Cass Ballenger

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, Thomas Paine, a true patriot and American hero who, of course, is no longer taught in many public schools today, once wrote: ``We still find the greedy hand of government thrusting itself into every corner and crevice of industry and grasping the spoil of the multitude.'' Although students today no longer find The Rights of Man on their reading lists, they would do well to take heed of Thomas Paine's observation that the government has an inevitable tendency to seek to expand its power and to confiscate the fruits of our labor. It is like a law of nature. Anyone who disputes this fact is invited to step forward and call his first witness. Government grows and grows, and it commands more and more of what we earn. Taxes go up and our freedom necessarily is reduced. Republicans believe that the greedy hand of government has reached too far, and that Americans have seen too many of their freedoms reduced. It is time to stand up to the greedy hand of government.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, I come before the House today to introduce legislation to promote more employee ownership in America. I believe this is a modest proposal which can be deemed technical and clarifying in many respects. Entitled the ``ESOP Promotion Act of 1999,'' this bill builds on legislation I introduced in the 102nd, 103rd, 104th and 105th Congresses with bipartisan support. Nearly 100 sitting members of this House have cosponsored this legislation over the years and, if former members are included, the number is over 200. Mr. Speaker, let me point out that the last Congress aided the creation of employee ownership through Employee Stock Ownership Plans (or ESOPs) by enabling a Subchapter S corporation to sponsor an ESOP. This provision was added to the Balanced Budget Act of 1997 (Public Law 105-34) by Senator John Breaux in the Senate Finance Committee and has been part of my ESOP bills since 1990. The effort to have these small businesses offer employee ownership to their employees started in 1987. Many private sector groups, representing both professionals and businesses, have supported permitting Subchapter S corporations to sponsor ESOP's. I am grateful to my colleagues for their support of this important change in the code. I encourage my colleagues in the 106th Congress to stand up for employee ownership and enhance the positive record for one of the most encouraging economic trends in America today--ownership by employees of stock in the companies where they work through an ESOP. As many of my colleagues know, I came to Congress first and foremost with a small business background, having created an ESOP plan for the company I founded over 40 years ago. The ESOP provides a method for current owners of stock to sell, at fair market value, their stock to a trust that holds the stock for eventual distribution to employees upon their death, disability or retirement. I believe the employee ownership which we promoted at my company will continue to be a valuable retirement asset for our employees and their families for years to come. I believe that employee ownership, properly managed, creates a win- win situation for all involved. America and our economic system benefit as we increase competitiveness through employee ownership and provide more opportunity for ownership for those who, frankly, would not have much of a chance to acquire stock ownership otherwise. Since 1989, the House has shown strong support for ESOP's, and I think it is important to confirm this support in the 106th Congress. Allow me to explain each section of my bill: Section 1: Names the bill ``The ESOP Promotion Act of 1999.'' Section 2: Current law permits a corporate deduction for dividends paid on ESOP stock that are passed through to the employees in cash or used to pay the ESOP stock acquisition debt [Internal Revenue Code Section 404(k)]. Section 2 would amend Section 404(k) to permit the deduction if the employees participating in the ESOP are allowed, as their choice, to have the dividend reinvested in more employer stock. In fact, current ESOP and 401(k) sponsors can nearly accomplish the same result under current law with a convoluted system that requires an IRS letter ruling. Why is this simplification? Because under very complex chain of events which the IRS has approved in a series of letter rulings, the employee can have ``constructive receipt'' of the cash dividend, and then ``constructively'' take the dividend money back to the payroll office and reinvest it. Since the employee has received the dividend in cash, the deduction is allowed, although in reality it was reinvested. This legislation says cut to the chase. Where the employee has made clear a desire for the dividends to be reinvested, why have an expensive, confusing system that the IRS has to review after the ESOP sponsor spends dollars on designing the new system? The ESOP sponsor can put these resources to more productive use, and the employees can put their dividends to use in further bolstering their retirement savings with this change. Section 3: From 1984 until 1989, an estate with share of certain closely-held corporation could transfer stock in the corporation to the corporation's ESOP, and the ESOP would assume the estate tax liability on the value of the transferred stock [former Internal Revenue Code Section 2210]. Unfortunately, the Tax Act of 1989 repealed this law which was an effective way to create more employee ownership. The proposed legislation would restore this incentive for stock to be transferred to an ESOP. No estate tax is being avoided here, it is just shifted from the estate to an American, closely-held corporation that has employee ownership through an ESOP. Section 4: This section would current what I believe is an anomaly in the current law. Internal Revenue Code Section 1042 provides that if a seller of closely-held stock reinvests his/her proceeds from the sale in the equities of a U.S. operating corporation, the gain on the sale to the ESOP is deferred until the replacement property is disposed of, if and only if the ESOP holds at least 30% of the outstanding shares of the corporation when the sale of stock to the ESOP is completed. This provision of current law plays a major role in the creation of over 50% of the ESOP companies in America. Current law benefits owner-founders, and outside investors of closely-held