paraprofessionals play Previous efforts to extend this provi- vention programs. an important role in extending rural sion have enjoyed broad and bipartisan Almost one fourth of Americans live mental health services to those in support. Encouraging workers to fur- in rural areas and thus frequently lack need. Linkage of these services can ther their education and to improve access to adequate physical and mental provide better utilization of existing their job skills is an important na- health care. For example, approxi- mental health care personnel, increase tional priority. It is crucial for preserv- mately 1,700 rural communities in vir- awareness and understanding of mental ing our competitive position in the tually every state of the union suffer health services, and contribute to the global economy. Permitting employees critical shortages of health care pro- overall health of rural communities. to receive educational assistance on a viders. As many as 21 million of the 34 The Rural Preventive Health Care tax-free basis, without incurring sig- million people living in underserved Training Act of 1997, targeted specifi- nificant cuts in take-home pay, is a rural areas are without access to a pri- cally toward rural communities, would demonstrated, cost-effective means for mary care provider. In areas where pro- implement the risk-reduction model achieving these objectives. This is a viders exist, there are numerous limits described in the IOM study. This model wonderful piece of unobtrusive social to access, such as geography and dis- is based on the identification of risk policy. tance, lack of transportation, and lack factors for a certain disorder and the Mr. President, I ask unanimous con- of knowledge about available re- implementation of specific preventive sent that the text of the bill be printed sources. Additionally, due to the diver- strategies to target groups with those in the RECORD. sity of rural populations, ranging from risk factors. The IOM Committee aptly There being no objection, the bill was native Americans to migrant farm demonstrates that methods of risk re- ordered to be printed in the RECORD, as workers, language and cultural obsta- duction have proven highly successful follows: cles are often a factor. in many health-related areas, such as S. 127 Compound these problems with slim cardiovascular disease, smoking reduc- Be it enacted by the Senate and House of Rep- financial resources and many of Ameri- tion, and the numerous childhood dis- resentatives of the United States of America in ca’s rural communities go without eases and conditions that are prevent- Congress assembled, vital health care, especially preventive able by early prenatal care for preg- SECTION 1. SHORT TITLE. care. Children fail to receive immuni- nant women. This Act may be cited as the ‘‘Employee zations and routine checkups. Prevent- The cost of human suffering caused Educational Assistance Act’’. able illnesses and injuries occur need- by poor health is immeasurable, but SEC. 2. EMPLOYER-PROVIDED EDUCATIONAL AS- lessly and lead to expensive hos- SISTANCE PROGRAMS. the huge financial burden placed on (a) PERMANENT EXTENSION.—Section 127 of pitalizations. Early symptoms of emo- communities, families, and individuals the Internal Revenue Code of 1986 (relating tional problems and substance abuse go is evident. By implementing preventive to exclusion for educational assistance pro- undetected and often develop into full measures, the potential for savings in grams) is amended by striking subsection (d) blown disorders. psychological and financial realms is and by redesignating subsection (e) as sub- An Institute of Medicine (IOM) report enormous. This savings is the goal of section (d). from their two-year study entitled, the Rural Preventive Health Care (b) REPEAL OF LIMITATION ON GRADUATE ‘‘Reducing Risks for Mental Disorders: Training Act of 1997. EDUCATION.—The last sentence of section Frontiers for Preventive Intervention 127(c)(1) of such Code is amended by striking Mr. President, I ask unanimous con- ‘‘, and such term also does not include any Research’’ highlights the benefits of sent that the text of this bill be printed payment for, or the provision of any benefits preventive care for all health problems. in the CONGRESSIONAL RECORD. with respect to, any graduate level course of Rural health care providers face a lack There being no objection, the bill was a kind normally taken by an individual pur- of training opportunities. Training in ordered to be printed in the RECORD, as suing a program leading to a law, business, prevention is crucial in order to meet follows: medical, or other advanced academic or pro- the demand for care in underserved S. 128 fessional degree’’. areas. Be it enacted by the Senate and House of Rep- (c) EFFECTIVE DATES.— Beyond the scope of simple preven- (1) EXTENSION.—The amendments made by resentatives of the United States of America in subsection (a) shall apply to taxable years tion training, interdisciplinary preven- Congress assembled, beginning after December 31, 1996. tive training in rural health is impor- SECTION 1. SHORT TITLE. (2) GRADUATE EDUCATION.—The amendment tant because of a growing array of evi- This Act may be cited as the ‘‘Rural Pre- made by subsection (b) shall apply with re- dence that links mental disorders to ventive Health Care Training Act of 1997’’. spect to expenses relating to courses begin- physical ailments. For example, it has SEC. 2. PREVENTIVE HEALTH CARE TRAINING. ning after June 30, 1996. been estimated that from fifty to sev- Section 778 of the Public Health Service (3) EXPEDITED PROCEDURES.—The Secretary enty percent of visits to physicians for Act (42 U.S.C. 294p) is amended— of the Treasury shall establish expedited pro- (1) in subsection (b)(3)(C), by striking ‘‘this cedures for the refund of any overpayment of medical symptoms are due in part or section’’ and inserting ‘‘subsection (a)’’; taxes imposed by the Internal Revenue Code whole to psychosocial problems. By en- (2) by redesignating subsections (e) and (f) of 1986 which is attributable to amounts ex- couraging interdisciplinary training, as subsections (f) and (g), respectively; cluded from gross income during 1996 or 1997 rural communities can integrate the (3) by inserting after subsection (d) the fol- under section 127 of such Code, including pro- behavioral, biological, and psycho- lowing new subsection: cedures waiving the requirement that an em- logical sciences to form the most effec- ‘‘(e) PREVENTIVE HEALTH CARE TRAINING.— ployer obtain an employee’s signature where tive preventive care possible. ‘‘(1) IN GENERAL.—The Secretary may make the employer demonstrates to the satisfac- The problems with quality, access, grants to, and enter into contracts with, eli- tion of the Secretary that any refund col- gible applicants to enable such applicants to lected by the employer on behalf of the em- and understanding of health care in provide preventive health care training, in ployee will be paid to the employee. rural areas all suggest that promoting interdisciplinary training of psycholo- accordance with paragraph (3), to health care By Mr. INOUYE: gists, nurses, and social workers is es- practitioners practicing in rural areas. Such S. 128. A bill to amend the Public sential. The need becomes clearer when training shall, to the extent practicable, in- clude training in health care to prevent both Health Service Act to provide health considering that many of the behavior- physical and mental disorders before the ini- care practitioners in rural areas with related problems afflicting rural com- tial occurrence of such disorders. In carrying training in preventive health care, in- munities are amenable to proven risk out this paragraph, the Secretary shall en- cluding both physical and mental care, reduction strategies that are best pro- courage, but may not require, the use of January 21, 1997 CONGRESSIONAL RECORD — SENATE S513 interdisciplinary training project applica- prisoners of war described in subsection (b) taxable year in purchasing a qualified child tions. may use commissary and exchange stores. restraint system for any child of the tax- ‘‘(2) LIMITATION.—To be eligible to receive ‘‘(b) COVERED INDIVIDUALS.—Subsection (a) payer. training using assistance provided under applies to any former prisoner of war who— ‘‘(b) DEFINITIONS.—For purposes of this sec- paragraph (1), a health care practitioner ‘‘(1) is separated from active duty in the tion— shall be determined by the eligible applicant armed forces under honorable conditions; ‘‘(1) QUALIFIED CHILD RESTRAINT SYSTEM.— involved to be practicing, or desiring to and The term ‘qualified child restraint system’ practice, in a rural area. ‘‘(2) has a service-connected disability means any child restraint system which ‘‘(3) USE OF ASSISTANCE.—Amounts received rated by the Secretary of Veterans Affairs at meets the requirements of section 571.213 of under a grant made or contract entered into 30 percent or more. title 49 of the Code of Federal Regulations. under this subsection shall be used— ‘‘(c) DEFINITIONS.—In this section: ‘‘(2) CHILD.—The term ‘child’ has the mean- ‘‘(A) to provide student stipends to individ- ‘‘(1) The term ‘former prisoner of war’ has ing given the term in section 151(c)(3).’’. uals attending rural community colleges or the meaning given the term in section 101(32) (b) CONFORMING AMENDMENT.—The table of other institutions that service predomi- of title 38. sections for subpart A of part IV of sub- nantly rural communities, for the purpose of ‘‘(2) The term ‘service-connected’ has the chapter A of chapter 1 of the Internal Reve- enabling the individuals to receive preven- meaning given the term in section 101(16) of nue Code of 1986 is amended by inserting tive health care training; title 38.’’. after the item relating to section 25 the fol- ‘‘(B) to increase staff support at rural com- (b) CLERICAL AMENDMENT.—The table of lowing: munity colleges or other institutions that sections at the beginning of such chapter is service predominantly rural communities to amended by inserting after the item relating ‘‘Sec. 25A. Purchase of child restraint sys- facilitate the provision of preventive health to section 1064 the following new item: tem.’’. care training; ‘‘1064a. Use of commissary stores by certain (c) EFFECTIVE DATE.—The amendments ‘‘(C) to provide training in appropriate re- disabled former prisoners of made by this section apply to taxable years search and program evaluation skills in war.’’. beginning after December 31, 1996. rural communities; ‘‘(D) to create and implement innovative By Mr. INOUYE: By Mr. MOYNIHAN (for himself, programs and curricula with a specific pre- vention component; and S. 130. A bill to amend the Internal Mr. LIEBERMAN, and Mr. JEF- ‘‘(E) for other purposes as the Secretary Revenue Code of 1986 to provide a cred- FORDS): determines to be appropriate. it for the purchase of child restraint S. 131. A bill to amend chapter 5 of ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.— systems used in motor vehicles; to the title 13, United States Code, to require There are authorized to be appropriated to Committee on Finance. that any data relating to the incidence carry out this subsection, $5,000,000 for each CHILD RESTRAINT SYSTEM AMENDMENTS ACT OF of poverty produced or published by the of fiscal years 1998 through 2000.’’; and (4) in subsection (g) (as so redesignated), by 1997 Secretary of Commerce for subnational inserting ‘‘except subsection (e),’’ after ‘‘sec- Mr. INOUYE. Mr. President, today I areas is corrected for differences in the tion,’’. am introducing legislation to provide cost of living in those areas; to the for a federal income tax credit for Committee on Governmental Affairs. By Mr. INOUYE: those families who purchase a child re- THE POVERTY DATA CORRECTION ACT OF 1997 S. 129. A bill to amend title 10, Unit- straint system for their automobiles. Mr. MOYNIHAN. Mr. President, I rise ed States Code, to authorize certain Accidents and injuries continue to today to introduce the Poverty Data disabled former prisoners of war to use cause almost half of the deaths of chil- Correction Act of 1997, a bill to require Department of Defense commissary dren between the ages of one and four, that any data relating to the incidence and exchange stores; to the Committee more than half of the deaths of chil- of poverty in subnational areas be cor- on Armed Services. dren between five and fifteen, and con- rected for the differences in the cost of FORMER PRISONERS OF WAR LEGISLATION tinue to be the leading cause of death living in those areas. This legislation, Mr. INOUYE. Mr. President, today I among children and young adults. cosponsored by Senators LIEBERMAN am introducing legislation to enable It is my understanding that although and JEFFORDS, would correct a long- those former prisoners of war who have the Department of Transportation has standing inequity and would provide us been separated honorably from their made injury prevention among children with more accurate information on the respective services and who have been a top priority, a significant number of number of Americans living in poverty. rated to have a 30 percent service-con- parents either do not have adequate Mr. President, residents of New York nected disability to have the use of child restraint systems or do not have and Connecticut earn more than do the both the military commissary and post them properly installed. residents of Mississippi or Alabama. exchange privileges. While I realize It is imperative that we create this But they also must spend more. The that it is impossible to adequately opportunity to provide America’s par- 1990 Census of Population and Housing, compensate one who has endured long ents with a financially accessible alter- for instance, determined that home- periods of incarceration at the hands of native to the insufficient level of child owner costs with a mortgage averaged our Nation’s enemies, I do feel that safety measures currently available for $1,096 per month in Connecticut, $894 in this gesture is both meaningful and im- use in automobiles. New York State—not city, $555 in Ala- portant to those concerned. It also Mr. President, I ask unanimous con- bama, and $511 in Mississippi. The na- serves as a reminder that our Nation sent that the text of this bill be printed tional average was $737. has not forgotten their sacrifices. in the Congressional RECORD. Yet, we have a national poverty Mr. President, I ask unanimous con- There being no objection, the bill was threshold adjusted only by family size sent that the text of the bill be printed ordered to be printed in the RECORD, as and composition, not by where the in the RECORD. follows: There being no objection, the bill was family lives. A family of four just S. 130 above the poverty threshold in New ordered to be printed in the RECORD, as Be it enacted by the Senate and House of Rep- follows: York City is demonstrably worse off resentatives of the United States of America in than a family of four just below the S. 129 Congress assembled, threshold in, say, rural Arkansas. And Be it enacted by the Senate and House of Rep- SECTION 1. CREDIT FOR PURCHASE OF CHILD resentatives of the United States of America in RESTRAINT SYSTEMS. yet the family in New York might be Congress assembled, (a) IN GENERAL.—Subpart A of part IV of ineligible for aid, and will not count in SECTION 1. USE OF COMMISSARY AND EX- subchapter A of chapter 1 of the Internal the poverty population tallies used to CHANGE STORES BY CERTAIN DIS- Revenue Code of 1986 (relating to nonrefund- allocate funds while the Arkansas fam- ABLED FORMER PRISONERS OF able personal credits) is amended by adding ily will receive aid, and will be count- WAR. at the end the following: ed. (a) IN GENERAL.—Chapter 54 of title 10, ‘‘SEC. 25A. PURCHASE OF CHILD RESTRAINT SYS- United States Code, is amended by inserting An August 7, 1994 New York Times TEM. editorial endorsing a version of this after section 1064 the following new section: ‘‘(a) GENERAL RULE.—In the case of an indi- ‘‘§ 1064a. Use of commissary stores by certain vidual, there shall be allowed as a credit bill introduced in the 104th Congress disabled former prisoners of war against the tax imposed by this chapter for sums it up nicely: ‘‘(a) IN GENERAL.—Under regulations pre- the taxable year an amount equal to the The cost of food, rent and other consumer scribed by the Secretary of Defense, former costs incurred by the taxpayer during such goods can be twice as high in Manhattan as S514 CONGRESSIONAL RECORD — SENATE January 21, 1997 in Little Rock, Ark. Yet the income cutoff cent; South 36.4 percent; and West: 24.5 per- S. 132. A bill to prohibit the use of for poverty programs is the same in both cent. certain ammunition, and for other pur- places, $14,769 for a family of four. That pro- Mr. President, our current poverty poses. A bill to prohibit the use of cer- duces the ridiculous and unfair result that a data are inaccurate. And these sub- tain ammunition, and for other pur- Manhattan family earning $15,000 does not qualify for Federal nutrition or education standard data are used in allocation poses; to the Committee on the Judici- programs while an Arkansas family earning formulas used to distribute millions of ary. $14,500—the equivalent of $29,000 in Manhat- Federal dollars each year. As a result, S. 133. A bill to amend the Internal tan—does. States with high costs of living—States Revenue Code of 1986 to increase the * * * Federal poverty levels are supposed like New York, Connecticut, Vermont, tax on handgun ammunition, to impose to identify families that cannot buy mini- Hawaii, and California, just to name a the special occupational tax and reg- mally decent food, clothes and shelter. To few—are not getting their fair share of istration requirements on importers act as if living costs do not matter, or as if Federal dollars because differences in and manufacturers of handgun ammu- financially strapped states will pick up nition, and for other purposes; to the where Washington leaves off, amounts to a the cost of living are ignored. And the vicious attack on the poor who happen to poor of these high cost States are pe- Committee on Finance. live in high-cost states. nalized because they happen to live LEGISLATION TO CONTROL DESTRUCTIVE Professor Herman B. ‘‘Dutch’’ Leon- there. It is time to correct this in- AMMUNITION Mr. MOYNIHAN. Mr. President, I in- ard and Senior Research Associate equity. troduce two measures to help fight the Monica Friar of the Taubman Center I ask unanimous consent that the epidemic of bullet-related violence in for State and local government at Har- New York Times editorial be inserted America: the Real Cost of Destructive vard have devised an index of poverty into the RECORD. Ammunition Act and the Destructive statistics that reflects the differences There being no objection, the item Ammunition Prohibition Act of 1997. in the cost of living between States. If was ordered to be printed in the ECORD, as follows: The purpose of these bills is to prevent we look at the ‘‘Friar-Leonard State R from reaching the marketplace some of Cost-of-Living index,’’ as it has come [From the New York Times, Aug. 7, 1994] the most deadly rounds of ammunition to be known, we find that New York POVERTY IS UNFAIRLY DEFINED ever produced. has a cost-adjusted poverty rate of 20.4 The cost of food, rent and other consumer Some of my colleagues may remem- percent, the fifth highest in the Na- goods can be twice as high in Manhattan as ber the Black Talon. It is a hollow- tion. Florida has the 12th highest ad- in Little Rock, Ark. Yet the income cutoff for poverty programs is the same in both tipped bullet, singular among handgun justed poverty rate; Arkansas drops places, $14,764 for a family of four. That pro- ammunition in its capacity for destruc- from 14th to 24th. New York fifth; Ar- duces the ridiculous and unfair result that a tion. Upon impact with human tissue, kansas 24th. Georgia as the 25th high- Manhattan family earning $15,000 does not the bullet produces razor-sharp radial est. It is no longer the case that the in- qualify for Federal nutrition or education petals that produce a devastating cidence of poverty is highest in the programs while an Arkansas family earning wound. It is the very same bullet that Mississippi Delta or Appalachia. The $14,500—the equivalent of $29,000 in Manhat- a crazed gunman fired at unsuspecting fifth highest poverty rate is in New tan—does. passengers on a Long Island Railroad York. We seem not to have grasped The Federal definition of poverty is blind to the real costs paid by people struggling to train in December 1993, Killing the hus- this. purchase the necessities of life. That is why band of now Congresswoman CAROLYN In 1995, a National Academy of Senator Joseph Lieberman, Democrat of MCCARTHY and injuring her son. That Sciences (NAS) panel of experts re- Connecticut, and Representative Dean Gallo, same month, it was also used in the leased a study on redefining poverty. Republican of New Jersey, have proposed shooting of Officer Jason E. White of Our poverty index dates back to the bills that would adjust poverty levels for the District of Columbia Metropolitan work of Social Security Administra- state differences in the cost of living. That Police Department, just 15 blocks from tion economist Mollie Orshansky who, way poor families in Los Angeles and Phila- the Capitol. in the early 1960s, hit upon the idea of delphia will get their fair share of the $20 bil- lion or more that Congress spends on need- I first learned of the Black Talon in a nutritional standard, not unlike the based programs. Senator Daniel Patrick a letter I received from Dr. E.J. Galla- ‘‘pennyloaf’’ of bread of the 18th cen- Moynihan of New York, an expert on pov- gher, director of Emergency Medicine tury British poor laws. Our poverty erty, says that adjusting poverty levels for at Albert Einstein College of Medicine standard would be three times the cost living costs will produce poverty rates in at the Municipal Hospital Trauma Cen- of the Department of Agriculture-de- New York nearly as high as those in the Deep South. ter in the Bronx. Dr. Gallagher wrote fined minimally adequate ‘‘food bas- that he has never seen a more lethal ket.’’ During consideration of the Fam- The only argument against the bills is that high-income states like New York and Cali- projectile. On November 3, 1993, I intro- ily Support Act of 1988, I included a fornia can afford to pay more to help their duced a bill to tax the Black Talon at provision mandating the National poor than can low-income states like Mis- 10,000 percent. Nineteen days later, Academy of Sciences to determine if sissippi and South Carolina. But the poor in Olin Corp., the manufacturer of the our poverty measure is outdated and New York are not just the responsibility of Black Talon, announced that it would how it might be improved. The study, taxpayers in New York; helping the poor is withdraw sale of the bullet to the gen- edited by Constance F. Citro and Rob- every American’s duty, best carried out by Federal payments that take account of dif- eral public. Unfortunately, the 103d ert T. Michael, is entitled Measuring Congress came to a close without the Poverty: A New Approach. A Congres- ferences in the cost of living. Of course, wealthy states like New York will pay a dis- bill having won passage. sional Research Service review of the proportionate share of the taxes that support As a result, there is nothing in law to report states: such payments. prevent the reintroduction of this per- The NAS panel * * * makes several rec- The argument for letting rich states take nicious bullet, nor is there any existing ommendations which, if fully adopted, could care of ‘‘their’’ own poor fails for another impediment to the sale of similar dramatically alter the way poverty in the reason: they will shirk. If state governments rounds that might be produced by an- U.S. is measured, how federal funds are allot- try to finance generous welfare, they trigger ted to the States, and how eligibility for in-migration of the poor and out-migration other manufacturer. So today I re- many Federal programs is determined. The of wealthy taxpayers. Therefore they under- introduce the bill to tax the Black recommended poverty measure would be finance welfare; over the past two decades, Talon as well as a bill to prohibit the based on more items in the family budget, states welfare benefits have dwindled. sale of the Black Talon to the public. would take major noncash benefits and taxes Federal poverty levels are supposed to Both bills would apply to any bullet into account, and would be adjusted for re- identify families that cannot buy minimally with the same physical characteristics gional differences in living costs. decent food, clothes and shelter. To act as if as the Black Talon. These bullets have * * * Under the current measure the share living costs do not matter, or as if finan- no place in the armory of criminals. of the poor population living in each region cially strapped states will pick up where It has been estimated that the cost of was: Northeast: 16.9 percent; Midwest: 21.7 Washington leaves off, amounts to a vicious percent; South: 40.0 percent; and West: 21.4 attack on the poor who happen to live in hospital services for treating bullet-re- percent. Under the proposed new measure, high-cost states. lated injuries is $1 billion per year, the estimated share in each region would be: with the total cost to the economy of Northeast: 18.9 percent; Midwest: 20.0 per- By Mr. MOYNIHAN: such injuries approximately $14 billion. January 21, 1997 CONGRESSIONAL RECORD — SENATE S515 We can ill afford further increases in York City Patrolmen’s Benevolent As- crime epidemic on more than just one this number, but this would surely be sociation asked me do something about front. If we are truly serious about con- the result if bullets with the destruc- armor-piercing bullets. Jacketed in fronting our Nation’s crime problem, tive capacity of the Black Talon are al- tungsten or other materials, these we must learn more about the nature lowed onto the streets. rounds could penetrate four police flak of the epidemic of bullet-related vio- Mr. President, despite the fact that jackets and five Los Angeles County lence and ways to control it. To do the national crime rate has decreased telephone books. They are of no sport- this, we must require records to be in recent months, the number of deaths ing value. I introduced legislation, the keep on the disposition of ammunition. and injuries caused by bullet wounds is Law Enforcement Officers Protection In October 1992, the Senate Finance still at an unconscionable level. It is Act, to ban the cop-killer bullets in the Committee received testimony that time we took meaningful steps to put 97th, 98th, and 99th Congresses. It en- public health and safety experts have, an end to the massacres that occur joyed the overwhelming support of law independently, concluded that there is daily as a result of gunshots. How bet- enforcement groups and, ultimately, an epidemic of bullet-related violence. ter a beginning than to go after the tacit support from the National Rifle The figures are staggering. most insidious culprits of this vio- Association. It was finally signed into In 1995, bullets were in the murders lence? I urge my colleagues to support law by President Reagan on August 28, of 23,673 people in the United States. these measures and to prevent these 1986. By focusing on bullets, and not guns, bullets from appearing on the market. The crime bill enacted in 1994 con- we recognize that much like nuclear tained may amendment to broaden the waste, guns remain active for cen- By Mr. MOYNIHAN: 1986 ban to cover new thick steel-jack- S. 134. A bill to amend title 18, Unit- turies. With minimum care, they do eted armor-piercing rounds. not deteriorate. However, bullets are ed States Code, with respect to the li- Out cities are becoming more ware of consumed. Estimates suggest we have censing of ammunition manufacturers, the benefits to be gained from ammuni- only a 4-years supply of them. and for other purposes; to the Commit- tion control. The District of Columbia Not only am I proposing that we tax tee on the Judiciary. and some other cities prohibit a person THE HANDGUN AMMUNITION CONTROL ACT OF 1997 from possessing ammunition without a bullets used disproportionately in Mr. MOYNIHAN. Mr. President, I rise valid license for a firearm of the same crimes, 9 millimeter, .25 and .32 caliber today to introduce a measure to im- caliber or gauge as the ammunition. bullets, I also believe we must set up a prove our information about the regu- Beginning in 1990, the city of Los Ange- Bullet Death and Injury Control Pro- lation and criminal use of ammunition les banned the sale of all ammunition 1 gram within the Centers for Disease and to prevent the irresponsible pro- week prior to Independence Day and Control’s National Center for Injury duction of ammunition. This bill has New Year’s Day in an effort to reduce Prevention and Control. This Center three components. First, it would re- injuries and deaths caused by the firing will enhance our knowledge of the dis- quire importers and manufacturers of of guns into the air. And in September tribution and status of bullet-related ammunition to keep records and sub- 1994, the city of Chicago became the death and injury and subsequently mit an annual report to the Bureau of first in America to ban the sale of all make recommendations about the ex- Alcohol, Tobacco and Firearms [BATF] handgun ammunition. tent and nature of bullet-related vio- on the disposition of ammunition, in- Such efforts are laudable. But they lence. cluding the amount, caliber and type of are isolated attempts to cure what is in So that the Center would have sub- ammunition imported or manufac- truth a national disease. We need to do stantive information to study and ana- tured. Second, it would require the more, but to do so, we need informa- lyze, this bill also requires importers Secretary of the Treasury, in consulta- tion to guide policymaking. This bill and manufacturers of ammunition to tion with the National Academy of would fulfill that need by requiring an- keep records and submit an annual re- Sciences, to conduct a study of ammu- nual reports to BATF by manufactur- port to the Bureau of Alcohol, Tobacco, nition use and make recommendations ers and importers and by directing a and Firearms [BATF] on the disposi- on the efficacy of reducing crime by re- study by the National Academy of tion of ammunition. Currently, import- stricting access to ammunition. Fi- Sciences. We also need to encourage ers and manufacturers of ammunition nally, it would amend title 18 of the manufacturers of ammunition to be are not required to do so. United States Code to raise the appli- more responsible. By substantially in- Clearly, it will take intense effort on cation fee for a license to manufacture creasing application fees for licenses to all of our parts to reduce violent crime certain calibers of ammunition. manufacturer .25 caliber, .32 caliber, in America. We must confront this epi- While there are enough handguns in and 9-mm ammunition, this bill would demic from several different range, rec- circulation to last well into the 22d discourage the reckless production of ognizing that there is no simple solu- century, there is perhaps only a 4-year unsafe ammunition or ammunition tion. supply of ammunition. But how much which causes excesses damage. of what kind of ammunition? Where I urge my colleagues to support this By Mr. MOYNIHAN: does it come from? Where does it go? measure. S. 136. A bill to amend chapter 44 of There are currently no reporting re- title 18, United States Code, to prohibit quirements for manufacturers or im- By Mr. MOYNIHAN: the manufacture, transfer, or importa- porters of ammunition; earlier report- S. 135. A bill to provide for the collec- tion of .25 caliber and .32 caliber and 9 ing requirements were repealed in 1986. tion and dissemination of information millimeter ammunition; to the Com- The Federal Bureau of Investigation’s on injuries, death, and family dissolu- mittee on the Judiciary. tion due to bullet-related violence, to annual Uniform Crime Reports, based VIOLENT CRIME REDUCTION ACT on information provided by local law require the keeping of records with re- S. 137. A bill to tax 9 millimeter, .25 enforcement agencies, does not record spect to dispositions of ammunition caliber, and .32 caliber bullets; to the the caliber, type, or quantity of ammu- and to increase taxes on certain bul- Committee on Finance. nition used in crime. In short, our data lets; to the Committee on Finance. base is woefully inadequate. THE VIOLENT CRIME CONTROL ACT OF 1997 REAL COST OF HANDGUN AMMUNITION ACT OF I supported the Brady law, which re- Mr. MOYNIHAN. Mr. President, I rise 1997 quires a waiting period before the pur- today to introduce a bill that com- Mr. MOYNIHAN. Mr. President, I in- chase of a handgun, and the recent ban prehensively seeks to control the epi- troduce two bills: the Violent Crime on semi-automatic weapons. But while demic proportions of violence in Amer- Reduction Act of 1997 and the Real the debate over gun control continues, ica. This legislation, the Violent Crime Cost of Handgun Ammunition Act of I offer another alternative: Ammuni- Control Act of 1997, combines most of 1997. Their purposes are to ban or heav- tion control. After all, as I have said the provisions of two of the other ily tax .25 caliber, .32 caliber, and 9 mm before, guns do not kill people; bullets crime-related bills I am introducing ammunition. These calibers of bullets do. today as well. are used disproportionately in crime. Ammunition control is not a new By including two different crime-re- They are not sporting or hunting idea. In 1982 Phil Caruso of the New lated provisions, my bill attacks the rounds, but instead are the bullets of S516 CONGRESSIONAL RECORD — SENATE January 21, 1997 choice for drug dealers and violent fel- limes in shipboard diets. Most solu- as an equal of the many similar programs of ons. Every year they contribute over- tions are not perfect. Disease is rarely health research which the federal govern- whelmingly to the pervasive loss of life eliminated. But might epidemiology be ment supports. caused by bullet wounds. applied in the case of bullets to reduce Experience in the 1950’s and early Today marks the fourth time in as suffering? I believe so. 1960’s prior to passage of the Motor Ve- many Congresses that I have intro- In 1854 John Snow and William Farr hicle Safety Act, showed that traffic duced legislation to ban or tax these collected data that clearly showed safety enforcement campaigns designed pernicious bullets. As the terrible gun- cholera was caused by contaminated to change human behavior did not im- shot death toll in the United States drinking water. Snow removed the han- prove traffic safety. In fact, the death continues unabated, so too does the dle of the Broad Street pump in Lon- and injury toll mounted. I was Assist- need for these bills, which, by keeping don to prevent people from drawing ant Secretary of Labor in the mid- these bullets out of the hands of crimi- water from this contaminated water 1960’s when Congress was developing nals, would save a significant number source and the disease stopped in that the Motor Vehicle Safety Act, and I of lives. population. His observations led to a was called to testify. It was clear to me and others that The number of Americans killed or legislative mandate that all London motor vehicle injuries and deaths could wounded each year by bullets dem- water companies filter their water by not be limited by regulating driver be- onstrates their true cost to American 1857. Cholera epidemics subsided. Now havior. Nonetheless, we had an epi- society. Just look at the data: treatment of sewage prevents cholera demic on our hands and we needed to In 1995, 13,673 people—68.2 percent of from entering our rivers and lakes, and do something about it. My friend Wil- all people murdered—were murdered by the disinfection of drinking water liam Haddon, the first Administrator gunshot. In addition, others lost their makes water distribution systems un- of the National Highway Traffic Safety lives to bullets by shooting themselves, inhabitable for cholera vibrio, identi- Administration, recognized that auto- either purposefully or accidentally. fied by Robert Koch as the causative mobile fatalities were caused not by And although no national statistics are agent 26 years after Snow’s study. the initial collision, when the auto- In 1900, Walter Reed identified mos- kept on bullet-related injuries, studies mobile strikes some object, but by a quitos as the carriers of yellow fever. suggest they occur two to five times second collision, in which energy from more frequently than do deaths. Subsequent mosquito control efforts by the first collision is transferred to the The lifetime risk of death from homi- another U.S. Army doctor, William interior of the car, causing the driver cide in U.S. males is 1 in 164, about the Gorgas, enabled the United States to and occupants to strike the steering same as the risk of death in battle complete the Panama Canal. The wheel, dashboard, or other structures faced by U.S. servicemen in the Viet- French failed because their workers in the passenger compartment. The nam war. For black males, the lifetime were too sick from yellow fever to second collision is the agent of injury risk of death from homicide is 1 in 28, work. Now that it is known that yellow to the hosts—the car’s occupants. twice the risk of death in battle faced fever is caused by a virus, vaccines are Efforts to make automobiles crash- by Marines in Vietnam. used to eliminate the spread of the dis- worthy follow examples used to control As noted by Susan Baker and her col- ease. infectious disease epidemics. Reduce or leagues in the book ‘‘Epidemiology and These pioneering epidemiology suc- eliminate the agent of injury. Seat- Health Policy,’’ edited by Sol Levine cess stories showed the world that belts, padded dashboards, and airbags and Abraham Lilienfeld: epidemics require an interaction be- are all specifically designed to reduce, There is a correlation between rates of pri- tween three things: the host—the per- if not eliminate, injury caused by the vate ownership of guns and gun-related son who becomes sick or, in the case of agent of automobile injuries, energy death rates; guns cause two-thirds of family bullets, the shooting victim); the transfer to the human body during the homicides; and small easily concealed weap- agent—the cause of sickness, or the second collision. In fact, we’ve done ons comprise the majority of guns used for bullet); and the environment—the set- homicides, suicides and unintentional death. nothing revolutionary. All of the tech- ting in which the sickness occurs or, in nology used to date to make cars Baker states that: the case of bullets, violent behavior. crashworthy, including airbags, was de- * * * these facts of the epidemiology of Interrupt this epidemiological triad veloped prior to 1970. firearm-related deaths and injuries have im- and you reduce or eliminate disease Experience shows the approach portant implications. Combined with their and injury. worked. Of course, it could have lethality, the widespread availability of eas- How might this approach applies to worked better, but it worked. Had we ily concealed handguns for impetuous use by the control of bullet-related injury and people who are angry, drunk, or frightened been able to totally eliminate the appears to be a major determinant of the death? Again, we are contemplating agent—the second collision—the cure high firearm death rate in the United States. something different from gun control. would have been complete. Nonethe- Each contributing factor has implications There is a precedent here. In the mid- less, merely by focusing on simple, for prevention. Unfortunately, issues related dle of this century it was recognized achievable remedies, we reduced the to gun control have evoked such strong sen- that epidemiology could be applied to traffic death and injury epidemic by 30 timents that epidemiologic data are rarely automobile death and injury. From a percent. Motor vehicle deaths declined employed to good advantage. governmental perspective, this hypoth- in absolute terms by 13 percent from Strongly held views on both sides of esis was first adopted in 1959, late in 1980 to 1990, despite significant in- the gun control issue have made the the administration of Gov. Averell Har- creases in the number of drivers, vehi- subject difficult for epidemiologists. I riman of New York State. In the 1960 cles, and miles driven. Driver behavior would suggest that a good deal of en- Presidential campaign, I drafted a is changing, too. National seatbelt ergy is wasted in this never-ending de- statement on the subject which was re- usage is up dramatically, 60 percent bate, for gun control as we know it leased by Senator John F. Kennedy as now compared to 14 percent in 1984. misses the point. We ought to focus on part of a general response to enquiries These efforts have resulted in some the bullets and not the guns. from the American Automobile Asso- 15,000 lives saved and 100,000 injuries I would remind the Senate of our ex- ciation. Then Senator Kennedy stated: avoided each year. perience in controlling epidemics. Al- Traffic accidents constitute one of the We can apply that experience to the though the science of epidemiology greatest, perhaps the greatest of the nation’s epidemic of murder and injury from traces its roots to antiquity—Hippoc- public health problems. They waste as much bullets. The environment in which rates stressed the importance of con- as 2 percent of our gross national product these deaths and injuries occur is com- sidering environmental influences on every year and bring endless suffering. The plex. Many factors likely contribute to human diseases—the first modern epi- new highways will do much to control the the rise in bullet-related injury. Here is demiological study was conducted by rise of the traffic toll, but by themselves they will not reduce it. A great deal more in- an important similarity with the situa- James Lind in 1747. His efforts led to vestigation and research is needed. Some of tion we faced 25 years ago regarding the eventual control of scurvy. It this has already begun in connection with automobile safety. We found we could wasn’t until 1795 that the British Navy the highway program. It should be extended not easily alter the behavior of mil- accepted his analysis and required until highway safety research takes its place lions of drivers, but we could—easily— January 21, 1997 CONGRESSIONAL RECORD — SENATE S517 change the behavior of three or four began in the 1910’s. The death rate and to begin a discussion on how to de- automobile manufacturers. Likewise, from typhoid in Albany, NY, prior to velop and maintain policies that pro- we simply cannot do much to change 1889, when the municipal water supply tect patients and ensure continued ac- the environment—violent behavior—in was treated by sand filtration, was cess to affordable high quality medical which gun-related injury occurs, nor do about 100 fatalities per 100,000 people care. we know how. We can, however, do each year. The rate dropped to about 25 Every 3 minutes another woman is something about the agent causing the typhoid deaths per year after 1889, and diagnosed with breast cancer. This injury: bullets. Ban them. At least the dropped again to about 10 typhoid year alone, more than 180,000 women rounds used disproportionately to deaths per year after 1915, when will find out they have breast cancer. cause death and injury; that is, the .25 chlorination was introduced. By 1950, This disease strikes at the core of caliber, .32 caliber, and 9 millimeter the death rate from typhoid fever had American families, taking our moth- bullets. These three rounds account for dropped to zero. It will likely take ers, wives, sisters, and daughters on an the ammunition used in about 13 per- longer than 60 years to eliminate bul- often terrifying tour of our health care cent of licensed guns in New York City, let-related death and injury, but we system. yet they are involved in one-third of all need to start with achievable measures The Breast Cancer Patient Protec- homicides. They are not, as I have said, to break the deadly interactions be- tion Act seeks to make the journey useful for sport or hunting. They are tween people, bullets, and violent be- less worrisome by requiring insurance used for violence. If we fail to confront havior. companies to provide at least a mini- the fact that these rounds are used dis- The bills I introduce today would mum amount of inpatient hospital care proportionately in crimes, innocent begin the process. They would begin to for patients undergoing mastectomies people will continue to die. control the problem by banning or tax- or lymph node dissections for the I have called on Congress during the ing those rounds used disproportion- treatment of breast cancer. The lan- past several sessions to ban or heavily ately in crime—the .25-caliber, .32-cali- guage is modeled after last year’s care- tax these bullets. This would not be the ber, and 9-millimeter rounds. The bills fully drafted and unanimously sup- first time that Congress has banned a recognize the epidemic nature of the ported compromise agreement that es- particular round of ammunition. In problem, building on findings con- tablished a similar policy to end the 1986, it passed legislation written by tained in the June 10, 1992 issue of the practice of drive-through deliveries. the Senator from New York banning Journal of the American Medical Asso- The bill was designed in part to the so-called ‘‘cop-killer’’ bullet. This ciation which was devoted entirely to counter a consulting firm’s rec- round, jacketed with tungsten alloys, the subject of violence, principally vio- ommendation to its insurance company steel, brass, or any number of other lence associated with firearms. clients that both mastectomies and metals, had been demonstrated to pen- Mr. President, it is time to confront lymph node dissections be performed etrate no fewer than four police flak the epidemic of bullet-related violence. on an outpatients basis. As a result, jackets and an additional five Los An- I urge my colleagues to support these some surgeons have been forced to send geles County phonebooks at one time. bills. patients home still groggy from anes- In 1982, the New York Police Benevo- thesia and with drainage tubes in lent Association came to me and asked By Mr. DASCHLE (for himself, place. Yet, with few exceptions, hos- me to do something about the ready Mr. HOLLINGS, Mr. KENNEDY, pitalization following major breast availability of these bullets. The result Ms. MIKULSKI, Mr. LEVIN, MS. cancer surgery is necessary not only to was the Law Enforcement Officers Pro- MOSELEY-BRAUN, Mrs. BOXER, control pain and manage postoperative tection Act, which we introduced in Mrs. FEINSTEIN, Mr. INOUYE, care, but also to provide a supportive 1982, 1983, and for the last time during Mrs. MURRAY, Mr. JOHNSON, Mr. environment for women who have un- the 99th Congress. In the end, with the BRYAN, Mr. SARBANES, Mr. dergone an undeniably traumatic and tacit support of the National Rifle As- FORD, and Mr. LAUTENBERG): challenging surgery. sociation, the measure passed the Con- S. 143. A bill to amend the Public Under this targeted legislation, gress and was signed by the President Health Service Act and Employee Re- women would be guaranteed at least 48 as Public Law 99–408 on August 28, 1986. tirement Income Security Act of 1974 hours of impatient care following a In the 1994 crime bill, we enacted my to require that group and individual mastectomy, and a minimum of 24 amendment to broaden the ban to in- health insurance coverage and group hours following lymph node dissection clude new thick steel-jacketed armor- health plans provide coverage for a for the treatment of breast cancer. pa- piercing rounds. minimum hospital stay for tients and their physicians—not insur- There are some 220 million firearms mastectomies and lymph node dissec- ance companies—could jointly decide in circulation in the United States tions performed for the treatment of whether it is appropriate for the pa- today. They are, in essence, simple ma- breast cancer; to the Committee on tient to leave the hospital earlier. chines, and with minimal care, remain Labor and Human Resources. These timeframes, which were designed working for centuries. However, esti- THE BREAST CANCER PATIENT PROTECTION ACT in consultation with surgeons who spe- mates suggest that we have only a 4- OF 1997 cialize in this area, reflect the mini- year supply of bullets. Some 2 billion Mr. DASCHLE. Mr. President, today mum amount of inpatient care thought cartridges are used each year. At any Senator HOLLINGS and I are introduc- to be necessary following these proce- given time there are some 7.5 billion ing the Breast Cancer Patient Protec- dures. It is our hope that insurers rounds in factory, commercial, or tion Act of 1997. I want to thank Sen- would choose to make an investment in household inventory. ators KENNEDY, MILULSKI, MOSELEY- the future health of their enrollees by In all cases, with the exception of BRAUN, BOXER, FEINSTEIN, LEVIN, allowing coverage for as long as the pistol whipping, gun-related injuries INOUYE, MURRAY, JOHNSON, BRYAN, provider determines to be medically are caused not by the gun, but by the SARBANES, FORD and LANDRIEU, for appropriate to ensure a proper recov- agents involved in the second collision: joining us as original cosponsors. We ery. the bullets. Eliminating the most dan- welcome the support of all of our col- I would also like to call to your at- gerous rounds would not end the prob- leagues, on both sides of the aisle, for tention Senator KENNEDY’s forthcom- lem of handgun killings. But it would this important legislation. Our bill is a ing bill that will require insurance reduce it. A 30-percent reduction in companion to H.R. 135, which was in- companies who cover mastectomies to bullet-related deaths, for instance, troduced in the House of Representa- also cover reconstruction surgery. Too would save over 10,000 lives each year tives by Representatives DELAURO, often, women and their physicians are and prevent up to 50,000 wounds. DINGELL, and ROUKEMA on January 7, faced with having to justify to the in- Water treatment efforts to reduce ty- 1997. surance carrier the clear need for re- phoid fever in the United States took I bring this bill to the Senate both to construction surgery following ampu- about 60 years. Slow sand filters were put an end to the relatively new prac- tation of a diseased breast. This is installed in certain cities in the 1880’s, tice of forcing women to have wrong. Women who have undergone dif- and water chlorination treatment mastectomies on an outpatient basis ficult and disfiguring surgery for S518 CONGRESSIONAL RECORD — SENATE January 21, 1997 breast cancer should not have to under- node dissection for the treatment of breast insurance coverage from negotiating the go additional hardship while simply cancer to less than 24 hours, or level and type of reimbursement with a pro- seeking to made physically whole ‘‘(B) require that a provider obtain author- vider for care provided in accordance with ization from the plan or the issuer for pre- this section. again. Senator KENNEDY’S bill, which I scribing any length of stay required under will cosponsor, will address this impor- ‘‘(f) PREEMPTION; EXCEPTION FOR HEALTH subparagraph (A) (without regard to para- INSURANCE COVERAGE IN CERTAIN STATES.