Kit Bond

Mr. BOND

Mr. BOND. Mr. President, I ask unanimous consent reading of the amendment be dispensed with.

Mr. BOND. Mr. President, I send an amendment to the desk, and I ask for its immediate consideration.

Mr. BOND. Mr. President, I apologize, but I want to take a break from the fascinating discussions, the dissertations on autobiographical materials, and raise a new subject. I will talk about the budget. I apologize for making this major shift in the direction of the debate, but I am offering today the President's budget. We offered this in the Budget Committee because a lot of people have been talking about the President's budget. Unfortunately, nobody has offered it here to date. I thought we ought to have an opportunity to discuss it. Some of our colleagues waxed very eloquent in the Budget Committee on the benefits of the President's budget. Of course, people who know budgets know that they are just basically a bunch of numbers, but those numbers do have consequences. When people talk about how great the President's budget is, when it comes time to vote on it, nobody seemed to want to do that in the Budget Committee, so I thought I would give all of our colleagues an opportunity to vote. As I look at the President's budget plan, it reminds me of the so- called garbage boat, the garbage barge that floated in the Atlantic a few years ago. Everybody kept saying how important it was to get the garbage buried someplace but nobody wanted the barge to land on their shores. A lot of our colleagues have talked about how important and how wonderful the President's plan is, but no one wants to take custody of it, nobody wants to take responsibility for it. I suggest that this substitute would be a great opportunity for somebody who wants to work from the principles and the ideas of the President's plan to vote for it. Then we can move forward and work on it. Why do our friends on the other side keep running away from the President's plan? The problem comes up when we move away from talking about general principles, platforms, and commitments and start talking about the details of the plan. I agree we ought to talk about principles, but principles are not enough. We have to get down to the point of talking about some plans, some numbers. In the Senate, we vote on a plan, not on some vague statements claiming to be principles. I am from Missouri and, of course, our motto is ``Show Me.'' Show me how these principles translate into a budget. That is what this amendment is all about. This is putting before the Senate the actual numbers that the President has set out to implement the details of his budget plan outlined to us and to the Nation just a month and a half ago. It is a vote on the specific plan proposed by the President. Now, let's take a look at what the President's plan does. This is just in summary, and there are a lot of things we can say about it. First and foremost, the President's plan breaks the budget discipline we worked so hard to achieve, the spending caps we agreed to in the balanced budget amendment that helped get control over spending and produced a surplus. These caps would be shattered by the President's plan. We would not have any surplus to be worrying about if we had not, under the leadership of our distinguished chairman of the Budget Committee, Senator Domenici, fought and fought and fought against plans that were vetoed, against objections from the other side, against every manner of obstacle, finally to get a plan in place which capped spending and produced a budget, where we are reducing the deficits and moving toward a surplus in the future. This has been stated by many observers as one of the reasons why there has been some strength in the economy, because after years of watching a totally undisciplined Federal spending machine raise the deficit and build on the debt of this Nation, we finally are getting spending under control. We have had good monetary policy. Our fiscal policy has been a disaster. Under the leadership of Chairman Domenici, we have finally gotten a handle on the fiscal policy. But the President's budget plan proposes to spend $30 billion more than we agreed to in the balanced budget amendment. He breaks the cap. This is going back to the old spend and spend and spend proposals that put us in the position where we have run up trillions of dollars of debt on our children's and our grandchildren's credit cards. I think it is very important that we focus on the budget caps. The plan goes against the principles we supposedly agreed to around here. I was very interested that, on February 28, the distinguished minority leader was being questioned by Cokie Roberts on the ``This Week'' program. When asked if we should keep the caps, his response was, ``Absolutely.'' Cokie Roberts says, ``So you are against breaking the caps?'' Senator Daschle says, ``Absolutely. I think we've got to live within those caps. We set them out. We all voted for them, agreed to them. We knew the ramifications when we did so. We know what kind of a surplus we are going to enjoy if we have them. I think we ought to stick with them.'' Well, that is a strong statement of principle in favor of the caps. I agree with it. But that principle is violated by the budget plan submitted by the President. That is why I think we are going to see a significant number of Members on the other side of the aisle vote against the President's plan, because the plan does not carry out the principles that he has so widely espoused and been so roundly cheered for espousing. Here is another principle from the President himself. This is from the State of the Union Message, January 27, 1998. Within the first portion of the remarks, he said: If we balance the budget for next year, it is projected we will have a sizable surplus in the years immediately after. What should we do with the projected surplus? I have a simple four word answer: save Social Security first. Tonight, I propose that we reserve 100 percent of the surplus--that is, every penny of any surplus--until we have taken all the measures necessary to strengthen the Social Security system for the 21st century. That was one time I was pleased to stand up and applaud the President, because I agreed with that principle. I agreed with the principle that we ought to take the money from the surplus, the surpluses we are seeing now, and apply them against Social Security. But what does the President's plan do? The President's plan, as outlined in the budget--you have heard about the devil being in the details. Man, that is an understatement when it comes to the President's budget, because it is full of devils. You can imagine what you call a place that is full of devils. There is a place named for that. That is what the President's budget is. The President's plan would spend a whopping $158 billion of the Social Security surplus on the President's big spending schemes. Let me show you this chart. Here is an opportunity to take a look at the difference in the two plans. Here is the plan before us, Senator Domenici's plan, ``The Fate of the Social Security.'' It says here is the surplus. Here is the President's plan. He says we can save this much, and then we want to invest some in equities. I believe Senator Ashcroft addressed that equity question. He wants to have the Federal Government investing in the stock market and taking control, potentially, of companies through ownership--a new form of nationalization, a national economic scheme that would make a central planner of the Marx or Lenin era salivate with anticipation. And then the President wants to spend $158 billion out of that surplus. That, Mr. President, is not saving the Social Security surplus for Social Security. These are some of the specifics of the plan. That is why we need an up-or-down vote on the President's plan, not on some vague statement by the President on the principles. That is why I have offered the plan. Let's talk a little bit about Medicare. We have heard that the President does wonderful things about Medicare. Well, you know, I was very interested. I want to look at this because the President's plan cuts about $9 billion out of Medicare for the next 5 years to pay for new spending programs. Mr. President, in my State, if you freeze hospital payments and you squeeze down on the money that the providers are getting, you are on the verge of doing something disastrous. Many of the small rural hospitals and rural health care providers in my State are at the point where they can no longer stay in business if the reimbursements are ratcheted down. The system has fatal flaws in it that need to be corrected. Throwing money at a fatally flawed system will not save it, and ratcheting it down further is going to wind up having small rural hospitals closed, having rural hospitals no longer able to take Medicare patients. It is going to wind up in denying Medicare to the people who most need it. If we are serious about Medicare reform--and I hope we all are--we had better go to work on the recommendations made by the bipartisan members of the Medicare Commission, led by our colleagues, Senators Breaux and Kerrey on the other side, with the active leadership of Senators Gramm and Frist on our side, and others, because throwing money at Medicare is not going to save a system that is fatally flawed. I wish to clear away some of the chaff that has been thrown out in discussions about Medicare by citing a fellow who I believe is a rather credible observer, David Broder. On March 15, he wrote an article that appeared in the St. Louis Post Dispatch, talking about the fury of some of the Finance Committee members in the Senate. He explained it. He said: The committee had just received prepared testimony saying in unusually blunt language that Clinton, far from cracking the Medicare problem, may be making it worse. Dan Crippen, the director of CBO, said that by transferring $350 billion from the anticipated budget surpluses to the Medicare trust fund, the Clinton plan would ``delay the date of insolvency.'' But the transfer would do nothing to address the underlying problem: ``Rapid growth in spending for Medicare. . .will still outstrip anticipated revenues.'' Listen to what Broder said: The prescription drug benefits Clinton touted (but left out of his budget because he has no way to pay for them) ``would be popular with beneficiaries,'' Crippen said, ``but the additional program costs would be large.'' Broder goes on to opine: By raising expectations, Clinton has made the Medicare problem worse. David M. Walker, the head of GAO, was even more biting. By proposing a large-scale shift of general revenues to a program now largely financed by payroll taxes, Walker said, the Clinton proposal ``could serve to undermine the remaining fiscal discipline associated with a self-financing trust fund concept.'' Meantime, he said, ``it has no effect on the current and projected cash-flow deficits'' in Medicare and ``would not provide any new money to pay for medical services.'' The Clinton program, he said, ``does not include any meaningful program reform that would slow spending growth. . ..At the same time, it could strengthen pressure to expand Medicare benefits in a program that is fundamentally unsustainable in its present form.'' There you have it. You have the President's budget plan, which is smoke and mirrors as far as Medicare goes. We have had the testimony before the Budget Committee from the Director of CBO and the Director of the General Accounting Office. It does nothing for Medicare. It provides some transfer of trust fund balances and shifts money back and forth with funny accounting. It gives new life to that old meaning that, ``I'm from the Federal Government, trust me. I am going to shuffle notes around and claim that we have solved some problems.'' The Clinton plan puts more IOUs into Social Security that will increase the debt held by the public. It is likely that the plan that he has presented will actually increase the debt that my son and the children and grandchildren of this country will have to carry for the rest of their lives. By raising the debt, it does nothing to save Social Security; it just increases the burden. Oh, yes. And taxes. At a time when we are looking at surpluses, he increases taxes so there will be more money to spend. This is a real plan. These are not principles. This is what his plan does. If there are some in this body who think that the President outlined the right way to go, I would say show me. Show me your support for it. Here is what it does. Show me if you are willing to vote for it. Mr. President, I don't know a lot of our colleagues who want to endorse a plan like that. I certainly wouldn't. But I appreciate the opportunity to give them the chance to speak up for the President's plan. I thank the Chair. I reserve the remainder of my time.

