Robert Bennett

Mr. BENNETT

Mr. BENNETT. I wish to bring to the attention of the chairman of the Interior Appropriations Subcommittee a matter of great importance to the State of Utah--the matter of the impending closure of U.S. Bureau of Mines facilities throughout the United States. The facility in Salt Lake City will be closed and 115 jobs will be lost. The Salt Lake City facility has conducted valuable research in environmental remediation and water research. While I am disappointed that the Senate acceded to House demands that the Bureau of Mines be closed, I also recognize the long-term benefits resulting from the earnest efforts to reduce the budget deficit and downsize the Federal Government. And in recent weeks, a silver lining emerged in the cloud surrounding the closure of the Salt Lake City facility. Mr. President, the chairman will be pleased to learn that efforts are underway right now to make preparations to privatize the Salt Lake City Bureau of Mines facility. I would be remiss if I did not commend the staff of the Salt Lake City facility for their tremendous efforts to find a viable alternative which will prevent the technical expertise which has been accumulated for years from going to waste. On their own initiative, several employees have prepared a list of options in light of the pending closure. The most promising option and the one that the people of Utah are the most excited about, would permit the privatization of the Bureau of Mines facility. An interested group of investors and the employees of the Bureau of Mines have been in close contact in recent weeks to work out the details. Sufficient funding has been secured and should the facilities be transferred to the State of Utah, the State would in turn take the necessary steps to ensure the continued operation of these facilities under a consortium of private and State interests. Mr. President, the chairman knows, there is legislative language in H.R. 1977 which grants the Secretary of Interior the authority to convey without reimbursement, the title and all interest of several Bureau of Mines facilities to various State university and government entities. While the Salt Lake City facility is not mentioned directly, the language permits transfer of such facilities as the Secretary deems appropriate. May I ask the chairman if such a transfer would be appropriate for the Salt Lake City facility?

Mr. BENNETT. Is it the chairman's understanding that this action should occur as soon as possible?

Mr. BENNETT. I thank the chairman for his explanation as well as the excellent manner in which has managed this bill.

Mr. BENNETT

Mr. BENNETT. Ten more seconds. The budget he sent us in 1996 received the resounding vote of 99-0 against it. We will see what he does next year.

Mr. BENNETT

Mr. BENNETT. I am not that optimistic. I thank the Senator for yielding.

Mr. BENNETT. Is it the Senator's memory that Senator Kennedy endorsed the 7.1 percent of the President's health care program?

Mr. BENNETT. Does the Senator recall that under the health care proposal offered by George Mitchell last year the growth rate on Medicare was held to 7.1 percent per year?

Mr. BENNETT. Did I hear the Senator correctly say that the growth of Medicare would be 7.7 percent per year?

Mr. BENNETT. Mr. President, will the Senator yield for a question?

Mr. BENNETT

Mr. BENNETT. Mr. President, today I am introducing legislation in behalf of myself, Senators Thomas, Simpson, Warner, and Hatch to amend the Surface Mining Control and Reclamation Act of 1977. I encourage my colleagues to support this legislation. The Surface Mining Control and Reclamation Act [SMCRA] was signed into law by President Carter in the aftermath of the energy crisis, when coal regulation was considered crucial to the success of his national energy program. In 1977, when this legislation was passed, there were more than 6,000 operating coal mines. Today, the number of operating mines has been reduced approximately to half of the 1977 level. The questions which were first raised back then regarding the States' abilities to effectively operate regulatory programs have been satisfactorily answered and now is the time that we should reexamine the role of OSM and the effectiveness of the current law. When Congress passed SMCRA, it was agreed that the time had arrived for tougher environmental standards for surface mining operations. SMCRA established specific environmental guidelines for surface mines, including requirements for water and soil treatment and remediation as well as reclamation requirements for old and abandoned mines. It also established the Abandoned Mine Reclamation Fund and the Office of Surface Mining. Most [[Page S 16822]] importantly, it established a framework under which States and the Federal Government could work in unison to administer this new law. SMCRA was hailed as a model of cooperative State and Federal efforts. Congress passed it with the understanding that after an initial phase- in period, the States would assume responsibility for administering the law. It was understood that once States established environmental standards which were equally as tough as Federal standards, States would assume primacy and could administer their own administrative and environmental programs subject to approval of those programs by the Office of Surface Mining. Today 23 of the 26 coal producing States have assumed the role as the SMCRA regulating authority in these States. These primacy States have their mining programs periodically reviewed by OSM, which has occasionally exercised its Federal regulatory authority as necessary and expected under the SMCRA agreements. Unfortunately, OSM has not relinquished full administrative oversight of SMCRA and still retains a great deal of regulatory authority that rightly belongs to the primacy States. The result has been the creation of a problematic, dual regulatory scheme in which OSM regularly issues notice of violations [NOV's] directly to coal mine operators in primacy States whenever OSM is dissatisfied with the way these States are administering their own programs. This daily intervention in State program matters impacts the coal operators most who are often caught in between Federal-State disputes. For example, the State of Utah obtained primacy for the administration of SMCRA in 1983. We mine 24 million tons of coal annually from 13 active mines. These mines operate in compliance with the environmental requirements of the Utah regulatory program and the mined lands are being returned to productive nonmining uses. In short, the regulatory program is working and the intent and purpose of SMCRA is being fulfilled. Since January 1993, OSM has taken five direct Federal enforcement actions against Utah. All five were based on disagreements between OSM and the State of Utah over interpretation of the program's language. Not one of the five violations concerned any environmental safety or environmental hazard. Three of the five enforcement actions were dismissed by the Department of Interior's own administrative law judges. The other two concerned a dispute between OSM and Utah concerning the jurisdictional reach of the regulatory program. Both these disputes concerned coal handling and processing equipment located at power plants. One has since been upheld and the other is pending an appeal. In each instance, OSM cited the operator for a practice or condition which had already specifically been approved by the Utah program. Again, none of the violations concerned adverse off-site environmental impacts. Direct Federal enforcement has not helped protect the citizens of Utah or the environment. Instead it has diverted scarce resources away from other, more productive work conducted by OSM, Utah, and Utah coal operators. Longstanding disagreements between OSM and the primacy States have retarded the development of State regulatory programs, and continue to inhibit effective implementation. While significant improvements have been made by OSM in recent months, several structural problems continue to interfere with effective and efficient implementation of the coal regulatory program. Again, the most troublesome of these problems is the dual enforcement authority. Direct Federal enforcement in Utah has not only been ineffective and expensive, it has been counterproductive environmentally. Clearly there is a need to amend SMCRA to return the balance of authority to the primacy States as originally intended by the law. This legislation would make several technical amendments designed to acknowledge the role of those States as the primary regulatory agency where there is an approved State program. These proposed revisions would eliminate the redundancy and confusion that occurs when duplicative State and Federal program provisions are applied directly to mining operations. This legislation would also clarify that the authority to issue notices of violations [NOV's] in primacy States rests exclusively with the State regulatory authority, unless OSM first determines that the State regulatory authority has failed to properly administer the program, in which case direct Federal authority can be implemented. We have also deleted the redundant reference to the Federal program provisions to avoid any implication of Federal oversight authority to suspend permits in a State with an approved regulatory program. I believe this clarifies the intent of SMCRA as originally passed. The legislation would clarify that an operator's responsibility is to conform his operations to the terms and conditions of the approved permit for the mine. It also clarifies the regulatory agency's authority to require revisions to a permit as necessary to ensure compliance with the program requirements. Since many decisions of the administrative law judges remain pending on appeal before the Interior Board of Land Appeals for several years before a decision is issued under the existing format, the legislation would eliminate the unnecessary requirement that, as established in OSM's rules, appeals of certain agency decisions proceed through two layers of administrative review prior to seeking judicial review. Finally, this legislation would place a 3-year time limitation upon commencement of actions for alleged violations. This would encourage the more prompt initiation of any administrative or other actions. In conclusion, Mr. President, the coal regulatory program created by SMCRA has provided great benefit to the environment, the citizens of Utah, and the coal-mining community. The issues raised by this legislation are not the fault of coal regulation itself, but are the products of an unclear delineation of responsibilities and authorities between the Federal OSM and the primacy States. These amendments will reestablish the intent of SMCRA by reinforcing the role of the States in administering their own regulations. This legislation makes good sense and I encourage my colleagues to join me in cosponsoring this legislation.

