Kit Bond

Mr. BOND

Mr. BOND. Mr. President, what we have today is an opportunity to correct this mistake made in 1989 by enacting legislation that reflects both Congress intent in 1989 and the Bumpers legislation that had such broad bipartisan support in 1991. This amendment does not go as far as what was intended in 1989 by a Democrat Congress and a Republican President and supported in 1991 by a bipartisan group of Senators. Twelve of the twenty-two Democrats who cosponsored Senator Bumpers' bill in 1991 are still in the Senate. I call on them today to maintain their earlier position so we can pass this amendment that is so important to America's small business. Let me focus just a minute on a couple of things that had been stated in the media that this amendment does and does not do. Some statements have been made that the amendment provides a complete exemption from any minimum wage. I have stated that is simply not true. For those exempted, it keeps the minimum wage at $4.25. President Clinton talked about the amendment causing employees of small businesses to be ineligible for an increase in their wages and locked in to the current minimum wage. Who do we think provides wages in this country? Is it Congress in its largess? No; it is the people who have committed their time, resources, energy, and their capital to providing the best jobs they can and the products and services that the marketplace will take. Anybody who understands a market economy knows that everyone in America is eligible for a raise. The minimum wage is a floor, not a ceiling, and nothing in our capital system or nothing in my amendment sets an upper limit on how much a worker can earn. The purpose of the small business amendment is, in fact, to make sure that America's workers continue to have the opportunity to enter into the small business work force and earn raises in the future. I also ought to address the statements that have been made on this floor totally, I think, without justification, that some 10.5 million workers would be covered by this minimum wage exemption. That simply is out of whole cloth. There are 10.5 million workers who are employed by businesses grossing under $500,000, but this amendment does not affect nearly that many. There are 11 States that have higher minimum wages. Those workers would not be affected. It takes it down to 8.8 million. How many of those actually work at minimum wage? We do not have the accurate figures, but the Small Business Administration's advocacy counsel said approximately 10 percent of the workers in small business earn the minimum wage. So we are talking roughly 10 percent of 8 million to 9 million people, or 800,000 to 900,000 people. Phil Lader, the Administrator of the SBA, agrees with me--has agreed with me in the past before he got his arms twisted--that the small business exemption is a good policy because it impacts a small number of employees while ensuring that firms at the margin will not be forced to cut jobs or not grow. In the letter I cited earlier from Mr. Lader to the Secretary of Labor, he said, ``an exemption for the smallest of small businesses makes sense.'' Mr. Lader went on to state that: An exemption allowing the minimum wage to stay at its present level for firms would be a way of crediting the smallest employers for costs they incur: (1) by employing young workers in their first jobs; (2) by providing general skills training to workers; (3) by hiring a large fraction of part time, seasonal and contingent workers, and (4) by bearing the cost of turnover associated with minimum wage jobs. Mr. Lader also pointed out that: By maintaining the status quo, the smallest of small businesses will be able to continue to provide jobs to the marginally employable, an important public policy goal during a time of near-full employment. Mr. Lader concludes by saying he believes that: rather than penalize workers in small firms, maintaining the present minimum wage would enable these small employers to sustain present employment levels without imposing the need to make difficult choices to preserve profitability. I agree with that position. I think that comes from a good understanding of what small businesses have been saying. I am sorry that he has not been able to maintain that position because the policy of the White House has changed. If you listen to small businesses, as members of the Small Business Committee have, as I have done, and as the Small Business Administration has done, you will know that small businesses, while they have difficult battles in the marketplace, fear nothing more than the heavy hand of the Federal Government--in this case the mom and pop or the mom operation with 5 and 10 employees getting a 20-percent increase in minimum wage mandated by the Federal Government which could force them to lay off 20 percent of their workers. That is one out of five, two out of 10, four out of 20. People have called this cruel to say they can be exempt. Mr. President, I think it is far crueler to throw these people out of work by saying to small business that we cannot allow you to continue to pay $4.25 an hour and make a profit on the business that you have undertaken. Small businesses under 500,000 deserve an exemption. On a bipartisan basis Congress in the past thought they were giving them that exemption. It is time to make good on the promises made by the statements from our distinguished colleagues on the other side of the aisle, as well as this body. Mr. Lader and I both believe that an exemption for the smallest of small businesses makes sense because it saves jobs. Unlike a corporation that can pass increased labor costs on to the consumer, the small, local grocery store or florist or hardware store doesn't have that option and the owner is who is dealing with a 5-percent profit margin is not taking home much money himself. Mr. Lader's point about providing jobs to the marginally employable is even more important today than it was 1-year ago when the letter was written. The Department of Labor just announced that unemployment is at a 6-year low. As Federal and State governments try to maintain this level of employment and struggle to reform our present welfare system, it is vital that we be able to rely on small businesses to continue to provide jobs. I think that we should take Mr. Lader's advice and allow these small businesses to remain at the current minimum wage so that two important public policy goals Mr. Lader mentions--promoting small businesses and preserving jobs--can be met. My amendment also contains several provisions that have already passed the House. The first two provisions were noncontroversial on the House sides and I believe that the same will hold true on this side. First, the amendment clarifies that employees do not have to be paid for time spent driving to and from work in company vehicles. Second, the overtime exemption for computer professionals making over $27.63 per hour is maintained. My amendment also contains the same tip credit provision that passed the House. Tipped employees would continue to be paid at least $2.13 per hour by their employers and would also earn tips. If the cash wage of $2.13 and the tips did not add up to the Federal minimum wage, then the employer would make up the difference. Thus, tipped employees, like all other employees, would earn at least the Federal minimum wage. My amendment contains an opportunity wage that would allow employers to pay first-time employees $4.25 for 180 consecutive days. This provision is designed to get unskilled people into the job market where they can develop the good work habits that make advancement possible. My amendment expands on the 90-day time period in the House bill because employers are more likely to hire unskilled workers that they have sufficient time to train. Unlike the House provision, my amendment does not include an age limit because unskilled workers of all ages much be permitted to enter the work force more easily. As my distinguished colleague, Senator Chafee, pointed out on the floor recently, Senators from both sides of the aisle are demanding that people get off of welfare and work and we must provide some incentive to employers for hiring unskilled workers. These people will be working at this first jobs and will be provided with the skills they need to advance and earn more. Mr. Kennedy said recently that the ``downsized, laid-off workers in a time of high unemployment'' will be hurt the most by the opportunity wage. I would point again to the figures released recently by the Department of Labor that show that unemployment has fallen to 5.3 percent, the lowest level in 6 years, and that wages are up to $11.82 per hour on average. President Clinton hailed the numbers as showing that ``wages for American workers are finally on the rise again. These figures indicate that the laid-off steelworker and the officeworker with 30 years of experience that Senator Kennedy spoke of are not going to be earning the opportunity wage. Instead, the opportunity wage is going to allow access to the job market for unskilled workers with little or no job experience, workers who otherwise would not have been hired at all. My amendment delays the implementation of the minimum wage increase until January 1, 1997. This delay will help small businesses adjust and minimize job loss. This is particularly true for small retailers that hire more workers during the holiday season. A delay is also important for employers that have committed to hiring teenagers for summer jobs. As Federal funding for summer youth job programs dries up, we must support private efforts. America's small businesses have been extremely successful and have created the vast majority of new jobs in the last decade. If we want this level of growth to continue, and if we want to give America's workers the opportunity to get in on the ground floor of some of today's most profitable businesses, we must protect these businesses from Federal mandates. I urge you to support my amendment so that the opportunities available in America's small businesses continue grow.