Mr. BOND. Mr. President, if I may respond, my initial presentation will not be over 12 to 15 minutes, at the most. When we had debate on this in the committee, a number of others wanted to join in. I do not know whether there will be others who want to join either on my side or the other side. But to answer the chairman's question, I personally need only about 15 minutes.

Mr. BOND. Will the Senator yield?

Mr. BOND

Mr. BOND. Thank you, Madam President. This amendment is an opportunity for all of our friends who think that the President's budget outlines the plan which we should follow to express themselves by voting for it. The President has said we must save the entire surplus to save Social Security, but the actual details of the plan takes $158 billion out of Social Security over the next 5 years. The President and the minority leader have said that we need to stay in the caps. This budget plan breaks the caps by $38 billion. These are the actual details. These are the actual plans and the absolute numbers that we think come from the President's budget. For our friends who believe that the President's budget is a preferable means of charting our spending programs for this coming year, I say vote for this. I believe it does not fix Medicare. It ignores Medicare. It spends money that should be put into the retiring debt from the Social Security surplus, and I urge my colleagues to vote no.

Mr. BOND. I agree.

Mr. BOND

Mr. BOND. Mr President, today we in the United States Senate have an opportunity to take an important step in strengthening the Women's Business Center Program at the Small Business Administration. The ``Women's Business Center Amendment Act of 1999'' authorizes SBA to make grants totaling up to $11 million annually to Women's Business Centers throughout the United States. During the past decade, the number of women-owned small businesses has exploded. Women-owned small businesses are the fastest growing segment of our nation's business community. Years ago, there was an advertising campaign slogan proclaiming that women ``had come a long way.'' I find that slogan very applicable to the plateau now reached by women entrepreneurs. During this time, women business owners have established themselves as a key component of our small business community, which has been the engine driving our economy during the 1990's. The research foundation arm of the National Association of Women Business Owners (NAWBO) has conducted studies which show that women no longer are having more trouble than men obtaining bank loans. However, obtaining a loan does not guarantee a business' success. In fact, many small businesses that start out well capitalized end up failing. Success of a small business is usually dependent on the owner's management capabilities. Women's Business Centers offer help to women entrepreneurs who are looking to start a business or who already have a business by providing them with business and education training, including marketing, finance, and management assistance. For the past three years, I have worked with Senator Domenici Senator Kerry, and members of the Committee on Small Business first to save and later to expand the Women's Business Center Program. In 1996, when the Administration sought to zero-out the budget for the program, I helped lead the effort to earmark funds for the program within the SBA FY 1997 budget. Senator Domenici, Senator Kerry and I sponsored the ``Women's Business Centers Act of 1997,'' which expanded the program from $4 million to $8 million per year. This bill was incorporated into the ``Small Business Reauthorization Act of 1997'' (Public Law 105-135). Last year, I sponsored the ``Year 2000 Readiness and Small Business Programs Restructuring and Reform Act of 1998,'' which included an increase from $8 million to $12 million and made other reforms in the Women's Business Center Program. This bill passed the Senate unanimously; unfortunately, the House of Representatives was not able to act on the bill before Congress adjourned. In light of the pressing demand to expand the authorization for the Women's Business Center Program, I applaud the Chairman of the House Committee on Small Business, Jim Talent, and the Committee's ranking Democrat, Nydia Velazquez, for their efforts to push through House-passage of the bill so quickly this year. The ``Women's Business Center Amendments Act of 1999'' brings us a giant step closer to achieving our goal of having at least one Women's Business Center up and running in each of the 50 states. Under this bill, SBA will be able to continue to fund the existing 35 eligible Centers and provide seed funding to new eligible applicant Centers in states not yet served by the program. The bill authorizes $11 million for Fiscal Year 2000 for the Women's Business Center Program; however, the Administration has requested $9 million. This summer I intend to work closely with Senator Kerry on legislation to allow Women's Business Centers that have completed their initial three or five year Women's Business Center grants with SBA to apply for another five year grant to allow them to be able to continue to provide the high level of service they are currently delivering to women small business owners. Our initiative may require an increase in SBA's budget for the Women's Business Center Program for FY 2000, and I intend to study very closely the financial needs of the program. As a member of the Appropriations Committee, I will urge my colleagues to support an increase in the FY 2000 budget for the program, if necessary, that will allow it to expand and meet the needs of the growing number of women-owned small businesses. I strongly believe we must pursue this course even if that means pushing for an increase above the amount requested in the President's budget request. Mr. President, it is critical that the Senate vote to approve the ``women's Business Center Act of 1999,'' so that the Federal government can continue to help make small business ownership a reality for women entrepreneurs. I urge my colleagues to support this important bill.

Mr. BOND

Mr. BOND. Yes, the figure was smaller, but the fact remained that the Ice Storm, as the first big storm of the year, was the impetus for us to provide supplemental funding to the CDBG program to help Maine and other states cover the costs of the disaster where FEMA wasn't able to assist.

Mr. BOND. The language will allow FEMA to assess and fund the States unmet needs, as determined by FEMA and the State.

Mr. BOND. The Senator is correct. It has been almost a year and I know that we are both extremely frustrated that we are still wrestling with using emergency CDBG funds for appropriations needs.

Mr. BOND. I appreciate the Senator's kind words. I did a colloquy on the Senate floor last March on this issue with the then junior Senator from New York, Mr. D'Amato outlining the funding needs of the Northeast. In this colloquy we outlined the history of the funding including the significant needs of Maine and New England. In fact, as we both discussed at that time, the Ice Storm, as the first big storm of the year, was the impetus for us to provide supplemental funding to the CDBG program to help Maine and other states cover the costs of the disaster where FEMA wasn't able to assist.

Mr. BOND. As the Senator and I have discussed, I remain very concerned by HUD's treatment of Maine and the other Northeast states, especially the fact that initial funding was not provided until six months after last year's supplemental bill was enacted, and the fact that I have yet to receive an acceptable explanation from HUD as to the funding formula used to allocate the money. The Northeast's experience is one of several reasons why the bill before us today transfers the money to FEMA.

Mr. BOND. The Senator is correct, and I know that neither of us thought we would be here, almost a year later, still trying to ensure that adequate funding was provided to the Northeast, as we felt we had provided for that in the FY98 Supplemental.

Mr. BOND. I appreciate the Senator's kind words. I did a colloquy on the Senate floor last March on this issue with the then junior Senator from New York, Mr. D'Amato, outlining the funding needs of the Northeast. In that colloquy we discussed the fact that of the $250 million the Senate was appropriating for HUD's Community Development Block Grant Program (CDBG) , that $60 million was meant for Maine and the rest of the Northeast.

Mr. BOND. As the Senator and I have discussed, I also was dismayed at the treatment Maine and the other Northeast states received--the fact that the money was not provided until six months after the bill was enacted, and the fact that I have yet to receive an acceptable explanation from HUD as to the funding formula used to allocate the money. The Northeast's experience is one of several reasons why the bill before us today transfers the money to FEMA.

Mr. BOND

Mr. BOND. Mr. President, I ask for the yeas and nays.

