Kit Bond

Mr. BOND

Mr. BOND. Mr. President, first, I want to thank my friend from Ohio for his very informed and very compelling arguments. I have had the pleasure of traveling abroad with the Senator from Ohio, as my ranking member has. If there is one area where the exploits and the accomplishments of our colleague from Ohio is well known throughout this world, they know what he has done. They know of his leadership in space. I think he makes a very, very compelling argument based on his firsthand knowledge and experience, and his commitment is second to none. We thank him for his very compelling arguments in favor of it. I know the Senator from Texas, who also is an expert and has very strong views on the space station, is waiting to speak. But I do want to ask my colleagues if they could accommodate us by letting the ranking member or me know about any amendments that they have pending. There are so many issues in this bill that people would like to discuss, yet we have a very short timeline on which to work. I believe the majority leader and the Democratic leader were both very clear. They want to complete action on three appropriations bills--the prior remaining appropriations bills--prior to the end of the fiscal year. I think that is something that every Member in this body can appreciate. We want at least to complete action in this body before the end of the fiscal year. They have suggested that we should finish this bill by Tuesday. If we are looking at late Tuesday night, I hope it is not sometime early Wednesday morning. But in order to do this, we need to have the amendments, and we hope to be able to accommodate the schedules of all Senators giving them some time but keeping it in a regular procedure so that we can complete this in a timely fashion. I hope they will come forward. For tomorrow, particularly people who want to debate for 2 hours, I urge them to make a compelling 5-minute argument and submit the rest of their statements for the Record. Because I promise we will read them, particularly if they do not give them. I yield the floor.

Mr. BOND. Mr. President, I gather that Members seeking to amend those provisions which are excepted will have to seek the guidance of the Parliamentarian on asking that the other amendments be set aside. I leave that to their ingenuity, and yield the floor.

Mr. BOND. Mr. President, I ask unanimous consent that Steve Isakowitz, a staff member on temporary assignment to the committee, be permitted privileges of the floor during consideration of H.R. 2099.

