Kit Bond

Mr. BOND

Mr. BOND. Mr. President, while we are talking about bills that need to be moved, I want to return to the matter of the VA-HUD appropriations bill. As Members in this body and those who are observing our actions will recall, last night, proceeding to the bill was objected to by the Senator from Minnesota. This bill is being held hostage for another issue not related to it. I rise today to point out to my colleagues the importance of passing this bill as quickly as possible. This is an appropriations bill. This is an important appropriations bill that provides money for the Veterans Administration, the Department of Housing and Urban Development, Environmental Protection Agency, National Aeronautics and Space Administration, National Science Foundation, and others. We not only have to pass that bill, however, to provide funds beginning on October 1, the start of the new fiscal year, there are, at the request of the administration, certain emergency supplemental matters that have to be dealt with now. Let me advise my colleagues that the consequences of continuing to delay action--and the delay last night may already have made it too late to get this bill through--I am ready, however, to stay here and work as long as the leadership wants us to work, because this bill contains a supplemental appropriation for Ginnie Mae, the Government National Mortgage Corporation. This bill provides a $20 billion increase in the current limitation on loan guarantees for mortgage-backed securities needed to finance FHA and Veterans Administration mortgages through September. If we do not pass this bill, it means that sometime probably in early September, the VA and FHA will no longer be able to sell in the secondary mortgage market the paper that is generated by an issuance of loans to veterans and to those who qualify for the FHA. These people will be without the financing that should be available to them, and it will be the fault of this body and those who have held up this bill if veterans in my State, in the State of California, the State of New York, or the State of Minnesota are not able to get mortgages in September. The effect will be ultimately increasing mortgage interest rates and constraining home financing availability. In addition, if this bill is delayed past the signing after October 1, as of September 30 the Federal Emergency Management Agency advises us that they will no longer be able to write flood insurance policies. Property owners in every State in the Nation depending upon Federal flood insurance will no longer be able to get Federal flood insurance. The authority expires. We have been asked to include an extension of the authorization for one more year in this bill. Without this bill, flood insurance will not be available. There has also been discussion of water projects. Everybody knows that the District of Columbia is suffering from drinking water problems. This bill includes $2 million for water infrastructure funds, including funds that will go ultimately to the safe drinking water revolving fund in every State and the District of Columbia. That requires some additional explanation. We know that the House has passed the safe drinking water bill. We know also that the appropriations measure which passed both bodies and was signed into law for the current fiscal year had a provision that if the safe drinking water law was reauthorized prior to August 1, there would be roughly $725 million available for that fund. August 1 has come and gone. As a result of the terms of the appropriations bill for this year, that money goes into the clean water fund. Those moneys are in the process of being paid out by the EPA to the State revolving funds. When this bill is ultimately passed and signed by the President, traditionally the EPA takes about 3 months to get regulations issued so that funds can be paid out to all of the States under the formula for the drinking water revolving fund. We are prepared in this measure when the President signs the safe drinking water bill, as I hope he will, to credit the safe drinking water fund with the money that is poured over into the clean water fund and provide additional appropriations, reducing the clean water funds for the next fiscal year. I have assured the authorizing committees that we will make those moneys available as soon as we can approve this bill. As soon as we can send it to the President and get it signed, that money will be there. The opposition to moving forward to VA-HUD means that we are holding up money to go to drinking water projects and clean water projects. The money that was temporarily set aside until August 1 for the States for the drinking water funds is now in the clean water fund, and the EPA can continue to distribute that money. It can go to the States and the State revolving fund. So that money is not lost. There have been some irresponsible statements by people who do not understand the process that the money is being lost. The money is not lost. The money can go to work today, tomorrow, this week on the clean water fund, but if it gets passed by both Houses and the President signs the safe drinking water fund at the direction and at the request of the authorizing committees, I will recommend to the committee and to this body that we put an equivalent amount from the 1997 appropriations into the safe drinking water revolving fund so that the District of Columbia and other States--as soon as the Environmental Protection Agency writes the regulations and can hand out the money--will have the dollars available to improve the drinking water supplies. That is another reason this bill must be protected. In addition, this bill includes the funds needed as of October 1 to send out benefit checks to about 2 million poor and disabled veterans and veterans' widows. When this bill is held hostage, as it was last night, we are threatening the money that goes to the poor and disabled veterans and their widows. This bill, Mr. President, also has $1 billion to restore FEMA's disaster relief fund so that disaster victims from floods and other disasters across the country may be helped by FEMA. Mr. President, when someone holds up this bill and holds it hostage, it is holding hostage the money that would go to aid victims of disaster. I ask my colleagues to quit playing games with a vitally important appropriations bill. Deal with the other matters. There are many sensitive matters. There are many things that I have that are being held up, and I am doing my best to work out agreements with those who are holding them up. But I say to you that the appropriations bills need to go forward not only to fund vital programs that begin October 1, but in the instance of the Ginnie Mae loan limitation, the bill has to be enacted as soon as possible so that Ginnie Mae's ability to sell VA and FHA mortgages will not expire. In addition, as of October 1, there will be no authority for FEMA to write flood insurance. Mr. President, we have talked enough about all of these problems. I hope that very shortly the majority leader will be able to ask unanimous consent to move forward on some of these vitally important measures that are pending before this body. I yield the floor. Several Senators addressed the Chair.

Mr. BOND. Mr. President, I would say simply that the effect of what has been done is to hold this bill hostage. I am not in here to fight about judges. I have had judges held up before. I sympathize with people who want to move things forward that are held up. I am simply pointing that out for whatever reason. I am not here to judge whether this judge may or may not be important in all the measures and all of the provisions that I have cited. I want to call attention to everybody in this body the likely consequences of holding up this bill. It was held hostage last night, and until we hear differently, I regret that it apparently is being held hostage, and the consequences. I yield the floor. Mr. FORD addressed the Chair.