Mr. BOND

Mr. BOND. Mr. President, I rise today in support of the Small Business Investment Improvement Act of 1999. I am pleased to report the bill received unanimous support of my colleagues on the Committee on Small Business, when we voted to report the bill on February 5, 1999. This is important legislation for one simple reason: it makes more investment capital available to small businesses that are seeking to grow and hire new employees. In 1958, Congress created the SBIC program to assist small business owners obtain investment capital. Forty years later, small businesses continue to experience difficulty in obtaining investment capital from banks and traditional investment sources. Although investment capital is readily available to large businesses from traditional Wall Street investment firms, small businesses seeking investments in the range of $100,000-$2.5 million have to look elsewhere. SBIC's are frequently the only sources of investment capital for growing small businesses. Often we are reminded that the SBIC program has helped some of our Nation's best known companies. It has provided a financial boost at critical points in the early growth period for many companies that are familiar to all of us. For example, Federal Express received a needed infusion of capital from two SBA-licensed SBIC's at a critical juncture in its development stage. The SBIC program also helped other well-known companies, when they were not so well-known, such as Intel, Outback Steakhouse, America Online, and Callaway Golf. What is not well known is the extraordinary help the SBIC program provides to Main Street America Small businesses. These are companies we know from home towns all over the United States. Main Street companies provide both stability and growth in our local business communities. A good example of a Main Street company is Steelweld Equipment Company, founded in 1932, which designs and manufactures utility truck bodies in St. Clair, MO. The truck bodies are mounted on chassis made by Chrysler, Ford, and General Motors. Steelweld provides truck bodies for Southwestern Bell Telephone Co., Texas Utilities, Paragon Cable, GTE, and GE Capital Fleet. Steelweld is a privately held, woman-owned corporation. The owner, Elaine Hunter, went to work for Steelweld in 1966 as a billing clerk right out of high school. She rose through the ranks of the company and was selected to serve on the board of directors. In December 1995, following the death of Steelweld's founder and owner, Ms. Hunter received financing from a Missouri-based SBIC, Capital for Business (CFB) Venture Fund II, to help her complete the acquisition of Steelweld. CFB provided $500,000 in subordinated debt. Senior bank debt and seller debt were also used in the acquisition. Since Mr. Hunter acquired Steelweld, its manufacturing process was redesigned to make the company run more efficiently. By 1997, Steelweld's profitability had doubled, with annual sales of $10 million and 115 employees. SBIC program success stories like Ms. Hunter's experience at Steelweld occur regularly throughout the United States. In 1991, the SBIC program was experiencing major losses, and the future of the program was in doubt. Consequently, in 1992 and 1996, the Committee on Small Business worked closely with the Small Business Administration to correct deficiencies in the law in order to ensure the future of the program. Today, the SBIC Program is expanding rapidly in an effort to meet the growing demands of small business owners for debt and equity Investment capital. Last year, the Senate unanimously approved a bill similar to the bill that is now before the Senate. Today's bill includes two technical changes in the SBIC program. The first change removes a requirement that at least 50 percent of the annual program level of the approved participating securities under the SBIC Program be reserved for funding with SBIC's having private capital of not more than $20 million. The requirement became obsolete following SBA's imposition of its leverage commitment process and congressional approval for SBA to issue 5-year commitments for SBIC leverage. The second technical change requires SBA to issue SBIC guarantees and trust certificates at periodic intervals of not less than 12 months. The current requirement is 6 months. This change will give maximum flexibility for SBA and the SBIC industry to negotiate the placement of certificates that fund leverage and obtain the lowest possible interest rate. The Small Business Investment Improvement Act of 1999 clarifies the rules for the determination of an eligible small business or small enterprise that is not required to pay Federal income tax at the corporate level, but that is required to pass income through to its shareholders or partners by using a specified formula to compute its after-tax income. This provision is intended to permit ``pass through'' enterprises to be treated the same as enterprises that pay Federal taxes for purposes of SBA size standard determinations. The bill would also make a relatively small change in the operation of the program. This change, however, would help smaller, small businesses to be more attractive to investors. SBIC's would be permitted to accept royalty payments contingent on future performance from companies in which they invest as a form of equity return for their investment. SBA already permits SBICs to receive warrants from small businesses, which give the investing SBIC the right to acquire a portion of the equity of the small business. By pledging royalties or warrants, the small business is able to reduce the interest that would otherwise be payable by the small business to the SBIC. Importantly, the royalty feature provides the smaller, small business with an incentive to attract SBIC investments when the return may otherwise be insufficient to attract venture capital. Lastly, the bill increases the program authorization levels to fund participating securities. In fiscal year 1999, the authorization level would increase from $800 million to $1.2 billion; in fiscal year 2000, it would increase from $900 million to $1.5 billion. The two increases have become necessary as the demand in the SBIC program was growing at a rapid rate. Higher authorization levels are necessary if the SBIC Program is going to meet the demand for investment capital from the small business community. Mr. President, this is a sound bill, which has the unanimous support of all 18 members of the Committee on Small Business. On February 2, 1999, a similar version of this legislation passed the House of Representatives by a vote of 402-2. I strongly urge my colleagues in the Senate to vote in favor of the Small Business Investment Improvement Act of 1999.

