Daniel Coats

Mr. COATS

Mr. COATS. I thank the Senator. I urge my colleagues to support the Ashcroft provision, which allows for delivery of social services through religious charities. I urge this for two compelling reasons. First, it is much more cost effective than the current Federal bureaucratic system. Utilization of facilities that are already there, that are neighborhood based and utilizating volunteers makes delivery of those services far more efficient than the Government can do. Second, they get better results. Survey after survey, in hearing after hearing that we have conducted in the Children and Families Subcommittee on Labor and Human Resources has proven the effectiveness in doing this. I urge my colleagues to support the Ashcroft amendment. I yield back the balance of my time.

Mr. COATS. Mr. President, in 1962, President Kennedy, in his budget message to Congress, noted: The goals of our public welfare program must be positive and constructive. It must contribute to the attack on dependency, juvenile delinquency, family breakdown, illegitimacy, ill health, and disability. It must replace the incidence of these problems, prevent their occurrence and recurrence, and strengthen and protect the vulnerable in a highly competitive world. This statement presents the strong, initial common ground that we share: that Government has a legitimate role in supporting our most helpless and desperate families with dependent children. Certainly, our second ground of agreement is that an appropriate welfare policy should do nothing to harm the family being supported. Families are the foundation of our Nation's values. They teach us the principles of economics, the value of relationships, and the importance of moral truths. They define our view of work, responsibility, and authority. They teach us the meaning of trust, the value of honesty, and are the wellspring of every individual's strength against alienation, failure, and despair. During countless eras when no other organized unit of society even functioned, the family was the institution that made survival of the cultural, political, economic, and social order possible. We should agree on what a welfare policy should protect--the family-- and what it should protect against--dependence on the State. We should also agree that this Nation's current welfare policy has diverged greatly from President Kennedy's vision. The Government has attempted to end poverty by establishing an engorged bureaucracy and writing checks, all told pouring over $5 trillion into the war on poverty. At the same time, individual dependence on the Government has increased, individual dignity has declined, and the family has been dealt a near fatal blow. Today, there are more people living in poverty than ever before--and the only thing the Government welfare state has succeeded at doing is spawning generations of people who will be born, live, and die without ever having held a steady job, owned a home, or known the strength of a two parent family. Individual dependence on the State has increased with every Government intervention. Indeed, the population receiving welfare payments receives checks for extraordinarily long periods of time. Under current law, 25 percent of women can expect to receive those payments for more than 8 years. The typical recipient receives payments for almost 4 years. Forty percent of recipients return to the welfare rolls at least once. Government intervention has distorted the economic incentive system that, at least in part, motivates a person to give of his labor. Government intervention eliminates the need to work to support oneself and one's family by providing money regardless of whether one works. Dependence on such a system is all but inevitable. Given time, a cash payment that is not tied to a requirement to work will undermine the second motivation to work; namely, the desire to produce some benefit, whether tangible or intangible, for oneself or for society. Who can doubt that a person experiencing such a disconnection for any protracted period of time will eventually suffer a loss of individual dignity as the welfare system undermines the moral and personal responsibility of the recipient? Today however, we are turning to the issue of solutions. Whatever the proposed solution, we must gauge its effectiveness and desirability in terms of the three common grounds discussed throughout this debate. Does our policy foster dependence on the Government or promote independent action by the individual? Does it promote the dignity of the human person or undermine it? Does it destroy the family or build it up? I am convinced that we will only achieve successful welfare reform when we begin to emphasize personal responsibility. Unfortunately, for far too long welfare programs supported by the Federal Government have failed to acknowledge and promote personal responsibility, and many other core American values. I would argue that the key goal of welfare reform must be to promote self-sufficiency. A beginning step toward self-sufficiency is to change people's expectations about welfare. A recent GAO study noted that a key challenge for States is to learn how to break the entitlement mentality--the view that public