Spencer Abraham

Mr. ABRAHAM

Mr. ABRAHAM. Mr. President, I rise today to talk about an important issue for small family farms and businesses in my State of Michigan and across our country. Family businesses need estate tax relief. Federal estate or death taxes kill family-owned businesses. These taxes impose an unbearable burden on our Nation's most productive citizens--family business entrepreneurs. The estate tax eliminates jobs and permanently damages communities that depend upon these businesses. Family businesses have the opportunity to continue growing and creating jobs for generations, instead of handing the business over to the IRS. Current estate tax rates range from 37 to 55 percent. Faced with the tremendous burden imposed by this tax upon their death, business owners in my home State of Michigan and across the United States, will react in several of the following ways: First, the business owner will not expand the business because large capital expenditures for long term growth make little sense when the family will soon be forced to sell or liquidate the business. Second, the children will not participate in the business because the business owner, knowing that taxes will prevent children from continuing operation of a family business, will often discourage their children from working in the business and encourage them to gain experience elsewhere. Third, the business owner will pay dearly in estate planning costs. Even if business owners have the foresight to plan early for their death, the expense of this planning, in insurance, legal and accounting costs, can be enough to eliminate the business' small profit margin. These extra insurance, legal, and accounting costs are especially burdensome because small businesses survive on cash flow, not profit. Fourth, heirs may not be able to afford tax payments. Despite some planning, heirs are often still faced with a significant tax burden. Even paid out over time, taxes may be too much of a burden to survive in an internationally competitive market. Plus, what bank is going to loan money to a business that the IRS holds a first lien against? Mr. President, I ask unanimous consent to have printed in the Record an article from today's Wall Street Journal, entitled ``Will Uncle Sam Inherit the Family Business'' by David Pankonin. This describes the terrible effects of estate taxes on his fourth-generation family business. Mr. Pankonin's story is typical of thousands of similar family businesses across the country.

Mr. ABRAHAM

Mr. ABRAHAM. Mr. President, I will be brief. Mr. President, I rise to speak along the same lines as the Senator from Georgia and talk a little bit about our apparent budget impasse. We are told--and I read in the media--that political advisers to the President have urged him to resist negotiations, to allow an impasse to continue, to theoretically take the impasse to the American electorate a year from now. That has resulted, as far as I can tell, in very limited discussions so far, limited efforts on the part of the administration to negotiate, and no plan by the administration with respect to balancing the budget, protecting Medicare, or any of the other vital priorities in this country. I do not know what the President's decision will be. I do know what I read to be the advice he is receiving from his political counselors. I do not know, he may well decide to take the politically expedient course here, Mr. President. Before he does, I hope the President will consider the implications of taking the advice of the political experts as to what is good for next year's election and understand the consequences of doing that, because if an impasse continues for a year, if the President is responsible for there not being a balanced budget passed, it means a lot of very critical, I think, things for the American people. It means, number one, that we will not deal with the problem of Medicare insolvency that is staring this country in the face. As the Senator from Georgia has already indicated, we stand on the brink of having part A in the Medicare trust fund bankrupt in just 6 years. If the President does not negotiate in good faith, if he plays the political card his advisers are recommending, then he will not sign, next week, the bill that would protect Medicare and keep the trust fund solvent. If the President continues the impasse, if the advisers, the political folks at the White House, are successful, it will also mean, I believe, very detrimental things for our economy. We have been very fortunate in recent weeks, as we have seen the stock market go up and interest rates go down. There is a very clear reason for that, and the analysts on Wall Street and elsewhere in this country all say the same thing. They say that the economy and the markets are reacting to the belief that we will have significant deficit reduction when this budget process is over. Mr. President, if they conclude that the President prefers an impasse for political reasons, then I think the robust stock market and the lower interest rates will be short-lived. Then the President will have to explain why interest rates are going back up again and why the market is going down. But most important, if the President heeds the advice of the political counselors, instead of doing what is right for this country, the impact will be felt greatest by the families of America, because if we fail to take advantage of this unique opportunity we have right now, Mr. President, to bring the budget under control and to put us on a path toward balance, what it means for the families, as the Senator from Georgia just indicated, is very, very considerable. It means continuing interest rates at levels beyond what they need to be. It means people paying more for their mortgage, more for their car payment, more for their student loans than they need to make. It means Washington continuing to make more money and keeping it here and making decisions for the families of America that they ought to make themselves. Mr. President, I hope when the President returns from his trip to Europe that he will reject the opinion of the political advisers, reject the notion of allowing a long impasse to continue, reject the notion of refusing to negotiate upfront in good faith and with his own plan, and instead come to the table, begin the discussions that I think are necessary for us to bring about the kind of balanced budget that we have passed here in the Senate and the Congress and for the American people, the first balanced budget in a quarter of a century. I hope that the President decides that the political advisers are not what matters and that next year's election is not what matters, but it is the future of this country, the future of our children that matter. If he does, he will join the Republicans in seeking to balance the budget, seeking to end the impasse, and most importantly, seeking to protect future generations. I yield the floor. I suggest the absence of a quorum.