Mr. BOND

Mr. BOND. Mr. President, today I join my distinguished colleague from Alabama, Senator Shelby, in reintroducing legislation, which we proudly offered in the 105th Congress and will work to enact during the 106th Congress. Our goal is to ensure that the Treasury Department's Internal Revenue Service does not usurp the power to tax--a power solely vested in Congress by the U.S. Constitution. ``The Stealth Tax Prevention Act'' will ensure that the duly elected representatives of the people, who are accountable to the electorate for our actions, will have discretion to exercise the power to tax. This legislation is intended to curb the ability of the Treasury Department to bypass Congress by proposing a tax increase without the authorization or consent of Congress. The Stealth Tax Prevention Act builds on legislation passed unanimously by the Senate in the 104th Congress. As Chairman of the Committee on Small Business, I authored the Small Business Regulatory Enforcement Fairness Act--better known as the Red Tape Reduction Act-- to ensure that small businesses are treated fairly in agency rulemaking and enforcement activities. Subtitle E of the Red Tape Reduction Act provides that a final rule issued by a Federal agency and deemed a ``major rule'' by the Office of Information and Regulatory Affairs of the Office of Management and Budget cannot go into effect for at least sixty days. This delay is to provide Congress with a window during which we can review the rule and its impact, allowing time for Congress to consider whether a resolution of disapproval should be enacted to strike down the regulation. To become effective, the resolution must pass both the House and Senate and be signed into law by the President or enacted as the result of a veto override. Later this month, I will commemorate the third anniversary of the Red Tape Reduction Act's enactment by highlighting the progress made to date and the obstacles small businesses continue to face primarily due to agency noncompliance. Because of the IRS' significant impact on the activities of small businesses, the Service's implementation of the Red Tape Reduction Act and the Regulatory Flexibility Act is of utmost importance to the Committee on Small Business. The bill Senator Shelby and I introduce today amends this law to provide that any rule issued by the Treasury Department's Internal Revenue Service that will result in a tax increase--any increase--will be deemed a major rule by OIRA and, consequently, not go into effect for at least 60 days. This procedural safeguard will ensure that the Department of the Treasury and its Internal Revenue Service cannot make an end-run around Congress, as it attempted with the ``stealth tax'' it proposed on January 13, 1997. In that case, the IRS issued a proposal that is tantamount to a tax increase on businesses structured as limited liability companies. The IRS proposed to disqualify a taxpayer from being considered as a limited partner if he or she ``participates in the partnership's trade or business for more than 500 hours during a taxable year'' or is involved in a ``service'' partnership, such as lawyers, accountants, engineers, architects, and health-care providers. The IRS alleges that its proposal merely interprets section 1402(a)(13) of the Internal Revenue Code, providing clarification, when in actuality it is a tax increase regulatory fiat. Under the IRS proposal, disqualification as a limited partner will result in a tax increase on income from both capital investments as well as earnings of the partnership. The effect will be to add the self-employment tax (12.4% for social security and 2.9% for Medicare) to income from investments as well as earnings for limited partners who under current rules can exclude such income from the self employment tax. Under the bill introduced today, this tax increase on limited partners, if later issued as a final rule, could not go into effect for at least 60 days following its publication in the Federal Register. This window, which coincides with issuance of a report by the Comptroller General, would allow Congress the opportunity to review the rule and vote on a resolution to disapprove the tax increase before it is applied to a single taxpayer. The Stealth Tax Prevention Act strengthens the Red Tape Reduction Act and the vital procedural safeguards it provides to ensure that small businesses are not burdened unnecessarily by new Federal regulations. Congress enacted the 1996 provisions to strengthen the effectiveness of the Regulatory Flexibility Act, a law which had been ignored too often by government agencies, especially the Internal Revenue Service. Three of the top recommendations of the 1995 White House Conference on Small Business sought reforms to the way government regulations are developed and enforced, and the Red Tape Reduction Act passed the Senate without a single dissenting vote on its way to being signed into law on March 29, 1996. Despite the inclusion of language in the 1996 amendments that expressly addresses coverage of IRS interpretative rules, the IRS continues to bypass compliance with the Regulatory Flexibility Act. As 18 of my Senate colleagues and I advised Secretary Rubin in an April 9, 1997, letter, the proposed IRS regulation on limited-partner taxation is precisely the type or rule for which a regulatory flexibility analysis should be done. Although, on its face, the rulemaking seeks merely to ``define a limited partner'' or to ``eliminate uncertainty'' in determining net earnings from self- employment, the real effect of the rule would be to raise taxes by executive fiat and expand substantially the spirit and letter of the underlying statute. The rule also seeks to impose on small businesses a burdensome new recordkeeping and collection of information requirement that would affect millions of limited partners and members of limited liability companies. The IRS proposed this ``stealth'' tax increase with the knowledge that Congress declined to adopt a similar tax increase in the Health Security Act proposed in 1994--a provision that the Congressional Joint Committee on Taxation estimated in 1994 would have resulted in a tax increase of approximately $500 million per year. The Stealth Tax Prevention Act would remove any incentive for the Treasury Department to underestimate the cost imposed by an IRS proposed or final rule in an effort to skirt the Administration's regulatory review process or its obligations under the Regulatory Flexibility Act. By amending the definition of ``major rule'' under the Congressional Review Act, which is Subtitle E of the Red Tape Reduction Act, we ensure that an IRS rule that imposes a tax increase will be a major rule, whether or not it has an estimated annual effect on the economy of $100,000,000. Our amendment does not change the trigger for a regulatory flexibility analysis, which still will be required if a proposed rule would have ``a significant economic impact on a substantial number of small entities.'' We believe the heightened scrutiny of IRS regulations called for by this legislation will provide an additional incentive for the Treasury Department's Internal Revenue Service to meet all of its procedural obligations under the Reg Flex Act and the Red Tape Reduction Act. I urge my colleagues to join us in supporting this important legislation to ensure that the IRS neither usurps the proper role of Congress--nor skirts its obligations to identify the impact of its proposed and final rules. When the Department of the Treasury issues a final IRS rule that increases taxes, Congress should have the ability to exercise its discretion to enact a resolution of disapproval before the rule is applicable to a single taxpayer. The Stealth Tax Prevention Act Senator Shelby and I introduce today provides that opportunity.