companies, but it does not permit holders of stock in a closely-held corporation who acquired the stock as a condition of employment, from a plan other than an ERISA plan, to sell that stock to an ESOP and receive a deferral of the tax on the gain. Section 4 would end the different treatment for shares acquired from a compensation arrangement as a condition of employment compared to stock acquired otherwise. Section 4 would expand the list of permissible reinvestment to U.S. mutual funds that represent U.S. operating corporation securities. This change would apply to an owner-founder or outside investor, as well as an individual who acquired the stock as a condition of employment. Section 4 also would correct another technical anomaly in current law. As presently written, Section 1042 provides that any holder of 25% or more of any class of stock in a company cannot participate in an ESOP established with stock acquired in a Section 1042 transaction. My bill would change the measure so that the 25% would be measured by the voting power of the stock, or the value of the stock in terms of total corporate value. This kind of measure is used in other sections of the code. Section 5: Amends the Internal Revenue Code of 1986 to permit limited distributions from ESOPs, without incurring a 10-percent penalty on early withdrawals, for high education expenses and first-time home purchases. The limitations relate to how much can be distributed and a requirement that the person have at least five years of participation before making the request for the distribution. The early withdrawal provision would be discretionary with the plan sponsor. I urge those of my colleagues who want to encourage employee ownership in America to join me by cosponsoring the ``ESOP Promotion Act of 1999'' and working hard to include these provisions in the tax bill that will soon be considered by the House Ways and Means Committee.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, I thank the gentleman for yielding me this time, and I appreciate the time to speak today in support of the full funding levels for Central America and the Caribbean emergencies, part of the supplemental bill that is currently being negotiated between the House and Senate conferees. As we all know, H.R. 1141 passed the House over a month ago. But, unfortunately, no money has been released to assist the devastated countries in Central America because Congress has yet to approve the supplemental. It is really disgraceful. I was able to visit Honduras just 2 weeks after Hurricane Mitch wreaked its havoc, and also Armenia, Colombia, after the earthquake, a town of 300,000 that was devastated. I do not know about the rest of my colleagues, but I thought Armenia was a small town until I visited it. Stop and think of a town of 300,000 in our country where half the whole town is just wiped away. It is unbelievable. In Honduras alone, 25,000 people lost their jobs in the banana fields, because not only was the banana crop destroyed but the plants that grow the bananas were washed away, the topsoil was washed away, and there is now just a bunch of sand there. It will be at least 3 years before they can ever start really growing banana crops again. Over a million people lost their homes and at least 7,000 people lost their lives. Luckily, through donations from various and sundry steel manufacturers and Rotary International, I was able to provide 100 tons of galvanized steel to supply roofing for housing in Honduras. These houses are 20 by 20, on a concrete slab. A concrete block, two windows and a door. No plumbing, no nothing, just a roof. And this steel was for that. One hundred tons of steel will roughly supply roofs for 1500 houses. That is roughly speaking 1 percent of the need they have down there. Now, if my colleagues can believe it, AID is running out of money. AID is running out of money to build the houses. We have the roof now, but we cannot continue without some money for AID to help us build the houses. I believe that now rather than later is the time for the United States to come to the aid of our neighbors to the south. Too much time has been wasted in negotiation. We simply need to release the funding by passing a clean supplemental. And I mean clean. This will ensure struggling nations that the United States is willing and ready to help. In the month that the U.S. Government has been inactive in sending relief funding to these disaster areas just miles from our borders, other countries from all over the world, not as rich and not as close in proximity to Central America, have sent money, supplies, aid and their nation's support. It is time for the United States to stop playing political games, step up to the plate and assist our disadvantaged neighbors to the south. I urge my colleagues to support full funding for the relief aid to the countries of Central America.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, today, I am introducing legislation, that when enacted, would designate Wilson Creek, in my district, as a Wild and Scenic River. Wilson Creek is a free flowing creek which passes through some of the most beautiful scenery in the nation. It is home to a multitude of fish species, plant life and serves as a habitat for thousands of animals which live along its banks. From its headwaters below Calloway Peak on Grandfather Mountain in Avery County, North Carolina to where it empties into Johns Creek in Caldwell County, Wilson Creek meets or exceeds all the requirements for such an important designation. Specifically, my bill would designate 23.3 miles of Wilson Creek as a Wild and Scenic River. In my opinion, having Wilson Creek designated as Wild and Scenic would help maintain the natural beauty of the creek while helping to improve the quality of recreational opportunities, like hunting, fishing, camping, canoeing and other activities for the thousands of people who would visit each year. The potential designation of Wilson Creek as a Wild and Scenic River has received tremendous support from the County Commissions from Avery and Caldwell County as well as local residents. In fact, when I met with the county commissioners of Caldwell County last month, I was presented with letters of support from local residents, positive newspaper articles and editorials, and a latter from the U.S. Forest Service which indicated a willingness to help us in this effort. I am convinced that the designation of Wilson Creek is well supported within the communities which surround it. I believe that this is an excellent bill that would do much to preserve Wilson Creek, turning it into both a natural asset and a national treasure. I urge its immediate consideration and enactment.