Mr. BENNETT

Mr. BENNETT. Mr. President, today I am introducing legislation in behalf of myself, Senators Thomas, Simpson, Warner, and Hatch to amend the Surface Mining Control and Reclamation Act of 1977. I encourage my colleagues to support this legislation. The Surface Mining Control and Reclamation Act [SMCRA] was signed into law by President Carter in the aftermath of the energy crisis, when coal regulation was considered crucial to the success of his national energy program. In 1977, when this legislation was passed, there were more than 6,000 operating coal mines. Today, the number of operating mines has been reduced approximately to half of the 1977 level. The questions which were first raised back then regarding the States' abilities to effectively operate regulatory programs have been satisfactorily answered and now is the time that we should reexamine the role of OSM and the effectiveness of the current law. When Congress passed SMCRA, it was agreed that the time had arrived for tougher environmental standards for surface mining operations. SMCRA established specific environmental guidelines for surface mines, including requirements for water and soil treatment and remediation as well as reclamation requirements for old and abandoned mines. It also established the Abandoned Mine Reclamation Fund and the Office of Surface Mining. Most [[Page S 16822]] importantly, it established a framework under which States and the Federal Government could work in unison to administer this new law. SMCRA was hailed as a model of cooperative State and Federal efforts. Congress passed it with the understanding that after an initial phase- in period, the States would assume responsibility for administering the law. It was understood that once States established environmental standards which were equally as tough as Federal standards, States would assume primacy and could administer their own administrative and environmental programs subject to approval of those programs by the Office of Surface Mining. Today 23 of the 26 coal producing States have assumed the role as the SMCRA regulating authority in these States. These primacy States have their mining programs periodically reviewed by OSM, which has occasionally exercised its Federal regulatory authority as necessary and expected under the SMCRA agreements. Unfortunately, OSM has not relinquished full administrative oversight of SMCRA and still retains a great deal of regulatory authority that rightly belongs to the primacy States. The result has been the creation of a problematic, dual regulatory scheme in which OSM regularly issues notice of violations [NOV's] directly to coal mine operators in primacy States whenever OSM is dissatisfied with the way these States are administering their own programs. This daily intervention in State program matters impacts the coal operators most who are often caught in between Federal-State disputes. For example, the State of Utah obtained primacy for the administration of SMCRA in 1983. We mine 24 million tons of coal annually from 13 active mines. These mines operate in compliance with the environmental requirements of the Utah regulatory program and the mined lands are being returned to productive nonmining uses. In short, the regulatory program is working and the intent and purpose of SMCRA is being fulfilled. Since January 1993, OSM has taken five direct Federal enforcement actions against Utah. All five were based on disagreements between OSM and the State of Utah over interpretation of the program's language. Not one of the five violations concerned any environmental safety or environmental hazard. Three of the five enforcement actions were dismissed by the Department of Interior's own administrative law judges. The other two concerned a dispute between OSM and Utah concerning the jurisdictional reach of the regulatory program. Both these disputes concerned coal handling and processing equipment located at power plants. One has since been upheld and the other is pending an appeal. In each instance, OSM cited the operator for a practice or condition which had already specifically been approved by the Utah program. Again, none of the violations concerned adverse off-site environmental impacts. Direct Federal enforcement has not helped protect the citizens of Utah or the environment. Instead it has diverted scarce resources away from other, more productive work conducted by OSM, Utah, and Utah coal operators. Longstanding disagreements between OSM and the primacy States have retarded the development of State regulatory programs, and continue to inhibit effective implementation. While significant improvements have been made by OSM in recent months, several structural problems continue to interfere with effective and efficient implementation of the coal regulatory program. Again, the most troublesome of these problems is the dual enforcement authority. Direct Federal enforcement in Utah has not only been ineffective and expensive, it has been counterproductive environmentally. Clearly there is a need to amend SMCRA to return the balance of authority to the primacy States as originally intended by the law. This legislation would make several technical amendments designed to acknowledge the role of those States as the primary regulatory agency where there is an approved State program. These proposed revisions would eliminate the redundancy and confusion that occurs when duplicative State and Federal program provisions are applied directly to mining operations. This legislation would also clarify that the authority to issue notices of violations [NOV's] in primacy States rests exclusively with the State regulatory authority, unless OSM first determines that the State regulatory authority has failed to properly administer the program, in which case direct Federal authority can be implemented. We have also deleted the redundant reference to the Federal program provisions to avoid any implication of Federal oversight authority to suspend permits in a State with an approved regulatory program. I believe this clarifies the intent of SMCRA as originally passed. The legislation would clarify that an operator's responsibility is to conform his operations to the terms and conditions of the approved permit for the mine. It also clarifies the regulatory agency's authority to require revisions to a permit as necessary to ensure compliance with the program requirements. Since many decisions of the administrative law judges remain pending on appeal before the Interior Board of Land Appeals for several years before a decision is issued under the existing format, the legislation would eliminate the unnecessary requirement that, as established in OSM's rules, appeals of certain agency decisions proceed through two layers of administrative review prior to seeking judicial review. Finally, this legislation would place a 3-year time limitation upon commencement of actions for alleged violations. This would encourage the more prompt initiation of any administrative or other actions. In conclusion, Mr. President, the coal regulatory program created by SMCRA has provided great benefit to the environment, the citizens of Utah, and the coal-mining community. The issues raised by this legislation are not the fault of coal regulation itself, but are the products of an unclear delineation of responsibilities and authorities between the Federal OSM and the primacy States. These amendments will reestablish the intent of SMCRA by reinforcing the role of the States in administering their own regulations. This legislation makes good sense and I encourage my colleagues to join me in cosponsoring this legislation.

Mr. BENNETT

Mr. BENNETT. Mr. President, as Utah prepares to host the 2002 Winter Olympics, I am pleased today to join my colleague Senator Hatch in introducing the Snowbasin Land Exchange Act of 1995. Snowbasin Ski Resort, which is owned by Sun Valley Company, will host both the men's and women's downhill ski events. This land exchange will direct the Secretary to exchange 1,320 acres of Forest Service Lands within the Cache National Forest for lands of approximate and equal value owned by Sun Valley Co. This legislation is fundamental to the success of the 2002 Winter Olympics. It is a win-win situation for all parties involved and I encourage my colleagues to support this bill.

Mr. BENNETT

Mr. BENNETT. Mr. President, as Utah prepares to host the 2002 Winter Olympics, I am pleased today to join my colleague Senator Hatch in introducing the Snowbasin Land Exchange Act of 1995. Snowbasin Ski Resort, which is owned by Sun Valley Company, will host both the men's and women's downhill ski events. This land exchange will direct the Secretary to exchange 1,320 acres of Forest Service Lands within the Cache National Forest for lands of approximate and equal value owned by Sun Valley Co. This legislation is fundamental to the success of the 2002 Winter Olympics. It is a win-win situation for all parties involved and I encourage my colleagues to support this bill.

Mr. BENNETT

Mr. BENNETT. Mr. President, I rise today to have printed in the Record a Declaration signed by Governor Mike Leavitt of Utah entitled: ``Greek-American Veterans Appreciation Week, November 5-November 12, 1995.'' During the week of November 5th, the Hellenic Cultural Association in Utah is sponsoring a series of events which include a variety of displays in the Hellenic Cultural Museum, Memorial Services and a Greek-American Veterans' Luncheon. The events have been created to coincide with the 50th Anniversary of the ending of World War II and also for the annual observance of Veterans Day, November 11th. I salute the Greek Community in Utah for this effort. To my knowledge they are the only Greek Community in America which is honoring their veterans in this way. I extend my appreciation, support and gratitude to Chris S. Metos, Chairman of the appreciation week. I applaud him for his leadership in this endeavor. I ask unanimous consent that the text of the declaration be printed in the Record.

Mr. BENNETT

Mr. BENNETT. Mr. President, on Monday, October 16, there was a very interesting article that ran in the Wall Street Journal. At the appropriate time, I am going to ask unanimous consent that it be printed in the Record. The headline says: ``Clinton Recruits Campaign Team of `Nasty Boys' With Reputation as Tough, Savvy Hired Guns.'' Then the lead paragraph says: Gearing up for 1996, President Clinton is fielding a motley crew of re-election strategists with reputations for shrewdness and ruthless tactics. A mainstay on his team, New Yorker Henry Sheinkopf, readily boasts, ``I subscribe to terror.'' That is a very interesting statement, Mr. President. I have had it put on a chart--we are debating this whole thing with charts--``I subscribe to terror.'' He goes on to say in the article: Terror tends to work . . . because it is so easy to make people hate. Now, back to the article, quoting: Mr. Sheinkopf doesn't deny the remarks, but says they were taken out of context. He says he was addressing the strategy for a noncandidate campaign . . . A noncandidate campaign. That is very interesting because what we have running on the airwaves today is a series of television ads that are terrorizing our senior citizens, and this is a noncandidate campaign. Mr. Sheinkopf was the architect of this summer's unprecedented ad campaign on crime. This is the next statement that I have here on a chart. He is part of the group that wanted to start the Medicare ads early this summer. Quoting now: The team wanted to attack the GOP with Medicare ads in early September . . . they got the go ahead. Again, he said, ``I subscribe to terror.'' That is the statement of the President's strategist on noncandidate campaigns. There is more in the article. I will quote a few before I turn directly to the Medicare debate. But this demonstrates what we are faced with, as far as the ads currently running on television are concerned. Quoting: Already, friends of the administration peg these mercenaries ``The Nasty Boys.'' Like Mr. Clinton, many of them are accused of lacking an ideological rudder, allowing them to roam from left to right on policies. Elsewhere in the article, it says: Elizabeth Holtzman will never forget when she first heard about Mr. Sheinkopf. The former New York congresswoman was running for Brooklyn district attorney in the 1980s when, she says, her opponent fired off one of the ``nastiest, sexist ads'' she had ever heard. . . . She found out the spot was created by Mr. Sheinkopf. Her reaction? She hired him for her next campaign. ``He's very creative,'' Mrs. Holtzman says. And, like other members of this media team, he'll bat for most anyone--as long as they are paying clients. Mr. President, I ask unanimous consent that the entire article be printed in the Record at the conclusion of my remarks.