Mr. BOND. Mr. President, I now ask unanimous consent that, notwithstanding the previous order, at 2:15 p.m. today the Democratic leader be permitted to make a statement utilizing his leader time to be followed by the recognition of the majority leader to make closing remarks on H.R. 3448, also using leader time; further, that immediately following those remarks the Senate then proceed to the previously ordered votes with the first vote limited to the standard 15 minutes and all additional stacked votes reduced to 10 minutes in length.

Mr. BOND. Mr. President, I yield the floor.

Mr. BOND. I thank the Chair. Might I inquire how much time is available?

Mr. BOND. I thank the Chair.

Mr. BOND. I thank the distinguished Chair of the Labor Committee. Mr. President, I rise today to talk about the provisions in my amendment and to give some background to my colleagues on why this amendment is important. I think by now everybody knows it would allow small businesses, the smallest of the small, grossing less than $500,000, the opportunity to continue to pay the minimum wage at $4.25. Businesses grossing above $500,000 would begin paying $4.75 on January 1, 1997, and $5.15 on January 1, 1998. Without this provision, this would be a retroactive minimum wage increase. As the Senator from Texas has already pointed out, it means that businesses who have laid out their plans, issued price lists, or bid on contracts will find that somebody is going around and reaching into their pockets and pulling out money that might not be there. Without the delayed effective date, it is possible that small businesses or a business of any size might find themselves working under existing arrangements, contracts, price lists, for a loss if we do the unheard of step of imposing a retroactive minimum wage. That alone, I think, mandates the passage of this amendment. In addition, we provide a training wage. A training wage is important not only to get teenagers and young people into work, but to get people coming off of welfare into a job, getting them started in the habits that make a job a productive commitment and teach the skills that are needed to hold a job. The most important part of this amendment, however, is the small business exemption. Why do we set out the exemption for the smallest of the small businesses? Mr. President, as chairman of the Small Business Committee, I have had the opportunity to talk with and, most importantly, to listen to many small businesses around this country. It is obvious to me that my colleagues, who are talking about how it is no problem for small businesses to have a 20-percent increase in what they pay minimum wage workers, have not been listening to the small businesses. They do not know what burdens they are under. These people who are getting started, they have an idea. They are willing to take a risk. They are willing to take it all on their own shoulders. They may work out of their house. They put their savings into their ideas. Most of them work far more than a 40-hour work week. They are just getting started--they are just getting started. If they become successful, like a Microsoft, as soon as they hit $500,000 annual gross revenue, then the minimum wage goes up to the full amount provided in this bill. Who does this affect? Well, Mr. President, among the people it affects are the National Association of Women Business Owners, NAWBO. This business organization has pointed out that between 1987 and 1996 the growth of women-owned firms continued to outpace the overall growth of business by nearly 2 to 1 and revenues generated by women-owned enterprises by more than triple. Almost 8 million women-owned businesses exist in the United States, and many of those, as we have heard in testimony before our committee, are very small businesses just getting started. If they are getting started, if they are making a success, we do not want to penalize them and their workers by imposing on those smallest of the small businesses a burden that they cannot handle. These are Main Street businesses, mom and pop, and in many instances a mom operation, working out of their garage, working out of their basement, with 3 to 4 to 5 to 10 employees. This kind of increase in the minimum wage is a 20-percent increase in their payroll costs for those minimum wage workers. That is a real problem. That is why the Administrator of the Small Business Administration under President Clinton, Phil Lader, back on March 2, 1995, wrote to Secretary Reich, the Secretary of Labor, saying, ``On balance, however, I believe that a tiered system''--a lower minimum wage for the smallest businesses-- ``would serve two public policy objectives: promoting small businesses and preserving jobs.'' It is obvious that since then the ear to small business has lost out in this administration. Organized labor and the Secretary of ``organized'' Labor have had their way. The Small Business Administration is now saying they no longer support that. But when he was speaking as a person who listens to small business, he said very clearly we need a two-tiered system. President Clinton has announced, as most of you have heard, that exempting the smallest of the small businesses is a poison pill. I frankly think that shows how little he understands how tight margins these smallest of the small businesses work on. He has promised to veto the legislation for that and a host of other provisions. I have to say that I am very surprised and disappointed about the President's characterization because the small business exemption has traditionally had broad bipartisan support in this body. Special minimum wage provisions for small businesses are not a new concept. The Fair Labor Standards Act has contained small business exemptions for well over 30 years. When the minimum wage was increased in 1989, Congress made several changes designed to expand small business protections. Congress