Mr. BOND

Mr. BOND. Mr. President, one year ago today, the Birth Defects Prevention Act passed the House of Representatives, clearing its way for the President's signature. With this new funding, the Centers for Disease Control has implemented a national strategy, in conjunction with the States and local organizations such as the March of Dimes, to prevent the devastating incidence of birth defects. Building upon that success, today I rise to introduce the Healthy Kids 2000 Act--comprehensive approach which addresses the broad spectrum of health issues affecting our nation's children. And I want to thank the March of Dimes and the National Association of Children's Hospitals for supporting me in this effort to improve the health of our nation's children and pregnant women as we move into the new millennium. I also want to thank my colleague from Ohio, Mike DeWine, for his work on children's health issues, and for allowing me to adopt some of his ideas for inclusion in this bill. Senator DeWine has been a dedicated leader on children's health, and has been essential to the development of the sections of this bill that focus on poison control centers and pediatric research within the National Institutes of Health. I am struck, every time I go into the neonatal wards across my home state of Missouri, at the tiny one and two pound babies, hooked up to monitors and tubes and looking so helpless. Many of them will survive; a few may not. My first thought is always one of thanks that I have been blessed with a very healthy son. The good news is that we are making progress in preventing diseases and in making sick and injured children well. Healing never thought possible a few years ago for those who are burn victims, or born with birth defects, or trauma victims, or even cancer patients, now occurs on a daily basis around our country. The question about how to finance health care and how to improve access to and the quality of health care, however, are the hottest challenges we face as a nation. There are some things we can all agree on: that the care and well- being of our children should come first, particularly those who are ill. Prenatal care is also paramount, because a great deal of child health is determined in the womb. Thus as a nation, we must stand up and speak for those who cannot speak for themselves. That is why I am introducing the ``Healthy Kids 2000 Act.'' The idea behind it is simple: we want pregnant women to be healthy, and we want children to be healthy. So we are going to remove some of the barriers they encounter in receiving good, appropriate health care. This bill will give States the flexibility to enroll eligible pregnant women in the State Children's Health Insurance Program (CHIP) and to coordinate essential outreach efforts to enroll qualified children. This program has already been funded by Congress to assist 10 million children whose families lack health insurance. These children are eligible to receive basic health care services like immunizations and antibiotics for ear infections, but pregnant women are not now eligible. Since so much of a child's health is determined in the womb, it is imperative that low-income pregnant women receive quality prenatal care. Similarly, we need to ensure that the National Institutes of Health research machine is focusing on diseases and conditions which afflict our nation's children, such as birth defects, SIDS, cystic fibrosis, juvenile diabetes, and arthritis, just to name a few. A simple statistic will highlight this need: 80% of prescription medications marketed in the U.S. today are not approved by the FDA for use by children under 12 because studies have not been conducted to document their safety or whether or not they work for children. That is a terrible disservice to the young people of our country who may need the relief of a particular prescription drug. This bill will also consolidate programs and provide more funds for local initiatives to prevent birth defects and maternal mortality. 150,000 infants are born each year with a serious birth defect, and birth defects are still the leading cause of infant death. During the 1990s we have witnessed an increase in maternal death during pregnancy and childbirth. There is no question that we need better approaches to ensure that women have healthier, safe pregnancies, and healthier babies. And my bill will help fund these vital prevention strategies. This bill will also ensure direct access to obstetric care, and direct access to pediatric care. Children have health needs that are very different than those of the adult population. Diseases and medications behave differently than in adults, and when children are treated, it should be by those who understand those differences. Finally, this initiative will assist children's hospitals in educating the next generation of pediatricians. Even with strapped budgets, teaching children's hospitals offer the more egalitarian health care in this country. These hospitals turn no one away. And it is essential that we support this noble mission by equipping children's hospitals with the tools to continue their educational and research efforts. So much of the most important work in our society goes unnoticed, and unrewarded. Saving the lives of our children, improving the health of our children, even caring for our children on a daily basis is not glamorous work, or sometimes even all that much fun. Doctors, nurses, mothers, fathers, child-care workers and teachers are performing the most difficult, and the most important, work of our society: raising up the next generation to be happy, healthy, and productive citizens. We must assist them in their efforts, and we can take a positive step by debating and enacting Healthy Kids 2000. Mr. President, I ask unanimous consent that letters of support be printed in the Record.