Mr. BOND. Mr. President, I thank the Chair. The Departments of Veterans Affairs and Housing and Urban Development and independent agencies appropriations bill for fiscal year 1996 embodies a comprehensive and systematic restructuring of Federal programs and activities within its jurisdiction. Critical activities are refocused and supported. Reforms to begin the difficult process of restoring fiscal reality and improving efficiency are initiated. Over $1 billion of obsolete and failed activities are terminated. The proliferation of small, burdensome, categorical programs is cleared away and delegated in block grants to States and local governments. Unsustainable policy mandates are repealed. Now, Mr. President, there is no longer any dispute over the critical need to reduce excessive Federal spending and to bring the budget back into balance. It has been nearly 30 years since the Federal Government curbed its appetite for spending to match its income. Since that time, Federal outlays have increased from $184 billion to nearly $1.6 trillion. The gross Federal debt has soared from less than $370 billion to nearly $5 trillion. Interest on the Federal debt now exceeds the $260 billion annual expenditure for all domestic discretionary programs by over $100 billion. Unless these alarming budgetary trends are reversed, resources available for discretionary programs such as those funded in this appropriations bill will soon shrink to negligible levels. The committee accepts measured reductions in discretionary spending as a necessary component of the multiyear budgetary plan to balance the Federal budget by the year 2002, if only because the consequences of failing to make such prudent reductions will be devastating, not only for ourselves, but our children, and their children. In addition, a balanced Federal budget will fuel new vitality in our Nation's economy which will provide the revenue necessary to sustain the priority programs which we propose to continue. The artificial stimulus of runaway deficit spending has failed. It is collapsing under the weight of a massive Federal debt, and is being crowded out by the pressure to meet interest payments on the debt and other mandatory costs. The bitter medicine of the congressional budget resolution is the only antidote to this poisoning of our Nation's economic health. If we stay the course, and cure our addiction to deficit spending, we have our best chance of sustaining the truly critical programs included in this appropriations bill. Finally, the budget crisis has created a rare opportunity to address long-festering problems and reexamining long-entrenched social dogma underpinning many failed governmental programs. Welfare reform, in part, is being implemented in the restructuring of low-income housing assistance programs funded in this appropriations bill. The 1960's era strategy of building high-rise public housing for families has failed. There is broad acceptance that these drug- infested, crime-breeding blights must be demolished. This bill provides a targeted focus on such efforts, but it also examines the root causes of such horrendously expensive failures and recommends comprehensive reform proposals to prevent such conditions from reoccurring, including efforts to encourage employment by recipients. The committee recommendation provides for the termination or consolidation of scores of duplicative, wasteful or otherwise unnecessary programs and activities. The bill terminates five agencies--the Corporation for National and Community Service, AmeriCorps, the Office of Consumer Affairs, the Chemical Safety and Hazard Board, the Community Development Financial Institutions Board, and the Office of Federal Housing Enterprise Oversight, whose functions are transferred to the Secretary of the Treasury. In addition, the bill reflects the previously mandated termination of the Resolution Trust Corporation. Another aspect of this bill is the assessment of the value of services provided by agencies, such as the Department of Veterans Affairs. In some cases, existing delivery schemes and organizational structures have been found deficient. For example, while most veterans medical facilities deliver top quality health services, many instances of systemic inefficiencies and a number of cases of substandard care have been painfully documented. The committee is recommending accelerated adoption of modern medical practices for health care delivery in the VA system. In addition, the committee has targeted budgetary reductions in the Washington, DC, headquarters bureaucracy which impede, rather than facilitate, innovation and initiative at the local hospital and clinic level. Mr. President, in the short time since I have assumed the chairmanship of this subcommittee, I have appealed and appealed again to the Secretary of Veterans Affairs for his help and assistance. During consideration of the budget resolution, I expressed my concern [[Page S 14177]] over the potential impact of discretionary budget reductions on the Department of Veterans Affairs, and I specifically requested the advice and recommendations of the Secretary on how we could minimize the adverse effects of the constrained resources. I wrote to the Secretary again after the House passed its appropriations bill in July and again in August. In each instance, the Secretary has not only failed to be responsive but has embarked instead on an concerted campaign to whip up opposition by veterans organizations and members of his own Department against any reforms or changes or improvements in the way the Department does business. We can admire the Secretary for his tenacious advocacy of veterans service and benefits, but as the chief administrator of a $37 billion agency, he must also accept responsibility for working with the rest of the administration and the Congress in improving management of his Department to meet the challenges of a declining discretionary Federal budget. Despite the $9 billion overall reduction in the bill for discretionary appropriations, we are recommending an increase of $235 million for VA medical care. In a few instances, the committee was able to recommend modest increases in other VA accounts over the levels contained in the House-passed bill, such as $5 million for medical research and $59 million to accelerate veterans claims processing. There should be no doubt our goal is to improve services and benefits for our Nation's veterans. What is more important, during these times of budgetary constraint, our goal can be accomplished with overall reductions in the rate of increase of funding for the Department if we insist that the VA modernize its operations and reduce administrative overhead. With the cooperation and help of the veterans, their service organizations and the Secretary, we could achieve this goal that we all share. Mr. President, the committee has also seized this opportunity to probe deeply into the structure and management of the Environmental Protection Agency. The critical mission served by the EPA requires substantial direct funding and, through its regulatory authorities, imposes a tremendous financial burden on the economy and on all Americans. The committee has recommended a new focus in the agency on improving the quality of the scientific basis for its regulatory decisionmaking. In addition, the committee reviewed the internal resource allocation management structure of EPA and is recommending a number of improvements to assure better cooperation with other levels of Government and to focus Federal expenditures on activities of greater environmental benefit. The amount provided for EPA is $5.66 billion. While this represents a reduction of about $1 billion below the fiscal year 1995 level, it is an increase of $769 million, 16 percent over the House. The cuts below last year come primarily from Superfund and sewer treatment earmarks. As to Superfund, it is my strong view that there is no need to throw more money at a program which does not work and which badly needs to be reauthorized, revamped, and modernized. There is overwhelming documentation of how lawyers and other administrative cost burdens are milking the lion's share of these funds. This allocation of resources serves neither the environment nor the taxpayers, nor those who are being assessed charges for these activities. While the authorizing committee is preparing reform legislation, we propose a moratorium on low-priority Superfund work. Last year's bill also included about $800 million in sewer construction earmarks for specific cities. All of that is eliminated in this year's bill. By eliminating these earmarks, the committee was able to increase to $1.5 billion the appropriation for the State revolving funds which are distributed on an equitable formula basis to finance wastewater treatment facilities across the Nation. This is a 21 percent increase in a critical form of assistance to States and localities in meeting Federal clean water mandates and safe drinking water mandates if the measure is authorized. The recommendation provides close to current funding levels for EPA's core operating programs--research, standard setting, technical assistance activities--while eliminating programs which are not crucial to the agency's core mission or which duplicate private sector or other agencies or State activities. The committee recommends providing full funding to the States for their critical environmental programs which they run. More than 40 percent of the appropriations, $2.34 billion, goes directly to the States for grants to meet environmental mandates. This is an increase of $310 million over last year, and by providing those funds in a separate account for the first time, we can be sure that EPA will not be dipping into State funds to fund its own activities. A great deal of attention has been focused on the so-called legislative riders included in the House-passed bill. Although House floor action concerned 17 of these provisions, the House bill, as it was finally passed, contained a total of 23 of these riders. As cochairman of the regulatory reform task force, as a member of the Senate Environment and Public Works Committee, I am well aware of the need to restructure and redirect many of the regulatory policies of EPA. Furthermore, many of us are concerned over how current environmental statutes have been broadly interpreted, indeed in some instances we could say misinterpreted, by some courts to mandate actions never contemplated by the Congress. I have been working, in those capacities in which I serve, to seek the fundamental changes in our environmental laws which are long overdue and necessary to reduce regulatory burdens while protecting our citizens and the environment and ensuring that the vitally important work of improving the environment continues and that we not step backward. These are, however, very complex issues which demand close examination and careful consideration. That is why in formulating our recommendations, rather than using the House bill as a base, we did an independent assessment of those issues that could and should be addressed in this appropriations bill. In drafting this bill, we set forth the standard that we would limit the so-called ``riders,'' administrative provisions or legislative provisions, as they might be called, to matters which have previously been enacted into law in appropriations acts, or passed the Senate in other current legislation, are needed to eliminate duplication or unnecessary spending, or were narrowly drafted to meet a specific misapplication of law or policy. Only one of the 23 House riders met this test: A limitation against EPA mandated car pooling. Two were modified to limit their application or clarify their intent--car inspection and maintenance and wetlands overfiling by EPA--and two others relating to drinking water were combined. The rest have been stricken. The committee is recommending three additional provisions: One relating to MTBE use in Alaska, foreign refineries, and Superfund listings, all of which have been previously enacted. These are eight provisions that the committee believes are appropriate and necessary to warrant consideration. A list of these provisions are included in the agency summary attached to my statement. Mr. President, one aspect of this bill which deserves special attention, however, is the committee's recommendations for the Department of Housing and Urban Development. The committee's report contains an extensive analysis of the management and budgetary morass afflicting this Department along with an explanation of our proposed reforms. The committee's recommendations reflect many months of work on a focused and detailed examination of HUD and its housing programs. Beginning with a series of special hearings in January, and drawing upon the previous work of the HUD inspector general, the General Accounting Office, and the National Academy of Public Administration, the committee probed deeply into these complex issues. The committee's preliminary recommendations were reflected in the rescission bill enacted earlier this year which cut HUD funding by $6.3 billion and redirected housing budgetary resources towards the [[Page S 14178]] more critical concerns of demolishing failed and obsolete projects. At that time the committee urged prompt action by the authorizing committees on urgently needed legislative reforms. These statutory changes are needed to curb the cost of these discretionary programs. Unfortunately, since this legislation has not yet moved, we have been compelled to include these reforms in the appropriations bill, because without these changes, the funds we appropriated would be wasted in perpetuating many of the inefficient, ineffective, counter-productive policies which created this mess in the first place. Our only alternative would have been to terminate funding, which would result in the displacement of thousands of families which depend on this assistance, and loss of desperately needed affordable housing opportunities. Mr. President, that is the crux of the issues confronting us. We either take on this enormous task, not only of finding the substantial budgetary resources necessary to sustain these programs, but also of restructuring a host of very complex housing laws and programs, or, abdicate our responsibilities for providing housing assistance to needy families. We chose the more difficult and burdensome course. Reforming these housing programs will take time, it will take discipline, it will take concerted effort, and it will entail sacrifice. If we fail, the consequences for families currently receiving or seeking assistance could be catastrophic, especially if we permit the current inventory of public and assisted housing stock to deteriorate further. The repercussions for our cities will be equally dire if these housing developments, rather than slowing or halting the decline of inner-city neighborhoods, merely become examples of further disinvestment. Mr. President, I am pleased that this bill does stand for a commitment to the important goals of the Federal assisted housing program. It not only provides the funding necessary, but together with needed program reforms, it represents a coherent strategy for cleaning up the mess at HUD, and enabling us to place these programs on a sound footing to survive the further rounds of budget cuts which will follow over the next several years. During Committee markup of this bill, concern was expressed over the potential cost of the legislative provisions associated with the HUD multi-family inventory. The three provisions in question were proposed to reduce the ongoing subsidy cost of maintaining these 1.6 million units of privately owned apartments which are covered by an assistance contract or by a FHA mortgage guarantee. The first would permit HUD to conduct a limited demonstration of its mark-to-market initiative along with other multi-family project workout strategies. The second provides authority to maintain project-based assistance for expiring contracts under limited circumstances. The third reforms the Low-Income Housing Preservation and Resident Homeownership Act [LIHPRHA] by replacing expensive section 8 subsidies with one-time capital grants and loans as a lower cost incentive to preserve existing affordable housing stock. The HUD multifamily portfolio costs taxpayers about $8 billion each year to subsidize, maintain, and pay-off loan losses, and these costs are rising because of inflationary factors and deterioration in this aging inventory of apartment buildings. The administrative provisions proposed by the committee are intended to enable HUD to reduce these costs by terminating subsidies for substandard or non-viable projects, and to squeeze out excessive subsidies from others. While these steps are necessary to substantially reduce the long-term cost of this inventory, when compared to the existing budgetary baseline, the measures recommended would cause a temporary increase in outlays. These costs in fiscal year 1996 result from recognition of mortgage guarantee losses, capital costs of preserving older assisted projects, and providing alternative subsidies to replace more costly section 8 contracts. Unfortunately these costs cannot be accommodated within the subcommittee's very constrained budget allocation, even though they save money over the longer term. I might add that we have worked with the Department of Housing and Urban Development, Office of Management Budget and Congressional Budget Office, and staffs on both sides of the aisle, to come to agreement on these very difficult problems. We have found that the solution to these problems is in no way simple and its complexities has forced us to postpone the implementation of these actions. We hope to continue to work with the Members on both sides, as well as the agency, OMB, and CBO, as we seek to unravel some very, very difficult problems which are facing us here. The Committee, therefore, was forced to insert language which would have the effect of delaying the effective date of these provisions until fiscal year 1997. This does not lessen the need to take immediate action on these issues, nor the Committee's intent to seek alternatives which can be accommodated within this year's budget allocation. I hope as this bill progresses, we will be able to come to better solutions which can begin the process of unraveling these difficult and costly problems earlier rather than later. Failure by Congress to address this issue during this session will only exacerbate the budgetary shortfall threatening this large and critical inventory of assisted housing, and will lead to needless displacement of tens of thousands of low-income families, including the elderly and disabled, in fiscal year 1996 and beyond. Mr. President, this appropriations bill reflects two principal concerns, both budgetary in nature. The first is the reversal in trend of annual increases in budgetary outlays for discretionary activities. Over the past decade, discretionary outlays for programs funded in this bill have increased at an average annual rate approaching 15 percent per year, primarily driven by the cumulative growth in low- income housing assistance programs and inflationary costs related to veterans medical care. The congressional budget resolution for fiscal year 1996, H. Con. Res. 67, however, abruptly reverses this trend, halting further continued expenditure growth in these programs. To comply with this dramatic shift in spending policies, the recently enacted Rescission Act for fiscal year 1995, Public Law 104-19, canceled a total of $8,500,000,000 in previously appropriated funds for programs included in this bill. The second, and perhaps more significant budgetary concern is the future year constraints reflected in the budget resolution 7-year projection toward eliminating the Federal deficit by the year 2002. While overall nondefense discretionary expenditures are required to drop by 2.9 percent in fiscal year 1996, the reduction proposed for fiscal year 1997 totals 4.4 percent, and approximately 2 percent per year thereafter. The committee, therefore, is confronting a profound shift from year- to-year budgetary increases to a multi-year period of substantial declines in aggregate funding support, in addition to the erosion in program levels resulting from inflationary factors. This reversal in funding trends is especially substantial for activities and programs sustained by funding in this appropriations bill. The bill as recommended appropriates a discretionary total of $61.6 billion in budget authority. While this is $1.3 billion more than the House-passed measure, it is nearly $9 billion less than the President's budget request and the originally enacted fiscal year 1995 level. The White House, and some of my colleagues, have protested the overall size of these reductions. Frankly, when the committee originally established its subcommittee budget allocations, I also felt that programs funded in this bill should receive greater budgetary support. But to oppose this measure on the basis of its aggregate funding level fails to account for the necessary improvements and reforms we are proposing, and ignores the crisis of deficit spending which requires much more sacrifice and budgetary reductions in the years to come. Mr. President, this is only a first step in long difficult march toward a balanced budget. The change in direction from the growing budgets of the past to this declining one was abrupt, and could be moderated to avoid some temporary [[Page S 14179]] disruption. There should be no confusion or doubt, however, that these reduction must be made, and will be made either in fiscal year 1996, or soon thereafter. Mr. President, for the reasons I have set forth, I believe this is a responsible and necessary bill, one which the Senate should support and pass. It addresses our urgent need to rein in Federal spending. It does so in a manner that limits and targets these resources to the highest priority needs, and aggressively pursues improvements in program management to require increased effectiveness from these expenditures. Finally, where appropriate and necessary, the committee has recommended program and policy reforms which correct well documented deficiencies in current activities. I urge all my colleagues will support this bill, and I hope it will be enacted into law soon. I truly hope that my colleagues will support this bill and I hope that it will be enacted into law in the very near future. Mr. President, before turning to my distinguished ranking member, I ask unanimous consent that a bill summary of H.R. 2099 be printed in the Record.