eliminated the exemption from minimum wage and overtime provisions for retail and service establishments grossing under $362,500 and replaced it with a $500,000 threshold for all types of businesses. Unfortunately, the 1989 amendments did not provide a true exemption. People did not realize at the time they did not provide the exemption and actually expanded coverage of small businesses because Congress failed to amend the portion of the minimum wage provision that covered individual employees. As a result, all employees engaged in commerce are covered by the minimum wage provision regardless of the revenue of their employers, despite the fact that this Congress, people on both sides of the aisle, thought they were giving the small business exemption. I was stunned to hear Senator Kennedy call this amendment cynical, devious, and shameful. What a difference an election year makes, Mr. President. It is obvious to me from reading the numerous floor statements made in 1989 that Congress thought it was protecting small businesses grossing under $500,000 from the Federal minimum wage and overtime provisions. For example, Senator Kennedy explained on the Senate floor that the Labor Committee: really bent over in our committee to try to consider the impact of the increase of the minimum wage on small business. That is why, when we initially considered the $4.65 minimum wage, we increased the threshold exemption for small business from $362,000 to $500,000 . . . we have been responsive, we believe, to the concerns of the small business community.' Those are Senator Kennedy's own words. I ask, was that statement cynical, devious, and shameful? If not, what are the statements today? A number of other people have come to the floor. I saw my good friend from North Dakota speak just a few moments ago on the minimum wage. April 11, 1989, he said on the floor, The expanded enterprise test will do much to blunt the effect of increasing the minimum wage on small businesses. It is something the administration rightly sought, and I am glad it has been included in both the committee-reported bill and the compromise. Senator Bingaman, during the 1989 minimum wage debates, on November 7, 1989: This legislation also includes an increase in the exemption for small businesses from $362,500 to $500,000. This increase helps alleviate some of the concerns expressed by small businesses throughout the Nation. Mr. President, those concerns are still there, and even more so, particularly when small business found that the 1989 amendments were not responsive to the concerns of small business because what was billed as a change exempting more businesses, actually resulted in broader coverage, since the businesses grossing under $362,500 lost their exemption. Mr. President, this amendment is more modest than what Congress intended in 1989 because no small business with employees engaged in commerce would be completely exempted from the Federal minimum wage and overtime provisions would not be impacted. My colleague from Arkansas and the ranking member of the Small Business Committee, Senator Bumpers, introduced in 1991 a bill that would have corrected the problems caused by the 1989 amendments. If enacted, the Bumpers legislation would have provided an exemption from minimum wage and overtime provisions for retail and service establishments grossing under $362,500. All other small businesses grossing under $500,000 would have been exempted from the 1989 increase. In essence, a three-tiered system, no minimum wage below $362,500, the existing minimum wage up to $500,000, and the increase above. That bill had 48 cosponsors, 26 Republicans and 22 Democrats-- Twelve of those Democrats are still in the Senate. I call on them to support a concept less far reaching than what they introduced and sponsored as a bill in 1989. When Senator Bumpers introduced his bill on February 5, 1991, he said, The clear intention was to protect the jobs of those who work in the smallest companies from the backlash of a higher Federal wage. However, the small business exemption has inadvertently been rendered useless because of a subsequent conforming amendment * * * Later on he says, We have, without intending to do so, given small businesses an exemption which is meaningless and which has added to their problems. Congressional Quarterly, doing a story on June 8, 1996, quoted Senator Bumpers as saying, I've been a small businessman with less than $500,000 in sales and I know this thing could be pretty detrimental. Senator Kerrey, reacting to a statement that Democrats in the House said the proposal would lead to the creation of a new class of exploited workers said, ``If they were good Democrats, they were,'' referring to demagoging the issue. Senator Pryor, on February 5, speaking in support of the Bumpers bill said, While these rates--talking then of a minimum wage increase from $3.80 to $4.25--While these rates may not seem high, to a mom and pop enterprise operating on a razor thin profit margin, it could be the final wave that takes them under. This seemingly innocuous omission in wording has in effect precluded almost all small businesses from qualifying for the exemption Congress obviously intended. If any of my colleagues have any doubt about congressional intent, all they have to do is go back and read the Record during the debate. Both proponents and opponents laud the small business exemption. Now, Mr. President, my amendment does not go as far as the proposal made by Senator Bumpers in 1991. Unlike the Bumpers amendment, there is no complete exemption from any business from the Federal minimum wage. The amendment does not affect the FLSA overtime provisions. The amendment simply maintains the status quo for America's small business by allowing them to continue to pay $4.25. Mr. President, I see I am probably approaching the end of my time, and I ask for 5 minutes of the leader's time.