— tant issue. graph (2)). ‘‘(1) IN GENERAL.—The requirements of this While these bills respond to ill-con- ‘‘(2) EXCEPTION.—Paragraph (1)(A) shall not section shall not apply with respect to ceived policies that we believe have apply in connection with any group health health insurance coverage if there is a State dangerous implications for women with plan or health insurance issuer in any case law (as defined in section 2723(d)(1)) for a breast cancer, let them serve as re- in which the decision to discharge the State that regulates such coverage that is minders of our broken health care sys- woman involved prior to the expiration of described in any of the following subpara- tem. Addressing health insurance prob- the minimum length of stay otherwise re- graphs: lems relating to quality of care and pa- quired under paragraph (1)(A) is made by an ‘‘(A) Such State law requires such coverage attending provider in consultation with the tient protection issues on a piecemeal to provide for at least a 48-hour hospital woman. length of stay following a mastectomy per- basis may be our only way to accom- ‘‘(b) PROHIBITIONS.—A group health plan, formed for treatment of breast cancer and at plish meaningful reforms in this in- and a health insurance issuer offering group least a 24-hour hospital length of stay follow- creasingly important area. health insurance coverage in connection ing a lymph node dissection for treatment of With one in eight women likely to with a group health plan, may not— breast cancer. develop breast cancer, it is increas- ‘‘(1) deny to a woman eligibility, or contin- ‘‘(B) Such State law requires, in connec- ingly likely that all of our families will ued eligibility, to enroll or to renew cov- tion with such coverage for surgical treat- erage under the terms of the plan, solely for be in some way affected by this dev- ment of breast cancer, that the hospital the purpose of avoiding the requirements of length of stay for such care is left to the de- astating disease. Let us take this small this section; step to ensure the experience is not ag- cision of (or required to be made by) the at- ‘‘(2) provide monetary payments or rebates tending provider in consultation with the gravated by unnecessarily difficult en- to women to encourage such women to ac- woman involved. counters with the companies that have cept less than the minimum protections ‘‘(2) CONSTRUCTION.—Section 2723(a)(1) shall agreed under contract to stand by us available under this section; not be construed as superseding a State law not only in health but also in sickness. ‘‘(3) penalize or otherwise reduce or limit described in paragraph (1).’’. This bill is strongly supported by the the reimbursement of an attending provider (B) CONFORMING AMENDMENT.—Section National Breast Cancer Coalition, the because such provider provided care to an in- 2723(c) of such Act (42 U.S.C. 300gg–23(c)), as dividual participant or beneficiary in accord- National Alliance of Breast Cancer Or- amended by section 604(b)(2) of Public Law ance with this section; 104–204, is amended by striking ‘‘section ganizations, the American College of ‘‘(4) provide incentives (monetary or other- Surgeons, the American Society of 2704’’ and inserting ‘‘sections 2704 and 2706’’. wise) to an attending provider to induce such (2) ERISA AMENDMENTS.— Plastic and Reconstructive Surgeons, provider to provide care to an individual par- (A) IN GENERAL.—Subpart B of part 7 of the Y-Me National Breast Cancer Orga- ticipant or beneficiary in a manner incon- subtitle B of title I of the Employee Retire- nization, the American Cancer Society, sistent with this section; or ment Income Security Act of 1974, as amend- Families USA, and the Women’s Legal ‘‘(5) subject to subsection (c)(3), restrict ed by section 702(a) of Public Law 104–204, is Defense Fund. benefits for any portion of a period within a amended by adding at the end the following Together, I am hopeful that we can hospital length of stay required under sub- new section: section (a) in a manner which is less favor- ‘‘SEC. 713. STANDARDS RELATING TO BENEFITS put critical health care decisions back able than the benefits provided for any pre- in the hands of breast cancer patients FOR CERTAIN BREAST CANCER ceding portion of such stay. TREATMENT. and their physicians. ‘‘(c) RULES OF CONSTRUCTION.— ‘‘(a) REQUIREMENTS FOR MINIMUM HOSPITAL Mr. President, I ask that the full text ‘‘(1) Nothing in this section shall be con- STAY FOLLOWING MASTECTOMY OR LYMPH of the Breast Cancer Patient Protec- strued to require a woman who is a partici- NODE DISSECTION.— pant or beneficiary— tion Act be inserted following may re- ‘‘(1) IN GENERAL.—A group health plan, and ‘‘(A) to undergo a mastectomy or lymph marks. a health insurance issuer offering group node dissection in a hospital; or There being no objection, the bill was health insurance coverage, may not— ‘‘(B) to stay in the hospital for a fixed pe- ordered to be printed in the RECORD, as ‘‘(A) except as provided in paragraph (2)— riod of time following a mastectomy or ‘‘(i) restrict benefits for any hospital follows: lymph node dissection. length of stay in connection with a mastec- S. 143 ‘‘(2) This section shall not apply with re- tomy for the treatment of breast cancer to Be it enacted by the Senate and House of Rep- spect to any group health plan, or any group less than 48 hours, or resentatives of the United States of America in health insurance coverage offered by a ‘‘(ii) restrict benefits for any hospital Congress assembled, health insurance issuer, which does not pro- length of stay in connection with a lymph SECTION 1. SHORT TITLE. vide benefits for hospital lengths of stay in node dissection for the treatment of breast This Act may be cited as the ‘‘Breast Can- connection with a mastectomy or lymph cancer to less than 24 hours, or cer Patient Protection Act of 1997’’. node dissection for the treatment of breast ‘‘(B) require that a provider obtain author- cancer. SEC. 2. COVERAGE OF MINIMUM HOSPITAL STAY ization from the plan or the issuer for pre- FOR CERTAIN BREAST CANCER ‘‘(3) Nothing in this section shall be con- scribing any length of stay required under TREATMENT. strued as preventing a group health plan or subparagraph (A) (without regard to para- (a) GROUP HEALTH PLANS.— issuer from imposing deductibles, coinsur- graph (2)). (1) PUBLIC HEALTH SERVICE ACT AMEND- ance, or other cost-sharing in relation to ‘‘(2) EXCEPTION.—Paragraph (1)(A) shall not MENTS.— benefits for hospital lengths of stay in con- apply in connection with any group health (A) IN GENERAL.—Subpart 2 of part A of nection with a mastectomy or lymph node plan or health insurance issuer in any case title XXVII of the Public Health Service Act, dissection for the treatment of breast cancer in which the decision to discharge the as amended by section 703(a) of Public Law under the plan (or under health insurance woman involved prior to the expiration of 104–204, is amended by adding at the end the coverage offered in connection with a group the minimum length of stay otherwise re- following new section: health plan), except that such coinsurance or quired under paragraph (1)(A) is made by an ‘‘SEC. 2706. STANDARDS RELATING TO BENEFITS other cost-sharing for any portion of a period attending provider in consultation with the FOR CERTAIN BREAST CANCER within a hospital length of stay required woman. TREATMENT. under subsection (a) may not be greater than ‘‘(a) REQUIREMENTS FOR MINIMUM HOSPITAL such coinsurance or cost-sharing for any pre- ‘‘(b) PROHIBITIONS.—A group health plan, STAY FOLLOWING MASTECTOMY OR LYMPH ceding portion of such stay. and a health insurance issuer offering group NODE DISSECTION.— ‘‘(d) NOTICE.—A group health plan under health insurance coverage in connection ‘‘(1) IN GENERAL.—A group health plan, and this part shall comply with the notice re- with a group health plan, may not— a health insurance issuer offering group quirement under section 713(d) of the Em- ‘‘(1) deny to a woman eligibility, or contin- health insurance coverage, may not— ployee Retirement Income Security Act of ued eligibility, to enroll or to renew cov- ‘‘(A) except as provided in paragraph (2)— 1974 with respect to the requirements of this erage under the terms of the plan, solely for ‘‘(i) restrict benefits for any hospital section as if such section applied to such the purpose of avoiding the requirements of length of stay in connection with a mastec- plan. this section; tomy for the treatment of breast cancer to ‘‘(e) LEVEL AND TYPE OF REIMBURSE- ‘‘(2) provide monetary payments or rebates less than 48 hours, or MENTS.—Nothing in this section shall be con- to women to encourage such women to ac- ‘‘(ii) restrict benefits for any hospital strued to prevent a group health plan or a cept less than the minimum protections length of stay in connection with a lymph health insurance issuer offering group health available under this section; January 21, 1997 CONGRESSIONAL RECORD — SENATE S519

‘‘(3) penalize or otherwise reduce or limit cision of (or required to be made by) the at- (2) INDIVIDUAL MARKET.—The amendment the reimbursement of an attending provider tending provider in consultation with the made by subsection (b) shall apply with re- because such provider provided care to an in- woman involved. spect to health insurance coverage offered, dividual participant or beneficiary in accord- ‘‘(2) CONSTRUCTION.—Section 731(a)(1) shall sold, issued, renewed, in effect, or operated ance with this section; not be construed as superseding a State law in the individual market on or after such ‘‘(4) provide incentives (monetary or other- described in paragraph (1).’’. date. wise) to an attending provider to induce such (B) CONFORMING AMENDMENTS.— Ms. MOSELEY-BRAUN. Mr. Presi- (i) Section 731(c) of such Act (29 U.S.C. provider to provide care to an individual par- dent, I am pleased to join the list of co- ticipant or beneficiary in a manner incon- 1191(c)), as amended by section 603(b)(1) of sistent with this section; or Public Law 104–204, is amended by striking sponsors of the Breast Cancer Patient ‘‘(5) subject to subsection (c)(3), restrict ‘‘section 711’’ and inserting ‘‘sections 711 and Protection Act of 1997. I think this act benefits for any portion of a period within a 713’’. is vitally important to prevent health hospital length of stay required under sub- (ii) Section 732(a) of such Act (29 U.S.C. providers from cutting costs at the ex- section (a) in a manner which is less favor- 1191a(a)), as amended by section 603(b)(2) of pense of women’s health. able than the benefits provided for any pre- Public Law 104–204, is amended by striking Breast cancer is the most common ceding portion of such stay. ‘‘section 711’’ and inserting ‘‘sections 711 and cancer among women. This year alone ‘‘(c) RULES OF CONSTRUCTION.— 713’’. ‘‘(1) Nothing in this section shall be con- (iii) The table of contents in section 1 of approximately 184,300 women will be di- strued to require a woman who is a partici- such Act is amended by inserting after the agnosed with breast cancer while an- pant or beneficiary— item relating to section 712 the following other 44,300 women will die of the dis- ‘‘(A) to undergo a mastectomy or lymph new item: ease. Breast cancer is a disease that node dissection in a hospital; or will affect one in every eight women. ‘‘(B) to stay in the hospital for a fixed pe- ‘‘Sec. 713. Standards relating to benefits for With statistics like these, it is possible riod of time following a mastectomy or certain breast cancer treat- that every family in America will feel lymph node dissection. ment.’’. the effects of this disease. ‘‘(2) This section shall not apply with re- (b) INDIVIDUAL HEALTH INSURANCE.— spect to any group health plan, or any group This act would ensure that health in- (1) IN GENERAL.—Part B of title XXVII of surers which already provide for the health insurance coverage offered by a the Public Health Service Act, as amended health insurance issuer, which does not pro- by section 605(a) of Public Law 104–204, is treatment of breast cancer cover a vide benefits for hospital lengths of stay in amended by inserting after section 2751 the minimum hospital stay of 48 hours for connection with a mastectomy or lymph following new section: patients undergoing mastectomies and node dissection for the treatment of breast ‘‘SEC. 2752. STANDARDS RELATING TO BENEFITS 24 hours for those undergoing lymph cancer. FOR CERTAIN BREAST CANCER node removal if she and her doctor ‘‘(3) Nothing in this section shall be con- TREATMENT. choose. I am cosponsoring this bill to strued as preventing a group health plan or ‘‘(a) IN GENERAL.—The provisions of sec- issuer from imposing deductibles, coinsur- tion 2706 (other than subsection (d)) shall ensure that breast cancer surgery is ance, or other cost-sharing in relation to apply to health insurance coverage offered not relegated to routine outpatient benefits for hospital lengths of stay in con- by a health insurance issuer in the individ- surgery. nection with a mastectomy or lymph node ual market in the same manner as it applies The average hospital stay of a breast dissection for the treatment of breast cancer to health insurance coverage offered by a cancer patient has dwindled from 4–6 to under the plan (or under health insurance health insurance issuer in connection with a 2–3 days and currently some patients coverage offered in connection with a group group health plan in the small or large group are sent home a few hours after their market. health plan), except that such coinsurance or operation. Both the American College other cost-sharing for any portion of a period ‘‘(b) NOTICE.—A health insurance issuer within a hospital length of stay required under this part shall comply with the notice of Surgeons and the American Medical under subsection (a) may not be greater than requirement under section 713(d) of the Em- Association believe that most patients such coinsurance or cost-sharing for any pre- ployee Retirement Income Security Act of require hospital stays that are longer ceding portion of such stay. 1974 with respect to the requirements re- than the current trends. In addition, ‘‘(d) NOTICE UNDER GROUP HEALTH PLAN.— ferred to in subsection (a) as if such section accepted practice has shown that The imposition of the requirements of this applied to such issuer and such issuer were a group health plan. breast cancer surgery patients require section shall be treated as a material modi- at least 48 hours in the hospital after a fication in the terms of the plan described in ‘‘(c) PREEMPTION; EXCEPTION FOR HEALTH section 102(a)(1), for purposes of assuring no- INSURANCE COVERAGE IN CERTAIN STATES.— mastectomy and 24 hours’ hospital stay tice of such requirements under the plan; ex- ‘‘(1) IN GENERAL.—The requirements of this after a lymph node removal. cept that the summary description required section shall not apply with respect to The important aspect of this matter to be provided under the last sentence of sec- health insurance coverage if there is a State is that women are being sent home tion 104(b)(1) with respect to such modifica- law (as defined in section 2723(d)(1)) for a after breast cancer surgery before they State that regulates such coverage that is tion shall be provided by not later than 60 are neither physically nor emotionally days after the first day of the first plan year described in any of the following subpara- in which such requirements apply. graphs: ready to be released from the hospital. ‘‘(e) LEVEL AND TYPE OF REIMBURSE- ‘‘(A) Such State law requires such coverage The reason for sending these women MENTS.—Nothing in this section shall be con- to provide for at least a 48-hour hospital home has nothing to do with medical strued to prevent a group health plan or a length of stay following a mastectomy per- standards of care and everything to do health insurance issuer offering group health formed for treatment of breast cancer and at with the bottom line. I support the insurance coverage from negotiating the least a 24-hour hospital length of stay follow- Breast Cancer Patient Protection Act level and type of reimbursement with a pro- ing a lymph node dissection for treatment of because it will allow the decisions on vider for care provided in accordance with breast cancer. this section. ‘‘(B) Such State law requires, in connec- how long to stay in the hospital to be ‘‘(f) PREEMPTION; EXCEPTION FOR HEALTH tion with such coverage for surgical treat- determined by the patient and her doc- INSURANCE COVERAGE IN CERTAIN STATES.— ment of breast cancer, that the hospital tor. If it is determined that the patient ‘‘(1) IN GENERAL.—The requirements of this length of stay for such care is left to the de- is not in need of a 48-hour stay, the section shall not apply with respect to cision of (or required to be made by) the at- doctor may release the patient from health insurance coverage if there is a State tending provider in consultation with the hospital care. The crucial distinction law (as defined in section 731(d)(1)) for a woman involved. between this scenario and what is cur- State that regulates such coverage that is ‘‘(2) CONSTRUCTION.—Section 2762(a) shall rently being practiced is that insurers described in any of the following subpara- not be construed as superseding a State law graphs: described in paragraph (1).’’. will not be able to force someone out ‘‘(A) Such State law requires such coverage (2) CONFORMING AMENDMENT.—Section on a purely arbitrary basis. Decisions to provide for at least a 48-hour hospital 2762(b)(2) of such Act (42 U.S.C. 300gg– will be made based on the needs of the length of stay following a mastectomy per- 62(b)(2)), as added by section 605(b)(3)(B) of patient rather than the fiscal concerns formed for treatment of breast cancer and at Public Law 104–204, is amended by striking of the insurer. least a 24-hour hospital length of stay follow- ‘‘section 2751’’ and inserting ‘‘sections 2751 This legislation enjoys the support of ing a lymph node dissection for treatment of and 2752’’. the National Breast Cancer Coalition, breast cancer. (c) EFFECTIVE DATES.— ‘‘(B) Such State law requires, in connec- (1) GROUP MARKET.—The amendments made the National Association of Breast tion with such coverage for surgical treat- by subsection (a) shall apply with respect to Care Organizations, the Y-me National ment of breast cancer, that the hospital group health plans for plan years beginning Breast Cancer Organization, the Fami- length of stay for such care is left to the de- on or after January 1, 1998. lies USA foundation, the Women’s S520 CONGRESSIONAL RECORD — SENATE January 21, 1997 Legal Defense Fund, and the American anxiety by ensuring that crucial health [HMO] payment guidelines. Today, one Society of Plastic and Reconstructive decisions are left in the hands of doc- in eight American women develop Surgeons. tors and patients, not accountants. breast cancer, and they and their fami- I have given careful consideration to I am pleased to support this impor- lies will thank her when the bipartisan the issues involved and believe that tant effort to provide women with members of this Congress act to ensure this act will ensure that American breast cancer the thorough health care that medical decisions for mastectomy women receive the health care treat- coverage they deserve. patients are made by the doctors and ment and coverage that they are enti- Mr. Johnson. Mr. President, I am patients involved in the case, rather tled to. I strongly encourage all of my proud and grateful to be here today as than by HMO’s or insurers. colleagues to endorse this effort. a co-sponsor of The Beast Cancer Pa- When I notified one constituent that Mr. FORD. Mr. President, I rise in tient Protection Act of 1997. I am proud I would help introduce legislation to support of the Breast Cancer Protec- because this bill is the right thing to guarantee women at least 48 hours of tion Act introduced earlier today by do—it’s a common sense measure that hospital coverage for mastectomies my friend the Democratic Leader, Sen- protects women undergoing breast can- and 24 hours for lymph node removals, ator Tom DASCHLE. I am pleased to be cer treatments. And I am grateful be- he asked ‘‘what have we come to when an original cosponsor of this important cause, as the husband of a woman who we need legislation like this?’’ What legislation to provide women with has suffered from breast cancer, I know have we come to, indeed. breast cancer the best care and health that every step makes a difference in Most Senators are not doctors, but coverage available. preserving and protecting the quality common sense dictates that mastec- I come here not as an authority on of life for those afflicted with this dis- tomy is not generally an outpatient this subject, but as one of the many ease. procedure. Not only the pain, but also Americans who have been touched by As health care costs spiral out of the need to tend drainage tubes and the this disease. My own daughter is a control, more and more decisions are psychological shock usually require at breast cancer survivor, as is a former being made based on the bottom-line least two days of medical care and ad- staff member. Unfortunately, another rather than on the needs of the patient. justment, and often more. Unfortu- member of my staff for 18 years, Mar- A twenty-four hour stay is not always nately, managed care payment rules tha Moloney, was not so lucky. After a long enough for a mother and newborn have led to cases where women are long battle with breast cancer, she died child. And a twenty-four hour stay is forced out of the hospital on the same in November 1995. often not long enough for a woman who day as their mastectomies, before It is for these women, and the thou- has undergone surgical treatment for spending a night in the hospital. sands of others affected by this disease, breast cancer. These extreme cases are part of a na- that I lend my support to this effort to I know this not just from literature tionwide reduction in hospital stays for ensure all women with breast cancer or fact sheets or discussions with women with breast cancer. Outpatient are treated with dignity and respect. health care professionals. I know that mastectomies have risen from less than Rather than being rushed out the door twenty-four hours isn’t long enough for two percent of mastectomies 5 years hours after a breast cancer surgery, everyone because I helped my wife ago to nearly 8 percent now. Mastec- women deserve to consult with their home from the hospital after her can- tomy patients overall now spend only physician to determine the appropriate cer surgery. With tubes running every- half of the time in the hospital that hospital stay. That is why I am sup- where, we brought her into our home they would have ten years ago—2–3 porting the Breast Cancer Protection twenty-two hours after her surgery. days rather than 4–6. Medical experts Act to provide a minimum hospital Many families aren’t equipped to give know that sometimes a shorter stay is stay of 48 hours for mastectomies and the care needed. And many women appropriate or even requested by a pa- 24 hours for lymph node removals. aren’t well enough to give themselves tient who wants to get home and has Over the past 10 years, the length of the care needed. An additional twenty- access to adequate follow-up care. But hospitalization for patients undergoing four hours in the hospital can decrease we obviously need to take note of in- breast cancer surgery has decreased the risk of infection, allow women to creased pressure to send women home significantly. Today, hospitalization rest more comfortably, and ensure that early. Medical and personal consider- time for patients undergoing any crucial health care decision is ations between the patient and attend- mastectomies has dwindled to a mere being made in the best possible envi- ing physician, and not HMO financial 2–3 days, down from 4–6 days, 10 years ronment. rules, should be the determining factor. ago. My wife and I are not alone. Nearly I am still collecting data in my home Under pressure to cut costs, surgeons one out of every eight women will de- State of South Carolina, which is have been instructed by managed care velop breast cancer. Approximately, among the States least affected so far companies to perform lymph node dis- 185,000 women will be diagnosed with by HMO’s. With our more personalized sections and even mastectomies as out- the disease this year. Sadly, more than medicine, we have not seen the same- patient surgery. I have heard stories 44,000 women will also die from this day discharges without an overnight about companies that require patients disease in the next 365 days. The num- stay. But South Carolina has a rel- to be sent home a few hours after their bers of those afflicted with this disease atively high number of mastectomies surgery, even though they may be in must decrease, but the options must and it appears that many South Caro- severe pain, groggy from anesthesia, increase. lina women stay 21 hours, or 23 hours and have surgical tubes still in place. These are our grandmothers, our in the hospital after their surgery. Some companies have even denied mothers, our daughters, our sisters, Again, something is wrong when pa- women hospitalization on the day of our wives. They deserve the best that tients tell me that they felt like the their surgery. These situations place we can give. stay was too short, the newfound pain doctors in the difficult position of hav- This bill does not do it all, but, as we was still there, and the medical practi- ing to choose between delivering the look for a cure and other innovative tioners speak in terms of 21 or 23 hours. quality care their patients deserve and treatments, it is part of a package to Obviously, this is someone’s attempt to a penalty for failing to follow an insur- ease the pain of this invasive disease. I call a procedure ‘‘outpatient’’ by not er’s guidelines. will do all that I can to make sure this covering 24 hours in the hospital, and Mr. President, women with breast bill becomes law. it represents a more subtle affect of in- cancer suffer not only from physical Mr. HOLLINGS. Mr. President, first I surance payment rules on medicine pain but also emotional and psycho- want to thank my colleague, Senator which this Congress should consider. logical trauma. They should not have DASCHLE, for introducing this legisla- Mr. President, I will also join my col- to worry whether their physician is tion in the Senate. Also, I must thank leagues, Senator D’AMATO and Senator struggling to comply with an arbitrary Congresswoman ROSA DELAURO for SNOWE, in introducing slightly broader length of stay guideline or their own taking the lead in the House in pro- legislation. I am heartened that so best health interests. The Breast Can- tecting mastectomy patients from new many Senators of both parties are anx- cer Protection Act will help ease their Health Management Organization ious to pass legislation in this area and January 21, 1997 CONGRESSIONAL RECORD — SENATE S521 I commend their bipartisanship. I in- Last year, Congress voted over- other statistical agencies in the De- vite all of my colleagues to join these whelmingly to ban the practice of partment of Commerce and Labor. efforts to make sure in this Congress health plans forcing excessively short When a new Department of Labor was that doctors and breast cancer pa- stays after delivery of a baby. This leg- formed in 1913, giving labor an inde- tients, rather than insurers, determine islation is a further needed step to pro- pendent voice—as labor was ‘‘removed’’ the best length of stay in the hospital tect consumers against a particularly from the Department of Commerce and for each mastectomy case. abusive practice, and I look forward to Labor—what we now know as the Bu- Mr. KENNEDY. Mr. President, I join its early bipartisan approval by Con- reau of Labor Statistics was trans- Senator DASCHLE in introducing legis- gress. ferred to it. lation to ban the abusive practice of And so it went. Statistical agencies drive-by″ mastectomies. This legisla- By Mr. MOYNIHAN (for himself sprung up as needed. And they moved tion will respond to the concerns of and Mr. KERREY): back and forth as new executive de- women throughout the country who S. 144. A bill to establish the Com- partments were formed. Today, some 89 fear that, in dealing with the cruel dis- mission to Study the Federal Statis- different organizations in the Federal ease of breast cancer, their health tical System, and for other purposes; Government comprise parts of our na- plan’s bottom line will take precedence to the Committee on Governmental Af- tional statistical infrastructure. Elev- over their health needs. This legisla- fairs. en of these organizations have as their tion will require health insurers to pro- FEDERAL STATISTICAL SYSTEM LEGISLATION primary function the generation of vide coverage for a minimum hospital Mr. MOYNIHAN. Mr. President, I rise data. These 11 organizations are: stay for mastectomies and lymph node today to reintroduce, along with Sen- Date dissections performed for the treat- ator KERREY of Nebraska, legislation Agency Department Estab- ment of breast cancer. The legislation to establish a commission to study the lished Federal Statistical System. allows outpatient surgery when the pa- National Agricultural Statistical Service ... Agriculture ...... 1863 tient and the doctor decide that a hos- Statistics are part of our constitu- Statistics of Income Division, IRS ...... Treasury ...... 1866 tional arrangement, which provides for Economic Research Service ...... Agriculture ...... 1867 pital stay is not necessary, but it pro- National Center for Education Statistics .. Education ...... 1867 hibits a health plan from forcing pa- a decennial census that, among other Bureau of Labor Statistics ...... Labor ...... 1884 purposes, is the basis for apportion- Bureau of the Census ...... Commerce ...... 1902 tients to go home on the same day that Bureau of Economic Analysis ...... Commerce ...... 1912 they have these major surgical proce- ment of membership in the House of National Center for Health Statistics ...... Health and Human 1912 Representatives. I quote from Article I, Services. dures. Bureau of Justice Statistics ...... Justice ...... 1968 The Daschle bill is a companion to Section I: Energy Information Administration ...... Energy ...... 1974 bipartisan legislation (H.R.135) intro- * * * enumeration shall be made within Bureau of Transportation Statistics ...... Transportation ...... 1991 duced by Representative ROSA three Years after the first meeting of the NEED FOR LEGISLATION DELAURO in the House of Representa- Congress of the United States, and within President Kennedy once said: tives. It will ban an abusive practice every subsequent Term of ten Years, in such that even the health plans themselves Manner as they shall by Law direct. Democracy is a difficult kind of govern- ment. It requires the highest qualities of have recognized should not be toler- But, while the Constitution directed that there be a census, there was, ini- self-discipline, restraint, a willingness to ated. make commitments and sacrifices for the This legislation is of major impor- tially, no Census Bureau. The earliest general interest, and also it requires knowl- tance to millions of women. Breast censuses were conducted by U.S. mar- edge. cancer is the most common solid tissue shals. Later on, statistical bureaus in That knowledge often comes from ac- cancer among women. In 1996, approxi- State governments collected the data, curate statistics. You cannot begin to mately 184,000 new cases of invasive with a Superintendent of the Census solve a problem until you can measure breast cancer were diagnosed. It is now overseeing from Washington. It was it. the leading cause of death in women not until 1902 that a permanent Bureau This legislation would require the between the ages of 40 and 55. of the Census was created by the Con- new commission to conduct a com- This legislation is supported by the gress, housed initially in the Interior prehensive examination of our current National Breast Cancer Coalition the Department. In 1903 the Bureau was statistical system and focus particu- National Association of Breast Care transferred to the newly established larly on the agencies that produce data Organizations, the Y-me National Department of Commerce and Labor. as their primary product—agencies Breast Cancer Organization, the Fami- The Statistics of Income Division of such as the Bureau of Economic Analy- lies USA Foundation, the Women’s the Internal Revenue Service, which sis [BEA] and the Bureau of Labor Sta- Legal Defense Fund, and the American was originally an independent body, tistics [BLS]. Society of Plastic and Reconstructive began collecting data in 1866. It too In September 1996, prior to the first Surgeons. It prohibits plans from re- was transferred to the new Department introduction of this bill, I received a quiring hospital stays shorter than 48 of Commerce and Labor in 1903, but letter from nine former chairmen of hours for patients after mastectomy then was put in the Treasury Depart- the Council of Economic Advisers and 24 hours after lymph node dissec- ment in 1913 following ratification of [CEA] endorsing this legislation. Ex- tion. the 16th amendment, which gave Con- cluding the two most recent chairs, Decisions about the need for hospital gress the power to impose an income who were still serving in the Clinton care after such surgery should be made tax. administration, the signatories include by a woman and her doctor. The social, A Bureau of Labor, created in 1884, virtually every living chair of the CEA. medical, geographic and health issues was also initially in the Interior De- While acknowledging that the United unique to each person must be consid- partment. The first Commissioner, ap- States ‘‘possesses a first-class statis- ered in deciding the required amount of pointed in 1885, was Colonel Carroll D. tical system,’’ these former chairmen in-hospital care. In certain cir- Wright, a distinguished Civil War vet- remind us that ‘‘problems periodically cumstances and with proper support, it eran of the New Hampshire Volunteers. arise under the current system of wide- may be possible for some women to un- A self-trained social scientist, Colonel ly scattered responsibilities.’’ They dergo these procedures with a shorter Wright pioneered techniques for col- conclude as follows: lecting and analyzing survey data on hospital stay, or even on occasion as an Without at all prejudging the appropriate outpatient. Each circumstance is income, prices, and wages. He had pre- measures to deal with these difficult prob- unique. viously served as chief of the Massa- lems, we believe that a thoroughgoing review This bill preserves every woman’s chusetts Bureau of Statistics, a post he by a highly qualified and bipartisan Commis- ability to avail herself of needed serv- held for 15 years, and in that capacity sion as provided in your Bill has great prom- ices without fear of penalty or preju- had supervised the 1880 Federal census ise of showing the way to major improve- dice. It does not require a stay in the in Massachusetts. ments. hospital for any fixed period of time. In 1888, the Bureau of Labor became The letter is signed by: Michael J. Rather, it guarantees that hospital an independent agency. In 1903 it was Boskin, Martin Feldstein, Alan Green- care will be provided when it is needed. once again made a Bureau, joining span, Paul W. McCracken, Raymond J. S522 CONGRESSIONAL RECORD — SENATE January 21, 1997 Saulnier, Charles L. Schultze, Beryl W. sions, and study groups have convened of our system with the systems of Sprinkel, Herbert Stein, and Murray to assess our statistical infrastructure, other nations; and recommendations Weidenbaum. but in most cases little or no action for a strategy to maintain a modern I ask unanimous consent that the has been taken on their recommenda- and efficient statistical infrastructure. full text of this letter be printed in the tions. The result of this inaction has All of these objectives will be ad- RECORD following my statement. been an ever-expanding statistical sys- dressed in an interim report due no It happens that this Senator’s asso- tem. It continues to grow in order to later than June 1, 1998, with a final re- ciation with the statistical system in meet new data needs, but with little or port due January 15, 1999. the executive branch began over three no regard for the overall objectives of The Commission is expected to spend decades ago. I was Assistant Secretary the system. Janet L. Norwood, former $10 million: $2.5 million in 1997, $5 mil- of Labor for Policy and Planning in the Commissioner of the BLS, writes in her lion in 1998, and $2.5 million in 1999. administration of President John F. book Organizing to Count: The Commission will cease to exist 90 Kennedy. This was a new position in The U.S. system has neither the advan- days after the final report is submit- which I was nominally responsible for, tages that come from centralization nor the ted. inter alia, the Bureau of Labor Statis- efficiency that comes from strong coordina- This legislation is only a first step, tics. I say nominally out of respect for tion in decentralization. As presently orga- but an essential one. The Commission the independence of that venerable in- nized, therefore, the country’s statistical will provide Congress with a blueprint stitution, which as I noted earlier long system will be hard pressed to meet the de- for reform. It will be up to us to finally predated the Department of Labor it- mands of a technologically advanced, in- take action after nearly a century of creasingly internationalized world in which self. The then-Commissioner of the inattention to this very important the demand for objective data of high quality issue. BLS, Ewan Clague, could not have been is steadily rising. more friendly and supportive. And so Mr. President, I ask unanimous con- In this era of government downsizing were the statisticians, who undertook sent that the text of the legislation be and budget cutting it is unlikely that to teach me to the extent I was teach- printed in the RECORD immediately Congress will appropriate more funds able. They even shared professional after my statement. for statistical agencies. It is clear that There being no objection, the items confidences. And so it was that I came to preserve and improve the statistical were ordered to be printed in the to have some familiarity with the field. system we must consider reforming it, For example, we had just received a RECORD, as follows: yet we must not attempt to reform the report on price indexes from a commit- S. 144 system until we have heard from ex- tee led by George J. Stigler, who later Be it enacted by the Senate and House of Rep- perts in the field. It is also clear there resentatives of the United States of America in won a Nobel prize in economics. Congress assembled, The Committee stressed the impor- is a need for a comprehensive review of the Federal statistical infrastructure. SECTION 1. SHORT TITLE. tance of accurate and timely statistics, This Act may be cited as the ‘‘Commission noting that: For if the public loses confidence in our statistics, they are likely to lose con- to Study the Federal Statistical System Act The periodic revision of price indexes, and of 1997’’. fidence in our policies as well. the almost continuous alterations in details SEC. 2. FINDINGS. of their calculation, are essential if the in- DESCRIPTION OF LEGISLATION The Congress, recognizing the importance dexes are to serve their primary function of The legislation established the Com- of statistical information in the develop- measuring the average movements of prices. mission to Study the Federal Statis- ment and administration of policies for the And while the recently released Final tical System. The Commission would private and public sector, finds that— Report of the Advisory Commission To consist of 13 members: 5 appointed by (1) accurate Federal statistics are required Study The Consumer Index (The to develop, implement, and evaluate govern- the President with no more than 3 from ment policies and laws; Boskin Commission) focused primarily the same political party, 4 appointed (2) Federal spending consistent with legis- on the extent to which changes in the by the President pro tempore of the lative intent requires accurate and appro- CPI overstate inflation, the Boskin Senate with no more than 2 from the priate statistical information; Commission also addressed issues re- same political party, and 4 appointed (3) business and individual economic deci- lated to the effectiveness of Federal by the Speaker of the House with no sions are influenced by Federal statistics and statistical programs and recommended more than 2 from the same political contracts are often based on such statistics; that: party. A chairman would be selected by (4) statistical information on the manufac- turing and agricultural sectors is more com- Congress should enact the legislation nec- the President from the appointed mem- plete than statistical information regarding essary for the Department of Commerce and bers. The members must have expertise the service sector which employs more than Labor to share information in the interest of in statistical policy with a background half the Nation’s workforce; improving accuracy and timeliness of eco- in disciplines such as actuarial science, (5) experts in the private and public sector nomic statistics and to reduce the resources demography, economics, finance, and have long-standing concerns about the accu- consumed in their development and produc- racy and adequacy of numerous Federal sta- tion. management. The Commission will conduct a com- tistics, including the Consumer Price Index, Our Government officials are not ob- prehensive study of all matters relat- gross domestic product, trade data, wage livious to the growing need for reform. data, and the poverty rate; ing to the Federal statistical infra- In fact, Under Secretary of Commerce (6) Federal statistical data should be accu- structure, including: and examination for Economic Affairs Everett M. Ehr- rate, consistent, continuous, and be designed of multipurpose statistical agencies lich has been most forthcoming on this to best serve explicitly stated purposes; such as the Bureau of Labor Statistics point. In a November 24, 1996 New York (7) the Federal statistical infrastructure [BLS]; a review and evaluation of the should be modernized to accommodate the Times article, Under Secretary Ehrlich mission and organizational structure of increasingly complex and ever changing states: statistical agencies, including activi- American economy; Our statistical system is failing to keep ties that should be expanded or elimi- (8) Federal statistical agencies should uti- track with a rapidly changing economy. The lize all practical technologies to disseminate data we provide give us a good picture of nated and the advantages and dis- statistics to the public; where we are in the business cycle but risk advantages of a centralized statistical (9) the Federal statistical infrastructure misrepresenting such long-term phenomena agency; an examination of the meth- should maintain the privacy of individuals; as inflation, productivity growth and the odology involved in producing data and and economy’s changing composition. the accuracy of the data itself; a re- (10) the Federal statistical system should To address this problem, Under Sec- view of interagency coordination and be designed to limit redundancy of activities retary Ehrlich has proposed a 3-year standardization of collection proce- while achieving the maximum practical level program to improve the Department of dures; a review of information tech- of knowledge, expertise, and data. Commerce’s measurement of statistics. nology and an assessment of how data SEC. 3. ESTABLISHMENT OF COMMISSION. (a) ESTABLISHMENT.—There is established a There is, of course, a long history of is disseminated to the public; an iden- commission to be known as the Commission attempts to reform our Nation’s statis- tification and examination of issues re- to Study the Federal Statistical System tical infrastructure. Between 1903 and garding individual privacy in the con- (hereafter in this Act referred to as the 1990, 16 different committees, commis- text of statistical data; a comparison ‘‘Commission’’). January 21, 1997 CONGRESSIONAL RECORD — SENATE S523