assistance is a guaranteed benefit. States had to start helping individuals understand that a job was in their best interests. One successful approach to encourage greater responsibility which is being experimented with by several States is the use of personal responsibility agreements. I am proud to say that Indiana has been at the forefront of helping individuals and families achieve long-term stability and self-sufficiency through the use of personal responsibility agreements. With personal responsibility agreements, Indiana's welfare reform plan moves families away from dependence and toward work. More than 39,000 individuals and families in Indiana have signed personal responsibility agreements as of April 1996. Indiana's agreements require that families who receive AFDC understand that welfare is temporary assistance, and not a way of life. They must develop a self-sufficiency plan and go to work as quickly as possible, recognizing sanctions will be imposed for quitting a job, refusing to accept a job or dropping out of the job program. Families must also take responsibility for their children's timely immunizations and regular school attendance. Furthermore, their AFDC benefits will be limited to the number of children in the family within the first 10 months of qualifying for AFDC. Teenage recipients must live with parents or other adults. And finally, families are limited to a 2-year period of AFDC assistance a job placement track. The amendment proposed by Senator Harkin and myself last Thursday makes it clear that States must develop these personal responsibility agreements, such as those required of families in both Indiana and Iowa. This amendment is necessary because under current law States who wish to enter into this agreement with their residents, must first apply to Washington for a waiver of current welfare laws. This requirement to get permission from Washington for such common sense reforms not only steals valuable time from a State's reform efforts, but also represents a completely unnecessary Government intrusion. This amendment frees States from the extended negotiations that are now necessary to receive a Federal waiver, and enables States to move forward from failed, dependence-ridden, welfare programs to programs which promote independence, self-sufficiency, and long-term economic stability. Senator Harkin has been a real leader in the area of personal responsibility agreements, having recognized early their success in the State of Iowa. He introduced a very similar amendment to H.R. 4 last year which was ultimately dropped in conference. This year, personal responsibility agreements are found in both the House welfare reform package, H.R. 3507, and in the President's welfare bill. The amendment adopted here last Thursday requires States to adopt this common sense reform measure which ensures that everyone who receives assistance understands from day one that the assistance is a temporary measure intended to help the family achieve self-sufficiency and independence through employment. Personal responsibility agreements help raise people's expectations while at the same time, giving them a clear goal and positive vision for their future. The time has come for us to reform our Nation's welfare system. A year ago we passed legislation that is nearly identical to the bill before us today. We have adjusted the bill in many ways in an effort to find the magic formula that would satisfy the opponents of real reform. We have produced a solid package that is best described as a good first step. And we are told that President Clinton may--just may--actually sign this bill. This welfare bill makes several important changes to the existing system. It ends the Federal entitlement and places strict time limits and work requirements on welfare recipients. Most importantly, this bill turns the task of redesigning public welfare systems over to the States. We will no longer be treated to the spectacle of Governors coming to the Department of Health and Human Services to ask permission for common-sense welfare reform measures. The lesson for this protracted political exercise is that President Clinton has abdicated leadership on welfare. In 1992, he promised to end welfare as we know it. In 1995 and 1996 he fought to preserve the status quo at every turn. Now, when pollsters and consultants tell him that signing a welfare reform bill might help his reelection campaign, the President has begun to edge his way toward the Rose Garden for a signing ceremony--a ceremony that should have been held a year ago. Welfare reform is simply too important for this kind of gamesmanship. If President Clinton had signed this bill a year ago, we could have begun the difficult task of changing a culture of dependence and despair into a culture of self-sufficiency and hope. A year later our path has gotten longer and steeper and rockier. For tens of thousands the habit of dependence has grown stronger while hope and will to change have grown fainter. The burden of this failure falls not on Congress--we have done our job not once, not twice, but three times. The burden of failure falls squarely on the shoulders of the President. The very least he can do now is sign this bill.

