Robert Bennett

Mr. BENNETT

Mr. BENNETT. I thank the Senator from Maryland. I think he is correct that there are some in the body who do not think there ought to be a limit. If I could just make one comment, the reason there is no limit now is because the original drafters of the legislation creating credit unions never conceived there would be any commercial lending by credit unions. It reminds me a little of the old story, ``Please Don't Eat the Daisies,'' where the kids said, ``Well, you never told us not to.'' And the mother said, ``It never occurred to me that you would, and therefore, I didn't give you those restrictions in the first place.'' But now it has started. I think the committee has rightly and properly said, we want to keep credit unions focused in the area where they have traditionally been focused, providing the service they have traditionally provided. We are going to allow some commercial lending because they have gotten into that area. But there is empirical evidence that credit unions can get in trouble with their commercial lending. We want to take advantage of that evidence and put a limit on it. So the question is, Should the limit be 12.25 percent? Should it be 7 percent? And should the $50,000 exemption continue? I realize in responding to the Senator from Maryland that the $50,000 threshold does put some new unchartered territory on this issue. We do not have as much information as we would like. But I will share with the Senate the information that we do have. During 1992 and 1993, the NCUA required credit unions to collect information on business loans under the threshold, which at that time was $25,000 rather than $50,000. I think it goes to the issue that the chairman raised about the burden that would be placed on credit unions to deal with this kind of requirement. There has been a period in our history when it was there. The NCUA used its authority to put that requirement in place. During 1992, the only year for which we have complete information, total business loans both above and below the threshold were 1.62 percent of the total outstanding loans. In other words, once again, the credit unions were saying, by their actions, ``We are not primarily involved in commercial lending.'' Of this 1.62 percent, loans above $25,000 constituted 1.42 percent, with loans under $25,000 constituting the remaining .20 percent. I think this tells us that the terms of this amendment can be adhered to. I think we have some past experience that says this will not be a burden and particularly, again, this will not be a burden on the small credit unions who do not do this anyway. All we are really saying to them is we do not want you to do it, we do not want you to get into territory that could cause you difficulty. The question has been raised, How about buying a pickup truck? Is that a business loan or a personal loan? In the hearings some of the credit union representatives said to me, ``Senator, you have to understand, in a credit union every single commercial loan is backed by the personal guarantee of the individual members of the credit union.'' And I said--and I repeat here on the floor--``I have borrowed a lot of money in my lifetime. I borrowed it from commercial banks. I borrowed it for commercial reasons. And in every single instance, I have had to make a personal guarantee. In every single instance, the bank wanted my personal guarantee. Sometimes they wanted my wife's personal guarantee. Sometimes I had the feeling they wanted the promise of our first-born child if we didn't produce--even though this was a business loan--the repayment appropriately.'' So the credit unions are not giving us anything specifically different when they say these are loans only made to members, and they have the members' personal guarantee. That is standard business practice everywhere across the board. As I said before, for me, this is a public policy debate of, what is it we are trying to do in terms of shaping the direction of the financial services industry? As I have said many times before, the financial services industry regulatory framework was created at a time when everybody knew where they were--credit unions were a very specific niche. They knew what they did. Commercial banks were a very specific niche. They knew what they did. The same is true of insurance companies and stockbrokers and savings and loans. Everybody had a clear understanding and nobody competed across those lines. Today, the competition runs across lines everywhere--insurance companies hand out checkbooks. I told a story before when my father died, we notified the life insurance company of his death and awaited a check of the face value of his insurance policy. Instead, we got a checkbook with a notice saying, ``This money has been deposited in this account as of the date of your husband's death''--it was addressed to my mother--``Here is a checkbook. You may write checks on that account and interest will accrue from the date of your husband's death.'' In other words, don't be in a big hurry to take your money away from the insurance company; use it as you would a checking account. When I purchased some stocks in one situation and I wanted to redeem those stocks under the old regulatory pattern that I was familiar with, I had to go down to the broker and the broker would give me a check. ``No, no, no, no, no,'' the broker says, ``we will give you a checkbook and you can write checks up to the value of your margin account against the margin value of your stocks''--clearly crossing the lines between banks, brokers, and insurance companies and so on. Now, we are beginning to say we have to create a new regulatory structure for the new reality of the financial services world. We recognize that everybody is in everybody else's business. All we are debating here on this floor is to what degree do we want credit unions to get out of their traditional business into the commercial lending business. I am not sure that says they should make no commercial loans. I think that is appropriate, particularly for the larger and more stable institutions to which the chairman has referred. But as a matter of policy, I think we are saying, I hope we are saying in this amendment, we want credit unions to stay where they have been traditionally. If we say, ``No, the credit unions should get into commercial lending in a big way,'' then at some point we are going to have to address the issue of taxation. We have not done that in this bill. We should not do that in this bill. It would not be appropriate in this bill. But as a public policy matter, if credit unions are going to get into commercial lending in a major way, the Congress is going to have to address the reality of the tax subsidy that they currently enjoy. I would just as soon avoid that question for awhile. I think keeping the credit unions in a more limited area of commercial lending will help us do that. I yield the floor.