Mr. BENNETT. Mr. President, I found this interesting because it demonstrated what is happening to political debate in this country when we are not debating the merits or demerits of the proposal before us. Instead, we are mounting 30-second spots to attack each other in the spirit of terror. That is not my word, but the word of the man whom the President of the United States has chosen to advise him on this particular issue. By contrast, Mr. President, I am aware of some focus groups that have been held in an attempt to understand this issue, where the Republican plan was described in as neutral a term as possible and the Democratic proposal is described in as neutral a term as possible; they were presented to a group of senior citizens in a focus group, with the first called the Smith plan and the second one called the Green plan. Discussion was held, without any prejudice one way or the other. When it was over, they found that by about an 80 percent to 20 percent margin, in virtually every section of the country where this attempt has been made to find out people's reaction, the Smith plan out-polled the Green plan. And only then was it unveiled to these people that they had, in fact, by a vote of 4 to 1, subscribed to the Republican position rather than the Democratic position on this issue. I find this very encouraging for this reason, Mr. President. I go back to the debate in the last Congress over health care when the President unveiled his health care proposal. A very substantial majority of Americans were in favor of it. We on this side of the aisle felt very lonely in our opposition to it, but we were sustained by this knowledge: The more people that knew about the President's plan, the less they approved of it. The more the information got out, the more the poll numbers fell. So that by the time we finally got to the resolution of that issue on this floor, they had switched completely. Instead of being 2 to 1 in favor of the President's plan, they were 2 to 1 in opposition to the President's plan. Based on the research that has been done in this nonideological fashion, we find that the more people know the facts of the Republican proposal on Medicare, the more they support it. So that, over time, the American people--as they did with President Clinton's plan--are going to move in the direction of supporting the Republican position. Right now, if you look at the polls, they are virtually identical. If you poll Americans, about 50-50 are saying we are for the Democrat position or we are for the Republican position. That would bother me a great deal if I did not know that the more people know about the particulars of our plan, the more they support it. So I urge my fellow Republicans to stand firm with where we are, knowing that time is on our side, that facts are on our side, and do not be terrorized by the deliberate program of terror that is being mounted primarily out of the White House and from the Democratic National Committee. I yield the floor. Exhibit 1 [From the Wall Street Journal, Oct. 16, 1995] Clinton Recruits Campaign Team of ``Nasty Boys'' With Reputation as Tough, Savvy Hired Guns (By Michael K. Frisby) Washington.--Gearing up for 1996, President Clinton is fielding a motley crew of re-election strategists with reputations for shrewdness and ruthless tactics. A mainstay on his team, New Yorker Henry Sheinkopf, readily boasts, ``I subscribe to terror.'' Already, friends of the administration peg these mercenaries ``The Nasty Boys.'' Like Mr. Clinton, many of them are accused of lacking an ideological rudder, allowing them to roam from left to right on policies. Bill Lacy, a strategist for GOP frontrunner Sen. Robert Dole of Kansas, says he expects ``a scorched earth campaign'' from this group. The Clinton-Gore re-election campaign will be headed by a prominent Democrat, perhaps a cabinet member, who will set the grand blueprint with the president. But every campaign relies on its savvy strategists and creative media team to fire up voters. And Mr. Clinton has loaded his campaign with the most aggressive war counselors available. Led by Dick Morris, of Connecticut, the president's media- message team also includes the New York polling firm Penn & Schoen Associates Inc. It's anchored by Washington veteran Robert Squier, a firebrand himself, who plays a calming role on this feisty group. ``We are putting together an exciting creative team that can pick up where the strategic thinking leaves off,'' Mr. Squier says. It is Mr. Sheinkopf, a whiz at low-budget ads, who has raised the most eyebrows. A year ago, he shared his trade secrets at a convention of political consultants and talked about using fear to win campaigns. Mr. Sheinkopf told the gathering, ``Terror tends to work . . . because it is so easy to make people hate.'' Mr. Sheinkopf doesn't deny the remarks, but says they are often taken out of context. He says he was addressing the strategy for a noncandidate campaign, such as a referendum fight, in which the clients don't have much money. ``I'm tough, but I'm not ruthless,'' he insists. ``I fight for my clients.'' Elizabeth Holtzman will never forget when she first heard about Mr. Sheinkopf. The former New York congresswoman was running for Brooklyn district attorney in the 1980s when, she says, her opponent fired off one of the ``nastiest, sexist ads'' she had ever heard. ``The voice said, `She's a very nice girl. I might like her for my daughter, but not district attorney,''' Ms. Holtzman recalls. She found out the spot was created by Mr. Sheinkopf. Her reaction? She hired him for her next campaign. ``He's very creative,'' Ms. Holtzman says. And, like other members of this media team, he'll bat for most anyone--as long as they are paying clients. Mr. Sheinkopf's claim to fame is hot radio spots for African-American candidates, many of whom are liberals. Yet, he and his partner, Gerry Austin, in the wake of the riots after the Rodney King case, worked on behalf of Los Angeles police officers fighting a reform measure on the ballot. Mr. Morris, a longtime associate of Mr. Clinton, has worked for conservative Republicans, such as Mississippi Sen. Trent Lott. Mark Penn, a partner in Penn & Shoen, worked for maverick Ross Perot in 1992, and the firm does considerable work for corporations. Thus far, the consultants, with Mr. Morris calling the shots, have helped bring Mr. Clinton back to life after last fall's GOP sweep. ``They have presented a disciplined and controlled message,'' said Democratic strategist Robert Beckel. ``It has put the president back in the dance.'' push for budget plan Even Mr. Morris's critics tip their hats to his pushing the president to offer up a balanced-budget plan last spring, a move that embittered other Democrats. Mr. Morris argued it would gain the president credibility on economic issues, opening the door for him to now hammer the GOP for squeezing Medicare and education funds without appearing to be a tax- and-spend Democrat. Mr. Sheinkopf was the architect of this summer's unprecedented ad campaign--16 months before the election-- portraying Mr. Clinton as tough on crime. Using his connections, the former New York City police officer lined up cops around the country for the ads. Inside the White House, the acceptance of Mr. Morris and his crew is growing, but there are still spats. The team wanted to attack the GOP with Medicare ads in early September, but were blunted by Deputy Chief of Staff Harold Ickes, who doesn't want to get caught short on campaign cash next summer. By late September, however, the media team got the go-ahead. Aides say that while Mr. Clinton values his hired guns, the president is comfortable with Mr. Ickes controlling the purse strings and taking charge of relations with the Democratic base--unions, liberals and minority voters. The team may prepare one more media hit before January; it is likely to be either a package on the budget battle or about Mr. Clinton cherishing the same values as average Americans. Some Democrats privately raise concerns about whether this crew is ready for prime time, however. Mr. Morris, for one, is described by many as brilliant, but has his share of bloopers. Last year, he produced an ad for Tennessee GOP gubernatorial candidate Don Sundquist that people still talk about. It was a high-tech TV spot with a car driving in a video game, crashing into barriers with signs carrying the theme that the candidate was against taxes. ``It didn't have the desired effect,'' concedes Ray Pohlman, the campaign manager. But in the next breath, he says Mr. Morris is fabulous at deciphering polling data and crafting a message. And Mr. Sundquist won the election. The strategizing on the Clinton campaign goes right down to bringing in an outside expert to do the video work. Mr. Morris, who was responsible for hiring Mr. Sheinkopf, also recruited Marius Penczner, who runs a video production house in Memphis, Tenn. Mr. Penczner, whom Mr. Morris met on the Sundquist campaign, is known more for country music videos than political work. Mr. Clinton has marveled at the quality of Mr. Penczner's Oval Office video shots, which are in most of the president's TV spots. Controversial Poll Mr. Morris also picked Penn & Schoen as the campaign pollsters, virtually ousting old Clinton hand Stan Greenberg. Their results, however, are sometimes controversial. Their poll put then-Ohio Rep. David Mann up 28 points in his Democratic primary fight against State Sen. William Bowen. A short time later, fund-raising letters went to political action committees, citing Mr. Mann's lead. He won the race, but by two percentage points. ``We laughed at that poll,'' recalls Mr. Bowen. ``It was just part of their tactical strategy to show him way in front; that wasn't the case.'' The poll was five months before the election, and undecided voters later turned against the incumbent, says Douglas Schoen. ``We always thought it would be close,'' he says, noting a poll closer to the election showed a tighter contest. The new Clinton campaign team raises concerns among presidential scholars. While applauding their cleverness, experts search for the intellectual thrust. Mr. Clinton likes to be compared to President Truman, who overcame a hostile Congress to win re-election. But Fred Greenstein, a Princeton University historian, notes Truman's comeback was fueled by the intellectual energy of Clark Clifford and others--not image-makers. And that, he says, is missing from a Clinton team searching for the best political answer. ``Maybe you need someone with substantive fiber to give you advice,'' Mr. Greenstein says.

