Kit Bond

Mr. BOND

Mr. BOND. I regret that I was unavoidably absent for the votes today. I was away from Washington to participate in a court-ordered appearance. If I had been present, I would have supported both the Abraham and the Nunn-Coverdell amendments. Mr. GRASSLEY addressed the Chair.

Mr. BOND

Mr. BOND. Mr. President, many very significant things have happened in this body during the 8\1/2\ years I have been here. Some have changed people's lives in America for the better and some have laid the groundwork for a better America in the future. Notwithstanding, I believe that this budget resolution is the most important thing we have done for America since I have been a Member of the Senate, and probably the most important since the Vietnam war. Why? Because we have committed ourselves to completing something the American people have wanted us to do for decades, but the Congress lacked the courage to go forward with it--that is making the very tough decisions to get our annual budget in balance and begin to lift the enormous burden of debt we have left for the next generation of Americans to carry. Mr. President, this had to happen and we have to see it through. Now we have the blueprint, but the tough part is just beginning. In the next 2 months, the authorizing committees and appropriations committees must do the heavy lifting of specifying in detail and in law, how we are going to squeeze down Federal spending to meet this ambitious plan. Make no mistake, this will not be easy. We are going to hear from every imaginable interest group and everyone of our friends. All will share the goal of balancing the budget, but all will also want us to protect their individual interest. Here is where the American people want us to show some courage. For the good of the whole, we must resist the pressures that will come from those only interested in the few. These will be tough and important decisions, but I believe we will see them through. When I became Governor of Missouri in 1981, I was faced with a similar situation. The State's budget was seriously out of balance. Most believed that the tough things we had to do would so anger the powerful special interests that I could not survive taking them on. Well, from that experience I learned something. People are willing to stick with you, even though a vocal minority make it their mission to bring you down, if you make the cuts fairly, and everyone contributes to solving the problem. I believe this budget resolution meets that test. This budget resolution allows Federal spending to grow, just at a slower rate. It does not rely on smoke and mirror accounting to achieve balance in 2002. And, it courageously confronts the entitlements, which we all know must be confronted if we are going to get the job done. Also, I am pleased that the tax relief for families and economic growth are conditioned upon actually realizing the revenue dividend that will come from balancing the budget. This is a responsible way to make sure deficit reduction is a condition precedent to tax cuts and I'm glad the Senate's position prevailed on this issue in conference. I hope that as the authorizing and appropriations committees begin their work, that we all will think of our children and the children of future generations. When the special interest cries begin, let's not forget what has already been done to future generations and ask ourselves, ``Can we put this off any longer?'' I believe the answer is no. Let's commit ourselves to seeing through this national priority and allow the good of the whole to override the good of the few. The American people will reward us for our commitment.

Mr. BOND

Mr. BOND. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 1485

Mr. BOND

Mr. BOND. The world's attention is focused on today's deadline for a resolution of the auto parts trade dispute between the United States and Japan. At the same time, however, another critical trade deadline looms largely unnoticed. On June 30, the United States must decide whether to lock open its financial services markets regardless of whether our trading partners do the same. We would do this by surrendering our right to take an exemption from the most-favored-nation [MFN] provision of the World Trade Organization's General Agreement on Trade in Services [GATS]. For many years, it has been the policy of the United States to provide open access and national treatment to foreign financial firms that want to enter our market, regardless of foreign barriers to entry by U.S. firms. During the past decade, our Government, actively aided by our financial services industry, has worked to open foreign financial markets. The Uruguay round of the GATT negotiations, which began in 1986, aimed at achieving for the first time multilateral standards for open trade in financial services. Our negotiators sought commitments from other countries that would guarantee substantially full market access and national treatment to U.S. financial firms in foreign markets. Unfortunately, those negotiations ran into difficulties as some of our trading partners with the most restrictive practices in financial services were reluctant to make the market opening commitments needed to bring them to a successful conclusion. In December 1993, as the Uruguay round concluded in Geneva, negotiators agreed to include financial services within the GATS. That agreement establishes a multilateral framework of principles and rules for trade in financial services, including the principles of national treatment and MFN status. However, members were bound by these principles only to the extent they made commitments in their GATS offers. Unfortunately, the commitments made by many countries to open their markets to foreign financial institutions under that framework were far less than the United States had hoped for. As a result, the United States, as it was legally permitted to do, took an exemption from the GATS MFN obligation with respect to new establishment and new powers for foreign financial firms. The purpose of doing so was to allow our Government to differentiate among members of the World Trade Organization in regard to providing their firms a guarantee they would always have full access with national treatment in our market. In essence, we did not want to lock our market open, while other countries were given GATS protection to continue restricting access to theirs. The Uruguay round final agreement provided that for 6 months after the GATS went into effect, countries would suspend their MFN exemption and continue to negotiate. The stakes in these talks are enormous. Exports of financial products and services represent one of the greatest potential export markets the United States will have in the coming century. We are far ahead of most of the rest of the world in development of our markets and of new financial instruments. One need only think of the billions of people in China, India, Indonesia, Brazil, and other developing nations who have no insurance, who do not have access to an ATM machine, who have not ever invested in mutual funds or who do not yet even have saving accounts. As these countries develop and personal income levels rise, U.S. firms can and should play a role in providing those services. Even more important is the impact of financial services on other trade and investment. The ability of other American industries to sell their goods overseas depends, in large part, on the support of American banks and securities firms in those markets. As U.S. Trade Representative Mickey Kantor recently told the Senate Banking Committee, ``if you can't get your financial services companies into a market, it has a negative effect upon your ability to get your products into the market and, of course, that has a negative effect on the U.S. economy.'' The United States has approached these talks with a call for fair and open markets. We have offered--and urged all other countries to offer-- a system of national treatment, whereby foreign institutions would be treated the same as domestic ones. Unfortunately, it appears likely that come midnight on June 30, we will not have seen sufficient progress to justify signing an agreement. Although several countries have put forward offers that would provide national treatment, the WTO's MFN rule prevents us from guaranteeing these countries national treatment in our market without giving it to all other WTO members as well. Thus, for example, if the United States and the European Union accept each other's offers and guarantee each other national treatment, other countries not doing the same would still reap the benefit of that agreement and get national treatment in both Europe and the United States without offering equal access to their market. These free riders would be getting the benefit of the agreement without giving anything in return. Many of the offers on the table today are simply unacceptable. India, for example, has closed its insurance market to all private companies. Brazil maintains a total prohibition on new foreign financial firms entering their market. Korea continues to restrict foreign access to its financial markets. A number of Southeast Asian nations have placed on the table offers that could require United States financial companies to divest their current holdings in local firms. These are some of the fastest growing and potentially most lucrative markets in the world. Signing an agreement under these conditions, would lock in these barriers and provide countries a legal right under the WTO to enforce them. That would deny our financial firms access to good markets, and would hurt our ability to get U.S. goods and investments into those markets. We would be insane to sign an agreement which would legitimize these barriers and effectively shut American firms out of these markets in perpetuity while locking our market open to firms from these same countries. There is an alternative for U.S. negotiators, however; we can reject a bad agreement, maintain our MFN exemption, and begin to negotiate bilateral agreements with countries that want open financial markets. Under such a plan, the United States could immediately sign agreements with the European Union, Switzerland, Norway, and other countries that are offering national treatment. We could then continue to negotiate with other nations, using access to our lucrative American market as a lever to get them to open their own. There is no question the United States is under strong international pressure to surrender our MFN exemption. Earlier this year, a senior British trade official flew to Washington to pressure United States Treasury officials to sign an agreement in Geneva--regardless of whether it makes sense for the United States. And the head of the WTO argued recently that the United States must make the right decision and sign whatever agreement is on the table when the deadline rolls around. Proponents of a deal argue that failure to conclude an agreement will weaken the WTO. But that argument is hogwash. To the contrary, the worst thing we could do would be to sign an agreement that sanctions closed markets and unfair barriers. That would weaken support for the WTO far more than failure to reach an agreement in Geneva. The American people rightly expect that free trade must be a two-way street. In recent days, some have proposed an extension of the talks as one way to deal with the lack of progress. I believe an extension makes sense since it will allow us to build on the progress that has been made to date. I believe strongly, however, that for the United States to maintain its leverage during any extended talks--whether in the multilateral WTO forum, or on a bilateral basis--the United States must exercise its MFN exemption. To do otherwise would remove any incentive for countries such as Korea, which wants to expand in our market, to negotiate in good faith. Exercising our MFN exemption would not require the United States to retaliate against other countries or to, in any way, close off its market. It would merely give us the right to do so at a later date, if we decided it was in our best interest to do so. Granting MFN, on the other hand, would lock our market open--and thereby remove our leverage in the talks. U.S. negotiators should stand firm. The United States has played the sucker far too many times in international trade negotiations. The stakes this time are simply too high. Handshakes and promises of future action are not good enough. If the final written offers are not significantly better than those on the table today, U.S. trade officials should act in our clear national interest, and walk away from the table.

Mr. BOND

Mr. BOND. Mr. President, S. 240, the private securities litigation legislation addresses a very important issue of concern to many Americans, securities litigation reform. While this is a subject that I believe needs to be addressed and one I have some personal views and experience in, I will not be participating in the debate or votes on the floor. I inform the Senate that I am currently engaged in securities litigation of the kind this legislation seeks to reform. As a result, I have decided to recuse myself from the debate. Given the status of my current suit and the issues before the Senate, I have been advised that I should not participate in the proceedings or voting on the floor.