Mr. COATS

Mr. COATS. Mr. President, many of the congressional efforts at reforming the welfare system have focused on the elimination of the Federal bureaucracy, the devolution of Federal authority, and the transfer of funds to the State bureaucracy. In some respects, these reforms may be effective and efficient. In other areas, the devolution will prove too limited in that authority and funds remain remote from the people and communities who would most benefit from change and who are most capable of effecting that change. Devolution to the States almost certainly will not change one critical flaw in traditional welfare programs--a focus on income maintenance and spending instead of a focus on asset-building and saving. The current welfare system in fact punishes the accumulation of assets by terminating eligibility for assistance when minimal asset levels are achieved. There is then a need to help low-income individuals and families, whether working or on welfare, to develop and reaffirm strong habits for saving money and to invest that money in assets rather than spending it on consumer goods or other items that may not help lift the individual or family from poverty. There is particularly a need to focus on the building of assets whose high return on investment propels them into economic independence and personal and familial stability. In addition, there is a recognized need to help revitalize low-income communities by reducing welfare rolls and increasing tax receipts, employment, and business activity with local enterprises and builders. Mr. President, the assets for independence amendment approved by the Senate yesterday would allow States to use part of their block grant moneys to establish an individual development account [IDA] savings accounts to help welfare recipients and low-income families build the family's assets and strengthen its ability to remain independent from Government income-maintenance programs. In some respects, IDA's are like IRA's for the working poor. Investments using assets from IDA savings accounts are strictly limited to three purposes: purchase of home, post-secondary education, or business capitalization. These purposes are connected with extremely high returns on investment and can propel both the communities and the families benefiting from the home, education, or small business into a new economic and personal prosperity. Just how might an IDA work? The individual or family deposits whatever they can save--typically $5 to $20 a month--in the account. The sponsoring organization matches that deposit with funds provided by local churches and service organizations, corporations, foundations, and State or local governments. With Federal block granted welfare funds, a State match of these deposits can also be deposited in the account. Just what are some of those benefits? Most fundamentally, participants will develop and reaffirm strong habits for saving money. To assist this, sponsor organizations will provide participating individuals and families intensive financial counseling and counseling to develop investment plans for education, home ownership, and entrepreneurship. In addition, participating welfare and low-income families build assets whose high return on investment propels them into independence and stability. The community will also benefit from the significant return on an investment in IDA's: We can expect welfare rolls to be reduced; tax receipts to increase; employment to increase; and local enterprises and builders can expect increased business activity. Neighborhoods will be rejuvenated as new microenterprises and increased home renovation and building drive increased employment and community development. In fact, it is estimated that an investment of $100 million in asset building through these individual accounts would generate 7,050 new businesses, 68,799 new job years, $730 million in additional earnings, 12,000 new or rehabilitated homes, $287 million in savings and matching contributions and earnings on those accounts, $188 million in increased assets for low-income families, 6,600 families removed from welfare rolls, 12,000 youth graduates from vocational education and college programs, 20,000 adults obtaining high school, vocational, and college degrees. Source: Corporation for Enterprise Development, ``The Return of the Dream: An Analysis of the Probable Economic Return on a National Investment in Individual Development Accounts,'' May 1995. IDA's are planned or now available on a small scale across the country, including Indiana, Illinois, Virginia, Oregon, and Iowa. The assets for independence amendment has been developed after a review of numerous, similar, successful programs, and most notably one run by the Eastside Community Investments community development corporation in Indianapolis, IN. The amendment incorporates a number of protections developed with their assistance and based on their experience. For example, accounts will be held in a trust. In addition, sponsor organizations must cosign any withdrawal of funds; withdrawals are strictly limited to home purchase, education, and microenterprise. I challenge this Congress to consider the $5.4 trillion we have spent on welfare programs in the past 30 years. Have these programs that focus on income maintenance been successful? Do we honestly believe that we can give money to low-income citizens and have them spend their way out of poverty? Or is it time to consider a new approach, not just an approach that focuses on a Federal bureaucracy or even a substituted State bureaucracy, but an approach that empowers families and communities directly to build assets with high returns on investment-- returns whose economic and personal growth approaches the exponential? The assets for independence amendment does just this. It does not concentrate on Government programs but focuses on community efforts to put high-return assets in the hands of families. I am very pleased that we have included it in this vital legislation. Coats-Wyden Kinship Care Amendment