(b) MEMBERSHIP.— and recommendations on ways to improve advisable to carry out the purposes of this (1) COMPOSITION.—The Commission shall be such accuracy and appropriateness so that Act. composed of 13 members of whom— the indicators better serve the major pur- (b) INFORMATION FROM FEDERAL AGEN- (A) 5 shall be appointed by the President; poses for which they were intended; CIES.—The Commission may secure directly (B) 4 shall be appointed by the President (B) an examination of multipurpose statis- from any Federal department or agency such pro tempore of the Senate, in consultation tical agencies that collect and analyze data information as the Commission considers with the Majority Leader and Minority of broad interest across department and necessary to carry out the provisions of this Leader of the Senate; and functional areas, such as the Bureau of Eco- Act. Upon request of the Chairman of the (C) 4 shall be appointed by the Speaker of nomic Analysis and the Bureau of the Census Commission, the head of such department or the House of Representatives, in consulta- of the Commerce Department, and the Bu- agency shall furnish such information to the tion with the Majority Leader and Minority reau of Labor Statistics of the Labor Depart- Commission. Leader of the House of Representatives. ment, for the purpose of understanding the (c) POSTAL SERVICES.—The Commission (2) POLITICAL PARTY LIMITATION.—(A) Of the interrelationship and flow of data among may use the United States mails in the same 5 members of the Commission appointed agencies; manner and under the same conditions as under paragraph (1)(A), no more than 3 mem- (C) a review and evaluation of the collec- other departments and agencies of the Fed- bers may be members of the same political tion of data for purposes of administering eral Government. (d) GIFTS.—The Commission may accept, party. such programs as Old-Age, Survivors and use, and dispose of gifts or donations of serv- (B) Of the 4 members of the Commission Disability Insurance and Unemployment In- ices or property. appointed under subparagraphs (B) and (C) of surance under the Social Security Act; paragraph (1), respectively, no more than 2 (D) a review and evaluation of the mission SEC. 6. COMMISSION PERSONNEL MATTERS. members may be members of the same polit- and organization of various statistical agen- (a) COMPENSATION OF MEMBERS.— ical party. cies, including— (1) IN GENERAL.—Subject to paragraph (2), each member of the Commission shall be (3) CONSULTATION BEFORE APPOINTMENTS.— (i) recommendations with respect to statis- In making appointments under paragraph tical activities that should be expanded or compensated at a rate equal to the daily (1), the President, the President pro tempore eliminated; equivalent of the annual rate of basic pay of the Senate, and the Speaker of the House (ii) the order of priority such activities prescribed for level IV of the Executive of Representatives shall consult with the Na- should be carried out; Schedule under section 5315 of title 5, United tional Academy of Sciences and appropriate (iii) a review of the advantages and dis- States Code, for each day (including travel professional organizations, such as the advantages of a centralized statistical agen- time) during which such member is engaged American Economic Association and the cy or a partial consolidation of the agencies in the performance of the duties of the Com- American Statistical Association. for the Federal Government; and mission. (2) CHAIRMAN.—The Chairman shall be (4) QUALIFICATIONS.—An individual ap- (iv) an assessment of which agencies could pointed to serve on the Commission— be consolidated into such an agency; compensated at a rate equal to the daily (A) shall have expertise in statistical pol- (E) an examination of the methodology in- equivalent of the annual rate of basic pay icy and a background in such disciplines as volved in producing official data and rec- prescribed for level III of the Executive actuarial science, demography, economics, ommendations for technical changes to im- Schedule under section 5315 of title 5, United finance, and management; prove statistics; States Code, for each day (including travel (B) may not be a Federal officer or em- (F) a review of interagency coordination of time) during which such member is engaged ployee; and statistical data and recommendations of in the performance of the duties of the Com- (C) should be an academician, a statistics methods to standardize collection procedures mission. (b) TRAVEL EXPENSES.—The members of user in the private sector, a corporate man- and surveys, as appropriate, and presen- the Commission shall be allowed travel ex- ager with experience related to information tation of data throughout the Federal sys- penses, including per diem in lieu of subsist- technology, or a former government official tem; ence, at rates authorized for employees of with experience related to— (G) a review of information technology and agencies under subchapter I of chapter 57 of (i) the Bureau of Labor Statistics of the recommendations of appropriate methods for title 5, United States Code, while away from Department of Labor; or disseminating statistical data, with special their homes or regular places of business in (ii) the Bureau of Economic Analysis or emphasis on resources, such as the Internet, the performance of services for the Commis- the Bureau of the Census of the Department that allow the public to obtain and report in- sion. Such travel may include travel outside of Commerce. formation in a timely and cost-effective the United States. (5) DATE.—The appointments of the mem- manner; (c) STAFF.— bers of the Commission shall be made no (H) an identification and examination of (1) IN GENERAL.—Subject to paragraph (2), later than 150 days after the date of the en- issues regarding individual privacy in the the Commission shall, without regard to the actment of this Act. context of statistical data; provisions of title 5, United States Code, re- (c) PERIOD OF APPOINTMENT; VACANCIES.— (I) a comparison of the United States sta- lating to the competitive service, appoint an Members shall be appointed for the life of tistical system to statistical systems of executive director who shall be paid at a rate the Commission. Any vacancy in the Com- other nations for the purposes of identifying equivalent to a rate established for the Sen- mission shall not affect its powers, but shall best practices and developing a system of be filled in the same manner as the original ior Executive Service under section 5382 of maintaining best practices over time; title 5, United States Code. The Commission appointment. (J) a consideration of the coordination of (d) INITIAL MEETING.—No later than 30 days shall appoint such additional personnel as statistical data with other nations and inter- the Commission determines to be necessary after the date on which all members of the national agencies, such as the Organization Commission have been appointed, the Com- to provide support for the Commission, and for Economic Cooperation and Development; may compensate such additional personnel mission shall hold its first meeting. and (e) MEETINGS.—The Commission shall meet without regard to the provisions of title 5, (K) a recommendation of a strategy for at the call of the Chairman. United States Code, relating to the competi- maintaining a modern and efficient Federal (f) QUORUM.—A majority of the members of tive service. statistical infrastructure to produce mean- the Commission shall constitute a quorum, (2) LIMITATION.—The total number of em- but a lesser number of members may hold ingful information as the United States soci- ployees of the Commission (including the ex- hearings. ety and economy change. ecutive director) may not exceed 30. (g) CHAIRMAN.—The President shall des- (b) REPORT.— (d) DETAIL OF GOVERNMENT EMPLOYEES.— ignate a Chairman of the Commission from (1) INTERIM REPORT.—No later than June 1, Any Federal Government employee may be among the members. 1998, the Commission shall submit an in- detailed to the Commission without reim- SEC. 4. FUNCTIONS OF THE COMMISSION. terim report on the study conducted under bursement, and such detail shall be without (a) STUDY.— subsection (a) to the President and to the interruption or loss of civil service status or (1) IN GENERAL.—The Commission shall Congress. privilege. conduct a comprehensive study of all mat- (2) FINAL REPORT.—No later than January (e) PROCUREMENT OF TEMPORARY AND ters relating to the Federal statistical infra- 15, 1999, the Commission shall submit a final INTERMITTENT SERVICES.—The Chairman of structure, including longitudinal surveys report to the President and the Congress the Commission may procure temporary and conducted by private agencies and partially which shall contain a detailed statement of intermittent services under section 3109(b) of funded by the Federal Government, for the the findings and conclusions of the Commis- title 5, United States Code, at rates for indi- purpose of identifying opportunities to im- sion, and recommendations for such legisla- viduals which do not exceed the daily equiva- prove the quality of statistics in the United tion and administrative actions as the Com- lent of the annual rate of basic pay pre- States. mission considers appropriate. scribed for level V of the Executive Schedule (2) STUDY AND RECOMMENDATIONS.—The SEC. 5. POWERS OF THE COMMISSION. under section 5316 of such title. matters studied by and recommendations of (a) HEARINGS.—The Commission may hold SEC. 7. TERMINATION OF THE COMMISSION. the Commission shall include— such hearings, sit and act at such times and The Commission shall terminate 90 days (A) an evaluation of the accuracy and ap- places, take such testimony, and receive after the date on which the Commission sub- propriateness of key statistical indicators such evidence as the Commission considers mits the final report of the Commission. S524 CONGRESSIONAL RECORD — SENATE January 21, 1997 SEC. 8. AUTHORIZATION OF APPROPRIATIONS. S. 145. A bill to repeal the prohibition SECTION 1. REPEAL OF THE PROHIBITION There are authorized to be appropriated against government restrictions on AGAINST GOVERNMENT RESTRIC- TIONS ON COMMUNICATIONS BE- $2,500,000 for fiscal year 1997, $5,000,000 for fis- communications between government cal year 1998, and $2,500,000 for fiscal year TWEEN GOVERNMENT AGENCIES 1999 to the Commission to carry out the pur- agencies and the INS; to the Commit- AND THE INS. poses of this Act. tee on the Judiciary. (a) WELFARE.—Section 434 of the Personal Responsibility and Work Opportunity Rec- GOVERNMENT AGENCIES LEGISLATION SEPTEMBER 23, 1996. onciliation Act of 1996 (Public Law 104–193, Mr. MOYNIHAN. Mr. President, I rise Hon. DANIEL P. MOYNIHAN, 110 Stat. 2275) is repealed. Hon. J. ROBERT KERREY, today to introduce legislation to repeal (b) IMMIGRATION.—Section 642 of the Illegal U.S. Senate, section 434 of the Personal Responsibil- Immigration Reform and Immigrant Respon- Washington, DC. ity and Work Opportunity Reconcili- sibility Act of 1996 (Public Law 104–208, 110 DEAR SENATORS MOYNIHAN AND KERREY: All ation Act of 1996, and subsections (a) Stat 3009–1834) is amended— of us are former Chairmen of the Council of and (b) of section 642 of the Illegal Im- (1) by striking subsections (a) and (b); and (2) in subsection (c), by striking ‘‘(c) OBLI- Economic Advisers. We write to support the migration Reform and Immigrant Re- basic objectives and approach of your Bill to GATION TO RESPOND TO INQUIRIES.—’’. establish the Commission to Study the Fed- sponsibility Act of 1996. Section 434 of eral Statistical System. the first act provides that: By Mr. FRIST (for Mr. ROCKE- The United States possesses a first-class Notwithstanding any other provision of FELLER (for himself and Mr. statistical system. All of us have in the past Federal, State, or local law, no State or local FRIST)): relied heavily upon the availability of rea- government entity may be prohibited, or in S. 146. A bill to permit medicare sonably accurate and timely federal statis- any way restricted, from sending to or re- tics on the national economy. Similarly, our beneficiaries to enroll with qualified ceiving from the Immigration and Natu- provider-sponsored organizations under professional training leads us to recognize ralization Service (INS) information regard- how important a good system of statistical ing the immigration status, lawful or unlaw- title XVIII of the Social Security Act, information is for the efficient operations of ful, of an alien in the United States. and for other purposes; to the Commit- our complex private economy. But we are tee on Finance. also painfully aware that important prob- This provision, along with portions of THE PROVIDER-SPONSORED ORGANIZATION ACT lems of bureaucratic organization and meth- section 642 of the aforementioned ille- OF 1997 odology need to be examined and dealt with gal immigration law, conflicts with an Mr. ROCKEFELLER. Mr. President. I if the federal statistical system is to con- executive order, issued by the mayor of ∑ am extremely pleased to be introduc- tinue to meet essential public and private New York in 1985, prohibiting city em- needs. ing legislation with my colleague from ployees from reporting suspected ille- All of us have particular reason to remem- Tennessee, Senator FRIST, that will gal aliens to the Immigration and Nat- ber the problems which periodically arise give Medicare beneficiaries the oppor- under the current system of widely scattered uralization Service unless the alien has tunity to receive their health care responsibilities. Instead of reflecting a bal- been charged with a crime. The execu- services from a locally-based, provider- ance among the relative priorities of one sta- tive order, which is similar to local owned and operated, health care plan. tistical collection effort against others, sta- laws in other States and cities, was in- tistical priorities are set in a system within In my own State of West Virginia, tended to ensure that fear of deporta- which individual Cabinet Secretaries rec- the health care landscape is changing tion does not deter illegal aliens from ommend budgetary tradeoffs between their rapidly. Managed care is becoming seeking emergency medical attention, own substantive programs and the statistical more prominent, and, with it, a con- operations which their departments, some- reporting crimes, and so forth. cern that profits are being put ahead of times by historical accident, are responsible On September 8, 1995, during Senate for collecting. Moreover, long range planning a patient’s health care needs. My con- consideration of H.R. 4, the Work Op- stituents want to be sure that their of improvements in the federal statistical portunity Act of 1995, Senators system to meet the changing nature and doctor is making his or her own medi- needs of the economy is hard to organize in SANTORUM and NICKLES offered this cal decisions on patient care and treat- the present framework. The Office of Man- provision as an amendment. The ment. They do not want to be told that agement and Budget and the Council of Eco- amendment was adopted by a vote of 91 their care is being directed by anony- nomic Advisers put a lot of effort into trying to 6. The Senators who voted ‘‘no’’ mous insurance officials in another to coordinate the system, often with success, were: AKAKA, CAMPBELL, INOUYE, State available only through a 1–800 but often swimming upstream against the MOSELEY-BRAUN, MOYNIHAN, and SIMON. system. phone number. We are also aware, as of course are you, of Four of these six—Senators AKAKA, Under current law, Medicare bene- a number of longstanding substantive and MOSELEY-BRAUN, SIMON, and the Sen- ficiaries have a choice of receiving methodological difficulties with which the ator from New York—were also among their health care services under tradi- current system is grappling. These include the 11 Democrats who voted against tional Medicare fee-for-service or from the increasing importance in the national H.R. 4 when it passed the Senate 11 economy of the service sector, whose output a Health Maintenance Organization days later on September 19, 1995. The (HMO). Our legislation would allow and productivity are especially hard to provision remained in H.R. 3734, the measure, and the pervasive effect both on seniors to choose another option and measures of national output and income and welfare bill recently signed by Presi- would make sure that patient care and on the federal budget of the accuracy (or in- dent Clinton. treatment decisions remain in the accuracy) with which our measures of prices Mayor Rudolph W. Giuliani of New hands of health care providers. This is capture changes in the quality of the goods York City filed suit last year to chal- accomplished by allowing provider- and services we buy. lenge section 434 of the new welfare law sponsored organizations [PSOs] to di- Without at all prejudging the appropriate and section 642 of the illegal immigra- measures to deal with these difficult prob- rectly provide benefits to Medicare lems, we believe that a thoroughgoing review tion law in U.S. District Court and I in- beneficiaries without the insurance by a highly qualified and bipartisan Commis- troduced a similar bill at the time. The middleman. Our bill would mean that sion as provided in your Bill has great prom- mayor’s lawsuit deserves to succeed for insurance administrative and overhead ise of showing the way to major improve- the same reason this legislation de- costs would be reduced, freeing funds ments. serves to pass: the provisions at issue which are better spent on patient care Sincerely, are onerous and represent bad public costs. Professor Michael J. Boskin, Stanford policy. University; Dr. Martin Feldstein, Na- Our legislation is necessary because tional Bureau of Economic Research; Mr. President, I ask unanimous con- insurance regulations in most States Alan Greenspan; Professor Paul W. sent that the text of the bill be printed do not take into account the unique McCracken, University of Michigan; in the RECORD. characteristics of a PSO. Only 4 States Raymond J. Saulnier; Charles L. There being no objection, the bill was have adopted licensure requirements Schultze, The Brookings Institution; ordered to be printed in the RECORD, as aimed at encouraging the development Beryl W. Sprinkel; Herbert Stein, follows: of provider sponsored organizations. American Enterprise Institute; Profes- sor Murray Weidenbaum, Center for S. 145 Our bill carves out a time-limited Fed- the Study of American Business. Be it enacted by the Senate and House of Rep- eral role of 4 years for direct federal resentatives of the United States of America in Medicare certification as a qualified By Mr. MOYNIHAN: Congress assembled, PSO. During those 4 years, a PSO could January 21, 1997 CONGRESSIONAL RECORD — SENATE S525 apply directly to the Medicare Pro- Secretary to develop specific solvency S. 146 gram to be designated as a qualified standards. I believe this approach will Be it enacted by the Senate and House of Rep- PSO that would be paid on a capitated address concerns raised by some that resentatives of the United States of America in prospective basis and could serve Medi- complete secretarial discretion on fis- Congress assembled, care beneficiaries. Beginning on Janu- cal soundness and solvency would SECTION 1. SHORT TITLE; REFERENCES. ary 1, 2002, State licensure would re- somehow result in weakened solvency (a) SHORT TITLE.—This Act may be cited as place the Federal certification process standards. the ‘‘Provider-Sponsored Organization Act of as long as a State’s standards for PSOs In 1972, a proxy measure for quality 1997’’. (b) REFERENCES TO SOCIAL SECURITY ACT.— were sufficiently similar to Federal was enacted by Congress which re- Except as otherwise specifically provided, PSO standards. PSOs could continue to quired health plans to meet an arbi- whenever in this Act an amendment is ex- apply for a Federal waiver after the trary standard of plan enrollment. pressed in terms of an amendment to or re- initial 4 years if a State failed to act Under the so-called ‘‘50–50 rule,’’ a peal of a section or other provision, the ref- on a PSO’s application within a reason- health plan’s Medicare and Medicaid erence shall be considered to be made to that able time period or if a State continued enrolles cannot exceed 50 percent of its section or other provision of the Social Secu- to apply unfair or unreasonable cri- total enrollment. The underlying rity Act. teria for PSOs to enter the market. premise of the 50–50 rule is that if a SEC. 2. QUALIFIED PROVIDER-SPONSORED ORGA- NIZATIONS AS MEDICARE HEALTH Mr. President, our bill is actually plan has a significant enrollment of PLAN OPTION. quite similar to legislation enacted in private or commercial enrolles its Section 1876(b) (42 U.S.C. 1395mm(b)) is the early 70s directed at promoting and quality will be higher than a health amended to read as follows: fostering the growth of HMOs. Accord- plan strictly serving Medicaid or Medi- ‘‘(b)(1) For purposes of this section, the ing to a recent issue briefing prepared care beneficiaries. This is an issue that term ‘eligible organization’ means a public by the Congressional Research Service is especially important in rural States or private entity (which may be a health on the HMO debate in the 1970s, ‘‘state like West Virginia. Many rural pro- maintenance organization, a competitive solvency requirements were seen as ex- medical plan, or a qualified provider-spon- vider networks—which this bill seeks sored organization) that— cessive and unappreciative of the to encourage—would be unable to meet ‘‘(A) is organized and licensed under State unique resources available to a HMO a 50–50 enrollment quota because a dis- law to offer prepaid health services or health . . . the outcome of the debate was the proportionate share of the elderly re- benefits coverage in each State in which the Health Maintenance Organization Act side in rural areas. entity seeks to enroll individuals who are en- . . . which enabled HMOs meeting Fed- Also, since adoption of the 50–50 rule, titled to benefits under this title; and eral requirements to be exempt from there have been significant advances ‘‘(B) is described in paragraph (2), (3), or specific State laws.’’ In many States, made in measuring and assuring qual- (4). the State HMO requirements that ‘‘(2) An entity is described in this para- ity care. While still far from perfect, I graph if the entity is a qualified health evolved were designed to address issues believe that we have gained sufficient maintenance organization (as defined in sec- presented by large, insurer-owned and knowledge to adopt an approach that tion 1310(d) of the Public Health Service operated HMOs, not smaller commu- relies on specific quality standards, Act). nity-based provider organizations. rather than a rough proxy based on a ‘‘(3)(A) An entity is described in this para- Our bill does not in any way weaken plan’s enrollment mix. Quality assur- graph if the entity— quality assurance or solvency stand- ance will continue to be a work in ‘‘(i) provides to enrolled members health ards for PSOs that choose to contract progress, but our bill begins to lay the care services that include at least— directly with the Medicare program. ‘‘(I) physicians’ services performed by phy- groundwork for explicitly setting and sicians (as defined in section 1861(r)(1)); Our legislation is very specific on the measuring the quality of health care ‘‘(II) inpatient hospital services; solvency and quality standards that received by Medicare beneficiaries. ‘‘(III) laboratory, X-ray, emergency, and must be met in order for a PSO to be Under our bill, the 50–50 rule would be preventive services; and federally qualified. Overall, I believe, waived for any health plan that con- ‘‘(IV) out-of-area coverage; our standards are even more detailed tracts with the Medicare Program if ‘‘(ii) is compensated (except for and explicit than current Medicare law the plan meets the enhanced quality deductibles, coinsurance, and copayments) relating to quality and solvency for requirements in our bill and also has for the provision of health care services to enrolled members by a payment which is HMOs. experience in providing managed or co- Our bill retains all of the consumer paid on a periodic basis without regard to ordinated care. PSOs would go further the date the health care services are pro- protections in current law that apply by adhering to additional standards vided and which is fixed without regard to to health plans that serve Medicare governing utilization review to reduce the frequency, extent, or kind of health care beneficiaries. Beneficiaries would con- intrusions into the doctor patient rela- service actually provided to a member; tinue to be protected from incurring tionship, as well as how physicians par- ‘‘(iii) provides physicians’ services pri- any financial liability if a health care ticipate in PSO networks. marily— plan became insolvent. In addition, Mr. President, last year Congress de- ‘‘(I) directly through physicians who are rules on open enrollment and arranging bated a variety of ways to improve either employees or partners of such organi- for continuing Medigap coverage— zation; or quality and to put an end to medical ‘‘(II) through contracts with individual without any pre-existing condition lim- decision-making driven by a desire to physicians or 1 or more groups of physicians itations—would apply as they do under earn hefty profits for a company’s (organized on a group practice or individual current Medicare law. Our legislation stockholders. Our bill gives health care practice basis); would also require Medicare to con- providers the opportunity to get back ‘‘(iv) except as provided in subsection (i), tract with local agencies for ongoing in the driver’s seat. In addition, by cut- assumes full financial risk on a prospective monitoring of PSO performance and ting out the insurance company mid- basis for the provision of health care services beneficiary access to services. dleman, more money could be spent on listed in clause (i), except that such entity may— Specifically on solvency, our legisla- providing patient care instead of on tion builds on fiscal soundness and sol- ‘‘(I) obtain insurance or make other ar- processing claims and realizing profits. rangements for the cost of providing to any vency standards that were developed I look forward to discussing this enrolled member health care services listed by the National Association of Insur- issue and pursuing the goal of this new in clause (i), the aggregate value of which ance Commissioners [NAIC]. Our bill bill later this year with my colleagues exceeds $5,000 in any year; slightly modifies the HMO Model Act in the Finance Committee as we look ‘‘(II) obtain insurance or make other ar- to take into account how affiliation ar- at a variety of ways to improve and rangements for the cost of health care serv- rangements are structured within strengthen the Medicare program. ices listed in clause (i) provided to its en- PSOs. It also recognizes a variety of al- Mr. President, I ask unanimous con- rolled members other than through the en- ternative means, that many States al- tity because medical necessity required their sent that the text of the bill be printed provision before they could be secured ready use, of meeting the solvency in the RECORD. through the entity; standards. In this way, our approach There being no objection, the bill was ‘‘(III) obtain insurance or make other ar- goes beyond earlier PSO legislative ordered to be printed in the RECORD, as rangements for not more than 90 percent of proposals which merely required the follows: the amount by which its costs for any of its S526 CONGRESSIONAL RECORD — SENATE January 21, 1997 fiscal years exceed 115 percent of its income deliver a spectrum of health care services date it is filed and shall grant a waiver for for such fiscal year; and (including basic hospital and physicians’ an organization with respect to a State if the ‘‘(IV) make arrangements with physicians services) under contract to purchasers of Secretary determines that— or other health professionals, health care in- such services. ‘‘(I) the State did not act upon a licensure stitutions, or any combination of such indi- ‘‘(C) In defining a ‘substantial proportion’ application within 90 days after the date it viduals or institutions to assume all or part for purposes of subparagraph (A)(i), the Sec- was filed; or of the financial risk on a prospective basis retary— ‘‘(II)(aa) the State denied a licensure appli- for the provision of basic health services by ‘‘(i) shall take into account the need for cation; and the physicians or other health professionals such an organization to assume responsibil- ‘‘(bb) the State’s licensing standards or re- or through the institutions; and ity for providing— view process are determined by the Sec- ‘‘(v) has made adequate provision against ‘‘(I) significantly more than the majority retary to impose unreasonable barriers to the risk of insolvency, which provision is of the items and services under the contract market entry, including through the imposi- satisfactory to the Secretary. under this section through its own affiliated tion of any requirements, procedures, or ‘‘(B) Subparagraph (A)(i)(II) shall not providers; and other standards on such organization that apply to an entity that has contracted with ‘‘(II) most of the remainder of the items are not generally applicable to any other en- a single State agency administering a State and services under the contract through pro- tities engaged in substantially similar ac- plan approved under title XIX for the provi- viders with which the organization has an tivities. sion of services (other than inpatient hos- agreement to provide such items and serv- ‘‘(iii) In the case of a waiver granted under pital services) to individuals eligible for such ices, this paragraph for an organization— services under such State plan on a prepaid in order to assure financial stability and to ‘‘(I) the waiver shall be effective for a 24- risk basis prior to 1970. address the practical considerations involved month period, except that it may be renewed ‘‘(4) An entity is described in this para- in integrating the delivery of a wide range of based on a subsequent application filed dur- graph if the entity is a qualified provider- service providers; ing the last 6 months of such period; sponsored organization (as defined in sub- ‘‘(ii) shall take into account the need for ‘‘(II) if the State failed to meet the re- section (l)(1)(A)).’’. such an organization to provide a limited quirement of clause (ii)(I)— SEC. 3. PARTIAL RISK ARRANGEMENTS. proportion of the items and services under ‘‘(aa) any application for a renewal may be Section 1876 (42 U.S.C. 1395mm) is amend- the contract through providers that are nei- made on the basis described in clause (ii)(I) ed— ther affiliated with nor have an agreement only if the State does not act on a pending (1) by redesignating subsections (i) and (j) with the organization; and licensure application during the 24-month as subsections (j) and (k), respectively; and ‘‘(iii) may allow for variation in the defini- period specified in subclause (I); (2) by inserting after subsection (h) the fol- tion of substantial proportion among such ‘‘(bb) any application for renewal (other lowing: organizations based on relevant differences than one made on the basis described in ‘‘(i) The Secretary may enter into a partial among the organizations, such as their loca- clause (ii)(I)) may be made only on the basis risk contract with an eligible organization tion in an urban or rural area. described in clause (ii)(II); and ‘‘(D) For purposes of this paragraph, a pro- under which— ‘‘(cc) the waiver shall cease to be effective vider is ‘affiliated’ with another provider if, ‘‘(1) notwithstanding subsection on approval of the licensure application by through contract, ownership, or otherwise— (b)(3)(A)(iv), the organization and the pro- the State during such 24-month period; and ‘‘(i) one provider, directly or indirectly, gram established under this title share the ‘‘(III) any provisions of State law that re- controls, is controlled by, or is under the financial risk associated with the services late to the licensing of the organization and control of the other; the organization provides to individuals en- prohibit the organization from providing ‘‘(ii) each provider is a participant in a titled to benefits under part A and enrolled coverage pursuant to a contract under this lawful combination under which each pro- under part B or enrolled under part B only; title shall be superseded during the period vider shares, directly or indirectly, substan- ‘‘(2) notwithstanding subsections (a)(1) and for which such waiver is effective. tial financial risk in connection with their ‘‘(D) Nothing in this paragraph shall be (h)(2), payment is based on— operations; construed as— ‘‘(A) a blend of— ‘‘(iii) both providers are part of a con- ‘‘(i) limiting the number of times such a ‘‘(i) the payments that would otherwise be trolled group of corporations under section waiver may be renewed under subparagraph made to such organization under a risk-shar- 1563 of the Internal Revenue Code of 1986; or (C)(iii)(I); or ing contract under subsection (g); and ‘‘(iv) both providers are part of an affili- ‘‘(ii) affecting the operation of section 514 ‘‘(ii) the payments that would be made to ated service group under section 414 of such of the Employee Retirement Income Secu- such organization under a reasonable cost re- Code. rity Act of 1974 (29 U.S.C. 1144). imbursement contract under subsection (h); ‘‘(E) For purposes of subparagraph (D), ‘‘(3) The requirement of subsection or control is presumed to exist if one party, di- (b)(3)(A)(i) (relating to benefit package for ‘‘(B) any other methodology agreed upon rectly or indirectly, owns, controls, or holds commercial enrollees) shall not apply to a by the Secretary and the organization; and the power to vote, or proxies for, not less qualified provider-sponsored organization. ‘‘(3) adjustments, if appropriate, are made than 51 percent of the voting rights or gov- ‘‘(4) The requirement of subsection to payments to the organization under this ernance rights of another. (b)(3)(A)(iii) (relating to delivery of physi- section to reflect any risk assumed by such ‘‘(2)(A) Subject to subparagraph (B), sub- cians’ services) shall apply to a qualified pro- program.’’. section (b)(1)(A) (relating to State licensure) vider-sponsored organization, except that SEC. 4. STANDARDS AND REQUIREMENTS FOR shall not apply to a qualified provider-spon- the Secretary shall by regulation specify al- QUALIFIED PROVIDER-SPONSORED sored organization. ternative delivery models or arrangements ORGANIZATIONS. ‘‘(B) Beginning on January 1, 2002, sub- that may be used by such organizations in Section 1876 (42 U.S.C. 1395mm), as amend- section (b)(1)(A) shall only apply (and sub- lieu of the models or arrangements specified ed by section 3 of this Act, is amended by paragraph (A) of this paragraph shall no in such subsection. adding at the end the following: longer apply) to a qualified provider-spon- ‘‘(5) The requirement of subsection ‘‘(l)(1)(A) For purposes of this section, the sored organization in a State if— (b)(3)(A)(iv) (relating to risk assumption) term ‘qualified provider-sponsored organiza- ‘‘(i) the financial solvency and capital ade- shall apply to a qualified provider-sponsored tion’ means a provider-sponsored organiza- quacy standards for licensure of the organi- organization, except that any such organiza- tion that— zation under the laws of the State are iden- tion with a full risk contract under sub- ‘‘(i) provides a substantial proportion (as tical to the regulations established under section (g) may (with the approval of the defined by the Secretary, in accordance with section 1889; and Secretary) obtain insurance or make other subparagraph (C) and the regulations estab- ‘‘(ii) the standards for licensure of the or- arrangements for covering costs in excess of lished under section 1889) of the health care ganization under the laws of the State (other those permitted to be covered by such insur- items and services under the contract under than the standards referred to in clause (i)) ance and any arrangements under subsection this section directly through the provider or are substantially equivalent to the standards (b)(3)(A)(iv)(III). through an affiliated group of providers that established by regulations under section ‘‘(6)(A) A qualified provider-sponsored or- comprise the organization; and 1889. ganization shall be treated as meeting the ‘‘(ii) is certified under section 1890 as meet- ‘‘(C)(i) A provider-sponsored organization, requirement of subsection (b)(3)(A)(v) (relat- ing the regulations established under section to which subsection (b)(1)(A) applies by rea- ing to adequate provision against risk of in- 1889, which, except as provided in the suc- son of subparagraph (B), that seeks to oper- solvency) if the organization is fiscally ceeding paragraphs of this subsection, shall ate in a State under a full risk contract sound. be based on the requirements that apply to under subsection (g) or a partial risk con- ‘‘(B) A qualified provider-sponsored organi- an organization described in subsection (b)(3) tract under subsection (i) may apply for a zation shall be treated as fiscally sound for with a risk contract under subsection (g). waiver of the requirement of subsection purposes of subparagraph (A) if the organiza- ‘‘(B) For purposes of this section, the term (b)(1)(A) for that organization operating in tion— ‘provider-sponsored organization’ means a that State. ‘‘(i) has a net worth that is not less than public or private entity that is a provider or ‘‘(ii) The Secretary shall act on such a the required net worth (as defined in sub- a group of affiliated providers organized to waiver application within 60 days after the paragraph (C)); and January 21, 1997 CONGRESSIONAL RECORD — SENATE S527 ‘‘(ii) has established adequate claims re- ‘‘(B) A quality assurance program meets ‘‘(3) For purposes of paragraph (1), the serves (as defined in subparagraph (D)). the requirements of this subparagraph if the term ‘health plan’ means— ‘‘(C) For purposes of subparagraph (B)(i), program— ‘‘(A) any contract of insurance, including the term ‘required net worth’ means— ‘‘(i) stresses health outcomes; any hospital or medical service policy or cer- ‘‘(i) in the case of an organization with a ‘‘(ii) provides opportunities for input by tificate, hospital or medical service plan full risk contract under subsection (g), a net physicians and other health care profes- contract, or health maintenance organiza- worth (determined in accordance with statu- sionals; tion contract, that is provided by a carrier; tory accounting principles for insurance ‘‘(iii) monitors and evaluates high volume and companies and health maintenance organiza- and high risk services and the care of acute ‘‘(B) an employee welfare benefit plan inso- tions), not less than the greatest of— and chronic conditions; far as the plan provides health benefits and ‘‘(I) $1,500,000 at the time of application ‘‘(iv) evaluates the continuity and coordi- is funded in a manner other than through the and $1,000,000 thereafter, nation of care that enrollees receive; purchase of one or more policies or contracts ‘‘(II) the sum of— ‘‘(v) establishes mechanisms to detect both described in subparagraph (A). ‘‘(aa) 8 percent of the cost of health serv- underutilization and overutilization of serv- ‘‘(4) For purposes of paragraph (3), the ices that are not provided directly by the or- ices; term ‘carrier’ means a licensed insurance ganization or its affiliated providers to en- ‘‘(vi) after identifying areas for improve- company, a hospital or medical service cor- rollees; and ment, establishes or alters practice param- poration (including an existing Blue Cross or ‘‘(bb) 4 percent of the estimated annual eters; Blue Shield organization), or any other en- costs of health services provided directly by ‘‘(vii) takes action to improve quality and tity licensed or certified by a State to pro- the organization or its affiliated providers to assess the effectiveness of such action vide health insurance or health benefits.’’. (b) SIZE REQUIREMENT FOR ELIGIBLE ORGA- enrollees; or through systematic followup; NIZATIONS.—Section 1876(g)(1) (42 U.S.C. ‘‘(III) 3 months of uncovered expenditures; ‘‘(viii) makes available information on 1395mm(g)(1)) is amended— and quality and outcomes measures to facilitate (1) by striking ‘‘5000’’ and inserting ‘‘1500’’; ‘‘(ii) in the case of an organization with a beneficiary comparison and choice of health and partial risk contract under subsection (i), an coverage options (in such form and on such (2) by striking ‘‘fewer’’ and inserting ‘‘500 amount determined in accordance with quality and outcomes measures as the Sec- or more’’. clause (i), except that in applying subclause retary determines to be appropriate); and (c) CONFORMING AMENDMENT.—Section (II) of such clause, the Secretary shall sub- ‘‘(ix) is evaluated on an ongoing basis as to 1876(f)(1) (42 U.S.C. 1395mm(f)(1)) is amended stitute for the percentages specified in such its effectiveness. by striking ‘‘Each eligible’’ and inserting subclause such lower percentages as are ap- ‘‘(C) If a qualified provider-sponsored orga- ‘‘Except as provided in subsection (m), each propriate to reflect the risk-sharing arrange- nization utilizes case-by-case utilization re- eligible’’. view, the organization shall— ments under the contract. SEC. 6. ADJUSTED COMMUNITY RATE FOR A ‘‘(D) For purposes of subparagraph (B)(ii), ‘‘(i) base such review on written protocols QUALIFIED PROVIDER-SPONSORED the term ‘adequate claims reserves’ means, developed on the basis of current standards ORGANIZATION. with respect to an organization, reserves for of medical practice; and Section 1876(g) (42 U.S.C. 1395mm(g)) is claims that are— ‘‘(ii) implement a plan under which— amended by adding at the end the following: ‘‘(i) incurred but not reported; or ‘‘(I) such review is coordinated with the ‘‘(7) In the case of a qualified provider- ‘‘(ii) reported but unpaid, quality assurance program of the organiza- sponsored organization, the adjusted commu- that are determined in accordance with stat- tion; and nity rate under subsection (e)(3) and para- utory accounting principles for insurance ‘‘(II) a transition is made from relying pre- graph (2) may be computed (in a manner companies and health maintenance organiza- dominantly on case-by-case review to review specified by the Secretary) using data in the tions and with professional standards of ac- focusing on patterns of care. general commercial marketplace or (during tuarial practice and are certified by an inde- ‘‘(D) A qualified provider-sponsored organi- a transition period) based on the costs in- pendent actuary as adequate in light of the zation shall be treated as meeting the re- curred by the organization in providing such operations and contracts of the organization. quirements of subparagraphs (A) and (B) and a product.’’. ‘‘(E) In applying statutory accounting the requirements of subsection (c)(6) if the SEC. 7. PROCEDURES RELATING TO PARTICIPA- principles for purposes of determining the organization is accredited (and periodically TION OF A PHYSICIAN IN A QUALI- reaccredited) by a private organization FIED PROVIDER-SPONSORED ORGA- net worth of an organization under subpara- NIZATION. graph (B)(i), the Secretary shall— under a process that the Secretary has deter- mined assures that the organization meets Section 1876 (42 U.S.C. 1395mm), as amend- ‘‘(i) treat as ‘admitted assets’— ed by section 5 of this Act, is amended by ‘‘(I) land, buildings, and equipment of the standards that are no less stringent than the standards established under section 1889 to adding at the end the following: organization used for the direct provision of ‘‘(n) A qualified provider-sponsored organi- carry out this paragraph and subsection health care services; zation shall not be treated as meeting the re- (c).’’. ‘‘(II) any receivables from governmental quirements of this section unless the organi- programs due for more than 90 days; and SEC. 5. EXEMPTION FROM CERTAIN ENROLL- zation— ‘‘(III) any other assets designated by the MENT REQUIREMENTS FOR ELIGI- ‘‘(1) establishes reasonable procedures, as BLE ORGANIZATIONS MEETING EN- Secretary; and HANCED QUALITY ASSURANCE RE- determined by the Secretary, relating to the ‘‘(ii) recognize, as a contribution to sur- QUIREMENTS. participation (under an agreement between a plus, amounts received under subordinated (a) IN GENERAL.—Section 1876 of the Social physician or group of physicians and the or- debt (meeting such requirements as the Sec- Security Act (42 U.S.C. 1395mm), as amended ganization) of physicians under contracts retary may specify). by section 4 of this Act, is amended by add- under this section, including procedures to ‘‘(F) The Secretary shall recognize ways of ing at the end the following: provide— complying with the requirement of subpara- ‘‘(m)(1) An eligible organization shall be ‘‘(A) notice of the rules regarding partici- graph (A) other than by means of subpara- deemed to meet the requirements of sub- pation; graph (B), including (alone or in combina- section (f) (relating to enrollment composi- ‘‘(B) written notice of a participation deci- tion)— tion) if the organization demonstrates that sion that is adverse to a physician; and ‘‘(i) letters of credit from a bank; it— ‘‘(C) a process within the organization for ‘‘(ii) financial guarantees from financially ‘‘(A) is capable of providing coordinated appealing an adverse decision, including the strong parties including affiliates; care in accordance with the quality assur- presentation of information and views of the ‘‘(iii) unrestricted fund balances; ance standards established under subsections physician regarding such decision; and ‘‘(iv) diversity of lines of business and pres- (c)(6) and (l)(7)(B); and ‘‘(2) consults with physicians who have en- ence of nonrisk related revenue; ‘‘(B) has experience, under a past or tered into participation agreements with the ‘‘(v) certification of fiscal soundness by an present arrangement, providing coordinated organization regarding the organization’s independent actuary; care to individuals (other than individuals medical policy, quality, and medical man- ‘‘(vi) reinsurance ceded to, or stop loss in- who are entitled to benefits under this title) agement procedures. surance purchased through, a recognized who are enrollees, participants, or bene- Paragraph (1)(C) shall not be construed to re- commercial insurance company; and ficiaries of a health plan or a State plan ap- quire a live evidentiary hearing, a verbatim ‘‘(vii) any other methods that the Sec- proved under title XIX. record, or representation of the appealing retary determines are acceptable for such ‘‘(2) An eligible organization shall be treat- party by legal counsel.’’. purpose. ed as meeting the quality assurance stand- SEC. 8. ESTABLISHMENT OF REGULATIONS; CER- ‘‘(7)(A) A qualified provider-sponsored or- ards referred to in paragraph (1)(A) if the or- TIFICATION PROCEDURES. ganization shall not be treated as meeting ganization is accredited (and periodically re- Part C of title XVIII (42 U.S.C. 1395x et the requirements of subsection (c)(6) (relat- accredited) by a private organization under a seq.) is amended by inserting after section ing to an ongoing quality assurance pro- process that the Secretary has determined 1888 (42 U.S.C. 1395yy) the following: gram) unless the quality assurance program assures that the organization meets stand- ‘‘ESTABLISHMENT OF REGULATIONS FOR QUALI- of the organization meets the requirements ards that are no less stringent than the re- FIED PROVIDER-SPONSORED ORGANIZATIONS of subparagraphs (B) and (C). quirements of that subparagraph. ‘‘SEC. 1889. (a) INTERIM REGULATIONS.— S528 CONGRESSIONAL RECORD — SENATE January 21, 1997 ‘‘(1) IN GENERAL.—Not later than 180 days 1903(m)(1)(A) (42 U.S.C. 1396b(m)(1)(A)) is should include looking at some of the after the date of enactment of this section, amended, in the matter preceding clause (i), payment methodology, another ele- the Secretary shall promulgate regulations by inserting ‘‘(which may be a provider-spon- ment that relates to this choice in the to implement the requirements for qualified sored organization, as defined in section structural reform. We have to accom- provider-sponsored organizations under sec- 1876(l)(1)(B))’’ after ‘‘public or private organi- tion 1876). Such regulations shall be issued zation’’. plish this structural reform if we are on an interim basis, but shall become effec- (c) CONFORMING AMENDMENTS.— going to truly strengthen the Medicare tive upon publication and shall remain in ef- (1) Section 1866(a)(1)(O) is amended by program and not just play with num- fect until the end of December 31, 2001. striking ‘‘1876(i)(2)(A)’’ and inserting bers. ‘‘(2) CONSULTATION.—In developing regula- ‘‘1876(j)(2)(A)’’. Again, we will be looking at a lot of tions under this subsection, the Secretary (2) Section 1877(e)(3)(B)(i)(II) is amended by numbers over the next several weeks. I, shall consult with the National Association striking ‘‘1876(i)(8)(A)(ii)’’ and inserting as a physician, will keep coming back of Insurance Commissioners, the American ‘‘1876(j)(8)(A)(ii)’’. to the importance of having true struc- Academy of Actuaries, State health depart- SEC. 10. REPORT ON MEDICARE CONTRACTS IN- tural reform built into the program, ments, associations representing provider- VOLVING PARTIAL RISK. both part A and part B, in the overall sponsored organizations, quality experts (in- (a) REPORT.—Not later than 4 years after cluding private accreditation organizations), the date of enactment of this Act, the Sec- Medicare program so that we truly will and medicare beneficiaries. retary of Health and Human Services (in this strengthen the system and make sure ‘‘(3) CONTRACTS WITH STATE AGENCIES.—The section referred to as the ‘‘Secretary’’) shall it is there for not only the 38 million Secretary shall enter into contracts with ap- submit a report to the Committee on Ways Americans today, senior citizens and propriate State agencies to monitor perform- and Means and the Committee on Commerce individuals with disabilities, but is ance and beneficiary access to services pro- of the House of Representatives and the there 5 years from now, 10 years from vided under this title during the period in Committee on Finance of the Senate. now, 15, 20 years from now on into the which interim regulations are in effect under (b) CONTENTS OF REPORT.—The report de- future. this subsection. scribed in subsection (a) shall include— ‘‘(b) PERMANENT REGULATIONS.— (1) the number and type of partial-risk con- I say all that to preface my reason ‘‘(1) IN GENERAL.—Not later than July 1, tracts entered into by the Secretary under for rising today, and that is to intro- 2001, the Secretary shall issue permanent section 1876(i) of the Social Security Act (42 duce a bill, the Provider Sponsored Or- regulations to implement the requirements U.S.C. 1395mm(i)); ganization Act of 1997, to be introduced for qualified provider-sponsored organiza- (2) the type of eligible organizations oper- along with my distinguished colleague tions under section 1876. ating such contracts; from West Virginia, Mr. ROCKEFELLER. ‘‘(2) CONSULTATION.—In developing regula- (3) the impact such contracts have had on This bill, I believe, offers one of those tions under this subsection, the Secretary increasing beneficiary access and choice very important structural components shall consult with the organizations and in- under the medicare program under title dividuals listed in subsection (a)(2). XVIII of that Act (42 U.S.C. 1395 et seq.); and which does expand choice for our senior ‘‘(3) EFFECTIVE DATE.—The permanent reg- (4) a recommendation as to whether the citizens, which when injected into the ulations developed under this subsection Secretary should continue to enter into par- Medicare system today will do some- shall be effective on and after January 1, tial-risk contracts under section 1876(i) of thing very important, and that is in- 2002. that Act (42 U.S.C. 1395mm(i)). ject quality into the considerations of ‘‘CERTIFICATION OF PROVIDER-SPONSORED SEC. 11. EFFECTIVE DATES; INTERIM FINAL REG- options and choices among Medicare ORGANIZATIONS ULATIONS. recipients. I will explain this shortly. ‘‘SEC. 1890. (a) IN GENERAL.— (a) EFFECTIVE DATES.— Provider sponsored organizations, or ‘‘(1) PROCESS FOR CERTIFICATION.—The Sec- (1) IN GENERAL.—Except as provided in PSOs, are integrated health care deliv- retary shall establish a process for the cer- paragraph (2), this Act and the amendments ery systems that are sponsored by local tification of provider-sponsored organiza- made by this Act shall take effect on the tions as qualified provider-sponsored organi- date of enactment of this Act. health care providers, physicians in zations under section 1876. Such process shall (2) ELIGIBLE ORGANIZATION AMENDMENTS.— hospitals at the local level. Their pur- provide that an application for certification The amendments made by sections 2 through pose is to deliver a full spectrum of shall be approved or denied not later than 90 8 shall take effect on the date of enactment health services. Very specifically, this days after receipt of a complete application. of this Act and shall apply to contract years bill establishes the Federal solvency ‘‘(2) FEES.—The Secretary may impose user beginning on or after January 1, 1998. requirements, the licensing require- fees on entities seeking certification under (b) USE OF INTERIM FINAL REGULATIONS.— ments and those quality standards that this subsection in such amounts as the Sec- In order to carry out the amendments made PSOs, provider sponsored organiza- retary deems sufficient to pay the costs to by this Act in a timely manner for eligible the Secretary resulting from the certifi- organizations under section 1876 of the So- tions, must meet in order to come to cation process. cial Security Act (42 U.S.C. 1395mm), exclud- the table and participate in the Medi- ‘‘(b) DECERTIFICATION.—If a qualified pro- ing organizations described in subsection care Program. vider-sponsored organization is decertified (b)(4) of that section, the Secretary of Health It was more than 20 years ago that under this section, the organization shall no- and Human Services may promulgate regula- Congress really stepped up to the plate tify each enrollee with the organization tions that take effect on an interim basis, and, I think, quite innovatively pro- under section 1876 of such decertification.’’. after notice and opportunity for public com- vided Federal guidance for the entry of SEC. 9. DEMONSTRATION OF COORDINATED ment.∑ ACUTE AND LONG-TERM CARE BENE- a brand-new phenomenon, and that was FITS; QUALIFIED PROVIDER-SPON- Mr. FRIST. Mr. President, earlier of HMOs, health maintenance organiza- SORED ORGANIZATIONS UNDER today the President of the United tions. HMOs were established with the MEDICAID PROGRAMS. States announced that in his budget, primary purpose of coordinating health (a) DEMONSTRATION OF COORDINATED ACUTE which will be released on February 6, care delivery in such a way that there AND LONG-TERM CARE BENEFITS.—The Sec- retary of Health and Human Services shall that he would aim to achieve approxi- could be competition and in some way provide, in not less than 10 States, for dem- mately $138 billion in savings in the control those skyrocketing costs that onstration projects that permit State medic- Medicare program. He described this as previously had been associated with aid programs under title XIX of the Social a first gesture, which I think should be the fee-for-service programs. What it Security Act (42 U.S.C. 1396 et seq.) to be applauded because the President clear- did, it allowed a combining of the fi- treated as eligible organizations under sec- ly recognized the importance of saving nancing delivery system to the health tion 1876 of that Act (42 U.S.C. 1395mm) for Medicare and strengthening it for fu- the purpose of demonstrating the delivery of care delivery system. primary, acute, and long-term care through ture generations. Today Senator ROCKEFELLER and I an integrated delivery network that empha- The real issue is what policy lies be- are proposing to level the playing field sizes noninstitutional care to individuals hind that number of $138 billion in sav- once again with our bill to allow PSOs, who are— ings. And to make it a legitimate first for the first time, to have access to the (1) eligible to enroll with an organization step, a first step that really does start Medicare market. Our bill sets the na- under such section; and the debate in Medicare, we need to tional rules by which these locally- (2) eligible to receive medical assistance make sure that there is policy which based networks of providers may com- under a State program approved under title does things like expand choice for sen- pete head to head with the traditional XIX of the Social Security Act (42 U.S.C. 1396 et seq.). ior citizens, give them the same op- managed care organizations. All of (b) PROVIDER-SPONSORED ORGANIZATIONS tions that most other people today that is done with the hope that the pro- UNDER MEDICAID PROGRAMS.