Mr. BOND

Mr. BOND. I thank the managers and my friend from Arkansas for taking the time to discuss this important issue. disallowance for business meals

Mr. BOND. It could be in trouble by the end of the year. Without clarifying language, it could well be impossible to sell any more certificates following the August 1996 quarterly offering. And let me add that the reason this issue was not raised earlier was that, up until last week, the SBA and IRS believed it could be worked out administratively. But at that time, the IRS determined it needed a legislative fix, and that is why we are here today. We have asked the Joint Committee on Taxation for a revenue request, which we hope will be ready post-haste.

Mr. BOND. Mr. President, I ask unanimous consent that I be allowed to engage in a colloquy with the managers of the bill and the Senator from Arkansas [Mr. Bumpers], regarding a correction that is needed for the Small Business Investment Company Participating Security Program.

Mr. BOND. That is correct. The IRS has provided private letter rulings to that effect on six occasions in the past. Unfortunately, just last week, the IRS made a final decision that it is unwilling to give a permanent revenue ruling that would so characterize the certificates for all time. The IRS believes that the language of the statute is ambiguous with respect to congressional intent and fears that a ruling based on the ambiguous language might have negative consequences in non-SBIC areas. However, notwith-standing this unwillingness of IRS to issue a revenue ruling, the Department of Treasury is not opposed to a legislative correction to clear up the issue of congressional intent.

Mr. BOND. So this characterization of the SBA-guaranteed certificates sold to the public as U.S. Government debt is what permits the certificates to be sold to the broadest possible base at the lowest possible interest rates.

