Kit Bond

Mr. BOND

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. BOND

Mr. BOND. Mr. President, I rise today in support of the Small Business Programs Improvement Act of 1996, which has been incorporated as division D of the omnibus appropriations bill. The language of this bill comes includes the substitute amendment to H.R. 3719, which I offered with the ranking Democrat on the Committee on Small Business, Senator Dale Bumpers. H.R. 3719 is a comprehensive bill that proposes to change numerous programs at the Small Business Administration, which are discussed in this statement. Most of the changes will go into effect on October 1, 1996. access to capital for small businesses Earlier this year, when the Clinton administration and the Small Business Administration submitted their fiscal year 1997 budget request, it was revealed that SBA's flagship loan programs had been experiencing considerably higher losses than had previously been revealed to the Congress. In the case of the 7(a) Guaranteed Business Loan Program, the credit subsidy rate, which is the calculation by OMB that projects losses from loans that are originated in fiscal year 1997, was increased from 1.06 percent to 2.68 percent, an increase of 150 percent. The losses facing 504 Development Company Loan Program are even greater, and the credit subsidy rate has increased from 0.57 percent to 6.85 percent, an increase of over 1,200 percent. As chairman of the Committee on Small Business, I was alarmed by the size of these increases, which were so large as to threaten the future of both programs. These two programs, however, are critical to tens of thousands of small businesses, who each year have come to rely on the availability of Government guaranteed financing to assure them adequate access to capital. They provide a very important source of capital to startup small businesses and to established small business seeking to expand to create more jobs. Because of the great importance of these programs to small businesses, the Senate and House Committees on Small Business chose to make some fundamental changes in the programs in order that they can continue through fiscal year 1997. 504 development loan program With a credit subsidy rate of 6.85 percent in the fiscal year 1997 budget request--versus 0.57 percent in fiscal year 1996--Congress would need to appropriate over $220 million to fund fully the 504 loan program in fiscal year 1997. Although such an increased appropriation would not be possible, committee staff worked on a solution that would combine additional program fees and a modest appropriation. This legislation adds new fees to be paid by the lender, the development company and the borrower and will support a $2 billion program level in fiscal year 1997. 7(a) guaranteed business loan program The legislation before us today includes a section calling for SBA to issue a regulation covering the sale of the unguaranteed portion of 7(a) loans by banks and Small Business Lending Companies [SBLC's]. Under current SBA regulations, only SBLC's are permitted to pool and sell the unguaranteed portion of 7(a) loans to outside investors. It is the intent of the bill to expand this authority to banks by directing SBA to promulgate new regulations requiring a uniform set of rules governing this transaction by banks and SBLC's. In addition, SBA is directed to set safety and soundness standards, including appropriate reserve requirements, to protect the taxpayers' exposure under this program. Last year, when the Senate unanimously adopted S. 895, we agreed to lower the government's guarantee rate on most 7(a) loans to 75 percent. Our intention was to increase SBA lenders' exposure on each loan in order to focus the lenders' attention on the quality of their loan making activities. Although this section the bill will allow SBA lenders to reduce their exposure on these loans, it is our belief that SBA can craft sufficient safeguards to protect the Government's position while granting the lenders an opportunity to raise more capital which can be loaned to small businesses. When the Senate Committee on Small Business takes up the 3-year reauthorization of SBA early next year, it will be my plan for the committee to study closely the impact of the new SBA regulations that are to be adopted as a result of this bill. sba finance program improvements This legislation directs SBA to create an ongoing system of management information about its 7(a) Business Loan Program. In order for SBA to monitor the performance of this loan portfolio, which is greater than $25 billion, it is essential that SBA collect and evaluate, on an ongoing basis, facts about both good and bad loans. This legislation emphasizes the importance of this program and expands the data gathering requirement to include key underwriting experience on each loan. In addition, the bill directs SBA to contract with a private firm to conduct a comprehensive study of the historical performance of the 7(a) Program. Further, it directs that specific attention be paid to the economic model used by OMB to calculate the credit subsidy rate. We concurred with the House Committee on Small Business in the need for this study. strengthening 7(a) program performance Over the past 18 months, the Senate and House Committees on Small Business have seen time and again evidence that SBA has failed to liquidate failed 7(a) loans in a prompt and effective manner. The result has been greater program losses, which have driven up the credit subsidy rate and caused the need for high borrower and lender fees and a larger appropriation. On average, it takes SBA 2 years to liquidate a defaulted loan after SBA pays off the guarantee to the bank. On the other hand, it takes a commercial bank, on average, 6 months to liquidate a loan after it is placed in default. The legislation takes a strong step to make improvements in SBA's performance in this area. SBA is directed to make better use of the expertise of its most experienced lenders who have been designated ``preferred lenders'' within the 