Mr. BOND. Mr. President, I ask unanimous consent that the committee amendments be considered and agreed to en bloc with the following exceptions, which I believe have been cleared on the other side. The exceptions are the amendments on page 8, lines 9 and 10, VA medical care; page 12, line 9, VA major construction; page 21, line 1 through page 22, line 4, VA administrative provisions relating to parcel of land in Wichita, KS, and VA supply fund; page 22, line 10 through page 34, line 24, HUD assisted housing, public housing demolition, and renewal accounts; page 38, line 24 through page 39, line 2, homeless assistance; page 44, lines 1-7 fair housing; page 45, lines 4-13, Office of Federal Housing Enterprise Oversight; page 51, line 3 through page 128, line 20, HUD administrative provisions; page 141, lines 5-12, Superfund general revenues; page 141, line 15 Superfund inspector general; page 141, line 20, Agency for Toxic Substances and Disease Registry; page 143, line 17 through page 151, line 10, water infrastructure/SRF; program and infrastructure assistance; and EPA administrative provisions; page 158, lines 13-14, human space flight and delayed availability of funding; page 168, line 12 through page 169 line 19, fair housing transfer to Department of Justice and Office of Federal Housing Enterprise Oversight transfer to Treasury; page 177, line 16 through page 178, line 5, EPA contractor conversion; Office of Consumer Affairs termination; and that the bill, as thus amended, be regarded for the purpose of amendment as original text, provided that no points of order shall be considered to have been waived with respect to the committee amendments adopted by this motion.