—Section have. The structural reform I think viders, the physicians, the hospitals, January 21, 1997 CONGRESSIONAL RECORD — SENATE S529 the frontline people who are taking issue of quality. As a physician, I find transplant center I negotiated with care of patients, will be able to more that very encouraging. managed care plans. Based on that ne- actively participate in coordinating People will still tell you today gotiation, all too often quality was not the overall health care for Medicare though, as you travel across Tennessee the issue, really, at the table. People beneficiaries. We trust that free and or our respective States, that their fear would come in and say, ‘‘I need a dis- fair competition will give Medicare of managed care stems a great deal count of 10 percent, of 15 percent or 20 beneficiaries more choices and ulti- from the fact that they feel their phy- percent.’’ What was missing at that mately improve the cost, and as I will sician is no longer in charge of their table was someone—a group of provid- discuss shortly, the quality of the serv- case, that somebody who is watching ers, physicians with hospitals, working ices they receive. just the dollars and cents or some bu- together—who would ask those ques- All of us know that today’s health reaucrat is now in charge of their care. tions about quality. Why do they ask care market in its broadest sense is in Now, this has generated, and it really the questions about quality? Because the midst of dynamic change. The cost starts at a grassroots level, has gen- they are on the frontline. At the table of care does continue to rise rapidly. erated a lot of proposals in the last sev- we will bring physicians who are deliv- There are a growing number of Ameri- eral months, both at the State level ering that care to individuals. cans all across this country who are and at the Federal level. That includes That to me is one of the most excit- shifting from a traditional fee-for-serv- the ban on the gag rule clauses and ing things about this bill. It injects ice model to a managed-care model. various length-of-stay proposals after quality back into the marketplace. Is Today’s paper, the Washington Post, various procedures that are done in the there any evidence today that senior released new figures that show that 75 hospital. citizens will respond to this alter- percent, three-quarters of all working America’s largest health care payer native? This year the Health Care Fi- Americans today, receive their health today is the Federal Medicare Pro- nancing Administration established insurance benefits through some type gram. It has had difficulty, interest- the demonstration project called Medi- of managed care. Unfortunately, I ingly enough, in attracting seniors to care Choices. think, in many ways, the accompany- managed care. The figure that I just This pilot project is examining ways ing perception with this shift of man- mentioned, three-quarters of all people of expanding the choice of health care aged care, although it is not always today being in managed care, contrasts plan options available to Medicare fair, has been that managed care com- with those senior citizens, all of whom beneficiaries. Included in this dem- panies focus almost entirely on cutting are in Medicare. Only 11 percent, only onstration are a number of PSO’s. Sen- costs, and then only after costs are cut 11 percent compared to 75 percent of ator MACK recently shared with me his is the quality issue discussed. Medicare beneficiaries are signed up to experience in Florida with this new In addition, physicians who have to participate. It is very clear that our demonstration project during its first 3 clear practice decisions through man- senior citizens have a great fear today weeks of enrollment. A participating aged care organizations, and I can re- of being herded into the traditional PSO in Orlando received 5,500 phone call before coming to the U.S. Senate 3 managed care plans where they have a calls from interested beneficiaries in years ago picking up the telephone and fear they will not include the physician the first 5 days. They have already calling a bureaucrat or someone sitting they choose or the hospital that they processed enrollment for 400 Medicare 200, 300 and 400 miles away, to ask if I might choose. beneficiaries. They started out holding could discharge my patient, or if my The outmoded blank check mental- 13 informational seminars each week patient met criteria for discharge, ity, on the other hand, of fee-for-serv- and had 600 attendees. They are now whether the hematic or blood count ice system is not sustainable over conducting 15 seminars a week with 700 was appropriate, this intrusion is real- time. It can be one of the choices, but attendees. In addition, the PSO staffs ly resented by physicians, that health it cannot be and will not be the only have been making home visits to those care delivery which really is in this choice. Given that Medicare’s own beneficiaries who are unable to come country a pact, a relationship between trustees have reported that the pro- to the seminars, and as a result of a doctor and a patient. gram is going to be bankrupt in 4 to 5 those home visits, they are enrolling The mother-may-I mentality that years, Medicare clearly has to find a seven to nine individuals a day. The has emerged has frustrated both par- way to have its growth slowed. Orlando PSO has already enrolled an- ties and providers and led them to Medicare beneficiaries who fear man- other 400 beneficiaries just for Feb- question who is in charge. Is it the aged care may well feel much more se- ruary. So, yes, I think our senior citi- physician, working with the patient, cure knowing that they have the zens will respond to this new option, taking care, who knows that patient, choice of a health care plan that is ac- this new option that expands choice, who has been trained to take care of tually run by providers—doctors work- when we bring physicians and hospitals that patient, or is it a bureaucrat or ing with hospitals, and not just a busi- through a PSO entity to the table. somebody hundreds of miles away? ness, not just a traditional insurance Clearly, we can make managed care On the other side of the coin, it is company. options more attractive to America’s very clear that managed care has been PSOs will help push the market to seniors by allowing PSO’s to partici- very successful in forcing an out-of- elevate the level of quality at all levels pate in the Medicare program. What date delivery system to be more ac- of plans of negotiation and delivery be- are the other advantages that provider- countable. This has had very important cause of the direct involvement of phy- sponsored organizations offer? These benefits for patients. That leads me to sicians with hospitals, of the people groups offer many advantages. think of how outcomes, data and re- who are actually delivering that care First, ‘‘one-stop shopping’’ for a co- sults are studied very carefully by in every step of the process. Quality, ordinated package of health care serv- most managed care organizations, driv- all of a sudden, becomes the primary ices really saves time and the expense ing us into the whole realm of quality goal. Once at the negotiating table, of negotiating with individual provider assessment. That has been a huge con- you bring physicians into the room. contracts. tribution of managed care, as well as Many see all of this as an ‘‘us-versus- Second, because it is the providers HMOs. Much of that would not have oc- them scenario.’’ In fact, neither group who are coordinating care, clinical de- curred without HMOs or managed care. acts alone when funds are limited, cisions and utilization reviews are con- Amidst all this change is a great deal whether care is paid for by a Govern- ducted by the providers themselves and of uncertainty. We have senior citizens ment program, an employer, an in- not by a faceless third party charged who are scared to death to change any- surer, an individual. Medicare provid- with conducting these reviews. thing, and that was reinforced in the ers and plan administrators simply Third, incentives to control costs are recent campaigns where huge advertis- must work together to increase the borne by the only group that can truly ing campaigns were put on television, value of health care dollars. deliver systematic quality improve- ‘‘Don’t change anything.’’ Today, pur- Before coming to the U.S. Senate, as ment and cost efficiency over the long chasers, consumers and providers are one who used to negotiate, as a trans- run. Why? Because it is the providers really forcing attention back to that plant surgeon and running a large who are monitoring that quality. It is S530 CONGRESSIONAL RECORD — SENATE January 21, 1997 the physicians and hospitals who are sure that they are able to take on the administrative expenses in comparison to actually providing that care and, thus, financial risks associated with deliver- many of the options offered to Medicare they are in a position to best monitor ing health care services for a set fee, beneficiaries today by stream-ling the orga- nization of administrative functions between that quality. but these are tailored to their primary the provider and the Medicare program. Finally, PSO’s simply tend to have role as providers, as physicians and In short, Medicare beneficiaries need and much lower startup and administrative hospitals; it will require collective ac- deserve additional health care choices built costs, making it easier for them to countability, where quality and cost from the base of their local community of enter the market in those key areas are both measured by overall practice hospitals and doctors. And they should be as- that we need to look at, and that is the patterns across the entire PSO, not by sured the uniformity of plan standards that rural areas. These rural areas have a only federal regulation can bring. case-by-case utilization review; finally, We look forward to working with you to real risk of being underserved without it will set a standard for quality assur- seek enactment of this important legislation this new entity, a PSO. ance, a standard that will set the pace in the first session of the 105th Congress. What are the advantages of the for the rest of the industry. Sincerely, PSO’s—provider-sponsored organiza- This legislation—I need to be very American Hospital Association; Associa- tions—for the country as a whole? The clear about this—does not, in any way, tion of American Medial Colleges; managed care industry has been able to eclipse other health care plans. Rather, Catholic Health Association; Federa- change our paradigms about health it complements, adds to the existing tion of American Health Systems; care tremendously over the last 10 menu of health care services. Qualified InterHealth; National Association of Childrens’ Hospitals; National Associa- years. Health care is becoming less provider-sponsored organizations will tion of Public Hospitals; Premier, Inc.; costly and more efficient. But now we challenge all health care organizations Voluntary Hospitals of America. have to come back to quality and in- participating with Medicare to meet ject quality back into the system and the goal of an integrated health sys- By Mr. DASCHLE (for himself, the effectiveness of that health care tem, a system which truly provides an Mr. CHAFEE, Mr. KENNEDY, Mr. delivery. By bringing providers, the environment with lower costs, better JOHNSON, and Mr. REID): people delivering that care every day, care, higher quality, and preserved re- S. 147. A bill to amend title XIX of to the table for the first time in Medi- lationships between caregivers and the Social Security Act to provide for care, PSO’s will create that oppor- their patients. coverage of alcoholism and drug de- tunity. Mr. President, I send the bill to the pendency residential treatment serv- The PSO’s are really in the health desk and ask that it be referred to the ices for pregnant women and certain care business day in and day out. Re- appropriate committee. family members under the Medicaid member, it is a group of physicians The PRESIDING OFFICER. The bill program, and for other purposes; to the who, every day, are taking care of pa- will be appropriately referred. Committee on Finance. tients who we are bringing to the table The PRESIDING OFFICER. Without THE MEDICAID SUBSTANCE ABUSE TREATMENT for the first time. PSO’s are in the objection, it is so ordered. ACT health care business, not in the insur- Mr. FRIST. I ask unanimous consent ance business, and they are currently that a letter of endorsement from a By Mr. DASCHLE (for himself, excluded from fair participation in the wide variety of hospital associations be Mr. CHAFEE, Mr. BINGAMAN, Mr. market by a system ill-suited to their printed in the RECORD. INOUYE, Mrs. MURRAY, Mr. needs. Let me give a couple of exam- There being no objection, the mate- JOHNSON, Mr. CAMPBELL and ples. rial was ordered to be printed in the Mr. REID): Providers navigating the complex RECORD, as follows: S. 148. A bill to amend the Public State licensure process for the first JANUARY 21, 1997. Health Service Act to provide a com- Hon. BILL FRIST, prehensive program for the prevention time are really at a significant dis- U.S. Senate, advantage compared to the very large Washington, DC. of Fetal Alcohol Syndrome; to the insurance companies and the large DEAR SENATOR FRIST: We endorse enthu- Committee on Labor and Human Re- managed care plans. In a competitive siastically ‘‘The Provider Sponsored Organi- sources. marketplace, the timing of entry is zation Act of 1997’’ which you are introduc- THE COMPREHENSIVE FETAL ALCOHOL critical. ing in the Senate today. This legislation pro- SYNDROME PREVENTION ACT Even though PSO’s do not take on vides an important new health care choice Mr. DASCHLE. Mr. President, today the same level of insurance risk as for Medicare beneficiaries, the Provider I am introducing two bipartisan bills Sponsored Organization (PSO) option. other players, PSO’s are now required Medicare beneficiaries deserve a greater to help prevent the tragic occurrence to submit the same State-defined sol- variety of high quality health care options of alcohol-related birth defects, includ- vency tests and net worth require- from which they can choose—and PSOs pro- ing both fetal alcohol syndrome [FAS] ments as HMO’s. Since the law now vide an outstanding additional choice for and fetal alcohol effects [FAE]. I speak only allows Medicare to contract with them. Medicare PSOs will hold down health on behalf of all cosponsors when I say organizations that are licensed by the care costs by directly managing both the use we are hopeful we can move these two States as HMO’s, many PSO’s are of services and the cost of providing those simple, but important, pieces of legis- services. These PSOs will offer affordable, forced to perform administrative con- lation this year. high-quality and coordinated care and be FAS and FAE are devastating, com- tortions in order to serve Medicare pa- sponsored by organizations that are con- tients—contortions that make them cerned about the health of the entire com- plex birth defects. Many people fail to look like insurance companies, even munity. Because the PSO focused on the realize that FAS is the leading cause of though, in reality, they are not. Community, its medical management poli- mental retardation. Too many women How does the Provider Sponsored Or- cies are locally focused rather than nation- remain uninformed about the real dan- ganization Act develop solutions to the ally driven. And, in a PSO plan, a consumer gers of alcohol consumption during problem? is more likely to maintain stable relation- pregnancy. And, unfortunately, mis- First, it recognizes the potential for ships with his or her personal physician and conceptions about the impact of alco- community hospital, whereas other health hol intake during pregnancy are not PSO’s to serve beneficiaries by ena- plans may change their rosters of participat- bling them to contract directly with ing providers from year to year. limited to the general public. Even Medicare, thus expanding the range of Your legislation recognizes that Medicare some health care providers are un- choices available to each Medicare ben- PSOs will not be in the insurance business, aware of the danger of drinking during eficiary. but will focus on what has been their pri- pregnancy, and for many years it was Second, it will provide Federal lead- mary business for years, the delivery of high widely held that moderate alcohol con- ership to the States in fashioning a quality care. The bill requires, however, high sumption during pregnancy was bene- solvency standards for those participating in ficial. I am happy to report that sev- more nationally consistent, stream- the program and organizational arrange- lined PSO approval process. ments that assure the plans are integrated, eral medical schools have begun teach- However, with access must come ac- fully operational, and responsive to the ing their students about FAS and FAE, countability. This bill will also require needs of the Medicare beneficiaries that they and I remain hopeful that medical pro- PSO’s to meet strict standards that en- will serve. Also, Medicare PSOs will reduce fessionals will continue to learn more January 21, 1997 CONGRESSIONAL RECORD — SENATE S531 about how to appropriately diagnose abusers in alcohol and drug treatment (6) women, in general, are underrep- and counsel women who are pregnant programs. Second, by increasing the resented in drug and alcohol treatment pro- or are considering pregnancy. availability of comprehensive and ef- grams; Recent estimates indicate that up to (7) due to fears among service providers fective treatment programs for preg- concerning the risks pregnancies pose, preg- 12,000 children are born each year in nant women and, thus, improving a nant women face more obstacles to sub- the United States with FAS. Thou- woman’s chances of bearing healthy stance abuse treatment than do other ad- sands more are born with FAE. It is es- children, it would help combat the seri- dicts and many substance abuse treatment timated that the incidence of FAS may ous and ever-growing problem of drug- programs, in fact, exclude pregnant women be as high as one per 100 in some Na- impaired infants and children, many of or women with children; tive American communities. whom are born with FAS and FAE. (8) residential alcohol and drug treatment The costs associated with caring for Third, it would address the unique situ- is an important prevention strategy to pre- individuals with FAS are staggering. vent low birthweight, transmission of AIDS, ation of pregnant addicted Native and chronic physical, mental, and emotional The Centers for Disease Control and American and Alaska Native women in disabilities associated with prenatal expo- Prevention estimates that the lifetime Indian Health Service areas. sure to alcohol and other drugs; cost of treating an individual with FAS Mr. President, the cost of prevention (9) effective substance abuse treatment is almost $1.4 million. The total cost in is substantially less than the down- must address the special needs of pregnant terms of health care and social services stream costs in money and human cap- women who are alcohol or drug dependent, to treat all Americans with FAS was ital of caring of children and adults including substance-abusing women who estimated to be $2.7 billion in 1995. This who have been impaired due to pre- may often face such problems as domestic vi- is an extraordinary and unnecessary natal exposure to alcohol and drugs. olence, incest and other sexual abuse, poor These prevention and treatment serv- housing, poverty, unemployment, lack of expense, especially when one considers education and job skills, lack of access to that all alcohol-related birth defects ices are an investment that yields sub- health care, emotional problems, chemical are 100 percent preventable. stantial long-term dividends—both on dependency in their family backgrounds, sin- The first step toward illuminating a societal level, as costs and efforts as- gle parenthood, and the need to ensure child this devastating disease is raising the sociated with taking care of children care for existing children while undergoing public’s consciousness about FAS/FAE. born with alcohol-related birth defects substance abuse treatment; Although great strides have been made decline, and on an individual level, as (10) nonhospital residential treatment is an in this regard, much more work re- mothers plagued by alcohol and drug important component of comprehensive and mains to be done. The Comprehensive addiction are given the means to heal effective substance abuse treatment for preg- themselves and give their unborn chil- nant addicted women, many of whom need Fetal Alcohol Syndrome Prevention long-term, intensive habilitation outside of Act attempts to fill in the gaps in our dren a healthier start in life. FAS and FAE represent a national their communities to recover from their ad- current FAS/FAE prevention system. diction and take care of themselves and their It contains four major components, tragedy that reaches across economic families; and representing the provisions of the and social boundaries. With researchers (11) a gap exists under the medicaid pro- original legislation that have not yet from Columbia University reporting gram for the financing of comprehensive res- been enacted. These provisions include that at least one of every five pregnant idential care in the existing continuum of the initiation of a coordinated edu- women uses alcohol and/or other drugs covered alcoholism and drug abuse treat- during pregnancy, the demand for a ment services for pregnant medicaid bene- cation and public awareness campaign; ficiaries. increased support for basic and applied comprehensive and determined re- sponse to this devastating problem is (b) PURPOSES.—The purposes of this Act epidemiologic research into the causes, are— clear. I welcome the support of my col- treatment and prevention of FAS/FAE; (1) to increase the ability of pregnant leagues on these important bills. widespread dissemination of FAS/FAE women who are substance abusers to partici- Mr. President, I ask unanimous con- pate in alcohol and drug treatment; diagnostic criteria; and the establish- sent that the text of the bills be print- ment of an interagency task force to (2) to ensure the availability of comprehen- ed in the RECORD. sive and effective treatment programs for coordinate the wide range of Federal There being no objection, the mate- pregnant women, thus promoting a woman’s efforts in combating FAS/FAE. rial was ordered to be printed in the ability to bear healthy children; A prevention strategy cannot succeed RECORD, as follows: (3) to ensure that nonhospital residential in the absence of increased access to S. 147 treatment is available to those low-income comprehensive treatment programs for pregnant addicted women who need long- Be it enacted by the Senate and House of Rep- pregnant addicted women. Many preg- resentatives of the United States of America in term, intensive habilitation to recover from nant substance abusers are denied Congress assembled, their addiction; (4) to create a new optional medicaid resi- treatment because facilities refuse to SECTION 1. SHORT TITLE. dential treatment service for alcoholism and accept them, or the women cannot ac- This Act may be cited as the ‘‘Medicaid drug dependency treatment; and Substance Abuse Treatment Act of 1997’’. cept treatment because they lack ade- (5) to define the core services that must be SEC. 2. FINDINGS AND PURPOSE. quate child care for their existing chil- provided by treatment providers to ensure (a) FINDINGS.—The Congress finds that— dren while they receive treatment. In that needed services will be available and ap- (1) a woman’s ability to bear healthy chil- fact, many treatment programs specifi- propriate. dren is threatened by the consequences of al- cally exclude pregnant women or coholism and drug addiction and particularly SEC. 3. MEDICAID COVERAGE OF ALCOHOLISM women with children. To make matters AND DRUG DEPENDENCY RESIDEN- by the use of alcohol and drugs during preg- TIAL TREATMENT SERVICES FOR worse, while Medicaid covers some nancy; PREGNANT WOMEN, CARETAKER services associated with substance (2) hundreds of thousands of infants each PARENTS, AND THEIR CHILDREN. abuse, like outpatient treatment and year are born drug-exposed, approximately (a) COVERAGE OF ALCOHOLISM AND DRUG DE- detoxification, it rails to cover non- 12,000 infants are born each year with fetal PENDENCY RESIDENTIAL TREATMENT SERV- hospital based residential treatment, alcohol syndrome, and thousands more are ICES.— which is considered by most health born each year with fetal alcohol effects, a (1) OPTIONAL COVERAGE.—Section 1905 of less severe version of fetal alcohol syndrome; the Social Security Act (42 U.S.C. 1396d) is care professionals to be the most effec- (3) drug use during pregnancy can result in amended— tive method of overcoming addiction. low birthweight, physical deformities, men- (A) in subsection (a)— The Medicaid Substance Abuse tal retardation, learning disabilities, and (i) in paragraph (24), by striking ‘‘and’’ at Treatment Act would permit coverage heightened nervousness and irritability in the end; of residential alcohol and drug treat- newborns; (ii) by redesignating paragraph (25) as ment for pregnant women and certain (4) fetal alcohol syndrome is the leading paragraph (26); and family members under the Medicaid identifiable cause of mental retardation in (iii) by inserting after paragraph (24) the program, thereby assuring a stable the United States and the only cause that is following new paragraph: source of funding for States that wish 100 percent preventable; ‘‘(25) alcoholism and drug dependency resi- (5) drug-impaired individuals pose extraor- dential treatment services (to the extent al- to establish these programs. The bill dinary societal costs in terms of medical, lowed and as defined in section 1931); and’’; has three primary objectives. First, it educational, foster care, residential, and sup- and would facilitate the participation of port services over the lifetimes of such indi- (B) in the sentence following paragraph pregnant women who are substance viduals; (26), as so redesignated— S532 CONGRESSIONAL RECORD — SENATE January 21, 1997 (i) in subparagraph (A), by striking ‘‘or’’ at ‘‘(ii) public education for their school-age provided to women eligible to receive serv- the end; children, including assistance in enrolling ices in Indian Health Facilities; and (ii) in subparagraph (B), by striking the pe- them in school; and ‘‘(B) except for Indian Health Facilities, riod and inserting ‘‘; or’’; and ‘‘(iii) public education for parents who meets all applicable State licensure or cer- (iii) by inserting after subdivision (B) the have not completed high school. tification requirements for a facility of that following: ‘‘(H) Facilitating access to prenatal and type. ‘‘(C) any such payments with respect to al- postpartum health care for women, to pedi- ‘‘(2)(A) The facility or a distinct part of the coholism and drug dependency residential atric health care for infants and children, facility provides room and board, except treatment services under paragraph (25) for and to other health and social services where that— individuals not described in section 1932(d).’’. appropriate and to the extent available, in- ‘‘(i) subject to subparagraph (B), the facil- (2) ALCOHOLISM AND DRUG DEPENDENCY RESI- cluding services under title V, services and ity shall have no more than 40 beds; and DENTIAL TREATMENT SERVICES DEFINED.— nutritional supplements provided under the ‘‘(ii) subject to subparagraph (C), the facil- Title XIX of the Social Security Act (42 special supplemental food program for ity shall not be licensed as a hospital. U.S.C. 1396 et seq.) is amended— women, infants, and children (WIC) under ‘‘(B) The single State agency may waive (A) by redesignating section 1932 as section section 17 of the Child Nutrition Act of 1966, the bed limit under subparagraph (A)(i) for 1933; and services provided by federally qualified one or more facilities subject to review by (B) by inserting after section 1931, the fol- health centers, outpatient pediatric services, the Secretary. Waivers, where granted, must lowing: well-baby care, and early and periodic be made pursuant to standards and proce- screening, diagnostic, and treatment serv- dures set out in the State plan and must re- ‘‘ALCOHOLISM AND DRUG DEPENDENCY ices (as defined in section 1905(r)). quire the facility seeking a waiver to dem- RESIDENTIAL TREATMENT SERVICES ‘‘(I) Ensuring supervision of children dur- onstrate that— ‘‘SEC. 1932. (a) ALCOHOLISM AND DRUG DE- ing times their mother is in therapy or en- ‘‘(i) the facility will be able to maintain a PENDENCY RESIDENTIAL TREATMENT SERV- gaged in other necessary health or rehabili- therapeutic, family-like environment; ICES.—The term ‘alcoholism and drug de- tative activities, including facilitating ac- ‘‘(ii) the facility can provide quality care pendency residential treatment services’ cess to child care services under title IV and in the delivery of each of the services identi- means all the required services described in title XX. fied in subsection (b); subsection (b) which are provided— ‘‘(J) Planning for and counseling to assist ‘‘(iii) the size of the facility will be appro- ‘‘(1) in a coordinated manner by a residen- reentry into society, including appropriate priate to the surrounding community; and tial treatment facility that meets the re- outpatient treatment and counseling after ‘‘(iv) the development of smaller facilities quirements of subsection (c) either directly discharge (which may be provided by the is not feasible in that geographic area. or through arrangements with— same program, if available and appropriate) ‘‘(C) The Secretary may waive the require- ‘‘(A) public and nonprofit private entities; to assist in preventing relapses, assistance in ment under subparagraph (A)(ii) that a facil- ‘‘(B) licensed practitioners or federally obtaining suitable affordable housing and ity not be a hospital, if the Secretary finds qualified health centers with respect to med- employment upon discharge, and referrals to that such facility is located in an Indian ical services; or appropriate educational, vocational, and Health Service area and that such facility is the only or one of the only facilities avail- ‘‘(C) the Indian Health Service or a tribal other employment-related programs (to the able in such area to provide services under or Indian organization that has entered into extent available). this section. a contract with the Secretary under section ‘‘(K) Continuing specialized training for ‘‘(3) With respect to a facility providing 102 of the Indian Self-Determination Act (25 staff in the special needs of residents and the services described in subsection (b) to an U.S.C. 450f) or section 502 of the Indian their children, designed to enable such staff individual eligible to receive services in In- Health Care Improvement Act (25 U.S.C. to stay abreast of the latest and most effec- dian Health Facilities, such a facility dem- 1652) with respect to such services provided tive treatment techniques. onstrates (as required by the Secretary) an to women eligible to receive services in In- ‘‘(2) REQUIREMENT FOR CERTAIN SERVICES.— ability to meet the special needs of Indian dian Health Facilities; and Services under subparagraphs (A), (B), (C), and Native Alaskan women. ‘‘(2) pursuant to a written individualized and (D), of paragraph (1) shall be provided in ‘‘(d) ELIGIBLE INDIVIDUALS.— treatment plan prepared for each individual, a cultural context that is appropriate to the ‘‘(1) IN GENERAL.—A State plan shall limit which plan— individuals and in a manner that ensures coverage of alcoholism and drug dependency ‘‘(A) states specific objectives necessary to that the individuals can communicate effec- residential treatment services under section meet the individual’s needs; tively, either directly or through inter- 1905(a)(24) to the following individuals other- ‘‘(B) describes the services to be provided preters, with persons providing services. wise eligible for medical assistance under to the individual to achieve those objectives; ‘‘(3) LIMITATIONS ON COVERAGE.— this title: ‘‘(C) is established in consultation with the ‘‘(A) IN GENERAL.—Subject to subparagraph ‘‘(A) Women during pregnancy, and until individual; (B), services described in paragraph (1) shall the end of the 12th month following the ter- ‘‘(D) is periodically reviewed and (as appro- be covered in the amount, duration, and mination of the pregnancy. priate) revised by the staff of the facility in scope therapeutically required for each eligi- ‘‘(B) Children of a woman described in sub- consultation with the individual; ble individual in need of such services. paragraph (A). ‘‘(E) reflects the preferences of the individ- ‘‘(B) RESTRICTIONS ON LIMITING COVERAGE.— ‘‘(C) At the option of a State, a caretaker ual; and A State plan shall not limit coverage of alco- parent or parents and children of such a par- ‘‘(F) is established in a manner which pro- holism and drug dependency residential ent. motes the active involvement of the individ- treatment services for any period of less ‘‘(2) INITIAL ASSESSMENT OF ELIGIBLE INDI- ual in the development of the plan and its than 12 months per individual, except in VIDUALS.—An initial assessment of eligible objectives. those instances where a finding is made that individuals specified in paragraph (1) seeking ‘‘(b) REQUIRED SERVICES DEFINED.— such services are no longer therapeutically alcoholism and drug dependency residential ‘‘(1) IN GENERAL.—The required services de- necessary for an individual. treatment services shall be performed by the scribed in this subsection are as follows: ‘‘(c) FACILITY REQUIREMENTS.—The require- agency designated by the chief executive of- ‘‘(A) Counseling, addiction education, and ments of this subsection with respect to a fa- ficer of the State to administer the State’s treatment provided on an individual, group, cility are as follows: alcohol and drug abuse treatment activities and family basis and provided pursuant to ‘‘(1) The agency designated by the chief ex- (or its designee). Such assessment shall de- individualized treatment plans, including ecutive officer of the State to administer the termine whether such individuals are in need the opportunity for involvement in Alcohol- State’s alcohol and drug abuse prevention of alcoholism or drug dependency treatment ics Anonymous and Narcotics Anonymous. and treatment activities and programs has services and, if so, the treatment setting ‘‘(B) Parenting skills training. certified to the single State agency under (such as inpatient hospital, nonhospital resi- ‘‘(C) Education concerning prevention of section 1902(a)(5) that the facility— dential, or outpatient) that is most appro- HIV infection. ‘‘(A) is able to provide all the services de- priate in meeting such individual’s health ‘‘(D) Assessment of each individual’s need scribed in subsection (b) either directly or and therapeutic needs and the needs of such for domestic violence counseling and sexual through arrangements with— individual’s dependent children, if any. abuse counseling and provision of such coun- ‘‘(i) public and nonprofit private entities; ‘‘(e) OVERALL CAP ON MEDICAL ASSISTANCE seling where needed. ‘‘(ii) licensed practitioners or federally AND ALLOCATION OF BEDS.— ‘‘(E) Room and board in a structured envi- qualified health centers with respect to med- ‘‘(1) TOTAL AMOUNT OF SERVICES AS MEDICAL ronment with on-site supervision 24 hours-a- ical services; or ASSISTANCE.— day. ‘‘(iii) the Indian Health Service or with a ‘‘(A) IN GENERAL.—The total amount of ‘‘(F) Therapeutic child care or counseling tribal or Indian organization that has en- services provided under this section as medi- for children of individuals in treatment. tered into a contract with the Secretary cal assistance for which payment may be ‘‘(G) Assisting parents in obtaining access under section 102 of the Indian Self-Deter- made available under section 1903 shall be to— mination Act (25 U.S.C. 450f) or section 502 of limited to the total number of beds allowed ‘‘(i) developmental services (to the extent the Indian Health Care Improvement Act (25 to be allocated for such services in any given available) for their preschool children; U.S.C. 1652) with respect to such services year as specified under subparagraph (B). January 21, 1997 CONGRESSIONAL RECORD — SENATE S533

‘‘(B) TOTAL NUMBER OF BEDS.—The total (3) by adding at the end the following new S. 148 number of beds allowed to be allocated under subparagraph: Be it enacted by the Senate and House of Rep- this subparagraph (subject to paragraph ‘‘(G) for payment for alcoholism and drug resentatives of the United States of America in (2)(C)) for the furnishing of services under dependency residential treatment services Congress assembled, this section and for which Federal medical which the State finds, and makes assurances assistance may be made available under sec- satisfactory to the Secretary, are reasonable SECTION 1. SHORT TITLE. tion 1903 is for calendar year— and adequate to meet the costs which must This Act may be cited as the ‘‘Comprehen- ‘‘(i) 1998, 1,080 beds; be incurred by efficiently and economically sive Fetal Alcohol Syndrome Prevention ‘‘(ii) 1998, 2,000 beds; operated facilities in order to provide all the Act’’. ‘‘(iii) 2000, 3,500 beds; services listed in section 1932(b) in conform- SEC. 2. FINDINGS. ‘‘(iv) 2001, 5,000 beds; ity with applicable Federal and State laws, ‘‘(v) 2002, 6,000 beds; and regulations, and quality and safety stand- Congress finds that— ‘‘(vi) 2003 and for calendar years thereafter, ards and to assure that individuals eligible (1) Fetal Alcohol Syndrome is the leading a number of beds determined appropriate by for such services have reasonable access to known cause of mental retardation, and it is the Secretary. such services;’’. 100 percent preventable; (2) each year, up to 12,000 infants are born ‘‘(2) ALLOCATION OF BEDS.— (c) CONFORMING AMENDMENTS.— in the United States with Fetal Alcohol Syn- ‘‘(A) INITIAL ALLOCATION FORMULA.—For (1) CLARIFICATION OF OPTIONAL COVERAGE drome, suffering irreversible physical and each calendar year, a State exercising the FOR SPECIFIED INDIVIDUALS.—Section option to provide the services described in 1902(a)(10) of the Social Security Act (42 mental damage; this section shall be allocated from the total U.S.C. 1396a(a)(10)) is amended, in the matter (3) thousands more infants are born each number of beds available under paragraph following subparagraph (F)— year with Fetal Alcohol Effects, which are (1)(B)— (A) by striking ‘‘; and (XIII)’’ and inserting lesser, though still serious, alcohol-related ‘‘(i) in calendar years 1998 and 1999, 20 beds; ‘‘, (XIII)’’; and birth defects; ‘‘(ii) in calendar years 2000, 2001, and 2002, (B) by inserting before the semicolon at (4) children of women who use alcohol 40 beds; and the end the following: ‘‘, and (XIII) the mak- while pregnant have a significantly higher ‘‘(iii) in calendar year 2003 and for each cal- ing available of alcoholism and drug depend- infant mortality rate (13.3 per 1000) than endar year thereafter, a number of beds de- ency residential treatment services to indi- children of those women who do not use alco- termined based on a formula (as provided by viduals described in section 1932(d) shall not, hol (8.6 per 1000); the Secretary) distributing beds to States on by reason of this paragraph, require the (5) Fetal Alcohol Syndrome and Fetal Al- the basis of the relative percentage of women making of such services available to other cohol Effects are national problems which of childbearing age in a State. individuals’’. can impact any child, family, or community, but their threat to American Indians and ‘‘(B) REALLOCATION OF BEDS.—The Sec- (2) CONTINUATION OF ELIGIBILITY FOR ALCO- Alaska Natives is especially alarming; retary shall provide that in allocating the HOLISM AND DRUG DEPENDENCY TREATMENT (6) in some American Indian communities, number of beds made available to a State for FOR PREGNANT WOMEN FOR 12 MONTHS FOLLOW- where alcohol dependency rates reach 50 per- the furnishing of services under this section ING END OF PREGNANCY.—Section 1902 of the that, to the extent not all States are exercis- Social Security Act (42 U.S.C. 1396a) is cent and above, the chances of a newborn ing the option of providing services under amended in subsection (e)(5) by striking suffering Fetal Alcohol Syndrome or Fetal this section and there are beds available that ‘‘under the plan,’’ and all through the period Alcohol Effects are up to 30 times greater have not been allocated in a year as provided at the end and inserting ‘‘under the plan— than national averages; in paragraph (1)(B), that such beds shall be ‘‘(A) as though she were pregnant, for all (7) in addition to the immeasurable toll on reallocated among States which are furnish- pregnancy-related and postpartum medical children and their families, Fetal Alcohol ing services under this section based on a assistance under the plan, through the end of Syndrome and Fetal Alcohol Effects pose ex- formula (as provided by the Secretary) dis- the month in which the 60-day period (begin- traordinary financial costs to the Nation, in- tributing beds to States on the basis of the ning on the last day of her pregnancy) ends; cluding the costs of health care, education, relative percentage of women of childbearing and foster care, job training, and general support age in a State. ‘‘(B) for alcoholism and drug dependency services for affected individuals; (8) the total cost to the economy of Fetal ‘‘(C) INDIAN HEALTH SERVICE AREAS.—In ad- residential treatment services under section dition to the beds allowed to be allocated 1932 through the end of the 1-year period be- Alcohol Syndrome was approximately under paragraph (1)(B) there shall be an addi- ginning on the last day of her pregnancy.’’. $2,500,000,000 in 1995, and over a lifetime, health care costs for one Fetal Alcohol Syn- tional 20 beds allocated in any calendar year (3) REDESIGNATIONS.—Section 1902 of the to States for each Indian Health Service area Social Security Act (42 U.S.C. 1396a) is fur- drome child are estimated to be at least within the State to be utilized by Indian ther amended in subsection (a)(10)(C)(iv), by $1,400,000; Health Facilities within such an area and, to striking ‘‘(24)’’ and inserting ‘‘(25)’’. (9) researchers have determined that the possibility of giving birth to a baby with the extent such beds are not utilized by a (d) ANNUAL EDUCATION AND TRAINING IN IN- Fetal Alcohol Syndrome or Fetal Alcohol Ef- State, the beds shall be reapportioned to In- DIAN HEALTH SERVICE AREAS.—The Secretary fects increases in proportion to the amount dian Health Service areas in other States.’’. of Health and Human Services in cooperation and frequency of alcohol consumed by a (3) MAINTENANCE OF STATE FINANCIAL EF- with the Indian Health Service shall conduct pregnant woman, and that stopping alcohol FORT AND 100 PERCENT FEDERAL MATCHING FOR on at least an annual basis training and edu- consumption at any point in the pregnancy SERVICES FOR INDIAN AND NATIVE ALASKAN cation in each of the 12 Indian Health Serv- reduces the emotional, physical, and mental WOMEN IN INDIAN HEALTH SERVICES AREAS.— ice areas for tribes, Indian organizations, consequences of alcohol exposure to the Section 1903 of the Social Security Act (42 residential treatment providers, and State baby; and U.S.C. 1396b) is amended by adding at the end health care workers regarding the availabil- (10) though approximately 1 out of every 5 the following new subsections: ity and nature of residential treatment serv- pregnant women drink alcohol during their ‘‘(x) No payment shall be made to a State ices available in such areas under the provi- pregnancy, we know of no safe dose of alco- under this section in a State fiscal year for sions of this Act. hol during pregnancy, or of any safe time to alcoholism and drug dependency residential (e) EFFECTIVE DATE; TRANSITION.—(1) The drink during pregnancy, thus, it is in the treatment services (described in section 1932) amendments made by this section apply to best interest of the Nation for the Federal unless the State provides assurances satis- alcoholism and drug dependency residential Government to take an active role in encour- factory to the Secretary that the State is treatment services furnished on or after Jan- aging all women to abstain from alcohol con- maintaining State expenditures for such uary 1, 1998, without regard to whether or services at a level that is not less than the sumption during pregnancy. not final regulations to carry out such average annual level maintained by the amendments have been promulgated by such SEC. 3. PURPOSE. State for such services for the 2-year period date. preceding such fiscal year. It is the purpose of this Act to establish, ‘‘(y) Notwithstanding the preceding provi- (2) The Secretary of Health and Human within the Department of Health and Human sions of this section, the Federal medical as- Services shall not take any compliance, dis- Services, a comprehensive program to help sistance percentage for purposes of payment allowance, penalty, or other regulatory ac- prevent Fetal Alcohol Syndrome and Fetal under this section for services described in tion against a State under title XIX of the Alcohol Effects nationwide. Such program section 1932 provided to individuals residing Social Security Act with regard to alcohol- shall— on or receiving services in an Indian Health ism and drug dependency residential treat- (1) coordinate, support, and conduct basic Service area shall be 100 percent.’’. ment services (as defined in section 1932(a) of and applied epidemiologic research concern- (b) PAYMENT ON A COST-RELATED BASIS.— such Act) made available under such title on ing Fetal Alcohol Syndrome and Fetal Alco- Section 1902(a)(13) of the Social Security Act or after January 1, 1998, before the date the hol Effects; (42 U.S.C. 1396a(a)(13)) is amended— Secretary issues final regulations to carry (2) coordinate, support, and conduct na- (1) by striking ‘‘and’’ at the end of subpara- out the amendments made by this section, if tional, State, and community-based public graph (E); the services are provided under its plan in awareness, prevention, and education pro- (2) by adding ‘‘and’’ at the end of subpara- good faith compliance with such amend- grams on Fetal Alcohol Syndrome and Fetal graph (F); and ments. Alcohol Effects; and S534 CONGRESSIONAL RECORD — SENATE January 21, 1997 (3) foster coordination among all Federal ‘‘(C) award grants to, and enter into coop- task forces on substance abuse prevention agencies that conduct or support Fetal Alco- erative agreements and contracts with, and maternal and child health; and hol Syndrome and Fetal Alcohol Effects re- States, Indian tribal governments, local gov- ‘‘(C) report on a biennial basis to the Sec- search, programs, and surveillance and oth- ernments, scientific and academic institu- retary and relevant committees of Congress erwise meet the general needs of populations tions, and nonprofit organizations for the on the current and planned activities of the actually or potentially impacted by Fetal purpose of— participating agencies. Alcohol Syndrome and Fetal Alcohol Effects. ‘‘(i) conducting innovative demonstration ‘‘(c) SCIENTIFIC RESEARCH AND TRAINING.— SEC. 4. ESTABLISHMENT OF PROGRAM. and evaluation projects designed to deter- The Director of the National Institute on Al- Title III of the Public Health Service Act mine effective strategies, including commu- cohol Abuse and Alcoholism, with the co- (42 U.S.C. 241 et seq.) is amended by adding nity-based prevention programs and multi- operation of members of the interagency at the end the following: cultural education campaigns, for preventing task force established under subsection (b), ‘‘PART O—FETAL ALCOHOL SYNDROME and intervening in fetal exposure to alcohol; shall establish a collaborative program to PREVENTION PROGRAM ‘‘(ii) improving and coordinating the sur- provide for the conduct and support of re- veillance and ongoing assessment methods search, training, and dissemination of infor- ‘‘SEC. 399G. ESTABLISHMENT OF FETAL ALCOHOL mation to researchers, clinicians, health pro- SYNDROME PREVENTION PROGRAM. implemented by such entities and the Fed- fessionals and the public, with respect to the ‘‘(a) FETAL ALCOHOL SYNDROME PREVEN- eral Government with respect to Fetal Alco- cause, prevention, diagnosis, and treatment TION PROGRAM.—The Secretary shall estab- hol Syndrome and Fetal Alcohol Effects; of Fetal Alcohol Syndrome and the related lish a comprehensive Fetal Alcohol Syn- ‘‘(iii) developing and evaluating effective condition know as Fetal Alcohol Effects. drome and Fetal Alcohol Effects prevention age-appropriate and culturally competent program that shall include— prevention programs for children, adoles- ‘‘SEC. 399H. ELIGIBILITY. ‘‘To be eligible to receive a grant, or enter ‘‘(1) an education and public awareness cents, and adults identified as being at-risk into a cooperative agreement or contract program to— of becoming chemically dependent on alco- under this part, an entity shall— ‘‘(A) support, conduct, and evaluate the ef- hol and associated with or developing Fetal ‘‘(1) be a State, Indian tribal government, fectiveness of— Alcohol Syndrome and Fetal Alcohol Effects; local government, scientific or academic in- ‘‘(i) training programs concerning the pre- and stitution, or nonprofit organization; and vention, diagnosis, and treatment of Fetal ‘‘(iv) facilitating coordination and collabo- ‘‘(2) prepare and submit to the Secretary Alcohol Syndrome and Fetal Alcohol Effects; ration among Federal, State, local govern- an application at such time, in such manner, ‘‘(ii) prevention and education programs, ment, Indian tribal, and community-based and containing such information as the Sec- including school health education and Fetal Alcohol Syndrome prevention pro- retary may prescribe, including a description school-based clinic programs for school-age grams; of the activities that the entity intends to children, concerning Fetal Alcohol Syn- ‘‘(3) a basic research program to support carry out using amounts received under this drome and Fetal Alcohol Effects; and and conduct basic research on services and part. ‘‘(iii) public and community awareness effective prevention treatments and inter- programs concerning Fetal Alcohol Syn- ventions for pregnant alcohol-dependent ‘‘SEC. 399I. AUTHORIZATION OF APPROPRIA- TIONS. drome and Fetal Alcohol Effects; women and individuals with Fetal Alcohol Syndrome and Fetal Alcohol Effects; ‘‘There are authorized to be appropriated ‘‘(B) provide technical and consultative as- to carry out this part, such sums as are nec- sistance to States, Indian tribal govern- ‘‘(4) a procedure for disseminating the Fetal Alcohol Syndrome and Fetal Alcohol essary for each of the fiscal years 1997 ments, local governments, scientific and aca- through 2001.’’