Mr. BOND. This is an issue that arose so recently that it has proven impossible to address it in this small business tax bill, even though this would be the perfect forum for it because it is a tax issue having a serious impact on SBIC's. So we are hopeful that this issue can be taken care of in the conference committee on the small business tax bill. Specifically, we are talking about a correction that is critical to the continuation of the newest form of SBIC: the participating securities SBIC. The need for and the language of the correction are supported by Treasury, SBA, and the SBIC industry. As you know, Mr. President, SBIC's are small, privately managed and privately capitalized venture capital firms that are licensed by SBA to invest solely in U.S. small businesses. In return for their agreement to invest and to put 100 percent of their private capital at risk before Government funds are at risk, SBIC's are eligible to draw additional capital, or leverage, which is raised by the sale of SBA- guaranteed certificates. Leverage is repaid with interest, and a share of the profits in the case of participating securities SBIC's, as investments mature. At a time when strictly private venture capital funds are less and less inclined to invest in the $250,000 to $3 million range critical to small businesses and more and more interested in investing in foreign companies which compete with our U.S. small businesses, the need for the SBIC program is perhaps greater than ever. The participating securities SBIC is a new form of SBIC financing that was created by Congress in 1992 to stimulate equity, vis-a-vis debt, investment in small U.S. businesses. With that legislation, Congress created not only a vehicle that has attracted substantial private capital for equity investment in small U.S. companies, but also created the mechanism by which the U.S. Treasury--and thereby the taxpayers--share directly in profits made by these SBIC's from their investments. To date, 35 participating securities SBIC's with $565 million in private capitalization operating in 17 States have been licensed by the SBA. By the close of fiscal year 1996, it is estimated that the Government will have received over $500,000 in profits over and above principal and interest factors from these new SBIC's. When one considers that nonprofit sharing SBIC's provided early financing to companies such as Apple Computer, Intel, Federal Express, and Cray Research, it is understandable why so many are excited about this new form of industry-led partnership with Government. It is a true partnership that will see U.S. taxpayers share both directly and indirectly in the profits associated with the creation of new jobs, technologies, and overall economic development by the small firms in which SBICs invest. As referenced above, leverage funds for participating securities SBIC's are raised quarterly by sale of SBA-guaranteed certificates by a funding trust set up for this purpose. The certificates are 10-year obligations with interest payable quarterly. Because the participating securities issued by SBIC's to the trust in return for the leverage raised by the trust's certificate sales are equities which do not require the SBIC's to pay any amounts unless they have earnings, which they likely will not have while holding the stock of the small companies they invest in, the SBA's guarantee of the payment of both regular interest and principal is the critical element which supports the sale of the certificates through public capital markets. In recognition of SBA's guarantee as the primary reliance factor for investors, in all fundings to date, the Internal Revenue Service, through private letter rulings, has characterized the SBA-guaranteed certificates sold by the trust as obligations of the U.S. Government and not as those of the participating securities SBIC's being funded by the trust. These rulings have supported the six sales that have occurred thus far in the short history of the new program. At this point, Mr. President, I wanted to ask my good friend from Arkansas, Senator Bumpers, a question regarding the intent behind the enabling legislation for this program when it was passed in 1992. Because the Senator from Arkansas was chairman of the Small Business Committee at that time, he is probably better qualified than anyone in this body to opine on this matter. And my question is this: Was the intent of the enabling legislation for the participating securities program that the SBA-guaranteed certificates sold by the trust were to be obligations of the U.S. Government and not obligations of the participating securities SBIC's being funded by the trust?

Mr. BOND

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

Mr. BOND. Mr. President, earlier today the majority leader submitted my amendment to this bill, amendment No. 4272. I believe it is held at the desk. I would like to call up that amendment now, please.