Mr. BOND

Mr. BOND. Mr. President, may I ask of my colleague if he would consent that after he finishes I be recognized?

Mr. BOND. I thank the Chair.

Mr. BOND

Mr. BOND. Mr. President, I appreciate very much the efforts of the majority leader. I assure you that the ranking member, Senator Mikulski, and I have worked long and hard with many Members to accommodate the interests Members have. We were prepared to negotiate time agreements so we could move this expeditiously. The matters involved in this bill include the funding for the Veterans Administration, the funding for the Housing and Urban Development, funding for EPA--there seems to be a great deal of concern about drinking water facilities; those funds are appropriated in this bill--Environmental Protection Agency, NASA, National Science Foundation. It had been our hope that by working with and being responsive to the concerns of Members on both sides of the aisle, with respect to what is, frankly, a very complicated bill, that we could wrap this up so we would not have to impinge upon any Saturday or Sunday activities that our colleagues may have. Mr. President, that is why I am deeply disappointed. The ranking member and I have been ready since last Wednesday to go forward on this bill. It is a complicated bill. I had hoped we would be able to go tonight. I am very disappointed, personally, and for the agencies and the people working with us. Let me say at this point that we have worked together prior to the bill coming to the floor. The ranking member and I have agreed that we can accept a significant number of amendments that have been presented to our staff. If there are other amendments, we ask Senators to bring them to us or to our staffs tonight so we may determine if we can accept them or work with the Members to gain accommodation on them. I have approved, as has my colleague, a number of colloquies that will be ready to go if we are able to move to this bill tomorrow. I think there are perhaps three or four issues which would require a vote, and we would like to work with the leadership and get short-time agreements on these votes, reserving everybody the right to submit additional comments for the Record so we can handle this in an expeditious manner. We understand how controversial the issues can be. We think we can deal with it in a timely fashion. I ask that people who do have amendments, questions, colloquies, please contact us tonight and perhaps we can move expeditiously tomorrow. I share the leader's disappointment that we are not able to do this tonight. With cooperation in bringing the amendments to us tonight, perhaps we can deal with the issues in a timely fashion tomorrow. I thank the majority leader, and I thank the Chair.

Mr. BOND

Mr. BOND. Mr. President, I move to reconsider the vote by which the conference report was agreed to.

Mr. BOND

Mr. BOND. Mr. President, I say that I well remember that. It only heightened my admiration for the Senator from New Mexico. It was a wonderful experience which I hope not to have to go through again but it was only because of his skill, good humor, wisdom, and kind judgment that we were able to accomplish that work. And it is truly a credit to his ability and his leadership. Mr. President, today the Senate will take another historic step in trying to curb the size of Government and provide for new approaches to help families in poverty. I am enthusiastic about this welfare reform legislation which we will pass today because it will basically take control from the impersonal inefficient Washington welfare bureaucracies and the dead hand of Congress and return that to State and local governments who are closer to the people, giving them the freedom to implement new ways to fight poverty. There can be no doubt that the current system is a failure. That should be the one thing that is agreed upon by Republicans, Democrats, liberals, conservatives, and anyone else who is concerned about their fellow man today. It is cruel to adults who are treated like numbers when they need public assistance. It is even crueler to the children because it encourages a lifetime of dependency and they are raised in an atmosphere without hope. The current system discourages work but it encourages illegitimacy. The current welfare system does not punish poor behavior--even behavior which threatens children, like not sending them to school, or not seeing that they receive their immunizations. The current welfare system does not even punish drug abuse among parents who may be welfare recipients. I am pleased that this conference report contains a provision which I authored that deals with an outrageous problem that came to my attention as a result of some efforts by the good folks in my home State of Sedalia, MO. In Sedalia, a private employer was trying to hire workers at a $6.50 per hour wage to process food. The employer worked with the local Family Services Division office and had some welfare recipients come out and get jobs. That was a win-win for those folks who got jobs, and for all of us in Missouri as taxpayers. Some of the recipients were interviewed and then hired. They now have good paying jobs. They are paying taxes. They are not living off the Government. They are contributing members of society. They can take pride in what they are doing for themselves and their families. However, a few folks did not get a job because they failed a mandatory drug test. They were not hired, unbelievably and terribly unfortunately, because of Federal rules and regulations. The State of Missouri cannot sanction those welfare recipients even though they were known to abuse drugs. They simply met their obligation by showing up for the work interview with drugs in their systems, and as a result of the Federal requirements they were sent back to get their food stamps without having to take a job. Mr. President, what kind of perverse incentive is that? That is the incentive we have seen too many times in the welfare system today. The people of Missouri are fed up with it. They know it is not working. It is costing money, and not helping the people that it should help. This is an absurd result. It harms the recipients because no one forces them to be responsible for their actions. It certainly harms the children of the drug users because their parents have no incentive. They need not get off drugs to continue to get their assistance. Of course, I would say on a much broader scale it is unfair to all of us as taxpayers who have to finance those habits and provide support for those who are using drugs. I think this is just one example that shows clearly that the Washington bureaucracy, the congressionally mandated and controlled scheme, cannot serve the needs of the millions of poor people in this country. The fact is in States like Massachusetts, Indiana, Wisconsin, and Utah where Governors have been able to take a tougher approach, welfare rolls have dropped, recipients have found jobs, and deadbeat dads have been forced to take responsibility for their children. Those are the results that we hope to duplicate throughout the country in this reform of welfare. I am pleased that President Clinton has decided to join us, and I think the overwhelming number of Americans who really want to end welfare as we know it. Countless Americans and I have been terribly disappointed. I felt cheated--not just once but on two previous occasions--when we worked very hard in this body and with overwhelming bipartisan support passed meaningful welfare reform. Those measures were vetoed, protecting the welfare system and its bureaucrats as it exists. Apparently the President has decided to give the American people what they want--real welfare reform. For some reason, an old story just came into my mind about a politician back home who had held a position for some time. When the clamor of the people got too great, he changed his position. A friend of mine went up to him and said, ``Congratulations. I see you finally have seen the light.'' He shook his head sadly, and said, ``No. I just felt the heat.'' But for whatever reason, the change was welcome in that situation. It has been said on this floor to those of us who support this welfare reform, ``How can you dare call it welfare reform?'' How can we dare call it reform? And they contend it would lead to more poverty. It was said that the evidence is irrefutable. Yes, Mr. President, the evidence is irrefutable. What the current system has done is to force more and more families and more and more children into welfare dependency. It has deprived the children and the families of the responsibility that each and every American citizen has the right to enjoy and the obligation to use. Those who oppose change in the current system must explain and defend the system that has forced so many more families and their children into poverty. With this great federally controlled, congressionally mandated, Washington-bureaucracy-run poverty system, we have seen the number of families and children in poverty skyrocket. Those who take a poverty tour and want to go out and look at the faces of the welfare recipients, I tell them I have seen those faces, and I have felt the shame that the current system we have is not getting them off welfare. When you go out and look at the people who are trapped in the system today, remember, it is the current system that has trapped them. Their plight is the direct responsibility of the system that we are here today to change, to give them an opportunity, to give them an incentive, to give them some encouragement to get off welfare, to help them reestablish themselves as responsible, contributing members of the community, able and willing to take care of their children. To say, as has been said on this floor, that we are abandoning children because we are turning back to the States the opportunity to devise, revise, improve and implement a welfare system is to ignore reality. I had the opportunity to serve on the other side of this intergovernmental program for 8 years as Governor of Missouri. As we tried to implement the Federal programs handed down from Washington, we found time and time again that what may have been well-intentioned and what sounded like a good idea when it was expounded upon in this body and in the other body, when great ideas from Washington came down as to how we were going to improve the system, what they did was hamstring our ability to shape a system that would serve our people and help them get off welfare. Too often we have been tied up in red tape and bureaucracy. This now is an opportunity to let the States that do care and that are concerned about those in poverty develop means of getting them off welfare and into work. I urge my colleagues to support this measure, and I thank those who have worked so hard for its passage. I yield the floor.