7(a) program. Preferred lenders have the staff and ability to take on a greater share of the burden now carried by SBA and to increase recoveries for the government after a loan fails. In addition, the bill directs SBA to begin using its licensed ``certified lenders'' to undertake liquidation efforts when the certified lender is deemed to have the experience and capability to undertake liquidation efforts. disaster loan servicing This legislation directs SBA to undertake a demonstration program to have private sector loans servicing companies contract to service SBA's disaster home loan portfolio. In our analysis of this demonstration program, we concluded that a large sample of home loans would be necessary to conduct a fair and conclusive demonstration of the ability of the private sector to service these loans. Therefore, the bill directs that 30 percent of the disaster home loan portfolio be included in the demonstration program. It is our belief that with a sample this size, the private sector servicing companies will have a large enough pool of loans to create the economies of scale so their performance can be evaluated fairly. It is our expectation that SBA will be able to solicit bids on this contract within 90 days of passage of this bill, and the test can be underway during fiscal year 1997. small business program extensions This legislation would extend the STTR Program for 1 year. This program allows universities and small businesses that specialize in R&D to combine forces and receive modest R&D grants. The STTR program was created in 1992, when the SBIC program was reauthorized and extended through fiscal year 2000. The purpose of our amendment is to extend the STTR program for 1 year, in order that the Committee on Small Business can take a closer look at the program next year when it takes up the 3 year reauthorization of SBA. It is my understanding the proponents of the STTR Program would like to see the program expanded, and it is my plan that the Committee on Small Business will consider this request and other program adjustments next year. In addition, the legislation extends the Small Business Competitiveness Demonstration Program for 1 year. It is scheduled to terminate on September 30, 1996. The House-passed version of H.R. 3719 included a 4-year extension. It also included some program changes, and the supporters of the program have made additional recommendations to improve the program. There is sufficient support to keep the program alive for an additional year in order that both the Senate and House Committees on Small Business can have an opportunity to evaluate fully the impact of the program and to consider legislation to make a longer term extension with some program adjustments. improvements to the small business investment company program Earlier this year, the Senate passed unanimously S. 1784, the Small Business Investment Company [SBIC] Improvement Act of 1996, which proposed numerous changes to the Small Business Investment Act of 1958 designed to improve, strengthen, and expand the availability of investment capital under SBA's SBIC Program. S. 1784 was considered thoroughly by the Senate Committee on Small Business. After the committee held a series of hearings on the need for improving the SBIC Program, thorough briefings were conducted for the staffs of each committee member to explain the program changes that were being recommended by committee staff, SBA, and outside organizations such as the National Association of Investment Companies [NAIC] and the National Association of Small Business Investment Companies [NASBIC]. Following the input from the above groups and others, I chaired a public hearing on a discussion draft of the bill prepared by the committee staff. After this hearing, interested parties, including SBA, NAIC, and NASBIC, were invited and participated in drafting proposed changes to the legislation for consideration by the committee staff as it prepared the final version of S. 1784. After extensive public hearings and open meetings with all interested parties, the Senate Committee on Small Business met in a markup session, and recommended S. 1784 to the full Senate by a vote of 18 to 0. Division D of the omnibus appropriations bill includes S. 1784, substantially in the form in which it passed the Senate. Prior to its inclusion in this bill, some inaccurate charges were made about the background and effect of S. 1784. In fact, officials from NAIC, who had participated in drafting S. 1784 and whose recommendations were included in the bill, found fault with the bill when Senator Bumpers and I attempted to bring it to the Senate floor as an amendment to H.R. 3719, the Small Business Programs Improvement Act. Their objections to the bill which they helped draft and which had previously passed the Senate unanimously led one Senator to object to Senate consideration of S. 3719. S. 1784 was written to place the SBIC Program on a sound, long-term footing. Historically, this program has been plagued by many abuses that have been well chronicled by the press. The purpose of the bill was to strengthen the rules and management of the SBIC Program, while allowing the program to substantially to meet the investment needs of America's small businesses. With the financial future of many small businesses depending on passage of this bill, we looked for ways to clear up the objections. In an attempt to resolve this stalemate, I agreed to several changes in the Senate-passed S. 1784 to make it absolutely clear that financially sound specialized SBIC's would not be hurt by the terms of S. 1784. Still unable to proceed with consideration of H.R. 3719, we began to hear from SBIC's and special SBIC's about the importance of passing this legislation. Their comments revealed the importance of adopting the improvements to the SBIC Program that were contained in S. 1784, and I ask unanimous consent that a letter from Mr. A. Fred March, president of Ventures Opportunities Corp., a New York-based special SBIC, be printed in the Record following my remarks.