Mr. BOND. Mr. President, today I join my distinguished colleague from Alabama, Senator Shelby, in reintroducing legislation, which we proudly offered in the 105th Congress and will work to enact during the 106th Congress. Our goal is to ensure that the Treasury Department's Internal Revenue Service does not usurp the power to tax--a power solely vested in Congress by the U.S. Constitution. ``The Stealth Tax Prevention Act'' will ensure that the duly elected representatives of the people, who are accountable to the electorate for our actions, will have discretion to exercise the power to tax. This legislation is intended to curb the ability of the Treasury Department to bypass Congress by proposing a tax increase without the authorization or consent of Congress. The Stealth Tax Prevention Act builds on legislation passed unanimously by the Senate in the 104th Congress. As Chairman of the Committee on Small Business, I authored the Small Business Regulatory Enforcement Fairness Act--better known as the Red Tape Reduction Act-- to ensure that small businesses are treated fairly in agency rulemaking and enforcement activities. Subtitle E of the Red Tape Reduction Act provides that a final rule issued by a Federal agency and deemed a ``major rule'' by the Office of Information and Regulatory Affairs of the Office of Management and Budget cannot go into effect for at least sixty days. This delay is to provide Congress with a window during which we can review the rule and its impact, allowing time for Congress to consider whether a resolution of disapproval should be enacted to strike down the regulation. To become effective, the resolution must pass both the House and Senate and be signed into law by the President or enacted as the result of a veto override. Later this month, I will commemorate the third anniversary of the Red Tape Reduction Act's enactment by highlighting the progress made to date and the obstacles small businesses continue to face primarily due to agency noncompliance. Because of the IRS' significant impact on the activities of small businesses, the Service's implementation of the Red Tape Reduction Act and the Regulatory Flexibility Act is of utmost importance to the Committee on Small Business. The bill Senator Shelby and I introduce today amends this law to provide that any rule issued by the Treasury Department's Internal Revenue Service that will result in a tax increase--any increase--will be deemed a major rule by OIRA and, consequently, not go into effect for at least 60 days. This procedural safeguard will ensure that the Department of the Treasury and its Internal Revenue Service cannot make an end-run around Congress, as it attempted with the ``stealth tax'' it proposed on January 13, 1997. In that case, the IRS issued a proposal that is tantamount to a tax increase on businesses structured as limited liability companies. The IRS proposed to disqualify a taxpayer from being considered as a limited partner if he or she ``participates in the partnership's trade or business for more than 500 hours during a taxable year'' or is involved in a ``service'' partnership, such as lawyers, accountants, engineers, architects, and health-care providers. The IRS alleges that its proposal merely interprets section 1402(a)(13) of the Internal Revenue Code, providing clarification, when in actuality it is a tax increase regulatory fiat. Under the IRS proposal, disqualification as a limited partner will result in a tax increase on income from both capital investments as well as earnings of the partnership. The effect will be to add the self-employment tax (12.4% for social security and 2.9% for Medicare) to income from investments as well as earnings for limited partners who under current rules can exclude such income from the self employment tax. Under the bill introduced today, this tax increase on limited partners, if later issued as a final rule, could not go into effect for at least 60 days following its publication in the Federal Register. This window, which coincides with issuance of a report by the Comptroller General, would allow Congress the opportunity to review the rule and vote on a resolution to disapprove the tax increase before it is applied to a single taxpayer. The Stealth Tax Prevention Act strengthens the Red Tape Reduction Act and the vital procedural safeguards it provides to ensure that small businesses are not burdened unnecessarily by new Federal regulations. Congress enacted the 1996 provisions to strengthen the effectiveness of the Regulatory Flexibility Act, a law which had been ignored too often by government agencies, especially the Internal Revenue Service. Three of the top recommendations of the 1995 White House Conference on Small Business sought reforms to the way government regulations are developed and enforced, and the Red Tape Reduction Act passed the Senate without a single dissenting vote on its way to being signed into law on March 29, 1996. Despite the inclusion of language in the 1996 amendments that expressly addresses coverage of IRS interpretative rules, the IRS continues to bypass compliance with the Regulatory Flexibility Act. As 18 of my Senate colleagues and I advised Secretary Rubin in an April 9, 1997, letter, the proposed IRS regulation on limited-partner taxation is precisely the type or rule for which a regulatory flexibility analysis should be done. Although, on its face, the rulemaking seeks merely to ``define a limited partner'' or to ``eliminate uncertainty'' in determining net earnings from self- employment, the real effect of the rule would be to raise taxes by executive fiat and expand substantially the spirit and letter of the underlying statute. The rule also seeks to impose on small businesses a burdensome new recordkeeping and collection of information requirement that would affect millions of limited partners and members of limited liability companies. The IRS proposed this ``stealth'' tax increase with the knowledge that Congress declined to adopt a similar tax increase in the Health Security Act proposed in 1994--a provision that the Congressional Joint Committee on Taxation estimated in 1994 would have resulted in a tax increase of approximately $500 million per year. The Stealth Tax Prevention Act would remove any incentive for the Treasury Department to underestimate the cost imposed by an IRS proposed or final rule in an effort to skirt the Administration's regulatory review process or its obligations under the Regulatory Flexibility Act. By amending the definition of ``major rule'' under the Congressional Review Act, which is Subtitle E of the Red Tape Reduction Act, we ensure that an IRS rule that imposes a tax increase will be a major rule, whether or not it has an estimated annual effect on the economy of $100,000,000. Our amendment does not change the trigger for a regulatory flexibility analysis, which still will be required if a proposed rule would have ``a significant economic impact on a substantial number of small entities.'' We believe the heightened scrutiny of IRS regulations called for by this legislation will provide an additional incentive for the Treasury Department's Internal Revenue Service to meet all of its procedural obligations under the Reg Flex Act and the Red Tape Reduction Act. I urge my colleagues to join us in supporting this important legislation to ensure that the IRS neither usurps the proper role of Congress--nor skirts its obligations to identify the impact of its proposed and final rules. When the Department of the Treasury issues a final IRS rule that increases taxes, Congress should have the ability to exercise its discretion to enact a resolution of disapproval before the rule is applicable to a single taxpayer. The Stealth Tax Prevention Act Senator Shelby and I introduce today provides that opportunity.