Mr. BENNETT

Mr. BENNETT. Mr. President, today I am introducing the Medical Records Confidentiality Act of 1995. This legislation is one of the many small steps that are needed to reform our health care system. I am pleased that a number of my Republican and Democratic colleagues have joined me in cosponsoring this legislation. [[Page S 15577]] I can think of few other areas in our lives that are more personal and private than is our medical history. Each of us has a relationship with our doctors, nurses, pharmacists, and other health care professionals that is unique and privileged. They may know things about us that we choose not to tell our spouses, children, siblings, parents, or our closest friends. While our medical records may contain nothing out of the ordinary, to us these records should be strictly personal. S. 1360 aims, first, to provide Americans with greater control over their medical records in terms of confidentiality, access, and security, and second, to provide the health care system with a Federal standard for handling identifiable health information. Most Americans believe their medical records are protected in terms of confidentiality under Federal law. Most Americans are mistaken. Protecting the confidentiality of our medical records is an expectation that is yet to be guaranteed as a right. This legislation is an opportunity for Congress to act in a bipartisan manner to resolve an important problem within our health care system. Today over 80 percent of our medical records are paper based; however, in the not too distant future all of our medical records will be electronic based. In my opinion and in the opinion of a number of outside groups such as the Center for Democracy and Technology, American Health Information Management Association, International Business Machines Corporation, Blue Cross and Blue Shield Association, and the American Hospital Association, it is time to put into place the safeguards and security measures needed to protect the integrity and confidentiality of our medical records. Patients should be assured that the treatment they receive is a matter between themselves and their doctor, regardless if it's a yearly physical, psychiatric evaluation, plastic surgery, or cancer treatment. The majority of patients agree that treatment and billing are the two appropriate uses of medical records. This legislation provides patients the right to limit disclosure of medical records for purposes other than treatment and billing and requires separate authorization forms for treatment, billing and other kinds of disclosures. It also requires providers to keep a record of those to whom they disclose information. In the hospital, most patients are unaware that their records are accessible to almost any health care provider walking into their room or almost any hospital employee with a computer who can gain access to the hospital's computer system. There are a number of doctors and nurses who refuse to be treated in the hospital where they practice medicine because they know that with a stroke of a keyboard their colleagues will know why they are in the hospital and know they are being treated. One of the most important issues this legislation addresses is that of access to personal medical records. It is difficult for most of us to understand that in many instances individuals may have great difficulty gaining access to their own medical records. There are no Federal laws regarding access to medical records and only a few States allow patients the right to review and copy their medical records. In many instances, if the medical record is incorrect the patient never has the opportunity to address those errors. This legislation would allow individuals not only access to their records but also the opportunity to address any errors. This legislation will enable organizations and entities involved in providing health care, or who act as contractors or agents to providers, to abide by one standard for confidentiality. Our health care system grows more complex and sophisticated with each year. Having one standard will simplify the business of health care, reduce the cost of complying with 50 state standards and allow the continuation of research that will improve the efficiency of our health care system. Currently, the only protection of medical records is under state laws. At this time there are 34 States with 34 different laws to protect these records. Only 28 States provide patients with access to their medical records. My own State of Utah does not have a comprehensive law to protect medical records or provide access. Given the transient nature of our society and that fact that more than 50 percent of the population live on a State boarder, it is vital that we provide a national standard for the protection of medical records. It is unfair to both the patients and the providers of medical services not to clearly and concisely outline the rights of the patient and define the standards of disclosure. The effort to provide Federal protection of medical records has continued for the last 20 years. Many of the outside groups that have provided assistance to me and my staff have been involved for many of these years. Those groups that have provided assistance include patient right advocates, health care providers, electronic data services, insurance companies, health researchers, States, health record managers--to name just a few. I am grateful to them for their assistance and expertise; without their efforts we would not be here today. I want to express my appreciation to the two leaders, Senators Dole and Daschle for their support as cosponsors. I am very pleased to have Chairwoman Kassebaum and the ranking minority member, Senator Kennedy of Labor and Human Resources Committee as cosponsors. I want to express my appreciation to Senator Leahy for his efforts on this legislation. He has been a supporter of this legislation for a number of years and I appreciate his cosponsorship I am also pleased to add Senators Hatch, Frist, Jeffords, Stevens, Gregg, Simon, Kohl, and Feingold as original cosponsors. I hope the Senate will act swiftly to hold hearings and to move this legislation through the committee process to the Senate floor for final consideration. I would urge my colleagues to support this legislation and would welcome their cosponsorship.

Mr. BENNETT

Mr. BENNETT. Mr. President, today I am introducing the Medical Records Confidentiality Act of 1995. This legislation is one of the many small steps that are needed to reform our health care system. I am pleased that a number of my Republican and Democratic colleagues have joined me in cosponsoring this legislation. [[Page S 15577]] I can think of few other areas in our lives that are more personal and private than is our medical history. Each of us has a relationship with our doctors, nurses, pharmacists, and other health care professionals that is unique and privileged. They may know things about us that we choose not to tell our spouses, children, siblings, parents, or our closest friends. While our medical records may contain nothing out of the ordinary, to us these records should be strictly personal. S. 1360 aims, first, to provide Americans with greater control over their medical records in terms of confidentiality, access, and security, and second, to provide the health care system with a Federal standard for handling identifiable health information. Most Americans believe their medical records are protected in terms of confidentiality under Federal law. Most Americans are mistaken. Protecting the confidentiality of our medical records is an expectation that is yet to be guaranteed as a right. This legislation is an opportunity for Congress to act in a bipartisan manner to resolve an important problem within our health care system. Today over 80 percent of our medical records are paper based; however, in the not too distant future all of our medical records will be electronic based. In my opinion and in the opinion of a number of outside groups such as the Center for Democracy and Technology, American Health Information Management Association, International Business Machines Corporation, Blue Cross and Blue Shield Association, and the American Hospital Association, it is time to put into place the safeguards and security measures needed to protect the integrity and confidentiality of our medical records. Patients should be assured that the treatment they receive is a matter between themselves and their doctor, regardless if it's a yearly physical, psychiatric evaluation, plastic surgery, or cancer treatment. The majority of patients agree that treatment and billing are the two appropriate uses of medical records. This legislation provides patients the right to limit disclosure of medical records for purposes other than treatment and billing and requires separate authorization forms for treatment, billing and other kinds of disclosures. It also requires providers to keep a record of those to whom they disclose information. In the hospital, most patients are unaware that their records are accessible to almost any health care provider walking into their room or almost any hospital employee with a computer who can gain access to the hospital's computer system. There are a number of doctors and nurses who refuse to be treated in the hospital where they practice medicine because they know that with a stroke of a keyboard their colleagues will know why they are in the hospital and know they are being treated. One of the most important issues this legislation addresses is that of access to personal medical records. It is difficult for most of us to understand that in many instances individuals may have great difficulty gaining access to their own medical records. There are no Federal laws regarding access to medical records and only a few States allow patients the right to review and copy their medical records. In many instances, if the medical record is incorrect the patient never has the opportunity to address those errors. This legislation would allow individuals not only access to their records but also the opportunity to address any errors. This legislation will enable organizations and entities involved in providing health care, or who act as contractors or agents to providers, to abide by one standard for confidentiality. Our health care system grows more complex and sophisticated with each year. Having one standard will simplify the business of health care, reduce the cost of complying with 50 state standards and allow the continuation of research that will improve the efficiency of our health care system. Currently, the only protection of medical records is under state laws. At this time there are 34 States with 34 different laws to protect these records. Only 28 States provide patients with access to their medical records. My own State of Utah does not have a comprehensive law to protect medical records or provide access. Given the transient nature of our society and that fact that more than 50 percent of the population live on a State boarder, it is vital that we provide a national standard for the protection of medical records. It is unfair to both the patients and the providers of medical services not to clearly and concisely outline the rights of the patient and define the standards of disclosure. The effort to provide Federal protection of medical records has continued for the last 20 years. Many of the outside groups that have provided assistance to me and my staff have been involved for many of these years. Those groups that have provided assistance include patient right advocates, health care providers, electronic data services, insurance companies, health researchers, States, health record managers--to name just a few. I am grateful to them for their assistance and expertise; without their efforts we would not be here today. I want to express my appreciation to the two leaders, Senators Dole and Daschle for their support as cosponsors. I am very pleased to have Chairwoman Kassebaum and the ranking minority member, Senator Kennedy of Labor and Human Resources Committee as cosponsors. I want to express my appreciation to Senator Leahy for his efforts on this legislation. He has been a supporter of this legislation for a number of years and I appreciate his cosponsorship I am also pleased to add Senators Hatch, Frist, Jeffords, Stevens, Gregg, Simon, Kohl, and Feingold as original cosponsors. I hope the Senate will act swiftly to hold hearings and to move this legislation through the committee process to the Senate floor for final consideration. I would urge my colleagues to support this legislation and would welcome their cosponsorship.