Mr. BOND. I would be happy to.

Mr. BOND. If the Senator would yield for a question, is it his thought that such a proposal would make it easier for small business to start exporting their products overseas?

Mr. BOND. As my friend from Rhode Island may know, the Senate Small Business Committee is scheduled to undertake a regular, 3-year authorization of our small business programs early next year. I long have been a strong supporter of efforts to increase American exports, particularly when it comes to small businesses. For this reason, I want to assure the Senator that the committee will take a hard look at this SBDC proposal as part of our review process. We would welcome his input at that time.

Mr. BOND. My colleague from new Jersey is correct. The securitization language contained in this legislation in no way preempts the existing SBA regulations that currently apply to participants in the 7(a) program on the sale of the unguaranteed portion of such loans until SBA finalizes a new regulation on this matter or until March 31, 1997, whichever occurs first.

Mr. BOND. The distinguished chairman of the Banking Committee is correct. Today the Senate will have an opportunity to pass a bipartisan bill that makes many improvements to the Small Business Act and the Small Business Investment Act and assures continued availability of capital and financing to small businesses through SBA's 7(a), 504 and SBIC programs. I thank the Senator for his longstanding and consistent support of small businesses, and for his understanding of their special needs in the financing area. This legislation includes the provision the chairman of the Banking Committee and I jointly developed to enhance the availability of SBIC leverage. I commend the Senator for his creativity and his support for new ways to improve small business access to capital.

Mr. BOND. Mr. President, I ask unanimous consent to include in the record a short statement describing this new statutory provision and expressing the joint views of the Banking Committee and the Small Business Committee on this matter. banking committee and small business committee joint explanatory statement The small business investment company improvements provisions included in the omnibus appropriations legislation contains a conforming amendment to the Federal Home Loan Bank Act that preserves and strengthens existing law specifying that stock, obligations or other securities of certain small business investment companies are authorized investments for Federal Home Loan Banks. The current Federal Home Loan Bank Act provision refers only to small business investment companies formed pursuant to section 301(d) of the Small Business Investment Act. This legislation amends the Federal Home Loan Bank Act to make clear that Federal Home Loan Banks are permitted, subject to any regulations, restrictions and limitations that may be prescribed by the Federal Housing Finance Board, to invest in stock, obligations or other securities of any small business investment company licensed and operating under the supervision of the Small Business Administration. This authority exists independently of whether the SBIC is owned by or affiliated with a banking organization. This amendment is intended to encourage Federal Home Loan Banks, on a prudent and financially sound basis, to play a part in satisfying the needs of small businesses for the kind of venture capital for business start-up or expansion that is made available by small business investment companies. A Federal Home Loan Bank's loans to or investments in an SBIC will not be counted as private capital of the SBIC within the meaning of Section 103(9) of the Small Business Investment Act. The structure of the Small Business Investment Act contemplates that an SBIC, rather than raising its original private capital from governmental or quasi- governmental sources, should demonstrate an ability to raise a significant amount of capital from private sources that demand a market-based financial return. Once an SBIC has raised this private capital and has become licensed by SBA, however, Federal Home Loan Banks would be furthering the legitimate objective of economic and community development through promoting small business investment and growth. In order to be attractive to SBICs that will, in most cases, be making long term portfolio investments, Federal Home Loan Bank investments to provide SBIC leverage should be made on a long term basis as well. Federal Home Loan Banks now routinely make long term advances to members in the normal course of business. However, under some circumstances a Federal Home Loan Bank may wish to sell or liquidate an SBIC investment prior to its stated maturity or prior to the date by which the Federal Home Loan Bank expects to receive a complete return on its investment. Because the Federal Home Loan Bank Act does not require that an investment in an SBIC be acquired directly from the SBIC, a Federal Home Loan Bank would be permitted to acquire and dispose of SBIC investments in secondary transactions, including transactions with other Federal Home Loan Banks. In addition, a Federal Home Loan Bank, for purposes of liquidity, diversification or otherwise, may want to structure its investments in SBIC's through a trustee relationship or other special purpose intermediary. This structure is permissible under the Federal Home Loan Bank Act as long as the Federal Home Loan Bank's beneficial ownership interest in the SBIC investment is sufficiently documented and the trustee or special purpose intermediary holds only stock, obligations or other securities of an SBIC or other authorized Federal Home Loan Bank investments. The Small Business Investment Act prescribes limits on the amount of SBA leverage made available to an SBIC. These statutory limits on SBA leverage are designed in part of achieve a fair distribution of SBA leverage among all SBICs in a situation where there may be more requests for leverage than SBA has authorization or appropriations to satisfy. A Federal Home Loan Bank should not invest in a single SBIC an amount in excess of any aggregate limits or percentages established by the Bank or by the Federal Housing Finance Board, but the statutory maximum on SBA leverage set forth in the Small Business Investment Act does not apply to Federal Home Loan Banks. In establishing the terms and conditions on which SBIC loans or investment will be made, Federal Home Loan Banks may want to take into account both the terms and conditions on which SBA now makes leverage available to its SBIC licensees, as well as the expected risk-adjusted return and other terms on which Federal Home Loan Banks structure their advances to members. Some SBIC's receive ``participating security'' leverage from SBA, structured as an equity instrument rather than debt of the SBIC. Other SBICs obtain traditional debt leverage from SBA through the issuance of debentures. The language of the Federal Home Loan Bank Act gives Federal Home Loans Banks the discretion to provide leverage to an SBIC on terms similar to the equity or debt securities SBIC's now issue to obtain leverage through SBA, or on any other terms approved by the banks and the Federal Housing Finance Board. SBA's participating security leverage offers some advantages for SBIC's planning to make equity oriented portfolio investments that are not expected to generate sufficient early stage cash flows to satisfy regular interest payment requirements. Leverage structured as equity also makes its easier for SBIC's to attract private capital from certain institutional investors that would not invest private capital in an SBIC planning to obtain debt leverage. If a Federal Home Loan Bank provides equity leverage to an SBIC, the investment could be structured as a preferred investment or otherwise senior in priority over the private equity capital of the SBIC. If a Federal Home Loan Bank investment in an SBIC is structured as debt, the Federal Home Loan Bank could obtain a first priority security interest or an unsecured senior position acceptable to the bank with regard to SBIC portfolio investments made with the proceeds of the Federal Home Loan Bank leverage. If the SBIC has SBA leverage outstanding or subsequently obtains SBA leverage, the SBIC's issuance of the Federal Home Loan Bank debt would be subject to the Small Business Investment Act's provisions dealing with third party debt of an SBIC. Section 303(c) of the Small Business Investment Act, as amended by this legislation, requires that SBA not permit an SBIC having outstanding SBA leverage to incur third party debt that would create or contribute to an unreasonable risk of default or loss to the Federal Government, and directs SBA to permit SBICs to incur such debt only on terms and subject to such conditions as may be established by SBA. In furtherance of the public policy objectives of encouraging the development of an additional source of reduced-cost leverage and to attract additional participation in the SBIC program that will increase the amount of venture capital available for small businesses, SBA should implement Section 303(c) in a manner that does not limit the ability of Federal Home Loan Banks to provide leverage to SBICs. Because Section 303(c) applies only to an SBIC having outstanding SBA leverage, SBA need not review or approve, and should not establish any conditions with regard to, a Federal Home Loan Bank investment in an SBIC with no outstanding SBA leverage. For an SBIC with outstanding SBA leverage, SBA should allow the SBIC to obtain additional debt or equity leverage from a Federal Home Loan Bank as long as the Federal Home Loan Bank investment does not give the Federal Home Loan Bank a priority claim on any assets of the SBIC attributable to or acquired with the proceeds of SBA leverage. Similarly, the existence of any outstanding Federal Home Loan Bank leverage should not cause SBA to decline a subsequent SBIC application for SBA leverage, as long as the terms of the outstanding Federal Home Loan Bank leverage do not give the Federal Home Loan Bank a priority claim on SBIC assets attributable to or made with the proceeds of any SBA leverage. thrift tax provision