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, I rise in support of the Special Supplemental Nutrition Program for Women, Infants and Children, better known as WIC, a program that has been providing short-term, low-cost preventive health services to young families who are at risk due to low income or nutritionally-related health conditions for 25 years. Studies have shown that pregnant women who participate in WIC have longer pregnancies leading to fewer premature births, have fewer low- birth-weight babies, experience few infant deaths, and seek prenatal care earlier in their pregnancy. And when I say it is cost effective, let me point out some real numbers to my colleagues. It costs $22,000 a pound to raise a low or very low-birth-weight baby to normal weight, costs that are often covered by Medicaid. It costs only $40 per pound to provide WIC prenatal benefits. These figures show that WIC is making a real difference. I want to thank those who have made the program a success and wish WIC a happy 25th birthday.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, in our markup we heard from the Democrats that this bill, if enacted, would rob Peter to pay Paul. A more accurate way for the Democrats to look at this resolution is from the perspective of paying what we promised Paul before we begin to give new money and make other promises to Peter. We simply cannot neglect the fact that we promised to help pay for the education of these special- needs children and put scarce funds into other programs that do not have the same mandate. It is also important to note that if the Federal Government had begun funding IDEA appropriately, schools would have more State and local money freed up to handle local school demands like teacher/pupil ratios and school construction.

Mr. BALLENGER

Mr. BALLENGER. Madam Speaker, the war in Kosovo has exposed a military readiness and national security vulnerability that must be removed. Evidence of our current military shortage is abundant: We are dangerously close to running out of air-launched cruise missiles, a situation unthinkable in the days of Ronald Reagan's strong leadership. More than half of the B1-B bombers in Ellsworth Air Force Base are not mission capable because they lack critical parts. We are diverting planes from their patrols over the Iraqi no-fly zone in order to fill out the Kosovo mission. Republican complaints and oversight hearings about this deteriorating situation over the past 6 years have been met with silence in the White House and indifference in the press. No one seems to care. For four straight years, four straight years, the Republican Congress appropriated more money for defense than the President requested. But each year it is more of the same: an inadequate defense budget and insufficient resources. Now will the President finally care?

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, I rise in support of H.R. 1569, a bill that would prohibit the appropriated funds of the Department of Defense from being used to deploy ground troops to Yugoslavia without the consent of Congress. I still have grave concerns about NATO actions in Kosovo because I see no direct U.S. interests at stake, no clearly defined mission and no exit strategy. After five weeks of bombing, there is no evidence that our actions are either convincing Slobodan Milosevic to agree to a peace treaty or protecting the thousands of ethnic Albanians who are fleeing Kosovo. The recent deployment of Apache helicopters, tanks, artillery and armored personnel carriers to the Balkans, and the Monday's call up of 33,000 reservists, is clear evidence that President Clinton intends to introduce ground forces to Kosovo itself sometime in the near future. H.R. 1569 simply requires the President to consult Congress before he does so. While I abhor the ethnic violence and the forced eviction of ethnic Albanians from Kosovo, I am still not convinced that this situation merits sending in U.S. ground troops. With that said Mr. Speaker, I urge the passage of this bill because it sends a clear and concise message to President Clinton--that Congress has a constitutional role to play and that the President must get the authorization of the Congress before he can commit ground troops to Yugoslavia. Mr. Speaker, I urge passage of H.R. 1569.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, today I am introducing five bills, each targeted specifically to a needed reform of the Occupational Safety and Health Act. Over the past several years, we have made progress in redirecting and refocusing OSHA, from an agency that was too often focused on enforcement ``for enforcement's sake'' to one that has begun to recognize the importance and effectiveness of cooperative efforts and consultation programs, and of encouraging the voluntary efforts of employers and employees. When we began this effort, the Clinton administration claimed that any change in OSHA's focus on enforcement would lead directly to increased injuries and deaths. In fact, just the opposite has occurred. The Department of Labor has reported in recent months that both workplace fatalities and workplace injury rates have again declined and are at the lowest levels since those records have been maintained. Those record low levels have been achieved even though we are the midst of a tight job market, a time in which, historically, injury rates increased. My goal is to continue to push for changes that will further reduce injuries and fatalities by encouraging voluntary action and cooperative approaches. Where regulation and enforcement is imposed, it should be fair and the benefits should justify the costs. Unfortunately, there are still far too many instances in which OSHA's enforcement and regulation is neither. The five bills that I am introducing cover the following areas. I welcome my colleagues' support for these bills. Audit Protection: Safety and health audits are an important aspect of a company's efforts to ensure that their workplaces are safe. Most employers, particularly in hazardous industries, do some type of safety and health audit. Those with good lawyers then either destroy the records or disclose it only