Mr. BENNETT. Mr. President, the Senator is once again correct in terms of the regulatory situation that existed. I am talking about the market situation that existed, and our amendment would not change the market situation. It would not change the amount of commercial lending the credit unions are doing. Mrs. HUTCHISON addressed the Chair.

Mr. BENNETT. Mr. President, I will make just one comment on the statement of my friend, the chairman of the committee. I agree with him absolutely that there are no massive failures. We do have the one example that occurred in the State of Rhode Island, and it is reflected in the additional views of Senator Reed of Rhode Island when he wrote, with respect to the bill that came out of the committee, that he was concerned that the cap adopted by the committee is higher than the level of commercial lending that credit unions are currently engaged in, and he is concerned that it might lead to a repeat of the problems they had in Rhode Island. I agree completely with the Senator from New York that we do not face a crisis here. My support of the amendment stems from my conviction that the amendment would help us avoid a crisis in the future. The amendment would establish a cap that is above the level of activity that is currently going on, with the exception of a very few major credit unions who have 3 years in which to work things out. It would establish a cap above where things currently are, allowing people plenty of room to round off their present activity. But it would send the public policy message that says: We want credit unions to remain in their traditional niche in the financial services area. And it is for that reason that I have decided to support this amendment, because that is where I want credit unions to remain. As I said earlier in my statement, all of the people who call me to talk about this bill insist that credit unions don't make commercial loans now. These are the members of the credit unions who are calling in who are unaware of the fact that their credit unions are making commercial loans. Therefore, I can't understand why they get upset when we say we are putting in a limit. It is not arbitrary in the sense that it is a limit above current levels; it is a limit above where people are currently operating and is simply sending the message that we don't want the current situation to change. That, after all, is the primary purpose of this bill. Without this bill, the Supreme Court changes the current situation and changes it drastically. The bill is crafted to say: No, we don't want to change; we want the present situation with respect to credit unions to be protected. Therefore, we are going to pass a bill that will change the law to protect where we are. Our amendment simply says, with respect to commercial lending and the levels of commercial lending, we will protect where we are. Now, I recognize there are those who disagree. I recognize that the committee decided to put the cap at a slightly higher level than one that would protect where we are, that would allow some growth from where we are in commercial lending. I don't think the Republic will fall if we allow that growth to occur. But I do think that if the thrust of this legislation is to keep in place the current situation of credit unions, our amendment is the logical way to keep in place the current situation with respect to commercial loans. Mr. SARBANES addressed the Chair.

Mr. BENNETT. Yes, I am happy to.

Mr. BENNETT

Mr. BENNETT. I thank the Chairman of the Subcommittee for his clarification and I thank the Chair for its time and attention on the Senate Floor. Southwest Florida International Airport Application for a Letter of Intent

Mr. BENNETT. Mr. President, I rise today to enter a colloquy with the Chairman of the Subcommittee on Transportation Appropriations, Senator Shelby. The topic of my colloquy addresses the ongoing design/build work on Interstate 15 through the Salt Lake Valley and the unique opportunity this project presents to conduct seismic and other bridge structure research on existing overpasses that will soon be replaced. I would like to thank the Transportation Appropriations Chairman for his interest and support of research on Interstate 15 bridge structures during the reconstruction of this important segment of highway. The Subcommittee on Transportation Appropriations included language in its report (105-249, page 96) which provides $2,000,000 for research on Interstate 15 bridge structures. This report language directs the Federal Highway Administration to make this money available to the Utah Department of Transportation (UDOT) and the Utah Transportation Center (UTC), Chairman Shelby, am I correct in understanding that UDOT was included in this language primarily to facilitate the flow of these federal funds to the Utah Transportation Center which will administer the research done by Utah State University, University of Utah and Brigham Young University?