Mr. BOND

Mr. BOND. Mr. President, one year ago today, the Birth Defects Prevention Act passed the House of Representatives, clearing its way for the President's signature. With this new funding, the Centers for Disease Control has implemented a national strategy, in conjunction with the States and local organizations such as the March of Dimes, to prevent the devastating incidence of birth defects. Building upon that success, today I rise to introduce the Healthy Kids 2000 Act--comprehensive approach which addresses the broad spectrum of health issues affecting our nation's children. And I want to thank the March of Dimes and the National Association of Children's Hospitals for supporting me in this effort to improve the health of our nation's children and pregnant women as we move into the new millennium. I also want to thank my colleague from Ohio, Mike DeWine, for his work on children's health issues, and for allowing me to adopt some of his ideas for inclusion in this bill. Senator DeWine has been a dedicated leader on children's health, and has been essential to the development of the sections of this bill that focus on poison control centers and pediatric research within the National Institutes of Health. I am struck, every time I go into the neonatal wards across my home state of Missouri, at the tiny one and two pound babies, hooked up to monitors and tubes and looking so helpless. Many of them will survive; a few may not. My first thought is always one of thanks that I have been blessed with a very healthy son. The good news is that we are making progress in preventing diseases and in making sick and injured children well. Healing never thought possible a few years ago for those who are burn victims, or born with birth defects, or trauma victims, or even cancer patients, now occurs on a daily basis around our country. The question about how to finance health care and how to improve access to and the quality of health care, however, are the hottest challenges we face as a nation. There are some things we can all agree on: that the care and well- being of our children should come first, particularly those who are ill. Prenatal care is also paramount, because a great deal of child health is determined in the womb. Thus as a nation, we must stand up and speak for those who cannot speak for themselves. That is why I am introducing the ``Healthy Kids 2000 Act.'' The idea behind it is simple: we want pregnant women to be healthy, and we want children to be healthy. So we are going to remove some of the barriers they encounter in receiving good, appropriate health care. This bill will give States the flexibility to enroll eligible pregnant women in the State Children's Health Insurance Program (CHIP) and to coordinate essential outreach efforts to enroll qualified children. This program has already been funded by Congress to assist 10 million children whose families lack health insurance. These children are eligible to receive basic health care services like immunizations and antibiotics for ear infections, but pregnant women are not now eligible. Since so much of a child's health is determined in the womb, it is imperative that low-income pregnant women receive quality prenatal care. Similarly, we need to ensure that the National Institutes of Health research machine is focusing on diseases and conditions which afflict our nation's children, such as birth defects, SIDS, cystic fibrosis, juvenile diabetes, and arthritis, just to name a few. A simple statistic will highlight this need: 80% of prescription medications marketed in the U.S. today are not approved by the FDA for use by children under 12 because studies have not been conducted to document their safety or whether or not they work for children. That is a terrible disservice to the young people of our country who may need the relief of a particular prescription drug. This bill will also consolidate programs and provide more funds for local initiatives to prevent birth defects and maternal mortality. 150,000 infants are born each year with a serious birth defect, and birth defects are still the leading cause of infant death. During the 1990s we have witnessed an increase in maternal death during pregnancy and childbirth. There is no question that we need better approaches to ensure that women have healthier, safe pregnancies, and healthier babies. And my bill will help fund these vital prevention strategies. This bill will also ensure direct access to obstetric care, and direct access to pediatric care. Children have health needs that are very different than those of the adult population. Diseases and medications behave differently than in adults, and when children are treated, it should be by those who understand those differences. Finally, this initiative will assist children's hospitals in educating the next generation of pediatricians. Even with strapped budgets, teaching children's hospitals offer the more egalitarian health care in this country. These hospitals turn no one away. And it is essential that we support this noble mission by equipping children's hospitals with the tools to continue their educational and research efforts. So much of the most important work in our society goes unnoticed, and unrewarded. Saving the lives of our children, improving the health of our children, even caring for our children on a daily basis is not glamorous work, or sometimes even all that much fun. Doctors, nurses, mothers, fathers, child-care workers and teachers are performing the most difficult, and the most important, work of our society: raising up the next generation to be happy, healthy, and productive citizens. We must assist them in their efforts, and we can take a positive step by debating and enacting Healthy Kids 2000. Mr. President, I ask unanimous consent that letters of support be printed in the Record.

Mr. BOND

Mr. BOND. Mr. President, I rise to offer my strong support to the resolution. For a long time now, the Palestinians and the Israelis have been negotiating a peace, based on compromise and a vision of peaceful coexistence. These negotiations have been difficult, for both sides. But, they have progressed steadily towards an extraordinary agreement. One which could be a model for all the world to marvel. A unilateral declaration by Chairman Arafat would destroy the advances he has made for his people in their quest for peaceful political and geographic autonomy. It is provocative, and it goes against every tenet of every accord to which he has affixed his signature. It would destroy any goodwill he has developed in this body because of his good faith negotiation with the Israeli Government. I am proud that this body has the courage to stand up and voice its opposition to any unilateral moves by Mr. Arafat. I hope that he can see through the political fog he has created by floating this situation, which was made obviously in an effort to pander to radical elements. As an original cosponsor of this resolution, I call upon all my colleagues to send a clear message that we could not accept such a declaration.