to their lawyers, neither of which is the most effective way to improve safety and health. The reason companies do so is that OSHA inspectors routinely use the audit to penalize the employer. OSHA's enforcement policy is counterproductive to employee health and safety. I believe we should encourage employers to conduct audits, not discourage them. My bill provides limited protection for audits, and at the same time, encourages employers to conduct audits and to fix the hazards found during those audits. Whistleblower Protection: The OSH Act provides important legal protection for employees who raise concerns about safety or health hazards. However, the current process for handling those complaints is neither effective nor fair. Complainants sometimes wait years for the Department of Labor to decide whether to seek relief in court. I am proposing that the OSH Act be amended to provide an administrative private right of action so that the complainant is assured opportunity for an administrative hearing and timely decision. Encouraging safety and health audits and assuring timely adjudication of whistleblower complaints by employees are important steps that Congress must take to support and encourage voluntary safety and health efforts by employers and employees. Safety Meetings: As a result of a December 1998 decision by the National Labor Relations Board, employee safety committee are illegal, except: (1) where a union is involved and the safety committee is negotiated with the union, or (2) the safety committee has no real responsibility for safety and health. For years we have argued over what employee involvement the law allows or does not allow. At least now, in the area of safety, it is clear that, for most workplaces, current law permits very little employee involvement. It is time to fix the law. My bill addresses only safely committees; it does not open up the National Labor Relations Act. It would allow employees to participate, through safety committees, in evaluating safety conditions and safety rules and policies--responsibilities that are now prohibited in the majority of workplaces. Rulemaking Reform: In my view, a relatively simple reform would make OSHA standards-setting more fair and lead to more practical regulation. When OSHA proposes a standard, it should clearly indicate which industries will be regulated, and its risk assessments and cost analysis regarding the standard should relate specifically to those industries. Neither of these steps is new. OSHA has identified specific industries in some rulemakings, and the courts have frequently required OSHA to reconsider standards because it failed to conduct ``industry specific'' analyses. Putting these changes in statute will ensure that both are consistently part of the rulemaking procedure, thereby providing greater fairness in future OSHA rulemakings. SBREFA Implementation: The 1996 Small Business Regulatory Enforcement Act (SBREFA) required all federal regulatory agencies to establish policies to provide for reduction and waiver of penalties for non- serious violations by small employers. OSHA has maintained that its existing penalty policy was an adequate response. However, the existing policy allows a maximum 35 percent reduction for most small businesses, and conditions even that reduction on meeting additional, non- regulatory requirements. My legislation will direct OSHA to adopt a specific waiver of penalties policy for non-serious violations, if those violations are corrected within a timeframe set by OSHA.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, I rise today to express my support for the Tax Limitation Constitutional Amendment. I applaud my colleagues--Representatives Barton, Shadegg, Goode, and Ralph Hall--for their perseverance in offering this important bipartisan legislation once again. The Tax Limitation Constitutional Amendment (House Joint Resolution 37) would amend the Constitution to require a two-thirds majority vote in both houses of Congress for passage of legislation that would result in any significant tax increase. This supermajority vote requirement would mean that only true national emergencies would be an excuse for raising even higher the tax burden on all Americans. Now that the Republican-inspired Balanced Budget Act of 1997 has led to the prospect of increasing budget surpluses in the years ahead, it is time to return tax dollars--in excess of Social Security receipts-- to the taxpayers who are responsible for the present tax overpayment. Every year around Tax Day my desk is covered with letters and phone messages from constituents who want tax relief--in the form of lower taxes and a simplified tax code. Since my first election to Congress, I have eagerly worked with my colleagues to enact tax relief for individuals and small businesses. Conversely, I have supported initiatives--like the Tax Limitation Constitutional Amendment--to insure that Federal taxes are not increased. The last thing our citizens and economy need is another round of tax increases like $108 billion which President Clinton proposed in his fiscal year 2000 budget. It is urgent that we lock into place the discipline we need to maintain a balanced Federal budget and the opportunity for tax relief for our citizens. I call on my colleagues to join me in guaranteeing the American people that we will block the pro-tax crowd in Washington, D.C., through this amendment. Please vote for H.J. Res. 37.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, it is that time of the year again, April 14th, the night before April 15th, the tax deadline. It is a bittersweet day for a politician. On the one hand, we are forced to confront the painful truth about how much the Federal Government takes from its productive citizens in the way of taxes. On the other hand, it is a tragic reality. It serves as an useful reminder to Republicans for what they stand for as a party. To Republicans, taxes are a freedom issue. We believe that people should be entitled to the fruits of their labor. Slavery was a great evil because slaves were not entitled to the fruits of their labor. That was wrong. The question for Republicans is one ultimately of choice: Who decides how to spend the money that Americans earn, those Americans or the government? We believe that people should have more power and more control over their lives, and the government should have less. That is the significance of April 15 to me.