. demic institutions, and nonprofit organiza- Effects diagnostic criteria developed pursu- tions concerning the programs referred to in ant to section 705 of the ADAMHA Reorga- Mr. DASCHLE. Mr. President, today subparagraph (A); and nization Act (42 U.S.C. 485n note) to health care providers, educators, social workers, I am reintroducing two bipartisan bills ‘‘(C) award grants to, and enter into coop- to help prevent the tragic occurrence erative agreements and contracts with, child welfare workers, and other individuals; States, Indian tribal governments, local gov- and of alcohol-related birth defects, includ- ernments, scientific and academic institu- ‘‘(5) the establishment, in accordance with ing both fetal alcohol syndrome [FAS] tions, and nonprofit organizations for the subsection (b), of an interagency task force and fetal alcohol effects [FAE]. I speak purpose of— on Fetal Alcohol Syndrome and Fetal Alco- on behalf of all cosponsors when I say ‘‘(i) evaluating the effectiveness, with par- hol Effects to foster coordination among all we are hopeful we can move these two ticular emphasis on the cultural competency Federal agencies that conduct or support simple, but important pieces of legisla- and age-appropriateness, of programs re- Fetal Alcohol Syndrome and Fetal Alcohol tion this year. Effects research, programs, and surveillance, ferred to in subparagraph (A); Recent estimates indicate that up to ‘‘(ii) providing training in the prevention, and otherwise meet the general needs of pop- ulations actually or potentially impacted by 12,000 children are born each year in diagnosis, and treatment of Fetal Alcohol the United States with FAS. Thou- Syndrome and Fetal Alcohol Effects; Fetal Alcohol Syndrome and Fetal Alcohol ‘‘(iii) educating school-age children, in- Effects. sands more are born with FAE. It is es- cluding pregnant and high-risk youth, con- ‘‘(b) INTERAGENCY TASK FORCE.— timated that the incidence of FAS may cerning Fetal Alcohol Syndrome and Fetal ‘‘(1) MEMBERSHIP.—The Task Force estab- be as high as one per 100 in some Na- Alcohol Effects, with priority given to pro- lished pursuant to paragraph (5) of sub- tive American communities. grams that are part of a sequential, com- section (a) shall— FAS and FAE are devastating, com- prehensive school health education program; ‘‘(A) be chaired by the Secretary or a des- plex birth defects. Many people fail to and ignee of the Secretary, and staffed by the realize that FAS is the leading cause of ‘‘(iv) increasing public and community Administration; and mental retardation. Too many women awareness concerning Fetal Alcohol Syn- ‘‘(B) include representatives from all rel- remain uninformed about the real dan- drome and Fetal Alcohol Effects through evant agencies and offices within the Depart- culturally competent projects, programs, ment of Health and Human Services, the De- gers of alcohol consumption during and campaigns, and improving the under- partment of Agriculture, the Department of pregnancy. In fact, at least one re- standing of the general public and targeted Education, the Department of Defense, the cently published popular pregnancy groups concerning the most effective inter- Department of the Interior, the Department book actually recommends a drink or vention methods to prevent fetal exposure to of Justice, the Department of Veterans Af- two to relax later in pregnancy. And, alcohol; fairs, the Bureau of Alcohol, Tobacco and unfortunately, misconceptions about ‘‘(2) an applied epidemiologic research and Firearms, the Federal Trade Commission, the impact of alcohol intake during prevention program to— and any other relevant Federal agency. pregnancy are not limited to the gen- ‘‘(A) support and conduct research on the ‘‘(2) FUNCTIONS.—The Task Force shall— eral public. For many years it was causes, mechanisms, diagnostic methods, ‘‘(A) coordinate all Federal programs and treatment, and prevention of Fetal Alcohol research concerning Fetal Alcohol Syndrome widely, though mistakenly, believed in Syndrome and Fetal Alcohol Effects; and Fetal Alcohol Effects, including pro- the medical community that moderate ‘‘(B) provide technical and consultative as- grams that— alcohol consumption during pregnancy sistance and training to States, Tribal gov- ‘‘(i) target individuals, families, and popu- was beneficial. These misperceptions ernments, local governments, scientific and lations identified as being at risk of acquir- are not only frightening, but life academic institutions, and nonprofit organi- ing Fetal Alcohol Syndrome and Fetal Alco- threatening. Children born to women zations engaged in the conduct of— hol Effects; and who drink alcohol during pregnancy ‘‘(i) Fetal Alcohol Syndrome prevention ‘‘(ii) provide health, education, treatment, have a 50 percent higher infant mortal- and early intervention programs; and and social services to infants, children, and ‘‘(ii) research relating to the causes, mech- adults with Fetal Alcohol Syndrome and ity rate than the children of women anisms, diagnosis methods, treatment, and Fetal Alcohol Effects; who abstain. Fortunately, several med- prevention of Fetal Alcohol Syndrome and ‘‘(B) coordinate its efforts with existing ical and nursing schools have begun of- Fetal Alcohol Effects; and Department of Health and Human Services fering a course specifically on FAS and January 21, 1997 CONGRESSIONAL RECORD — SENATE S535 FAE. I remain hopeful that medical nant women and, thus, improving a that year, did just that. Section 2012 professionals will continue to learn woman’s ability to bear health chil- sets out the purposes of the law. They more about how to appropriately coun- dren, it would help combat the serious include: To increase to the greatest ex- sel women who are pregnant or are and ever-growing problem of drug-im- tent possible the availability and qual- considering pregnancy and how to rec- paired infants and children, many of ity of treatment services so that treat- ognize and diagnose children who may whom are also born with FAS or FAE. ment on request may be provided to all be suffering from FAS or FAE. Third, it would address the unique situ- individuals desiring to rid themselves The costs associated with caring for ation of pregnant, addicted Native of their substance abuse problem. the individual with FAS and FAE are American and Alaska Native women in The legislation established an Office staggering. The Centers for Disease Indian Health Service areas. of National Drug Control Policy in the Control and Prevention estimates that Mr. President, the cost of prevention executive office of the President. It the lifetime cost of treating an individ- is substantially less than the down- was headed by a so-called czar and in- ual with FAS is almost $1.4 million. stream costs in money and human cap- cluded a deputy director of supply re- The total costs in terms of health care ital of caring for children and adults duction and a deputy director for de- and social services to treat all Ameri- who have been impaired due to pre- mand reduction. The Deputy Director cans with FAS was estimated to be $2.7 natal exposure to alcohol and drugs. for Demand would seek a clinical de- billion 1995. This is an extraordinary These prevention and treatment serv- vice, a pharmacological block, similar and unnecessary expense, especially ices are an investment that yields sub- to methadone treatment for heroin. when one considers that all alcohol-re- stantial long-term dividends—both on The Deputy Director would know the lated birth defects are 100% prevent- a societal level, as costs and efforts as- chemistry of the subject enough to pro- able. sociated with taking care of children mote some treatment beyond the sort The first step eliminating this dev- born with alcohol-related birth defects of psychiatric treatment currently astating disease is raising the public’s decline and on a individual level, as available. consciousness about FAS/FAE. Al- mothers plagued by alcohol and drug President Bush made extraordinary, though great strides have been made in addiction are given the means to heal fine appointments. He appointed Dr. this regard, much more work remains themselves and give their unborn chil- William Bennett as the head of the of- to be done. The Comprehensive Fetal dren a healthier start in life. fice. As the Deputy Director for De- Alcohol Syndrome Prevention Act at- FAS and FAE represent a national mand Reduction he appointed Dr. Her- tempts to fill in the gaps in our current tragedy that reaches across economic bert Kleber, a physician at the Yale FAS/FAE prevention system. In con- and social boundaries. With researchers Medical School, a research scientist, tains four major components, rep- from Columbia University reporting and exactly the person you would want resenting the provisions of the original that at least one of every five pregnant for this. legislation that have not yet been en- women uses alcohol and/or other drugs Then, after a while, Bennett left, and acted. These provisions include the ini- during pregnancy, the demand for a Kleber also left. Kleber has gone to Co- tiation of a coordinated education and comprehensive and determined re- lumbia College of Physicians and Sur- public awareness campaign; increased sponse to this devastating problem is geons and is working at the New York support for basic and applied epidemio- clear. I welcome the support of my col- Psychiatric Institute in this field. logic research into the causes, treat- leagues on these important bills. Nobody succeeded him in a scientific ment and prevention of FAS/FAE; role. There have been a number of per- widespread dissemination of FAS/FAE By Mr. MOYNIHAN (for himself sons in the job. I am sure they are good diagnostic criteria; and the establish- and Mr. GRASSLEY): persons, but they are nothing like what ment of an inter-agency task force to S. 149. A bill to amend the National we had in mind in the legislation. coordinate the wide range of federal ef- Narcotics Leadership Act of 1988 to es- The bill I introduce today would re- forts in combating FAS/FAE. tablish qualification standards for indi- quire that the Deputy Director of De- A prevention strategy cannot succeed viduals nominated to be the Deputy Di- mand Reduction have a scientific back- in the absence of increases access to rector of Demand Reduction in the Of- ground and be a leader in the field of comprehensive treatment programs for fice of National Drug Control Policy; substance abuse prevention or treat- pregnant addicted women. Many preg- to the Committee on Labor and Human ment. This is no more than what the nant substance abusers are denied Resources. 1988 Act intended. We enacted a good treatment because facilities specifi- NATIONAL DRUG CONTROL POLICY LEGISLATION statute which has been trivialized. If cally exclude them, or they cannot find Mr. MOYNIHAN. Mr. President, I rise we are serious about getting hold of or afford adequate child care for their today to introduce a bill, cosponsored the drug dealer epidemic in this coun- existing children while they receive by Senator CHARLES E. GRASSLEY, to try, we must have an individual emi- residential treatment. To make mat- amend the Anti-Drug Abuse Act of 1988 nent in the field of substance abuse ters worse, while Medicaid covers some to establish qualification standards for prevention leading the charge on de- services associated with substance individuals nominated for the position mand reduction. abuse, like outpatient treatment and of Deputy Director of Demand Reduc- Mr. GRASSLEY. Mr. President, Sen- detoxification, it fails to cover non- tion in the Office of National Drug ator MOYNIHAN and I are introducing hospital based residential treatment, Control Policy. Legislation today to spell out more which is considered by most health On May 17, 1988, then-Senate Major- specifically the requirements for the care professionals to be the most effec- ity Leader ROBERT S. BYRD established office of Deputy Director for Demand tive method of overcoming addiction. a working group on substance abuse Reduction at the Office of National The Medicaid Substance Abuse which I was to co-chair with Senator Drug Control Policy. I know it is Sen- Treatment Act would create an op- Sam Nunn of Georgia. Interdiction and ator MOYNIHAN’S view, and mine, that tional Medicaid benefit that would per- crackdown were then all the rage. My this office requires an incumbent of the mit coverage of non-hospital based res- role on the working group was to assert highest qualifications in the demand idential alcohol and drug treatment for that, other than to raise the price of reduction area. This is especially true Medicaid-eligible pregnant women and drugs somewhat, interdiction was not at this time. We have seen 4 years of their children. This would assure a sta- going to have the slightest effect on rising teenage drug use in this country. ble source of funding for states that supply. We saw the failure of supply We have seen initiatives that move us wish to establish these programs. The side measures during Prohibition and perilously close to legalizing a dan- bill has three primary objectives. First, in the French Connection model of cut- gerous drug. We have seen the cynical it would facilitate the participation of ting off production abroad. Accord- exploitation of the public’s trust in pregnant women who are substance ingly, any comprehensive legislation order to do this. In response, we need abusers in alcohol and drug treatment should place at least equal emphasis on credible, visible leadership of the high- programs. Second, by increasing the demand. est caliber in the Nation’s chief de- availability of comprehensive and ef- The Anti-Drug Abuse Act of 1988, mand reduction office. These qualifica- fective treatment programs for preg- which became law on November 18 of tions were what Congress had in mind S536 CONGRESSIONAL RECORD — SENATE January 21, 1997 when we created the Drug Czar’s office I would also like to call to the atten- name by any chance was among those dearly and the position of Deputy Director for tion of my colleagues the excellent wanted? Demand Reduction. Today, we are in- work of the Office of Special Investiga- Didn’t the British know? They voted for troducing legislation that will spell out tions of the Department of Justice. the listing too. And the Russians—Yugo- slavia moved to list him when it was a So- more clearly this intent. This office has a monumental task and viet satellite. Belgrade never told Moscow? Last year, Congress increased fund- I would not wish to add to that burden How did Mr. Waldheim repay the U.S. for ing to restore the Drug Czar’s office to or divert its officials from their pri- its enduring fondness to him? Twice it effective staffing levels. This year we mary goal of pursuing Nazi war crimi- pushed him successfully for the job. The will be reviewing the reauthorization nals. To that end, I would note that third time it was among few countries that of the office. Congress remains deeply this legislation does not apply to the backed him again but lost. Nobody can say interested in ONDCP and I and others Office of Special Investigations, as it is the U.S. was not loyal to the end. Did he also serve the Russians and British? will be working to ensure that it is not identified in paragraph (1)(B) of the One at a time? Or was he a big-power meeting the expectations that we have bill as a ‘‘specified agency.’’ I would groupie, serving all? in it. also add that there is a provision in the One thing is not secret any longer, thanks As we work during this Congress to bill which specifically prohibits the to Prof. Robert Herzstein of the University ensure a drug-free future for our chil- disclosure of information which would of South Carolina history department. He dren, we must have an individual in compromise the work of the Office of has managed through years of perseverance charge of our national demand reduc- Special Investigations. to pry some information loose. He found that tion efforts who can command the re- I would like to thank Representative while Mr. Waldheim worked for the Austrian spect of parents, doctors, treatment bureaucracy, the U.S. Embassy in Vienna MALONEY for her original work on this year after year sent in blurby reports about and prevention specialist, and the pub- subject in the House of Representa- his assistance to American foreign policy— lic. I am pleased to join Senator MOY- tives. I would also thank Senators friendly, outstanding, cooperative, receptive NIHAN in this effort. Our legislation D’AMATO and DODD for joining me in to American thinking. All the while, this will ensure that we will see candidates this effort here in the Senate. cuddly fellow was on the A list, which was in for this important post who command Mr. President, I ask unanimous con- the locked files or absent with official leave. universal respect. I welcome the sup- sent that additional material be print- On May 24, 1994, I reported on Professor Herzstein’s findings and the need for opening port of our colleagues. I look forward ed in the RECORD. files of war-crime suspects. Representative to having someone of outstanding ca- There being no objection, the mate- Maloney quickly set to work on her bill to pabilities with whom we can work and rial was ordered to be printed in the open those files to Freedom of Information in whom the public can have con- RECORD, as follows: requests—providing safeguards for personal fidence. [From the New York Times, June 25, 1996] privacy, on-going investigations and na- MS. MALONEY AND MR. WALDHEIM tional security if ever pertinent. By Mr. MOYNIHAN (for himself, Her first bill expired in the legislative ma- (By A.M. Rosenthal) Mr. D’AMATO, and Mr. DODD): chinery and in 1995 she tried again. She got S. 150. A bill to amend section 552 of For a full half-century, with determination her hearing recently thanks to the chairman and skill, and with the help of the law, U.S. of her subcommittee of the Government Re- title 5, United States Code, (commonly intelligence agencies have kept secret the referred to as the Freedom of Informa- form Committee—Stephen Horn, the Califor- record of how they used Nazis for so many nia Republican. tion Act), to provide for disclosure of years after World War II, what the agencies If the leaders of Congress will it, the information relating to individuals got from these services—and what they gave Maloney bill can be passed this year. I nomi- who committed Nazi war crimes, and as payback. nate my New York Senators to introduce it for other purposes; to the Committee Despite the secrecy blockade, we do know in the Senate. It will be a squeeze to get it on the Judiciary. how one cooperative former Wehrmacht offi- passed before the end of the year, so kindly cer and war crimes suspect was treated. We ask your representatives and senators to THE WAR CRIMES DISCLOSURE ACT know the U.S. got him the Secretary Gener- Mr. MOYNIHAN. Mr. President, start squeezing. alship of the U.N. as reward and base. If not, the laborious legislative procedure today I am joined by Senators For more than two years, Congress has had will have to be repeated next session. Ques- D’AMATO and DODD in introducing the legislation before it to allow the public ac- tions about the Waldheim connection will go War Crime Disclosure Act. This legisla- cess to information about U.S.-Nazi intel- unanswered, and also about other cases that tion is a companion to a measure intro- ligence relations—a bill introduced by Rep- may be in the files or strangely misplaced, duced in the House, sponsored by Rep- resentative Carolyn B. Maloney, a Manhat- which will also be of interest. tan Democrat, and now winding through the resentative MALONEY. legislative process. The measure is a simple one. It re- By Mr. MOYNIHAN: If Congress passes her War Crimes Disclo- S. 151. A bill for the relief of Dr. Yuri quires the disclosure of information sure Act, H.R. 1281, questions critical to his- under the Freedom of Information Act tory and the conduct of foreign affairs can be F. Orlov of Ithaca, New York; to the regarding individuals who participated answered and the power of government to Committee on Governmental Affairs. in Nazi war crimes. withhold them reduced. The case of Kurt SOVIET DISSIDENT LEGISLATION Ideally, such documents would be Waldheim is the most interesting example— Mr. MOYNIHAN. Mr. President, made available to the public without the most interesting we know of at the mo- today I rise to introduce a bill to rec- further legislation and without having ment. ognize the immeasurable debt which we Did the U.S. know when it backed him for to go through the slow process involved Secretary General that he had been put on owe to a leading Soviet dissident. Dr. in getting information through the the A list of war-crime suspects, adopted in Yuri F. Orlov, a founding member of Freedom of Information Act [FOIA]. London in 1948, for his work as a Wehrmacht the Soviet chapter of Amnesty Inter- Unfortunately, this is not the case. Re- intelligence officer in the Balkans, when national and founder of the Moscow searchers seeking information on Nazi tens of thousands of Yugoslavs, Greeks, Ital- Helsinki Watch Group (the first nation- war criminals are denied access to rel- ians, Jew and non-Jew, were being deported wide organization in Soviet history to evant materials in the possession of to death? question government actions), who now the U.S. Government, even when the If not, isn’t that real strange, since the lives in Ithaca, New York, is threat- U.S. representative on the War Crimes Com- disclosure of these documents no mission voted to list him. A report was sent ened by poverty. Yuri Orlov could not longer poses a threat to national secu- to the State Department. Didn’t State give be stopped by the sinister forces of the rity—if indeed such disclosure ever did. the C.I.A. a copy—a peek? Soviet Union and, no doubt, he will not With the passing of time it becomes And when he was running for Secretary be stopped by poverty. But I rise today ever more important to document Nazi General why did State Department biog- in hopes that it will not come to that. war crimes, lest the enormity of those raphies omit any reference to his military Dr. Orlov’s career as a dissident crimes be lost to history. The greater service—just as he forgot to mention it in began while he was working at the fa- access which this legislation provides his autobiographies? mous Institute for Theoretical and Ex- If all that information was lost by teams of will add clarity of this important ef- stupid clerks, once the Waldheim name came perimental Physics in Moscow. At the fort. I applaud those researchers who up for the job why did not the U.S. do the ob- Institute in 1956 he made a pro-democ- continue to pursue this important vious thing—check with Nazi and war-crime racy speech which cost him his posi- work. records in London and Berlin to see if his tion and forced him to leave Moscow. January 21, 1997 CONGRESSIONAL RECORD — SENATE S537 He was able to return in 1972, where- labor camp and two years in Siberian She spent the next 30 years fighting to upon he began his most outspoken crit- exile, never ceased protesting against regain employment and restore her icism of the Soviet regime. oppression. Despite deteriorating reputation. Though she succeeded in On September 13, 1973, in response to health and the harsh conditions of the 1982 (at the age of 69) in securing a po- a government orchestrated-public camp, Dr. Orlov smuggled out messages sition in the CIA as a language instruc- smear campaign against Audrei in support of basic rights and nuclear tor, she still had not been able to clear Sakharov, Orlov sent ‘‘Thirteen Ques- arms control. His bravery and that of her name by the time of her death in tions to Brezhnev,’’ a letter which ad- his dissident colleagues played no 1988. The irony of the charges against vocated freedom of the press and re- small role in the dissolution of the So- Dr. Braude is that she was an anti- form of the Soviet economy. One viet Union. I am sure many would communist, having witnessed first- month later, he became a founding agree that we owe them a tremendous hand communist-sponsored terrorism member of the Soviet chapter of Am- debt. This then is a call to all those in Europe while she was an assistant nesty International. His criticism of who agree with that proposition. Dr. cultural affairs officer in Paris and, for the Soviet Union left him unemployed Orlov is now in need; please join our a brief period, an exchange officer in and under constant KGB surveillance, endeavor. Bonn during the late 1940s and early but he would not be silenced. 1950s. In May, 1976 Dr. Orlov founded the By Mr. MOYNIHAN (for himself Mr. President, I would like to review Moscow Helsinki Watch Group to pres- and Mr. D’AMATO): the charges against Dr. Braude because sure the Soviet Union to honor the S. 152. A bill to provide for the relief they are illustrative of that dark era human rights obligations it had accept- and payment of an equitable claim to and instructive to us even today. There ed under the Helsinki Accords signed in the estate of Dr. Beatrice Braude of were a total of four. First, she was 1975. His leadership of the Helsinki New York, New York; to the Commit- briefly a member of the Washington Watch Group led to his arrest and, tee on the Judiciary. Book Shop at Farragut Square that the eventually, to a show trial in 1978. He PRIVATE RELIEF LEGISLATION Attorney General later labeled subver- was condemned to seven years in a Mr. MOYNIHAN. Mr. President, I rise sive. Second, she had been in contact labor camp and five years in exile. today to introduce a bill, cosponsored with Mary Jane Keeney, a Communist After having served his prison sen- by Senator D’AMATO, to provide for the Party activist employed at the United tence, and while still in exile, Dr. Orlov relief and payment of an equitable Nations. Third, she had been a member was able to immigrate to the United claim to the estate of Dr. Beatrice of the State Department unit of the States in 1986 in an exchange arranged Braude. Communist-dominated Federal Work- by the Reagan Administration. A cap- Mr. President, this is a measure of ers’ Union. Fourth, she was an ac- tured Soviet spy was returned in ex- justice which brings back memories of quaintance of Judith Coplon. change for the release of Dr. Orlov and an old and awful time. Dr. Braude, a With regard to the first charge, Dr. a writer for U.S. News & World Report linguist fluent in several languages, Braude had indeed joined the Book who had been arrested in Moscow, was dismissed from her position at the Shop shortly after her arrival in Wash- Nicholas Daniloff. United States Information Agency ington in 1943. She was eager to meet Since then, Dr. Orlov has served as a (USIA) in 1953 as a result of accusa- congenial new people and a friend rec- senior scientist at Cornell University tions of disloyalty to the United ommended the Book Shop, which in the Newman Laboratory of Nuclear States. The accusations were old; two hosted music recitals in the evenings. I Studies. Now that he is 72 years old, he years earlier, the State Department’s must express some sensitivity here: my is turning his thoughts to retirement. Loyalty Security Board had inves- F.B.I. records report that I was ob- Unfortunately, since he has only been tigated and unanimously voted to dis- served several times at a ‘‘leftist musi- in the United States for 10 years, his miss them. The Board sent a letter to cal review’’ in suburban Hampstead retirement income from the Cornell Dr. Braude stating ‘‘there is no reason- while I was attending the London pension plus Social Security will be in- able doubt as to your loyalty to the School of Economics on a Fulbright sufficient: only a fraction of what Cor- United States Government or as to Fellowship. nell faculty of comparable distinction your security risk to the Department Dr. Braude was aware of the under- now get at retirement. of State.’’ current of sympathy with the Russian His scientific colleagues, Nobel phys- Dr. Braude was terminated one day cause at the Book Shop, but her mem- icist Dr. Hans A. Bethe, Kurt Gottfried after being praised for her work and in- bership paralleled a time of close U.S.- of Cornell, and Sidney Drell of Stan- formed that she probably would be pro- Soviet collaboration. She drifted away ford, have made concerted efforts to moted. USIA officials told her that the from the Book Shop in 1944 because of raise support for Dr. Orlov’s retire- termination was due to budgetary con- her distaste for the internal politics of ment, but they are in further need. straints. Congress had funded the USIA other active members. Her membership To this end, I have agreed to assist at a level 27 percent below the Presi- at the Book Shop was only discovered these notable scientists in their en- dent’s request. The Supplemental Ap- when her name appeared on a list of de- deavor to secure a more appropriate propriation Act of 1954 (Public Law 83– linquent dues. It appears that her most recompense for this heroic dissident. 207) authorized a reduction in force sinister crime while a member of the That is the purpose that brings me commensurate to the budget cut. Fair book shop was her failure to return a here to the Senate floor today, on the enough. As Dr. Braude remarked years book on time. first day of the 105th Congress, to in- later, ‘‘I never felt that I had a lien on Dr. Braude met Mary Jane Keeney on troduce a bill on Dr. Orlov’s behalf. a government job.’’ But what Dr. behalf of a third woman who actively While I acknowledge the daunting pros- Braude did not know is that she was se- aided Nazi victims after the war and pects that face private relief bills these lected for termination because of the was anxious to send clothing to an- days, I offer the bill at least as a step old—and answered—charges against other woman in occupied Germany. Dr. toward bringing the kind of attention her. And because she did not know the Braude knew nothing of Keeney’s polit- to Dr. Orlov’s situation which he de- real reason for her dismissal, she was ical orientation and characterized the serves. denied certain procedural rights (the meeting as a transitory experience. To understand Dr. Orlov’s contribu- right to request a hearing, for in- With regard to the third charge, Dr. tions to ending the Cold War, I would stance). Braude, in response to an interrogatory draw my colleagues attention to his The true reason for her dismissal was from the State Department’s Loyalty autobiography, Dangerous Thoughts: kept hidden from her. When she was Security Board, argued that she be- Memoirs of a Russian Life. It captures unable, over the next several years, to longed to an anti-Communist faction of the fear extant in Soviet society and secure employment anywhere else the State Department unit of the Fed- the courage of men like Orlov, within the Federal Government—even eral Workers’ Union. Sakharov, Sharansky, Solzhenitsyn, in a typing pool despite a perfect score Remember that the Loyalty Security and others who defied the Soviet re- on the typing test—she became con- Baird invested these charges and exon- gime. Dr. Orlov, who spent 7 years in a vinced that she had been blacklisted. erated her. S538 CONGRESSIONAL RECORD — SENATE January 21, 1997 The fourth charge, which Dr. Braude the Court of Federal Claims issued his Mr. MOYNIHAN (for himself and certainly did not—or could not—deny, verdict that the USIA had wrongfully Mr. ASHCROFT): was her friendship with Judith Coplon. dismissed Dr. Braude and intentionally S. 153. A bill to amend the Age Dis- Braude met Coplon in the summer of concealed the reason for her termi- crimination in Employment Act of 1967 1945 when both women attended a class nation. He concluded that such actions to allow institutions of higher edu- Herber Marcuse taught at American constituted an equitable claim for cation to offer faculty members who University. They saw each other infre- which compensation is due. Forty- are serving under an arrangement pro- quently thereafter. In May 1948, Coplon three years after her dismissal from viding for unlimited tenure, benefits on wrote to Braude, then stationed in the USIA and 8 years after her death, voluntary retirement that are reduced Paris and living in a hotel on the Left the Court found in favor of the estate or eliminated on the basis of age, and Bank, to announce that she would be of Dr. Braude. for other purposes; to the Committee visiting shortly and needed a place to Senator D’AMATO and I wish to ex- on Labor and Human Resources. stay. Dr. Braude arranged for Coplon to press our profound admiration for THE FACULTY RETIREMENT INCENTIVE ACT stay at the hotel. Coplon stayed for 6 Judge Andewelt’s decision in which he Mr. MOYNIHAN. Mr. President, weeks, during which time Dr. Braude absolved Dr. Beatrice Braude of the today I rise to introduce the Faculty found her behavior very trying. The surreptitious charges of disloyalty Retirement Incentive Act. This bill two parted on unfriendly terms. The with which she was never actually con- will amend the Age Discrimination in friendship they had prior to parting fronted. The Court declared that Dr. Employment Act of 1967 (ADEA) to was purely social. Braude ‘‘cared about others deeply and allow the use of age-based incentives Mr. President, Judith Coplon was a was loyal to her friends, family and for the voluntary retirement of tenured spy. She worked in the Justice Depart- country.’’ faculty at colleges and universities. I ment’s Foreign Agents Registration We are equally grateful to Chris- am pleased that Senator Ashcroft is an Division, an office integral to the FBI’s topher N. Sipes and William Living- original cosponsor of this legislation. counter-intelligence efforts. She was ston, Jr. of Covington & Burling, two of Since the late 1950s, there has been a arrested early in 1949 while handing the many lawyers who have handled vast expansion in the number of indi- over notes on counterintelligence oper- Dr. Braude’s case on a pro bono basis viduals pursuing careers in academia. ations to Soviet citizen Valentine over the years. Mr. Sipes quite prop- Now, an unusually large cohort of Gubitchev, a United Nations employee. erly remarked that the decision rep- tenured faculty make it difficult for Coplon was tried and convicted—there resents an important page in the an- universities to hire more recent grad- was no doubt of her guilt—but the con- nals of U.S. history: ‘‘The Court of the uates. As a practical matter, it is ex- viction was overturned on a technical- United States has said it recognizes tremely difficult or costly or both for ity. Gubitchev was also convicted but that this conduct is out of bounds. It institutions to bring on new tenured was allowed to return to the U.S.S.R. tells the government it must acknowl- faculty except where tenure positions because of his quasi-diplomatic status. edge its wrongs and pay for them.’’ open up as a result of retirement. In My involvement in Dr. Braude’s case Justice Department attorneys have order for academic institutions to re- dates back to early 1979, when Dr. reached a settlement with lawyers rep- main effective centers of teaching and Braude came to me and my colleague resenting the estate of Dr. Beatrice scholarship they must have a balance at the time, Senator Javits, and asked Braude concerning monetary damages of old and new faculty. This balance, us to introduce private relief legisla- equitably due for the wrongful dismis- however, is threatened by continuing tion on her behalf. In 1974, after filing sal of Dr. Braude from her Federal job uncertainties created by recent legisla- a Freedom of Information Act request in 1953 and subsequent blacklisting. tion. and finally learning the true reason for The estate will receive $200,000 in dam- I support the ADEA, but when it was her dismissal, she filed suit in the ages. Family members have announced amended in 1986 to extend the protec- Court of Claims to clear her name and that the funds—which Congress must tions of the act to individuals age 70 seek reinstatement and monetary dam- now appropriate—will be donated to and over, I expressed concern that the ages for the time she was prevented Hunter College, the institution from application of this change to the from working for the Federal Govern- which Dr. Braude received her bach- unique situation of tenured faculty ment. The Court, however, dismissed elor’s degree. members at colleges and universities her case on the grounds that the stat- Now that the parties to the Braude would affect teaching and scholarship ute of limitations had expired. On case have reached an agreement on the at these institutions. While it did in- March 5, 1979, Senator Javits and I to- monetary damages equitably due to Dr. clude an exemption from the provisions gether introduced a bill, S. 546, to Braude’s estate, Senator D’AMATO and for the bill for tenured faculty, the ex- waive the statute of limitations on Dr. I are offering legislation to release the emption only lasted seven years. Braude’s case against the U.S. Govern- $200,000 to her estate. I hope that we Therefore, I was pleased when that bill ment and to allow the Court of Claims will have the unqualified and unani- included a request for the National to render judgment on her claim. The mous support of our colleagues. Academy of Sciences (NAS) to appoint bill passed the Senate on January 30, What happened to Dr. Braude was a a commission to study the impact of 1980. Unfortunately, the House failed to personal tragedy. But it was also part removing the mandatory retirement take action on the bill before the 96th of a national tragedy, too. This Nation age for faculty members at colleges Congress adjourned. lost, prematurely and unnecessarily, and universities. In 1988, and again in 1990, 1991, and the exceptional services of a gifted and When the National Research Council 1993, Senator D’AMATO and I re-intro- dedicated public servant. Stanley I. released this study, Ending Mandatory duced similar legislation on Dr. Kutler, a professor of constitutional Retirement for Tenured Faculty: The Braude’s behalf. Our attempts met history at the University of Wisconsin, Consequences for Higher Education, on with repeated failure. Until at last, on estimates that Dr. Braude was one of behalf of NAS in 1991, the report con- September 21, 1993, we secured passage about 1,500 Federal employees who cluded that diminished faculty turn- of Senate Resolution 102, which re- were dismissed as security risks be- over—particularly at research univer- ferred S. 840, the bill we introduced for tween 1953 and 1956. Another 6,000 re- sities—could increase costs and limit the relief of the estate of Dr. Braude, signed under the pressure of security institutional flexibility in responding to the Court of Claims for consider- and loyalty inquiries, according to Pro- to changing academic needs, particu- ation as a congressional reference ac- fessor Kutler, who testified as an ex- larly with regard to necessary hires in tion. The measure compelled the Court pert witness on Dr. Braude’s behalf. It new and existing disciplines. In con- to determine the facts underlying Dr. was, as I said earlier, an awful time. cluding that there was ‘‘no strong basis Braude’s claim and to report back to We had settled ‘‘as on a darkling plain, for continuing the exemption for Congress on its findings. Swept with confused alarm of struggle tenured faculty,’’ the NAS report pre- The Court held a hearing on the case and flight, Where ignorant armies sumed that the Federal government in November of 1995 and on March 7 of clash by night.’’ It must not happen would allow ‘‘Practical steps’’ such as last year Judge Roger B. Andewelt of again. age-based early-retirement incentives January 21, 1997 CONGRESSIONAL RECORD — SENATE S539 to mitigate the impact of an uncapped the Bronx, which is one of New York In 1881 the former President moved retirement age for tenured faculty. City’s most urbanized areas. Orchard to New York City, and four years later Specifically, the NAS report stated: Beach provides a welcome respite from to Mount McGregor near Saratoga. He ‘‘The committee recommends that urban living and is particularly valued died in 1885. In the next few years, Congress, the Internal Revenue Serv- by low-income families with children 90,000 people contributed to a fundrais- ice, and the Equal Employment Oppor- who cannot afford summer homes or ing effort that brought in $600,000. This tunity Commission permit colleges and trips to the tonier beach resorts on was enough to build structure on Riv- universities to offer faculty voluntary- Long Island or the Jersey shore. Over erside Drive in Manhattan modeled on retirement incentive programs that are two million people visit Orchard Beach the tombs of the Emperor Hadrian in not classified as an employee benefit, annually. For many of New York’s Rome, Napoleon in Paris, and King include an upper age limit for partici- working families, it offers the only af- Mausolis in Turkey. Inside are two pants and limit participation on the fordable and convenient place for their eight-and-a-half ton sarcophagi made basis of institutional needs.’’ children to play in the sea and sand. of Wisconsin red granite and a great These practical steps, however, were In addition, the beach and surround- mural depicting Lee’s surrender to not taken although the exemption was ing wetlands and salt marshes provide Grant at Appomattox. allowed to run out. Instead, passage of a vital habitat for many marine crea- The tomb became a leading attrac- the Older Workers Benefit Protection tures, including crabs, lobsters, striped tion for New York residents and for Act of 1990 (OWBPA) further confused bass and winter flounder, as well as nu- tourists. However, the neighborhood the issue. OWBPA made early-retire- merous species of overwintering water- around the tomb has changed in recent ment incentives permissible in the con- fowl. years and visitorship is down. Vandal- text of defined-benefit retirement plans But today, the beach is in urgent ism is an ongoing concern. This bill but did not address the status of such need of repair—there is widespread ero- takes several steps that are past due to incentives in the context of defined- sion due to repeated storm damage, protect and preserve the tomb. contribution retirement plans. De- threatening both the recreational util- The bill would make Grant’s Tomb a fined-contribution retirement plans are ity of the beach and the stability of the National Monument and require the most popular with tenured faculty due animal and ocean life habitats. It Secretary of the Interior to ‘‘admin- to their pension portability. The seems only appropriate that we come ister, repair, restore, preserve, main- OWBPA did not preclude defined-con- to the rescue of this treasure now be- tain, and promote’’ the tomb in accord- tribution retirement plans, but by not fore irreversible damage is done. ance with the law applicable to all Na- addressing the issue at all, it added to In the Water Resources Development tional Monuments. It requires the Sec- the ambiguity surrounding the matter. Acts of 1992 and 1996, a total of $5.6 mil- retary to build a visitors center. It also Functionally, early-retirement incen- lion was authorized to study and then calls for a study over two years to plan tives operate in the same manner for conduct an Orchard Beach shoreline interpretive programs, restoration, and both types of plans. There is continued protection project to address storm security and maintenance. uncertainty, however, whether early- damage prevention, recreation, and en- This bill addresses the needs at retirement incentives with an upper- vironmental restoration. The bill I in- Grant’s Tomb. It can again become a age limit that are offered to tenured troduce today would help to ensure leading attraction in New York. More faculty conflict with the purpose of that this important project for New important, the bill does what is right ADEA of prohibiting arbitrary age dis- York goes forward. for the memory of our eighteenth crimination. President. I am troubled by the continued un- By Mr. MOYNIHAN (for himself certainty created by these bills, and I and Mr. D’AMATO): hope that the Faculty Retirement In- S. 155. A bill to redesignate General By Mr. DASCHLE (for himself centive Act will provide a ‘‘safe har- Grant National Memorial as Grant’s and Mr. JOHNSON): bor’’ for colleges and universities by Tomb National Monument, and for S. 156. A bill to provide certain bene- clarifying that the early retirement in- other purposes; to the Committee on fits of the Pick-Sloan Missouri River centives are permitted by the ADEA. Energy and Natural Resources. Basin program to the Lower Brule Universities must ensure that older Mr. MOYNIHAN. Mr. President, I rise Sioux Tribe, and for other purposes; to faculty members retire at an appro- to introduce, along with my friend and the Committee on Energy and Natural priate age, not simply to ‘‘make room’’ colleagues, Senator D’Amato, a bill to Resources. for younger faculty, but to maintain a designate President Grant’s tomb a na- THE LOWER BRULE SIOUX TRIBE INFRASTRUC- contemporary, innovative, and creative tional monument. This April 27 will be TURE DEVELOPMENT TRUST FUND ACT OF 1997 atmosphere at our nation’s colleges the centennial of the dedication of the Mr. DASCHLE. Mr. President, I am and universities. tomb. I can think of no better observ- pleased to introduce the Lower Brule ance than to pass this designation and Sioux Tribe Infrastructure Develop- By Mr. MOYNIHAN (for himself the other provisions in this bill that ment Trust Fund of 1997. This legisla- and Mr. D’AMATO): would protect and preserve the tomb tion is the companion bill to the Crow S. 154. A bill to improve Orchard and make it more attractive to visi- Creek Sioux Tribe Infrastructure De- Beach, New York; to the Committee on tors. velopment Trust Fund Act of 1996, Environment and Public Works. The Nation owes President Grant a which was signed by President Clinton THE ORCHARD BEACH, NEW YORK IMPROVEMENT great debt for his efforts during the on October 1, 1996. ACT OF 1997 Civil War alone. He proved to be the ca- When the Senate considered the Crow Mr. MOYNIHAN. Mr. President, I rise pable general President Lincoln lacked Creek Sioux bill last fall, I told my col- today to introduce a most important in the early years of that conflict. leagues it is important to enact legis- piece of legislation for the State of Grant provided the leadership, strat- lation to address similar claims by the New York, and to ask my Senate col- egy, determination, and courage to do Lower Brule Sioux and Cheyenne River leagues for their support. This bill di- what was necessary to win the war. He Sioux tribes. The introduction of this rects the Secretary of the Army to re- should also be remembered for his ef- legislation is intended to start that pair a section of waterfront parkland forts to include Blacks in the Union process for the Lower Brule Sioux in the Bronx, New York, known as Or- Army and later for his relentless oppo- Tribe. I intend to introduce similar chard Beach. My colleague in New sition to the Ku Klux Klan. Many legislation for the Cheyenne River York City, Bronx Borough President Southerners appreciated his generous Sioux Tribe later in this session. Fernando Ferrer, has worked hard for terms with General Lee, which in- The need for this legislation is great. many years to get this beach—so be- cluded allowing Lee’s men to keep In 1944, Congress passed the Flood Con- loved by the citizens of the Bronx—re- their horses for the spring plowing. trol Act, authorizing the Pick-Sloan stored to its former glory. Grant went on to become the eight- Plan to build five dams on the Missouri Orchard Beach is a splendid natural eenth President and to serve two River. Four of the Pick-Sloan dams are sanctuary and recreational spot within terms. located in South Dakota. While the S540 CONGRESSIONAL RECORD — SENATE January 21, 1997 Pick-Sloan Project has been instru- able to use the interest generated from schools, hospitals, offices of the Public mental in providing the region with ir- the fund to finance its own economic Health Service and the Bureau of Indian Af- rigation, hydropower and flood control development priorities according to a fairs, service buildings, and employee quar- capabilities, its construction took a se- plan prepared in conjunction with the ters existing at the time that the projects were carried out; and rious toll on many Native American Bureau of Indian Affairs and the Indian (ii) roads, bridges, and incidental matters tribes, who were forced to cede land to Health Service. or facilities in connection with those facili- the project and suffer the turmoil asso- Mr. President, in conclusion I want ties; ciated with relocating entire commu- to emphasize the broad support this (B) provide for a townsite adequate for 50 nities. legislation enjoys in South Dakota. homes, including streets and utilities (in- Like many of the tribes along the Senator TIM JOHNSON is a cosponsor cluding water, sewage, and electricity), tak- Missouri River, the Lower Brule Sioux and Governor Bill Janklow has en- ing into account the reasonable future Tribe shouldered a disproportionate dorsed this bill. Establishing this fund growth of the townsite; and amount of the cost to implement the for the Lower Brule Sioux Tribe bene- (C) provide for a community center con- fits the entire state of South Dakota, taining space and facilities for community Pick-Sloan project. Three decades ago, gatherings, tribal offices, tribal council the Big Bend and Fort Randall dams as well as the tribal members. It will chamber, offices of the Bureau of Indian Af- flooded more than 22,000 acres of the spur greater economic activity within fairs, offices and quarters of the Public Lower Brule Sioux land. Over 70 per- the state and help the Lower Brule Health Service, and a combination gym- cent of the tribe’s residents were forced Sioux Tribe establish the infrastruc- nasium and auditorium; to settle elsewhere. The tribe suffered ture necessary to participate more (6) the requirements under Public Law 87– the loss of fertile and productive land fully in the region’s economy. 