Mr. BOND. Mr. President, I ask unanimous consent that Andrew Wheeler, legislative fellow for Senator Inhofe, be permitted privileges of the floor for the duration of the VA-HUD bill.

Mr. BOND. Mr. President, I thank the Chair. Before yielding to my distinguished ranking member, I say to this body and to my colleague that it is a great honor and pleasure to be working with the Senator from Maryland on this bill. I had the pleasure of serving in the minority when she chaired this committee, and I found that she has tremendous knowledge, understanding, and insight into these programs. I have addressed in my remarks the need to begin to make some very significant reforms in the funding and in the operations of the agencies included within this appropriations bill. For the most part, the reforms we are advocating are ones that she initiated when she chaired this committee. They understand the vitally important work of all the agencies. Yet, she is also dedicated to the necessary reforms to assure that they provide the services that they are expected to provide in the most efficient and effective manner. While we do not agree on all issues in this bill, I say that it is with great appreciation that I have been able to work with my distinguished ranking member and her staff. I believe she has continued to supply very useful and helpful changes and recommendations. I look forward to working with her on this and other measures, particularly as we seek to achieve a final product that will be signed into law by the budget and will carry on the funding of the agencies funded by this VA-HUD bill. I thank the Chair. I yield the floor.

Mr. BOND

Mr. BOND. Mr. President, I further ask unanimous consent that at 2:15 the Senate proceed to 4 minutes equally divided in the usual form to be followed by a vote on or in relation to the Bumpers amendment numbered 2776.

Mr. BOND. Mr. President, I ask unanimous consent that when the Senate completes its business today it stand in recess until the hour of 9:30 a.m. on Tuesday, September 26, 1995; that following the prayer, the Journal of proceedings be deemed approved to date; the time for the two leaders be reserved for their use later in the day, and the Senate then resume consideration of H.R. 2099, the VA-HUD appropriations bill. I further ask unanimous consent that the Senate resume consideration of the Bumpers amendment numbered 2776 regarding the space station at 11 a.m. on Tuesday, and there be 90 minutes of debate equally divided in the usual form, and following the debate the Senate stand in recess until the hour of 2:15 p.m. for the weekly policy conferences to meet.

Mr. BOND

Mr. BOND. Mr. President, I rise today to discuss some concerns I have about the flurry of recent proposed mergers by certain rail carriers. The Commerce, State, Justice appropriations bill that we will consider later, terminates funding for the Interstate Commerce Commission at the end of year. Downsizing the Federal Government and eliminating Federal agencies is a goal I certainly support and I have supported elimination of the ICC, but as of today, reorganization of the ICC's statutory responsibilities has not been done. I understand the Commerce Committee is preparing to report out legislation to accomplish this reorganization and I support that effort as I believe we must not eliminate the Commission without reassigning their most important regulatory responsibilities. In the meantime, the Commission continues its mission. One responsibility they have that I wish to comment on today is their review of proposed railroad mergers. In the past several months we have seen two huge railroad combinations. The Burlington Northern/Sante Fe merger has been approved and appears to be moving toward completion. Now recently, the Union Pacific/Southern Pacific merger has been proposed. Little thought seems to have been given to the impact that both these mergers will have on the continued availability of effective and efficient railroad transportation. For example, what effect will these exceptionally large combinations have on consumers, shippers, and communities as well as on the surviving competing railroads? Consider the current critical rail transportation situation in the Midwest, as reported recently in the Journal of Commerce, where timely rail movement to market of grain, corn, and soybeans is seriously threatened. According to this article, which follows my remarks, because of a shortage of cars, freight rates are going up significantly. What will be the impact of these megamergers on other railroads and their ability to provide a needed and competitive service? Take for example, a regional railroad such as Kansas City Southern Railroad Co., and I am sure there are others; will KCS survive as a reliable competitive line offering a needed service to thousands of shippers and hundreds of communities? If it and others like it do not survive as viable competitors, isn't it likely that the serious freight car shortage and escalating rate problems we're seeing, as reported by the Journal of Commerce, will become even more serious? And how about the consumers? Any such increased costs of necessity are passed on to them. If all of this were not worrisome enough, the Union Pacific/Southern Pacific combination is being hurried through at a time when the only deliberative body charged with evaluating the ramifications of this sort of activity, the ICC, is threatened with legislative extinction. In the absence of the ICC, who is going to impartially assess the anticompetitive impact on the public of these mergers? Serious nationwide public policy issues are raised which must be addressed before the [[Page S 14097]] merger of the Union Pacific and Southern Pacific Railroads is consummated. It is not my intention to prejudge the legitimacy of this merger, but only to be certain that the public interest is not adversely threatened. Mr. President, these megamergers pose very serious questions which must be answered by the players themselves or the agencies charged with maintaining an essential competitive transportation system. Mr. President, I ask that the Journal of Commerce article referred to in the body of my statement appear in the Record at this point: The article follows: [From the Journal of Commerce, Sept. 13, 1995] Rails Strain to Service Midwest Grain Harvest (By Rip Watson) The U.S. Midwest's rail network, normally no stranger to the crunch of the fall harvest, is beginning to strain this year under the weight of strong demand, tight car supply and skyrocketing prices. Conditions are so tense in Iowa that farm trade associations will hold a Grain Transportation Summit on Thursday in Des Moines to vent their frustrations with some rail carriers, while seeking ways to ease the problem before soybean harvests begin in a few days. ``Grain is hot. Export demand is huge and will continue to be that way in the foreseeable future,'' said Jim Higgins, an analyst for Donaldson, Lufkin & Jenrette in New York. As an industry, railroads boosted grain carloadings 23% in August from a year ago. Burlington Northern Railroad led the pack with a 28% increase, followed by Union Pacific Railroad at 19%. That higher traffic volume is proving to be little comfort to Iowa shippers. ``We are sitting with most of our facilities full.'' said Dawn Carlson of the Iowa Institute for Cooperatives. ``People are getting concerned. Every day that goes by is tacking on more and more charges and the farmer will get less and less for the grain delivered. If we don't get the grain moving, we'll have a lot of grain sitting on the ground.'' Arthur Breenken, manager for the Farmers Co-Op Society in Wesley, Iowa, said, ``The Soo Line is shipping cars but they are not supplying them fast enough.'' He said the problem was that much Iowa grain is moving to the Gulf of Mexico instead of the Mississippi River, which lengthens the round trip time to more than 30 days. John Bromley, a spokesman for Union Pacific, blamed rail unions for not allowing UP employees to work in Iowa, where the railroad is short staffed. UP is hiring and training new workers now, he said. Without those industrywide increases, the Association of American Railroads would have been 1% lower than last year. ``Our export projections are strong,'' said Brad Clow, director of transportation for Sparks Commodities in Memphis, Tenn. ``In some commodities, shipments could outdo USDA forecasts.'' With export demand strong and the corn and soybean harvests expected during the next several weeks, industry observers see no changes in the rate and car supply situation. ``We expect cars to remain tight until January or February,'' Mr. Clow said. ``It would surprise me if we didn't continue to have this shortage problem for a while,'' said Steve Strege, who directs the North Dakota Grain Dealers Association in Fargo. ``We're just getting into the usual crunch time. I don't know if there is much precedent for us to have a problem at this time of year and have it relax at the time of corn and soybean harvest.'' With shippers paying premiums of up to $500 a car to guarantee availability of covered hopper cars for grain shipments late in 1995, Mr. Strege said he believed rates will continue to climb. ``We have people willing to pay a hell of a premium for cars,'' one official said. ``These programs (for ordering cars in advance) give signals to the railroads that they should or can raise their rates,'' Mr. Strege said. Other forces are influencing the 1995 grain shipping picture. Operating under a strike threat last year, CP Rail System's Soo Line unit posted meager grain carloadings in August 1994 that were nearly quadrupled last month. Barge freight markets are facing similar pressures, several industry observers said. One factor affecting the barge markets is the continued strong northbound river movements of aluminum ore, steel and other products that have reduced availability of barges to haul grain, said Jerry Fruin, a transportation economist for the University of Minnesota in Minneapolis. ``Even with the recent fall in rates in the past week, we expect barge freight rates will continue to remain very strong as we move into harvest,'' Mr. Clow said. The traffic picture is brightening for some other commodities but remains dim for manufactured goods. Coal traffic could pick up this month, Mr. Higgins said, because of the hot summer and a resulting reduction in utility stockpiles that have to be replenished. Export traffic is showing some cyclical strength driven by demand for some steam coals and metallurgical coal, he said. August carloadings were 2% below last year. ``We're expecting a strong fourth quarter (for coal),'' said Dave Rohall, director of planning for CSX Transportation.