Mr. ABRAHAM

Mr. ABRAHAM. Mr. President, I would like to bring to the attention of my Senate colleagues a piece that appeared in the November 27 edition of the Wall Street Journal entitled ``Immigration: Where to Go From Here?'' In this piece, the Journal asked a panel of opinion- makers--ranging from Jack Kemp to former New York Mayor Edward Koch to our colleague Ben Nighthorse Campbell--about the impact of legal immigration on America's society and economy. I think that the views expressed in this article will be helpful to my colleagues as we debate immigration reform in the coming months. I ask that the article be printed in the Record. The article follows: [From the Wall Street Journal, Nov. 27, 1995] Immigration: Where to Go From Here Jack Kemp is a co-director of Empower America, a conservative advocacy organization. Some immigration policies badly need reform, especially those having to do with illegal immigration. Under the 1986 immigration reform act, for example, it's illegal to hire an undocumented alien, and hard and costly even to hire a legal one. By contrast, the law allows, and in many cases legally mandates, payment of welfare, medical, education and other benefits. A better, more American, policy would be to make it easy for immigrants to work--for example, with a generous guest worker program and low-cost i.d. for participants. We can design a policy that would be just and would create better incentives, but would make it harder to get welfare payments. For instance, the U.S. could more readily accept immigrants who take a pledge not to go on welfare (a pledge many have already taken). With such policies, we not only can ``afford'' to keep the golden door open; we will attract the same type of dynamic men and women who historically helped build this immigrant nation. Let's agree to reform the welfare state and not allow America to be turned into a police state.