Mr. BOND

Mr. BOND. Mr. President, I thank my distinguished chairman and the Senator from Maine. Mr. President, it was a real pleasure for me on February 16 of this year to join the distinguished chairman of this committee, the ranking member, Senator Baucus, and chairman of the subcommittee, Senator Warner, with whom I joined in introducing S. 440, the National Highway System Designation Act of 1995. Since its introduction, the Subcommittee on Transportation and Infrastructure, of which I am a member, conducted four hearings, had a full committee markup and moved this bill to the point where we are now. This is a priority measure. I am very grateful for the bipartisan leadership and support that this measure has obtained. The concept of the NHS was authorized in the big Federal highway bill, ISTEA, to solicit State and local input in designing a national transportation system which would move people and goods efficiently and safely across the country. This is something I have worked for throughout my career in State and Federal government, and it has always been important to those of us in my State of Missouri, that we who are at the crossroads of the Nation be included in a modern national network that would provide Missouri the same kind of full access to the markets that the coasts currently have, and it would provide our friends and neighbors from other States the opportunity for efficient transportation through the heartland of the Nation. NHS was developed from the bottom up. In our State, the highway and transportation department coordinated with metropolitan planning organizations, regional planning agencies, highway groups and local officials to determine the highway priorities. Missouri then acted promptly in submitting the approved plan to the Federal Department of Transportation for incorporation into the overall system. This, to me, Mr. President, is a great example of the cooperation between Federal, State, local governments, and private sector organizations, and we should encourage this kind of cooperation in the future. In its entirety, as the Members well know, NHS will be a 159,000-mile network of interstate highways, major arterials and key corridors across the United States. These highways will carry more than 75 percent of all commercial traffic, although they comprise only 4 percent of the Nation's highway mileage. For our State of Missouri, Mr. President, this means 3,490 rural and 973 urban miles of highways that are the most economically important roads in the State, carrying 46 percent of all motor vehicle traffic. The NHS will be the backbone of our transportation infrastructure network. They will carry over 40 percent of the Nation's highway traffic, 75 percent of heavy truck traffic, and 80 percent of our tourist traffic, which is vitally important to us. These highways are critical for both State and interregional commerce. These highways are the economic lifeline, especially for States like mine. I know that in striving to reach a balanced budget by 2002, we have to make tough choices and recognize that the Government cannot do it all. But by developing and passing the NHS, we are establishing priorities, priorities on our highway and transportation needs, in order to ensure that we invest our limited funds wisely. We recognize the role that the transportation infrastructure has with the state of our economy. It is imperative that these critical things receive priority attention. We must realize the importance of this legislation being passed and signed into law by September 30 of this year. Without passage, States will not receive their apportionments of $6.5 billion. There is $156 million for our State of Missouri. We cannot delay or hinder the passage of this bill which means so much to our constituents. I join my colleagues in urging prompt adoption of this measure here. I also urge our colleagues in the House to act on this legislation before it is too late. This is of vital national concern. Mr. President, I thank the Chair, and I particularly thank the distinguished Senator from Maine for yielding time to me. [[Page S 8746]] Amendment No. 1442 (Purpose: To eliminate the penalties for noncompliance by States with a program requiring the use of motorcycle helmets)

Mr. BOND

Mr. BOND. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. BOND

Mr. BOND. Mr. President, I ask unanimous consent that I may be permitted to proceed as if in morning business.

Mr. BOND. Mr. President, I express my sincere thanks to the majority leader.

Mr. BOND

Mr. BOND. Mr. President, I have been very troubled during the past few months by the debate over the proposal to eliminate the Department of Commerce. Much of the debate has focused on the need to eliminate the so-called corporate welfare programs of the International Trade Administration and the Bureau of Export Administration. I would like to address these proposed cuts today. Congress is embarked on a long overdue effort to make real cuts in Government programs and move toward balancing the budget by 2002. This effort deserves strong support from every member of this body, because eliminating the budget deficit is the primary responsibility facing Members of Congress today. The debt is a burden on the backs of the American people, on the future of our children, and on the competitiveness of U.S. companies trying to win in today's competitive world marketplace. That is why I voted for the budget in committee and again on the Senate floor, and that is why I support it strongly. Certainly, the Commerce Department--like most of the Federal Government--can stand some significant trimming, and I applaud efforts to weed out outdated and inefficient programs at Commerce as well as at other departments. I believe, however, the attacks on these two trade agencies are misguided and misinformed. As we enter the 21st century, it is clear the future of our Nation's economy depends on the international marketplace. If we are to remain the world's leading economy, then we will have to dominate the international market as well as our own. The competition will be intense, and companies from other nations will come to the field equipped with a wide array of tools provided by their nation's governments--from concessional financing, to market research, to high- level sales help from senior government officials. If our companies are going to remain competitive, they must have at least some access to the same tools. The International Trade Administration is the agency that helps to provide that edge. At the same time, it is just as critical that we ensure other countries are trading fairly and playing by the rules. That is the job of the U.S. Trade Representative. However, all of the trade negotiators at USTR operate with significant support from the Commerce Department. The loss of that support would have a crippling impact on our ability to ensure our interests. BXA, the Bureau of Export Administration, and ITA, the International Trade Administration, are the engine that drive the rest of the Federal Government's trade agencies. Without them, the other agencies will cease to function properly, and effectively to help our businesses gain jobs and the revenues that they need from the world market. For that reason, when the Senate considers legislation to abolish the Department of Commerce, I will offer an amendment to create a new, but very small Department of International Trade which will consist solely of the current Commerce Department trade agencies--the Bureau of Export Administration and the International Trade Administration. There are a wide range of reasons for retaining the trade functions in a Department of International Trade. I would like to take a few moments to discuss the most important ones: First, Senators need to understand that the International Trade Administration is responsible for supporting the activities of the Office of the U.S. Trade Representative with sectoral and technical expertise. The proposals to eliminate the Commerce Department appear not to recognize this fact. Everyone seems to agree that USTR is a successful agency which performs a critical function, and which must be retained. But too few seem to realize that USTR is made up of a mere 170 people. They could not possibly handle all of our trade negotiations without significant support from other agencies, particularly the International Trade Administration. When we are negotiating an auto parts deal with Japan, for example, there will be a USTR official sitting at the bargaining table leading the team. Behind that person, however, are almost certain to be experts from the Office of Automotive Affairs and the Office of Japan Trade Policy. The proposals to abolish the Commerce Department would eliminate both of these offices, which would leave the USTR negotiator unsupported, and unable to counter the Japanese negotiator on the other side of the table. We would have our head handed to us in these negotiations, and every other international trade negotiation we undertook. The result would be a loss of U.S. jobs as our ability to negotiate fair trade agreements is eroded. The important role that ITA plays in trade negotiations is illustrated by looking at the NAFTA talks on which ITA experts spent more than 50,000 hours in the last year of the negotiations alone. It should also be noted that ITA plays the lead role in a wide range of trade talks. For example, ITA led the negotiations that opened Japan's construction and government procurement markets to United States firms. ITA experts developed the negotiating positions for all U.S.-E.U. standards barrier talks since 1990. It is also important to note that the International Trade Administration is the Federal agency with primary responsibility for monitoring bilateral and multilateral trade agreements. Elimination of the network of ITA specialists would severely hamper our ability to monitor trade agreements and ensure that other countries are playing by the rules. Second, the proposals to eliminate the Commerce Department would effectively remove the Federal Government from providing export promotion and assistance for nonagricultural exports. Now I realize there are many of my colleagues who would applaud that development, but I would like to take just a moment to review the impact it would have on American companies. The economic battleground has moved solidly to the international marketplace. Our future economic growth depends, in large part, on American firms winning their share of the new markets developing in places like Indonesia, India, Brazil, and China. These countries have huge populations which are hungry for development. The infrastructure needs is these nations are staggering. Investment in roads, bridges, telecommunications systems, power generation, and other infrastructure projects is estimated to be $1 trillion over the next 5 years in Asia alone. The competition for these projects will be intense. Companies from Germany, Japan, Canada, and other nations will aggressively seek to win them; and they will go after them with strong tools provided by their governments. These tools will include not only concessional financing, but also market research, industry expertise, and the high- level marketing help of senior government officials. Already our companies go into this battle with fewer resources available from the government than their foreign competitors. If we send them in unarmed, they will simply get stomped. We must also recognize that the markets in these countries are not like ours. Almost all of these infrastructure contracts will be awarded by governments, not by private firms. The officials responsible for making the buying decisions are used to dealing with other Government officials, rather than with businessmen. U.S. Government support is needed to support the business effort so that they can win in these markets. I know of many examples from my personal experience in which ITA personnel played a key role in helping to clinch huge exports for companies in my State. In one, Black & Veatch, a Kansas City construction firm teamed with General Electric, won a $250 million power generation project in Malaysia last year with the active support of the Foreign Commercial Service officer in Kuala Lumpur, who spent 3 years on the project. The result was a win for the United States against a Japanese firm offering concessional government financing. The project has the potential to bring in a total of $1 billion in business if the American companies win the follow-on work. They would never have had a chance of winning without the active, on-the- [[Page S 8632]] ground support of the U.S. Government. Commerce assistance is just even more important for small firms. Earlier this year, I received a letter from one businessmen in St. Louis who summed up the important role the US&FCS plays in supporting exports by small companies. I might add here, Mr. President, we all know the major exporting companies, large companies in America are very competitive in the world market. They need help to stay on an equal footing with Export-Import Bank assistance and other financing, but when it comes to getting into the world market our medium- and small-sized businesses do not have the resources to mount an effective campaign for a small business. This letter reads as follows, and I quote: Four years ago, acting as vice president of a 65-year-old small business in St. Louis, Mo., I watched in horror as more and more of our independently owned retail customer base began closing. I then observed the exit of our largest single account, which accounted for 10% of our total company sales. After studying the competitive nature of U.S. business, I decided to investigate foreign markets as a possible answer to our declining sales problems. I did not know one single thing about international trade, I did not know where to look for possible customers, how to find them or how to communicate with them if, indeed, one was to be found. To a first-time potential exporter, the world looked like a very big place indeed, and I thought I had no way of knowing how to access it. One single seminar sponsored by the Department of Commerce, a two-hour lecture on international shipping, started my company once again on the road to financial stability. For during that two-hour meeting, and during the subsequent small talk that followed, I was introduced to the world through the eyes of the United States and Foreign Commercial Service and the U.S. Department of Commerce. Within only one year's time, our company exports climbed to $110,000. With continued tutelage from various members of the US&FCS, the second year of exporting yielded $263,000. Year three saw our sales climb to $473,000. Year four saw $576,000 in international sales alone. Mr. President, those are significant amounts for a small company. They are very significant for any community. They are vitally important for the workers who make the products that are sold in the world market. If we multiply it across the tens of thousands of small firms that could be exporting, you would see the enormous impact on our trade deficit and our overall economic well-being that these functions of the Department of Commerce serve. It is for that reason, Mr. President, I believe, when we take a look at weeding out the chaff and cutting out unnecessary activities, we must be well advised to keep those things which are working, to keep those things which are vitally important for ensuring the continued competitiveness of small- and medium-sized firms in the world market. If we do not help these firms, they will wither and die. We must recognize, however, that small companies like this one are not going to export without help. They do not have the people, they do not have the time, and they do not have the resources to devote to entering the often-difficult international marketplace. If we take away their access to Commerce Department assistance, they are not going to go out and hire private lawyers and accountants--instead, they are going to forgo exporting, and cede valuable markets to foreign firms. Third, the proposals to eliminate the Commerce Department would destroy the Import Administration. The Import Administration is the Agency responsible for enforcing and administering the laws against dumped and subsidized exports of other countries. Actions initiated by the Import Administration have played a key role in the revitalization of several U.S. industries. The proposal that has been introduced in the House to abolish the Commerce Department would transfer the functions of the Import Administration to USTR which is not a proper agency to be making such determinations, and which will not have the manpower to handle the job. A fourth problem with the plans that have been put forward is that they would transfer the responsibility for licensing dual use exports from the Bureau of Export Administration, to either the State Department or Defense Department. Under the current system of export controls, the Commerce Department is responsible for licensing dual-use exports such as machine tools, computers, and telecommunications. The State Department has the responsibility for licensing weapons sold overseas. Over the past several years, as Congress has considered proposals to rewrite the export control system, a primary goal of exporters has been to ensure that as many exports as possible fall under the jurisdiction of the Commerce Department rather than the State Department. There are several reasons for this move. State is seen as not being friendly to exporters. It is seen as something of a black hole where export license applications can disappear until sales are lost to foreign firms by default. Further, exporting is not the primary concern of the State Department. Instead, the Agency is focused on foreign policy concerns. It is easy to imagine a scenario in which an export application might be denied due to foreign policy interests rather than commercial interests. Finally, State is in the process of taking cuts in its primary programs. As that happens, there is almost certainly not going to be an adequate number of people assigned to noncore functions such as export licensing. The result will be a further loss of jobs for American firms. The alternate proposal to move the licensing function to the Defense Department is similarly problematic. DOD has responsibility for national security, not exporting. They do not have there expertise to deal with dual-use commercial items such as machine tools, computers, and telecommunications items. The result is certain to be that they will err on the side of caution and deny all licenses--or at least a majority of them. Fifth, the proposal would transfer the responsibility for enforcing export controls from Commerce to the Customs Service. Now I am a strong supporter of the Customs Service. I think they are doing a fine job with the limited resources we give them. I have visited several of their facilities, I have watched them in action at the border. We can be proud of the job they are doing, particularly in keeping illegal drugs out of our country. I am concerned, however, that the proposal to split enforcement from export licensing and transfer it to Customs will weaken our effort to control the spread of weapons of mass destruction. No matter how good a job Customs does, and they have done some good work in this area, they will still not be focused on it as their primary function, as the agents in Commerce are currently. Also, I fear that export enforcement will take back seat to the more visible activity of combating the spread of illegal drugs. I should like to turn for a moment to the proposal to transfer several of these functions to USTR. I simply do not think that will work. USTR is part of the Executive Office of the President. For 2 years now, we have told the President that he must cut the White House staff back significantly. Now some are coming forward with a proposal that would reverse any progress that has been made, by transferring hundreds of new employees to the White House. That does not make a whole lot of sense. Just as important, USTR is not an appropriate home for these agencies or functions. USTR is a policy agency designed to advise the President and play the role of honest broker between other trade agencies. Transferring the functions of the Import Administration, the Foreign Commercial Service, and other agencies to USTR will make it a line agency with significantly broader responsibilities than it currently has. I question whether that is a step we want to be taking. I, for one, do not think so. And there are other problems that are sure to arise. I am sure agricultural interests will be concerned that this proposal will put some of Commerce's manufacturing and services trade specialists into USTR. Since we would not be doing the same for the commodity specialists in the Department of Agriculture, they are certain to see this move as tipping the balance of interest in the White House away from agriculture interests. As I stated earlier, if we are in fact going to eliminate the Commerce Department, I believe the solution to this [[Page S 8633]] problem is to create a very small, but very effective Department of International Trade made up solely of the existing functions of the International Trade Administration and the Bureau of Export Administration, and represented in the Cabinet. Creation of this agency will allow us to continue to remain effective in the international arena without spending more money than we are now. It keeps BXA and ITA together, thereby preserving the synergy that comes from keeping trade in one agency; and it allows exporters to continue to have a place at the cabinet table. This new Department of International Trade would not be the bureaucratic monster that today's Commerce Department has become. It would have a budget of less than $400 million--not even one-tenth of the current Commerce Department budget. My plan would not consolidate other existing trade agencies. It would leave USTR, the Export-Import Bank, OPIC, and TDA as independent agencies. Senators may ask why I do not consolidate them into this new agency, and my answer is very simple, they work, and I have long subscribed to the old adage, if it ain't broke, don't fix it. They are small agencies, performing critical functions, and we ought to leave them alone to continue that fine work. As I have said already, trade is the key to our economy's future. If we toss in the towel right now, we can give up on the hope of remaining the world's most important economy. We simply will not be able to do so. I am not willing to toss in the towel, and I bet a majority of Senators agree with me. In closing, I would note that a number of wild charges have been tossed around by those opposed to the so-called corporate welfare programs of export promotion and finance. I would like to focus on just one of those wild charges. The report accompanying the House budget resolution references a CBO report which states: [a]ll increases in exports * * * resulting from ITA's * * * activities are completely offset by some mix of reduced exports of other industries and increased imports. Now, Mr. President, I do not know which rocket scientist at CBO came up with than analysis, but it is one of the most ludicrous assertions I have come across in my time here in Washington--and trust me I have heard some good ones. When the people at ITA work to see that a foreign airline buys Boeing 747's or McDonnell Douglas MD-11's rather than Airbus aircraft, is that increase in our exports offset by reduced exports or increased imports? No. When a US&FCS officer in Kuala Lumpur helps to ensure that American firms win a major power project against their subsidized Japanese competitor, does that result in reduced exports somewhere else in our economy? Of course not. Mr. President, the world trade pie is huge. The United States has a large part of it, but we should have an even larger part. Attitudes like the one expressed by this bureaucrat at CBO show a complete lack of understanding of this fact. If we make the mistake of believing them, we will condemn this Nation to lost jobs, a declining economy, and a lower standard of living as we enter the 21st century. Mr. President, I thank the Chair for the indulgence. I yield the floor.