Mr. BOND. Mr. President, I would like to take this opportunity to thank Chairman Specter for increasing funds for the Parents as Teachers [PAT] Program in the Labor, Health and Human Services, and Education, and related agencies appropriations bill. The key to success for our children's education is to begin early in life through well-rounded early childhood education programs that benefit not only the child, but the parent as well. I firmly believe that we must give parents the tools they need to fulfill their responsibility to develop their children's character, personality and ability to learn as well as to provide for their material needs if we are ever to see our social ills diminish. Title IV of the Goals 2000: Educate America Act requires at least 50 percent of funds awarded to each grantee to be used to establish, expand, or operate Parents as Teachers Program or Home Instruction Programs for Preschool Youngsters [HIPPY]. This will enhance three of the four purposes of the legislation as stated in section 401(a): The purpose of this title is-- First, to increase parents' knowledge of and confidence in child- rearing activities, such as teaching and nurturing their young children; Second, to strengthen partnerships between parents and professionals in meeting the educational needs of children aged birth through five and the working relationship between home and school; Third, to enhance the developmental progress of children assisted under this title; and Fourth, to fund at least one parental information and resource center in each State before September 30, 1998. The purposes clearly focus on parents of young children, and this appropriation will carry these purposes forward by awarding funds to States who commit to spend at least half of their grant on Parents as Teachers or HIPPY, early childhood parent education programs which have been proven effective.