Mr. ABRAHAM

Mr. ABRAHAM. Mr. President, I want to speak today on a couple of topics. First of all, I would like to lend my voice of support for the proposal that was earlier discussed by the Senator from Maine, Senator Snowe, in regard to legislation she introduced, legislation I am a cosponsor of, to treat the salaries and pay of the Members of Congress in the same fashion that other Federal employees are being treated during this period of Government shutdown. I share the opinion the Senator from Maine expressed very effectively earlier that it is important for the public to understand that those of us in Congress are no different than anybody else and that we should live by the same sets of rules that govern the rest of the people of similar status as we; and that is, the laws of the country should apply to us the way they apply to the rest of the country. We did that earlier this year. We ended a long period of time in which Congressmen and Senators were exempt from any laws which people back in our States were forced on a daily basis to adhere to. In the same vein as Federal employees ourselves, we should be required to be treated in the same fashion as the Federal employees whose families this week have been confronted with the issues surrounding the Government shutdown. Also, I am intrigued by and likely to support the amendment that Senator Brown discussed in his remarks. I have long felt, in fact, in my campaign I talked about the need for us to place some sort of incentive for the Members of Congress to bring about a balanced budget that they all campaigned on but went to Washington and somehow found very elusive. The notion of in some way treating us like the officers of a corporation that is running in the red intrigues me a lot, and it is very appealing, I think, to citizens across this country. If the country keeps running big deficits, it hurts the country. If a business runs big deficits, it hurts the business. When the business runs those deficits and is hurt, it is its owners, its managers who ultimately pay a price, and normally that comes in the form of seeing their salaries reduced. In the same vein, it strikes me perhaps we, as the Nation's stewards of our economy, should have the same kind of responsibility and the same sort of incentive that people running a company have to make sure that we do not run a deficit. So I look forward to working with the Senator from Colorado to try to come up with a proposal or a program or an amendment that could address that set of incentives as well. Finally, Mr. President, I would like to talk briefly about why at least those of us who supported the Balanced Budget Act Friday night, who have been so strongly keeping committed to the notion of balancing the budget in 7 years, adhere to this position, because I think those Americans who are watching us in Washington, probably from time to time are wondering why are the stakes so high, why is it so critical that this budget be balanced and the sooner the better, not in 10 years, 9 or 8 years, but in the 7 years we have talked about? The answer is, a balanced budget means important things to virtually everybody in this country. To average working families, Mr. President, it means a chance to keep more of what they earn. Most families in our country pay interest on something, some pay interest on car loans that they have taken out; some pay interest on home mortgages, some pay interest on student loans, some pay interest on all of the above. Of course, there are many other items that people borrow money from lending institutions for today, and these interest rates are a big price that they pay along the way. Putting the Nation's budget into balance means those interest rates we pay are going to come down. It means average families who work hard in this country and want to keep more of what they earn will see rates come down and see more money in their own pockets, instead of sending those dollars along to the persons from whom they have borrowed the dollars. That means more money to pay for children's education, more money to spend on other family necessities. In short, average working families get to have more control over their destinies. Putting the budget into balance also means a lot for young people in this country. I mentioned already the impact of the student loans and interest rates paid on those loans. Let us talk about a young person who is looking forward to getting out of school in the near future and going to work and earning their own living and addressing their own needs, starting their own families, and so on. Considering the current rate of our national spending growth and the deficits we have been generating and projecting that on into the future, without restraint, means that young people today are confronting a debt burden that is incredibly large. Already, earlier the Senator from Arizona talked about the impact of these deficits on a child born in 1995. It is estimated that a child born this year, Mr. President, will, in their lifetime, pay $187,000 just to pay their share of interest on the national debt that already exists and will grow during their lifetime. That would mean, Mr. President, that if we do not bring this spending spree, this sort of unlimited credit card type of Government operation under control, we will pass on to the children of our country a lot less opportunity than we inherited. It seems to me that all of us have a responsibility to take care of our own bills--not to pass them on to the next generation. The Senator from Vermont talked about these deficits, and I recognize that they are not just deficits that started today. They have been building over time. One of the reasons I ran for the Senate last year and I think a lot of the other people in the freshman class ran, was to come down here and end the way business had been conducted--no matter who was in the White House, no matter who controlled Congress, because our objective is to try and set the Nation on a new course. So as we continue this discussion, as we continue to strive to find common ground with regard to starting the Government, we should not lose sight of the overall objective--the objective for this Senator, at least, is to bring the budget into balance in 7 years so the families of this country will be able to keep more of what they earn, so that the children of this country will not grow up with a huge debt burden confronting them and spend too much of their time working to send money to Washington and to pay for their parent's bills, so that our Nation can compete even more effectively in a new century in which global competition will dominate even more than it does today. For those reasons, I am very proud of what we did Friday night, that for once, despite all the conversations and talk and claims, and so on, that have gone on for many years about balancing the budget, we actually did something about it. We ended the talk and put a bill before the House and before the House of Representatives which, if enacted, would balance the budget. I am proud to say I voted for that bill, and I am proud to say that the bill passed. For once, Mr. President, on Friday night, we took a stand that was more than just rhetoric. It was a commitment to a specific piece of legislation that would accomplish the balanced budget we all talk about in Washington, and that people have talked about here for a quarter century. After 25 years of rhetoric, Friday night, we did something about it. Mr. President, I am glad I was part of that effort. I yield the floor. Mr. DORGAN addressed the Chair.

Mr. ABRAHAM

Mr. ABRAHAM. At this time I yield 20 minutes to the Senator from Delaware, the chairman of the Finance Committee.

Mr. ABRAHAM. I yield 1 minute to the Senator.

Mr. ABRAHAM. Mr. President, I yield myself such time as I may need. I will be very brief. Mr. President, I guess two people can look at the same bill and see different things. I have a hard time looking at our Balanced Budget Act of 1995 and seeing the kind of recklessness in values and concerns the Senator has just spoken of. I see a whole different picture in front of America if we do not pass this act. What I see as reckless is spending the country into the debt we are headed toward, in which children, in their lifetime, will pay $187,000 just in interest on the Federal debt that will grow during their lifetime if we do not bring this under control. That is the kind of unfairness to children in America we are here to end today. When we are talking about values, I can think of no values more important than the long-sustaining values of this country, and that we pass on to the next generation more than we inherited, not less. Yet, that is the direction in which we would head if we do not balance the budget and pass this act today. To expand more on that, I now yield 15 minutes to the Senator from Missouri, Senator Ashcroft.