Mr. BENNETT

Mr. BENNETT. Mr. President, I know of no further amendments or debate at this time. I ask the Chair to put the question before the Senate, and I ask for the yeas and nays.

Mr. BENNETT. Mr. President, I raise a point of order that the pending McCain amendment is not germane post-cloture.

Mr. BENNETT

Mr. BENNETT. Mr. President, the distinguished Chairman is aware of the importance of weather forecasting support for the 2002 Winter Olympics in Salt Lake City. I appreciate the continued support of the Committee with these important preparations for the 2002 Winter Olympics. Millions of spectators will gather in mountain venues. Obviously, accurate and timely weather forecasting support is critical to ensure the safety of both the spectators and the athletes. As you know, the Committee directs the National Weather Service to provide support to the NOAA Cooperative Institute at the University of Utah. It is my understanding that the committee expects the National Weather Service to work with the Cooperative Institute to develop a plan and budget which will help ensure public safety and assist with the operations of the Games. The 2002 Winter Games represents an excellent opportunity for the National Weather Service and the Cooperative Institute to work with private meteorological firms and federal, state, and local agencies to provide accurate weather forecasting for the Games.

Mr. BENNETT

Mr. BENNETT. I further ask unanimous consent that I be allowed to exceed the 10-minute period in the discussion of the legislative branch bill that will be propounded at some point, if, indeed, my time goes beyond that.

Mr. BENNETT. Mr. President, I ask unanimous consent that we now go into a period of morning business, with Senators allowed to speak up to 10 minutes each.

Mr. BENNETT

Mr. BENNETT. I suggest the absence of a quorum.

Mr. BENNETT

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

Mr. BENNETT. I want to make one quick clarification. The Senator made a comment that before we pay ourselves, and there are many people who believe that pay for Members of the Senate is included in the legislative branch appropriations bill. I want to make it clear that it is not. The legislative branch bill is pay for the staff, pay for the agencies connected with the legislative branch, but Members' pay is not here. If we do go to the legislative branch appropriations bill, it will not deal with pay for Members of Congress.

Mr. BENNETT

Mr. BENNETT. Mr. President, it was my intention at this point to propound the unanimous consent request that the Senate proceed to S. 2137, with a list of the amendments to be in order. At the moment, full agreement on this has not yet been worked out between the majority and minority and negotiations are still going on to that end. It is my hope I will be able to offer such a unanimous consent request at sometime in the future. Looking forward to that time later today when we can get unanimous consent on proceeding to the bill, I would like to outline for the Senate the highlights of the bill. Then I understand there are some others who might wish to speak on the amendments that they would offer to the bill if we were, indeed, on it, and thereby have some of the discussion that we could deal with prior to the bill.

Mr. BENNETT

Mr. BENNETT. I yield the floor.

Mr. BENNETT. Mr. President, as I said, I was planning to ask unanimous consent that we proceed to S. 2137 and outline a series of amendments that would be in order. We are still working on that agreement between the majority leader and the minority leader who, I understand, are talking on this issue right now. When we do go to that appropriations bill, I will make a point of thanking Senator Dorgan for his assistance as the ranking member. Since I have been chairman of the Legislative Branch Subcommittee and he has been my ranking member, we have not had, in my memory, a single point of major disagreement. Senator Dorgan has been more than diligent in attending all of the meetings of the subcommittee. His staff has been very cooperative with the majority staff in working out the difficulties, and I think it has been the kind of legislative relationship that I looked forward to, when I ran for the Senate, between members of the different parties. The legislative branch bill will provide $1,585,021,425 in new budget authority, exclusive of the House items for fiscal year 1999. Comity between the two Houses allows the House to set its amount and the Senate to set its amount, without difficulty from each other. This is a $53,704,925 increase, or 3.5 percent above the fiscal year 1998 level. But it is $72,359,575 below the amount included in the President's budget. The majority of the increases in the bill are for cost-of- living adjustments, estimated at 3.1 percent. The Senate portion of the bill includes a 1.8 percent increase over the fiscal year 1998 funding, which I think demonstrates some fiscal responsibility on our part. The Library of Congress and the GAO were provided funds for additional FTEs to assist the Congress in the information technology area, particularly addressing the year 2000 computer problem. The Presiding Officer and others in the Chamber know I have made this something of an obsession. The Senate has created a special committee on the year 2000 technology problem, which I chair. We recognize that most of the expertise to provide the committee with the guidance that it needs will come from detailees to the special committee and from those experts in the Library of Congress and the GAO who already have a background in this area. So, to make sure the year 2000 problem is not exacerbated by lack of funds, these additional FTEs were included in this bill. That is part of the 3.5 percent increase over last year's level. Approximately 21 percent of the Architect's budget is for capital projects; the balance, of course, of 79 percent is for the operating statement. These are the outlines of the overall bill. As far as I know, and Senator Dorgan knows, the bill is noncontroversial except for those amendments that some Senators have indicated they would be willing to offer. With that background of the bill that we have in mind, I yield the floor. I understand Senator Brownback will be talking about some of the amendments that he would offer once the bill does come before us, and we can proceed then in morning business with that matrix. I see the Senator from Kentucky. I will be happy to yield.