Mr. BOND. I recall it as it if were yesterday.

Mr. BOND. I am happy to yield.

Mr. BOND. Mr. President, I thank the Chair. I begin by expressing my sincere thanks and appreciation to the managers of the bill, particularly to my good friend, the Budget Committee chairman, the Senator from New Mexico, Senator Domenici. The fact that we have this measure before us today reflects not only all the practice we have had in passing welfare bills but reflects the great skill, the compassion, and the wisdom that he has exercised throughout this process. I think all of us are deeply indebted to the tremendous skill he has shown in keeping us on track to bring us to this day.

Mr. BOND

Mr. BOND. Mr. President, I ask on behalf of the Senator from Virginia, Senator Warner, that he be added as a cosponsor to the amendment.

Mr. BOND. Mr. President, I join in thanking my colleague from Montana for his willingness to work with us on this amendment.

Mr. BOND

Mr. BOND. Mr. President, I move to table the Dorgan amendment, and I ask for the yeas and nays.

Mr. BOND. Mr. President, due to a failure to communicate, I did not convey to the floor manager of the bill my very strong opposition to the Dorgan amendment. The time was yielded back. I ask unanimous consent that I may be recognized for 5 minutes prior to the vote on the Dorgan amendment, which I feel is fatally flawed and will have very serious consequences. I would like to have the opportunity to have appropriate time to address that amendment. I ask unanimous consent for 5 minutes.

Mr. BOND. Mr. President, I move to reconsider the vote.

Mr. BOND. Mr. President, I do not want to interrupt the debate on this very important amendment. In fact, I ask unanimous consent that I be added as a cosponsor to the amendment by the Senator from New Mexico.

Mr. BOND. I thank the Chair and the managers of the bill. I rise in opposition to the Dorgan-Hatfield amendment. I have great respect for both of the sponsors of this amendment. I can sympathize with their objectives. I think they are operating from the noblest of motives. Once again, I believe that this amendment causes far more problems than it solves. The current Arms Export Control Act requires the executive branch to assure that any sales are in the interest of the foreign policy of the United States. When the executive branch decides to go forth with a sale, the Congress is notified and reviews the sale. Modifications to sales or a withdrawal of the sale request has occurred because of these congressional reviews. Pakistan is one such example. Now, the restrictive nature of the amendment on which we are going to be voting in a few minutes would arbitrarily cut out all but a few select countries in the world. Many other countries would argue that perhaps even the United States could not meet these standards. There is yet to be a clear definition of a political prisoner or what constitutes aggression under international law or discrimination on the basis of race, religion on gender. Very few countries have a history of elective democracy such as ours. We are not against the intent of this amendment, but I think it puts overly restrictive limitations on the administration and on our military and economic sectors. There are over 40,000 export licenses for munitions issued per year which we may very well have to review on a case-by-case basis above and beyond what the executive branch already does. Some of our NATO allies would be called into question. For example, Turkey, as well as our long-term friends like Israel who might be challenged on the basis of the treatment of Palestinian terrorists, or political prisoners. Spain can be attacked on the basis of its treatment of Basques, or perhaps even England for its quagmire with the IRA. Saudi Arabia and Egypt could be adversely affected by this amendment. Where we have not had contact in countries like Cuba, communism continues to flourish in spite of our ever increasingly restrictive sanctions. They are not working there. This amendment would not prevent the procurement of weapons. It would allow the procurement of weapons from possibly rogue states and arbitrarily lock us out of a major conduit of foreign policy. Mr. President, this is a very serious amendment. Its effect would be to immobilize the administration from normal conduct of its foreign policy, trade policy, and military policy as it would create lists of countries for congressional approval every year and then await for approval each year. Each year this body would be tied up in the process of giving a country-by-country approval needlessly antagonizing countries who support our policies. And it will most likely not affect the trade policies of our competitors, including allies. There will be no reduction in arms sales--only in U.S. businesses, jobs and, most importantly, U.S. influence. The influence extends beyond business and military interests. It extends to our ability to work diplomatically and subtly across all policy issues. The world has changed, continues to change. The Communist monolith is crumbling. But the fact is that the countries with whom we have had a defense relationship are in general gravitating towards more democratic political systems and market-oriented economies. There is no empirical evidence that by unilaterally denying ourselves access to other countries' military and political infrastructures that we have had or will have any positive impact on democratizing them or improving their human rights records. The legislation is counterproductive. It would make the world less stable. We would have less influence over proliferation and lose our ability to provide a positive political effect on a military policy of friendly countries. I urge my colleagues to recognize that while this amendment has been offered with all good intentions and with the highest of purposes, it is a significantly flawed piece of legislation that would have very much an unanticipated and very harmful impact. I hope we will vote it down.