Mr. BOND

Mr. BOND. Madam President, I join my colleagues from Arizona and Massachusetts in urging Senators to oppose this amendment. Earlier this year, President Clinton made the decision to restore diplomatic relations with Vietnam. That was a correct decision for him to make, one which I supported and I believe a majority of this body supported. Frankly, when the President announced his recognition of Vietnam, he made an announcement at the time that the conditions had been complied with. I think it is time the United States restore relations with Vietnam. It is in the best interest of the United States and in the best interest of the families of those soldiers who continue to be missing in action. I did not serve in Vietnam, as did my colleagues from Arizona, Massachusetts, and New Hampshire, but I have traveled, however, to Vietnam in the past year. I participated in extensive meetings with our military officials there who are responsible for discovering the fate of those missing in action. I came away from every single one of those conversations with the same clear message, and that is, the Vietnamese are working very hard to meet our request for assistance. I got the same message in June when I met with the Presidential delegation who just returned from meetings in Vietnam. Vietnam has allowed us to conduct field exercises, allowed us to dig up military cemeteries. Can you imagine our permitting a nation with which we engaged in armed conflict to come in and dig up Arlington? You talk about cooperation. I had the opportunity to talk with Col. Mel Richmond who is in charge of the Joint Task Force for Full Accounting, and he has outlined the great lengths of cooperation to which the Vietnamese have gone. I can tell you from the men who are directly involved in the effort that they believe that increased contacts and relations between the United States and Vietnam will increase our ability to find out any possible leads to those who remain, and they are very few. Those who were not lost at sea, those who have had any possible sightings, there are fewer than 100 open cases, and there have been extensive efforts on behalf of each of those cases to track them down. The amendment that is offered by our friend from New Hampshire would set additional conditions before the administration can go forward with additional trade ties, including Eximbank support, OPIC, TDA and MFN status. There would not, as suggested by my colleagues, be any savings to the American taxpayer. These activities, basically, are to provide assistance to American businesses which are now competing for business in Vietnam. These programs carry with them their own conditions on when they can be utilized, and there is, in my judgment, no reason to delay at this point the opportunities to obtain, through better contact, information from Vietnam by allowing American businesses who are there competing for the opportunities in a growing market to go further. I believe that the demonstrated activities, the demonstrated efforts by the Vietnamese have justified the President's announcement on the signing of the relationship agreement with Vietnam that the conditions are being complied with. That does not make sense. It would only have the impact of keeping United States firms from being competitive with their European, Japanese, and Taiwanese competitors. It will do nothing to help the MIA search. All of these programs carry requirements that must be met in terms of human rights certifications, labor certifications, and so forth. It does not make sense to add additional requirements. Certainly we need to keep pressure on the Vietnamese Government to help us with the MIA search, and certainly we need to keep pressure on them to improve human rights. However, it only makes sense to increase bilateral ties, increase trade ties, and have as many Americans over there. That increased contact is the best thing we can do to influence their conduct.