Mr. BENNETT

Mr. BENNETT. Mr. President, I wish to bring to Chairman Bond's attention a matter regarding the Environmental Technology Initiative [ETI] and the proposed reductions to its budget. The underlying bill will reduce funding for ETI by approximately $100 million. I do not take issue with the committee's actions to reduce this particular budget. I have every confidence that the remaining funds appropriated by the committee will be sufficient to fulfill the mission of this EPA initiative. My concern lies chiefly in a clarification of the objectives ETI should be pursuing with the resources that are being appropriated in this legislation. On page 88 of the committee report, we state that the remaining funds--approximately $20 million--are to be directed toward technology verification activities and other continued efforts that do not duplicate private sector initiatives. Is it your understanding Mr. Chairman that the funds allocated by the committee to ETI are sufficient for, and ought to be used to complete EPA's multiprogram efforts to streamline the approval process for new analytical methods including the move toward performance-based standards?

Mr. BENNETT. I think the chairman for his clarification. I am sure that we both agree on the importance of analytical methods to ensure compliance with environmental laws. Without them, it would be impossible to determine whether industry was meeting the effluent standards established by law and through the permit process. Efficient analytical methods are also used to characterize hazardous waste and ensure that our drinking water is free of harmful concentrations of contaminants. Unfortunately, while methods to ensure compliance continue to improve and are more accurate, the current EPA process for approving the use of new methods keeps getting slower and more bogged down. I understand that EPA recognizes this problem, and several program offices have been working to reduce the backlog of analytical method approval requests and to reduce the time it takes to review and approve these methods. Once a streamlined process is in place, these moneys will be needed for a limited time to educate States and supervise implementation. EPA has laid the foundation and the funds appropriated by the committee will be needed to put these procedures into practice. Overall, this effort will decrease the time and resources that are needed to approve analytical methods, resulting in more and better methods. From the Agency perspective, this effort will provide a way to increase the number of methods that can be used to meet statutory requirements. In addition, [[Page S 14304]] EPA's efforts to streamline the approval process for new analytical methods will spur new technologies and create new jobs. The money allocated to this process will significantly lower the cost of environmental measurements, thereby reducing the cost of environmental compliance for industry and municipalities. I thank the chairman for his time and support in this matter.

Mr. BENNETT. I thank the chairman.

Mr. BENNETT

Mr. BENNETT. Mr. President, I rise to make several comments about the underlying bill. First, I have a comment I should like to direct to the managers of the bill. I am a member of the subcommittee, and I wish to congratulate the Senator from Missouri and the Senator from Maryland for the outstanding way in which they have handled this particular piece of legislation. It has been a difficult time, and they have been faced with difficult questions and challenges. So I am grateful for my first experience as a member of the Appropriations Committee to serve on this subcommittee and watch Senators Bond and Mikulski work through these very difficult issues. There is one specific issue about which I have talked to Senator Bond that I would like to make mention of in the Chamber to make sure it does not get lost. This has to do with the expiring contracts under HUD housing programs. In the city of Salt Lake, where we are enjoying boom economic times, the vacancy rate for many of these houses is around 1 percent. If people who have contracts that expire are forced to leave their housing at the moment of that expiration, they will have a very difficult time finding additional housing. I have talked to the chairman, Senator Bond, about this issue and asked him to please work with the authorizing committee to see if there can be an extension of those contracts under this circumstance so people who are in this kind of housing are not faced with the immediate challenge of finding housing in an extremely tight housing market. He has assured me of his willingness to work on this issue, and I publicly thank him for that assurance and tell him that I will be working with him in any way I can to see that this problem gets resolved. The second issue I should like to discuss has to do with the space station, about which we have heard so much on this floor in the last 24 hours or so. The Senator from Arkansas, with his traditional persistence, has once again challenged the wisdom of the space station and will once again bring the Senate to a vote on whether or not this should be continued. He does this in every session of Congress, as is his right. Many of us admire him for his tenacity on issues in which he believes strongly. Each time he has failed. I rise to say that I think he should fail this time as well. In my opinion, the space station should go forward for a variety of reasons, many of which were outlined by our colleague from Ohio, Mr. Glenn, last night. I will not take the time to repeat all of the tangible benefits that the Senator from Ohio listed, but I will call the attention of the Senate to his presentation because it was an excellent one. There is an interesting juxtaposition of events in this debate for me. Just last week, in Utah, we have had the fourth edition of Space Talk, a conference on space that I had the honor to originate back in 1992. In 1992, there were not very many people who were interested in coming. I was then a candidate for the Senate, and they thought it was just an election year gimmick for me to get some out-of-State speakers to come to the [[Page S 14229]] State and, hopefully, get a little press and link that press to my name and thereby help me in the campaign. But I promised on that occasion that if I were elected, I would continue this annual conference on space and the issues of space that have grown into Space Talk. I am delighted to be able to report to the Senate that Space Talk has grown every year, has been more and more successful every year, and that the centerpiece of Space Talk in terms of public awareness has been the exhibit at the Utah State Fair. When we first put it on 3 years ago, NASA was a little nervous about bringing exhibits all the way to Utah, but they were willing to try it. We got the appropriate cooperation from the State fair board and the Utah National Guard and mounted the exhibit. NASA was stunned at the response that came from the citizens of Utah in general and the schoolchildren of Utah in particular. Space Talk became the No. 1 attraction at the Utah State Fair, and fair officials said to us, ``You must bring this book next year,'' which we did. And then again this year NASA brought a mockup of the space station to Space Talk, and once again this year it was the No. 1 attraction at the Utah State Fair. Many schoolteachers would plan field trips to the State fair just to come to Space Talk, so that the schoolchildren could get the educational experience of finding out about space. The space station mockup this year made a strong point of outlining those portions of the space station that would be built by other countries. ``This would be the Japanese section of space station,'' we were told as we walked through the mockup. ``This is where the Europeans will be working. This is where the Russians will be,'' and so on, demonstrating that the space station is not only a technological breakthrough for the United States, but it represents an international exercise in understanding and cooperation that can have fallout far beyond the technological areas, but in the diplomatic area as well. So, coming off this successful and growing support for our Nation's space program in Utah, I come now to the floor of the Senate to find once again an effort to cut back our activity in space and particularly with respect to the space station. Now, Mr. President, there is a quote that has been used many times. But I am going to repeat it. I have discovered since I have been in the Senate that there is no such thing as repetition. We go on again and again and again and always act as if it is new. I think my friend from Arkansas will understand that, because most of the arguments he is raising against the space station are repetitious of arguments he has raised before. So I think this quote deserves repeating. It is by the historian Samuel Eliot Morison. He said, ``America was discovered accidentally by a great seaman who was looking for something else. When discovered, it was not wanted, and most of the exploration for the next 50 years was done in the hope of getting through or around it. America was named after a man who discovered no part of it. History is like that. Very chancy.'' We look back on Columbus and his activity here and Amerigo Vespucci, after whom it was named, and the lack of activity that he put forward here, and we see the truth of the historian's comment, ``History is like that. Very chancy.'' But as we look at history as a whole, we realize that out of the chanciness of history comes a whole series of unexpected benefits or, in some cases, unexpected difficulties. I was interested, Mr. President, at one of the Space Talk presentations to be told by one of our speakers that prior to the great European era of discovery in exploration when the Europeans ended up coming to these shores and for them discovering what is now called America, there was another nation that was a great explorer nation, sending out ships onto the uncharted seas for the sole purpose of seeing what they could find. The ships of this great nation ended up ultimately on the shores of what we now call Africa, a tremendously exotic discovery for those who sailed the ships. The great nation that sent those ships out on that discovery mission was China. Now, whoever governed China in those years decided that they had budget problems at home and that it was time to cut back on the exploration, that they had more urgent budget pressures domestically, and so they stopped their exploration. They brought the ships back, and they became wholly insular in their administration. I have stood upon the Great Wall of China, which I think stands in history as one of the prime examples of a public works project gone wrong. They started building it and they simply could not stop. And so in their budget priorities to do something for home, they built the Great Wall that stands in great disrepair, and it serves primarily now as a tourist attraction. They turned their back on the exploration that would have made the Chinese, and not the Europeans, ultimately the masters of the world, as the Europeans picked up the challenge of exploration, not knowing what they were going to find, not knowing what the return would be, but, in fact, laying the groundwork for the ability to govern the entire world. Mr. President, history is like that. Things start out very small, with unintended consequences later on. We do not know who first thought of the notion of interchangeable parts, the idea that instead of building every carriage fresh and new as a single work of art, you would build a series of axles, every one exactly alike that would be interchangeable with each other so you could assemble a whole bunch of carriages. But upon the principle of interchangeable parts rests the concept of mass production and ultimately the entire industrial revolution, a simple little idea that somebody started somewhere, we do not know, upon which the entire world was changed. Just when we get used to that concept, let us think then of the notion of digital code. Somewhere, somebody--probably the historians know this name, but I do not--came up with the idea that a switch is either on or off. And if you line up enough switches in a row, you can create a computer that by calculating whether this row of switches are either on or off, can do calculations beyond the human ability to do those calculations. So early computers were built with the understanding that a transistor was either on or off. And those computers were created primarily to make calculations concerning ballistic projectiles for wartime. If we shoot this, what is the trajectory it will follow? We cannot figure it with pen and pencil or even slide rule. Let us get a bunch of switches lined up and put electricity through them; and through writing digital code, we figure that out. From that, of course, has come the entire information revolution that has changed all of our lives, and an idea that someone who started out had no concept of. Now we come, of course, to the space station. Can I tell the Senator from Arkansas what is going to happen in the space station? No; I can tell him the experiments that will be run. I can tell him the efforts that will be made. But I cannot tell whether or not some discovery as simple but as far reaching as the notion of interchangeable parts or the notion of digital code will come out of our activities on space station. We do know the kinds of things that can happen on space station. It will serve as a laboratory for materials processing in zero gravity. We have never been able to do that before. There are a myriad of industrial and scientific research projects that can be run in that kind of an environment. It will provide a platform for astronomical observations, the study of our Earth's development and current conditions. Then it will provide a base to further the exploration of the solar system as the first component in a space-based international industrial park. Well, maybe we cannot put a dollar value on this. And unable to put a dollar value on this, maybe we should do as the ancient Chinese mandarins did and say, ``Bring the ships home. Let us spend our time taking care of our domestic priorities. Leave that for some future time.'' I believe if we do that, the human spirit to explore is sufficiently strong elsewhere that we will see someone other than the Americans take over this lead. I think we will see Europeans or someone else, maybe not yet on the screen, some Asians, perhaps, as those [[Page S 14230]] economies become stronger, step into the void that we will create if we abandon this leadership challenge. So, Mr. President, I rise once again in support of space station. I rise once again in support of the spirit of exploration. I rise once again in support of the great human spirit of adventure that has served us so well throughout the centuries. And I call upon us not to make the mistakes of others who have turned their back on this only to discover in subsequent years that other human beings have not lacked this spirit of exploration, and the torch is passed from American hands to those who might wish us ill. For these reasons, Mr. President, I support the space station and urge the rest of the Senate to do likewise. Mr. BOND addressed the Chair. Amendment No. 2776