Mr. ABRAHAM

Mr. ABRAHAM. I yield 10 minutes to the Senator from Oklahoma.

Mr. ABRAHAM. Mr. President, I yield myself such time as I may consume. Mr. President, I say very briefly there is once again information on the floor that must be corrected: the argument that the tax cuts included in the Balanced Budget Act of 1995 are going to the very wealthy in our country. In fact, Mr. President, 65 percent of all the tax cuts that are being provided for in this legislation go to people who are making less than $75,000 a year, 80 percent goes to people making less than $100,000. If you are in those categories, according to what we have just heard, you are rich. In my State of Michigan, people making less than $75,000 a year are not the wealthiest people in America, and I do not think they are the wealthiest people in America or any other State. The other claim, Mr. President, with respect to children, I think it is hard to argue that the policies which we are changing with this legislation are going to be worse for children than what we have seen under the policies that have been in existence for so many years. Today, more children and more people are in poverty than when the war on poverty began. Today, children in America born this year are faced with huge debts that we have been running up on the Federal Government's unlimited credit card. There can be no greater punishment for the children in America today than to let the spending spree in Washington continue. That will continue if we do not pass the Balanced Budget Act which we are dealing with right now. I yield 11 minutes to the Senator from Rhode Island, of the 15 we have allotted, and then 5 minutes to the Senator from Alaska.

Mr. ABRAHAM. I yield the Senator an additional minute.

Mr. ABRAHAM. Mr. President, I yield 5 minutes to the Senator from Alaska.

Mr. ABRAHAM. Mr. President, at this time I would yield 10 minutes to the Senator from Iowa.

Mr. ABRAHAM. Mr. President, I yield 7 minutes to the Senator from Georgia.

Mr. ABRAHAM. Mr. President, I yield 5 minutes to the Senator from Montana.

Mr. ABRAHAM. Mr. President, I yield 5 minutes to the Senator from Florida.

Mr. ABRAHAM. Mr. President, I yield 5 minutes to the Senator from Texas.

Mr. ABRAHAM. Mr. President, I yield 5 minutes to the Senator from Kansas.

Mr. ABRAHAM. I yield myself such time as I need briefly, and then I will yield to the Senator from Minnesota. As I said several times here today, apparently in some parts of this country people making less than $75,000 a year are ``the most wealthy Americans.'' In my State that is not the case. Mr. President, 65 percent of the tax cuts contained in this package will go to people and families making less than $75,000 a year. Mr. President, 80 percent will go to people whose families make less than $100,000 a year. In Michigan, those people are not wealthy people. Maybe they are in other parts of America, but people making less than $75,000 are not wealthy people in my State. As to the so-called tax cuts for wealthy, I point out as I have already numerous times in relationship to this bill, there are $26 billion in loophole closings contained in this legislation, closing loopholes on these so-called wealthiest Americans, individuals and corporations, which largely offsets whatever tax cuts might benefit people in those categories. Finally, with regard to students, we should point out to the students watching that, as Senator Kassebaum indicated earlier, regarding the student loan program insofar as it affects students, the volume of loans remain unabated, at levels that have always been out there, and there are no changes in the cost of loans to students. Moreover, there are further provisions in the bill that will actually provide students with student loans with the opportunity to deduct interest they pay on those loans. In fact, it places people in a stronger position. That said, Mr. President, at this time, I yield five minutes to the Senator from Minnesota.

Mr. ABRAHAM. I yield 4 minutes to the Senator from Oklahoma.

Mr. ABRAHAM. Mr. President, I yield 5 minutes to the Senator from Tennessee.

Mr. ABRAHAM

Mr. ABRAHAM. Mr. President, pursuant to section 904 of the Congressional Budget Act, I move to waive the point of order for consideration of the antitrust provisions that have been raised in this point of order.

Mr. ABRAHAM

Mr. ABRAHAM. Mr. President, I move to lay it on the table. The motion to lay on the table was agreed to.