Mr. BOND

Mr. BOND. Mr. President, I rise today in support of the amendment by my colleague from Maine. I am very much concerned about the impact of the provisions in the underlying bill. Like most, if not all, of my colleagues, I would agree and agree wholeheartedly that the present conditions in Burma, or Myanmar, are deplorable. The conditions of SLORC cannot and should not be condoned. As I have said in the past on many occasions, their claim to govern is an illegitimate claim. Their hold on power through oppression and denial of human rights is one that I and, I believe, everyone else in this body would like to see come to end as soon as possible. Aung San Suu Kyi and her party won an election in 1990 and I am confident would win again if another election were held today. SLORC came to power solely due to its ability to coerce. Period. End of story. The question that we are now trying to answer is, how do we respond to the situation? How can the United States influence the activities of SLORC to bring about change in Burma and to bring the democratically elected government of Aung San Suu Kyi back to Burma? One approach that is taken in the foreign operations appropriations bill is to try to achieve change in Burma through total unilateral sanctions--unilateral sanctions. This approach assumes that such actions will influence and pressure SLORC to change its behavior. I have to commend my colleagues for their eagerness, their dedication and the leadership of the Senator from Kentucky to try to see that we do something to bring about change in Burma, but I am not convinced that cutting off what little contact we do have with that country will serve the positive purpose we seek. That action, in my opinion, will do nothing to bring about change in Burma. Such sanctions would be ineffective in achieving their purpose and would solely deny the Burmese people, the ones we are trying to assist in this whole debate, the positive effect of closer and deeper American engagement. What would be accomplished by implementing sanctions unilaterally on a country where U.S. investment is relatively insignificant, minor, almost unimportant and would be quickly taken up by our competitors? We must remember that all of the nations of Asia and much of Europe, including France, Germany, and the United Kingdom, disagree with this policy of sanctions. Like the Senator from Maine, I have had the opportunity to visit with leaders in the ASEAN countries, and I can tell you that they are not going to impose sanctions. They believe in engagement. They are going to continue to engage in Burma. Is the progress toward peace, human rights, and the recognition of democratic principles more likely to be furthered by our withdrawing from the field? I think not. Sanctions did work in South Africa, but only because the United States was part of a much larger coalition. They do not work when we go in as the Lone Ranger and try to cut off our minuscule investment. The Senator from Kentucky has given us quotes from Aung San Suu Kyi and her spokesperson, in which they talk about foreign sanctions. If all countries who are now trading with Burma could be enlisted, then there could be a major impact. But I can tell you from talking to--and mostly from listening to--the leaders of the countries that are the neighbors of Burma, that is not going to happen. Burma is just beginning to open its doors to the outside world. There are neighboring countries and other countries in the world anxious and willing to go in. The opening is a unique opportunity that we have not seen before, an opportunity to help bring about change, to make things happen. Frankly, I am not so much concerned, not so much interested in the very small investment that our companies may now have in Burma. If we were part of an overall sanctions picture, I would say it would be worth it, if other countries would get out as well. But I can see us having a positive effect in the entire region if we continue to be involved, if we continue to have the opportunity to exercise U.S. influence to bring U.S. values to that country. It just makes sense. How can we influence anything if we are the only ones outside the room while the rest of the world is carrying on without us, probably happy to see us play the self-righteous outsider and get out? I cannot see how punishing United States firms by threatening to keep them out of Burma is an effective way to bring about change. United States presence, U.S. firms are the ones on the ground who can help spread American values. Obviously, our global competitors and Burma's neighbors see opportunities arising in Burma. I fear they are more interested in monetary gain, in many instances, from such change and not the opportunity to bring about the political change that we in the United States are seeking. I can imagine that European and Asian trade competitors would be wildly supportive and happy to see total sanctions unilaterally imposed by the United States on its own companies. Another possibility we must start considering is the security issue of continually isolating Burma. To do so could drive them into the arms of the Chinese. A strong security relationship between Burma and China is not, in my view, in the best interests of the United States. I fear to think what it would mean if such a relationship were to lead to a port in Southeast Asia for the Chinese Navy. At this time the United States does not do much for Burma. We purchase a mere 7 percent of all Burma's exports and provide an insignificant 1 percent of its imports. We provide them no aid. We limit international financing by continuing to vote against loans to Burma through international financial institutions. Frankly, these votes are likely to be overridden by other voting countries who seek the opportunities that large-scale projects in Burma would provide. We have very little leverage even now with Burma. To isolate ourselves even further from that country would be to give up what little influence, what positive pressure for change we can bring. The United States can either be at the table and foster meaningful dialog and negotiations, or we can walk out of the room. I believe that, recognizing the opportunity that SLORC is providing by opening Burma to foreign interests, staying and engaging the country's foreign leader is the best hope we have for fostering democratic change in Burma. We all want to see change in Burma. We all feel that SLORC's actions are reprehensible and would like to see the legitimately elected government of Aung San Suu Kyi brought to power. I hope, while making efforts to bring about these results, we do not give up existing and future United States interests, not only in Burma but throughout Southeast Asia. I yield the floor.