734 (76 Stat. 698 et seq.) with respect to the along the river that provided many of It is my hope that my colleagues will mitigation of the effects of the Fort Randall and Big Bend projects on the Lower Brule In- the tribe’s basic staples, including join with me in supporting this legisla- tion. dian Reservation have not been fulfilled; wood for fuel and construction, edible (7) although the national economy has ben- plants, and wildlife habitat that sup- Mr. President, I ask unanimous con- sent that the text of the bill be printed efited from the Fort Randall and Big Bend ported the game on which the tribe re- projects, the economy on the Lower Brule lied for food. This land, which once in the RECORD. Indian Reservation remains underdeveloped, There being no objection, the bill was played such an important role in the in part as a consequence of the failure of the ordered to be printed in the RECORD, as day-to-day lives of the tribal members, Federal Government to fulfill the obliga- follows: now lies underneath the Missouri River tions of the Federal Government under the S. 156 laws referred to in paragraph (4); reservoirs. The tribe was never ade- (8) the economic and social development quately compensated for this extraor- Be it enacted by the Senate and House of Rep- resentatives of the United States of America in and cultural preservation of the Lower Brule dinary loss. Congress assembled, Sioux Tribe will be enhanced by increased It was not until 1992 that Congress SECTION 1. SHORT TITLE. tribal participation in the benefits of the formally acknowledged the federal gov- This Act may be cited as the ‘‘Lower Brule Fort Randall and Big Bend components of ernment’s failure to provide the tribes Sioux Tribe Infrastructure Development the Pick-Sloan Missouri River Basin pro- with adequate compensation. The pas- Trust Fund Act’’. gram; and sage of the Three Affiliated Tribes and SEC. 2. FINDINGS. (9) the Lower Brule Sioux Tribe is entitled Standing Rock Sioux Tribe Equitable Congress finds that— to additional benefits of the Pick-Sloan Mis- souri River Basin program. Compensation Act, which I cospon- (1) under the Act of December 22, 1994, sored, established a recovery fund to commonly known as the ‘‘Flood Control Act SEC. 3. DEFINITIONS. of 1994’’ (58 Stat. 887, chapter 665; 33 U.S.C. In this Act: compensate these tribes. This fund is 701–1 et seq.) Congress approved the Pick- (1) FUND.—The term ‘‘Fund’’ means the financed entirely from Pick-Sloan Sloan Missouri River Basin program— Lower Brule Sioux Tribe Infrastructure De- power revenues, and payments to the (A) to promote the general economic devel- velopment Trust Fund established under sec- fund are structured in such a way that opment of the United States; tion 4(a). they will not result in rate increases to (B) to provide for irrigation above Sioux (2) PLAN.—The term ‘‘plan’’ means the plan power customers. This is appropriate City, Iowa; for socioeconomic recovery and cultural and fair. As with any well-run business, (C) to protect urban and rural areas from preservation prepared under section 5. the revenues from the project should be devastating floods of the Missouri River; and (3) PROGRAM.—The term ‘‘Program’’ means (D) for other purposes; the power program of the Pick-Sloan Mis- used to pay its costs. (2) the Fort Randall and Big Bend projects souri River Basin program, administered by With the legislation that I am intro- are major components of the Pick-Sloan the Western Area Power Administration. ducing today, we have an opportunity Missouri River Basin program, and contrib- (4) SECRETARY.—The term ‘‘Secretary’’ to finally compensate the Lower Brule ute to the national economy by generating a means the Secretary of the Interior. Sioux Tribe for the sacrifices it has had substantial amount of hydropower and im- (5) TRIBE.—The term ‘‘Tribe’’ means the to bear since being relocated forcibly pounding a substantial quantity of water; Lower Brule Sioux Tribe of Indians, a band decades ago. We have an opportunity to (3) the Fort Randall and Big Bend projects of the Great Sioux Nation recognized by the mitigate the effects of dislocating the overlie the western boundary of the Lower United States of America. tribal communities and inundating the Brule Indian Reservation, having inundated SEC. 4. ESTABLISHMENT OF LOWER BRULE the fertile, wooded bottom lands of the Tribe SIOUX TRIBE INFRASTRUCTURE DE- natural resources that the tribe de- along the Missouri River that constituted VELOPMENT TRUST FUND. pended upon for its survival. This legis- the most productive agricultural and pas- (a) LOWER BRULE SIOUX TRIBE INFRASTRUC- lation will help the Lower Brule Sioux toral lands of the Lower Brule Sioux Tribe TURE DEVELOPMENT TRUST FUND.—There is Tribe build new facilities and improve and the homeland of the members of the established in the Treasury of the United existing infrastructure. Hopefully, by Tribe; States a fund to be known as the ‘‘Lower doing so, it will improve the lives of (4) Public Law 85–923 (72 Stat. 1773 et seq.) Brule Sioux Tribe Infrastructure Develop- tribal residents in a meaningful and authorized the acquisition of 7,997 acres of ment Trust Fund’’. lasting way and promote greater eco- Indian land on the Lower Brule Indian Res- (b) FUNDING.—Beginning with fiscal year ervation for the Fort Randall project and immediately following the fiscal year during nomic self-sufficiency. Public Law 87–734 (76 Stat. 698 et seq.) au- which the aggregate of the amounts depos- Under this legislation, a fund similar thorized the acquisition of 14,299 acres of In- ited in the Crow Creek Sioux Tribe Infra- to the Crow Creek Sioux Infrastructure dian land on the Lower Brule Indian Res- structure Development Trust Fund is equal Development Trust Fund will be estab- ervation for the Big Bend project; to the amount specified in section 4(b) of the lished for the Lower Brule Sioux Tribe. (5) Public Law 87–734 (76 Stat. 698 et seq.) Crow Creek Sioux Tribe Infrastructure De- The trust fund will be capitalized from provided for the mitigation of the effects of velopment Trust Fund Act of 1996 (110 Stat. hydropower revenues until the fund ac- the Fort Randall and Big Bend projects on 3026 et seq.), and for each fiscal year there- cumulates $39.3 million—a figure well the Lower Brule Indian Reservation, by di- after, until such time as the aggregate of the documented by Dr. Michael Lawson in recting the Secretary of the Army to— amounts deposited in the Fund is equal to (A) as necessary, by reason of the Big Bend $39,300,000, the Secretary of the Treasury his study of the history of this issue project, protect, replace, relocate, or recon- shall deposit into the Fund an amount equal entitled An Analysis of the Impact of struct— to 25 percent of the receipts from the depos- Pick-Sloan Dam Projects on the Lower (i) any essential governmental and agency its to the Treasury of the United States for Brule Sioux Tribe. The tribe will be facilities on the reservation, including the preceding fiscal year from the Program. January 21, 1997 CONGRESSIONAL RECORD — SENATE S541 (c) INVESTMENTS.—The Secretary of the (B) unavailable through facilities of the In- health care services, especially if they Treasury shall invest the amounts deposited dian Health Service on the Lower Brule In- live in many of our rural towns and vil- under subsection (b) only in interest-bearing dian Reservation in existence at the time of lages or inhabit our Indian commu- obligations of the United States or in obliga- the determination. nities. Many good people are trying to tions guaranteed as to both principal and in- (3) WATER SYSTEM.—The plan shall provide terest by the United States. for the construction, operation, and mainte- deliver services that are so vitally (d) PAYMENT OF INTEREST TO TRIBE.— nance of a municipal, rural, and industrial needed, but we need to do more. We (1) ESTABLISHMENT OF ACCOUNT AND TRANS- water system for the Lower Brule Indian must make full use of all health care FER OF INTEREST.—The Secretary of the Reservation. practitioners, especially those who Treasury shall, in accordance with this sub- (4) RECREATIONAL FACILITIES.—The plan have been long waiting to give the na- section, transfer any interest that accrues shall provide for recreational facilities suit- tion the full measure of their profes- on amounts deposited under subsection (b) able for high-density recreation at Lake sional abilities. into a separate account established by the Sharpe at Big Bend Dam and at other loca- Secretary of the Treasury in the Treasury of tions on the Lower Brule Indian Reservation Nursing is one of the noblest profes- the United States. in South Dakota. sions, with an enduring history of of- (2) PAYMENTS.— (5) OTHER PROJECTS AND PROGRAMS.—The fering effective and sensitive care to (A) IN GENERAL.—Beginning with the fiscal plan shall provide for such other projects and those in need. Yet it is only in the last year immediately following the fiscal year programs for the educational, social welfare, few years that we have begun to recog- during which the aggregate of the amounts economic development, and cultural preser- nize the role that nurses can play as deposited in the Fund is equal to the amount vation of the Tribe as the Tribe considers to independent providers of care. Only re- specified in subsection (b), and for each fiscal be appropriate. cently, in 1990, Medicare was changed year thereafter, all amounts transferred SEC. 6. AUTHORIZATION OF APPROPRIATIONS. to authorize direct reimbursements to under paragraph (1) shall be available, with- There are authorized to be appropriated out fiscal year limitation, to the Secretary such funds as may be necessary to carry out nurse practitioners. Medicaid is gradu- of the Interior for use in accordance with this Act, including such funds as may be nec- ally being reformed to incorporate subparagraph (C). essary to cover the administrative expenses their services more effectively. The (B) WITHDRAWAL AND TRANSFER OF FUNDS.— of the Fund. Nursing School Clinics Act continues For each fiscal year specified in subpara- SEC. 7. EFFECT OF PAYMENTS TO TRIBE. the progress toward fully incorporating graph (A), the Secretary of the Treasury (a) IN GENERAL.—No payment made to the nurses in the delivery of health care shall withdraw amounts from the account es- Tribe pursuant to this Act shall result in the services. Under the act, nursing schools tablished under paragraph (1) and transfer reduction or denial of any service or program such amounts to the Secretary of the Inte- will be able to establish clinics, super- to which, pursuant to Federal law— vised and staffed by nurse practitioners rior for use in accordance with subparagraph (1) the Tribe is otherwise entitled because (C). The Secretary of the Treasury may only of the status of the Tribe as a federally rec- and nurse practitioner students, that withdraw funds from the account for the pur- ognized Indian tribe; or provide primary care targeted to medi- pose specified in this paragraph. (2) any individual who is a member of the cally underserved rural and native (C) PAYMENTS TO TRIBE.—The Secretary of Tribe is entitled because of the status of the American populations. the Interior shall use the amounts trans- individual as a member of the Tribe. In the process of giving direct ambu- ferred under subparagraph (B) only for the (b) EXEMPTIONS; STATUTORY CONSTRUC- purpose of making payments to the Tribe. latory care to their patients, these TION.— clinics will also furnish the forums in (D) USE OF PAYMENTS BY TRIBE.—The Tribe (1) POWER RATES.—No payment made pur- shall use the payments made under subpara- suant to this Act shall affect Pick-Sloan which both public and private schools graph (C) only for carrying out projects and Missouri River Basin power rates. of nursing can design and implement programs pursuant to the plan prepared (2) STATUTORY CONSTRUCTION.—Nothing in clinical training programs for their under section 5. this Act may be construed as diminishing or students. Simultaneous school-based (3) PROHIBITION ON PER CAPITA PAYMENTS.— affecting— education and clinical training have No portion of any payment made under this (A) any right of the Tribe that is not other- been a traditional part of physician de- subsection may be distributed to any mem- wise addressed in this Act; or ber of the Tribe on a per capita basis. velopment, but nurses have enjoyed (B) any treaty obligation of the United fewer opportunities to combine class- (e) TRANSFERS AND WITHDRAWALS.—Except States. as provided in subsection (d)(1), the Sec- room instruction with the practical ex- retary of the Treasury may not transfer or By Mr. INOUYE: perience of treating patients. This bill withdraw any amount deposited under sub- S. 157. A bill to amend title XIX of reinforces the principle for nurses of section (b). the Social Security Act to provide for joining schooling with the actual prac- SEC. 5. PLAN FOR SOCIOECONOMIC RECOVERY coverage of services provided by nurs- tice of health care. AND CULTURAL PRESERVATION. ing school clinics under State medicaid To accomplish these objectives, title (a) PLAN.— XIX of the Social Security Act is (1) IN GENERAL.—The Tribe shall, not later programs; to the Committee on Fi- than 2 years after the date of enactment of nance. amended to designate that the services this Act, prepare a plan for the use of the THE NURSING SCHOOL CLINICS ACT OF 1997 provided in these nursing school clinics payments made to the Tribe under section Mr. INOUYE. Mr. President, I rise are reimbursable under Medicaid. The 4(d)(2). In developing the plan, the Tribe today to introduce the Nursing School combination of grants and the provi- shall consult with the Secretary of the Inte- Clinics Act of 1997, a bill that has two sion of Medicaid reimbursement fur- rior and the Secretary of Health and Human nishes the incentives and operational Services. main purposes. First, it builds on our concerted efforts to provide access to resources to start the clinics and to (2) REQUIREMENTS FOR PLAN COMPONENTS.— keep them going. The plan shall, with respect to each compo- quality health care for all Americans nent of the plan— by furnishing grants and incentives for To meet the increasing challenges of (A) identify the costs and benefits of that nursing schools to establish primary bringing cost-effective and quality component; and care clinics in areas where additional health care to all Americans, we are (B) provide plans for that component. medical services are most needed. Sec- going to have to think about and de- (b) CONTENT OF PLAN.—The plan shall in- ond, it provides the opportunity for bate a variety of proposals, both large clude the following programs and compo- nursing schools to enhance the scope of and small. Most important, however, nents: we must approach the issue of health (1) EDUCATIONAL FACILITY.—The plan shall their students’ training and education provide for an educational facility to be lo- by giving them firsthand clinical expe- care with creativity and determina- cated on the Lower Brule Indian Reserva- rience in primary care facilities. tion, ensuring that all reasonable ave- tion. Any good manager knows that when nues are pursued. Nurses have always (2) COMPREHENSIVE INPATIENT AND OUT- major problems are at hand and re- been an integral part of health care de- PATIENT HEALTH CARE FACILITY.—The plan sources are tight, the most important livery. The Nursing School Clinics Act shall provide for a comprehensive inpatient act is the one that makes full use of all of 1997 recognizes the central role they and outpatient health care facility to pro- available resources. The American can perform as care givers to the medi- vide essential services that the Secretary of cally underserved. Health and Human Services, in consultation health care system is particularly defi- with the individuals and entities referred to cient in this regard. We all know only Mr. President, I ask unanimous con- in subsection (a)(1), determines to be— too well that many individuals in the sent that the text of this bill be printed (A) needed; and Nation have no or inadequate access to in the RECORD. S542 CONGRESSIONAL RECORD — SENATE January 21, 1997 There being no objection, the bill was odology for reimbursing clinical social with respect to payments made for clinical ordered to be printed in the RECORD, as workers’ services is set at a percentage social worker services furnished on or after follows: of the fee for another nonphysician January 1, 1998. S. 157 provider group, creating a greater dif- By Mr. INOUYE: Be it enacted by the Senate and House of Rep- ferential in charges than that which S. 159. A bill to amend title XVIII of resentatives of the United States of America in exists in the marketplace. I am aware the Social Security Act to remove the Congress assembled, of no other provision in the Medicare restriction that a clinical psychologist SECTION 1. MEDICAID COVERAGE OF SERVICES statute where one nonphysician’s reim- PROVIDED BY NURSING SCHOOL or clinical social worker provide serv- bursement rate is tied to that of an- CLINICS. ices in a comprehensive outpatient re- other nonphysician provider. This is a (a) IN GENERAL.—Section 1905(a) of the habilitation facility to a patient only precedent that clinical social workers Social Security Act (42 U.S.C. 1396d(a)) is under the care of a physician, and for amended— understandably wish to change. I also other purposes; to the Committee on (1) in paragraph (24), by striking ‘‘and’’ at wish to see that clinical social work- Finance. the end; ers’ services are valued on their own (2) by redesignating paragraph (25) as para- merit. MEDICARE LEGISLATION graph (26); and Second, this legislation makes it Mr. INOUYE. Mr. President, today I (3) by inserting after paragraph (24), the am introducing legislation to authorize following: clear that services and supplies fur- ‘‘(25) nursing school clinic services (as de- nished incident to a clinical social the autonomous functioning of clinical fined in subsection (t)) furnished by or under worker’s services are a covered Medi- psychologists and clinical social work- the supervision of a nurse practitioner or a care expense, just as these services are ers within the Medicare comprehensive clinical nurse specialist (as defined in sec- currently covered for other mental outpatient rehabilitation facility pro- tion 1861(aa)(5)), whether or not the nurse health professionals in Medicare. gram. practitioner or clinical nurse specialist is Third, the bill would allow a clinical In my judgment, it is truly unfortu- under the supervision of, or associated with, social worker to be reimbursed for nate that programs such as this cur- a physician or other health care provider; rently require clinical supervision of and’’. services provided to a client who is (b) NURSING SCHOOL CLINIC SERVICES DE- hospitalized. the services provided by certain health FINED.—Section 1905 of such Act (42 U.S.C. Clinical social workers are valued professionals and do not allow each of 1396d) is amended by adding at the end the members of our health care provider the various health professions to truly following: team. They are legally regulated in function to the extent of their state ‘‘(t) The term ‘nursing school clinic serv- every state of our nation and are recog- practice acts. In my judgment, it is es- ices’ means services provided by a health nized as independent providers of men- pecially appropriate that those who care facility operated by an accredited need the services of outpatient reha- school of nursing which provides primary tal health care throughout the health care, long-term care, mental health counsel- care system. Clinical social worker bilitation facilities have access to a ing, home health counseling, home health services were made available to Medi- wide range of social and behavioral care, or other health care services which are care beneficiaries through the Omnibus science expertise. Clinical psycholo- within the scope of practice of a registered Budget Reconciliation Act of 1989. I be- gists and clinical social workers are nurse.’’. lieve that it is time now to correct the recognized as independent providers of (c) CONFORMING AMENDMENTS.—Section reimbursement problems that this pro- mental health care services through 1902 of such Act (42 U.S.C. 1396a) is amend- the Federal Employee Health Benefits ed— fession has experienced through Medi- (1) in subsection (a)(10)(C)(iv), by striking care. Program, the Civilian Health and Med- ‘‘through (24)’’ and inserting ‘‘through (25)’’; Mr. President, I ask unanimous con- ical Program of the Uniformed Serv- and sent that the text of this bill be printed ices, the Medicare (Part B) Program, (2) in subsection (j), by striking ‘‘through in the RECORD. and numerous private insurance plans. (25)’’ and inserting ‘‘through (26)’’. There being no objection, the bill was Mr. President, I ask unanimous con- (d) EFFECTIVE DATE.—The amendments ordered to be printed in the RECORD, as sent that the text of this bill be printed made by this Act shall be effective with re- in the CONGRESSIONAL RECORD. spect to payments made under a State plan follows: under title XIX of the Social Security Act S. 158 There being no objection, the bill was for calendar quarters commencing with the Be it enacted by the Senate and House of Rep- ordered to be printed in the RECORD, as first calendar quarter beginning after the resentatives of the United States of America in follows: date of the enactment of this Act. Congress assembled, S. 159 SECTION 1. IMPROVED REIMBURSEMENT FOR Be it enacted by the Senate and House of By Mr. INOUYE: CLINICAL SOCIAL WORKER SERV- Representatives of the United States of America S. 158. A bill to amend title XVII of ICES UNDER MEDICARE. in Congress assembled, the Social Security Act to provide im- (a) IN GENERAL.—Section 1833(a)(1)(F)(ii) of SECTION 1. REMOVAL OF RESTRICTION THAT A proved reimbursement for clinical so- the Social Security Act (42 U.S.C. CLINICAL PSYCHOLOGIST OR CLINI- cial worker services under the medi- 1395l(a)(1)(F)(ii)) is amended to read as fol- CAL SOCIAL WORKER PROVIDE care program, and for other purposes; lows: ‘‘(ii) the amount determined by a fee SERVICES IN A COMPREHENSIVE schedule established by the Secretary,’’. OUTPATIENT REHABILITATION FA- to the Committee on Finance. (b) DEFINITION OF CLINICAL SOCIAL WORKER CILITY TO A PATIENT ONLY UNDER THE CLINICAL SOCIAL WORKER SERVICES ACT OF SERVICES EXPANDED.—Section 1861(hh)(2) of THE CARE OF A PHYSICIAN. 1997 such Act (42 U.S.C. 1395x(hh)(2)) is amended (a) IN GENERAL.—Section 1861(cc)(2)(E) of Mr. INOUYE. Mr. President, today I by striking ‘‘services performed by a clinical the Social Security Act (42 U.S.C. am introducing legislation to amend social worker (as defined in paragraph (1))’’ 1395x(cc)(2)(E)) is amended by inserting be- Title XVIII of the Social Security Act and inserting ‘‘such services and such serv- fore the semicolon ‘‘(except with respect to to correct discrepancies in the reim- ices and supplies furnished as an incident to services provided by a clinical psychologist or a clinical social worker)’’. bursement of clinical social workers such services performed by a clinical social worker (as defined in paragraph (1))’’. (b) EFFECTIVE DATE.—The amendment covered through Medicare, Part B. The (c) CLINICAL SOCIAL WORKER SERVICES NOT made by subsection (a) shall become effec- three proposed changes that are con- TO BE INCLUDED IN INPATIENT HOSPITAL tive with respect to services provided on or tained in this legislation are necessary SERVICES.—Section 1861(b)(4) of such Act (42 after January 1, 1998. to clarify the current payment process U.S.C. 1395x(b)(4)) is amended by striking for clinical social workers and to es- ‘‘and services’’ and inserting ‘‘clinical social By Mr. INOUYE: tablish a reimbursement methodology worker services, and services’’. S. 160. A bill to amend title 5, United for the profession that is similar to (d) TREATMENT OF SERVICES FURNISHED IN States Code, to require the issuance of other health care professionals reim- INPATIENT SETTING.—Section 1832(a)(2)(B)(iii) a prisoner-of-war medal to civilian em- of such Act (42 U.S.C. 1395k(a)(2)(B)(iii)) is ployees of the Federal Government who bursed through the Medicare program. amended by striking ‘‘and services’’ and in- First, this legislation would set pay- serting ‘‘clinical social worker services, and are forcibly detained or interned by a ment for clinical social worker services services’’. enemy government or a hostile force according to a fee schedule established (e) EFFECTIVE DATE.—The amendments under wartime conditions; to the Com- by the Secretary. Currently, the meth- made by this section shall become effective mittee on Governmental Affairs. January 21, 1997 CONGRESSIONAL RECORD — SENATE S543 PRISONER OF WAR MEDAL LEGISLATION (a), applies with respect to any person who, Several factors are associated with Mr. INOUYE. Mr. President, all too after April 5, 1917, is forcibly detained or in- the difficulties in retention of VHA often we find that our nation’s civil- terned as described in subsection (a) of such psychologists including low salaries section. ians who have been captured by a hos- and lack of career advancement oppor- tile government do not receive the rec- By Mr. INOUYE: tunities. It seems that psychologists ognition they deserve. My bill would S. 161. A bill to amend title 38, Unit- are apt to leave the VA system after correct this inequity and provide a ed States Code, to revise certain provi- five years because they have almost prisoner of war medal for civilian em- sions relating to the appointment of reached peak levels for salary and pro- ployees of the federal government. clinical and counseling psychologist in fessional development in the VHA. Fur- Mr. President, I ask unanimous con- the Veterans Health Administration, sent that the text of the bill be printed thermore, under the present system and for other purposes; to the Commit- psychologists cannot be recognized nor in the RECORD. tee on Veterans Affairs. There being no objection, the bill was appropriately compensated for excel- THE VETERANS’ HEALTH ADMINISTRATION ACT lence or for taking on additional re- ordered to be printed in the RECORD, as OF 1997 follows: Mr. INOUYE. Mr. President, I am in- sponsibilities such as running treat- S. 160 troducing legislation today to amend ment programs. Be it enacted by the Senate and House of chapter 74 of title 38, United States In effect, the current system for hir- Representatives of the United States of America Code, to revise certain provisions relat- ing psychologists in the VHA supports in Congress assembled, ing to the appointment of clinical and mediocrity, not excellence and mas- SECTION 1. PRISONER-OF-WAR MEDAL FOR CI- VILIAN EMPLOYEES OF THE FED- counseling psychologists in the Veter- tery. Our veterans with behavioral dis- ERAL GOVERNMENT. ans Health Administration (VHA). orders and mental health problems are (a) AUTHORITY TO ISSUE PRISONER-OF-WAR The VHA has a long history of main- deserving of better psychological care MEDAL.—(1) Subpart A of part III of title 5, taining a staff of the very best health from more experienced professionals United States Code, is amended by inserting care professionals to provide care to than they are currently receiving. after chapter 23 the following new chapter: those men and women who have served ‘‘CHAPTER 25—MISCELLANEOUS AWARDS their country in the Armed Forces. It A hybrid title 38 appointment au- ‘‘Sec. thority for psychologists would help ‘‘2501. Prisoner-of-war medal: issue. is certainly fitting that this should be done. ameliorate the recruitment and reten- ‘‘§ 2501. Prisoner-of-war medal: issue Recently a quite distressing situa- tion problems in several ways. The ‘‘(a) The President shall issue a prisoner- tion regarding the care of our veterans length of time it takes to recruit psy- of-war medal to any person who, while serv- has come to my attention. In particu- chologists could be abbreviated by ing in any capacity as an officer or employee of the Federal Government, was forcibly de- lar, the recruitment and retention of eliminating the requirement for appli- tained or interned, not as a result of such psychologists in the VHA of the De- cants to be rated by the Office of Per- person’s own willful misconduct— partment of Veterans Affairs has be- sonnel Management. This would also ‘‘(1) by an enemy government or its agents, come a significant problem. facilitate the recruitment of applicants or a hostile force, during a period of war; or The Congress has recognized the im- ‘‘(2) by a foreign government or its agents, who are not recent VA interns by re- portant contribution of the behavioral ducing the amount of time between or a hostile force, during a period other than sciences in the treatment of several a period of war in which such person was identifying a desirable applicant and conditions from which a significant held under circumstances which the Presi- being able to offer that applicant a po- portion of our veterans suffer. For ex- dent finds to have been comparable to the sition. circumstances under which members of the ample, programs related to homeless- armed forces have generally been forcibly de- ness, substance abuse, and post trau- It is expected that problems in reten- tained or interned by enemy governments matic stress disorder [PTSD] have re- tion of behavioral science experts will during periods of war. ceived funding from the Congress in re- be greatly alleviated with the imple- ‘‘(b) The prisoner-of-war medal shall be of cent years. mentation of a hybrid title 38 system appropriate design, with ribbons and appur- Certainly, psychologists, as behav- tenances. for VA psychologists, primarily ‘‘(c) Not more than one prisoner-of-war ioral science experts, are essential to through offering financial incentives medal may be issued to a person under this the successful implementation of these for psychologists to pursue professional section or section 1128 of title 10. However, programs. However, the high vacancy development with the VHA. Achieve- for each succeeding service that would other- and turnover rates for psychologists in ments that would merit salary in- wise justify the issuance of such a medal, the the VHA (over 11 percent and 18 per- President (in the case of service referred to creases under title 38 should include cent respectively as reported in one re- such activities as assuming supervisory in subsection (a) of this section) or the Sec- cent survey) might seriously jeopardize retary concerned (in the case of service re- responsibilities for clinical programs, ferred to in section 1128(a) of title 10) may these programs and will negatively im- implementing innovative clinical issue a suitable device to be worn as deter- pact overall patient care in the VHA. Recruitment of psychologists by the treatments that improve the effective- mined by the President or the Secretary, as ness and/or efficiency of patient care, the case may be. VHA is hindered by a number of factors ‘‘(d) For a person to be eligible for issuance including a pay scale not commensu- making significant contributions to of a prisoner-of-war medal, the person’s con- rate with private sector rates of pay as the science of psychology, earning the duct must have been honorable for the period well as by the low number of clinical ABPP diplomate status, and becoming of captivity which serves as the basis for the and counseling psychologists appearing a Fellow of the American Psycho- issuance. logical Association. ‘‘(e) If a person dies before the issuance of on the register of the Office of Person- a prisoner-of-war medal to which he is enti- nel Management [OPM]. Most new Currently, psychologists are the only tled, the medal may be issued to the person’s hires have no post-doctoral experience doctoral level health care providers in representative, as designated by the Presi- and are hired immediately after a VA the VHA who are not included in title dent. internship. Recruitment, when success- ‘‘(f) Under regulations to be prescribed by 38. This is, without question, a signifi- ful, takes up to six months or more. cant factor in the recruitment and re- the President, a prisoner-of-war medal that Retention of psychologists in the VA is lost, destroyed, or rendered unfit for use tention difficulties that I have ad- without fault or neglect on the part of the system poses an even more significant dressed. Ultimately, an across-the- person to whom it was issued may be re- problem. I have been informed that al- board salary increase might be nec- most 40 percent of VHA psychologists placed without charge. essary. However, the conversion of psy- ‘‘(g) In this section, the term ‘period of had five years or less of post-doctoral chologists to a hybrid title 38, as pro- war’ has the meaning given such term in sec- experience. Without doubt, our veter- posed by this amendment, would pro- tion 101(11) of title 38.’’. ans would benefit from a higher per- (2) The table of chapters at the beginning vide relief for these difficulties and en- of part III of such title is amended by insert- centage of senior staff who are more experienced in working with veterans hance the quality of care for our Na- ing after the item relating to chapter 23 the tions’ veterans and their families. following new item: and their particular concerns. My bill ‘‘25. Miscellaneous Awards ...... 2501’’. provides incentives for psychologists to Mr. President, I ask unanimous con- (b) APPLICABILITY.—Section 2501 of title 5, continue their work with the VHA and sent that the text of this bill be printed United States Code, as added by subsection seek additional education and training. in the CONGRESSIONAL RECORD. S544 CONGRESSIONAL RECORD — SENATE January 21, 1997 There being no objection, the bill was veterans. Therefore, I ask that my col- There being no objection, the bill was ordered to be printed in the RECORD, as leagues show their concern and join me ordered to be printed in the RECORD, as follows: in saying ‘‘thank you’’ by supporting follows: S. 161 this legislation. S. 163 Be it enacted by the Senate and House of Rep- Mr. President, I ask unanimous con- Be it enacted by the Senate and House of Rep- resentatives of the United States of America in sent that the text of my bill be printed resentatives of the United States of America in Congress assembled, in the RECORD. Congress assembled, SECTION 1. REVISION OF AUTHORITY RELATING There being no objection, the bill was SECTION 1. CHARTER. TO APPOINTMENT OF CLINICAL AND ordered to be printed in the RECORD, as The National Academies of Practice orga- COUNSELING PSYCHOLOGISTS IN follows: nized and incorporated under the laws of the THE VETERANS HEALTH ADMINIS- District of Columbia, is hereby recognized as S. 162 TRATION. such and is granted a Federal charter. (a) IN GENERAL.—Section 7401(3) of title 38, Be it enacted by the Senate and House of Rep- SEC. 2. CORPORATE POWERS. United States Code, is amended by striking resentatives of the United States of America in The National Academies of Practice (here- out ‘‘who hold diplomas as diplomates in Congress assembled, after referred to in this Act as the ‘‘corpora- psychology from an accrediting authority SECTION 1. TRAVEL ON MILITARY AIRCRAFT OF tion’’) shall have only those powers granted approved by the Secretary’’. CERTAIN DISABLED FORMER MEM- to it through its bylaws and articles of incor- (b) CERTAIN OTHER APPOINTMENTS.—Sec- BERS OF THE ARMED FORCES. poration filed in the State in which it is in- (a) IN GENERAL.—Chapter 53 of title 10, tion 7405(a) of such title is amended— corporated and subject to the laws of such (1) in paragraph (1)(B), by striking out United States Code, is amended by adding State. after section 1060a the following new section: ‘‘Certified or’’ and inserting in lieu thereof SEC. 3. PURPOSES OF CORPORATION. ‘‘Clinical or counseling psychologists, cer- ‘‘§ 1060b. Travel on military aircraft: certain The purposes of the corporation shall be to tified or’’; and disabled former members of the armed honor persons who have made significant (2) in paragraph (2)(B), by striking out forces contributions to the practice of applied psy- ‘‘Certified or’’ and inserting in lieu thereof ‘‘The Secretary of Defense shall permit chology, dentistry, medicine, nursing, op- ‘‘Clinical or counseling psychologists, cer- any former member of the armed forces who tometry, osteopathy, podiatry, social work, tified or’’. is entitled to compensation under the laws veterinary medicine, and other health care (c) EFFECTIVE DATE.—The amendments administered by the Secretary of Veterans professions, and to improve the practices in made by subsections (a) and (b) shall take ef- Affairs for a service-connected disability such professions by disseminating informa- fect on the date of enactment of this Act. rated as total to travel, in the same manner tion about new techniques and procedures. (d) APPOINTMENT REQUIREMENT.—Notwith- and to the same extent as retired members of SEC. 4. SERVICE OF PROCESS. standing any other provision of law, the Sec- the armed forces, on unscheduled military With respect to service of process, the cor- retary of Veterans Affairs shall begin to flights within the continental United States poration shall comply with the laws of the make appointments of clinical and counsel- and on scheduled overseas flights operated State in which it is incorporated and those ing psychologists in the Veterans Health Ad- by the Military Airlift Command. The Sec- States in which it carries on its activities in ministration under section 7401(3) of title 38, retary of Defense shall permit such travel on furtherance of its corporate purposes. United States Code (as amended by sub- a space-available basis.’’. SEC. 5. MEMBERSHIP. section (a)), not later than 1 year after the (b) CLERICAL AMENDMENT.—The table of Eligibility for membership in the corpora- date of enactment of this Act. sections at the beginning of such chapter is tion and the rights and privileges of mem- amended by adding after the item relating to bers shall be as provided in the bylaws of the By Mr. INOUYE: section 1060a the following new item: corporation. S. 162. A bill to amend title 10, Unit- ‘‘1060b. Travel on military aircraft: certain SEC. 6. BOARD OF DIRECTORS; COMPOSITION; ed States Code, to permit former mem- disabled former members of the RESPONSIBILITIES. bers of the Armed Forces who have a armed forces.’’. The composition and the responsibilities of service-connected disability rated as the board of directors of the corporation By Mr. INOUYE: shall be as provided in the articles of incor- total on military aircraft in the same S. 163. A bill to recognize the organi- poration of the corporation and in conform- manner and to the same extent as re- zation known as the National Acad- ity with the laws of the State in which it is tired members of the Armed Forces are emies of Practice; to the Committee on incorporated. entitled to travel on such aircraft; to the Judiciary. SEC. 7. OFFICERS OF THE CORPORATION. the Committee on Armed Services. The officers of the corporation and the THE NATIONAL ACADEMIES OF PRACTICE TRAVEL PRIVILEGES LEGISLATION election of such officers shall be as provided RECOGNITION ACT OF 1997 in the articles of incorporation of the cor- Mr. INOUYE. Mr. President, today I Mr. INOUYE. Mr. President, today I poration and in conformity with the laws of am introducing a bill which is of great am introducing legislation that would the State in which it is incorporated. importance to a group of patriotic provide a federal charter for the Na- SEC. 8. RESTRICTIONS. Americans. This legislation is designed tional Academies of Practice. This or- (a) USE OF INCOME AND ASSETS.—No part of to extend space-available travel privi- ganization represents outstanding the income or assets of the corporation shall leges on military aircraft to those who practitioners who have made signifi- inure to any member, officer, or director of have been totally disabled in the serv- the corporation or be distributed to any such cant contributions to the practice of person during the life of this charter. Noth- ice of our country. applied psychology, medicine, den- ing in this subsection shall be construed to Currently, retired members of the tistry, nursing, optometry, podiatry, prevent the payment of reasonable com- Armed Forces are permitted to travel social work, and veterinary medicine. pensation to the officers of the corporation on a space-available basis on non- When fully established, each of the or reimbursement for actual necessary ex- scheduled military flights within the nine academies will possess 100 distin- penses in amounts approved by the board of continental United States and on guished practitioners selected by their directors. scheduled overseas flights operated by (b) LOANS.—The corporation shall not peers. This umbrella organization will make any loan to any officer, director, or the Military Airlift Command. My bill be able to provide the Congress of the employee of the corporation. would provide the same benefits for 100 United States and the executive branch (c) POLITICAL ACTIVITY.—The corporation, percent service-connected disabled vet- with considerable health policy exper- any officer, or any director of the corpora- erans. tise, especially from the perspective of tion, acting as such officer or director, shall Surely, we owe these heroic men and those individuals who are in the fore- not contribute to, support, or otherwise par- ticipate in any political activity or in any women, who have given so much to our front of actually providing health care. country, a debt of gratitude. Of course, manner attempt to influence legislation. As we continue to grapple with the (d) ISSUANCE OF STOCK AND PAYMENT OF we can never repay them for the sac- many complex issues surrounding the DIVIDENDS.—The corporation shall have no rifice they have made on behalf of our delivery of health care services, it is power to issue any shares of stock nor to de- nation but we can surely try to make clearly in our best interest to ensure clare or pay any dividends. their lives more pleasant and fulfilling. that the Congress have systematic ac- (e) CLAIMS OF FEDERAL APPROVAL.—The One way in which we can help is to ex- cess to the recommendations of an corporation shall not claim congressional tend military travel privileges to these approval or Federal Government authority interdisciplinary body of health care for any of its activities. distinguished American veterans. I practitioners. SEC. 9. LIABILITY. have received numerous letters from Mr. President, I ask unanimous con- The corporation shall be liable for the acts all over the country attesting to the sent that the text of this bill be printed of its officers and agents when acting within importance attached to this issue by in the RECORD. the scope of their authority. January 21, 1997 CONGRESSIONAL RECORD — SENATE S545 SEC. 10. MAINTENANCE AND INSPECTION OF I feel that the time has come to allow that they need a wider range of health BOOKS AND RECORDS. our nation’s judicial system to have ac- services, some of which are simply not (a) BOOKS AND RECORDS OF ACCOUNT.—The corporation shall keep correct and complete cess to a wide range of behavioral available under Medicare. These indi- books and records of account and shall keep science and mental health expertise. I viduals made a commitment to their minutes of any proceeding of the corporation am confident that the enactment of nation, trusting that when they needed involving any of its members, the board of this legislation would be very much in help the nation would honor that com- directors, or any committee having author- our nation’s best interest. mitment. The bill that I am rec- ity under the board of directors. Mr. President, I ask unanimous con- ommending today would ensure the (b) NAMES AND ADDRESSES OF MEMBERS.— sent that the text of this bill be printed highest possible quality of care for The corporation shall keep at its principal office a record of the names and addresses of in the RECORD. these dedicated citizens and their fami- all members having the right to vote in any There being no objection, the bill was lies, who gave so much for us. proceeding of the corporation. ordered to be printed in the RECORD, as Mr. President, I ask unanimous con- (c) RIGHT TO INSPECT BOOKS AND follows: sent that the text of this bill be printed RECORDS.—All books and records of the cor- S. 164 in the RECORD. poration may be inspected by any member Be it enacted by the Senate and House of Rep- There being no objection, the bill was having the right to vote, or by any agent or resentatives of the United States of America in ordered to be printed in the RECORD, as attorney of such member, for any proper pur- Congress assembled, pose, at any reasonable time. follows: SECTION 1. EXAMINATIONS BY CLINICAL SOCIAL (d) APPLICATION OF STATE LAW.—Nothing WORKERS. S. 166 in this section shall be construed to con- Section 4247(b) of title 18, United States travene any applicable State law. Be it enacted by the Senate and House of Rep- Code, is amended in the first sentence by— resentatives of the United States of America in SEC. 11. AUDIT OF FINANCIAL TRANSACTIONS. (1) striking out ‘‘or’’ after ‘‘certified psy- The first section of the Act entitled ‘‘An Congress assembled, chiatrist’’ and inserting a comma; and Act to provide for audit of accounts of pri- (2) inserting after ‘‘psychologist,’’ the fol- SECTION 1. EXPANSION OF MEDICARE EXCEP- vate corporations established under Federal lowing: ‘‘or clinical social worker,’’. TION TO THE PROHIBITION OF law’’, approved August 30, 1964 (36 U.S.C. CHAMPUS COVERAGE FOR CARE COVERED BY ANOTHER HEALTH 1101), is amended— By Mr. INOUYE: (1) by redesignating paragraph (72) as para- CARE PLAN. S. 165. A bill for the relief of Donald graph (71); (a) AMENDMENT AND REORGANIZATION OF (2) by designating the paragraph relating C. Pence; to the Committee on the Ju- EXCEPTIONS.—Subsection (d) of section 1086 to the Non Commissioned Officers Associa- diciary. of title 10, United States Code, is amended to tion of the United States of America, Incor- PRIVATE RELIEF LEGISLATION read as follows: porated, as paragraph (72); Mr. INOUYE. Mr. President, I ask ‘‘(d)(1) Section 1079(j) of this title shall (3) by redesignating paragraph (60), relat- unanimous consent that the text of the apply to a plan contracted for under this sec- ing to the National Mining Hall of Fame and bill be printed in the RECORD. tion except as follows: Museum, as paragraph (73); and There being no objection, the bill was ‘‘(A) Subject to paragraph (2), a benefit (4) by adding at the end the following: may be paid under such plan in the case of a ordered to be printed in the RECORD, as ‘‘(75) National Academies of Practice.’’. person referred to in subsection (c) for items SEC. 12. ANNUAL REPORT. follows: and services for which payment is made The corporation shall report annually to S. 165 under title XVIII of the Social Security Act. the Congress concerning the activities of the Be it enacted by the Senate and House of Rep- ‘‘(B) No person eligible for health benefits corporation during the preceding fiscal year. resentatives of the United States of America in under this section may be denied benefits Such annual report shall be submitted at the Congress assembled, under this section with respect to care or same time as is the report of the audit for SECTION 1. RELIEF OF DONALD C. PENCE. treatment for any service-connected disabil- such fiscal year required by section 3 of the (a) RELIEF.—The Secretary of the Treasury ity which is compensable under chapter 11 of Act referred to in section 11 of this Act. The shall pay, out of any moneys in the Treasury title 38 solely on the basis that such person report shall not be printed as a public docu- not otherwise appropriated, to Donald C. is entitled to care or treatment for such dis- ment. Pence, of Sanford, North Carolina, the sum ability in facilities of the Department of SEC. 13. RESERVATION OF RIGHT TO AMEND OR of $31,128 in compensation for the failure of Veterans Affairs. REPEAL CHARTER. the Department of Veterans Affairs to pay ‘‘(2) If a person described in paragraph The right to alter, amend, or repeal this dependency and indemnity compensation to (1)(A) receives medical or dental care for Act is expressly reserved to the Congress. Kathryn E. Box, the now-deceased mother of which payment may be made under both SEC. 14. DEFINITION. Donald C. Pence, for the period beginning on title XVIII of the Social Security Act (42 For purposes of this Act, the term ‘‘State’’ July 1, 1990, and ending on March 31, 1993. U.S.C. 1395 et seq.) and a plan contracted for includes the District of Columbia, the Com- (b) LIMITATION ON FEES.—Not more than a under subsection (a), the amount payable for monwealth of Puerto Rico, and the terri- total of 10 percent of the payment authorized that care under the plan may not exceed the tories and possessions of the United States. by subsection (a) shall be paid to or received difference between— SEC. 15. TAX-EXEMPT STATUS. by agents or attorneys for services rendered ‘‘(A) the sum of any deductibles, coinsur- The corporation shall maintain its status in connection with obtaining such payment, ance, and balance billing charges that would as an organization exempt from taxation as any contract to the contrary notwithstand- be imposed on the person if payment for that provided in the Internal Revenue Code of 1986 ing. Any person who violates this subsection care were made solely under that title; and or any corresponding similar provision. shall be fined not more than $1,000. ‘‘(B) the sum of any deductibles, coinsur- SEC. 16. TERMINATION. ance, and balance billing charges that would If the corporation fails to comply with any By Mr. INOUYE: be imposed on the person if payment for that of the restrictions or provisions of this Act S. 166. A bill to amend section 1086 of care were made solely under the plan. the charter granted by this Act shall termi- title 10, United States Code, to provide ‘‘(3) A plan contracted for under this sec- nate. for payment under CHAMPUS of cer- tion shall not be considered a group health plan for the purposes of paragraph (2) or (3) By Mr. INOUYE: tain health care expenses incurred by certain members and former members of section 1862(b) of the Social Security Act S. 164. A bill to allow the psychiatric (42 U.S.C. 1395y(b)). or psychological examinations required of the uniformed services and their de- pendents to the extent that such ex- ‘‘(4) A person who, by reason of the appli- under chapter 313 of title 18, United cation of paragraph (1), receives a benefit for States Code, relating to offenders with penses are not payable under Medicare, items or services under a plan contracted for mental disease or defect, to be con- and for other purposes; to the Commit- under this section shall provide the Sec- ducted by a clinical social worker; to tee on Armed Services. retary of Defense with any information re- the Committee on the Judiciary. THE CHAMPUS AMENDMENT ACT OF 1997 lating to amounts charged and paid for the items and services that, after consulting THE PSYCHIATRIC AND PSYCHOLOGICAL Mr. INOUYE. Mr. President, I feel with the other administering Secretaries, EXAMINATIONS ACT OF 1997 that it is very important that our na- Mr. INOUYE. Mr. President, today I tion continue its firm commitment to the Secretary requires. A certification of such person regarding such amounts may be am introducing legislation to amend those individuals and their families accepted for the purposes of determining the Title 18 of the United States Code to who have served in the Armed Forces benefit payable under this section.’’. allow our nation’s clinical social work- and made us the great nation that we (b) REPEAL OF SUPERSEDED PROVISION.