Mr. ABRAHAM

Mr. ABRAHAM. Mr. President, I rise today to call my colleagues' attention to a woeful misuse of the taxpayers' money. As we have debated the so-called Istook amendment banning taxpayer subsidies for lobbyists, those opposed to reform have argued that current law already prohibits using grant funds for advocacy. But there has come to my attention a blatant example of just this phenomenon. The National Telecommunications and Information Administration, a part of the Commerce Department, has provided $200,000 to HandsNet, Inc., a California group which operates an online computer service focused on lobbying and available on the Internet. According to its own Internet-based documents, HandsNet links ``5,000 public interest and human service organizations across the United States.'' Among the services offered: ``the latest Action Alerts,'' a weekly digest summarizing the alerts, and daily updates on key issues. Mr. President, NTIA's own description of the grant award specifically mentions that the grant will allow ``National organizations [to] help local ones keep up to date by publicizing action alerts. . . .'' And what are these action alerts? Allow me to offer a few recent examples: ``ISTOOK AMENDMENT--CALL YOUR REPRESENTATIVES'' The message? ``Now is the time to turn up the heat. . . . So Call, E- Mail, or Fax Your Representative Today!'' ``GIVE PRESIDENT CLINTON A WAKE-UP CALL.'' The message? ``If President Clinton signs immoral welfare and Medicaid `reform' bills, the 60-year-old guaranteed safety net for children will be destroyed.'' ``CONGRESS YIELDS TO TRADITIONAL VALUES COALITION'' The message? ``The hearing, dubbed `Parental Involvement in Social Issues in Education'. . . Is likely to become a tax-funded platform for gay bashing.'' I could go on, Mr. President, but my point is clear. These action alerts are intended to facilitate and increase the effectiveness of lobbying on this Congress. ``HandsNet'' has a clear political agenda, and it is using Commerce Department funding--the taxpayers' money--to further that agenda. We cannot afford to fund this kind of political activism. It is a waste of taxpayers' money in times when the Government already taxes too much and spends even more than it takes in. It is also counterproductive, in times of budgetary downsizing, to fund the interest groups that seek to continue Government's expansion. The sum of $200,000 may not sound like a lot of money Mr. President, but it is the taxpayers' money. What is more, this practice is entirely too widespread. NTIA also has funded on-line activities for a number of other groups engaged in lobbying activities. Mr. President, HandsNet members include several special interest groups lobbying against the Istook-McIntosh-Ehrlich reform effort. Not surprisingly, these groups are more than happy to use taxpayer funds to lobby against having taxpayer funds cut off from their lobbying efforts. This brings up the problem of the Commerce Department itself. I say the problem of the Commerce Department because that agency itself is an invitation and a source of funds for lobbying activities and subsidies against the interests of America's taxpayers. The General Accounting Office has noted that the Commerce Department is duplicative and so unnecessary. It shares its missions with over 71 Federal departments, agencies and offices. It controls at most 8 percent of funding devoted to actual trade issues in our Government and has no unified purpose for its existence. What, then, do we get for our $3.6 billion in funding for the Commerce Department? Corporate welfare and subsidies for lobbying organizations. The HandsNet example proves how counterproductive Commerce Department grants really are. These grants encourage a growth industry of special- interest lobbying, distort our deliberations here, and push us toward overspending and unbalanced budgets. We must stop this blatant self- interested lobbying for the sake of our Nation and for the sake of our own independence as a legislative body. I ask unanimous consent that the full text of the Heritage Foundation's Government Integrity Project Report titled ``Commerce Department Funds Blatant Lobbying'' be printed in the Record.