Mr. BOND

Mr. BOND. Mr. President, I rise today in support of S. 1784, The Small Business Investment Company Improvement Act of 1996. This bill proposes numerous changes to the Small Business Investment Act of 1958 designed to improve, strengthen, and expand the availability of investment capital under the Small Business Administrations's Small Business Investment Company (SBIC) program. S. 1784 builds on the improvements of the SBIC program contained in the law passed by Congress in 1992 by making the following changes to reduce the risk of SBIC defaults and losses to the Federal government: 1. Increases the level of private capital needed to obtain an SBIC license from SBA. 2. Requires experienced and qualified management for all SBICs. 3. Requires diversification between investors and the management team. In addition, S. 1784 makes these important changes to the Small Business Investment Act to increase the availability of investment capital to small businesses: 1. Increases fees paid by SBICs which reduces the credit subsidy rate. 2. Eliminates the distinction between SBICs and SSBICs, while grandfathering'' successful SSBICs into the new program. 3. Places a greater emphasis on SBIC investments in smaller enterprises or smaller small businesses. In 1958, Congress first approved the Small Business Investment Act creating Small Business Investment Companies, which are private investment companies licensed by SBA, whose sole activity is to make investments in small businesses. An SBIC raises private capital which is matched by additional funds guaranteed by SBA. The private capital and SBA-guaranteed funds are invested by SBICs in small businesses. SBICs fill a void that is not addressed by private venture capital firms, most of which are so large they are usually unwilling to make investments in smaller firms, which generally seek investments in the range of $500,000 to $2.5 million each. Since the beginning of the SBIC program, nearly $12 billion has been invested in approximately 77,000 small businesses. Some SBICs make equity investments in small businesses, while others make long-term loans, which are frequently coupled with rights to purchase an equity interest in the company, sometimes called warrants''. The lending-type'' or debenture SBICs provide long-term financing that is generally not available from banks or private venture capital firms. Today, there are 185 active regular SBICs and 89 Specialized SBICs (SSBICs) in the SBIC program. SSBICs invest only in minority owned and controlled businesses. Together, these SBICs and SSBICs have raised nearly $4 billion in private capital and have received $1.02 billion in SBA-guaranteed funds. Today's SBIC program has been shaped in large part by the Small Business Equity Enhancement Act of 1992. The genesis of this important legislation resulted from the hard work of SBA's Investment Capital Advisory Council, a public-private working group formed in 1991 to address the problems confronting the SBIC program. The 1992 Act produced the first major change in the SBIC program since it's formation in 1958. It created the Participating Security program, which incorporates some of the best practices of the private venture capital industry. The 1992 act came about in response to the persistence of my good friend and colleague from Arkansas, Senator Bumpers, who as chairman of the Committee on Small Business held a series of hearings focusing attention on the problems under the program. The result of the Act was to strengthen the SBIC program and to correct serious weaknesses that had been exposed by well publicized problems of the past. Since the 1992 Act became law, more than 30 new participating security SBICs with nearly $500 million in private capital have been licensed by SBA, and 17 new SBICs with over $200 million of private capital have been licensed as debenture SBICs. There is a significant difference between the SBICs licensed before the 1992 Act and the SBICs licensed under the more strict guidelines set forth under the 1992 Act. While the 1992 Act increased the minimum private capital threshold for licensing to $2.5 million for each debenture SBIC and $5 million for each new participating security SBIC, SBA has imposed even more strict standards in its regulations. Under the SBA rules, debenture SBICs must have a minimum of $5 million in private capital and participating security SBICs must have $10 million in private capital. Since the 1992 Act has created two distinct types of SBICs, it allows for investments to be tailored to meet the needs of small businesses. For example, when a small business needs a loan and can meet projected interest payments, the traditional lending-type or debenture SBICs are available to make debt investments. For small businesses that need non- interest bearing investment capital, the participating security SBICs can offer an equity-type investment which anticipates an extended period of time, such as two to three years, before the small business is expected to begin repayment of this investment. In this latter case, interest payments are deferred until the investments begin to generate a positive return. Under the Participating Security program, the Federal government's return is not limited to repayment of principal and interest--it can also share in the profits of the SBIC. During this Congress, I have chaired three hearings investigating the success and problems associated with the SBIC program. Testimony before the Senate Committee on Small Business has been supportive and positive. Numerous small business entrepreneurs have testified about their inability to obtain investment capital from banks and other traditional investment sources, and SBICs are frequently their only source of investment capital. Last year, Jerry Johnson, the Chief Executive Officer of Williams Brothers Lumber Co. located near Atlanta, testified that not one bank in the Atlanta area would speak with him about asset-based lending. After a lengthy search, he and his partner turned to Allied Capital Corp., a Washington, D.C.-based SBIC. Within 60 days of their first contact with Allied Capital Corp., Mr. Johnson was able to conclude his financing arrangement. Being able to clear this financing hurdle with the help of an SBIC, Mr. Johnson's company has grown significantly, adding many new employees and increasing its tax base. Often, we hear about major success stories like Federal Express and the Callaway golf club co. that received SBIC funding at critical times in their early growth stages. It is, however, far more likely that businesses like the Williams Brothers Lumber Co. will be the typical beneficiaries of the SBIC program. These are ``Main Street'' enterprises located across America who have looked to traditional money sources and been turned away. The SBIC program is filling this niche--a large niche to say the least--that picks up where banks fear to tread and Wall Street is not interested because the investment size is too small. There are thousands of companies like Williams Brothers Lumber Company across the country that need investment financing to support growth and new jobs and have nowhere to turn but to the SBIC program to meet their demand for