Mr. BENNETT

Mr. BENNETT. When I recently congratulated our colleague from Delaware, Senator Roth, on his ascension to the chairmanship of the Finance Committee, he was gracious enough to tell me that he would welcome my ideas as the committee begins to deal with tax reform. I do have some ideas I would like to share with Chairman Roth, and I will take the opportunity within the morning business period [[Page S 14148]] this morning to share them with the Senate as a whole. I say quickly that many of these ideas are similar to those that were expressed recently by Senator Dole when he addressed this topic in Chicago. First, Mr. President, we will start with a little history, and I call your attention to this chart. We have learned from the 1992 campaign you cannot talk about taxes without a chart, so I decided to get with the program. Here on the chart you have a red line, and that red line matches the left-hand side of the chart. It shows revenue to the Federal Government from the end of the Second World War until now. It is expressed as a percentage of the total economic output of the Nation, or what the economists call gross domestic product [GDP]. See how exciting that red line is, Mr. President. It is flat, unchanging, unwavering. Now let us look at the green line up here. This green line shows the top personal tax rates, and the chart showing that is on the right-hand side. Back here, at the end of the Second World War, the top marginal tax rate was 91 percent, and it has moved around in the time from then until now. You will notice there was this one bump. You may remember that, Mr. President. That was the Lyndon Johnson surcharge for the Vietnam war, when everything was left as it was but there was to be a 10-percent increase added after you had fixed your tax return. Interestingly enough, that is the only time that you see any correlation between the top personal tax rate and the Federal receipts as a percentage of GDP. This has gone from 91 percent under Harry Truman down to 28 percent under Ronald Reagan and back up to 40 percent under Bill Clinton, but the impact on receipts has been negligible, if not zero. That should put to rest the notion that it was the Reagan tax cuts which caused the deficit to soar. The Reagan tax cuts did not impact the percentage of GDP that came into the Government in that period of time. No, Mr. President, no matter how many tax reform bills were passed, no matter how much Congress tinkered with the tax rates, the amount of money the Federal Government received as a percentage of the economy did not move more than a point. Why? Because every time Congress reformed the system, taxpayers adjusted their behavior in response to that reform and the percentage of their aggregate income coming to the Federal Government stayed about the same. As I said, one exception is this 10-percent surcharge blip that happened before they had an opportunity to adjust. Now, what did change--I will talk about this later on--is the rate at which the economy grew. In these years, the Reagan years, we had a period of high economic growth, indeed, the longest sustained period of high economic growth that we have had in this century. Now, that is important to keep in mind because you look at this flat 19-percent result. Nineteen percent of a big economy produces more money for the Government than 19 percent of a small one. So what we really want most of all is growth. Now, as I said, I will get back to that later on. As I reflect on all of the debates held over the years on tax policy, I realize that there is one word that comes up over and over again-- fairness. Every time we make a change in the tax law, we are told that it is necessary to make things more fair. Franklin Roosevelt pushed for a 91-percent tax rate in the 1930's in the name of fairness. ``Share the wealth.'' That was the cry. Sharing, means being fair. Well, 91 percent is by itself not fair. If it was fully enforced on everyone who had money to invest, it would shut down the economy. People would move out of the United States as they have moved out of the European countries that have tried these kinds of confiscatory rates. So to offset the impact of this confiscatory rate, Congress enacted a series of deductions and exceptions, each one with its own fairness rationale. What we have done, Mr. President, is this: tip the Tax Code this way to encourage that activity or tip it that way to discourage the other one. And every time we do this, the code gets bigger and more complex. The rich hire more accountants and advisers to help them stay rich, or worse, they refrain from investments that create more jobs and more economic growth in order to avoid the impact of the latest reform. Do you remember the windfall profits tax? With oil prices going through the roof and inflation gathering steam back in the 1970's, people decided that it was not fair that oil companies, by selling proven reserves already in the ground, would make more money than they had planned on--windfall profits. So in order to be fair about it, Congress put an extra tax on those profits. Well, new domestic oil drilling dropped off, jobs went overseas, and gaslines formed. Congress eventually had to repeal the windfall profits tax after it had done its damage. And at the time of the debate on the repeal, it was argued again that the tax was not fair. During the recess, Mr. President, back home I sat down with my accountant. It was time to finally file my income tax. I had gotten an extension on the 15th of April. And that was up on the 15th of August. As we went over the details of my tax return, we got into a discussion of this very issue. And my accountant, unprompted by me, made an interesting comment. He said, ``Senator, the present system is not fair to anybody.'' I find that a great irony, Mr. President, that we have in the name of fairness for some created a system that is unfair to everybody. So, I say to Senator Roth, as he asked for my suggestions, I start with this one. Let us get out a clean sheet of paper and repeal the present Tax Code in its entirety. Let us abolish the IRS as it currently stands. Let us stop the tinkering and create a new system based on the principle that the purpose of taxes is to raise money to run the Government, not to set priorities in the economy. I will repeat that, Mr. President, because it is the heart of what has been wrong and what we must do to make things right. The purpose of taxes is to raise money to run the Government. Now, the new word that we should enshrine in every tax debate is neutrality. Neutrality is easier to define than fairness because we can test in advance whether a tax system is neutral. We cannot test whether or not it is fair because fairness is in the eye of the beholder. Neutrality means that the Tax Code should not be used to punish the bad guys and reward the good guys. We have other laws for that. The Tax Code should be used to collect money for the Government in as neutral and nonintrusive a way as possible leaving the marketplace free to set economic priorities based on true economic demand. Neutrality also means that payment for labor and capital would have the same tax rates. When you look at it this way, some interesting things start to happen. A tax code that is neutral can also be simple; anyone can figure it out, and the goal of a 1040 on a postcard becomes achievable. One that is neutral and simple is also one that can be stable; it need not change. We regress the way we do it now. Now, there is great power in this idea. With a stable tax code, you will be able to start a business and know that the tax laws will not change on you midstream. You will be able to buy a house, take out a loan, put money aside in a savings account or make any other investment you want and know that there will not be a nasty surprise coming after the next election. A tax code that is neutral, simple, and stable--that should be America's goal for the 21st century. And if we get it, I believe there will be an added bonus. A system that is neutral, simple, and stable will also be the system that comes the closest to being fair. Now, I hear the question: ``Does this mean, Senator Bennett, that you are endorsing a flat tax?'' I want to see the recommendations that will be coming from the tax study commission that Senator Dole and Speaker Gingrich appointed, the one headed by Jack Kemp, before I lay out any specifics. But, yes, I do endorse the concept of a flat tax as one way to get a system that is neutral, simple, stable, and fair. There may well be others. I am a cosponsor of the Nunn-Domenici proposal, but I salute the Kemp commission for looking at all of them, as I know they are doing. Now, the purists will say, to be completely neutral a flat tax should have no deductions. Theoretically they are [[Page S 14149]] right. However, I want to be sure that in making the transition from the present to a better tax system, we do not permit American homeowners to be adversely affected by higher mortgage interest burdens. Home mortgage interest rates currently reflect the value of the existing tax deduction. If we wipe out that single deduction in a single step and leave fixed interest rates where they are, we will penalize everyone who has a mortgage. The deduction should be phased out and only after homeowners can refinance their mortgages at rates that are more advantageous to them than are the existing rates with the tax deduction. And until that happens, I endorse leaving the home mortgage interest deduction as it is. On the question of charitable contributions, I point out that we are constantly asked in this Chamber on the Federal level to take care of people who are in trouble, to support educational institutions, research projects, the arts, or all other kinds of good works in society. Right now much of the burden in these areas is being shouldered by good-hearted Americans who want to help through churches and other charities beyond just paying their taxes. These charities are usually better run and more efficient than the Government. We should find a way to encourage those Americans who voluntarily give beyond their tax payments to engage in these kinds of activities and thus save the Government money. So I support a continuation of the charitable deduction. And I assume that at least Elizabeth Dole will agree with me on this one. Now, the deductibility of State and local taxes in Federal income tax systems is, for me, an issue with constitutional overtones. I believe that States have an equal standing with the Federal Government under the Constitution and income should only be taxed once. That is a principle. As I have said, I will wait for the Kemp commission to report on specific rates and levels for a flat tax, but I do ask the Kemp Commission to consider fully the impact of any proposal on the deduction of mortgage interest, charitable contributions and State taxes. I want the Commission to explore all approaches, just so long as they are neutral, simple, stable and fair. Let me repeat my longstanding support for indexing the tax rate for capital gains as an immediate improvement in the present system. Taxes should be on real income, not paper income. Our present system of taxing paper profits as if they were real is not only a drag on the economy, but, in my view, it is contrary to the fifth amendment prohibition against taking. In terms of purchasing power, many Americans have experienced such a loss of their property through the tax law; the Government has taken it. Here is an example. Suppose, Mr. President, you invested $10,000 in a business in 1975, just before the great inflation of the 1970's. Say the business survived till now but has paid you no dividend and no interest, no return at all on your money. Your $10,000 has been locked up in that investment for over 20 years. Finally, last year you found a buyer who paid you 20,000 1994 dollars. In purchasing power, you had a loss. To break even, you would have had to sell for $27,540 because your 10,000 1975 dollars lost more than half their value in that timeframe. But in tax terms, you owe Uncle Sam $2,800 for so-called capital gains. You not only lost $7,540 in purchasing power on the principal, you lost an additional $2,800 in taxes. The unindexed capital gains tax confiscated a portion of your investment, not your gain. In real terms, there was no gain. As I said, Mr. President, to me, that constitutes a taking in violation of the spirit of the fifth amendment. It is time to stop it, stop taxing inflationary imaginary gains. Our system of double taxation of corporate profits, if the profits are paid out as dividends, tilts the investment community away from equity investment and toward debt. A system that is truly neutral, simple, stable, and fair would avoid this tilt. The taking on of huge debt by corporate America in the 1980's was not driven by the fabled greed of the Reagan years that some commentators talk so much about. It was driven by the nonneutrality of the Tax Code. As I said at the beginning, the principal economic goal that we should have is growth. If the tax system produces--back to the chart-- 19 percent of GDP as revenue to the Government and the economy grows faster than Government spending does, it is clear we can do something positive about our national debt. An expanding GDP allows us to reduce the deficit with increased revenue and not depend on spending cuts alone. Mind you, I am not saying we do not need to make the cuts, because clearly we do and for a whole series of reasons. However, if we try to