Mr. ABRAHAM

Mr. ABRAHAM. Mr. President, during consideration of the Budget Reconciliation Act of 1995, the Senate conducted a remarkable number of rollcall votes, including a record 39 votes on Friday, October 27. I want to take some time now to discuss several of the more critical votes about which I was unable to comment at the time. First of all, Mr. President, I generally voted against motions to waive the Budget Act for amendments that resulted in higher deficits and amendments to strike budget savings in the bill because they would have moved us away from the goal of balancing the budget by the year 2002. These amendments included the Jeffords amendment on two-part dairy, the Specter amendment to strike all of the savings derived from the Medicare disproportionate share payments, and the Moynihan amendment to strike the indirect medical payments provisions. Aside from the respective merits of each amendment, their adoption would have resulted in a deficit in the year 2002, taking the reconciliation package out of balance and causing us to miss our primary goal in this budget process--enactment of a balanced budget. Second, I voted against amendments to roll back the $245 billion in tax relief for middle-class families and small businesses. As I have noted previously, as a consequence of the $900 billion in savings generated from our budget over 7 years, the Congressional Budget Office estimates that an economic dividend will accrue to the Federal Government. In my mind, this tiny surplus belongs to the taxpayers who make all the other Government programs possible, and for that reason, I opposed all amendments to reduce the size of the tax cut. These amendments included the Rockefeller motion to reduce the savings from Medicare to $89 billion and to offset this reduction by reducing the tax cuts by a like amount; the Bumpers amendment to delay the tax cut for 7 years; the Dorgan-Harkin-Kennedy amendment to limit the capital gains tax reduction; the Lautenberg amendment to prohibit high-income people from benefiting from the lower taxes; the Baucus amendment to strip out the tax cuts in order to avoid any reductions in spending that might impact rural America; the Simon-Conrad substitute amendment to strike the tax cuts and entitlement reforms; and the Byrd amendment to strike the tax cuts altogether. As I have said previously, I fully support providing American families and businesses with this modest tax cut. The Republican budget projects that the Federal Government will spend about $12 trillion over the next 7 years. The tax cut included in this bill would return to the taxpayers just a fraction of that amount. This is certainly reasonable, especially considering the primary beneficiaries of these tax cuts are low- and middle-income families--families that have seen their Federal tax burden rise dramatically over the past 40 years. Mr. President, let me comment on the Rockefeller motion in particular. The effort to tie the tax cuts included in the budget reconciliation bill with the necessary reforms made to Medicare is disingenuous. With or without tax cuts, the Medicare trustees have stated in no uncertain terms that the Medicare trust fund will go insolvent in 2002. The Senate reconciliation bill makes the fundamental reforms necessary to keep Medicare solvent and it lays the foundation for long-term reform of the Medicare system. These reforms have nothing to do with any tax cuts included in the bill and everything to do with preserving Medicare for future generations. Mr. President, there were a few amendments offered that pertained to the treatment of low-income families. I opposed Senator Bradley's motion to increase spending for the earned income tax credit by raising unspecified taxes. While the basic premise and goals of the earned income tax credit are sound, it is apparent that the program is in need of reform. As was stated clearly during the debate, the EITC has suffered in recent years from fraud and abuse. According to the Governmental Accounting Office, the EITC has an error and fraud rate of between 30 and 40 percent. Aside from cheating the taxpayers, this problem is also cheating deserving families from receiving payments for which they are eligible. Under this budget, spending on the ETIC Program will continue to increase, from $19.8 billion this year to $22.8 billion in 2002. As a result, the maximum credit available to low-income families with two children will increase from $3,110 this year to $3,888 in the year 2002. Contrary to what was argued during debate, EITC payments don't go down under this legislation, they go up. Another amendment worth commenting upon was the Breaux amendment to make the $500 per child family tax credit refundable against employee- paid payroll taxes by limiting the tax credit to children under 16 years of age and phasing it out to families with incomes between $60,000 and $75,000. As I noted at the time, I support making the $500 family tax credit refundable against employee-paid payroll taxes. Nevertheless, I opposed this amendment because it would unfairly exclude many middle-class families who also need this relief. In my State of Michigan, there are many families where both the husband and the wife work. It's not hard to imagine a family where the husband is an auto worker, the wife is a teacher, and their combined incomes are well above the arbitrary cutoff established by the Breaux amendment. Furthermore, there are many families with children aged 16 or 17 who will also lose out under the Breaux amendment. I should point out that teenagers are just as expensive as younger children--if not more; I don't need to remind anyone just how much college costs these days, or car insurance for that matter. Parents of children aged 16 and 17 are struggling to make ends meet too, and they need the tax relief the Breaux amendment would take from them. It is my hope that FICA refundability will be raised during conference and that a solution will be adopted to provid tax relief to as many American