Mr. BALLENGER

Mr. BALLENGER. Mr. Chairman, I rise today in support of H.R. 1143, the Microenterprise Self-Reliance Act. The low-cost loans and training opportunities provided by this program create unimaginable opportunity and hope for people living in the poorest and most desolate areas of the world. As a Member who is personally committed to the growth and prosperity of Central and South America, I have witnessed firsthand the benefits of microenterprise and the microcredit programs to the poorest of the poor. Through these programs, the U.S. has been able to encourage economic growth and self-dependency in countries less fortunate than our own. The minimal cost of the microenterprise program yield great benefits and have a tremendous long-term impact on the future economic and social development of many nations, specifically those in Central America. I would like to give, if I may, a couple of individuals cases that I personally have seen, first that occurred in El Salvador maybe 10 or 12 years ago. They took us to a tailor shop where this gentleman volunteered to give me a three-piece suit, cut to my standard style and size and everything, for $100. I don't know how the rest of the Members feel, but this was unbelievable. I found out that this gentleman in his time of need found out that he could get a sewing machine for $100 that he borrowed from the microenterprise. With that $100 and a pair of scissors, he started producing clothes. At the time that I saw him there, he had four sewing machines and the whole operation, and his $100 now had become $3,000 that he was able to invest. That was in El Salvador. Several years later when we were in Nicaragua we asked, why in the world don't microenterprises come to Nicaragua? In this particular case they took us to a shopping area of downtown Managua and showed us a young lady there who had borrowed $200 to start off with. She put vegetables and flowers and seeds and so forth for sale. After 3 years in that small investment of about $200, I asked her what her inventory was. It was a little grocery store by then. She had $7,000 worth of groceries there. All of this was done by small loans that were immediately paid back. Their loan qualities were unbelievable the way they paid it back, just as the statistics have already shown. I would just like to recommend highly that this is a wonderful program and we ought to do something about it. In many impoverished countries there are no secure financial institutions where people can apply for loans, no training facilities to teach people a trade, and no encouraging signs of growth and prosperity. The microenterprise programs make these resources available, and allow people who once had no hope of sustaining a livable wage, it gives them a real chance to become self-sufficient. As the U.S. continues to promote assistance, as opposed to handouts, I think it is important for us to applaud programs that grant an opportunity for growth. I encourage all my colleagues to vote in favor of this legislation, which has proven to benefit the international community that needs our help most, the poorest of the poor. Please support the Microenterprise Self-Reliance Act.

Mr. BALLENGER. Mr. Chairman, Section 4(b)5 of the bill states that ``Assistance provided under this subsection may only be used to support microenterprise programs and may not be used to support programs not directly related to the purposes described in paragraph (1).'' I would ask the gentleman from New Jersey (Chairman Smith), do I understand correctly that this language prohibits requirements not directly related to the enterprise for which credit is extended from being imposed on a microcredit beneficiary as a condition on their eligibility for assistance?

Mr. BALLENGER. Requirements not directly related to the microenterprise cannot be considered as a factor affecting the amount or terms of the assistance that microcredit applicants are eligible to receive?

Mr. BALLENGER. Thus, to take an extreme example, a program funded by this bill could not require that an applicant be sterilized before she is eligible for microenterprise assistance?

Mr. BALLENGER. I thank the gentleman from New Jersey (Mr. Smith).