Mr. BOND

Mr. BOND. Mr. President, I rise to honor a very special person with whom many of us have worked over the years on a variety of technical and important issues. These issues have been and continue to be of great importance to the American consumer and the world marketplace. I learned recently that John Hoffman, currently Senior Vice President of Sprint Communications, has decided to leave and remit the ongoing telecommunications debate to others. I think that what I, and others, will perhaps miss most, is the calm, rational and fair presence that John brought to the telecommunications debate here in Congress and elsewhere. John has spent his entire career, some thirty years, with Sprint, helping bring it from a small local exchange company to a major state- of-the-art communications company providing services to millions of businesses and consumers. Throughout John's career, which began in 1970 while John was still in law school at the University of Missouri-Kansas City and Sprint was called United Telecom, he persevered through tough times and retained his vision of what the small company could become. I don't think there is any doubt that his ideas and efforts were right. Sprint, today, is a global communications company at the forefront in integrating long distance, local and wireless communications services and one of the world's largest carriers of internet traffic. With John's help and diligence, Sprint built the nation's only all-digital, fiber optic network and is the leader in advanced data communications services. John has been a good friend to me over the years. He should be very proud of his contributions to making Sprint the world class company it is today. I wish the best to John, his wife Linda and daughter Heather. Good luck John, and feel free to call me--I know you have a phone.

Mr. BOND

Mr. BOND. Mr. President, I appreciate the opportunity to come back to the floor to talk about Ed-Flex and the importance of that measure for the good education of our kids, and that is what we ought to be talking about. We heard a lot of posturing. Everybody thinks the ideas that come out of Washington are great. Frankly, listening to some of the ideas, I think those are good ideas. If we were a great big United States school board, if we were making the decisions, if we had the responsibility and the authority of making decisions for educating our kids, these might be ideas we would adopt. In any event, they are good ideas to be talking about. There is a real disconnect, and that is what the Ed-Flex measure begins to address. I sincerely hope that our colleagues on the other side of the aisle will let us have a vote on this very, very important bill. We need to move on. There are a lot more things we need to do in education beyond this. I am going to have a very radical proposal to get the Federal Government strings off local education all the way. But I think Ed-Flex is a good bipartisan start, and it builds on a successful example that has been tried in 12 States. It is working. It is working because it gives the flexibility to local school districts to decide how they wish to use the money. The people in the local schools--the school board members, the teachers, the administrators, the parents--know the names of the kids. They know Joe and Sally and Harry and Willie and Thelma and the kids who are being educated in that school district. They know what their challenges are. Some of the good ideas we have in Washington may not work in a particular school district. It may not be the right recipe. Who better to make the decision than the people who know the children, who know their potential, who know their problems? I have found in meetings with educators and parents in every section of this State--in the metropolitan areas, in the urban schools, in the suburban schools, in the rural schools, in the big school districts and the small school districts--that there is one theme that has become a recurring and a growing crescendo. It is: The Federal camel's nose is under the education tent, and it is not doing good things. It is taking time away from the task of educating the kids. When a teacher has to spend hours writing a grant or a principal has to spend time to figure out if they are doing things the way the bureaucrats in Washington want them, he or she is not worrying about what is good for educating Sally or Tommy or Ralph or Cheryl or the kids who are actually getting educated. I am very fortunate, my son is finishing up high school. We watched during his education; we wanted to know what was going on in the classroom, how was he working with his teacher. We as parents knew that. The people who run the local schools know that, but those coming up with great ideas in Washington have no idea of the names of the kids or what their problems are. I thought maybe it would help my colleagues if I shared a few of the stories we are getting from schools in our State. These are smaller schools. It does not matter what the size of the school is, the child who is in that school is just as important whether she or he is in a major metropolitan school district or in a small rural district. Here is a letter from the superintendent of the Bismarck R-V School District. In part it says: . . . In our small school of 700 students, we receive less than $15,000 in the combination of Title II, Title IV and Title VI funds. The restrictions on these funds make them very difficult to deal with for such a small amount of dollars. Some years we consider not using them, simply because the time and effort are not worth the small amount we receive. Removal of some or all of the restrictions would allow us to use the funding to better meet the needs of our school instead of spending the funds in the very restrictive designated areas of Federal funding. Signed, Donald E. Francis, Superintendent, Bismarck R-V Schools. North Mercer District R-3 Public Schools: . . . As the system now works we are overwhelmed by federal and state forms and regulations. We also sacrifice many dollars to support federal and state bureaucracies that compound the forms, rules and regulations. We encountered one program this school year with in excess of 150 pages of instructions. We would like to bring dollar, services and equipment directly to children for their educational benefit. And one more. The Webb City School District R-7: . . . Those of us who have spent a career in education have repeatedly experienced the jubilation of anticipation that arose from promises made by the Federal Government toward education. Unfortunately, however, excitement was then always tempered by the reality of the red tape that accompanied the promise. As the result, frustration was generally the only product forthcoming. Signed, Ronald Lankford, Superintendent of Schools, Webb City School District R-7. Mr. President, that is just a very small sample of the kind of response we are getting from our schools. I challenge any one of you here, any one of our colleagues, to go home and ask the educators who have the job--it is a wonderful opportunity, it is the most important job that we have in this country--of educating our students: Are the 763 different Federal education programs we have right now improving education? I get an overwhelming no. We have to worry about the Washington bureaucracy rather than the needs of the kids in our classrooms. This reality has been recognized. The Nation's Governors--Democrat, Republican, and Independent--50 to 0, said, ``We want to expand Ed- Flex; we want the opportunity in all of the schools in this country to get rid of and cut away some of the bureaucracy and some of the redtape and put that money directly back to education.'' There is bipartisan support for this bill. The bill has been supported by the President, by the Secretary of Education, both of whom were former Governors. I am a former Governor. I served with both of them, and we know the importance of education. But the decisions on how we spend the last dollar of Federal aid are not best made here, they are best made at the local school district level. I really hope we can move forward and get this money directly to the schools, giving them the flexibility to use those funds where they are most needed. I urge our colleagues to allow us to do so and pass this bill and go on to the many other important issues involving education that we will be facing later this year. Mr. President, I yield the floor and reserve the remainder of the time. Mr. CRAIG addressed the Chair.