capital. During the past year, the Committee on Small Business has received a great deal of information about the need to strengthen the SBIC program. In July 1995, Patricia Cloherty, Chair of SBA's private sector SBIC Reinvention Council, testified on the Council's recommendations to strengthen and expand the program. In addition, last summer the National Association of Investment Companies forwarded to the Committee on Small Business a copy of their recommendations to improve the SSBIC program, which was also submitted to SBA's SSBIC Advisory Council. The involvement of the private sector in analyzing the performance of the SBIC program and the insight provided by these recommendations are commendable - and very helpful to this Committee. In 1995, the SBIC Reinvention Council recommended that new fees be imposed to lower the credit subsidy rate so that the program can provide a significant increase in leverage to licensed SBICs. It also recommended certain administrative changes to improve the management and operations of the SBIC program. The National Association of Investment Companies (NAIC), which represents SSBICs, also recommended in 1995 that all statutory and regulatory distinctions between SBICs and SSBICs be eliminated, including the deletion of all references to social or economic disadvantage'' from the Small Business Investment Act. NAIC proposed creating a single, combined SBIC program that would retain an important focus on investments in small business at the smaller end of the eligible size standards. They recommended sensible improvements to make more investment capital available to more small businesses and proposed to remove the current restrictions that prohibit Specialized SBICs from investing in companies not owned by socially or economically disadvantaged persons. S. 1784 includes many of their recommendations. NEW FEES FOR SBICs The President's FY 1997 budget request included a recommendation that fees paid by SBICs be increased to finance a significant reduction in the credit subsidy rate. The Office of Management and Budget, recognizing the positive effect of some of the regulatory changes already implemented by SBA, now is using a lower projected default rate, thereby reducing the credit subsidy rate for debenture and participating security licensees under the SBIC program. The Administration's recommendation to lower the credit subsidy rate by increasing fees is similar to one made last year in their amended FY 1996 budget request for the 7(a) Guaranteed Business Loan Program. Accompanying their request for a fee increase were statements by SBA about how well the 7(a) program was performing. What happened following SBA's positive predictions for the 7(a) program has been alarming. Based in part on SBA's glowing report card on the 7(a) program, Congress passed legislation to raise fees and lower the subsidy rates of the program. The changes became law in October 1995, which is about the same time SBA and OMB were beginning to work on their most recent budget request which raises the 7(a) credit subsidy rate by 150% and the cost of the program by $180 million. This higher cost is the direct result of greater losses from loan defaults and lower recoveries from liquidations. As Chairman of the Committee on Small Business, I believe it is prudent for Congress to take steps so that we do not allow a repeat of the 7(a) problem with the SBIC program. Based on our experience last year, Congress should not approve any decrease in the credit subsidy rate through the increase of fees without taking some corresponding steps to strengthen the safety and soundness of the SBIC program. SBICs IN LIQUIDATION In addition, evidence before the Committee on Small Business about the failure of SBA to maximize its recoveries from failed SBICs is alarming. SBA acknowledges there are assets with a value of approximately $500 million tied up with SBICs in liquidation. To make this situation even more alarming, many of these failed SBICs have been in liquidation for over ten years, including one that was transferred into liquidation on January 5, 1967. S. 1784 directs SBA to submit to the Senate and House Committees on Small Business, no later than October 15, 1996, a detailed plan to expedite the orderly liquidation of all licensee assets in liquidation. This plan should include a timetable for liquidating the liquidation portfolio of assets owned by SBA. In addition, SBA needs to take a hard look at how it manages failed SBICs that are in receivership. It is not a sufficient explanation for SBA to claim it is at the mercy of the court system in winding up the affairs of SBICs in receivership. In each case, the court acts in response to SBA's petition, has named SBA the receiver, and SBA has retained independent contractors to act as principal agents for the receivership. These principal agents are paid hourly and appear to have little or no incentive to wind up the affairs of an SBIC. In fact, the opposite is true, and the real incentive appears to be to drag out the receivership as long as possible. Based on SBA replies to requests for information from the Committee on Small Business, we have learned that these principal receivers agents bill significant hours each year. In FY 1995, one principal agent billed over 3,200 hours for one year, the equivalent of over 8 hours per day for 365 days. Other principal agents billed over 2,500 hours each for FY 1995. At the time of the Committee's inquiry into these billing practices, SBA gave no indication that it felt they were unusual. It is clear to me that without incentives to complete action on these SBICs in receivership, the current system used by SBA will allow these abuses to continue. Although the Committee did not reach a consensus on my proposal to create an incentive based system to improve recoveries from SBICs in receivership, we will continue to monitor SBA's performance closely in this area. For several months starting late last year, the Committee worked on draft legislation to strengthen and enhance the SBIC program. S. 1784, the Small Business Investment Company Improvement Act of 1996, is the result. It incorporates recommendations from SBA's SBIC Reinvention Council, the National Association of Investment Companies, the National Association of Small Business Investment Companies, and the President's FY 1997 budget request. S. 1784 was approved by the Senate Committee on Small Business by a unanimous 18-0 vote. It makes substantial progress toward our goal of strengthening the SBIC program, while allowing the program to expand, providing more investment capital to small businesses as the cost and risk to the government declines. It was only after nearly 18 months of study and investigation that we were able to produce such a bill. S. 1784 is sound legislation that improves the safety and soundness of the SBIC program and makes more investment capital available to small businesses. And it accomplishes all of these goals while reducing the risk of loss to the government. It is for these reasons that I recommend to my colleagues that they vote in favor of S. 1784. Mr. President, I ask unanimous consent that a section-by-section analysis of this bill be printed in the Record.