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, today I am introducing two bills which reflect our continued efforts to make the Fair Labor Standards Act (FLSA) applicable to today's workforce. The FLSA is one of the most outdated workplace regulatory schemes faced by businesses and employees. As the primary statute governing the payment of wages and hours of work, the FLSA has changed little since it was enacted in 1938. In today's business environment, employers and employees must find ways to compete and meet the challenges of an increasingly competitive and global economy. Government should be user-friendly, less confrontational, and less costly. The regulatory scheme must be designed to be flexible to accommodate different situations and future challenges. The demographics of the workforce and the characteristics of jobs have changed dramatically over the past 60 years. But, the FLSA has not kept pace with these changes and it now stands out as being rigid and inflexible for today's work styles and work arrangements. The two bills that I am introducing today will update areas of the FLSA which regulate scheduling and compensation. Currently, the FLSA does not allow private sector employers to give their employees the choice of compensatory time off in lieu of overtime wages. The first bill, ``The Working Families Flexibility Act of 1999,'' would give private sector employers and employees an option which Federal, State, and local governments have had for many years--the choice of ``comp time'' in lieu of overtime pay. The legislation is identical to that which the House passed during the 105th Congress. The Working Families Flexibility Act answers the call of many workers for increased flexibility and choices in the workplace. Many employees are finding it increasingly difficult to find enough time for important family obligations or outside interests, which makes receiving comp time instead of cash overtime an attractive option. Many employers who want to be family-friendly find that flexible scheduling can be extremely difficult for employees who are paid by the hour and covered by the overtime provisions in the FLSA. Suppose an employee has a terminally ill parent who lives several states away. Days off with pay can become precious for that employee when a 2-day weekend does not provide enough time to travel and spend time with that parent. When that employee works a few hours of overtime each week, he or she may prefer to be paid with time off rather than with cash wages. If the individual is employed in the public sector, then he or she would have the choice of receiving paid time off in lieu of cash wages for overtime hours worked. However, under current Federal law, if the individual is employed in the private sector then he or she cannot choose paid time off, even if that form of compensation is preferred. The Working Families Flexibility Act would allow employers to make comp time available as an option for employees. Employees would have the choice, through an agreement with the employer, to take overtime pay in the form of paid time off. As with overtime pay, comp time hours would accrue at a rate of one and one-half hours of comp time for each hour of overtime worked. In response to concerns about employees being coerced by employers into choosing comp time over cash wages, the legislation includes numerous protections to ensure that employees cannot be pressured into one choice or the other. Employees could accrue up to 160 hours of comp time within a 12-month period. The legislation would require the employer to annually cash-out any unused comp time accrued by the employee. Employees may withdraw from a comp time agreement at any time and request a cash-out of any or all accrued, unused comp time. The employer would have 30 days in which to comply with the request. The legislation would also require an employer to provide the employee with at least 30 days notice prior to cashing out any accrued time in excess of 80 hours or prior to discontinuing a policy of offering comp time. Employees would be able to use their accrued comp time at anytime, so long as its use did not unduly disrupt the operations of the business (the same standard used in the public sector and under the Family and Medical Leave Act.) Employers would be prohibited from requiring employees to take accrued time solely at the convenience of the employer. I want to emphasize that this legislation does not eliminate or change the traditional 40-hour workweek. It simply provides employees with another option in the workplace--time off instead of overtime pay. This concept may be revolutionary to some, but to America's workers, who are increasingly frustrated about coping with the demands of work and family responsibilities, it is a long overdue change. The second bill, ``The Rewarding Performance in Compensation Act,'' would help workers to share, financially, when their efforts help produce gains for their company in productivity, sales, fewer injuries, or other important aspects of performance. The pressures of worldwide competition and rapid technological change have forced most employees to seek continuous improvement in productivity, quality, and other aspects of company performance. Employers often seek to encourage and reward employee efforts to improve productivity, quality, etc. through what are called ``gainsharing'' plans--linking additional compensation to measurable improvements in company, team, or individual performance. Employees are assigned individual or group productivity goals and the savings achieved from improved productivity, or the gains, are then shared between the company and the employees. The payouts are based directly on factors under an employee's control, such as productivity or costs, rather than on the company's profits. Thus, employees directly benefit from improvements that they help to produce by increasing their overall compensation. Unfortunately, employers who choose to implement such programs can be burdened with unpredictable and complex requirements by the Fair Labor Standards Act, which clearly did not envision these types of ``pay based upon performance'' plans. For example, if a bonus is based on production, performance or other factors, the payment must then be divided by the number of hours worked by the employee during the time period that the bonus is meant to cover, and added to the employee's regular hourly pay rate. This adjusted hourly rate must then be used to calculate the employee's overtime rate of pay. For other types of employees, such as executive, administrative, or professional employees who are exempt from minimum wage and overtime, an employer can easily give financial rewards without having to recalculate rates of pay. The Rewarding Performance in Compensation Act would amend the FLSA to specify that an employee's regular rate of pay for the purposes of calculating overtime would not be affected by additional payments that reward or provide incentives for employees who meet productivity, quality, efficiency or sales goals. By eliminating disincentives in current law, this legislation will encourage employers to reward their employees and make it easier for employers to ``share the wealth'' with their employees. I would urge my colleagues to support these two common sense reforms that will help to bring the FLSA, passed in 1938, a little closer to the needs of employees that the law is meant to benefit, as we enter the 21st century.