Mr. COATS

Mr. COATS. Mr. President, I will be brief. I know time is of the essence here, and we will yield back some of our time. Let me state that I support very much what Senator Dodd and Senator Mikulski are attempting to do here. This is essentially the same legislation that we are attempting to restore that we enacted in the 1990 child care legislation. This gives States a great deal of flexibility. For instance, the State of California has a program called Trust Line which allows the State to require background checks, criminal background checks, of child-care providers. In those background checks, they found 5 percent of those who had applied to be State-certified child-care providers had criminal backgrounds and they had to disqualify them. Not all States have chosen to operate on that basis, although I think that is a reasonable requirement that a State might want to impose on a child-care provider. That is just one example of the flexibility that a State has to impose, those minimal conditions for safety and health, under child-care provisions. Now, the House Ways and Means committee has supported this. The House Employment Economic Opportunity Committee, President Bush supported this in 1990, the Congress supported it on a bipartisan basis, the Governors have supported this. What we are attempting to do is correct something that I believe was an error, maybe it was not, but I think all indications are that it was an error as it was put in the reconciliation bill. This would restore it to what, essentially, is current law and what the Congress agreed to in 1990. I urge its adoption.

Mr. COATS. Mr. President, each year, scores of abused, neglected, and abandoned children are herded into the world of child protection to be cared for by strangers. For many of these children, foster care will be a refuge, for others, a nightmare. Being separated from a parent is never easy, but we can make the transition smoother by looking to relatives when a child must be removed from his home. And so I wish, with my colleague from Oregon, to introduce the kinship care amendment. This amendment encourages States to use adult relatives as the preferred placement option for children separated from their parents. We are introducing this amendment because we feel strongly that if a child has to be separated from their parents for a period of time, that separation should be as smooth as possible. Kinship care is a time honored tradition in most cultures. Care of children by kin is strongly tied to family preservation. These relationships may stabilize family situations, ensure the protection of children, and prevent the need to separate children from their parents and place them in a formal foster care arrangement within the child welfare system. Yet, rather than encourage relative or kinship care some States have made it increasingly difficult for relatives to provide care for their own. Immense financial, emotional, and regulatory challenges are often barriers willing kinship caregivers. The amendment I am offering is consistent with current law. The Adoption Assistance and Child Welfare Act of 1980, Public Law 96-272, requires that when children are separated from their parents and placed in the custody of a public child welfare agency, the State must place them in the least restrictive alternative available. While relatives are not expressly mentioned, this requirement has been interpreted by many child welfare practitioners as a preference for placement with relatives when separation from parents must occur. Mr. President, this amendment is also consistent with previous positions I have taken on this matter. In S. 919, the 1995 amendments to the Child Abuse Prevention and Treatment Act which was passed unanimously by the Labor Committee, includes a kinship care demonstration project. This demonstration project, which is administered by the Secretary of HHS, awards grants to public entities to assist in developing or implementing procedures using adult relatives as the preferred placement for children removed from their home, when those relatives are found to be capable of providing a safe, nurturing environment for the child. Additionally, S. 1904, the Project for American Renewal, includes The Kinship Care Act which creates a $30 million demonstration program for States to use adult relatives as the preferred placement option for children separated from their parents. Mr. President, this country is truly facing a very serious crisis concerning many of our children. By the end of 1992, 442,000 children were in foster care, up from 276,000 in 1985, at a Federal cost in fiscal year 1993 of $2.6 billion. The population of children in foster care is expected to exceed 500,000 by the end of 1996. The National Foster Parent Association reports that between 1985 and 1990, the number of foster families declined by 27 percent while the number of children in out of home care increased by 47 percent. Children placed for foster care with relatives grew from 18 percent to 31 percent of the foster care caseload from 1986 through 1990 in 25 States that supplied information to the Department of Health and Human Services. Children in kinship care are less likely to experience multiple placements than their counterparts in family foster care. Of the children who entered California's foster care system in 1988, for example, only about 23 percent of those placed initially with kin experienced another placement, while 58 percent of children living with unrelated foster families experienced at least one subsequent placement during the following 3.5 years. This amendment will: Ensure that grandparents and other adult relatives will be first in line to care for children who would otherwise be forced into foster care or adoption; strengthen the ability of families to rely on their own family members as resources. It will also help soften the trauma that occurs when children are separated from their parents. Living with relatives that they know and trust will give these children more immediate stability during this painful transition; and provide a hopeful alternative to traditional foster care. I hope that all my colleagues can see the critical importance of ensuring that children who are in need of out-of-home placement will be placed with relatives who they know and trust, rather than strangers. Please join me and Senator Wyden in supporting the kinship care amendment.