Mr. BOND. I thank my colleague from Pennsylvania and appreciate all of his good work on this bill. As members of the Senate Labor, Health and Human Services, and Education, and Related Agencies Appropriations Subcommittee, we want to ensure, from the start, that children are ready to learn, physically and emotionally. Parents as Teachers has a proven track record of increasing a child's intellectual and social skills that are essential when a child enters school, and involving parents in creating a healthy and safe environment for their children. This program strengthens the foundation for children's educational success and healthy development, and I urge my colleagues to continue to support the Parents as Teachers Program. efforts to combat hemochromatosis

Mr. BOND

Mr. BOND. Mr. President, as we consider funding for the Health Care Financing Administration [HCFA], I would like to commend the conferees for including a reference in the Statement of Managers of the Conference to a demonstration program that will demonstrate and evaluate the best approaches for a community health care center to provide services through a health care network. We are well aware of the tumultuous changes occurring in the health care field as managed care becomes more and more predominant. For those who are involved in the services of community health centers, whether as providers or patients, the uncertainty of the current health care landscape can be overwhelming. As health care networks are formed, community health centers can either participate in this phenomenon or risk being excluded from the networks. Exclusion is tantamount to severely limiting the patient's medical options, which is a repudiation of the centers' mission and mandate to serve the less advantaged among us. One community health center in particular, with which I am familiar, is Swope Parkway Health Center in Kansas City, MO. Swope Parkway was founded in 1969 and serves about 35,000 patients each year as a federally qualified community health center. Its approach to health care is uniquely comprehensive, combining medical and behavioral health and social services, housing and economic development. Swope Parkway has decided to assure its patient continued quality health coverage by forming a health maintenance organization [HMO] and developing its own network of providers. It is my understanding that Swope Parkway is one of the first--but in all likelihood not the last--federally qualified community health centers in the Nation to assume full risk and has formed a new HMO. Given the Federal funding that has been dedicated over the years to community health centers, it would seem logical in this time of transition to managed care to demonstrate various approaches for community health centers to determine and deliver the most cost- effective way to provide services and maintain the quality of care to low-income patients in urban settings. Mr. President, I am pleased that the conferees are recommending that HCFA conduct such a demonstration as part of its Research, Demonstration, and Evaluation Program, and I strongly urge them to consider Swope Parkway Health Center as the site for this demonstration. ryan white care act

Mr. BOND

Mr. BOND. This change should have little effect on the collection of residue data. As the Senator from Arkansas explained, the collection of pesticide residue data is achieved through contractual agreements with a number of States. This process will continue. The only difference will be that the funding for fiscal year 1997 will flow through the Environmental Protection Agency rather than the Agricultural Marketing Service. This 1-year approach will allow a more timely distribution of funds to the States than would otherwise occur if they first had to be transferred to USDA.

Mr. BOND. I agree with the views of the Senator from Arkansas.

Mr. BOND

Mr. BOND. Mr. President, I rise today to pay a special tribute to Ms. Barbara Sheffield. It is a great pleasure to recognize Ms. Sheffield for her many years of loyal service to the General Services Administration [GSA], Heartland Region. Many Missourians have truly benefitted from her life-long dedication as a Federal employee. Barbara Sheffield joined the GSA on January 23, 1963, as a GS-3 card punch operator with the Department of Veterans Affairs Hospital in Kansas City. Distinguished by her cheerful and efficient demeanor, she was quickly promoted, and eventually moved into a GS-7 position as inventory management specialist for the Veterans' Administration. In 1976, Ms. Sheffield took a short break from her career, and in December of the same year, she resumed her employment with GSA as a temporary GS-4 clerk typist. Starting over did not deter her, and Ms. Sheffield's commitment to serving others carried her through an ensuing 20 years with GSA. Since 1979, she has worked as a GS-12, Congressional Liaison Specialist, working with congressional clients, setting up disaster field offices and maintaining a host of other special projects. Ms. Sheffield's inestimable contributions and respected professional experience will be sorely missed when she retires from GSA on January 3, 1997. I wish her the best of luck in all of her future endeavors and continued good health and happiness.