— ers to provide their mental health ex- are today. As this population becomes Such section is further amended— pertise to the federal judiciary. older, they are unfortunately finding (1) by striking out subsection (g); and S546 CONGRESSIONAL RECORD — SENATE January 21, 1997 (2) by redesignating subsection (h) as sub- from armed career criminals will re- to toughen the law against those who section (g). duce crime. use a gun to commit a crime. My bill SEC. 2. CONFORMING AMENDMENT. No question, Mr. President. When it would say to career criminals—if you Section 1713(d) of title 38, United States comes to felons, unilateral disar- possess a gun after being convicted for Code, is amended by striking out ‘‘section mament of the thugs is the best policy. gun crimes, you will get a mandatory 1086(d)(1) of title 10 or’’. Let’s disarm the people who hurt peo- 15-year sentence. SEC. 3. EFFECTIVE DATE. ple. Under current law, a first-time felon The amendments made by this Act shall take effect with respect to health care items We have actually tried it—and we gets a 5-year mandatory minimum sen- or services provided on and after the date of know it works. One of the most suc- tence. A third-time felon gets a manda- enactment of this Act. cessful crime-fighting initiatives of re- tory minimum of 15 years. But there is cent years was known as Project a gap—there’s no mandatory minimum By Mr. INOUYE: Triggerlock. This project was wildly for a second-time felon. S. 167. A bill for the relief of Alfredo successful precisely because it address- My legislation would fix that. It Tolentino of Honolulu, Hawaii; to the es a problem squarely—and places the would provide a mandatory minimum Committee on Governmental Affairs. resources where they are most needed. of 10 years for a second-time felon. PRIVATE RELIEF LEGISLATION Let me tell you a little about project That would make it a lot easier for Mr. INOUYE. Mr. President, I ask Triggerlock. The U.S. Justice Depart- police to get gun criminals off our unanimous consent that the text of the ment began Project Triggerlock in streets. bill be printed in the RECORD. May 1991. The program targeted for BAIL REFORM There being no objection, the bill was prosecution—in Federal court—armed A third thing we have to do is reform ordered to be printed in the RECORD, as and violent repeat offenders. the bail system. follows: Under Triggerlock, U.S. Attorneys Under current law—the Bail Reform S.167 throughout the country said to State Act—certain dangerous accused crimi- Be it enacted by the Senate and House of Rep- and local prosecutors: If you catch a nals can be denied bail detention if resentatives of the United States of America in felon with a gun, and if you want us to, they have been charged with crimes of Congress assembled, That, notwithstanding we—the Federal prosecutors—will take violence. But it’s unclear under current the provisions of section 8337(b) of title 5, over the prosecution. law whether possession of firearms United States Code, Alfredo Tolentino of We will prosecute him. We will con- should be considered a crime of vio- Honolulu, Hawaii may file an application no vict him. We will hit him with a stiff lence. later than 60 days after the date of the enact- Federal mandatory sentence. And we ment of this Act with the Office of Personnel Mr. President, let us do a reality Management for a claim of disability retire- will lock him up in a Federal prison at check on this. If someone who is a ment under the provisions of such section. no cost to the State or local commu- known convicted felon is walking nity. around with a gun, what’s the likeli- By Mr. DeWINE: That’s what Triggerlock did. hood that person is carrying the gun S. 168. A bill to reform criminal pro- Triggerlock was an assault on the very for law-abiding purposes? cedure, and for other purposes; to the worst criminals in America. And it I think it is perfectly reasonable to Committee on the Judiciary. worked. consider that person prima facie dan- THE TRIGGERLOCK ACT OF 1997 This program took 15,000 criminals gerous. We should deny bail—and keep Mr. DEWINE. Mr. President, there off the streets in an 18-month period. that convicted felon off the streets are two truly fundamental issues we Incredibly, the Clinton Justice De- while awaiting trial on the new charge. need to address in the area of crime. partment abandoned Project My legislation would eliminate the First, what is the proper role of the Triggerlock. It was the most effective ambiguity in current law. May bill Federal Government in fighting crime Federal program in recent history for would define a ‘‘crime of violence’’ spe- in this country? Second, despite all the targeting and removing armed career cifically to include possession of a fire- rhetoric, what really works in law en- criminals. But the Justice Department arm by a convicted felon. forcement? stopped Triggerlock dead in its tracks. If you are a convicted felon, and What matters? What doesn’t matter? What I am proposing in this bill is you’re walking around with a gun— Today, I would like to discuss one that we resurrect Project Triggerlock. you’re dangerous. You need to be kept issue that I believe really matters: How My bill requires the U.S. attorneys in off the streets. We need to give pros- do we go about protecting America every jurisdiction in this country to ecutors the legal right to protect the from armed career criminals? make a montly report to the Attorney community from these people while I am talking about repeat violent General in Washington on the number they are awaiting trial. criminals who use a gun while commit- of arrests, prosecutions, and convic- CRACK DOWN ON ILLEGAL GUN SUPPLIERS ting a crime. tions they have gotten on gun-related A fourth way we can crack down on In this area, too, we need to be ask- offenses. The Attorney General should gun crimes is to go after those who ing: What works? And what level of then report, semi-annually, to the Con- knowingly provide the guns to felons. Government should do it? gress on the work of these prosecutors. Under current law, you can be pros- In the area of gun crimes, we have a Like all prosecutors, U.S. attorneys ecuted for providing a gun only if you pretty good answer. have limited resources. So—like all know for certain that it will be used in We all know that there is some con- prosecutors—U.S. attorneys have to ex- a crime. troversy over whether general restric- ercise discretion about whom to pros- The revision I propose would make it tions on gun ownership would help to ecute. We all recognize the Congress illegal to provide a firearm if you have reduce crime. But there is no con- can’t dictate to prosecutors whom they reasonable cause to believe that it’s troversy over whether taking guns should prosecute—but it’s clear that going to be used in a crime. away from felons would reduce crime. we should go on record with the follow- The is the best way to go after the il- There is legitimate disagreement ing proposition: There’s nothing more legal gun trade—those who provide over whether the Brady bill would re- important than getting armed career guns to the predators on society. We duce crime. Similarly, reasonable peo- criminals off the streets. will no longer allow these gun provid- ple can disagree on the question of Mr. President, I think Project ers to pretend ignorance. They are whether a ban on assault weapons Triggerlock is a very important way to helping felons—and they need to be would reduce crime. I happen to sup- keep the focus on the prosecution of stopped. port both those measures—but I recog- gun crimes. Getting gun criminals off All of these proposals are motivated nize that some people think they are the streets is a major national prior- by a single purpose: I—along with the not effective. ity—and we ought to behave accord- police officers of this country—believe But what I am talking about today is ingly. that we have to get the guns away from something on which there is absolutely MANDATORY MINIMUMS the gun criminals. no controversy. There’s simply no Mr. President, the second thing we Project Triggerlock is one major ini- question that taking the guns away need to do is change the law. We need tiative we can pursue at the Federal January 21, 1997 CONGRESSIONAL RECORD — SENATE S547 level to help make this happen. Impos- duce the availability of agricultural gram. The H–2A program is intended to ing stiff mandatory minimums and workers. serve as a safety valve for times when cracking down on illegal gun providers Farmers need access to an adequate domestic labor is unavailable. Unfortu- are also important measures. supply of workers and want to have nately, the H–2A program isn’t work- All of the gun proposals contained in certainty that they are hiring a legal ing. my crime legislation have the same work force. In 1995, the total agricul- Despite efforts to streamline the goal. They are designed to assure tural work force was about 2.5 million temporary worker program in 1986, it American families who are living in people. That equals 6.7 percent of our now functions so poorly that few in ag- crime-threatened communities that labor force, which is directly involved riculture use it without risking an in- we’re going to do what it takes to get in production agriculture and food adequate work force, burdensome regu- guns off your streets. processing. lations and potential litigation ex- We are going to go after the armed Hired labor is one of the most impor- pense. In fact, usage of the program career criminals. We’re going to pros- tant and costly inputs in farming. U.S. has actually decreased from 25,000 ecute them. We’re going to convict farmers spent more than $15 billion on workers in 1986 to only 17,000 in 1995. them. We are going to keep them off hired labor expenses in 1992—one of The bill I am introducing would pro- the streets. every eight dollars of farm production vide some much-needed reforms to the This is why we have a government in expenses. For the labor-intensive fruit, H–2A program. I urge my colleagues to the first place—to protect the inno- vegetable and horticultural sector, consider the following reasonable cent, to keep ordinary citizens safe labor accounts for 35 to 45 percent of modifications of the H–2A program. from violent, predatory criminals. production costs. First, the bill would reduce the ad- I think Government needs to do a The competitiveness of U.S. agri- vance filing deadline from 60 to 40 days much better job at this fundamental culture, especially in the fruit, vegeta- before workers are needed. In many ag- task—and that’s why targeting the ble and horticultural specialty sectors, ricultural operations, 60 days is too far armed career criminals is such a major depends on the continued availability in advance to be able to predict labor component of this bill. of hired labor at a reasonable cost. U.S. needs with the precision required in H– farmers, including producers of labor- 2A applications. Furthermore, vir- By Mr. CRAIG: intensive perishable commodities, com- tually all referrals of U.S. workers who S. 169. A bill to amend the Immigra- pete directly with producers in other actually report for work are made close tion and Nationality Act with respect countries for market share in both U.S. to the date of need. The advance appli- to the admission of temporary H–2A and foreign commodity markets. cation period serves little purpose ex- workers; to the Committee on the Ju- Wages of U.S. farmworkers will not cept to provide time for litigation. diciary. be forced up by eliminating alien labor, Second, in lieu of the present certifi- THE AGRICULTURAL WORK FORCE STABILITY because growers’ production costs are cation letter, the Department of Labor AND PROTECTION ACT capped by world market commodity [DOL] would issue the employer a do- Mr. CRAIG. Mr. President, I rise to prices. Instead, a reduction in the work mestic recruitment report indicating introduce the Agricultural Work Force force available to agriculture will force that the employer’s job offer meets the Stability and Protection Act. This bill U.S. producers to reduce production to statutory criteria and lists the number would make needed reforms to the so- the level that can be sustained by a of U.S. workers referred. The employer called ‘‘H–2A Program,’’ the program smaller work force. would then file a petition with INS for intended by Congress in the Immigra- Over time, wages for these farm admission of aliens, including a copy of tion and Nationality Act to allow for a workers have actually risen faster than DOL’s domestic recruitment report and reliable supply of legal, temporary, im- non-farm worker wages. Between 1986– any countervailing evidence concern- migrant workers in the agricultural 1994, there was a 34.6 percent increase ing the adequacy of the job offer and/or sector, under terms that also provide in average hourly earnings for farm the availability of U.S. workers. The reasonable worker protections, when workers, while non-farm workers only Attorney General would make the ad- there is a shortage of domestic labor in saw a 27.1 percent increase. mission decision. The purpose is to re- this sector. Even with this increase in on-farm store the role of the Labor Department Last year, Senator Alan Simpson, wages, this country has historically to that of giving advice to the Attor- then the Chairman of the Judiciary been unable to provide a sufficient ney General on labor availability, and Committee’s Subcommittee on Immi- number of domestic workers to com- return decision making to the Attor- gration, and then this body as a whole, plete the difficult manual labor re- ney General. acknowledged the importance of this quired in the production of many agri- Third, the Department of Labor issue by agreeing to including in the Il- cultural commodities. In Idaho, this is would be required to provide the em- legal Immigration Reform conference especially true for producers of fruit, ployer with a domestic recruitment re- report some compromise language re- sugar beets, onions and other specialty port not later than 20 days before the garding the Sense of the Congress on crops. date of need. The report either states the H–2A Program and requiring the The difficulty in obtaining sufficient sufficient domestic workers are not General Accounting Office to review domestic workers is primarily due to available or gives the names and Social the effectiveness of the program. the fact that domestic workers prefer Security numbers of the able, willing The language included in the Illegal the security of full-time employment and qualified workers who have been Immigration Reform and Immigrant in year round positions. As a result the referred to the employer. The Depart- Responsibility Act of 1996 was essen- available domestic work force tends to ment of Labor now denies certification tially the same as language agreed to prefer the long term positions, leaving not only on the basis of workers actu- in the conference report on fiscal year the seasonal jobs unfilled. In addition, ally referred to the employer, but also 1997 Agriculture Appropriations. With many of the seasonal jobs unfilled. In on the basis of reports or suppositions these provisions, the Congress went on addition, many of the seasonal agricul- that unspecified numbers of workers record twice on the importance of hav- tural jobs are located in areas where it may become available. The proposed ing a program that helps ensure an is necessary for workers to migrate change would assure that only workers adequate workforce for agricultural into the area and live temporarily to actually identified as available would producers. do the work. Experience has shown be the basis for denying foreign work- This is an issue that is of the utmost that foreign workers are more likely to ers. importance to this country’s farmers migrate than domestic workers. As a Fourth, the Immigration and Natu- and ranchers, especially in light of the result of domestic short supply, farm- ralization Service [INS] would provide impact that immigration reform will ers and ranchers have had to rely upon expedited processing of employers’ pe- have on the supply of agricultural the assistance of foreign workers. titions, and, if approved, notify the labor. There is very real concern The only current mechanism avail- visa issuing consulate or port of entry among Idaho farmers and throughout able to admit foreign workers for agri- within 15 calendar days. This would en- the country that these reforms will re- cultural employment is the H–2A pro- sure timely admission decisions. S548 CONGRESSIONAL RECORD — SENATE January 21, 1997 Fifth, INS would provide expedited utility for agricultural employers in address- to report on the date of need, or who aban- procedures for amending petitions to ing agricultural labor shortages, while pro- don employment or are terminated for cause, increase the number of workers admit- viding wages and benefits that equal or ex- without first obtaining a redetermination of ted on 5 days before the date of need. ceed the median level of compensation in need from DOL. This is to reduce the paperwork and in- non-H–2A occupations, and reducing the vul- Rationale: To reduce the paperwork and nerability of the program to being ham- increase the timeliness of obtaining needed crease the timeliness of obtaining strung and delayed by litigation. needed workers very close to or after workers very close to or after the work has 1. Reduce the advance filing deadline from started. the work has started. 60 to 40 days before workers are needed. Sixth, DOL would continue to recruit Rationale. In many agricultural oper- 6. DOL would continue to recruit domestic domestic workers and make referrals ations, 60 days is too far in advance to be workers and make referrals to employers to employers until 5 days before the able to predict labor needs with the precision until 5 days before the date of need. Employ- ers would be required to give preference to date of need. This method is needed to required in H–2A applications. Furthermore, virtually all referrals of U.S. workers who able, willing and qualified workers who agree allow the employer at a date certain to to be available at the time and place needed complete his hiring, and to operate actually report for work are made close to the date of need. The advance application pe- who are referred to the employer until 5 days without having the operation disrupted riod serves little purpose except to provide before the date workers are needed. After by having to displace existing workers time for litigation. that time, employers would be required to with new workers. 2. In lieu of the present certification letter, give preference to U.S. workers who are im- Seventh, the bill would enumerate DOL would issue the employer a domestic re- mediately available in filling job opportuni- the specific obligations of employers in cruitment report indicating that the employ- ties that become available, but would not be occupations in which H–2A workers are er’s job offer meets the statutory criteria (or required to bump alien workers already em- employed. The proposed definition the specific deficiencies in the order) and the ployed. would define jobs that meet the follow- number of U.S. workers referred, per #3 Rationale: A method is needed to allow the ing criteria as not adversely affecting below. The employer would file a petition employer at a date-certain close to the date U.S. workers: with INS for admission of aliens (or transfer of need to complete his hiring, and to oper- 1. The employer offers a competitive wage of aliens already in the United States), in- ate without having the operation disrupted for the position. cluding a copy of DOL’s domestic recruit- by having to displace existing workers with 2. The employer would provide approved ment report and any countervailing evidence new workers. housing, or a reasonable housing allowance, concerning the adequacy of the job offer and/ 7. Create a ‘‘bounded definition’’ of adverse to workers whose permanent place of resi- or the availability of U.S. workers. The At- effect by enumerating the specific obliga- dence is beyond normal commuting distance. torney General would make the admission tions of employers in occupations in which 3. The employer continues to provide cur- decision. H–2A aliens are employed. The proposed defi- Rationale. The purpose is to restore the rent transportation reimbursement require- nition would define jobs that meet the fol- role of the Labor Department to that of giv- ments. lowing criteria as not adversely affecting ing advice to the AG on labor availability, 4. A guarantee of employment is provided U.S. workers: for at least three-quarters of the anticipated and return the true gatekeeper role to the hours of work during the actual period of AG. Presently the certification letter is, de 7a. Offer at least the median rate of pay for employment. facto, the admission decision. the occupation in the area of intended em- 5. The employer would provide workers’ 3. DOL provides employer with a domestic ployment. compensation or equivalent coverage. recruitment report not later than 20 days be- 7b. Provide approved housing or, if suffi- 6. Employer must comply with all applica- fore the date of need stating either that suf- cient housing is available in the approximate ble Federal, State, and local labor laws with ficient domestic workers are not available, area of employment, a reasonable housing respect to both United States and alien or giving the names and Social Security allowance, to workers whose permanent workers. Numbers of the able, willing and qualified place of residence is beyond normal commut- This combination of employment require- workers who have been referred to the em- ing distance. ments would eliminate the discretion of De- ployer and who have agreed to be available NOTE: Provision should also be made to partment of Labor to specify terms and con- at the time and place needed. DOL also pro- ditions of employment on a case-by-case allow temporary housing that does not meet vides a means for the employer to contact the full set of Federal standards for a transi- basis. In addition, the scope for litigation the referred worker to confirm availability would be reduced since employers (and the tional period in areas where sufficient hous- close to the date of need. DOL would be em- courts) would know with particularity the ing that meets standards is not presently powered to issue a report that sufficient do- required terms and conditions of employ- available, and for such temporary housing on mestic workers are not available without ment. a permanent basis in occupations in which Eighth, the bill would provide that work- waiting until 20 days before the date of need the term of employment is very short (e.g. ers must exhaust administrative remedies for workers if there are already unfilled or- cherry harvesting, which lasts about 15–20 before engaging their employers in litiga- ders for workers in the same or similar occu- days) if sufficient housing that meets the tion. pations in the same area of intended employ- full standards is not available. Federal law Ninth, certainty would be given to employ- ment. should pre-empt state and local laws and Rationale: DOL now denies certification ers who comply with the terms of an ap- codes with respect to the provision of such not only on the basis of workers actually re- proved job order. If at a later date the De- temporary housing. partment of Labor requires changes, the em- ferred to the employer, but also on the basis 7c. Current transportation reimbursement ployer would be required to comply with the of reports or suppositions that unspecified requirements (i.e. employer reimburses law only prospectively. This very important numbers of workers may become available. provision removes the possibility of retro- These suppositions almost never prove cor- transportation of workers who complete 50 active liability if an approved order is rect, forcing the employer into costly and percent of the work contract and provides or changed. time wasting redeterminations on or close to pays for return transportation for workers As the Illegal Immigration Reform law is the date of need and delaying the arrival of who complete the entire work contract). implemented, action on these H–2A reforms workers. The proposed change would assure 7d. A guarantee of employment for at least will be necessary in the coming months to that only workers actually identified as three-quarters of the anticipated hours of avoid jeopardizing the labor supply for available would be the basis for denying for- work during the actual period of employ- American agriculture. eign workers. DOL also interprets the exist- ment. Therefore, I am introducing this bill at ing statutory language as precluding it from 7e. Employer-provided Workers’ Compensa- this time and invite and urge my colleagues issuing each labor certification until 20 days tion or equivalent. to sign on as cosponsors. It is time to begin before the date of need, even in situations 7f. Employer must comply with all applica- in earnest to discuss these issues and exam- where ongoing recruitment shows that suffi- ble federal, state and local labor laws with ine these vitally-needed reforms. I hope and cient workers are not available. expect the Senate will pass constructive leg- 4. INS to provide expedited processing of respect to both U.S. and alien workers. islation along these lines this year. employer’s petitions, and, if approved, notify Rationale: The objective is to eliminate Thank you, Mr. President. At this time, I the visa issuing consulate or port of entry the discretion of DOL to specify terms and ask unanimous consent that a summary of within 15 calendar days. conditions of employment on a case-by-case the bill be printed in the RECORD. Rationale: To assure timely admission de- basis and reduce the scope for litigation of There being no objection, the summary cisions. applications. Employers (and the courts) was ordered to be printed in the RECORD, as 5. INS to provide an expedited procedures would know with particularity, up front, follows: for amending petitions to increase the num- what the required terms and conditions of SUMMARY OF THE AGRICULTURAL WORK FORCE ber of workers admitted (or transferred) on employment are. The definition also reduces STABILITY AND PROTECTION ACT or after 5 days before the date of need, to re- the cost premium for participating in the The following proposed changes to the H– place referred workers whose continued program by relating the Adverse Effect Wage 2A program would improve its timeliness and availability can not be confirmed, who fail Rate to the minimum wage and limiting the January 21, 1997 CONGRESSIONAL RECORD — SENATE S549 applicability of the three-quarters guarantee vices, and the procedures mandated by law enforcement officers a tool they to the actual period of employment. the courts once the authorization was need to their jobs—protecting Amer- 8. Provide that workers must exhaust ad- granted would be the same. However, ican families. It would establish, for ministrative remedies before engaging their in both cases it is not. employers in litigation. the first time in the Federal Criminal Rationale: To reduce litigation costs. Under current law, the requirements Code, a general attempt provision. 9. Provide that if an employer complies for obtaining authorization to use a Thankfully, criminals to not succeed with the terms of an approved job order, and clone pager are much more stringent every time they set out to commit a DOL or a court later orders a provision to be than they are for using a pen register. crime. We need to take advantage of changed, the employer would be required to I would like to briefly outline the dif- these failed crimes to get criminals off comply with the new provision only prospec- ferences. the streets. tively. In order to obtain authorization to Mr. President, under current Federal Rationale: To reduce the exposure of em- use a pen register, a Federal prosecutor law, there is no general attempt provi- ployers to litigation seeking to overturn must certify to a district court judge DOL’s approval of job orders, and to retro- sion applicable to all Federal offenses. active liability if an approved order is the phone number to which the pen This has forced Congress to enact sepa- changed. register will be attached, the phone rate legislation to cover specific cir- company that delivers service to that cumstances. This approach to the law By Mr. DEWINE: number, and that the pen register has led to a patchwork of attempt stat- S. 170 A bill to provide for a process serves a legitimate law enforcement utes—leaving gaps in coverage, and to authorize the use of clone pagers, purpose. In other words, the prosecutor failing to adequately define exactly and for other purposes; to the Commit- must show only that the use of the pen what constitutes an attempt in all cir- tee on the Judiciary. register is based on an ongoing inves- cumstances. THE CLONE PAGER AUTHORIZATION ACT OF 1996 tigation. The district court judge may Some statutes include attempt lan- Mr. DEWINE. Mr. President, I believe then grant the authorization on a mere guage within the substantive offense, that, to stop crime, we have to do finding that the prosecutor has made but don’t bother to define exactly what more. That doesn’t mean another rhe- the required certification. The pen reg- an attempt is. Others define, as a sepa- torical assault on crime—or even a ister can then be used for a period of 60 rate crime, conduct which is only a flashy ten-point program. Rather, we days—with no requirement that law step toward commission of a more seri- have to do more of the little things enforcement report pen register activ- ous offense. Moreover, there is no of- that—when you put them all to- ity to the court. fense of attempt for still other serious In contrast, the U.S. Attorney for a gether—make a big difference. crimes, such as disclosing classified in- particular district must sign off on a The most important of these is giv- formation to an unauthorized person. ing law enforcement officials the tools request for clone pager authorization. This ad hoc approach to attempt they need to do their jobs. Today, I am Once this occurs, a prosecutor may statutes is causing problems for law introducing legislation that will help then go before a district court judge enforcement officials. At what point is where he must show that there is prob- us do that. it OK for law enforcement officials to able cause to suspect an individual has The bill I am introducing today step in to prevent the completion of a committed a crime—a much higher would simply rectify an imbalance in crime? If someone is seriously dedi- standard than what is required for a current Federal law which makes it cated to committing a crime, law en- pen register authorization. He must more difficult for law enforcement offi- forcement must be able to intervene also detail what other investigative cials to fight drug trafficking. Today, and prevent it—without having to techniques have been used, why they drug traffickers have taken advantage worry whether doing so would cause a have not been successful, and why they of technological advances to advance criminal to walk. In the absence of a will continue to be unsuccessful. More- their own criminal interests. statutory definition of an attempt, the Drug traffickers—on a regular basis— over, the prosecutor must disclose other available investigative tech- courts have been called upon to decide use digital display paging devices, bet- whether specific actions fit within ex- ter known as beepers—in transacting niques and why they are unlikely to be successful. Only after all of this is done isting statutory language. their business. They do this because it When a criminal is attempting to can authorization to use a clone pager gives them the freedom to run their commit a crime where attempt is not criminal enterprise out of any avail- be granted. But these are not the only differences an offense, then law enforcement must able phone booth, and to avoid police in treatment. After the authorization wait until the crime is completed, or surveillance. If law enforcement offi- is granted, it can only be used for 30 find some other charge to fit the crimi- cials knew from whom they were re- days. During that 30 days, the prosecu- nal’s actions. Law enforcement should ceiving the calls to their beepers it tor must report activity from the clone never be placed in either of these posi- would certainly aid efforts in tracking pager to the issuing judge at least once tions. down drug traffickers. every 2 weeks. The bill that I am introducing today The technology now exists to allow I do not believe that the authoriza- will solve these problems in the cur- law enforcement to receive the digital tion disparity in authorization for rent law. As I mentioned earlier, this display message, without intercepting these two devices is warranted. legislation will add a general attempt the content of any conversation or The legislation that I am introducing provision to the U.S. Criminal Code. It message. It is called a ‘‘clone pager.’’ today would simply amend the Federal provides congressional direction in de- This clone pager is programmed identi- code to end this disparity. This bill fining what constitutes an attempt in cally to the suspect’s pager and allows would give law enforcement agents all circumstances. And, it will serve to law enforcement to receive the digital ready access, with warranted limita- fill in the irrational gaps in attempt displays at the same time as the sus- tions, to the tools they need to do their coverage. pect. jobs. This bill will bring Federal law In my view, it’s time for the Amer- This device functions identically to a enforcement into the 21st century. The ican people—acting through the Con- pen register. Mr. President, as you may drug traffickers are already there. It’s gress—to clarify their intention when know, a pen register is a device which time for law and order to catch up with it comes to this area of the law. law enforcement attaches to a phone them. Millions of Americans work hard line to decode the numbers which have every day to make ends meet and raise called a specific telephone. Like a By Mr. DEWINE: their families and provide a better life clone pager, the pen register only S. 171. A bill to amend title 18, for their children. intercepts phone numbers, not the con- United States Code, to insert a general But, there are some people who tent of any conversation or message. provision for criminal attempt; to the choose a different approach to life—a Since both devices serve the same Committee on the Judiciary. life of crime. We as Americans need to purpose, a reasonable person would THE ATTEMPT ACT OF 1997 leave no doubt where we stand on that conclude that both the system for re- Mr. DEWINE. Mr. President, I am in- choice. If you even try to commit a ceiving authorization to use these de- troducing a bill today that will give crime, we’re going to prosecute you S550 CONGRESSIONAL RECORD — SENATE January 21, 1997 and convict you. This bill will make it THE PRIVATE SECURITY OFFICERS QUALITY Recently, the National Park Service easier for our law enforcement officers ASSURANCE ACT completed a special resource study ex- to protect our families and our commu- Mr. DEWINE. Mr. President, I rise amining the proposed National Historic nities. today to introduce the Private Secu- Site designation and the suitability of rity Officer Assurance Act of 1997. This these sites for inclusion in the Na- By Mr. DEWINE: bill establishes an expedited procedure tional Park System. S. 172. A bill to amend title 18, Unit- for State regulators or private security The Park Service concluded that ed States Code, to set forth the civil ju- officers to obtain criminal records these sites were suitable for inclusion risdiction of the United States for background checks through the FBI in the National Park System—with crimes committed by persons accom- prior to issuing state permits to secu- non-Federal management and National panying the Armed Forces outside of rity officers. Currently, it frequently Park Service assistance. The bill I am the United States, and for other pur- takes between 6 to 18 months to com- introducing today would act on that poses; to the Committee on the Judici- plete such checks. recommendation. ary. My bill would authorize the Attorney My legislation will accomplish the General to designate an association of following: THE MILITARY AND CIVILIAN JUSTICE ACT employers of security officers to col- Recognize and preserve the 185-acre Mr. DEWINE. Mr. President, there lect signature cards from applicants Fallen Timbers Battlefield site; are shortcomings in the Code of Mili- and forward them to the FBI for a com- Formalize the linkage between the tary Law that have terrible repercus- parison against the Federal criminal Fallen Timbers Battlefield and Monu- sions in the streets of civilian America. history records on file. The records ment to Fort Meigs and Fort Miamis; These failures of the military judicial would then be forwarded to the appro- Preserve and interpret U.S. military system too often result in military priate State regulators who would de- history and Native American culture criminals being pushed out of the serv- cide the qualification of the applicants during the period from 1794 through ice and into our civilian streets—where for permits based on State laws. Under 1813; and, these criminals continue to behave as this bill, the applicant would pay fees Provide technical assistance to the lawless predators. This bill closes two to compensate for the cost of the back- State of Ohio as well as interested such gaps in the Military Code and en- ground checks. No criminal history in- community and historical groups in sures that the enlisted criminal is not formation would go to the employer. the development and implementation pushed out to prey on decent citizens. I would note that Congress has estab- of programming and interpretation of This bill protects civilians from mili- lished similar procedures for banks, the the three sites. tary personnel who have committed parimutuel industry and the financial However, my legislation will not re- crimes, just as the Military protects it- securities industry. The process that I quire the Federal Government to pro- self from those same people. described takes about 3 weeks for these vide direct funding to these three sites. My bill addresses an important gap industries. That responsibility remains with—and in the law. Under current law, many il- Mr. President, I believe this bill will is welcomed by—the many individuals, legal acts committed abroad by U.S. help improve public safety by ensuring community groups, elected officials, soldiers or accompanying civilians go the integrity of those hired as security and others who deserve recognition for unpunished by the military courts. The officers. their many hours of hard work dedi- prosecution of these crimes is left to cated to this issue. the discretion of a military court, By Mr. DEWINE: Mr. President, we have entered an S. 174. A bill to establish the Fallen which either chooses to do no more era where the responsibility and the Timbers Battlefield, Fort Meigs, and than hand down a dishonorable dis- drive behind the management, pro- Fort Miamis National Historical Site charge or lacks jurisdiction over the gramming, and—in many cases—the in the State of Ohio; to the Committee civilian defendant. This should not be funding for historic preservation is the on Energy and Natural Resources. the case. responsibility of local community This bill guarantees that a soldier or THE FALLEN TIMBERS ACT groups, local elected officials, and local Mr. DEWINE. Mr. President, I rise accompanying civilian abroad, com- business communities. today to introduce legislation that will mitting an illegal act punishable under This legislation to designate the designate the Fallen Timbers Battle- the United States Code by more than a Fallen Timbers Battlefield, Fort Meigs, field, Fort Meigs, and Fort Miamis as year’s imprisonment, will be handed and Fort Miamis as National Historic National Historic Sites. Sites represents just such an effort. In over to civilian authorities for prosecu- Mr. President, the people of north- tion under the United States Code. my opinion, it is long overdue. west Ohio are committed to preserving Mr. President, it is time to grant There is another aspect of this bill the historic heritage of the United these truly historic areas the measure intended to protect civilian Americans States and the State of Ohio, as well as of respect and recognition they de- from the actions of those who commit that of their own community. serve. I agree with the National Park crimes while in the military. This bill The truly national significance of the Service—and the people of Ohio—on also mandates that when an enlisted Battle of Fallen Timbers and Fort this issue. That is why I am proposing criminal is discharged from the serv- Meigs have been acknowledged already. this important legislation today. ice, the military Secretary will turn In 1960, Fallen Timbers was designated over to the FBI all the criminal records as a National Historic Landmark. In By Mr. INOUYE: of that soldier for inclusion in the FBI 1969, Fort Meigs received this designa- S. 175. A bill to amend chapter 81 of criminal records system. Again, Mr. tion. title 5, United States Code, to author- President, this is another way to pro- The Battle of Fallen Timbers is ac- ize the use of clinical social workers to tect the tax-paying, law-abiding Amer- knowledged by the National Park Serv- conduct evaluations to determine ican from dishonorably discharged ice as a culminating event in the his- work-related emotional and mental ill- criminals. Under current law, the tory of the struggle for dominance in nesses; to the Committee on Govern- criminal histories of these military the old Northwest Territory. mental Affairs. personnel do not become part of the Fort Meigs is recognized by the Na- THE CLINICAL SOCIAL WORKERS’ RECOGNITION National Crime Information Center tional Park Service as ‘‘the zenith of ACT OF 1997 database. This bill will ensure that the British advance in the west as well Mr. INOUYE. Mr. President, I rise they do. as the maximum effort by Native today to introduce the Clinical Social forces under the Shawnee, Tecumseh, Workers’ Recognition Act of 1997 to By Mr. DEWINE: during the War of 1812.’’ correct an outstanding problem in the S. 173. A bill to expedite State re- Fort Miamis, which was attacked Federal Employees Compensation Act. views of criminal records of applicants twice without success by British This bill will also provide clinical so- for private security officer employ- troops, led by General Henry Proctor, cial workers the recognition they de- ment, and for other purposes; to the in the spring of 1813, is listed on the serve as independent providers of qual- Committee on the Judiciary. National Register of Historic Places. ity mental health care services. January 21, 1997 CONGRESSIONAL RECORD — SENATE S551 Clinical social workers are author- S. 176. A bill for the relief of Susan creased the supervision of children in ized to independently diagnose and Rebola Cardenas; to the Committee on the foster care system. And it gave fi- treat mental illnesses through public the Judiciary. nancial support to people to encourage and private health insurance plans PRIVATE RELIEF LEGISLATION them to adopt children with special across the Nation. However, title V, Mr. INOUYE. Mr. President, I ask needs. United States Code, does not permit unanimous consent that the text of the But while the law has done a great the use of mental health evaluations bill be printed in the RECORD. deal of good, many experts are coming conducted by clinical social workers There being no objection, the bill was to believe that this law has actually for use as evidence in determining ordered to be printed in the RECORD, as had some bad unintended con- workers’ compensation claims brought follows: sequences. about by Federal employees. The bill I S. 176 Under the 1980 Act, for a state to be am introducing corrects this problem. eligible for Federal matching funds for Be it enacted by the Senate and House of Rep- All 50 States, the District of Colum- foster care expenditures, the state bia, Puerto Rico, and the Virgin Is- resentatives of the United States of America in Congress assembled, must have a plan for the provision of lands legally regulate social workers child welfare services approved by the through licensure or certification. SECTION 1. PERMANENT RESIDENCE. Notwithstanding any other provision of Secretary of HHS and this State plan Thirty-one States and the District of law, for purposes of the Immigration and Na- must provide, and I quote: Columbia have enacted laws that man- tionality Act (8 U.S.C. 1101 et seq.), Susan that, in each case, reasonable efforts will be date reimbursement for clinical social Rebola Cardenas shall be held and considered made (A) prior to the placement of a child in workers by insurance plans that offer to have been lawfully admitted to the United foster care, to prevent or eliminate the need mental health care coverage. All Fed- States for permanent residence as of the date for removal of the child from his home, and eral insurance programs that authorize of the enactment of this Act upon payment (B) to make it possible for the child to re- the provision of mental health care of the required visa fee. turn to his home. services, including Medicare, the Fed- SEC. 2. REDUCTION OF NUMBER OF AVAILABLE In other words, Mr. President, no eral Employee Health Benefits Pro- VISAS. matter what the particular cir- gram [FEHBP], and the Civilian Health Upon the granting of permanent residence to Susan Rebola Cardenas as provided in this cumstances of a household may be the and Medical Program of the Uniformed Act, the Secretary of State shall instruct the state must make reasonable efforts to Services [CHAMPUS] recognize the proper officer to reduce by one number dur- keep it together, and to put it back to- ability of clinical social workers to ing the current fiscal year the total number gether if it falls apart. provide mental health services. of immigrant visas available to natives of What constitutes reasonable efforts? It is a sad irony that Federal employ- the country of the alien’s birth under section How far does the State have to go? ees may select a clinical social worker 203(a) of the Immigration and Nationality This has not been defined by Con- through their health plans to provide Act (8 U.S.C. 1153(a)). gress. Nor has it been defined by HHS. mental health services but may not go By Mr. INOUYE: This failure to define what con- to this professional for a workers’ com- stitutes ‘‘reasonable efforts’’ has had a pensation evaluation. Studies show S. 177. A bill to provide for a special application of section 1034 of the Inter- very important—and very damaging— that as much as 65 percent of all men- practical result. There is strong evi- tal health services are provided by nal Revenue Code of 1986; to the Com- mittee on Finance. dence to suggest that in the absence of clinical social workers and clinical so- a definition, reasonable efforts have be- cial workers are often the only provid- SPECIAL APPLICATION LEGISLATION come in some cases extraordinary ef- ers of mental health service in rural Mr. INOUYE. Mr. President, I ask forts. Efforts to keep families together areas of the country. The failure to unanimous consent that the text of the at all costs. recognize the validity of evaluations bill be printed in the RECORD. Mr. President, during the past year, I provided by clinical social workers un- There being no objection, the bill was have traveled throughout the state of necessarily limits the choice of Federal ordered to be printed in the RECORD, as Ohio, talking to social work profes- employees in selecting a provider to follows: sionals. In these discussions I have conduct the mental health evaluation S. 177 found that there is great disparity in and may well impose an undue burden Be it enacted by the Senate and House of Rep- how the law is being interpreted by for Federal employees in certain areas resentatives of the United States of America in judges and social workers. where clinical social workers are the Congress assembled, That, in the case of Rita Let me give you an example. I posed Bennington— only available providers for mental this hypothetical to representatives of health care. This legislation will cor- (1) who purchased her new principal resi- dence (within the meaning of section 1034 of children’s services in both rural and rect such an inequity. urban counties. Mr. President, I ask unanimous con- the Internal Revenue Code of 1986) in Janu- Mary is a 28-year-old crack-addicted sent that the text of this bill be printed ary 1992, and (2) who was unable to meet the require- mother who has seven children. Steve, in the RECORD. ments of such section with respect to the There being no objection, the bill was the 29-year-old father of the children, sale of an old principal residence until May is an abusive alcoholic, and all seven of ordered to be printed in the RECORD, as 1994, because of unexpected delays caused by the children have been taken away— follows: Hurricane Iniki, the Secretary of the Treas- S. 175 ury, in the administration of section 1034 of permanently—by the county. Now, Mary gives birth to an eighth Be it enacted by the Senate and House of Rep- the Internal Revenue Code of 1986, shall resentatives of the United States of America in apply subsection (a) of such section by sub- child, little Peggy. The newborn Peggy Congress assembled, stituting ‘‘2.5 years’’ for ‘‘2 years’’ each place tests positive for crack. Therefore, it is SECTION 1. SHORT TITLE. it appears. obvious that her mother is still ad- This Act may be cited as the ‘‘Clinical So- dicted to crack. Steve, the father, is cial Workers’ Recognition Act of 1997’’. By Mr. DEWINE: still an alcoholic. SEC. 2. EXAMINATIONS BY CLINICAL SOCIAL S. 178. A bill to amend the Social Se- Pretend for a moment that you work WORKERS FOR FEDERAL WORKER curity Act to clarify that the reason- for the county children’s services de- COMPENSATION CLAIMS. able efforts requirement includes con- Section 8101 of title 5, United States Code, partment. Does the law allow you to is amended— sideration of the health and safety of get the new baby out of the household? (1) in paragraph (2) by striking ‘‘and osteo- the child; to the Committee on Fi- And if you do, should you file for per- pathic practitioners’’ and inserting ‘‘osteo- nance. manent custody so that the baby can pathic practitioners, and clinical social FOSTER CARE LEGISLATION be adopted? workers’’; and Mr. DEWINE. Mr. President, in 1980, The answer will surprise you. In fact, (2) in paragraph (3) by striking ‘‘and osteo- Congress passed the Adoption Assist- I was surprised at the response I got pathic practitioners’’ and inserting ‘‘osteo- pathic practitioners, and clinical social ance and Child Welfare Act, known as when I asked a number of Ohio social workers’’. CWA. The 1980 Act has done a great work professionals that very same deal of good. It increased the resources question. The answer varied from coun- By Mr. INOUYE: available to struggling families. It in- ty to county, but I heard too much S552 CONGRESSIONAL RECORD — SENATE January 21, 1997