Mr. BENNETT

Mr. BENNETT. Mr. President, I ask unanimous consent that the Subcommittees on Financial Institutions and Regulatory Relief, and Housing Opportunity and Community Development of the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on Friday, July 17, 1998, to conduct a joint hearing to review a report on the Real Estate Settlements Procedure Act and The Truth in Lending Act (RESPA/TILA) from the Department of Housing and Urban Development and the Federal Reserve.

Mr. BENNETT

Mr. BENNETT. I thank my friend from Missouri for his assistance and support in addressing growth in Utah. budget committee scoring of s. 2168

Mr. BENNETT. Mr. President, I take the Senate floor to enter a colloquy with the distinguished Chairman of the VA, HUD and Independent Agencies Subcommittee, Senator Bond. The topic of which I speak is the tremendous growth that continues to take place in my home state of Utah. Presently, Utah is ranked by the U.S. Bureau of the Census as the third fastest growing state in the Union. While Utah is often thought of as a rural state, roughly 80 percent of our population resides in the narrow mountain valleys along 100 miles of the Wasatch Front. In reality, Utah is one of the most urban states in the country. With this in mind, I would like to thank the Chairman of the VA, HUD Committee for his assistance in including report language in the Fiscal Year 1999 bill, which encourages the Environmental Protection Agency (EPA) to work with Envision Utah, a private/ public organization tasked with planning for Utah's future. I would also like to ask Chairman Bond whether or not additional EPA programs might be of assistance to Envision Utah in fulfilling its mission?