Mr. BOND

Mr. BOND. Mr. President, I thank my colleague from Georgia. I appreciate the opportunity to explain to some of my colleagues, and those who might be interested, what is going on with the appropriations process. I think all of us know that the time has come to shut down this session of Congress. We have a couple of very important things pending. The fine chairman of the Judiciary Committee has just described what needs to be done on a problem that everyone recognizes, and that is the problem of illegal immigration. Can we move forward on that bill? I think it is one of the key elements of a resolution of this session of the Congress. But everybody knows that before we leave town we have to provide the appropriations measures to keep the Government running and to keep programs going which the Federal Government has undertaken as a responsibility. I understand that perhaps an hour or so ago the Democratic leaders on this side and on the House side had another one of their infamous non- infomercials, a news conference in which the facts were not necessarily the absolute requirement of any of the discussions. I believe they were talking about how the Republicans intend to shut down the Government again. Let me be clear about one thing, Mr. President. The distinguished occupant of the chair chairs an important appropriations subcommittee. The appropriations bills are extremely important, and we work on those appropriations bills on a bipartisan basis. I have the pleasure of serving as chairman of the Veterans' Administration, Housing and Urban Development, and Independent Agencies Subcommittee. And on that subcommittee, I am greatly aided and assisted by my ranking member, Senator Barbara Mikulski, a Democrat from Maryland. Now, we often have disagreements on those measures, but we work them out here on the floor. We can, in this body, pass measures that are greatly objectionable because of the right of any Senator to filibuster. So we, in essence, need to have 60 votes for a controversial provision in any measure. And we customarily operate on the basis of courtesy to take into consideration the views of the minority. In this VA-HUD bill, we went a long way because there were a lot on this side of the aisle who were not thrilled about AmeriCorps, the national service program. Yet, as an accommodation to those who felt strongly about it--Senator Mikulski was an original sponsor of it; it had the strong backing of the administration--we put $400 million in that bill for AmeriCorps. We carried it over to conference with the House. And the House, many on our side, felt even more strongly in opposition. We made the point that we fought the battle and we won because we knew it was important to Members on the Democratic side here, to the President. We included that in the bill. Our bill has some very, very difficult things. Allocating scarce funds for housing, for urban affairs, for the Veterans Administration, for EPA, for NASA, for the Federal Emergency Management Agency. We worked all those out. During the course of those conversations, we had not only the budget requests from the White House in front of it, but we were assured that the White House had conversations with and expressed their views to the members on the minority side in our committee. We came up with what I think was a good bill. It passed overwhelmingly. It had some additional things on it this time. It became not just an appropriations bill, it is an authorizing bill, a new entitlement bill. But we got it through. Yesterday, at about 10 o'clock, the President signed the VA-HUD bill. He signed it, signed it into law. It is law. The appropriations bill is the law for spending for those key agencies for the coming fiscal year. Imagine my surprise when I was summoned to a meeting of the negotiators on the omnibus appropriations bill to handle the unresolved issues in appropriations. I was told by Mr. Panetta, a representative of the White House, that they wanted to put $160-plus million in the VA-HUD bill. I said, ``Excuse me, I believe the President just signed the bill yesterday.'' They said, ``Well, the President had some reservations and he wanted more money.'' There are a lot of things, Mr. President, on which I wanted more money. We did not put enough money into the preservation of low-income housing. We need to do more in terms of an investment to make sure we have an affordable housing stock, that we have the stock of housing that is either publicly owned or reflects public assistance through section 8 programs in this country. If we had more money in the budget I could find some very, very important places to put it in terms of housing, in terms of science, space, and environment, giving more money to the States for their State revolving funds. The White House said, ``But we want to add some more money to your bill.'' I said, ``This is the bill that you signed about 26 hours ago.'' They said, ``No, we had reservations.'' Mr. President, I heard of the old trick of moving the goalposts. Some may like the analogy of the Peanuts cartoon strip, where every fall Lucy promises to hold the football for Charlie Brown. She says she will not move the ball this year, but every year she takes the ball away. We are beginning to learn very slowly, too slowly I am afraid, that this administration does not negotiate in good faith. This administration has some other game they are playing. It is not designed to achieve a reasonable accommodation between the parties, between the legislative and executive branch, to move forward on appropriations. Now, if there is a shutdown, let me assure you it will be a shutdown engineered by the White House and their allies in Congress. This is where the responsibility will lie. Why do we have a number of bills that are not signed? Mr. President, you and I have been here while we went through the process. Now, a lot of people may not understand what we say by the term ``filibuster by amendment.'' But for those who do not understand the procedures of the Senate, unless you have a unanimous consent agreement, unless there is an agreement before you start out on a bill, you can continue to add things and add things and add things. You can never come to closure. As Republicans we have 53 votes. If we wanted to cut off debate we have to have 60 votes. We cannot stop people from talking or filibustering by adding amendment after amendment after amendment. That is what was done on Treasury-Postal. I worked on the Treasury-Postal bill in the previous Congress as the ranking member, and it funds some very important things--White House, Treasury, Customs, GSA, things like that are very, very important. There are not 50 different amendments that needed to be offered to that bill. I remember one of the measures we voted on was a measure to establish a new Federal responsibility, a new Federal responsibility relating to guns in schools. Mr. President, if there is one area where the Federal Government has not been before, it is in local law enforcement. I suggest that the Federal Government has fallen short in those responsibilities which are properly the Federal Government's responsibility. We fought--and when I was the ranking member, Senator DeConcini was the chairman of the committee, my good friend from Arizona--we fought against cutting back on the Customs work in interdiction, to stop drugs coming into this country. We have cut too much in the Federal law enforcement agencies. We certainly do not need to be setting up new Federal responsibilities which directly overlap and are totally inconsistent with local law enforcement responsibilities. But that amendment was voted on on the Treasury-Postal appropriations bills, after 3 days on the floor, a bill which should take at most 2 days to debate those issues, that genuinely related to appropriations for Treasury-Postal accounts. We had so many amendments still hanging out that the majority leader had to withdraw the bill. We went on to Interior, to try to get a resolution for those. Then the amendments kept coming out of the woodwork. If anybody does not understand it, I can tell you unless you have 60 votes and can invoke cloture continually, you can continue to hold this place hostage by offering amendments or talking as long as you want. Now, we have made a good-faith effort across the board to get the appropriations bills done. I have no interest in going back and reopening one of the appropriations bills that has been signed. More and more ideas keep floating in from the White House. They want to add this. They want to add that. They want to write their own legislation. It is as if they never worked in a government where there was a strong opposition party--in this case, a party in control of the Congress. I came from Missouri where I served as Governor for 8 years with a 2- 1 Democratic majority in both houses. I learned early on, I had to learn, that bipartisan cooperation, comity, honesty in dealing with the other side was essential to make the process move. We do not have that here. It is perhaps the fact that the President comes from a one-party State. All I can say is we are doing our work on appropriations. We are going to move forward on appropriations. I hope our leaders will make the best offer they can, trying to guess what the White House's latest demands are to accommodate as many as they can. If they will not, we should do a continuing resolution and get out of town. One last piece of business that we have from the small business committee, since my colleagues on the other side are not present I will not at this point ask unanimous consent to proceed to H.R. 3719. That is vitally important if we are to keep the lending programs, 5047(a) program, SBIC program working, for the Small Business Administration. It is being held up on the minority side. I will come back and explain in detail why the SBA and small business in this country needs that measure. I hope the hold is lifted so we could pass this measure, many of the provisions of which have already been passed in this body. I acknowledge and appreciate the work of the Senator from Georgia.