Mr. BOND

Mr. BOND. Mr. President, the requirement for the additional procurement of F/A-18C/D aircraft does not come from the industrial community and is not a result of trying to string out a program which has come to the end of its viable life. The requirement comes from the Department of the Navy and its own inventory requirements. According to the Director of Air Warfare for the Navy, a minimum of 436 F/A-18C/D aircraft are required to fill the 10 active carrier airwings. The Navy expects that without continued procurement, it will be 30 aircraft short of the CNO mandated and congressionally approved requirements. If we include the normal attrition factor into the equation, the gap grows even wider for even though the F/A-18 is the safest aircraft in tactical Naval aviation history, approximately eight aircraft per year are lost. The night-strike capabilities of the C/D are critical to the fighting effectiveness of our carriers and allow for the use of the full range of the Navy's current weapons inventory. These aircraft improve pilot situational awareness and survivability over their A/B model counterparts. They are also fully compatible with shipboard maintenance and diagnostic equipment. The F/A-18E/F aircraft is on schedule and cost and its performance exceeds expectations so far. So why do we need more C/D's? Because the procurement schedule of the E/F will not produce significant numbers of aircraft until 2009. As my colleagues know, I am a staunch supporter of the F/A-18 E/F, for it does bring so much more warfighting capabilities to the men and women defending us, but that does not relieve us of the responsibility to provide our fliers with these additional C/D's which will bridge the technological void until the E/F's hit the fleet. Let me put it to my colleagues this way. Advances in aviation, military aviation in particular, are a little like those experienced in the computer world. The strategic mix of aircraft currently in our inventory and those projected to be in our inventory are representative steps in technological advances which will face threats from weapon systems that are advancing as well. Much like computer systems, we can project capabilities beyond our production abilities. The F-18C/D represents the current cutting edge in tactical Naval aviation, the E/F the next, JAST hopefully the next. But, we cannot in good conscience ask our young men and women to put their lives on the line for us and not give them the best we know we have to offer in the hope of dramatic future improvements which are not yet developed. I urge my colleagues to support, and support fully, the strategic growth of Naval aviation, starting with the continued buy of the C/D's appropriated for in this bill.

Mr. BOND

Mr. BOND. Mr. President, I rise to address the issues raised by Senator Frahm's amendment. I must first note that the T-39N aircraft currently in use by the U.S. Navy has been performing its duties for over 5 years and it will perform the same duties in the future. This is not a new program nor a new aircraft. I also understand the concern of some that the aircraft may be too old, however Navy analysis indicates this aircraft will provide valuable service through 2025. The Sabreliner T-39N has a mission completion rate of 98 percent. The U.S. Air Force in fact has consolidated its tactical navigator and weapon sensor operator training under the Navy umbrella with the understanding that the T-39N would be the trainer aircraft. Our allies who conduct the same type of training have also elected to use the U.S. Navy's T-39 Flight Officer Training Program. Future concerns of system upgrades would be the same regardless of the aircraft flown and any other modernization upgrades would also be figured into any new aircraft purchase. So, how does the T-39N stack up to the Navy's mission requirements? First, the men and women who fly it, love it. The aircraft possesses the speed and range they desire and the swept wing design makes it much more adaptable to the harsh conditions of low level flight required in their training. Straight wing aircraft experience a much rougher ride at low level and may have lower mission completion rates. In terms of flight characteristics the T-39N has been and is closest to the rise and performance of the jets the Navy, U.S. Air Force, and allied Air Force personnel will find in their inventories. I would also point out that this aircraft has had years of ``fly before you buy'' experience without complaint. The aircraft has performed superbly as opposed to other aircraft used in the program in the past. As I noted before, this aircraft is currently in use as we speak, turning out the finest tactical flight officers in the world. These men and women will be going to the same aircraft they have been going to since the current contract began over 5 years ago. There are no new design aircraft on the drawing boards which require a new airframe; any avionics systems upgrades or radar upgrades can be accommodated by the T-39N. This is the right aircraft, at the right time, and for the right cost.

Mr. BOND

Mr. BOND. Mr. President, I wish to announce that the Committee on Small Business will hold an oversight hearing entitled Implementation of the Small Business Regulatory Enforcement Fairness Act of 1996 on Tuesday, July 23, 1996, beginning at 9:30 a.m., in room 428A of the Russell Senate Office Building. For further information, please contact Keith Cole 224-5175. subcommittee on forests and public land management