Mr. BOND

Mr. BOND. Mr. President, today, Senator Mack, Senator D'Amato, and I are introducing a housing reauthorization bill, the Public Housing Reform and Empowerment Act of 1995. Over the last several months, I have worked with my colleagues on the appropriating committee where I serve as chairman of the VA/HUD Appropriations Subcommittee, and my fellow members of the housing authorizing committee to do something about the train wreck that has occurred in public housing. Within this context, this public housing reform bill dovetails with many of the public housing reforms contained in the VA/HUD FY 1996 appropriations bill and reflects the need to provide streamlined programs and local responsibility as the most appropriate method to address local housing needs. This bill also represents a complete overhaul of the public housing system and a move away from HUD's ``one size fits all'' mentality. As I discussed on this floor this summer, when the rescissions bill was before us, HUD not only is a dysfunctional agency but it has made far too many commitments to be able to live up to those commitments. HUD has undertaken advance commitments for new housing beyond its ability and capacity particularly under these budget constraints to fund. We have in the rescissions bill taken over $6 billion out of the current year's budget authority for Department of Housing and Urban Development. In the coming fiscal year, our subcommittee has over $9 billion less for budget authority than we do in the current year. As a result, the budgetary pressures are forcing us to reevaluate all HUD housing and community development programs, including the public housing programs. It is not only the budget pressures, Mr. President; it is the total lack of foresight in planning in HUD that has led us to the situation where reforms are vitally needed. Any of us who go back to our States and talk with people who are in housing, who are concerned about providing housing for those in need, know that reforms are needed. The housing reauthorization bill that I am introducing with my colleagues on the Banking Committee today goes a long way towards making the changes in law that will enable public housing authorities in local jurisdictions to make the decisions that are so vitally important to assure that we continue to supply housing to those who are counting on it. In public housing, frankly, we are going to move to two flexible block grants, one for operating funds, one for capital grants. I emphasize flexibility; for example, the operating funds should be used by well performing public housing authority as that housing authority wants and needs. Too many times in too many areas we have seen HUD trying to second-guess the decisions made by those who are on-site directly responsible to the residents or tenants they serve, and the decisions have been delayed or denied. There has been an inordinate amount of red tape and delay, hamstringing the ability of public housing authorities to move forward. This block grant system would allow PHAs to make the decisions on operating funds. PHAs also would have a separate fund for capital grants. This would enable them to decide how to modernize or rehabilitate public housing or, in many instances, demolish unusable and obsolete public housing. We also tell housing authorities that if they have uninhabitable housing units that are not good places to raise families, that are unsafe, unclean, crime and drug havens, then they ought to tear them down and move those families out. This to me is a very important step for us to clean up our communities and provide decent housing for the people who depend upon publicly assisted housing. We think there are tremendous savings and tremendously improved services that will come about from getting HUD out of the business of micromanaging public housing at the local level. Now, we believe that good performing public housing authorities ought to be freed of the day-to-day regulation by HUD. We would require that all public housing authorities submit a public housing agency plan to HUD that tells how they are going to serve their tenants. They would have an advisory committee made up of 60 percent of the tenants or residents who would work with them on the plan, but the housing authority would have the final authority. That plan would be submitted to the HUD Secretary, and the Secretary would have 45 days to disapprove it. If it were not disapproved, it would be in effect. The only reasons the Secretary could disapprove a plan is if it is incomplete, does not comply with law, or HUD has other information that the housing authority is not living up to the commitments made in its previous plans. So there would be some minimal oversight for good performing public housing. We also make it clear that where public housing authorities are not doing their job, HUD can then step in and provide more extensive oversight, and if they are totally failed public housing authorities, HUD would be empowered to take over the authorities, be able to petition for a receiver and take over the management, turn it over to a competent manager, either private sector, not-for-profit or for-profit manager to make sure that the people who are in public housing are well served. I have seen too many instances, as I have visited public housing authorities around this country, where they are not being well served; the residents are not being well served because too much time, effort and energy is being spent on complying with rules, requirements, and directives that HUD bureaucrats have laid down that make no sense and do not serve local needs. In addition to the basic structure, we get rid of permanently the one-for-one hard unit replacement rule on public housing. That has prevented many, many housing authorities and communities from tearing down outmoded, obsolete and unsafe public housing units. Even though there may only be 25 percent occupancy, the rules that HUD has previously operated under say if you tear down a dilapidated, unsafe housing project, which is only 25 percent occupied, you have to replace it with 100 percent of the units. This removes the ability to make common sense decisions on the demolition and disposition of public housing. The Secretary of HUD has agreed with us, that the one-for-one replacement rule needs to go. That is essential for our communities. This legislation would still continue to protect the poorest of the poor by requiring public housing authorities to continue to make 40 percent of all units available to families whose incomes do not exceed 30 percent of the area median income, and to make all other units available to families with incomes no greater than 80 percent of median. This bill also addresses the problem of mixed populations in public housing where we house both the elderly and the young disabled, including drug abusers, alcoholics, and people with mental disabilities. This has been a significant housing problem and this housing legislation would provide local flexibility to designate elderly-only housing and disabled-only housing, subject to strong tenant protections. The existing, burdensome HUD requirements have proven to be unacceptable and unworkable. Finally this bill reforms and consolidates the section 8 voucher and certificate programs into a single voucher program which is designed to reduce administrative burden and increase the acceptability of vouchers in the private housing market. I think of this bill as part of a downpayment on a larger HUD reform which I expect will be pursued through appropriations and the Banking Committee. I reemphasize that the job is not simple; as chairman of the VA/HUD Appropriations Subcommittee and as a member of the Housing Opportunities Subcommittee of the Senate Banking Committee, I can personally attest to the many complexities of HUD programs and the need to redirect federal housing and community development policy from federal micromanagement to state and local decisionmaking. HUD has become the poster child for bad government. Nevertheless, I am not recommending that we dismantle HUD, but I do suggest that we devolve many of HUD's responsibilities to states and localities or other entities better able to handle them. Mr. President, I see that my time has expired. I ask unanimous consent that a letter in support of this measure prepared by the Missouri National Association of Housing Officers be printed in the Record.

Mr. BOND

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

Mr. BOND. Mr. President, I further ask I may be permitted to proceed as if in morning business for 5 minutes.

Mr. BOND. I thank the Chair, and I yield the floor. Excepted Committee Amendment on Page 83, Line 4 through Line 2 on Page 84

Mr. BOND. I thank the Chair. (The remarks of Mr. Bond pertaining to the introduction of legislation are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. BOND