Mr. BOND

Mr. BOND. Mr. President, I appreciate the consideration of the Senators from Arkansas, Senator Inhofe from Oklahoma and the chairman of the Committee. Hydropower is critical to the citizens and economies of our states. I understand that power producers have been working already with fish and wildlife specialists to accommodate their interests. As this project proceeds, I will watch with great interest to see that fish and wildlife interests can be served additionally without undermining the clear and explicit intent of this provision.

Mr. BOND. Mr. President, section 304 of this legislation includes ``recreation and fish and wildlife mitigation'' as purposes of the White River Basin Lakes project approved June 28, 1938 (52 Stat. 1218.). There are some in my State who have voiced strong concern that this provision may impact adversely the currently authorized project purposes of flood control, power generation, and other purposes. They fear that the outcome may be loss in generation capacity or energy production which would increase the costs to ratepayers and adversely affect the region's citizens. The Senate language, however, explicitly authorizes these new purposes ``to the extent that the purposes do not adversely impact flood control, power generation, or other authorized purposes of the project.'' Is it the intent of the Senators from Arkansas, who sponsored this provision, that this provision forbids any adverse impacts on currently authorized projects?

Mr. BOND. Mr. President, is it the interpretation of the distinguished chairman of the Committee that the clear priority project purposes remain flood control, power generation capacity, energy production, Federal revenues, and those other purposes authorized subject to the 1938 law and that the additional authorization included in this legislation shall be secondary should there be any conflict between them, and the current operation of the projects for the purposes of flood control and power shall remain project priorities?

Mr. BOND

Mr. BOND. Mr. President, we are at the end of a very long road in the process of enacting the 1996 Water Resources Development Act authorizing various water resources projects to enhance flood protection, navigation, environmental protection, and related Corps of Engineers projects. Special thanks and congratulations are in order for the Chairman of the full committee, Senator Chafee and his ranking member, Senator Baucus and the Subcommittee Chairman, Senator Warner. They and their excellent staff have carried the difficult burden of sorting through in a bipartisan manner these very complex and sensitive issues--issues that are of vital concern to many in this country but particulary for my State of Missouri. For States like Missouri, who rely greatly on water resources, this legislation is crucial to provide safety, economic development opportunities, and cost-effective navigation on our inland waterway system. Since 1928, for every dollar the corps has spent on flood control, 8 dollars' worth of damages have been avoided. This 8 to 1 benefit to cost ratio does not account for the economic development and job creation benefits that flood protection provides. Recent flooding has highlighted the need to maintain this commitment and keep the Corps of Engineers engaged in partnering with Missouri citizens in this regard. This is a safety, jobs, and international competitiveness issues pure and simple. Again, I applaud the efforts of the chairman and urge strongly support for this bipartisan legislation. THE EpA LONG ISLAND SOUND OFFICE

Mr. BOND

Mr. BOND. Madam President, I rise today to express my strong support for the override of President Bill Clinton's veto of the partial-birth abortion bill. Rarely have we seen a President so willing to ignore the wishes of the overwhelming majority of the American people. Having talked to and listened to the people of Missouri over the last few weeks, I can say that there is an overwhelming majority opposed to this heinous procedure. The President has told us that the procedure is rare and only done to save the life of the mother. But that is not true. Surveys of practitioners of abortion in several States show that the procedure is often elective, not essential. Right in the bill is a provision that the procedure can be performed to save the life of the mother. So President Clinton cannot hide behind this reason in choosing to veto this bill. Many reporters have asked me why we are holding a vote on this issue in the Senate today when we are, unfortunately, likely to fall short of what is needed to override the veto. Here is the reason: The American people are asking us to override the veto. I have been home in Missouri these past weekends, and there is no issue I have heard more about where the feelings are strong. Since July, I have received more than 27,000 cards and letters from Missourians who are strongly opposed to this. So we are holding this vote because the President made a terrible mistake in vetoing this bill, and it is up to Congress, representing the people, to reverse it. As has been stated, several Senators who have studied this issue since we first voted have already had a change of heart. The people want this bad decision by the President overturned. Now is the time to do it. It has to be done. I yield the floor.