Mr. BOND

Mr. BOND. Mr. President, today I am announcing the opening of a new front in our fight against oppressive, onerous, and overly meddlesome Government regulations. I believe this new front will, for the time, take the fight outside the beltway and attack regulations and agencies where they impact people in their day-to-day lives. Since the election, there has been tremendous activity in reforming the way Federal agencies develop and issue regulations, and I have been deeply involved in this effort as cochair, along with Senator Kay Bailey Hutchison, of the Senate Republican Regulatory Relief Task Force. As we speak, we are working with Senator Dole and others on his Comprehensive Regulatory Reform Act, S. 343. These efforts are vitally important if we are to slow run-away regulation and better control Federal agencies. Equally important for small business is to add some meaningful judicial enforcement provisions to the Regulatory Flexibility Act, and I have introduced legislation to accomplish this. All of these efforts focus on changing the way agencies enact regulations. Today, I announce an effort to reform the way Government officials enforce Federal regulations. After all, most people, most small business people, do not have the time to concern themselves with the process of reviewing and commenting on proposed and final rules in the Federal Register. Small businesses have to deal with regulations when the regulator shows up on the doorstep to inspect their facility or to enforce a new Federal mandate. As chairman of the Senate Committee on Small Business, I have heard numerous horror stories about burdensome regulations. But as I have listened and learned from businessmen and women with real life problems, I have become increasingly convinced that the enforcement of regulations is a problem as troublesome as the regulations themselves. Today I am introducing legislation to make fundamental changes in the way regulatory agencies think about small business. It should be every regulatory agency's mission to encourage compliance by making rules easier to understand and by not enforcing their regulations in a way that unnecessarily frustrates law abiding small businesses. To this end, my bill includes a three part attack on unfair enforcement of Government regulations. First, small businesses should be able to understand what is expected of them. I want small businesses to know that if they are playing by the rules of the game as expressed in plain English compliance guides the agencies will be required to print, then they have nothing to fear from inspectors. Sound like common sense? It should be, but for too long agencies like EPA and OSHA have refused to tell businesses how they can avoid the threat of regulatory action. Like the merchant who responds to questions about his product with the phrase caveat emptor, some regulators have taken the attitude that it is not their responsibility to make complying with the law easy, preferring instead to punish small business owners who deviate in the smallest way from the most complicated regulation. The second part of my bill is designed to give small businesses a place to voice complaints about excessive, unfair or incompetent enforcement of regulations, with the knowledge that their voices will be heard. My bill sets up regional Small Business and Agriculture Ombudsmen through the Small Business Administration's offices around the country to give small businesses assurance that their confidential complaints and comments will be recorded and heard. These Ombudsmen also will coordinate the activities of volunteer Small Business Regulatory Fairness Boards, made up of small business people from each region. These boards will be able to investigate and make recommendations about troublesome patterns of enforcement activities. Any small business that is subject to an inspection or enforcement action will have the chance to rate and critique the inspectors or lawyers they deal with. In dealing with small businesses today, agencies sometimes seem to assume that every one is a violator of their rules, trying to get away with something. Some agencies do a good job of fulfilling their legal mandate while assisting small business, but many agencies seem stuck in an enforcement mentality where everyone is presumed guilty until proven innocent. I think we should let small businesses compare their dealings with one agency to dealings with another so that the abusive agencies or agents can be weeded out and exposed. Agencies should be vying to see which can fulfill their statutory mandate in a way that helps and empowers small business. We need direct feedback from small businessmen and women around the country on how well the regulators are doing their jobs. The third part of the legislation will create some financial accountability at Federal agencies and level the playing field for small businesses when they disagree with a fine or penalty imposed on them this bill will make the Government inspectors and lawyers responsible for their actions in assessing fines, penalties, and citations because it will allow small businesses to recover their legal costs from the Government when the enforcers and the lawyers have been unreasonable. If Federal agencies make excessive demands that they can not sustain in court, then the Federal agency will have to pay the legal fees of the small business. Small businessmen and women in American are more than willing to comply with regulations and pay appropriate penalties when they are in the wrong. But it is time we put a stop to powerful Federal agencies swooping down on small businesses and insisting on unreasonable fines just because they agency enjoys an enormous financial and resource advantage and can afford an expensive and time consuming court challenge. If the small business can reduce or eliminate the penalty, this bill will require the legal costs to be paid directly out of the agency's budget. On Monday of this week, the President told the White House conference that he wants Government regulators to stop treating small business men and women as criminals and start treating them as partners or customers. I believe this legislation will make that goal a reality and bring much needed relief to small businesses across the country. I hope the President will follow through on his speech to small business and join with the National Federation of Independent Businesses in supporting this bill. I urge all of my colleagues to join with me in supporting small business by supporting this legislation. Mr. President, I ask unanimous consent that the bill and additional material be printed in the Record.