families as possible. Another group of amendments related to Medicare, Medicaid, and other health related matters. Senator Graham of Florida offered a motion to recommit the reconciliation bill to the Finance Committee in an effort to reinstate the Federal entitlement and reduce the level of savings from the Medicaid program proposed in the Republican bill. This was, in essence, a killer amendment. As with the Rockefeller Medicare motion to recommit, the Graham amendment struck at the core of our efforts to balance the Federal budget by the year 2002. Republicans believe it is time to end the Washington knows best mentality that dominates our budget policies and programs. Under our budget, we want to give the States more control over the Medicaid Program in exchange for an overall reduction in the growth rate of the program. The States have proven that they can deliver government services more efficiently and at less cost if they are given the freedom to do so. The Republican bill does that by placing fewer strings on the funds it provides to the States while focusing its resources on those workers on the frontlines--providing direct assistance to the needy. There were separate amendments offered by Senators Chafee and Dodd related to Medicaid eligibility issues. I voted to maintain the Medicaid eligibility criteria already included in the reconciliation bill by the Finance Committee. The Chafee and Dodd amendments would have mandated to the [[Page S 17042]] States to cover certain classes of individuals under the State-run Medicaid Program. Again, this runs counter to our effort to provide States with more flexibility--not less. A similar amendment was offered by Senator Pryor. His amendment would have extended existing Medicaid standards with regard to nursing home facilities. At the time of the vote, it was my understanding that the Senate leadership would offer a subsequent amendment addressing the concerns raised by the Senator from Arkansas. This amendment was offered and accepted, and it ensures that Federal nursing home standards remain the minimum protection level afforded to nursing home residents. Under this amendment, States may receive a waiver from Federal requirements, but only if the Secretary of Health and Human Services determines that the State's regulations are as tough--or tougher--than Federal regulations. With the understanding that this amendment would be offered, I voted against the Pryor amendment. Mr. President, another amendment worthy of note was the Kassebaum amendment to restore funding to the school loan program. I had an opportunity to address these issues first as a member of the Senate Labor Committee. At that time, we were confronted with the need to meet our reconciliation instructions by reducing the cost of the school loan program. While the committee met its instruction by choosing the most acceptable of undesirable alternatives, several of my colleagues and I promised to work to reduce the impact these cuts would have on students and their parents. The result of this effort was the Kassenbaum amendment to strike provisions eliminating the 6-month grace period for student, imposing a loan fee on institutions, and increasing the interest rate on PLUS loans. This amendment effectively shielded college students from increased out-of-pocket costs, and I was pleased to see it adopted. Senator Biden offered President Clinton's education tax credit proposal as an amendment to the bill. I voted against it because the reconciliation bill already includes a student loan tax credit of up to $500 for middle-class families. Our plan also provides considerable additional relief to those families struggling to find enough resources in their limited family budget to cover the rising costs of college. Senator Baucus offered an amendment to strike the ANWAR provisions of the bill. I support responsible, environmentally controlled efforts to explore and develop certain wilderness areas and, for that reason, I voted to table this amendment. It is important to note that, on this issue, the State of Alaska and its citizens have spoken out. The Eskimos and Alaska's elected representatives recognize the potential benefits of development and support exploration of the region. The Inupiat Eskimos are the historic residents of Alaska's North Slope; they are subsistence hunters who live off the land. Proceeds from oil production means good schools, medical services, and a better standard of living for them and their children. Furthermore, responsible development of these oilfields is in Alaska's and the Nation's best interest. Alaska's current production facility at Prudhoe Bay, which provides more than 20 percent of domestic oil, is in decline. The State's revenues from oil are projected to fall from more than $2 billion today to $700 million in 2010. This could cause a grave fiscal crisis for Alaska. By contrast, if a commercial field is discovered projected Federal revenues could approach $40 billion. Finally, it should be noted that the Eskimos, who are dependent on the Caribou, fish, and other wildlife, believe that opening the refuge is compatible with their lifestyle and crucial to their survival. For these reasons, I support the exploration of the coastal plain. I believe exploration can be done in a manner that protects the environment and also provides needed economic development. A final tax matter which was addressed during debate was the Specter amendment supporting replacing the current Tax Code with a flat tax. As an extraneous matter, this amendment was subject to a point of order. I voted to sustain this point of order, but I want to emphasize that this vote should not be interpreted as opposition to the idea of the flat tax--but rather opposition to including it on this vehicle at this time. I agree with Senator Specter that our current Tax Code is too complex and inefficient and needs to be replaced, and I support investigating the benefits of all of the proposed reforms that have been put forward, including a flat tax.