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

Mr. BOND. Mr. President, this is an amendment that merely carries out the intent that Congress has shown on many occasions to exclude the smallest of the small employers from the burdens of a minimum wage. Basically, it says that for firms grossing less than $500,000, the small mom and pop businesses, the folks in your neighborhood, the people who are just getting by and providing a few jobs in their community, will not be subjected to the increase in the minimum wage. This does not say that their workers will not be protected by the current minimum wage or by Federal overtime provisions. It just says that we are not going to put another burden on the backs of those very small employers by ordering them to add 20 percent to their payroll costs for those who are employed at minimum wage. As the Clinton administration's own Administrator of the Small Business Administration, Phil Lader, said, this kind of exemption, this two-tiered system makes sense. It protects minimum wage jobs in the smallest business and it protects small business. Those of us who have talked with and, more importantly, listened to small business people throughout this country know that the burdens of Government regulation, Government mandates fall very heavily on small business. This amendment just says we are not going to put another mandate, another heavy financial burden, on the very smallest of the small employers on Main Street in your community and my community. Earlier today, the Senators from Massachusetts and South Dakota stated the reasons they opposed my amendment. I am here to set the record straight about what my amendment does and does not do. First, contrary to their assertions, this amendment is not a killer amendment. It simply means that the smallest of the small businesses will not have to lay off some of their workers in order to comply with the law. Who says that is a killer amendment? What forces are telling the President that he cannot protect the smallest of the small businesses and give all of the rest of minimum wage workers a minimum wage increase? What kind of logic would say that you cannot have it for anybody if you protect just the employees and the smallest businesses grossing under $500,000? The Senators from Massachusetts and South Dakota would have you believe that the debate is only about whether or not people should be paid more. Would I like to see working Americans earn more money? Absolutely. I believe that everybody who has joined me as a cosponsor of this amendment and who will vote for this amendment would agree. But the way to get increases in wages is through increases in productivity, getting the training, getting the experience that often minimum wage workers are getting in their very first job. We expand the opportunity for a training wage so people can get off welfare and into work or start on the work ladder. That experience is vital to getting them better paying jobs in the future. If you increase the minimum wage for the smallest of the employers, there are real tradeoffs. The smallest of the small employers, American businesses grossing under $500,000 per year, will, in my view, be forced to lay off workers. That is the bottom line. An increase in wages with no increase in productivity and revenues means lost jobs. Here is how it works. Say your neighbors own a small grocery store. They have a payroll budget of $85,000 available for wages. How do we know what is available for wages? Well, that is about how much they can pay after they figure out how much they are taking in, the costs of goods that they sell, what their operating costs are, and what they need to live on. At the current minimum wage, they could afford to hire about 10 workers. It comes out to a minimum wage, 40 hours per week, 50 weeks per year, of about $8,500. If the minimum wage were to be increased by mandate on them by 90 cents, there is added $1,800 per employee to the grocer's cost. But raising that wage does not sell more groceries or anything else in the store. So how many people will they be able to afford to hire? Only eight. A 20-percent increase in the minimum wage means they will have to lay off 20 percent of their minimum wage workers, or two people. A small business employing only five would have too lay off one. To suggest that a minimum wage increase has no effect on employment in the smallest of small businesses is just plain wrong. A mandatory minimum wage increase for the smallest employers means job loss. The Senator from Massachusetts would also have you believe that we have locked out millions from increases in the minimum wage, ``employees of fully two-thirds of all firms in the United States.'' Come now, Mr. President, the truth is this amendment only applies to those firms that take in revenues of $500,000 per year or less. These firms employ only about 8 percent of the American work force. The percentage of those earning the minimum wage at those firms is even smaller. The Advocacy Council at the Small Business Administration says only about 10 percent of the small business employees are at minimum wage. So we are talking, probably--we do not have exact figures from the Bureau of Labor Statistics--less than a million people. I also find it somewhat odd that my Democratic colleagues are complaining about the amendment as a poison pill. Many of them happily voted for similar poison last time we passed a minimum wage increase in 1989. And many of them supported a bill authored by Senator Bumpers, my distinguished ranking member on the Small Business Committee, in 1991. That amendment clarified the need for a small business exemption. If it was not poison then, why is it poison now? I think it is very unfortunate that this administration is ignoring the advice of its own top small business spokesman, Philip Lader, the administrator of the Small Business Administration, who says: An exemption for the smallest of small businesses makes sense. Exempting small businesses from a mandatory wage increase for minimum wage workers means that firms at the margin will not be forced to cut jobs or not grow. So there you have it. The view of the need for a small business exemption from the Clinton administration's own spokesman on small business. We, on our side of the aisle, believe the minimum wage is a floor. Apparently some on the other side view it as a ceiling. There are some Democrats who would have you believe that Americans are locked into minimum wage jobs, in some cases for life. Those just are not the facts. Most Americans do not earn the minimum wage. Many of them start there and they move up the scale. They have to get a start somewhere. That is why the minimum wage and the training wage is so important. Those who obtain minimum wage jobs learn the skills and, as they become productive, go on to better jobs at better pay. Who is it that is saying this is a poison pill? Common sense sure does not. I cannot believe the President would deny the minimum wage increase he so robustly seeks for the very large percentage of minimum wage workers who are not employed by the smallest of the small. Mr. President, we will, I understand, have an opportunity to discuss this matter further tomorrow. At this point, I yield the floor and suggest the absence of a quorum.