Mr. BOND. Mr. President, today, Senator Mack, Senator D'Amato, and I are introducing a housing reauthorization bill, the Public Housing Reform and Empowerment Act of 1995. Over the last several months, I have worked with my colleagues on the appropriating committee where I serve as chairman of the VA/HUD Appropriations Subcommittee, and my fellow members of the housing authorizing committee to do something about the train wreck that has occurred in public housing. Within this context, this public housing reform bill dovetails with many of the public housing reforms contained in the VA/HUD FY 1996 appropriations bill and reflects the need to provide streamlined programs and local responsibility as the most appropriate method to address local housing needs. This bill also represents a complete overhaul of the public housing system and a move away from HUD's ``one size fits all'' mentality. As I discussed on this floor this summer, when the rescissions bill was before us, HUD not only is a dysfunctional agency but it has made far too many commitments to be able to live up to those commitments. HUD has undertaken advance commitments for new housing beyond its ability and capacity particularly under these budget constraints to fund. We have in the rescissions bill taken over $6 billion out of the current year's budget authority for Department of Housing and Urban Development. In the coming fiscal year, our subcommittee has over $9 billion less for budget authority than we do in the current year. As a result, the budgetary pressures are forcing us to reevaluate all HUD housing and community development programs, including the public housing programs. It is not only the budget pressures, Mr. President; it is the total lack of foresight in planning in HUD that has led us to the situation where reforms are vitally needed. Any of us who go back to our States and talk with people who are in housing, who are concerned about providing housing for those in need, know that reforms are needed. The housing reauthorization bill that I am introducing with my colleagues on the Banking Committee today goes a long way towards making the changes in law that will enable public housing authorities in local jurisdictions to make the decisions that are so vitally important to assure that we continue to supply housing to those who are counting on it. In public housing, frankly, we are going to move to two flexible block grants, one for operating funds, one for capital grants. I emphasize flexibility; for example, the operating funds should be used by well performing public housing authority as that housing authority wants and needs. Too many times in too many areas we have seen HUD trying to second-guess the decisions made by those who are on-site directly responsible to the residents or tenants they serve, and the decisions have been delayed or denied. There has been an inordinate amount of red tape and delay, hamstringing the ability of public housing authorities to move forward. This block grant system would allow PHAs to make the decisions on operating funds. PHAs also would have a separate fund for capital grants. This would enable them to decide how to modernize or rehabilitate public housing or, in many instances, demolish unusable and obsolete public housing. We also tell housing authorities that if they have uninhabitable housing units that are not good places to raise families, that are unsafe, unclean, crime and drug havens, then they ought to tear them down and move those families out. This to me is a very important step for us to clean up our communities and provide decent housing for the people who depend upon publicly assisted housing. We think there are tremendous savings and tremendously improved services that will come about from getting HUD out of the business of micromanaging public housing at the local level. Now, we believe that good performing public housing authorities ought to be freed of the day-to-day regulation by HUD. We would require that all public housing authorities submit a public housing agency plan to HUD that tells how they are going to serve their tenants. They would have an advisory committee made up of 60 percent of the tenants or residents who would work with them on the plan, but the housing authority would have the final authority. That plan would be submitted to the HUD Secretary, and the Secretary would have 45 days to disapprove it. If it were not disapproved, it would be in effect. The only reasons the Secretary could disapprove a plan is if it is incomplete, does not comply with law, or HUD has other information that the housing authority is not living up to the commitments made in its previous plans. So there would be some minimal oversight for good performing public housing. We also make it clear that where public housing authorities are not doing their job, HUD can then step in and provide more extensive oversight, and if they are totally failed public housing authorities, HUD would be empowered to take over the authorities, be able to petition for a receiver and take over the management, turn it over to a competent manager, either private sector, not-for-profit or for-profit manager to make sure that the people who are in public housing are well served. I have seen too many instances, as I have visited public housing authorities around this country, where they are not being well served; the residents are not being well served because too much time, effort and energy is being spent on complying with rules, requirements, and directives that HUD bureaucrats have laid down that make no sense and do not serve local needs. In addition to the basic structure, we get rid of permanently the one-for-one hard unit replacement rule on public housing. That has prevented many, many housing authorities and communities from tearing down outmoded, obsolete and unsafe public housing units. Even though there may only be 25 percent occupancy, the rules that HUD has previously operated under say if you tear down a dilapidated, unsafe housing project, which is only 25 percent occupied, you have to replace it with 100 percent of the units. This removes the ability to make common sense decisions on the demolition and disposition of public housing. The Secretary of HUD has agreed with us, that the one-for-one replacement rule needs to go. That is essential for our communities. This legislation would still continue to protect the poorest of the poor by requiring public housing authorities to continue to make 40 percent of all units available to families whose incomes do not exceed 30 percent of the area median income, and to make all other units available to families with incomes no greater than 80 percent of median. This bill also addresses the problem of mixed populations in public housing where we house both the elderly and the young disabled, including drug abusers, alcoholics, and people with mental disabilities. This has been a significant housing problem and this housing legislation would provide local flexibility to designate elderly-only housing and disabled-only housing, subject to strong tenant protections. The existing, burdensome HUD requirements have proven to be unacceptable and unworkable. Finally this bill reforms and consolidates the section 8 voucher and certificate programs into a single voucher program which is designed to reduce administrative burden and increase the acceptability of vouchers in the private housing market. I think of this bill as part of a downpayment on a larger HUD reform which I expect will be pursued through appropriations and the Banking Committee. I reemphasize that the job is not simple; as chairman of the VA/HUD Appropriations Subcommittee and as a member of the Housing Opportunities Subcommittee of the Senate Banking Committee, I can personally attest to the many complexities of HUD programs and the need to redirect federal housing and community development policy from federal micromanagement to state and local decisionmaking. HUD has become the poster child for bad government. Nevertheless, I am not recommending that we dismantle HUD, but I do suggest that we devolve many of HUD's responsibilities to states and localities or other entities better able to handle them. Mr. President, I see that my time has expired. I ask unanimous consent that a letter in support of this measure prepared by the Missouri National Association of Housing Officers be printed in the Record.

Mr. BOND

Mr. BOND. Mr. President, I wish to announce that the Committee on Small [[Page S 13476]] Business will hold a hearing regarding ``Tax Issues Impacting Small Business'' on Tuesday, September 19, 1995, at 2:30 p.m., in room 428A of the Russell Senate Office Building. For further information, please contact Noreen Bracken at 224-5175. committee on indian affairs

Mr. BOND. Mr. President, I wish to announce that the Committee on Small Business will hold a hearing regarding ``Tax Issues Impacting Small Business'' on Wednesday, September 20, 1995, at 2:30 p.m., in room 428A of the Russell Senate Office Building. For further information, please contact Noreen Bracken at 224-5175.

Mr. BOND

Mr. BOND. Mr. President, I ask unanimous consent the amendment be set aside to be called up pursuant to agreement by the manager and ranking member.

Mr. BOND. Mr. President, I will only take a moment. I want to offer an amendment. I will send it to the desk and ask it be set aside so it may be covered--may be discussed and acted upon next week. Yesterday I told this Chamber about a situation in Sedalia, MO, where we are attempting to get people off of welfare into an employment situation. The program is working well except we found that when welfare recipients, AFDC recipients, went to the employer and tested positively for drugs and were refused a job, the State was prohibited under Federal regulations from cutting them off from their AFDC aid. So we have a situation where, if someone wants to stay on welfare and does not want to have to take a job, they could use drugs, be disqualified from taking a position because of drug tests, and could not be sanctioned by the State. This measure very simply states that notwithstanding any other provision of law, a State shall not be prohibited by the Federal Government from sanctioning welfare recipients who test positive for use of controlled substances. Mr. President, I send the amendment to the desk.