solve the deficit problem entirely with spending cuts and ignore the growth side of the equation, we are turning our backs on our biggest opportunity for financial stability in the years to come. I have seen economic studies that show that if we can increase the rate of growth by simply one-half of 1 percent per year--in other words, if we can grow at around 3 percent a year instead of 2.5 percent a year, the additional tax revenue that will come from that one-half percent, combined with the cuts we propose in Government spending, will allow us to balance the budget in less than 7 years. That is what Senator Dole was talking about in Chicago a few weeks ago. Some say the way to get this growth is to have the Federal Reserve devalue the currency. I disagree. We have seen the dollar drop significantly in recent years, reducing America's share of control of the world's goods, but it has not brought the growth we need. We cannot inflate our way to prosperity, nor can we devalue our way to prosperity, as we learned in the stagflation years of the seventies. We need sound money with price stability tied to a neutral, simple, stable, and fair Tax Code. That is the key to our achieving the higher rate of real growth, combined with discipline on the spending side, that will give us what we need in our fiscal future. Those are the ideas I would share with the new chairman of the Finance Committee, Mr. President. I believe that the Senate author of the Kemp-Roth bill, who is that chairman, will be receptive to this recommendation. If I can recap at this point, our financial future depends on the following principles: First, we need a tax system that is neutral, simple, stable and fair, based on the concept that its purpose is to raise the money we need to run the Government and not to set economic and social priorities. Second, income should only be taxed once. Third, phantom income should not be taxed at all. Fourth, our deficit problems should be attacked by both spending cuts and revenue growth, with the recognition that true revenue growth derives not from higher rates but from a stronger economy. These are the principles that are the root to the solution of our economic ills. I salute Senator Dole and Speaker Gingrich for their leadership in creating a commission to focus on economic growth and intelligent tax policy for the next century, and I look forward to the commission's report with great anticipation. Now, Mr. President, since I prepared these remarks, we have had a very busy schedule in the Senate, and I was unable to deliver them in the timeframe that I had anticipated. As often happens, events overtake you, and there are some other things that have occurred since I prepared this presentation that I would like to share with you at this time. On September 13 in the Wall Street Journal, Robert L. Bartley, who is the editor of the editorial page of the Journal, produced a piece called ``Giving up on Growth.'' I am dependent upon Mr. Bartley for the first recognition of this 19-percent reality, as he has highlighted that again and again on the pages of the Journal. I will not take the time to read all of his editorial ``Giving up on Growth,'' but he talks about many of the same things I talked about here. How, if we could only get the economy to grow at the same rate it did during the Reagan years, during the years, Mr. President, when the marginal tax rate was down here rather than up there, that we could solve most of our deficit problems, because the income would be so [[Page S 14150]] much higher in an economy growing at 3 percent plus than it will be at an economy growing at 2.5 percent that it tips the equation favorably in our balance. He points out that the Clinton administration has resigned itself, if you will, to 2.5 percent as the highest possible growth we can achieve into the next century, turning their backs on the Reagan experience and the empirical evidence of the Reagan years. However, whenever this is brought up, people immediately turn to the deficit issue, and we are confronted with the next chart, Mr. President, the chart showing the red ink, the sea of deficits, if you will. Here in nominal dollars is the record of the amount of deficits we had in the last century, so small at the beginning that you cannot even find them on this chart. This little bump is the First World War. We have the Second World War. But here we are, ``You see, when Ronald Reagan is elected President, look at the deficits. How can you stand there, Senator Bennett, and say that we must go back to the Reagan years of high growth when the price we paid for that growth was the tremendous explosion of deficits?'' Then to really scare us, we are shown the next chart, when all of these deficits are accumulated in the form of the national debt, and the national debt goes up to the point where it is projected by the year 2005 to be $9 trillion. This is a chart that scares everybody today. Well, Mr. President, let me comment briefly on this chart, before I move to the others, and take an experience out of my own lifetime. When I was hired as the chief executive officer of the company that I headed for half a dozen years, we had some debt. It was $75,000. Today, that company has debt in excess of $7.5 million. If you were to put that debt on a chart like this, it would be even more dramatic than that. Clearly, you need to do something, Senator, this company is headed for bankruptcy because the debt has soared from a mere $75,000 to $7.5 million. But, of course, that does not tell the story. When we had a debt of $75,000, our total sales were $250,000. Our debt was more than 25 percent of our total sales. Today, a debt of $7.5 million on a company with sales of close to $300 million is an insignificant issue indeed. But while we happen to have debt on the balance sheet of about $7.5 million, we have cash on the balance sheet of close to $60 million. You may ask why do you not pay off the debt? Well, it is left over from mortgages on buildings that were built at the time when we did not have that much cash, and there is a prepayment penalty attached to it. That debt is in no way threatening the existence of the corporation; whereas, the $75,000 debt caused us some sleepless nights. So it is not the nominal amount of the debt that we should look at, but the debt in relation to something else. Let us go, for a clearer picture, to the next chart. Here is the chart of deficits listed in dollars that are adjusted for purchasing power. What in the previous chart was a mere blip for the Second World War now, in purchasing power, makes it clear that the highest deficit we have ever had in our history was in the Second World War, and none of the subsequent deficits have come close to it. What has happened to the economy? How big was the economy during the Second World War compared to the economy now? So on the next chart we have computed the debt not as a piling up of nominal dollars, but as a percentage of GDP, or a percentage of the economy. And now you see that in the Second World War, the debt was close to 130 percent of total output. That is, we were spending 30 percent more than the entire economy was producing in the days of the Second World War, as the debt soared. And as soon as the war ended, the debt, as a percentage of GDP, began to fall, and fall dramatically, all the way down to during the 1970's, at roughly 30 percent of the economy. From 130 down to 30--a very different picture than the skyrocketing red ink on the previous chart. So if you look at it in historic terms, Mr. President, today the debt, as a percentage of the economy, is roughly what it was when Dwight Eisenhower was President of the United States. We did not feel that the economy was in danger of political collapse and financial collapse during the Eisenhower Presidency. But there are differences. Obviously, the major difference is this one. It is growing now. In the Eisenhower Presidency, it was shrinking. Let us look at the nature of the budget. In the Eisenhower Presidency, roughly 50 percent of the budget was devoted to defense. Today, I wish I could ask the distinguished occupant of the chair to respond because he serves on the Armed Services Committee and could give us a more correct answer. But the defense budget is about 6 percent--no, it is less than that, of the GDP and falling. And it is a relatively small percent of the total budget. What happened here-- referring to the chart--that did not happen here? Well, in Eisenhower's time, there was no Medicaid, there was no Medicare, there were no middle class entitlements. As I say, the defense spending constituted about 50 percent of the budget. What has happened is that entitlement spending has taken hold, regardless of whatever else is happening in the economy, and entitlement spending, as we have seen from the Commission headed by the Senator from Nebraska [Mr. Kerrey], is going to take us over the cliff. Are we in danger of immediate financial distress? No. When you look at it in this historical context, no. Do we need to do something about our financial circumstance right now, however? Yes, because these lines are going up instead of down. This is the first time in our history, Mr. President, that the lines have been going up in peacetime. Always before, when the lines went up, it was because of a war, and then they came down. Well, the cold war is over and the lines are still going up. Now, Mr. President, as I said earlier, there are two parts of this line. One has to do with the amount of debt, and the other, since it is a percentage, has to do with the size of the economy. You can start these yellow lines moving down if you cut spending. But you can also start them coming down if you increase the size of the economy. We are back to growth, as one of the major solutions--one of the ignored solutions--to our fiscal circumstance. Robert Bartley asks the question in his editorial: Have the Republicans given up on growth? He says, talking about the importance of growth: Such discussion ought to start with the heirs of Ronald Reagan, the President who presided over our last period of acceptable growth. But with the withdrawal of Jack Kemp, no strong growth message comes from any of the GOP Presidential contenders, and even the newly ascendant Republicans pitch their rhetoric toward sacrifice rather than hope. I object to his characterization of the majority leader's position. I think his statement in Chicago, which is in concert with the statement I have just made here, makes it very clear that he at least is determined to support growth as a major goal should he accede to the Presidency. Steve Forbes has just entered the Presidential list, calling for growth as the major goal of the Forbes administration. So there are contenders who, contrary to Mr. Bartley's comment, are focusing on growth. But as a general rule, his criticism, I think, is well taken. He goes on: Even Representative Dick Armey's flat tax, in fact an incentive-boosting and investment-oriented initiative, has been promoted so far with arguments about simplification. It is almost as if Republicans are ashamed to promise growth. Despite their congressional triumph, that is, Republicans are still spooked by rhetoric about ``the rich'' and a ``decade of greed.'' In the off-year elections, President Clinton's every campaign appearance was marked by assaults against the 1980s; when votes were counted, the 1980s won. The Republicans could boost their own fortunes, and give the nation a badly needed psychological lift, if they started to claim their own birthright, to promise a return to the economic growth of the Reagan years. I conclude, Mr. President, by going back to the original chart once again, which has been up for so much of my presentation but needs to be looked at again. We have been told ad nauseam that the reason we are in deficit now is because of the disastrous tax cuts of the Reagan years. The fact is, the tax cuts of the Reagan years have no impact on the percentage of the economy that came to the Federal Government. As Mr. Bartley points out, they had a tremendous impact upon the rate at which that economy grew. Nineteen [[Page S 14151]] percent of a rapidly growing economy produces more money for the Government than 19 percent of a stagnant economy. Mr. President, I certainly support spending cuts. We need to enforce spending cuts for a whole series of reasons. I conclude by saying that the Republicans in this Senate need to recognize, as Senator Dole called on us to recognize in his speech in Chicago, that our main goal for the economy should be long-term sustained growth in excess of the 2.5-percent rate for which the Clinton administration is prepared to settle. If we can do that, Mr. President, if we can get the growth rate back up to where it was in the Ronald Reagan years and then with spending cuts get some control over the runaway entitlement pressures, we will see this line of yellow bars begin to move back down as it has done throughout our history. We will leave to our children not only a Federal debt that is under control but an American economy that is growing rapidly enough to create the number of jobs and job opportunities that our children and grandchildren so richly deserve. I apologize for the length of this presentation. As I say, we have opportunities only so often in morning business in which to give them, so I have combined several topics here in a single presentation on a Monday afternoon. I thank the Chair for his attention. I yield the floor. I suggest the absence of a quorum.