Mr. BOND

Mr. BOND. Mr. President, let me explain why I think this amendment is not appropriate, it is not a good idea. The distinguished Senator from Georgia has already pointed out that an amendment like this, by delaying the production of the aircraft, would inevitably do little more than add cost to the total program and to the total buy. There are ongoing studies. The Navy and the Defense Department have been conducting these studies. They have reviews ongoing, and we will have access to not only their comments on the GAO report but their reviews. Let me say in summary, the GAO is not flying the airplane. The GAO people are not the ones landing fully-weapons-loaded airplanes on pitching aircraft carriers in the ocean. The Navy people are. They are the ones who made a compelling case for this airplane and the need for it. I should point out the F/A-18E/F exceeds the interdiction mission of the current C/D models in range by some 40 to 50 percent, regardless of the mission profile. There is talk about adding additional tanks or larger tanks on the C/ D, but these have been rejected because of restrictive load limitations and the structural operational limitations on the C/D on board the carrier. The Navy has conducted a thorough engineering analysis on the matter of putting larger tanks, for example, on the C/D's and concluded this was not suitable for carrier operations. The real question is the bringback capability. The current model of C/D fleet is at its operational limit in regard to its ability to bring back weapons. The E/F will be able to bring back the more advanced smart weapons which tend to be heavier than the majority of weapons in the fleet today. The E/F, the next generation of the Super Hornet, provides future room for future growth and flexibility to accommodate the technological advancements into the next century. One point the GAO has made is that there is a waiver for the C/D's landing restrictions. They say it is a permanent waiver. Well, that is not true. NAVAIR has said the waiver was acceptable in the interim, but it was up to individual air wings to approve or disapprove depending on their own assessments. Let me tell you, from the viewpoint of those who have flown on carriers and flown on and off of carriers at sea, what will have to happen. With the current C/D's to bring back fully loaded the weapons and the fuel, the ship will have to increase its speed to maintain 30 knots or more of wind over the deck, which will increase its fuel costs, whether nuclear or conventional; then the pilots will have to fly a full flap approach. But if the wind goes over 35 knots because of unpredictable winds, then the pilot is required by the Navy safety manual to fly at half lap and would not be able to land with the heavier strike munitions load. It is a small and costly window to achieve. Though in some instances it can be achieved, it is only because of the extreme skill of our carrier crews. It is not an ideal situation to put the pilots or the carrier crews at risk when there is such a limited window of acceptable operations. The new E/F Super Hornet will enable the carrier to cruise at its normal speed and the pilots will be able to fly the normal patterns. They will not have to drop either their weapons or dump their fuel into the ocean to below safe minimums to bring back our most sophisticated and expensive ordnance. Let us remember, however, that the F/A-18C/D models will continue to carry numerous ordnance loads safely and without restrictions covering many missions. It is only for certain strike mission loads that the waiver is required. But we have to plan for the future. For the Navy, that future should and must include the F/A-18E/F. The Super Hornet is desired by the customer, the Navy, which has been consistent and vocal in its support of procuring the aircraft rapidly and efficiently. Further delays in a go-slow approach for this program in its current stage are both inappropriate and costly. We cannot sit around and wait for future paper airplanes magically to appear. We have modified to the limit our older aircraft. For many years aviation, and naval aviation in particular, has been subject to technical, administrative and political forces which have given it the appearance of having no direction. We have been clamoring for such direction. Now we have it. The Navy has said, ``This is what we need. This airplane is meeting our specs. We need it.'' Let us go forward with it. I strongly urge this body not to be in a position of ``go-slowing'' this program to death. Our pilots want the aircraft. They need the aircraft to maintain their critical edge. I urge this body not to pull the wings off. Let us let the Navy get about the job of continuing to defend this Nation now and in the future. The F/A-18E/F program has been a model program, by any measure, and remains on cost, on schedule in meeting all performance requirements. The Navy is developing, at one-half to one-third the cost of a new- start program, a highly capable carrier-based tactical aircraft. The amendment, as written, would divert program management attention away from the execution of the program and, if yet another program review were to be required, could impose as much as an 8-month delay in the program. This delay would affect the 3-year flight test program, the operational evaluation, and IOC of the first squadron. I think that the formal program reviews which are already being conducted are enough. The analytical basis of the program was thoroughly examined at the previous milestone decision, and the program has performed precisely to the plan approved at that time. I believe there are studies going on, and thus this amendment is unnecessary to ensure that we continue to get the kind of additional capability that the Navy, its pilots, and its aircraft crews demand and need. I urge my colleagues, if this amendment is brought up for a vote, to oppose the amendment. I thank the Chair and yield the floor. Mr. FEINGOLD addressed the Chair.