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, I rise today in support of House Resolution 110, a resolution congratulating the Government and the people of the Republic of El Salvador on successfully completing free and democratic elections. On March 7, 1999, El Salvador held free and fair elections for president and vice-president. I would like to take this time to personally congratulate President-elect Francisco Guillermo Flores Perez and Vice President-elect Carlos Quintilla Schmidt on their recent victory and their continued commitment to democracy. This election was yet another milestone in the normalization of the democratic process in El Salvador, and I wish to commend this nation for its efforts. El Salvador has come a long way since the 1980's, when the nation was in the midst of a terrible civil war. Many of you will recall that the war cost the lives of tens of thousands of Salvadorans and left the country in shambles. Now, the Salvadorans have replaced bullets with ballots. It was the strong leadership and guidance, coupled with courage, demonstrated by former President Alfredo Cristiani that rescued the country and paved the way for El Salvador's future. His successor, President Armando Calderon Sol, elected in a free and fair contest, held the same commitment to democracy and kept this nation moving forward. The stark contrast between war-torn El Salvador and the El Salvador of today is a tribute to its people and its leaders. In a time where peace and unity are not always the goal of the majority, I believe Americans must continue to show support for our Salvadoran neighbors and their continued progress through this long and fragile process of democratization. I hope you will join me in congratulating El Salvador on this latest and most remarkable accomplishment.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, how soon we forget. President Clinton just 3 years ago proposed a five year budget that would have added $1.2 trillion to the national debt. That is $200 billion deficits every year for as far as the eye could see. The Republicans said no. They said no to big government. They said no to using phony numbers. They said no to a national health care system that his own party admitted would have pushed the deficit into the stratosphere. So Congress insisted on passing a bipartisan budget that balanced and kept the lid on spending. Well here we go again. It is back to budget-busting time. Once again, it is going to be up to Congress to act like grownups and keep the lid on spending. The President's budget actually expands entitlement spending, puts the Medicare program in jeopardy only one year after we acted to save it, and goes back to tax increases that hurt the economy. Tax and spend, tax and spend. No matter how good the White House can spin it, and they are very good, this budget is a tax and spend budget that takes us in the wrong direction.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, one would never know what is actually in the Republican budget proposal by listening to the other side. In fact, I do not even recognize our own budget after listening to what the other side is saying about it. I guess it is Mediscare all over again with a lot of demagoguery on Social Security added on to it. On second thought, make that a lot of demagoguery on Social Security to go with it. One has the impression that our friends on the other side of the aisle have not looked at the Congressional Budget Office report on our budget. Maybe they are getting their information about our budget from their own press releases. Our budget reserves 100 percent of the retirement surplus for Social Security and Medicare. Let me repeat that for the benefit of any demagogues on the other side of the aisle who seem to have some difficulty with that fact. Our budget reserves 100 percent, again 100 percent, of the retirement surplus for Social Security and Medicare. I urge my skeptical colleagues on the other side to call the CBO for themselves to verify this fact.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, the President and the Vice President have worked diligently in the past few years to link Federal projects to union-only construction firms. Unfortunately, the Los Angeles Unified School District is following suit by proposing a new major $2.4 billion school construction initiative, using only unionized contractors. I say this is unfortunate because union-only contracts increase the cost of construction projects by limiting competition, which results in higher labor costs. It has been estimated by some that the union-only project labor agreement could increase the construction cost by 10 to 15 percent. This means that funds aimed at building and renovating some of Los Angeles' schools would actually be lost to artificially high labor cost. I am a firm believer that the lowest qualified bidder for these building projects should be able to win the construction job, regardless of union affiliation. Quite frankly, I find it against the American spirit of healthy competition to put rules in place that work otherwise. I hope that when this project labor agreement is voted upon on the 23rd of this month, the Los Angeles Unified School District will vote for the best interest of their students and against an anti-education project labor agreement.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, to make sure that the Social Security and Medicare are there when people need it, the Republican plan locks away 100 percent of the retirement surplus in a safe deposit box. Now I know that the response of many seniors in my district is, ``But I thought that was already the case,'' or, ``Why wasn't that done a long time ago?'' Mr. Speaker, I cannot answer for 40 years of Democrat control of this body, but I can say that Republicans are taking the lead on the issue. While the President's plan takes only 62 percent of the surplus and reserves it for Social Security, the Republican plan takes 100 percent of the retirement surplus and locks it away for both Social Security and Medicare. Now let me repeat that the Republican plan locks away 100 percent of the retirement surplus and reserves it for Social Security and Medicare. Let us not kid ourselves. The retirement surplus alone will not solve the problems of Social Security and Medicare, but our commitment to strengthen these two programs and protect seniors is clear. Mr. Speaker, I urge my Democrat colleagues to join us in a commitment to protecting these programs for seniors.