Mr. BOND

Mr. BOND. Mr. President, today I am announcing the opening of a new front in our fight against oppressive, onerous, and overly meddlesome Government regulations. I believe this new front will, for the time, take the fight outside the beltway and attack regulations and agencies where they impact people in their day-to-day lives. Since the election, there has been tremendous activity in reforming the way Federal agencies develop and issue regulations, and I have been deeply involved in this effort as cochair, along with Senator Kay Bailey Hutchison, of the Senate Republican Regulatory Relief Task Force. As we speak, we are working with Senator Dole and others on his Comprehensive Regulatory Reform Act, S. 343. These efforts are vitally important if we are to slow run-away regulation and better control Federal agencies. Equally important for small business is to add some meaningful judicial enforcement provisions to the Regulatory Flexibility Act, and I have introduced legislation to accomplish this. All of these efforts focus on changing the way agencies enact regulations. Today, I announce an effort to reform the way Government officials enforce Federal regulations. After all, most people, most small business people, do not have the time to concern themselves with the process of reviewing and commenting on proposed and final rules in the Federal Register. Small businesses have to deal with regulations when the regulator shows up on the doorstep to inspect their facility or to enforce a new Federal mandate. As chairman of the Senate Committee on Small Business, I have heard numerous horror stories about burdensome regulations. But as I have listened and learned from businessmen and women with real life problems, I have become increasingly convinced that the enforcement of regulations is a problem as troublesome as the regulations themselves. Today I am introducing legislation to make fundamental changes in the way regulatory agencies think about small business. It should be every regulatory agency's mission to encourage compliance by making rules easier to understand and by not enforcing their regulations in a way that unnecessarily frustrates law abiding small businesses. To this end, my bill includes a three part attack on unfair enforcement of Government regulations. First, small businesses should be able to understand what is expected of them. I want small businesses to know that if they are playing by the rules of the game as expressed in plain English compliance guides the agencies will be required to print, then they have nothing to fear from inspectors. Sound like common sense? It should be, but for too long agencies like EPA and OSHA have refused to tell businesses how they can avoid the threat of regulatory action. Like the merchant who responds to questions about his product with the phrase caveat emptor, some regulators have taken the attitude that it is not their responsibility to make complying with the law easy, preferring instead to punish small business owners who deviate in the smallest way from the most complicated regulation. The second part of my bill is designed to give small businesses a place to voice complaints about excessive, unfair or incompetent enforcement of regulations, with the knowledge that their voices will be heard. My bill sets up regional Small Business and Agriculture Ombudsmen through the Small Business Administration's offices around the country to give small businesses assurance that their confidential complaints and comments will be recorded and heard. These Ombudsmen also will coordinate the activities of volunteer Small Business Regulatory Fairness Boards, made up of small business people from each region. These boards will be able to investigate and make recommendations about troublesome patterns of enforcement activities. Any small business that is subject to an inspection or enforcement action will have the chance to rate and critique the inspectors or lawyers they deal with. In dealing with small businesses today, agencies sometimes seem to assume that every one is a violator of their rules, trying to get away with something. Some agencies do a good job of fulfilling their legal mandate while assisting small business, but many agencies seem stuck in an enforcement mentality where everyone is presumed guilty until proven innocent. I think we should let small businesses compare their dealings with one agency to dealings with another so that the abusive agencies or agents can be weeded out and exposed. Agencies should be vying to see which can fulfill their statutory mandate in a way that helps and empowers small business. We need direct feedback from small businessmen and women around the country on how well the regulators are doing their jobs. The third part of the legislation will create some financial accountability at Federal agencies and level the playing field for small businesses when they disagree with a fine or penalty imposed on them this bill will make the Government inspectors and lawyers responsible for their actions in assessing fines, penalties, and citations because it will allow small businesses to recover their legal costs from the Government when the enforcers and the lawyers have been unreasonable. If Federal agencies make excessive demands that they can not sustain in court, then the Federal agency will have to pay the legal fees of the small business. Small businessmen and women in American are more than willing to comply with regulations and pay appropriate penalties when they are in the wrong. But it is time we put a stop to powerful Federal agencies swooping down on small businesses and insisting on unreasonable fines just because they agency enjoys an enormous financial and resource advantage and can afford an expensive and time consuming court challenge. If the small business can reduce or eliminate the penalty, this bill will require the legal costs to be paid directly out of the agency's budget. On Monday of this week, the President told the White House conference that he wants Government regulators to stop treating small business men and women as criminals and start treating them as partners or customers. I believe this legislation will make that goal a reality and bring much needed relief to small businesses across the country. I hope the President will follow through on his speech to small business and join with the National Federation of Independent Businesses in supporting this bill. I urge all of my colleagues to join with me in supporting small business by supporting this legislation. Mr. President, I ask unanimous consent that the bill and additional material be printed in the Record.

Mr. BOND

Mr. BOND. Mr. President, I would like to take a few moments to recognize the 1965 alumni class of Charles Sumner High School on their 30-year class reunion. Charles Sumner High School, located in St. Louis, MO, is one of the oldest high schools west of the Mississippi River founded in 1875. Sumner High has been one of the most prestigious schools in the Midwest, concentrating on educating students for a college curriculum. The alumni of Sumner high are very proud and distinguished people. It is with fond memories that the Class of 1965 recognize and remember their Alma Mater as ``No Substitute for Excellence.'' Mr. President, the 1965 alumni class of Charles Sumner High will be celebrating their 30-year class reunion on June 16-18. I would like to extend my sincere congratulations and best wishes to the Class of 1965, and hopes for continued success in the future.

Mr. BOND

Mr. BOND. Mr. President, a few weeks ago the Senate made good on its historic opportunity to balance our Nation's budget, and we voted to save our children and tomorrow's children from a burden that they did not cause and do not deserve. The American people made their position on this issue crystal clear--a balanced budget is their top priority. Even many of those who have long-standing interests in tax relief, including the small business owners that I hear from as chairman of the Committee on Small Business, do not want tax cuts at the expense of a balanced budget. One poll conducted by a nationwide organization representing over 600,000 [[Page S8184]] small businesses showed that 95 percent favored a constitutional amendment requiring the Federal Government to balance the budget and that 88 percent believed Congress should focus its attention primarily on deficit reduction. The Senate listened to the American people on this issue. We worked hard, debated earnestly, made difficult decisions, and fulfilled our obligation by voting to bring the budget into balance by the year 2002. The result of that work is not only a better financial legacy for America, but the production of an economic dividend of approximately $170 billion over the next 7 years. When the opportunity for tax cuts arrives as a result of our control over budget deficits, Congress should view the economic dividend as a young, growing business would view a small influx of cash. It should be invested very carefully. I strongly believe that some tax relief needs to go to families with children. I also believe, however, that we should use a portion of the dividend in a way that will create jobs and stimulate investment and growth in our economy by providing tax cuts for small businesses. Year after year small businesses generate a significant number of new jobs, even while corporate America downsizes. In fact, according to the Small Business Administration, small businesses provided 100 percent of the net new jobs from 1987 to 1992. By targeting some of the tax cuts toward small business we will not be spending the dividend but rather reinvesting it in our economy. That way, all Americans will benefit through an improved standard of living. Small businesses need cash to meet payroll, pay their day-to-day bills and to invest in capital improvements. In a recent study, small business owners identified tax burdens as their No. 1 problem. The economic dividend provides us with an opportunity to rectify the single most important concern of that portion of our economy that can contribute to America's economic growth. When the Committee on Finance is determining what tax cuts should be enacted as a result of the budget resolution and the economic dividend, I strongly encourage the members to include on the priority list at least the following four targeted tax cuts to promote economic growth and job creation by American small business. First, increase the small business expensing provision. Allowing a current deduction for newly purchased assets improves the cash flow of a small business. It also would encourage a small business to invest in new equipment which in turn helps manufacturing and related industries. This is a formula for maintaining and enhancing job growth. Second, provide a 100-percent deduction for the health insurance costs of the self-employed. With the passage of H.R. 831 earlier this year, we gave the self-employed a permanent but only a partial deduction for health insurance. Corporate employers already are able to deduct the full cost of health insurance. This disparity in treatment continues to put the entrepreneurs of America at a disadvantage--23 percent of the self-employed are uninsured today. About 4 million of the uninsured are in families headed by a self-employed worker. A 100- percent deduction will make their insurance more affordable and help these families purchase the health insurance coverage they need and deserve. Third, estate tax relief targeted specifically for small business. Generally, this would be a tax deferral for a family owned and operated business that is passed to heirs who continue to own and operate the business. As you know, this is a vital change because some owners of a small family businesses find they cannot afford to pass the business on to their children simply because they cannot afford to pay the estate taxes. A recent survey of family businesses showed that a mere 57 percent of owners planned on keeping the business in the family; taxes were cited as one of the prime reasons for their plans to sell out. Unfortunately, our system of taxation is working against us here. Rather than promoting and stimulating business growth, the law is forcing people to make decisions to sell or close what otherwise could be a viable enterprise. Fourth, cut the capital gains tax rate and index it for inflation. In order to unlock built up asset values. Entrepreneurs that have become successful might repeat their job-creating activities in a new company if it were not for the disincentive in the tax laws against realizing and reinvesting these gains. The effect of permitting all capital gains to be reinvested more freely would be to give our economy a boost that it otherwise would not enjoy, and much of this reinvestment likely will be directed at small business. Simply said, a reduction in the capital gains rate will expand economic activity so all Americans will be able to reap the benefit of that growth by additional jobs and an improved standard of living. As chairman of the Committee on Small Business, I urge my colleagues to look at tax-cutting opportunities as a way to make an intelligent, long-term investment in our small business sector but will benefit the entire economy.