Mr. ABRAHAM

Mr. ABRAHAM. Mr. President, I would like to bring to the attention of my Senate colleagues an important article prepared by Stuart Anderson and Steve Moore of the Cato Institute entitled ``GOP Breaches of Contract.'' This piece explains why the immigration reform bill moving through the House violates the core principles of more freedom and less government that form the basis of the GOP's Contract With America. I would also like to highlight a recent statement signed by several business leaders on the need to maintain America's historic commitment to legal immigration. As we begin debate on immigration legislation here in the Senate, I would urge my colleagues to consider this information carefully. I ask that these materials be printed in the Record. The material follows: [From the Washington Times, Nov. 6, 1995] GOP Breaches of `Contract'? (By Stuart Anderson and Stephen Moore) The ``Contract With America'' was not simply a list of 10 bills to be voted upon, but rather it represented the governing philosophy of the Republican Party. Unfortunately, the immigration bill recently voted out of the House Judiciary Committee, with unanimous Republican support, violates the four key precepts of the ``Contract with America.'' (1) Family values. The Contract states: ``The American family is at the very heart of our society. It is through the family that we learn values like responsibility, morality, commitment, and faith.'' The House immigration bill, H.R. 2202, strikes at the heart of family unification by preventing brothers, sisters and nearly all adult children from joining their families here in the United States. A guarantee to admit 25,000 eligible parents annually (half the current yearly total) was included in the bill, but only after an outside analysis confirmed that no parents could have immigrated if the bill had passed without amendment. But the bill contains a new obstacle for parents--only those who purchase nursing home and Medicare-comparable health insurance will be allowed to [[Page S 17043]] immigrate. That leaves only spouses and minor children, who could immigrate only if their sponsors meet new income requirements. (2) Fiscal responsibility. ``Controlling spending is the primary means to controlling the deficit,'' states the Contract, yet the House immigration bill carries several big ticket items. First, up to $80 million would be needed to return fees paid by petitioners whose siblings or adult children have received permission to immigrate but who will be cut off the waiting list if the bill passes in its present form. Second, estimates by the Cato Institute, the Immigration and Naturalization Service, and the Social Security Administration reveal that hundreds of millions of dollars would eventually be needed to pay new and current federal bureaucrats to staff, maintain and clean up the proposed computer verification system. The system is designed to check the legal status of new private and public sector hires via telephone or modem. Third, the federal government will assume the potentially quite large liability for compensating any individual who loses a job or wages from being wrongfully denied employment due to an error under the new employment verification system. (3) Rolling back government regulations. The Contract notes, ``To free Americans from bureaucratic red tape, we will require every new regulation to stand a new test: Does it provide benefits worth the cost? To help our cities and states, we will ban unfunded mandates.'' The bill's various new mandates on cities, counties and states, including requiring such entities to verify new hires through a federal computer system, violate the intent of the recently passed Unfunded Mandates Reform Act, which requires that new mandates be paid for. According to the Justice Department report on the nine- company pilot project that the bill's new computer system is based upon, compliance cost for companies using the system has averaged $5,000 annually. During the Judiciary Committee markup, Republicans defeated an amendment to stop the computer system if a GAO study found the new program cost small businesses more than $5,000 a year to implement. However, even this figure understates the true cost to businesses, since the pilot project allowed companies to check the legal status of only self-identified immigrants, while the House bill requires companies to check citizens as well. As for the cost-benefit analysis for new regulations recommended in the Contract, any benefit from this new system is only hypothetical, since there is no evidence this new mandate on businesses will reduce illegal immigration. (4) Individual liberty. The Contract criticized the ``Clinton Congress'' when it argued, ``Big Brother is alive and well through myriad government programs.'' In committee, Ohio Republican Rep. Steve Chabot attempted to delete the computer system from the bill, calling it 1-800-BIG BROTHER, but his effort lost on a 17-15 vote. He promises to fight the measure on the House floor. Advocates of individual liberty should at least question any program that would centralize data on all Americans in a place where future social engineers can wreak havoc on the citizenry. Senate legislation attempts to ensure that only Americans and legal residents are listed in the computer system by requiring that everyone be fingerprinted or provide other biometric data (such as a retina scan) to ``personalize'' birth certificates by age 16. The House bill moves in that direction by mandating a study of ``counterfeit-resistant'' birth certificates. Moreover, at least one computer system supporter in the House has said the system will not work without some type of national ID card. Supporters of smaller government and family values will find that the House immigration bill violates the spirit, indeed the essence, of the Contract. It also contradicts Majority Leader Dick Armey's vision of a freedom revolution and Speaker Newt Gingrich's desire to create a ``Conservative Opportunity Society.'' The immigration bill's provisions against families, the mandates on businesses, cities and states, and the specter of creating yet another uncontrollable government program should give pause to reformers. These measures would represent business as usual, not the Republican Revolution promised by the ``Contract With America.''