Mr. BENNETT

Mr. BENNETT. Mr. President, I thank you for the opportunity to address this assembly today. We live in a time of great progress; a time when technology is growing exponentially. Just a few years ago, it would take an ordinary citizen days to send a document from Utah to Washington; today, thanks to the fax machine and cyberspace, it takes a matter of seconds. Not that long ago, in order to speak with constituents face to face, we would have no choice but to travel back to our States; now, due to satellite technology, we can participate in electronic town meetings and interact with voters 2,500 miles away. Technology also necessitates changes in society in order to deep up and reach maximum efficiency. For example, often when using the telephone today, you might run across an automated directory. If you are using a digital phone, there is no problem; you can conduct your business easily. If, however, you are using an analog line, you [[Page S 14204]] might meet with some difficulty in concluding your affairs. So it is with Federal regulations. We find the need in today's world to guard society from potential abuses through the process of regulation. However, technology can make existing regulations obsolete, or at least uneconomical to enforce. As the world changes around us, we must be willing and able to adapt. The Electronic Fund Transfer Act, or EFTA, to which I am proposing changes today, regulates the use of debit cards and other so-called access devices to initiate electronic transfers to or from a consumer's deposit or other asset account. The EFTA imposes significant burdens on financial institutions that hold such accounts. For example, financial institutions must provide extensive disclosures to consumers before initial electronic fund transfers involving the account are made; they must provide periodic statements to consumers each month which detail every transfer made to or from an account; and they must provide receipts at electronic terminals for electronic fund transfers made by consumers. The EFTA is an important act, but one that requires change due to technological advancements. Therefore, I propose that we amend the EFTA to reflect the progress of the industry. This bill, entitled ``Exemption for Stored Value Cards,'' modifies the definitions of ``accepted card or other means of access'' and ``account'' to clarify that the regulatory burdens imposed under the EFTA do not apply to so- called stored value cards. A stored value card is a card which can be used to pay for transactions by use of value which is stored on the card itself. Good examples of stored value cards include the Washington, DC metro fare-cards or cards which contain value that can be used at such devices as vending machines, parking meters, or bridge toll booths. When a stored value or prepaid card is used to pay for a transaction with value stored on the card itself, it does not access the consumer's account and typically does not utilize the systems which are used by financial institutions to generate receipt information, and other information needed to comply with the EFTA. As a result, it would be inappropriate to apply all of the EFTA regulatory requirements to such stored value cards. It is intended, however, that the EFTA would apply to such a card when the card is used to access the consumer's deposit, savings, or similar asset account to load value onto the card for use at such vending and other machines. In addition, application of the EFTA regulatory and procedural burdens to stored value cards would significantly impede the development of stored value programs, and in some instances may entirely preclude the development of such programs. Stored value card programs typically involve frequent, small dollar transactions with unsophisticated vending machines, parking meters, and similar equipment. Given the small dollar amount of these transactions, stored value card programs must be operated at a very low cost in order to be cost efficient for merchants, consumers, and card issuers alike. Applying the requirements of the EFTA to stored value card programs would significantly raise the cost of operating such programs and, in some instances, would make such programs economically unfeasible. This amendment also clarifies that the EFTA would not apply to value stored on other devices such as computers. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. BENNETT

Mr. BENNETT. I thank the Chair. I appreciate the opportunity to take some time now. I apologize in advance for the state of my voice. Like many of our colleagues, I have sustained something of a cold or perhaps worse over the weekend. I am delighted we had the weekend so I got some rest and was able to recuperate a little bit. But if my voice gets a little raspy, Mr. President, I assure you there is no intention to do anything but communicate.