Mr. BALLENGER

Mr. BALLENGER. Mr. Chairman, Mike Ward, North Carolina Chief School Official said before the Committee, we wanted Ed Flex as soon as possible. This postpones it. As a former county commissioner, I was able to see the actual effect of federal funding of local education along with the rules and regulations that tell you what you have to do and how you have to do it. One size fits all--like it or not. Same for my poorest or richest schools. Now we have a chance to free local schools from the restrictions and red tape that go with not only federal but also state monies. Let's keep it simple and Ed Flex does that. Twelve states are currently able to waive certain federal education regulations, giving schools within these states the ability to use federal education funds to support innovative, comprehensive school improvement measures. I feel that it is imperative that we give all 50 states such waivers--including my state of North Carolina--so that students all across America may benefit from locally-designed school improvements. Only approximately six percent of the funds needed to educate our K- 12 students are provided by the federal government. However, countless regulations and requirements are tied to the use of these funds. Again, the education environment in each state and local school district is different, so why should the federal government operate under the assumption that one set of universal program requirements fits all circumstances? States and schools must be flexible in addressing local school matters and the federal government should aide in this effort rather than obstruct positive reforms. And, for the record, H.R. 800 does contain provisions that ensure states are on the way to adopting educational content standards, performance standards, and accountability standards for local education agencies before being granted waiver authority. Under the bill, the Secretary of Education will conduct performance reviews and can revoke a state's waiver authority if a state educational agency fails to make measurable progress in meeting their stated objectives. Like the existing 12 ``ed-flex'' states, North Carolina and every other state deserves the right to participate in this program. As we all know, education in this country is at a crisis point. We must let go of limited thinking in terms of education improvement and let the states and local governments use every tool at their disposal in finding new solutions--including non-traditional uses of federal education funds. We need to formulate some new thinking in education and passage of this bill is one step towards that goal. Some of our colleagues from the other side of the aisle have said that they are in full support of this bill but feel it should only move if it is part of the reauthorization legislation for the Elementary and Secondary Education Act which we hope to pass in the upcoming months. Well, if Congress were to wait for the ideal vehicle to move all legislation, we'd never get anything done. And maybe as some people look to the 2000 election--that's the point. Two or three weeks ago the minority leader in the Senate said this was the ideal bill to show how bipartisanship works and that probably all 100 Senators would vote for it. Additionally, all 50 governors endorse it. So what happened? Last week the minority decided to hold up that bill in the Senate by offering partisan amendments. Does it appear that our Democratic brethren have decided to stop all constructive efforts in hopes to produce a ``do nothing Congress'' and in doing so, gain control of the House and forget the needs of the country.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, the same people who told us again and again and again just 2 years ago that Congress could not cut taxes and balance the budget were wrong. Congress cut taxes, and the budget is actually now in surplus. Well, the same people now are telling us that we cannot cut taxes and strengthen Social Security at the same time. Well, of course we can. The same people who are defending the President's budget, which loots the Social Security trust fund to the tune of $30 billion on new Washington-based social programs and double counts $2.4 trillion in Social Security, are criticizing the Republican plan to strengthen Social Security, cut taxes and pay down the debt. Well, the naysayers are wrong. The Republican plan will accomplish three important goals. It will strengthen Social Security, it will refund middle-class taxpayers some of the government overcharge, and it will start to chip away at the national debt, which means lower interest rates and good economic times for people trying to make ends meet.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, I would like to challenge the other side to a pledge, a pledge that has been notably absent from the proposals of the other side of the aisle. The Republican plan to protect and strengthen Social Security does not raise taxes, and it does not reduce benefits. The President's plan, however, leaves that option wide open. It would not take a rocket scientist or a fortune teller to figure out what that means. The key issues for the current and future retirees is, will my retirement be secure and will Social Security remain a good deal? Social Security, unless dramatically reformed, fails on the first question. As for the second, Social Security is a good deal for current retirees; but, very soon, it will be a terrible deal for future retirees. The President's proposal does nothing about that. A worker's return on investment will continue to head down if real structural reforms are not made. Let us keep Social Security solvent and a good deal for workers when they retire.