‘‘no’’ in the answers I got. Some offi- ASHCROFT, Mr. SESSIONS, Mr. rates of our society, keep the stock cials said they could apply for emer- D’AMATO, Mr. HELMS, Mr. market going, protect social security, gency custody of the baby and take her LUGAR, Mr. CHAFEE, Mr. Medicaid, Medicare, veterans pensions away on a temporary basis, but they MCCAIN, Mr. JEFFORDS, Mr. and other matters, by having a strong would have to make a continued effort WARNER, Mr. COVERDELL, Mr. fiscal economy through the balanced to send the baby back to her mother! COCHRAN, Mrs. HUTCHISON, Mr. budget amendment. Other social workers said that if they MACK, Mr. GRAMM, Ms. SNOWE, We are very concerned. This is a went to court to get custody of the Mr. ALLARD, Mr. BROWNBACK, major, major battle this year. We have baby, they probably wouldn’t be able to Ms. COLLINS, Mr. ENZI, Mr. 62 cosponsors—all 55 Republicans and 7 get even temporary custody of her. In HAGEL, Mr. HUTCHINSON, Mr. courageous Democrats so far. We have one county, I was told it would be two ROBERTS, Mr. GORDON H. SMITH, another six Democrats who have prom- years before the baby could be made Mr. BENNETT, Mr. BOND, Mr. ised their people at home that they available for adoption. Another county BURNS, Mr. CAMPBELL, Mr. would vote for the balanced budget said it would be five years. COATS, Mr. FAIRCLOTH, Mr. amendment. Everybody knows this One social worker—just one, out of FRIST, Mr. GORTON, Mr. GRAMS, game. Everybody knows there will be all the ones I asked—told me that her Mr. GREGG, Mr. INHOFE, Mr. some killer amendments trying to de- department would move immediately KEMPTHORNE, Mr. MCCONNELL, feat this amendment. In the end, every- for permanent custody of the baby. But Mr. MURKOWSKI, Mr. SANTORUM, body knows what the amendment is. It she said that their success would still Mr. SHELBY, Mr. SMITH, and Mr. is precisely the same as that found in depend on the judge assigned to the THOMAS): the House and that which will be case. S.J. Res. 1. A joint resolution propos- brought up in the House. If we are ever Should our Federal law really push ing an amendment to the Constitution going to get this fiscal house in order, the envelope, so that extraordinary ef- of the United States to require a bal- this is the way to do it. It is only the forts are made to keep that family to- anced budget; to the Committee on the first step. gether—efforts that any of us would Judiciary. Even if both Houses of Congress do not consider reasonable? THE CONSTITUTIONAL BALANCED BUDGET ACT pass the balanced budget amendment It is clear after 17 years of experience Mr. HATCH. Mr. President, let me by the requisite two-thirds vote, the with this law that there is a great deal just say I compliment my colleagues amendment still has to be submitted to of confusion as to how the act applies. for the excellent job they have done in the States, and three-quarters of them, My legislation would clarify, once coming up with the first 10 bills of this or 38 States, have to ratify the amend- and for all, the intent of Congress in session. I think they are bills that the ment. It is a very, very difficult proc- the 1980 Act. My legislation would American people have to be very inter- ess at best. amend that language in the following ested in. There is no question that each I just believe this is the year to do it. way: ‘‘In determining reasonable ef- and every one is essential for the fu- I hope that everybody will live up to forts, the best interests of the child, in- ture of our country. I am very appre- the commitments they have made to cluding the child’s health and safety, ciative that so many colleagues are their constituents at home. If they do, shall be of primary concern.’’ willing to cosponsor and to push these we will have set this country on a fis- The 1980 Act was a good bill. There particular bills. cal order path that will be very bene- are some families that need a little Having said that, the No. 1 issue on ficial for all of our children and grand- help if they are going to stay together, our agenda is, as it has always been for children and future generations. and it’s right for us to help them. Republicans and I think some very cou- Mr. President. I rise to speak on the That’s what the Child Welfare Act did. rageous Democrats as well, S.J. Res. 1, Balanced Budget Amendment, which I But by now it should be equally clear the balanced budget constitutional have just introduced. Last Congress, that the framers of the 1980 Act did not amendment. when the Amendment fell a mere one intend for extraordinary efforts to be Mr. President, this is an amendment vote short of passage here in the Sen- made to reunite children with their that literally could change the future ate, I vowed that we would be back to abusers. As Peter Digre, the director of of our country for the better. We are try to pass this amendment and put the Los Angeles County Department of now approaching a $6 trillion deficit. It America back on the course of fiscal Children and Family Services, testified has been largely accumulated over the responsibility. We are back again and I at a hearing last year before the House last 15 or 20 years. We have had a pe- have brought sixty-one other Senators Ways and Means Subcommittee on riod of almost 60 years of unbalanced with me. Every one of the 55 Repub- Human Resources: ‘‘[W]e cannot ignore budgets, except on very rare occasions. licans in the Senate are original co- the fact that at least 22% of the time The Senate and the Hose seem to be sponsors, and we are joined by seven infants who are reunified with their institutionally incapable of reaching strong Democrats. The Balanced Budg- families are subjected to new episodes balanced budget appropriations and et Amendment has sixty two original of abuse, neglect, or endangerment.’’ budget acts. And I might add, the cosponsors. If only five other Senators That was not the intention of Con- President is incapable, as well. If you join us we will have the votes America gress in the 1980 law. But too often, look at the last budgets that the Presi- needs to see the Senate pass the Bal- that law is being misinterpreted in a dent has submitted, even the one that anced Budget Amendment. If everyone way that is trapping these children in he called the balanced budget, it was votes as they said they would before abusive households. heavily loaded in the rear end of the the November election and keeps their I believe we should leave no doubt budget, in the last 2 years, knowing promise to their constituents, the Sen- about the will of the American people that there is no way in the world that ate will pass the balanced budget on this issue affecting the lives of when we ultimately reach 2001 and 2002 amendment. America’s children. The legislation I that we can actually balance the budg- The Balanced Budget Amendment am proposing today would put the chil- et. will again be S.J. Res. 1. It is right that dren first. It has been a phony game. It is time it should be, because it is the single to end that game. It is time to literally most important piece of legislation By Mr. HATCH (for himself, Mr. strike out for the people of this coun- that will be voted on this Congress. It LOTT, Mr. THURMOND, Mr. try and for our children and grand- is that important because if enacted it CRAIG, Mr. NICKLES, Mr. DOMEN- children of future generations by get- will change forever the way business is ICI, Mr. STEVENS, Mr. ROTH, Mr. ting our fiscal house in order. The only done in Washington. BRYAN, Mr. KOHL, Mr. GRASS- way that many of the now 62 cospon- The idea of a Balanced Budget LEY, Mr. GRAHAM, Mr. SPECTER, sors, and another 6 who have said to Amendment is not new. Unfortunately, Mr. BAUCUS, Mr. THOMPSON, Mr. their constituents that they will vote neither is the problem it is designed to BREAUX, Mr. KYL, Ms. for this amendment, it is the only way solve. About thirty years ago, we got MOSELEY-BRAUN, Mr. DEWINE, we can bring about a fiscal sanity that off track and ran a deficit. It was not Mr. ROBB, Mr. ABRAHAM, Mr. will reduce taxes, reduce the interest the first deficit we had ever run, and it January 21, 1997 CONGRESSIONAL RECORD — SENATE S553 was only a small one, nothing to get ment and balancing our federal budget view. If my colleagues are concerned too worried about. But we never got threatens the retirement security of with the financial security of current back on track: we ran another deficit older Americans. What they ignore is and future older Americans, they will the next year, and again the next year that Congress simply never will allow refrain from the wedge politics of Med- after that, and never got back into bal- social security or Medicare checks to icare and social security cuts and, in- ance. In fact, we have run a deficit stop. It simply will not happen. Fur- stead, support the balanced budget. every year since 1969. And that budget thermore, they fail to appreciate—or The fact is that every political incen- in 1969 was the only balanced budget fail to mention—the positive effect the tive in this town is to spend now and since 1960. balanced budget amendment would let the next guy worry about paying Today, the national debt is estimated have on the long term stability of so- the bill. Fiscal accountability is the to be $5.311 trillion. Last Friday, when cial security as well as the retirement enemy of big government. There is we began hearings on S.J. Res 1, the investments for most every American. only one way to break Washington’s debt was at less than $5.310 trillion. In To listen to opponents of the bal- addiction to spending other people’s other words, the debt has already in- anced budget amendment, one would money and borrowing from our chil- creased by more than $1 billion since think that Americans are counting ex- dren to do so: the pressure of a con- the Senate began consideration of the clusively on social security for their stitutional amendment for a balanced measure last week. Portioned out economic security during retirement budget. equally, every man, woman, and child when in fact, more and more Ameri- I look forward to the debate on this in America owes about $20,000. If the cans are relying on Wall Street. A re- important measure, and I look forward debt were piled into a single stack of cent PBS Frontline documentary, to more fully explaining why I think pennies, that pile could reach past the ‘‘Betting on the Market,’’ explains how that only a structural change in our Moon, past Mars, and all the way to Americans are increasingly entrusting basic charter can restore the fiscal re- Jupiter! It is enough money to buy their long-term retirement savings in sponsibility we seem to have lost over every single automobile ever sold in Wall Street. There are 34 million the three or so decades. the United States AND every plane households that have invested in the Mr. President, I ask unanimous con- ticket ever sold for travel in the United stock market in some form. As finan- sent that the text of the Joint Resolu- States. cial expert and the best-selling author tion be printed in the RECORD. And, Mr. President, the debt contin- of ‘‘Smart Money,’’ Jim Cramer, points There being no objection, the Joint ues to grow. If you spent a dollar a sec- out, if you have a pension, it’s likely Resolution was ordered to be printed in ond, it would take you over 150,000 that it’s invested in stocks. If you have the RECORD, as follows: years to spend as much as the national a 401K plan, it’s probably invested in S.J. RES.1 debt. But we have managed to accumu- stocks. Worth magazine’s Ken Kurson Resolved by the Senate and House of Rep- late our national debt much faster. points out that in 1996, 34 percent of resentatives of the United States of America in This year, we will increase the debt by households headed by someone under 25 Congress assembled, (two-thirds of each House about $4,500 every second. At this rate had some sort of mutual fund. Stock concurring therein), That the following article is proposed as an amendment to the Con- it won’t be long before we’re all going mutual funds represent the biggest stitution, which shall be valid to all intents to have to learn what comes after tril- chunk of young investor’s money. At and purposes as part of the Constitution lion. The reality is that the bridge we the same time Americans carry record when ratified by the legislatures of three- are building to the 21st century is credit card debt. As financial historian fourths of the several States within seven awash in debt. Peter Bernstein points out, the money years after the date of its submission to the I read recently that this year the Eu- that people used to put in the stock States for ratification: ropean Union will be deciding which market was money that they hoped to ‘‘ARTICLE — nations quality to join the new single get rich on. Today, we are investing ‘‘SECTION 1. Total outlays for any fiscal currency in the first tier. In order to our blood money—our savings; our nest year shall not exceed total receipts for that join, nations must satisfy several cri- eggs. America’s affection for the mar- fiscal year, unless three-fifths of the whole teria. One of those criteria is that the kets is demonstrated by Paine number of each House of Congress shall pro- vide by law for a specific excess of outlays nation’s total debt must be no greater Webber’s recent announcement that it over receipts by a rollcall vote. than sixty percent of that nation’s achieved a fifty percent increase in ‘‘SECTION 2. The limit on the debt of the GDP. Well, Mr. President, our debt is earnings last quarter. This is all well United States held by the public shall not be about seventy percent of our GDP. and good while the Dow Jones Indus- increased, unless three-fifths of the whole Which means if we tried to join the Eu- trial keeps setting new highs—it closed number of each House shall provide by law ropean Union’s new currency now, the yesterday at 6,843. NASDAQ also for such an increase by a rollcall vote. ‘‘SECTION 3. Prior to each fiscal year, the United States would not qualify. By reached record levels benefiting from a President shall transmit to the Congress a international standards, we are too far boost in technology stocks. proposed budget for the United States Gov- in debt to be trusted financially. This With more and more Americans rely- ernment for that fiscal year, in which total nation faces a future with higher taxes, ing on mutual funds and stocks— outlays do not exceed total receipts. lower wages, and dramatically reduced whether they know it or not—for their ‘‘SECTION 4. No bill to increase revenue world influence if we do not get our retirement, what happens to our retire- shall become law unless approved by a ma- spending habits under control. As well, ment security if we experience an eco- jority of the hole number of each House by a nomic downturn precipitated by our rollcall vote. failure to get our national debt under ‘‘SECTION 5. The Congress may waive the control could prove catastrophic to failure to address our nation’s growing provisions of this article for any fiscal year current and future older Americans. debt? What happens if Congress once in which a declaration of war is in effect. Over the next few weeks, opponents again demonstrates an unwillingness The provisions of this article may be wived of the balanced budget amendment are to pass the balanced budget amend- for any fiscal year in which the Untied going to try to change the subject to a ment and take this necessary step to- States is engaged in military conflict which discussion of social security and Medi- wards balancing the budget? With the causes an imminent and serious military care. For example, Treasury Secretary fortunes of Wall Street effecting the threat to national security and is so declared by a joint resolution, adopted by a majority Rubin testified before the Judiciary quality of life for more and more future of the whole number of each House, which Committee on Friday in opposition to retirees, Congress needs to concern it- becomes law. the balanced budget amendment and self with how our growing debt and our ‘‘SECTION 6. The Congress shall enforce and suggested—no less than eight times willingness to make tough choices will implement this article by appropriate legis- during a six page statement—that pas- affect Wall Street. Nothing the Con- lation, which may rely on estimates of out- sage of the balanced budget amend- gress can do would have a more posi- lays and receipts. ment would result in social security or tive effect on Wall Street and, in turn, ‘‘SECTION 7. Total receipts shall include all receipts of the United States Government ex- Medicare checks being stopped. Oppo- the stability of our retirement savings cept those derived from borrowing. Total nents of the balanced budget amend- than passing the balanced budget outlays shall include all outlays of the Unit- ment want the public to believe that amendment and balancing the budget. ed States Government except for those for passing the balanced budget amend- More than 250 economists share this repayment of debt principal. S554 CONGRESSIONAL RECORD — SENATE January 21, 1997 ‘‘SECTION 8. This article shall take effect that crowd out all our other priorities. about their courageous stand on this beginning with fiscal year 2002 or with the Let us remember, the debt is the threat issue. second fiscal year beginning after its ratifi- to Social Security and to our seniors. Mr. ABRAHAM. Mr. President, 2 cation, whichever is later.’’. When the Senator from Utah and the years ago, the Senate failed by one Mr. HATCH. I am delighted to yield Senator from Idaho began to work to vote to support a constitutional to my colleague and friend from Idaho convince the Congress and the Amer- amendment requiring a balanced budg- who I think has played not only a sin- ican people that a constitutional et. At the time, opponents told the gularly important role in the Senate, amendment to require a balanced budg- Senate that balancing the budget but long has played a very important et was necessary in the early 1980’s, if didn’t require amending the Constitu- role when he was in the House of Rep- it had passed at that time, if it had be- tion. All we needed, they told us, was resentatives, as well, and has been a come part of the Constitution, the Con- to make the tough choices and cast the great partner in fighting this battle. I cord Coalition and others have esti- hard votes. Two budgets, hundreds of yield to the distinguished Senator from mated that the average income per tough votes, and one Government shut- Idaho. American family today would be $15,000 down later, the budget is still in defi- Mr. CRAIG. Mr. President, let me more than it currently is. I think, from cit, and the case for a constitutional thank the senior Senator from Utah for that kind of fact, you begin to recog- balanced budget amendment is strong- yielding but for a moment, to add to nize the power and the importance of er than ever. the comments that he has made as we what we offer up today. You begin to That’s not to say we haven’t made have introduced S.J. Res. 1, or Senate recognize the very critical nature of progress in the past 2 years. We have. Joint Resolution 1, the balanced budg- what a $5.3 trillion debt really is, and Since the 1994 elections, Congress has et constitutional amendment. The Sen- how it is growing by $800 million a day worked hard to hold the line on discre- ator from Utah has outlined, as chair- and more than $9,000 a second. If this tionary spending while just last fall we man of the Judiciary Committee, what Senate is to stand in the shadow of to- passed historic reforms to the 60-year- we bring to the floor and the very criti- day’s work a decade from now and say old welfare state. Perhaps just as im- cal nature of this debate. For a mo- that we did for our country what we portantly, we have witnessed a dra- ment, let me humanize it, if I can, as thought was necessary to assure the matic shift in the debate itself. Two to what it means to you, to me, to our American dream to our children, to be years ago, President Clinton submitted children, and to the future of this able to say to Americans that you will a budget that never reached balance. country. have the same unique opportunity that Today all sides have agreed—at least in Without a fiscally responsible Gov- your forebears had, then we must make principle—to the goal of balancing the ernment that begins to rein in the sure that we have produced, and locked budget by the year 2002. growth of the Federal debt, already at in the requirement of, a Government That’s the good news. 5.3 trillion dollars, and the ongoing that is fiscally responsible. The bad news is that while we have year-after-year multibillion-dollar def- What we offer today and what we will all seemingly agreed on the goal of bal- icit that we have seen now for decades, be debating in the coming weeks is a ancing the budget, we are miles apart the financial future of our country and balanced budget amendment to our on the details. It’s one thing to say you its citizens is in doubt. There is no Constitution which assures that this support a balanced budget—it’s quite question today that the Congress and body and the other, as well as the another to make the tough decisions our President mouth the words of a President and his budget office, must necessary to make it happen. balanced budget. We even work toward operate in a fiscally sound and respon- Mr. President, that’s where Senator that by the very actions undertaken in sible way. It is what the American peo- Hatch’s amendment to the Constitu- writing the annual budgets. ple say is their No. 1 issue. It must be tion comes in. As an original cosponsor To guarantee it, to assure that when our No. 1 issue. of this amendment, I believe it will it gets to the time of making the tough I am pleased today to join as a co- force the hand of an unwilling Congress votes to truly create a balanced budg- sponsor in this critical amendment and to set its fiscal house in order. Where et, can we do it? Will we have the will look forward to the debate in the com- Congress has failed, I am confident the of the people behind us and the support ing weeks as we say to the American Constitution will succeed. How would to accomplish that? I think that, ab- people, ‘‘We have heard your message it work? sent a balanced budget amendment, the and we will fight to be fiscally respon- Section 1 of the amendment requires strength will not be there. I say that sible in the building and the maintain- that total outlays of the Government having watched this institution for ing of a federally balanced budget.’’ not exceed receipts unless three-fifths many decades, and recognize that in I yield back to the Senator from of the whole number of both Houses the end when it really comes to the Utah. waives the requirement. Once this business of sorting out Government, Mr. HATCH. I thank my colleague amendment is passed, a three-fifths the decisions become very tough. from Idaho for his excellent remarks vote of both the House and the Senate If we pass a balanced budget amend- and for his ardent fight for this amend- will be necessary in order to increase ment to our Constitution this year, and ment through the years. the deficit. if the States ratify it within the next 2 Mr. President, there are 13 Demo- Section 2 prohibits Congress from years, we will offer to the young people crats who have promised to vote for raising the debt ceiling unless three- born today a unique opportunity. What this amendment. If we add all 55 Re- fifths of the whole number of both is that opportunity? That they will pay publicans and the 13 heroic Democrats Houses of Congress waives the require- in their lifetime $180,000 less in taxes, who have agreed to vote for this ment. compared to what they would pay amendment, that will give us 68 votes, And, finally, section 4 requires that under the trends of the status quo, be- 1 more than we need. We know the there be no revenue increases unless cause of the rate at which our Govern- President is going to put on a full- approved by a majority of the whole ment currently grows. court press. We also know that the mi- number of each House in Congress. If We will offer to the average Amer- nority leader and others will do the this proposal becomes the 28th amend- ican family an opportunity unprece- same. It is important that these people ment to the Constitution, then in order dented, and that is a better standard of live up to the commitments they made to increase taxes, you would need first, living and actually more take-home to the constituents at home, and we a recorded vote and, second, the sup- pay and more dollars to spend, on an are counting on them to do it. I believe port of at least 51 U.S. Senators and 218 annualized basis, of more than $1,500 a they will. Members of the House. year, in addition to their current in- Thus far, only seven have cospon- Quite simply, Mr. President, the bal- come. We will offer our senior citizens sored, but I believe the others will be anced budget amendment raises the the economic security we have prom- on board when the debate comes to the procedural bar necessary for Congress ised them, by protecting Social Secu- floor. I hope, with all my heart, they to incur debt and raise taxes. Given rity and Medicare from the ravages of realize how important this is. I hope Congress’ historic predilection toward a massive debt and interest payments they also realize how very deeply I feel doing both, I believe this amendment is January 21, 1997 CONGRESSIONAL RECORD — SENATE S555 possibly the most important measure economy, our senior citizens, and fu- Amendment. I am optimistic that this we will consider in the 105th Congress. ture generations is not an amendment year we can pass this legislation and Having focused on what the balanced to the Constitution restricting Con- send the measure on to the states for budget amendment does, it is just as gress’ ability to borrow money or raise their deliberation. It is time to allow important to focus on what it doesn’t taxes, but rather the endless stream of the American people and the State leg- do. The first thing it doesn’t do is en- deficits and huge mountains of debt islatures the opportunity to debate the danger the Social Security System. So- that a previous, unrestricted Con- merits of the Balanced Budget Amend- cial Security currently operates with a gresses have imposed upon this and fu- ment, and I hope that the Congress will surplus, and some Members have ar- ture generations. It is unfair, irrespon- see fit to entrust this measure to those gued that sound fiscal policy demands sible, and immoral to pass this burden who must ratify or reject it. that we should exclude that surplus on to our children, and I applaud you from the amendment and our deficit and the Republican leadership for mak- By Mr. HOLLINGS (for himself, calculations. ing passage of Senate Joint Resolution Mr. SPECTER, Mr. DASCHLE, Mr. I am of the opinion that this argu- 1 the No. 1 priority of the 105th Con- DORGAN, Mr. SHELBY, Mr. REID, ment is more of a diversion than any- gress. Mr. FORD, and Mr. REED): thing else. It has been raised to confuse Mr. CAMPBELL. Mr. President, for S.J. Res. 2. A joint resolution propos- the issue and provide some Members many years I have spoken out in favor ing an amendment to the Constitution with a smokescreen to cover their op- of a Balanced Budget Amendment to of the United States relating to con- position to a measure that is supported the Constitution, and have supported tributions and expenditures intended by an overwhelming majority of Amer- and voted for this measure each time I to affect elections; to the Committee icans. Balancing the budget will have had the opportunity to do so. on the Judiciary. strengthen, not weaken, the Social Se- Now, once again, I join many of my THE CAMPAIGN FINANCE REFORM curity System. colleagues as an original cosponsor of CONSTITUTIONAL AMENDMENT The second thing this amendment the Balanced Budget Amendment Mr. HOLLINGS. Mr. President, I rise doesn’t do is endanger the health of the which is being introduced today, and I today, along with my collegue and co- national economy. Some—including applaud Senator ORRIN HATCH, Major- sponsor Senator SPECTER, to introduce the President—argue the balanced ity Leader TRENT LOTT, and the leader- for the sixth time a constitutional budget amendment will prevent Con- ship for making this particular item a amendment to limit campaign spend- gress from responding to shifting eco- top priority for the 105th Congress. ing. Although I commend the efforts of It would be so easy to give up on the nomic recessions and booms. the Minority Leader and others seek- Mr. President, the amendment being idea of passing the Balanced Budget ing to statutorily reform our campaign discussed today does not prohibit run- Amendment. For a number of years, finance laws, I am convinced the only ning a deficit or borrowing money. It despite the hard work of many individ- way to solve the chronic problems sur- uals, this measure has failed to pass requires a three-fifths vote in order to rounding campaign financing is to re- through Congress and move on to the do those things. Under the cir- verse the Supreme Court’s flawed deci- states for ratification where it belongs. cumstances generally described in sup- sion in Buckley versus Valeo by adopt- However, I believe passage of this port of an economic exception, I think ing a constitutional amendment grant- Amendment is in the best interest of it is incumbent upon the exceptions ad- ing Congress the right to limit cam- the future of this country. It will force vocates to explain why they could not paign spending. us to make the tough choices that need get the necessary votes. Furthermore, I We all know the score—we’re ham- to be made to balance the budget and am interested to hear why the higher strung by that decision and the ever in- eventually eliminate the staggering standards established by the balanced creasing cost of a competitive cam- debt. budget amendment would be more re- There are those that believe there is paign. With the total cost for congres- strictive than the prospect of contin- no need for the Balanced Budget sional elections, just general elections, ued annual deficits, higher debt and Amendment, that Congress can contin- skyrocketing from $403 million in 1990 debt payments, and less real discre- ually balance the budget without being to over $626 million in 1996, the need for tionary spending under Congress’ con- mandated by the Constitution to do so. limits on campaign expenditures is trol. However, I have been a member of this more urgent than ever. For nearly a Finally, this amendment does not institution for ten years now, and I quarter of a century, Congress has transfer undue power to the judiciary. have yet to see Congress and the ad- tried to tackle runaway campaign One concern raised about the balanced ministration bite the bullet, balance spending with bills aimed at getting budget amendment is the role the the budget, and tackle our enormous around the disjointed Buckley deci- courts will play in enforcing its provi- debt. If we do not address this impor- sion. Again and again, Congress has sions. In the past, some have argued tant issue, the amount of the federal failed. that the courts will involve themselves budget devoted toward paying off the Let us resolve not to repeat the mis- in the Federal budget process in order interest on the debt and the entitle- takes of past campaign finance reform to enforce the balanced budget amend- ment programs will increase to the efforts, which have become bogged ment. As someone with deep concerns point that there will be barely any down in partisanship as Democrats and about judicial activism, I have in- money left for those programs which Republicans each tried to gore the oth- spected this issue closely, and I am deserve and require federal funding er’s sacred cows. During the 103d Con- confident that adoption of this amend- such as education, law enforcement, gress there was a sign that we could ment will not authorize courts to in- national security, or even our national move beyond this partisan bickering, sert themselves into the budget proc- parks and monuments. I think we owe when the Senate in a bipartisan fash- ess. more to the American people and to fu- ion expressed its support for a con- As I mentioned previously, the bal- ture generations. stitutional amendment to limit cam- anced budget amendment establishes For those of us who remain commit- paign expenditures. In May 1993, a non- new procedures that encourage Con- ted to this effort, this piece of legisla- binding sense of the Senate resolution gress to move toward and adopt a bal- tion is a vital tool for tackling the dif- was agreed to which advocated the anced budget. It does not, however, cre- ficult task of balancing the budget. I adoption of a constitutional amend- ate a ‘‘right’’ to a balanced budget. It would like to see an increase not only ment empowering Congress and States does not disturb the powers of Congress in our standard of living and national to limit campaign expenditures. under Article I of the Constitution, it savings rate but also in the amount of Now it is time to take the next step. does not confer those powers on the money the Federal Government de- We must strike the decisive blow courts, and it does not give to the votes to worthwhile and beneficial pro- against the anything-goes fundraising courts authority to interfere in those grams—programs which could suffer and spending tolerated by both politi- powers. due to our financial troubles. cal parties. Looking beyond the cur- Mr. President, in conclusion, let me Congress came within one vote last rent headlines regarding the source of say the greatest danger facing our session of passing the Balanced Budget these funds, the massive amount of S556 CONGRESSIONAL RECORD — SENATE January 21, 1997 money spent is astonishing and serves Justice Byron White points out, clear more than $724 million in 1994—almost only to cement the commonly held be- as a bell, in his dissent, both contribu- a 70 percent increase in 4 short years. I lief that our elections are nothing tion limits and spending limits are predict that when the final FEC re- more than auctions and that our politi- neutral as to the content of speech and ports are compiled for 1996, that figure cians are up for sale. It is time to put are not motivated by fear of the con- will go even higher. a limit on the amount of money slosh- sequences of the political speech in This obsession with money distracts ing around campaign war chests. It is general. us from the people’s business. It cor- time to adopt a constitutional amend- Mr. President, every Senator realizes rupts and degrades the entire political ment to limit campaign spending—a that television advertising is the name process. Fundraisers used to be ar- simple, straightforward, nonpartisan of the game in modern American poli- ranged so they didn’t conflict with the solution. tics. In warfare, if you control the air, Senate schedule; nowadays, the Senate As Prof. Gerald G. Ashdown has writ- you control the battlefield. In politics, schedule is regularly shifted to accom- ten in the New England Law Review, if you control the airwaves, you con- modate fundraisers. amending the Constitution to allow trol the tenor and focus of a campaign. I have run for statewide office 16 Congress to regulate campaign expend- Probably 80 percent of campaign times in South Carolina. You establish itures is ‘‘the most theoretically at- communications take place through a certain campaign routine, say, shak- tractive of the approaches-to-reform the medium of television. And most of ing hands at a mill shift in Greer, visit- since, from a broad free speech perspec- that TV airtime comes at a dear price. ing a big country store outside of tive, the decision in Buckley is mis- In South Carolina, you’re talking be- Belton, and so on. Over the years, they look for you and expect you to come guided and has worsened the campaign tween $1,000 and $2,000 for 30 seconds of around. But in recent years, those mill finance atmosphere.’’ Adds Professor primetime advertising. In New York visits and dropping by the country Ashdown: ‘‘If Congress could constitu- City, it’s anywhere from $30,000 to store have become a casualty of the tionally limit the campaign expendi- $40,000 for the same 30 seconds. system. There is very little time for tures of individuals, candidates, and The hard fact of life for a candidate is that if you’re not on TV, you’re not them. We’re out chasing dollars. committees, along with contributions, During my 1992 reelection campaign, truly in the race. Wealthy challengers most of the troubles * * * would be I found myself raising money to get on as well as incumbents flushed with eliminated.’’ TV to raise money to get on TV to Right to the point, back in 1974, Con- money go directly to the TV studio. raise money to get on TV. It’s a vicious Those without a fundraising advantage gress responded to the public’s outrage cycle. over the Watergate scandals by pass- or personal wealth are sidetracked to I remember Senator Richard Russell ing, on a bipartisan basis, a com- the time-consuming pursuit of cash. saying: ‘‘They give you a 6-year term prehensive campaign finance law. The The Buckley decision created a dou- in this U.S. Senate: 2 years to be a centerpiece of this reform was a limita- ble bind. It upheld restrictions on cam- statesman, the next 2 years to be a pol- tion on campaign expenditures. Con- paign contributions, but struck down itician, and the last 2 years to be a gress recognized that spending limits restrictions on how much candidates demagogue.’’ Regrettably, we are no were the only rational alternative to a with deep pockets can spend. The Court longer afforded even 2 years as states- system that essentially awarded office ignored the practical reality that if my men. We proceed straight to politics to the highest bidder or wealthiest can- opponent has only $50,000 to spend in a and demagoguery right after the elec- didate. race and I have $1 million, then I can tion because of the imperatives of rais- Unfortunately, the Supreme Court effectively deprive him of his speech. ing money. overturned these spending limits in its By failing to respond to my advertis- My proposed constitutional amend- infamous Buckley versus Valeo deci- ing, my cash-poor opponent will appear ment would change all this. It would sion of 1976. The Court mistakenly unwilling to speak up in his own de- empower Congress to impose reason- equated a candidate’s right to spend fense. able spending limits on Federal cam- unlimited sums of money with his Justice Thurgood Marshall zeroed in paigns. For instance, we could impose a right to free speech. In the face of spir- on this disparity in his dissent to limit of, say, $800,000 per Senate can- ited dissents, the Court came to the Buckley. By striking down the limit on didate in a small State like South conclusion that limits on campaign what a candidate can spend, Justice Carolina—a far cry from the millions contributions but not spending Marshall said, ‘‘It would appear to fol- spent by my opponent and me in 1992. furthered ‘‘* * * the governmental in- low that the candidate with a substan- And bear in mind that direct expendi- terest in preventing corruption and the tial personal fortune at his disposal is tures account for only a portion of appearance of corruption’’ and that off to a significant head start.’’ total spending. For instance, my 1992 this interest ‘‘outweighs considerations Indeed, Justice Marshall went fur- opponent’s direct expenditures were of free speech.’’ ther: He argued that by upholding the supplemented by hundreds of thou- I have never been able to fathom why limitations on contributions but strik- sands of dollars in expenditures by that same test—the governmental in- ing down limits on overall spending, independent organizations and by the terest in preventing corruption and the the Court put an additional premium State and local Republican Party. appearance of corruption—does not on a candidate’s personal wealth. When you total up spending from all overwhelmingly justify limits on cam- Justice Marshall was dead right and sources, my challenger and I spent paign spending. The Court made a huge Ross Perot and Steve Forbes have roughly the same amount in 1992. mistake. The fact is, spending limits in proved it. Massive spending of their And incidentally, Mr. President, let’s Federal campaigns would act to restore personal fortunes immediately made be done with the canard that spending the free speech that has been eroded by them contenders. Our urgent task is to limits would be a boon to incumbents, the Buckley decision. right the injustice of Buckley versus who supposedly already have name rec- After all, as a practical reality, what Valeo by empowering Congress to place ognition and standing with the public Buckley says is: Yes, if you have a caps on Federal campaign spending. We and therefore begin with a built-in ad- fundraising advantage or personal are all painfully aware of the uncon- vantage over challengers. Nonsense. I wealth, then you have access to tele- trolled escalation of campaign spend- hardly need to remind my Senate col- vision, radio, and other media and you ing. The average cost of a winning Sen- leagues of the high rate of mortality in have freedom of speech. But if you do ate race was $1.2 million in 1980, rising upper chamber elections. And as to the not have a fundraising advantage or to $2.9 million in 1984, and skyrocket- alleged invulnerability of incumbents personal wealth, then you are denied ing to $3.1 million in 1986, $3.7 million in the House, I would simply note that access. Instead of freedom of speech, in 1988, and up to $4.3 in 1996. To raise well over 50 percent of the House mem- you have only the freedom to say noth- that kind of money, the average Sen- bership has been replaced since the 1990 ing. ator must raise over $13,800 a week, elections and just 3 weeks ago we swore So let us be done with this phony every week of his or her 6-year term. in 15 new Senators. charge that spending limits are some- Overall spending in congressional races I can tell you from experience that how an attack on freedom of speech. As increased from $446 million in 1990 to any advantages of incumbency are January 21, 1997 CONGRESSIONAL RECORD — SENATE S557 more than counterbalanced by the ob- amendments to the Constitution have concurring therein), That the following article vious disadvantages of incumbency, dealt with Federal election issues. In is proposed as an amendment to the Con- specifically the disadvantage of defend- elections, the process drives and shapes stitution of the United States, to be valid ing hundreds of controversial votes in the end result. Election laws can skew only if ratified by the legislatures of three- fourths of the several States within 7 years Congress. election results, whether you’re talk- after the date of final passage of this joint Moreover, Mr. President, I submit ing about a poll tax depriving minori- resolution: that once we have overall spending ties of their right to vote, or the ab- ‘‘ARTICLE— limits, it will matter little whether a sence of campaign spending limits giv- ‘‘SECTION 1. Congress shall have power to candidate gets money from industry ing an unfair advantage to wealthy set reasonable limits on the amount of con- groups, or from PAC’s, or from individ- candidates. These are profound issues tributions that may be accepted by, and the uals. It is still a reasonable amount which go to the heart of our democ- amount of expenditures that may be made any way you cut it. Spending will be racy, and it is entirely appropriate by, in support of, or in opposition to, a can- under control, and we will be able to that they be addressed through a con- didate for nomination for election to, or for account for every dollar going out. stitutional amendment. election to, Federal office. On the issue of PAC’s, Mr. President, And let’s not be distracted by the ar- ‘‘SECTION 2. A State shall have power to set reasonable limits on the amount of contribu- let me say that I have never believed gument that the amend-the-Constitu- tions that may be accepted by, and the that PAC’s per se are an evil in the tion approach will take too long. Take amount of expenditures that may be made current system. On the contrary, PAC’s too long? We have been dithering on by, in support of, or in opposition to, a can- are a very healthy instrumentality of this campaign finance issue since the didate for nomination for election to, or for politics. PAC’s have brought people early 1970’s, and we haven’t advanced election to, State or local office. into the political process: nurses, edu- the ball a single yard. All-the-while the ‘‘SECTION 3. Congress shall have power to cators, small business people, senior Supreme Court continues to strike implement and enforce this article by appro- priate legislation.’’. citizens, unionists, you name it. They down campaign limit after campaign permit people of modest means and limit. It has been a quarter of a cen- f limited individual influence to band to- tury, and no legislative solution has Mr. SPECTER. Mr. President, I have gether with others of mutual interest done the job. sought recognition today to join with so their message is heard and known. Except for the 27th amendment, the Senator HOLLINGS in introducing a For years we have encouraged these last five constitutional amendments joint resolution providing for an people to get involved, to participate. took an average of 17 months to be amendment to the United States Con- Yet now that they are participating, adopted. There is no reason why we stitution which would provide author- we turn around and say, ‘‘Oh, no; your cannot pass this joint resolution, sub- ity to the Congress to regulate Federal influence is corrupting, your money is mit it to the States for a vote, and rat- election spending and to the States to tainted’’. This is wrong. The evil to be ify the amendment in time for it to regulate spending in State and local corrected is not the abundance of par- govern the 1998 election. Once passed elections. ticipation but the superabundance of by the Congress, the Joint Resolution This joint resolution is very similar money. The culprit is runaway cam- goes directly to the States for ratifica- to S.J. Res. 48, which I introduced in paign spending. tion. Once ratified, it becomes the law the 104th Congress on January 26, 1996, To a distressing degree, elections are of the land, and it is a Supreme Court 3 days before the 20th anniversary of determined not in the political mar- challenge. the Supreme Court’s decision in Buck- ketplace but in the financial market- And, by the way, I reject the argu- ley versus Valeo. It is also very similar place. Our elections are supposed to be ment that if we were to pass and ratify to constitutional amendments which contests of ideas, but too often they de- this amendment, Democrats and Re- Senator HOLLINGS and I have proposed generate into megadollar derbies, publicans would be unable to hammer since 1989. paper chases through the board rooms out a mutually acceptable formula of Now, more than ever, the time has of corporations and special interests. campaign expenditure limits. A Demo- come for meaningful election law re- Mr. President, I repeat, campaign cratic Congress and Republican Presi- form—reform which necessitates over- spending must be brought under con- dent did exactly that in 1974, and we turning the Buckley decision. trol. The constitutional amendment can certainly do it again. The unprecedented spending levels Senator SPECTER and I have proposed Mr. President, this amendment will during 1996 Presidential and Congres- would permit Congress to impose fair, address the campaign finance mess di- sional campaigns should serve as the responsible, workable limits on Federal rectly, decisively, and with finality. impetus for approving this campaign expenditures and allow The Supreme Court has chosen to ig- consitutional amendment. Presidential States to do the same with regard to nore the overwhelming importance of candidates spent a total of $237 million State and local elections. media advertising in today’s cam- in the 1996 primary campaigns, of Such a reform would have four im- paigns. In the Buckley decision, it pre- which $56 million represented publicly portant impacts. First, it would end scribed a bogus if-you-have-the-money- funded matching payments. Public fi- the mindless pursuits of ever-fatter you-can-talk version of free speech. In nancing of the general election added campaign war chests. Second, it would its place, I urge the Congress to move $153 million to the total. One primary free candidates from their current ob- beyond these acrobatic attempts at candidate decided not to take Federal session with fundraising and allow legislating around the Buckley deci- matching funds and used $37 million of them to focus more on issues and ideas; sion. As we have all seen, no matter his own resources to fund a campaign once elected to office, we wouldn’t how sincere, these plans are doomed to in which he was not restricted from the have to spend 20 percent of our time fail. The solution rests in fixing the same state-by-state and overall limits raising money to keep our seats. Third, Buckley decision. It is my hope that as as other candidates. it would curb the influence of special the campaign financing debate unfolds, The 1996 Congressional campaign interests. And fourth, it would create a the Majority Leader will provide us cycle was similarly grim for all but tel- more level playing field for our Federal with an opportunity to vote on this evision station advertising managers campaigns—a competitive environment resolution—it is the only solution. and political consultants. There were where personal wealth does not give Mr. President, I ask unanimous con- record levels of spending including candidates an insurmountable advan- sent that the text of the bill be printed $220.8 million by Senate candidates and tage. in the RECORD. $405.6 million by House candidates. Finally, Mr. President, a word about There being no objection, the joint This spending, much of which went to the advantages of the amend-the-Con- resolution was ordered to be printed in negative television commercials, did stitution approach that I propose. Re- the RECORD, as follows: little to restore the public’s confidence cent history amply demonstrates the S.J. RES. 2 in the electoral process, much less our practicality and viability of this con- Resolved by the Senate and House of Rep- institution. stitutional route. Certainly, it is not resentatives of the United States of America in The Supreme Court has made this coincidence that five of the last seven Congress assembled (two-thirds of each House proposed amendment even more urgent