Mr. BOND. Mr. President, there is no question that we need to study carefully all of the views and opinions and the best information available on any program like this. But I suggest that if you take a look at the series of reviews and experiments, tests, and evaluations that have been done on this plane and that will be done, there is no need, unless and until we find from the Navy that the GAO has raised questions which they have not addressed or we can find that responses by the Defense Department are not adequate, there is no reason to raise further the cost of this program and delay it even further. The Assistant Secretary of the Navy for Research, Development and Acquisition completed a review of the F/A-18E/F program on March 25 of this year. As of that time, the program review included program cost, schedule, and technical performance, examination of the formal exit criteria which had been approved at the previous milestone, and results of an early operational assessment conducted by the Navy's commander, Operational Test and Evaluation Force. This assessment was based on extensive documentation review, modeling and simulation, and analysis flight test data from the first two test aircraft. In May 1996, notification was provided to Congress that the review had been successfully completed and the Navy had authorized contracting for long-lead items for the first low-rate initial production of the aircraft. The Office of the Secretary of Defense is scheduled to conduct another program review in March 1997. At that time, all aspects of the program will again be examined prior to authorizing full funding for the procurement of the first low-rate initial production aircraft. The analytical basis for the decision to begin engineering and manufacturing development of the F/A-18E/F program was thoroughly evaluated by both the Department of the Navy and the Department of Defense prior to the milestone decision in May of 1992. Numerous studies which looked at the future of naval aviation, projected threats, and capabilities required to defeat those threats were considered as part of these analyses. It is not to say that we should not continue to review and analyze, look at the cost and determine the capability. That is an ongoing process. What I am saying, Mr. President, is we could significantly increase the cost of the program, throw production off schedule, and delay the availability of aircraft which the Navy said they have needed by putting a roadblock in the way of the initial low-rate production of the aircraft. This is not the time to throw a monkey wrench into a program which has been on schedule, above performance, and well within cost parameters at this time. I urge my colleagues not to delay the program.

Mr. BOND. Reserving the right to object, I will not object to setting aside the amendment, but I do want to add some points on the discussion of it. I have no objection to setting it aside, but I do seek the floor to respond to some of the questions raised by the Senator from Wisconsin.

Mr. BOND

Mr. BOND. Mr. President, the subject of Senator Inhofe's GAO request will be the unaccompanied noncommissioned officers barracks. This project was planned, programmed, and funded to house NCO's who will come to Fort Leonard Wood as a result of the BRAC decision to move the chemical warfare training school and military police school to Fort Leonard Wood from Fort McClellan which is scheduled to close. Current barracks space at FLW is designed for basic training students living four to a room with gang latrines--not for senior NCO's. Any connection between the new barracks and the totally separate issue of basic training housing is irrelevant since the BRAC was aware of the need for the new barracks when it made its decision. Even if there were space to renovate current barracks rather than build new barracks, the Corps of Engineers has already studied that option and deemed the extensive renovations required would not be cost effective. The result of this report for all its good intentions will be to subvert the decision of the BRAC Commission and will set an unacceptable precedent. military traffic management command's personal property reengineering program

Mr. BOND. I agree that reforming the current system can lead to improvement of service to our military members and their families and a reduction in costs to the Government. I am sure that the reforms to the Military Traffic Management Command's personnel property reeningeering program as instituted by the Senate Armed Services Committee will ensure that our military enjoys flexible, rapid, and efficient service as can only be found in a competitive environment.

Mr. BOND. I also share Senator Stevens' concerns about the Department of Defense proposal to reengineer the personal property program and its associated impact on the small business community. While I support the Department's goals of improving the quality of personal property shipment and storage services to members of the military and their families, it should not be done at the expense of the small businesses which make up most of the moving industry.

Mr. BOND

Mr. BOND. Mr. President, along with Senator Ford as cochairman of the National Guard Caucus. I rise to address my concerns over the amendment to provide for a quadrennial defense review and the independent assessment of alternative force structures for the Armed Forces. While I applaud and appreciate the specific inclusion of the Reserve and National Guard components in the review. I would be remiss if I did not raise my concerns over the qualifications of the independent members of the National Defense Panel. I believe that for the panel to be truly independent it must be diverse and must include collectively, members knowledgeable in all components of the Nation's Armed Forces. I am concerned because of historical precedent set by the makeup of prior panels when composed of Secretariat designees. It is my understanding that when the Commission on Roles and Missions initially conducted its work, there was no one with specific background expertise in National Guard issues.

Mr. BOND. Mr. President, I ask the Chairman, to be resolute in his insistence that at least one member of the panel have a recognized understanding of National Guard functions when consulting with the Secretary of Defense on the composition of the panel and I and Senator Ford would be more than willing to lend any assistance the Chairman and the ranking member might require during those consultations.

Mr. BOND

Mr. BOND. I thank the Chair and my colleagues. This means a great deal to the family of Bill Emerson, to his constituents, and all of his good friends. We very much appreciate the expeditious handling of it.