Mr. BENNETT

Mr. BENNETT. Mr. President, today I introduce a bill to provide individuals with greater control over their health care choices and dollars. This legislation will allow individuals enrolled in Flexible Spending Accounts (FSA) at year's end to move unutilized funds in the amount of $500 or less to other tax protected accounts such as: a medical savings account, an individual retirement account or a 401k account. A flexible spending account is one of the options available to employers as they provide benefits to their employees. At the beginning of the year the employer gives the employee a set number of pre-tax benefit dollars which they can then allocate to any one or combination of the IRS approved FSA uses: health care, life insurance, day care, vacation, or retirement. The employee then must determine at the beginning of the year the number of dollars they will put in each account. In most cases the employee hopes they have made the appropriate allocation. If the employee has over funded a particular account they lose those benefit dollars at the end of the year. About 21.7 million Americans lose between $125 to $200 every year because of a 1984 Internal Revenue Service regulation that governs FSAs. Every year Americans lose between $4.3 and $2.7 billion due to this IRS regulation! The regulation mandates that individuals with FSAs must either ``use-it-or-lose-it.'' In other words, if you do not spend your money by the end of the year, your employer gets to keep the money you don't spend! This legislation will allow individuals enrolled in flexible spending accounts at year's end to ``rollover'' or move up to $500 per year from their FSA into one of the approved accounts including: IRAs, MSAs, or 401ks. The funds rolled over into an appropriate account would be treated for tax purposes as a rollover contribution for the taxable year from which it was unused. The $500 allowable rollover would be indexed in increments of $50 and rounded to the lowest multiple of $50. I believe this small change would have a significant impact on individuals and their health care. First, the incentive would be to spend these dollars only on health care services that are necessary, thus encouraging rational health care spending rather than the irrational health care spending promoted by the ``use-it-or-lose-it'' policy. Second, individuals would be more inclined to open up a MSA, and in doing so they would have both greater portability and greater choice. This would empower individuals by giving them greater control over their own health care dollars and expand access and choice. Third, more rational spending is likely to translate into lower health care costs and greater competition. 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 introduce a bill to provide individuals with greater control over their health care choices and dollars. This legislation will allow individuals enrolled in Flexible Spending Accounts (FSA) at year's end to move unutilized funds in the amount of $500 or less to other tax protected accounts such as: a medical savings account, an individual retirement account or a 401k account. A flexible spending account is one of the options available to employers as they provide benefits to their employees. At the beginning of the year the employer gives the employee a set number of pre-tax benefit dollars which they can then allocate to any one or combination of the IRS approved FSA uses: health care, life insurance, day care, vacation, or retirement. The employee then must determine at the beginning of the year the number of dollars they will put in each account. In most cases the employee hopes they have made the appropriate allocation. If the employee has over funded a particular account they lose those benefit dollars at the end of the year. About 21.7 million Americans lose between $125 to $200 every year because of a 1984 Internal Revenue Service regulation that governs FSAs. Every year Americans lose between $4.3 and $2.7 billion due to this IRS regulation! The regulation mandates that individuals with FSAs must either ``use-it-or-lose-it.'' In other words, if you do not spend your money by the end of the year, your employer gets to keep the money you don't spend! This legislation will allow individuals enrolled in flexible spending accounts at year's end to ``rollover'' or move up to $500 per year from their FSA into one of the approved accounts including: IRAs, MSAs, or 401ks. The funds rolled over into an appropriate account would be treated for tax purposes as a rollover contribution for the taxable year from which it was unused. The $500 allowable rollover would be indexed in increments of $50 and rounded to the lowest multiple of $50. I believe this small change would have a significant impact on individuals and their health care. First, the incentive would be to spend these dollars only on health care services that are necessary, thus encouraging rational health care spending rather than the irrational health care spending promoted by the ``use-it-or-lose-it'' policy. Second, individuals would be more inclined to open up a MSA, and in doing so they would have both greater portability and greater choice. This would empower individuals by giving them greater control over their own health care dollars and expand access and choice. Third, more rational spending is likely to translate into lower health care costs and greater competition. 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. Is it the Committee's intent that the Department of Energy is to give priority in the expenditure of such funds to assisting western states which are collectively working with the industry on a gridwide basis to promote competitive and reliable regional electricity markets?

Mr. BENNETT. Mr. President, I appreciate the Senator from New Mexico's support for this project. I have recently become aware of a problem with this project related to the Bureau of Reclamation's interpretation of the project's authorization which I hope we can clarify. As the Senator knows, I am a strong advocate for the concept of water recycling and reuse. In arid States such as ours we simply have to make every gallon of available water stretch as far as we can. It is for that reason that I sponsored the legislation that eventually became Public Law 104-266. The passage of that legislation expanded the Bureau of Reclamation's water recycling program and authorized the Tooele City project. Under this program the Bureau is authorized to contribute up to twenty-five percent of the cost of planning, designing and constructing water recycling and reuse projects. The Tooele Wastewater Treatment and Reuse project is designed to reclaim 2.25 million gallons of effluent daily and utilized the reclaimed water for a variety of non-potable uses permitted by Utah State law. Unlike some other States, Utah permits the utilization of water treated to secondary--as opposed to advanced secondary or tertiary--standards for certain non-potable uses. In formulating the Tooele project, the City has always anticipated the utilization of secondary effluent in conformance with State law. Now the Bureau of Reclamation has informed the City that it will not provide funds appropriated by Congress for that portion of the Tooele project that provides secondary treatment. I have searched the authorizations for the Title XVI program and the Tooele project high and low and can not find a statutory basis for the Bureau's position. Had Congress wished to limit the use of title XVI funds in this manner, it certainly could have done so. It did not. Mr. President, I remain hopeful that we can resolve this matter before this bill goes to Conference. However, in the event that we are not successful, I would like to ask the Chairman to entertain the possibility of Conference Report language, if necessary, to clarify this matter.

Mr. BENNETT

Mr. BENNETT. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.