Mr. BOND

Mr. BOND. Mr. President, as our Nation rushes toward the 21st century, we are living in a critical time for small business men and women. For over 40 years, it has been our Government's policy to encourage the growth of small business and entrepreneurship. With all the discussion today about reinventing or reorganizing Government, I am concerned that too much emphasis has shifted away from our Government's role in promoting small business. We must be committed to deficit reduction, but we also must remain committed to the vital small business sector of our economy. As chairman of the Committee on Small Business, I believe it is time to reassure America's small business owners and entrepreneurs that their Government is behind them 100 percent. During the past 10 years, as large businesses have restructured, laying off thousands of very able workers, small businesses have filled this void, creating up to five new jobs for each person laid off as the result of a corporate restructuring. During these years, economic growth has been fueled by small business. Fifty-four percent of America's work force now is employed by small businesses which generate 50 percent of the gross domestic product. As we experience this period of restructuring and significant change in our business community, many small businesses have flourished. And their success has added to our Federal tax revenue base. As small businesses are confronted with the uncertainties of a changing Government, I believe we should provide them with positive assurance that their Government will continue to support them in the future. Therefore, I have developed the following five fundamental principles for reform, that define the critical role that the Small Business Administration should play as we prepare for the next fiscal year and the next century. First, consolidate and redesign small business loan guarantee programs: Abolish all SBA direct loan programs except for Disaster Assistance. Implement a simpler and safer credit support role for SBA to encourage private sector loans to small business. Second, make SBA an effective small business advocate: Change SBA's structure and refocus SBA's resources to make it an effective advocate and ombudsman for small business on Federal governmental policy issues. SBA field offices and Small Business Development Centers should work together to provide regulatory compliance assistance to small businesses and act as a watchdog for excessive Federal regulatory behavior. Third, refocus SBA's role in small business Government contracting: Retain SBA's role to encourage Federal Government contracting opportunities available to all small businesses. Discontinue the practice of having SBA act as a contracting party with the Federal Government and then subcontracting with small businesses. Consider a new Federal contracting preference for small business located in, and hiring employees from, high unemployment and low income areas. Fourth, redesign SBA's role in small business venture capital: Increase private sector responsibilities in funding SBA's Small Business Investment Company Program. Investigate authorizing a Government sponsored enterprise to issue pooled securities to fund venture capital investments made by SBIC's. Fifth, shift small business counseling and management assistance to the private sector: Phase out SBA's direct delivery of small business management assistance and business counseling, and shift the cost of SBA sponsored management assistance increasingly to colleges, universities, and to the States. Encourage the lending community to offer business counseling to applicants for SBA guaranteed loans. I am setting forth these five fundamentals for reform as a positive statement to our Nation's small business community to assure them that Government reform does not mean they suddenly have been forgotten. And as a demonstration of my strong belief that we need to implement the reforms spelled out in the five fundamentals, today I am introducing the Small Business Lending Enhancement Act of 1995. This legislation will increase the supply of loans available under the Small Business Administration's 7(a) Guaranteed Business Loan Program. The direct beneficiaries of this bill are America's small business men and women who otherwise would not be able to obtain affordable financing for their companies. The formula I have chosen for this bill authorizes a combination of lower guarantee levels and higher lender fees to increase loan capacity and reduce the taxpayer subsidy of these loans. The impact of these changes dramatically decreases the amount of the loan loss reserve that must be funded out of annual congressional appropriations. In fiscal year 1995, SBA's 7(a) loan program needed $215 million in appropriated funds to support a $7.8 billion guaranteed loan program. Under my bill, in fiscal year 1996, the 7(a) program can grow to $11 billion but will only require $119 million in appropriations. While the loan program size increases by 41 percent, there is a 44 percent decrease in taxpayer cost to fund the program. This bill is structured to balance the demands of the popular 7(a) Guaranteed Business Loan Program with prudent fiscal management. While I am committed to balancing the Federal budget, I will work to retain and improve effective programs, like 7(a). I believe the dual avenue I am advocating--combining increased fees from lenders with a decreased appropriations level--creates the correct balance in these times of fiscal restraint. Small business owners need access to capital, and the Small Business Lending Enhancement Act of 1995 is the first step toward meeting the financing demands of small businesses. My bill is just a beginning. I will continue to study additional enhancements for the 7(a) program, as well as other ways to streamline and improve the manner in which we carry out our Federal policy of encouraging our small business community to continue its growth into the 21st century. Mr. President, I ask unanimous consent that the bill and certain additional materials be printed in the Record.

Mr. BOND

Mr. BOND. Mr. President, I rise today to introduce an old friend--the Health Information Modernization and Security Act. In past years, I had worked with Senator Riegle in developing this legislation. I am now very pleased that Senator Lieberman has been working with me to present this legislation for this Congress. Also, as in past years, we are very fortunate to have the bipartisan support of Congressmen Hobson and Sawyer from Ohio who will introduce this bill in the other Chamber. Our health care system today needlessly wastes billions of dollars on red tape and paperwork. This administrative waste effectively adds a 10-percent surcharge to every health insurance and health bill in the country. In a world that is increasingly automated and computerized, health professionals must still largely rely on an antiquated and inefficient paper-based system to file claims with insurers and coordinate benefits. The bill that I am introducing today is the latest in a project that began 3 years ago with the introduction of the Health Insurance Simplification and Portability Act. That legislation has evolved considerably since then and we have sought the input of hundreds of experts from across the Nation. Last year during the health care reform debate, this effort received broad bipartisan support and was included in nearly every major health care reform bill. The first and most obvious question is: Why is Federal legislation needed? The answer to that question goes back to 1991 when the Workgroup for Electronic Data Interchange, or WEDI as it is now called, was formed by then Secretary of Health and Human Services, Dr. Louis Sullivan. WEDI was formed to respond to the challenge of reducing administrative costs in the Nation's health care system. WEDI is made up of health insurers, hospital officials, physicians, dentists, nurses, pharmacists, privacy experts, businesses, and technology experts. WEDI has strongly recommended that the Federal Government adopt standards for the electronic data interchange of financial and administrative information to ensure uniformity across State lines. There is a blizzard of paperwork that is a nightmare for patients, hospitals, doctors and businesses in this country. Everyone agrees that a solution must be found that reduces these costs and the burden they are placing on our health care system and the ability of people to afford it. A study conducted by Lewin-VHI estimated that administrative costs add $135 billion in health costs in the United States. These costs are escalated by the unwieldy inefficient paperwork-blizzard billing system that has evolved in this country. In other sectors where accurate and timely information is key to production, the investment has been made in information systems. There are good explanations for why health care has been slow to invest in information systems. There are barriers such as so-called quill pen laws that require information to be sent and kept on paper. There is a lack of standards for the data and there is a lack of discipline on the part of insurers to agree unanimously to a common set of data to use for billing purposes. These are just a couple of examples of the barriers to overcome. In March 1992, I introduced, along with Senator Riegle, the Health Insurance Simplification and Portability Act. The main purpose of that bill was to reduce administrative costs and protect consumers from insurance rip-offs. I am proud to say that it was one of the few bipartisan health bills that were introduced during that Congress. Later in 1992, I introduced the Medical and Health Insurance Information Reform Act which was the Bush administration's proposal for bringing administrative costs under control. My goal has been to draft legislation to propose what the experts are saying must be done to reduce administrative costs. The steps they recommend would facilitate the development of a viable market in this area and lead to the eventual implementation of electronic solutions to many information problems that exist in health care today. In determining the proper Federal role, the experts have been telling us is that first they don't want Government to be part of the problem. That should be obvious, but as we all know it many times is easier said than done. Second, they want the Government to adopt a set of standards and conventions for electronic data interchange for financial and administrative transactions in the health care system. In adopting these standards, the Government should recognize the value of standards that have already been [[Page S7622]] adopted or are in development and not try to reinvent the wheel. Where standards already exist, those are the standards that should be adopted. And lastly, but most importantly, legislation is needed to protect the privacy and confidentiality of patient data. The importance of this effort must be underscored. We must ensure that access to data that includes patient identifiers is secure. Under this legislation, the Secretary would adopt national standards for electronic health claims and other financial and administrative transactions. The standards that would be adopted by the Secretary would be those that have been developed by private standards-setting organizations that seek broad consensus and input to their standards. If the Secretary determines, however, that the standards that have been developed by these standard-setting organizations are not practical and would lead to substantially greater administrative costs compared to other alternatives, then the Secretary could adopt other standards that are in use and generally accepted. Two years after these national standards for electronic transactions are adopted, all health care plans including Medicare and Medicaid would be required to accept health claims electronically or perform any of the standardized transactions electronically with any doctor, pharmacist, dentist, hospital, or any health provider that wants to take advantage of the new electronic standards. Smaller health plans would be given an additional year, for a total of three years, to accept the electronic transactions. Putting this system of standards in place means that all health providers would be able to send their insurance claims electronically to the universe of payors using the same formats and data. These standards would create an electronic universal claims form. It further means that payors would be able to perform coordination of benefits activities electronically with all other payors. This will help crack down on fraud and dramatically reduce the number of improperly paid claims. This will save consumers billions of dollars each year. Having a system with these national standards in place will also mean that providers will no longer be forced to wade through the multiple forms and formats and requests for additional data for billing in order to get reimbursed for their services. In addition, health plans would reap large savings from the increased number of claims they would receive electronically. When insurers accept claims on paper an expensive data entry system is in place today to computerize the data from the paper claim. This bill would also repeal the controversial Medicare and Medicaid Databank. This databank was created in OBRA 93 to collect data at the Health Care Financing Administration to identify cases in which claims were improperly paid by Medicare when they should have been paid by a private insurer. By law, when a Medicare beneficiary has private insurance, the private insurance plan is the primary payor. The databank had proved to be unworkable, but the need still exists. Medicare loses billions of dollars each year by paying claims improperly. In estimating the amount of savings that would result from this effort, the workgroup for electronic data interchange [WEDI] conducted an extense study and analysis of data to determine the costs of implementation and the net savings possible from moving to electronic data interchange of health data. Using the WEDI data, it is estimated that the changes that would result from this bill would produce a net savings of over $29 billion over a 5-year period to health plans, and providers. In closing, the Government should play only the minimal role needed to help the market work. Government should not design the solution. If the Government tried to design the solution we would end up with another set of multimillion dollar DOD toilet seats and we would not solve the problems that exist. In the past I have been told to wait for passage of a comprehensive health care plan to enact this legislation into law. I have agreed with that strategy in the past, but it did not happen and the legislation has died in two previous Congresses. Had we gone ahead in 1992, this system would be in place today. I do still want to see comprehensive health care reform and will await action by Congress to take that important step. I believe this legislation will and should be included in comprehensive reform of the health care system. However, I will ask the committee of jurisdiction and the majority leader to move this legislation as a free standing bill. This health care information system will lower administrative costs, improve the quality of care and help us to learn what works and what does not work in health care. This system will provide innumerable benefits to our health care system and to the patients who rely on it. I still agree that we need comprehensive health care reform. I want to see that done. I want this bill to be considered. I believe it will be included in most of the major reform packages coming forward. But I believe that, if no comprehensive legislation passes, we can pass this bill. If we had gone ahead and passed it in 1992, the 2 or 3 years needed to get the system up and running would have been accomplished and we could have that process in place now. If it appears that we will not have comprehensive health legislation I will ask the committee of jurisdiction and the majority leader to move this legislation as a freestanding bill. It will lower administrative costs, improve the quality of health care, and help us learn what works and what does not work. I welcome inquiries of my colleagues. We solicit support. Senator Lieberman and I would be delighted to have other colleagues join with us in this effort. Mr. President, I ask unanimous consent that a summary of the bill be printed in the Record. Summary of the Health Information Modernization and Security Act title i--purpose and repeal of databank Purpose: the purpose is to improve the Medicare and Medicaid programs and the efficiency and effectiveness of the health care system by encouraging the development of a health information network through the establishment of standards and requirements for electronic transmission of certain health information. Repeal of databank: Repeals the Medicare and Medicaid Coverage Databank established in OBRA 93 when the Secretary of Health and Human Services provides written notice to Congress that the Medicare and Medicaid Coverage Data Bank is no longer necessary because of the operation of the health information network established pursuant to this Act. title ii--administrative simplification Adoption of electronic transaction standards: The Secretary adopts standards so that certain common health care administrative transactions may be conducted electronically to reduce the costs of paying and providing health care. These transactions include claims, coordination of benefits, claims attachments, enrollment and disenrollment, eligibility, payment and remittance advice, premium payments, first report of injury, claims status, and referral certification and authorization of services. These standards must be those that have been developed by a private standards setting organization such as the American National Standards Institute. The Secretary may adopt additional standards if the Secretary determines that the standards developed by private standards setting organizations are impractical and more costly to implement than a standard that is in use and generally accepted. The Secretary is required to publish in the Federal Register the analysis upon which such a determination is made. The Secretary may adopt different standards for data elements than those developed by a standards setting organization through the use of negotiated rulemaking if a different standard would substantially reduce administrative costs. The Secretary also adopts standards for unique health identifiers, code sets, electronic signatures and coordination of benefits. Security standards: The Secretary is required to adopt security standards to protect the confidentiality of health information, to protect against threats or hazards to the security or integrity of the information, and to protect against unauthorized uses or disclosures of health information. Privacy standards: The Secreatry is required to adopt privacy standards including the rights of individuals with respect to their health information and the procedures for exercising these rights. Privacy standards shall also include standards describing the uses and disclosures which are authorized, and the security of such information. Health information advisory committee: The Secretary must consult with other appropriate federal agencies in carrying out these duties and must rely on recommendations from the Health Information Advisory [[Page S7623]] Committee. The Secretary is required to publish in the Federal Register the recommendations of the advisory committee regarding adoption of standards. Timetables for adoption of standards: Initial standards are to be adopted within 18 months of enactment with the exception of standards for claims attachments which are to be adopted within 30 months. The Secretary reviews and modifies these standards as determined appropriate but not more frequently than every 6 months. These modifications must still be those adopted by a private standards-setting organization or follow the procedures outlined earlier. Requirements for health plans: If anyone desires to conduct any of the standardized financial and administrative transactions with a health plan (which includes government health plans), then the health plan must conduct that standard transaction in a timely manner. A health plan can satisfy this requirement by using a health information network service or ``clearinghouse'' to translate a transaction into the standardized form. Timetables for compliance with requirements: Large health plans, as defined by the Secretary, must comply within 24 months of the adoption of a standard. Small health plans must comply within 36 months. Health plans must comply with modification to standards in a timeframe determined appropriate by the Secretary, but not sooner than 180 days. General penalty for failure to comply with requirements and standards: A penalty of $100 for each violation is imposed. No penalty higher than $25,000 may be imposed during a calendar year for a violation of a specific standard or requirement. Penalties do not apply if it established that the person did not know and would not have known by exercising reasonable diligence. If the failure was due to reasonable cause and not to willful neglect and the failure is corrected within 30 days (or longer as determined by the Secretary), no penalty is applied. A penalty not already waived, may be further reduced if the failure is due to reasonable cause and not to willful neglect and the penalty would be excessive relative to the compliance failure. Criminal penalties for wrongful disclosure of health information: Any person who knowingly (1) uses or causes a unique identifier to be used for a purpose not authorized by the Secretary, (2) obtains individually identifiable health information in violation of the privacy standards or (3) discloses individually identifiable health information to another person in violation of the privacy standards shall (1) be fined up to $50,000, imprisoned for up to a year, or both, (2) if the offense is committed under false pretenses, fined up to $100,000, imprisoned for up to 5 years, or both; and (3) if the offense is committed with intent to sell transfer, or use individually identifiable health information for commercial advantage, personal gain or malicious harm, fined up to $250,000, imprisoned for up to 10 years, or both. Effect on State law: Provisions, requirements and standards under this Act supersede contrary provisions of State law including laws that require medical plan records or billing information to be maintained in written rather than electronic form (so-called ``quill pen'' laws) and provisions which are more stringent than the requirements or standards under the Act. Exceptions: (1) state laws which establish more stringent requirements or standards with respect to privacy of individually identifiable health information (2) state laws which require health providers to transmit financial and administrative health transactions electronically, (3) state laws which provide for the coordination of health benefits which are in effect on the date of enactment, (4) state laws that the Secretary determines are necessary to prevent fraud and abuse. Nothing in this Act preempts or invalidates any state or federal laws for public health reporting of certain health data. Health information advisory committee: Establishes a Health Information Advisory Committee of 15 members; 3 appointed by the President, 6 appointed by the Speaker of the House of Representatives after consultation with the Minority Leader, and 6 appointed by the President pro tempore of the Senate after consultation with the Minority Leader of the Senate. Standards for patient medical record information: Not earlier than 4 years, but sooner than 6 years after enactment, the Secretary is required to recommend to Congress a plan for developing and implementing uniform data standards for patient medical record information and the electronic exchange of such information. Grants for demonstration projects: The Secretary is authorized to make grants for demonstration projects to promote the development and use of electronically integrated clinical information systems and computerized patient medical records.