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

Mr. BOND

Mr. BOND. Mr. President, I thank the distinguished Senator from Pennsylvania. I want to raise a question for my colleagues on the other side of the aisle as to whether the proposed Daschle amendment would deal with a very disturbing situation we found in the State of Missouri. Under the current law, and this is one of the reasons people are going nuts with welfare today, we have had an innovative program in Sedalia, MO, where the president pro tempore of the Missouri State Senate worked with the Division of Family Services, which administers AFDC, to try to find employees for a major employer coming to the Sedalia area, bringing 1,500 to 1,600 jobs. They had the very simple idea that if they would bring qualified AFDC recipients to the employer, then they might help solve the problems of the people who did not have jobs and meet the needs of the employer for workers. They sent over a number of workers. Some of the workers have accepted employment, and the system seems to be working very well for them. Some of them chose to find other jobs because they did not like this employer, and that is a good result. Those two classes of people found work. A third class of people was turned down for jobs. They continued to receive AFDC. Another class of workers who refused to show up for jobs could be cut off, but they could only be cut off of the AFDC rolls for 2 months--jobs for which they were qualified, well above the minimum wage, and they were cut off, but they could only be cut off for 2 months. No. 1, would that restriction continue under the proposed Daschle amendment? No. 2, and this is probably the most troubling part, two of the AFDC recipients who went to the employer failed the mandatory drug test. Since they failed the mandatory drug test, they were not offered jobs. They went back to the Division of Family Services and continued their AFDC checks. They could not be cut off, as we understand in Missouri the requirements of AFDC, even though they failed drug tests. As I see it, if this is the effect of existing law or the Daschle amendment, then there would be an incentive for people who wanted to stay on AFDC simply to take drugs to prevent them from passing a drug test. I invite Members who are supporting the Daschle amendment to tell me if those two very important requirements would be changed under the Daschle amendment. I thank the Chair, and I thank my colleague from Pennsylvania.

Mr. BOND

Mr. BOND. Mr. President, earlier this summer the Clinton administration released its report on affirmation action. The President's report devotes considerable attention to the Small Business Administration's 8(a) Minority Contracting Program. The report details the 8(a) program's failings and abuses, but in the end the President concludes that the program should be saved in the name of affirmative action. As the chairman of the Committee on Small Business, I have first hand familiarity with the 8(a) program. It is a program that gives a very valuable government contracting preference to members of certain minority groups without requiring proof of specific discrimination or social disadvantage. The 8(a) statute requires proof of economic disadvantage. But in practice, even those who have accumulated substantial wealth are still welcomed into this program. An applicant to the 8(a) program is deemed economically disadvantaged if the applicant has a net worth less than $250,000, excluding the value of his or her home and the value of the small business owned by the applicant. Let's focus for just a minute on what this economic disadvantage test really means. According to data provided to me by the Administrator of the Small Business Administration, 81.6 percent of all small businesses owners in the United States have a net worth under $250,000. But the 8(a) limit for economic disadvantage doesn't stop at $250,000. Once you are in the program, net worth can grow to $750,000 without jeopardizing participation in the 8(a) program. The SBA Administrator has informed me that 91.6 percent of all small business owners have a net worth below this level. And President Clinton's affirmative action report correctly notes that business owners with excessive wealth even above these levels have managed to avoid detection and wrongfully remain in the 8(a) program. So let's review where we are on the 8(a) program. We have a program supposedly for small business owners who are socially and economically disadvantaged. But an applicant is eligible for the 8(a) program without an individual showing of specific discrimination. Then, under the economic disadvantage test, over 80 percent of all small business owners in the United States would be small enough to be eligible. And on top of that, an 8(a) participant's wealth can triple in size once in the program and still remain eligible for special government contract preferences. It doesn't surprise me that participants in the 8(a) program are fighting to save it. It is a good deal for anyone who can get in. In April 1995, I chaired a hearing before the Committee on Small Business, and we heard a great deal of passionate testimony about the 8(a) program--both in favor of and opposed to the program. One of the witnesses was Josh Smith, founder of Maxima Corp., one of the best known companies to have participated in the 8(a) program. Mr. Smith discussed how the 8(a) program fails to benefit low-income communities and low-income minorities. Mr. Smith testified that 8(a) companies were not locating in and hiring people from needy neighborhoods and distressed inner cities with large numbers of unemployed members of minority groups. To the contrary, too often 8(a) firms can be found in northern Virginia or suburban Maryland. I think its wrong that the important objective of this program--bringing economic opportunity and jobs to historically disadvantaged areas and small businesses--has been lost. Today, the 8(a) program builds wealth among a small group of individuals who own small businesses and who gain acceptance into the program. The program makes no effort to encourage hiring of minorities or residents of distressed areas, nor is there any requirement that the 8(a) company assist community redevelopment effort by locating in or performing work in distressed areas. The social disadvantage requirement of the 8(a) program is satisfied merely if the owner, who controls 51 percent of the company, is a member of a prescribed racial or ethnic group. I believe the 8(a) program as we know it today should be replaced with a race neutral program specifically designed to use Federal contracting expenditures to help attract small businesses and employment to distressed areas with low income and high unemployment. Such areas might be located in the inner city, on an Indian reservation, or in Appalachia. I suggest we call these areas historically underutilized business zones or [[Page S 12746]] HUBZones. My proposal will allow any small business located in a HUBZone and employing people in the HUBZone to obtain a reasonable and meaningful preference in competing for Federal Government contracts against other businesses not located in a HUBZone. My proposal begins to return the idea behind the 8(a) program to its roots, when it was targeted to inner city areas after the riots following the assassination of Martin Luther King. In this case, government contract set-asides were used to bring in new businesses to areas trying to recover from the dramatic damage and tension that accompanies a riot, such as those that occurred in 1968. The HUBZone replacement for today's 8(a) program should not be limited, however, to inner cities. My program creates hope and opportunity for all cities, rural areas, and Native American communities that have not prospered while other more affluent areas of our country have flourished. For too long, we have overlooked programs to bring jobs and wealth to economically distressed areas of our Nation. We now have an opportunity to take a positive step to provide long overdue help where help is needed in our country. The HUBZone proposal will create a powerful private-public partnership to give opportunity to small businesses who locate in economically distressed areas and to give hope to people who have not had much chance until now to pull themselves up the economic ladder.

Mr. BOND

Mr. BOND. As Chairman Stevens and Senator Inouye know, the committee has provided funds in the past to continue work performed under a program referred to as the Instrumented Factory for Gears, or GEAR INFAC. As a primary purchaser and user of precision gears, the Army has endorsed and supported this program.