Mr. BOND

Mr. BOND. Mr. President, I congratulate the chairman and ranking member of the Environment and Public Works Committee, Chairman Chafee and Senator Baucus, and Senator Warner, chairman of the subcommittee of jurisdiction for their efforts to put together this very difficult legislation. Flood damage prevention and navigation are of particular importance to the people of Missouri given our unique reliance on the inland waterway system. Both the benefits of this system and its shortfalls have been highlighted by the recent record flood events in 1993 and again this spring. Though substantial progress has been made, there remains much hard work to be completed. Of considerable concern to me are the crippling effects the President's budget is placing on our Nation's effort to protect lives and property from flooding. Clearly, the President does not consider the missions of flood control and navigation to be a priority and through various policy positions and inadequate funding requests, our inland waterway system, the economic activity that depends on it, and the people who live near it are at risk. Those of us who represent regions that rely on flood protection and the competitive international trade advantages provided by the critical corps navigation programs must continue to oppose the administration's intention to let them wither on the vine. This legislation includes an important Missouri project and many others. Since 1928, the corps has spent $33 billion for flood control projects. In that time, $275 billion in damages have been prevented. This does not account for the massive economic development that flood protection permits. I would have thought the political leadership of the administration would be trying to promote these important missions of safety, economic development, and international competitiveness instead of trying to undermine the successful mission and efforts of the Corps of Engineers. The cheapest way to move a ton of grain in the world is by barge on the Mississippi River. Senators who are concerned about competitiveness, promoting trade opportunities, protecting jobs, and growing the economy recognize the benefits of promoting water resources on our inland waterway system. Half our Nation's grain is shipped by barge and this cost advantage contributes to the fact that we are expecting a record $60 billion in agricultural exports this year with a $30 billion trade surplus. As I have said before, trying to update our water infrastructure to capture the growing Asian market is not pork as OMB would suggest--``its the economy, stupid.'' On another matter, I am very proud to have included in the managers package of amendments language I drafted to encourage more effective approaches to dam safety. As people in Missouri know well, the power of water and its potential for causing loss of life and property is a profound reality. The National Inventory of Dams includes roughly 75,000 dams. Over 95 percent of these dams are State regulated. Of these dams, over 9,000 are considered ``State high hazard'' dams which means that dam failure may result in significant loss of life or property. Many of these dams are considered ``unsafe'', or susceptible to failure due to deficiencies. Thousands of citizens in every State are dependent on dams for water supply, flood control, irrigation, and recreation. High safety standards for these dams can keep them from failing and causing devastating environmental and property damage, economic hardships, and, in the worst case, loss of life. My State of Missouri has 3,500 dams on the inventory of which 650 are high hazard. Deterioration of the infrastructure is a major concern and problems increase as dams decay with age. It has been determined that the life of a dam is 50 years. The majority of dams in this country are quickly approaching this age and rehabilitation of these structures is a major concern. In 1994 alone, 273 documented failures occurred across the Nation. This included 250 during the Georgia flood where lives were lost and where States reported downstream repair costs of over $50 million. In the 1970's, a dam failure in Idaho cost 11 lives and a West Virginia dam failure was responsible for killing 125 people. Recent studies by the Association of State Dam Safety Officials show that about half the States have shown program improvement progress while half have either remained constant or regressed in the last 10 years. With the recent economic climate, even those State programs showing improvement are struggling to keep up with growing responsibilities. There is currently no statutory national dam safety program. Two laws enacted by previous Congresses have since expired. The Federal Emergency Management Agency coordinates the implementation of guidelines pursuant to Executive order to implement a program to encourage coordination among Federal and State dam safety personnel and activities but a more aggressive partnership is needed. The legislation reauthorizes several previously enacted provisions and codifies the interagency working groups who have expertise in issues of dam safety. The lead agency will be FEMA, whose stated goal is ``to make mitigation the cornerstone of the Federal multi-hazard emergency management system.'' This approach promotes a focus on taking relatively inexpensive preventative approaches that can preclude expensive and fatal disasters. The legislation authorizes matching funds of up to $4 million per year over 5 years as an incentive for States to adopt dam safety programs. It further authorizes research in dam safety technology to discover methods to make new dams more reliable; to assess more reliably the condition of existing dams; and to prolong the reliable life of existing dams. Also included are funds to train State dam inspectors. In short, this program is meant to share the considerable level of Federal expertise and modest dollars to maximize the effectiveness of States to improve their programs and reduce exposure to dam failure. This incentive and partnership-based approach is not a Federal mandate and does not interfere with the Federal responsibility to ensure the safety of Federal dams. It does not provide for Federal inspection of non-Federal dams and does not authorize any funds for construction and rehabilitation which explicitly and appropriately remain the responsibility of the States. This approach has the support of the Federal agencies, the National Governors Association, the Association of State Dam Safety Officials who brought these recommendations to the Congress, the National Association of Civil Engineers, and others. I am pleased to note that the House Committee on Transportation and Infrastructure adopted companion language in their markup of WRDA legislation on June 30. I thank representatives of the ASDSO and ASCE for working closely and diligently with my office in pursuit of these commonsense provisions to improve dam safety. Brad Iarossi with the Maryland Department of Natural Resources has been of invaluable assistance as this process has moved forward. Again, I appreciate the assistance of Chairman Chafee, Chairman Warner and Senator Baucus and their able staff in bringing this legislation before the Senate. Lower Fox River Sediment Remediation Project

Mr. BOND

Mr. BOND. Mr. President, I pay tribute to my good friend and colleague from Missouri, Congressman Bill Emerson, who represented southeast Missouri's Eighth Congressional District for 16 years. Bill Emerson was well known in this body, and certainly to many around this city, and was loved by the people of southeast Missouri. He had a long and distinguished career of service in the U.S. Congress. Bill was especially well known for his work in agriculture and in the fight against hunger, including being an ardent supporter of food distribution programs. One of his legislative priorities this session was a bill that would make it easier for millions of tons of unused food by restaurants, supermarkets, and other private businesses to end up in food pantries and shelters rather than in garbage cans and dumpsters. In honor of Bill Emerson, I now send to the desk the Bill Emerson Good Samaritan Food Donation Act, which is identical to legislation championed by Bill Emerson before his death. In the past, private donors have been reluctant to make contributions to non-profit organizations because they are concerned about potential civil and criminal liability. With this legislation, private donors will be protected from such liability, except in cases of gross negligence and intentional misconduct. Those in need will truly benefit from this legislation. I am happy to continue Bill Emerson's effort, and I will work hard to ensure that the Senate passes this common sense approach to fight hunger. I hope my colleagues will join me in this effort.

Mr. BOND

Mr. BOND. Mr. President, I pay tribute to my good friend and colleague from Missouri, Congressman Bill Emerson, who represented southeast Missouri's Eighth Congressional District for 16 years. Bill Emerson was well known in this body, and certainly to many around this city, and was loved by the people of southeast Missouri. He had a long and distinguished career of service in the U.S. Congress. Bill was especially well known for his work in agriculture and in the fight against hunger, including being an ardent supporter of food distribution programs. One of his legislative priorities this session was a bill that would make it easier for millions of tons of unused food by restaurants, supermarkets, and other private businesses to end up in food pantries and shelters rather than in garbage cans and dumpsters. In honor of Bill Emerson, I now send to the desk the Bill Emerson Good Samaritan Food Donation Act, which is identical to legislation championed by Bill Emerson before his death. In the past, private donors have been reluctant to make contributions to non-profit organizations because they are concerned about potential civil and criminal liability. With this legislation, private donors will be protected from such liability, except in cases of gross negligence and intentional misconduct. Those in need will truly benefit from this legislation. I am happy to continue Bill Emerson's effort, and I will work hard to ensure that the Senate passes this common sense approach to fight hunger. I hope my colleagues will join me in this effort.