Mr. BOND. Mr. President, because of the limitations of time during morning business, I gave only a summary of the statement I had on the Health Information Modernization and Security Act. There is another very important part of it that I would like to have added to that record. The fact that this measure has been worked on for at least 3, and perhaps 4\1/2\ or five years by Mark Hayes, a very capable member of my staff. Mark has worked tirelessly contacting all of the interested parties working with governmental agencies, private standard setting organizations, and people who are concerned about privacy, and all other aspects of the measure. It is due in large part to his dedication, his skill, and his good humor to put up with all of the many, many different variations and different ideas that we were able to produce what I think is a very good measure. I am very pleased with that measure. But I also note that this is the last day that Mr. Hayes will be working with me on the Small Business Committee staff. And I take this opportunity to express to him my sincere appreciation for his dedicated efforts. I can say from those who have contacted me who have worked with him that there are many, many people who join with me in expressing appreciation for the great leadership that he has shown. We shall miss him in the Federal Government. But I know that he will do well in the private sector, and the work that he has done on the Health Information Modernization and Security Act I think will serve the cause of improving and making more efficient the health care delivery system in the United States.

Mr. BOND

Mr. BOND. I thank the Chair. (The remarks of Mr. Bond pertaining to the introduction of S. 872 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'') THE PRESIDING OFFICER. The Senator from Missouri is recognized. MR. ASHCROFT. I thank the Chair. (The remarks of Mr. Ashcroft pertaining to the introduction of Senate Joint Resolution 36 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. BOND

Mr. BOND. No. The 2-year period to demonstrate the effectiveness of a State program may be granted by EPA, if the Agency believes it to be reasonable. This allows the Agency to implement the inspection and maintenance requirements in a more flexible way. But unreasonable proposals that surely would not merit the emissions credits claimed need not be granted a 2-year demonstration period. It is not an automatic extension for any and all inspection and maintenance programs that may be submitted by the States.

Mr. BOND. The Senator is correct. EPA is to examine the entirety of each State inspection and maintenance program and is to assign the appropriate emissions credits based on the actual program the State submits. No automatic discounting factors should apply and the determination of the appropriate emissions credits should be based on good science and engineering analysis.

Mr. BOND. No. The sole purpose of this language is to prevent EPA from requiring States to adopt enhanced inspection and maintenance programs based on the I/M240, test-only model and to prevent EPA from automatically discounting programs that use test-and-repair stations by a factor of 50 percent. The language has no other effect on State obligations under the Clean Air Act.

Mr. BOND

Mr. BOND. Twenty minutes. Mr. President, I am happy to yield to Senator Hatfield.