Mr. BOND

Mr. BOND. HUD is instructed to use a three-pronged approach in determining whether the debt should be restructured. First, no tenants should be displaced. Second, the owners should not be forced to sell the project. Third, owners should not be subject to significant tax liability.

Mr. BOND. Mr. President, that is correct.

Mr. BOND. Mr. President, the senior Senator from Maine is absolutely right.

Mr. BOND. Mr. President, I want to make it clear that I am fundamentally and adamantly opposed to discrimination in any form, including discrimination in the provision of property insurance. Nevertheless, I believe that HUD has no authority under the Fair Housing Act to regulate the practices of the insurance industry, including practices related to the provision of property insurance. Moreover, HUD does not have the capacity or ability to address discrimination issues in the practices of the insurance industry, and any attempts to establish and enforce standards are likely to result in confusion and questionable actions. The purpose of both the Senate and House committee reports to the VA/ HUD fiscal year 1997 appropriations bill is to ask HUD to focus its fair housing resources of $30 million toward activities designed to fight discrimination in the sale, rental, and financing of housing. These are limited resources and the committee report language in both House and Senate reports is designed to ensure that this funding is used in a comprehensive and focused manner to fight housing discrimination. Furthermore, while the courts have not always been consistent in the application of the Fair Housing Act, I believe Congress has made it clear that the regulation of property insurance is outside the scope of the Fair Housing Act and is contrary to the intent of the MacCarran- Ferguson Act which states that the responsibility for insurance matters, including property insurance, is the responsibility of the States. The Fair Housing Act says nothing about Federal action with regard to discrimination in the provision of property insurance. In fact, the legislative history of the Fair Housing Act indicates that the Fair Housing Act does not apply to insurance. Notably, in the Senate floor debate on the 1980 amendments to the Fair Housing Act, Senator Heflin stated that it was * * * * * *the decision of the Subcommittee on the Constitution, acquiesced in by the full Senate Judiciary Committee, to leave the regulation and oversight of the property insurance business to the States and to reject extension of [the Fair Housing Act] to that business. HUD's property insurance activities are wholly unwarranted. Every State and the District of Columbia have laws and regulations addressing unfair discrimination in property insurance. We need to avoid duplication of effort and also avoid the risk of creating new and different standards that will be confusing and administratively burdensome. The House and Senate reports to the VA/HUD fiscal year 1997 Appropriations Act are identical on the issue of fair housing and property insurance, and are designed to state the understanding of the House and Senate that HUD should not intrude upon the responsibilities of the States with regard to the regulation of insurance, including property insurance.

Mr. BOND. Mr. President, the conference report to H.R. 3666, the VA/ HUD Fiscal Year 1997 Appropriations Act, included an amendment by Senator Bennett, that requires GAO to audit the operations of the Office of Federal Housing Enterprise Oversight [OFHEO] concerning staff organization, expertise, capacity, and contracting authority to ensure that the resources are adequate and that they are being used appropriately to ensure that Fannie Mae and Freddie Mac are adequately capitalized and operating safely. As Senator Bennett previously advised, OFHEO is over 2 years behind in developing risk-based capital standards which are intended to ensure the financial safety and soundness of these Government-sponsored entities. Senator Bennett further advised that OFHEO needs to refocus its activities, away from such activities as trips abroad, to ensure that these critically needed risk-based capital standards are developed and operative. I also am very concerned over OFHEO's lapse in its responsibility for the timely development of these risk-based capital standards, and I urge OFHEO to expedite these necessary rulemaking requirements. I also advise that the Housing and Community Development Act of 1992 established OFHEO as an independent office in HUD and not as a new Federal agency. Nevertheless, in a time of Government downsizing, OFHEO continues to request additional staff and funding, while focusing on activities other than its primary responsibility to promulgate financial safety and soundness rules. The 1992 housing bill, which I worked on, intended OFHEO, as a practical matter, to be a tripwire to alert Congress and the Nation to any significant financial risks that may be confronting Fannie Mae and Freddie Mac. This is a critically important function and OFHEO's primary function--I do not think that anyone intends or expects OFHEO to become a new agency or act as a political entity. I expect the GAO audit to lend some perspective to OFHEO's purpose, its ability to perform its purpose, and recommend ways to streamline and ensure OFHEO's capacity and expertise will meet its rulemaking and regulatory functions. drinking water health effects research