Mr. BOND. Mr. President, I thank my colleague from New Mexico who has presided over a very difficult, but a very, very important effort in the Senate Budget Committee. I think the tremendous effort he made deserves a great deal of praise and thanks not only by us, but by future generations and a lot of people who may not really understand the full impact of what Senator Domenici has led us to achieve for the health of our economy and for future generations. In the next few days, we are going to have the historic opportunity to move through Congress a budget plan which will actually get this Government's books to balance. How many times have we talked about it? Everybody decided that it was the ``holy grail,'' that we could never get there. Well, through Senator Domenici's leadership, we have come up with a plan. Nobody said it would be easy. With his leadership and the willingness of Members to stand up and vote for action instead of just talking a good game, this Senate can take that first step. Make no mistake, the step is a big one. For the first time in 25 years, the Congress has an opportunity to pass a budget which will get us into a surplus rather than keep adding to our debt. The budget is tough. It sets priorities and recognizes that Government cannot do it all. It makes a statement that the time has come for leaders of today to start paying attention to the economic devastation that is being created for tomorrow's generations because we cannot live within our means. We have heard many speeches about the need to cut spending, reduce the deficit, and get our Nation's books into balance. Everyone who looks at our nearly $5 trillion debt recognizes the need to do something so that we do not keep piling on that debt for our children and grandchildren. Over the next few days, the American people will have a rare opportunity to see exactly what the political leadership's visions for our country's future are. I have a chart, and you have seen it before in different colors, with the same message. The vision of this Domenici budget shown here in blue is that by taking us from $176 billion on a glidepath to 2002, we can reach a surplus by 2002. It is a bold plan. It scrutinizes every program in the Federal budget from agriculture to welfare, and already the dollar has strengthened because we did something. The Washington Times reported last Friday that on Thursday, May 11, the dollar jumped in its biggest 1-day advance in 4 years. That was the same day that the House and Senate Budget Committees approved our plans for reducing the deficit to zero by 2002. It is no coincidence that the dollar strengthened the same day we made an effort to restore fiscal sanity to the Federal books. Earlier this year, by contrast, when the Senate failed, by one vote, to pass the balanced budget amendment, we showed that some were willing to sacrifice U.S. global competitiveness for short-term political gain. The message was heard loud and clear in the global markets, and the dollar fell to record lows against the Japanese yen and the German mark. Why is that important? Well, Mr. President, it is important because the international monetary markets can tell a country when it is sick. They told Mexico it was sick because the peso started declining and nothing was done. Mexico got in big trouble. The international markets were taking a look at our fiscal policy, our inability to control our spending and saying that the United States is sick. And when we failed to pass the balanced budget amendment, they recorded their votes in the way that is most effective. They placed their convictions with money behind their views. They said we are in danger of going downhill. The dollar devaluation does not just impact big banks and big industry. It has an affect on each and every American. The dollar's low value means that U.S. assets are less valuable, imports are more expensive, and that the threat of foreign competition and lost jobs is greater than ever. Passage of this budget resolution, which would get us to balance by 2002, [[Page S6880]] is critical to the health of the dollar and to the American economy. Bold changes are in store. We have proposed dramatically to restructure several Cabinet agencies and the programs under their jurisdiction. We propose the elimination of programs, new and old, which will outlive their purpose or are too expensive for the supposed good they do. We have heard very passionate speeches, sincere speeches, on this floor, about how we need to be spending more in all of these areas. That is precisely how we got into this fix. We did not get into this fix spending too much money because we were spending it on things that were low priorities. We wanted to spend more on everything. That is what has led us to the fix that we are in today. What we are seeing, in essence, in this budget is that we cannot spend more on everything. We have to make some choices and we have to slow the growth. We have told agencies they have to buy smarter, travel more cheaply, and squeeze out the last nickel in their operating budgets. Let me deal with one particular charge, or one particular allegation, that I am afraid was based on misinformation. One of my colleagues, earlier today, was told by NIH that if funding was cut by 16 percent, the researchers would not get any new grants. There was talk of the success rate. Currently, the success rate for health research is one in four. That means one out of four new applications for research gets granted. The NIH apparently told my colleague that under this plan only 1 out of 100 new grant applications would get NIH funds. Our staff looked into it and we found out that that was totally unsupportable. First, NIH got the numbers wrong. The budget resolution assumes a 10 percent cut in NIH; NIH assumed a 16 percent cut. They came up with some figures that were not the figures we used and took totally different assumptions. So, No. 1, their overall figure was wrong. No. 2, NIH decided, in that classic of all Washington moves, to ``close the Washington Monument.'' They were going to hit the thing with all of the cuts that are most important, and that is the research dollars. The ``Washington Monument syndrome'' is when any agency's budget is cut, they shut down the most visible thing that they do. They said, ``That cheap Congress would not give us the money to keep it operating.'' So NIH said that 70 percent of the cut would come from research grants. If I were a researcher out looking for grants, I would ask the folks at NIH: How come you do not want to cut money out of the overhead, the bureaucracy, the buildings, the Washington, DC, efforts? I think that is a pretty good question. In any event, they gave us that assumption. Finally, NIH assumed they would take all the money from new grants. NIH gets 34,000 requests for new grants each year, and they assume they would cut all the money designated for new grants. In fact, this resolution would cut NIH funding by $1.1 billion. The Senate Budget Committee staff asked the NIH if they distributed that 10 percent cut equally among the bureaucrats, Washington researchers, new grants and existing grants, what would they get? First of all, NIH had two responses. They said they would do it differently. That is cause for us to worry. They said, ``If the cuts were distributed equally, one in six researchers would get new grant money''--in other words, one out of six instead of the current one out of four. Not one out of 100. This, I think, is important to set the record straight. This budget plan is not going to gut NIH. In addition, this budget is going to say that we are going to save Medicare. Medicare is broke; it must be fixed. The public trustees are right. The people who were appointed as public representatives and the President's Cabinet members said that Medicare, part A, is on the verge of collapse. It will go into the red in 1997 and start spending more money than it takes in and, by 2002, the trust fund will be broke. If the trust fund is broke, then under the terms of the law, no more money can be paid. In other words, the system shuts down. I do not think it is responsible to walk away from that. The President has decided to sit back and make a political game out of Medicare. Worse, he is talking out of both sides of his mouth and saying, ``You cannot claim to protect Medicare when it is cut.'' But he has no plan for saving it. The fact that Medicare part A is on the death spiral was revealed by the President's own Cabinet members. The President knew back in February when he said there would not be one penny cut out of Medicare, that Medicare was on the path to first insolvency and then bankruptcy. He set up a status quo budget with no changes, no plans for saving Medicare. We stepped to the plate to fix the crisis, and he says that we are trying to kill Medicare. Second, the President conveniently forgets that he proposed similar cuts in Medicare himself. When the President, in 1993, needed to finance his Government-controlled, top-down health care plan, he proposed spending reductions in Medicare and Medicaid to pay for them. He said Medicare and Medicaid are going up three times the rate of inflation, and all we propose to do is let it go up two times the rate of inflation, and he said that is not a cut. When he said specifically that is not a cut, how come it gets to be a cut now when we propose to save Medicare by doing about what he proposed to do in 1993? Mrs. Clinton, the First Lady, has said that she is confident we can reduce the rate of increase in Medicare spending without undermining the quality of Medicare recipients. We know we can get savings. That is what she said. Perhaps the best evidence of the political game that is being played here comes from the architect of the Clinton health care plan, Mr. Magaziner, who said, ``Slowing the rate of growth actually benefits beneficiaries considerably because it slows the rate of growth of the premiums they have to pay.'' It seems to me that those great arguments of a couple years ago cannot be ignored when they come out and try to attack our efforts to save Medicare now. Under the Senate budget resolution, Medicare will still be the fastest growing part of the Federal budget. Solvency would be guaranteed for 10 years. Medicare spending will continue to grow at more than twice the rate of inflation well into the next century. That is just the first step. Let me move now, Mr. President, to one other example of the kinds of reforms that this budget tackles. That is, reforming the Department of Housing and Urban Development. I happen to be the chairman of the subcommittee that handles the HUD appropriations. We are responsible for trying to stop the train wreck. This year, we began holding hearings to get at the funding crisis at HUD. This is a crisis that not only threatens the programs which millions of people depend on for the very roof over their head, but threatens to squeeze out needed dollars for other important programs. We have found in our hearings and in our investigations that HUD is a dysfunctional agency that requires a complete reevaluation of its mission and a major reform of its program and program operations. The Department has grown from an agency responsible for about 50 programs in 1980 to well over 200 programs now. It has neither the capacity nor the political will to administer all these programs. Frankly, we have got to make some serious changes. It is this crisis that led me to advocate and propose a dramatic restructuring of HUD, which is to be incorporated in this budget plan. That is why I argued so strongly for the passage of the rescission package which begins the major surgery HUD so desperately needs. In particular, the budget anticipates the creation of block grants for public housing. It assumes that the actual projected costs of section 8 contract renewals, that some of this assistance should be given in block grants to the States. The States would get broad latitude to redesign their programs so that they could use State housing finance agencies to manage their program to contract out the responsibilities and to get that program under control. Unfortunately, when the President indicated he would veto the disaster relief supplemental bill with the rescissions in it, he not only took the money away from the California earthquake took over $6 billion in cuts for future year spending from HUD. Let me make this point again. The bill that we passed out of the conference committee the President said he would veto provides vitally needed funding for disaster relief. The House and the Senate also passed and we passed by an overwhelming majority in this body, a measure to cut spending in HUD so that we will face not quite as serious a problem next year. We still have a funding problem for HUD that is unbelievable. The President's budget asks for $20 billion in budget authority and $14 billion in outlay increases for HUD over the next 5 years. Even those first are suspect. We have to have the rescission bill to cut off the authority now or we will add more commitments to HUD that they will have even greater trouble funding in the future. Now, to me, that effort for fiscal responsibility is one of the first and most important steps we can take. The President has come out with some kind of gobbledygook, saying that this bill that we pass contains pork. Does he want more cuts or does he want less cuts? Items that he objected to in the rescissions bill were items that had been passed by Congress and signed by the President in past years. Now he objects because we have not cut the right things? What does he want Congress to cut? We stepped up to the plate and gave him some cuts that were carefully worked out in this body and in conference with the House. He wants to veto that rescission bill. Two things happen if that veto goes through and it is upheld: No. 1, we do not have the money for the emergencies; No. 2, the money that is not rescinded, the budget authority that is not rescinded, will go into effect. We will be on an even steeper incline in our rate of spending, and it will be more difficult. The President told us back in 1993 he wanted to see us end the deficit. What happened? Did he forget what he said in 1993? He raised taxes to start what he said was the process. He said the second step is cutting spending. Where has he gone? Frankly, after the President raised taxes and cut defense, he has decided that that was enough. So what if the deficit goes up every year on his budget reaching $276 billion by the year 2000. So what if another $1.2 trillion are added to the debt? Well, I think there are some serious consequences. No. 1, it will hurt our economy right now. It is going to be a real problem for those who are making a living in our economy today. We are going to see the potential of inflation coming back much more strongly. That is what happens when the value of our dollar falls. We are going to see our costs of goods go up. Most of all, we are going to see debt added to the credit cards of our children and our grandchildren. Can we afford to say that we are for our children, we are concerned about children, when we want to walk away from fiscal responsibility and add another $1.2 trillion to the $5 trillion we have already put on their backs? Mr. President, I do not think so. Mr. President, we have heard a lot of fancy speeches and we will hear a lot of fancy speeches, but when it comes right down to it, this is what we say back in Missouri: ``Show me'' time. Are we for cutting spending? Do we want to balance the budget? Or do we want to leave that spending machine going full throttle? I think we will get a fairly clear indication, because when the votes start, we will find out who really is serious about the financial stability of our economy today and the total economic security of our future generations. Do we have the political will? Are we willing to stand up to face the music and to vote for a tough budget? I believe we will. I will urge my colleagues to support the effort to get the budget deficit to zero and move it into surplus in the year 2002, because it is essential for our economy now. It is essential for the well-being of future generations. Mr. President, I yield the floor.

Mr. BOND. I will need 20 minutes.

Mr. BOND

Mr. BOND. Madam President, I thank my good friend, my colleague from New York. Madam President, as we begin the debate on this resolution authorizing a second round of Whitewater hearings, I thought it would be helpful to review why the Senate and the committee need these issues to be aired. [[Page S6775]] I wish to summarize for my colleagues some points that are particularly important to me and have come from my experience with the first round of hearings and also with the hearing back in February where we asked the questions that began some of the process in finding out what has gone on in the administration. As most of the Nation now knows, Madison Guaranty was a Little Rock savings and loan which went belly-up at the cost of nearly $50 million, and was owned by James McDougal--the business partner of the Clintons' in the Whitewater real estate deal. Madison Guaranty was the classic S&L story of insider dealing, reckless loan policies and ultimate failure with the U.S. taxpayers picking up the tab. It is a part of the $105 billion cost of the S&L debacle, and in that way is a story repeated in many communities around the country. But one part of this case has made it famous--many of its borrowers, directors, and counsel were prominent figures in Arkansas politics and government. The tangled web of Madison, Jim McDougal, and the Clintons has led to two sets of criminal referrals, an ongoing civil liability investigation by the RTC, a potential conflict of interest case for the First Lady's former law firm, a conviction of a Little Rock judge who improperly loaned SBA money to McDougal and Whitewater, several other recent guilty plea agreements and an ongoing investigation by independent counsel Starr. Since these issues first came to light, I have said over and over that the American people have a right to know what happened to the millions of dollars lost, and we, in Congress, must fulfill our obligation and get the facts out into the open. Last year the Senate was engaged in a lengthy struggle over what questions and areas the Banking Committee would be allowed to address as Whitewater--Madison hearings begin. Unfortunately, the Democratic leadership at that time did everything in their power to limit the scope of the hearings, and to block our efforts to get at the truth-- particularly as it relates to what Clinton administration officials have done to control or interfere with investigations. The questions we asked last year remain as relevant today as they did last May: Did Whitewater Development Corp. benefit from taxpayers insuring of Madison Guaranty deposits? Did any of Madison's federally insured funds go to benefit the Clinton campaigns? Were the bank regulatory agencies operating in an impartial and independent manner as they handled Madison Guaranty? How did the Resolution Trust Corporation handle the criminal referrals on Madison--both under the Bush administration as well as the Clinton administration? How did the Resolution Trust Corporation and the FDIC handle potential civil claims against Madison--both under the Bush administration as well as the Clinton administration? How did the Department of Justice handle the RTC criminal referrals it received, again both under the Bush administration and the Clinton administration? What were the sources of funding and lending practices of Capital Management Services, and how did the SBA regulate and supervise it, particularly as it related to loans to Susan McDougal and her company, Master Marketing. Full hearings on the Whitewater-Madison affair are needed so that all these questions can be fairly asked and answered. What happened in Arkansas, what happened in the 1992 Clinton campaign in their efforts to keep the lid on about the actions in Arkansas, and what has the administration done to manage the Madison-Whitewater issues since they took office. If we are to finally get to the bottom of the story as to what happened with the criminal referrals, I believe that we need to start with the first criminal referral on Madison Guaranty which was already in the Justice Department awaiting action when the Clinton administration took office. Remember, Madison Guaranty had failed in 1989 and had been first taken over by the FDIC, and then in August 1989 when Congress passed the S&L bailout bill the newly created RTC took over Madison. The RTC's mission was to close down failed thrifts, sell the assets, pay off the depositors and then seek out criminal or civil wrongdoing that may have occurred. If they found criminal wrongdoing--fraud, or attempts to enrich, they referred their findings to the Department of Justice for further action. If they found civil wrongdoing--for example, law firms or accounting firms who helped institutions stay open by providing misleading, incomplete or incorrect information to regulators or the S&L's board members--the RTC would pursue those cases. Thus from August 1989 the RTC had Madison Guaranty on its plate. No action was taken by the RTC on potential civil claims, but several criminal referrals were developed. In one case Jim McDougal and two others were accused of fraud, but were acquitted, in another case a board member plead guilty to falsifying documents. Then came March 1992 when the New York Times reported a series of potential misdealings in Madison Guaranty and spurred the RTC to take another look at the institution. This second look caused the first criminal referral to be sent to Justice in the fall of 1992, and it was this referral which awaited final action when the Clinton administration came into office in January 1993. I give this brief history in order to put things into perspective. Last year, Senator Specter and I offered amendments to the Whitewater Committee resolution which would have allowed the Banking Committee to pick up story at this point, and follow the trail of the first referral as it made its way through the Government, and then to follow the trail of the second referral as it was developed throughout 1993, up to and including the improper contacts by Treasury officials with White House staff. This of course would entail questioning the RTC officials involved, Justice Department officials involved, as well as Treasury and White House staff. Because we must remember that on the day that the Clinton administration officials walked in the door on January 21, 1993, a criminal referral on Madison Guaranty was sitting in the Department of Justice. I for one still want to know: How did the Department of Justice handle this referral? Was the White House informed and if so when and by whom? Who in Justice was assigned to monitor the Madison case, and what actions did they take? And then, as we know now, just months after taking office, a second set of referrals was being developed--and it too was sent off to the Clinton Justice Department by RTC officials in Kansas City. I want to know why the RTC decided to stay on the case. What happened to get a series of RTC officials reassigned and taken off the case? Is there a pattern of special treatment for politically sensitive cases? And again, how did the Department of Justice handle the second referral? I want to know why did the Clinton appointed Little Rock U.S. attorney Paula Casey, along with Webb Hubbell, delay their recusals until after the decision not to prosecute Madison was made? I also want to know the details about Paula Casey and Webb Hubbell's phone contacts during the period when Casey was deciding what to do with the referrals, and did either one of them have any contact with the White House on the referrals at any time? And now, just in the past weeks we have seen reported by the Associated Press that: Preparing for televised Whitewater hearings last summer, White House attorneys consulted confidential depositions from a Treasury investigation in an effort to reconcile differing accounts of administration officials who were about to testify. Former White House counsel Lloyd Cutler acknowledged this week that the depositions were used to identify discrepancies in the recollections of presidential aides before the congressional hearings. White House lawyers would then ``confront'' the aides with information they had obtained from the depositions without revealing the sources, he told The Associated Press. ``If we found inconsistencies, we would go back to White House officials, and go back over testimony they gave us,'' Cutler explained. ``and then we would say `we have heard other reports.''' which I have been following since the close of the hearings last August. As we know now, confidential information was again turned over by Treasury to the White House--this time under the guise of a Treasury Department inspector general's investigation. This calls into question not only the independence of the IG, but also the willingness of this administration to politicize what is supposed to be an internal watchdog. It also calls into question the entire testimony offered by White House officials before the Senate Banking Committee--as they were given another heads up in order to best tailor their testimony to help the boss. Last November I wrote to then Chairman Riegle and ranking member D'Amato about what I had discovered. In my letter I stated: As you know, over these past several months I have continued my efforts to resolve outstanding questions which were raised during the Banking Committee's Whitewater hearings. Initially I became concerned upon discovering during our hearings that the Treasury Inspector General had turned over to the White House--at Lloyd Cutler's specific request--transcripts of all the testimony taken by the investigators a full week before the Office of Government Ethics (OGE) report was made public. At the time we learned this, several former Inspectors General expressed amazement at this unprecedented action. However, no further review of the incident was undertaken. During my investigation of this disclosure, I discovered that not only were the documents released to the White House at the specific request of White House Counsel Lloyd Cutler, but, in doing so, the Treasury turned over confidential RTC information to the White House. On Saturday, July 23, 1994, the Department of the Treasury gave the White House all of the sworn depositions of Treasury, White House, and RTC personnel. These depositions were unedited. According to the RTC, it was not until July 26 or 27 that the RTC became aware of the fact that RTC depositions had been provided to the White House. July 26, after reviewing the information provided by the Treasury I.G., Lloyd Cutler testified before the House Banking Committee. July 28 and 29, Counsel to the RTC Inspector General Patricia Black redacted all the Treasury, RTC, and White House depositions in order to remove confidential RTC information. July 31 the OGE report, with edited testimony, was provided to Congress and subsequently made public. Given that the focus of our hearings this past August was the improper transmittal of confidential information from the RTC to the White House regarding Madison Guaranty and the Clintons, I must tell you I am appalled that the same Treasury Department, acting under specific direction from Secretary Bentsen, would again provide nonpublic information about the Madison Guaranty case directly to the White House. In addition, I found it extraordinary that the White House, which was itself under investigation, would be given nonpublic information prior to Congressional hearings--particularly when Congress itself was not given the information. And now of course we have discovered that Mr. Cutler and others used this information not only to assist in the drafting of Mr. Cutler's testimony--but to help White House staff with the inconsistencies in their own stories. I find this entire episode just another example of the extraordinary lengths the White House was willing to go to keep the facts from Congress, keep the facts from the American people, and ultimately to protect the administration. As I have said on this floor before, breaching the public trust is as serious an offense as committing a crime, or being found liable for financial penalties. Governments in free societies have a fundamental pact with the governed. In exchange for the powers and responsibilities which is given the Government, the people expect fairness, evenhanded justice, impartiality, and they held the innate belief that those in power can be trusted to be good stewards of their power. Our form of democracy relies on checks and balances to keep too much power from ending up in just one place--and Congress, as the people's closest link to their Government has the responsibility to keep a sharp eye out for abuses and breaches of the people's trust. Thus every Member of Congress takes an oath of office, to uphold the Constitution--and certainly part of that duty to be ever watchful for abuses of power. Interestingly, and not surprisingly, it nearly always falls to the party out of power to be the more diligent in watching out for abuses. No one disputes this. But one other fact should also be noted. As important it is for the general public to believe in and trust that their elected leaders are performing their jobs in an ethical, truthful, and fair manner--we, in Congress, must also believe that those in high positions of responsibility are telling us the truth. When we ask questions or make inquiries we must trust that administrations will tell the truth, will be honest, and that when we get an answer, it is a full and complete one. Unfortunately, Madam President, it is this standard that inevitably some administration officials seem unable to comprehend. Instead of cooperation and truthfulness we have seen evasions, omissions, misstatements, and possibly outright lies. And the story of potential abuse of the public trust, the politicization of independent agencies and investigations, the use of confidential material for political gain--it only seems to get worse the deeper you look. Madam President, the next rounds of hearings will go a long way toward clearing the air, and I commend the chairman of the Banking Committee for brining this matter back into the public eye. I reserve the remainder of my time and I yield the floor. Mr. DODD addressed the Chair.