Mr. COATS

Mr. COATS. Mr. President, child abuse is a critical issue facing our Nation. Each year, close to 1 million children are abused or neglected and as a result, in need of assistance and out of home care. CAPTA is a small but vital link in the provision of these services. S. 919, which was unanimously reported by the Senate Labor Committee nearly 1-year ago, streamlines State plan and reporting requirements; eliminates unnecessary research and technical assistance activities; and encourages local innovation through a restructured demonstration program. Additionally, we have consolidated the Child Abuse Community Based Prevention Grants, Family Resource Centers, Family Support Centers into the Community and Family Resource and Support Grants. Finally, S. 919 repeals the Temporary Child Care for Children with Disabilities and Crisis Nurseries Act, Title VII (F) of the McKinney Homeless Assistance Act, and the Emergency Child Abuse Prevention Grants. Mr. President, each day, hundreds of children and families come into contact with, and are affected by, our nation's child protective system. For many, it is a frightening experience. For others--for those on the front lines, it is sometimes an opportunity to rescue children from horrific circumstances. Unfortunately, the issues facing this overburdened system are seldom easily resolved. Too often--overworked, under paid, untrained, and sometimes over-zealous caseworkers have a tremendous and devastating impact on families. Decisions are routinely made to remove children and place them in foster care--into situations that are sometimes more dangerous than the one they were removed from. Other times, because of mounting paperwork and case files, a serious case goes uninvestigated--or a decision to return a child to an unsafe home is made because there are no more out of home placements available. These are all difficult circumstances that require balance, training, and resources. Since 1974, CAPTA, through a relatively small program, has assisted states in meeting child protection needs. It is a small, but important program, because it mandates have radically changed how we view child protection. Unfortunately, not all of these changes have been helpful. CAPTA has, until now, been viewed as a very prescriptive program, with States judged, not on how well they protect children, but on how close they come to mirroring Federal requirements. The 1995 CAPTA Amendments are an important first step toward addressing some of the problems in CAPTA while at the same time, building upon its strengths. Most experts agree that what CAPTA can do, and do best, is provide guidance to states; assist States with training and technical assistance; and promote better research and dissemination of information while allowing for maximum flexibility in approach and response. With that in mind, S. 919: Eliminates unnecessary bureaucracy by repealing mandates for a National Center on Child Abuse and Neglect, the U.S. Advisory Board, and the Interagency Task force on Child Abuse. Instead, the Secretary may use discretion in deciding whether or not they are an essential function. Restructures and consolidates various research functions into one coordinated effort. Places a significant emphasis on local experimentation by expanding Demonstration Grants to encourage local innovation and experimentation. One of these areas involves a triage system approach which we heard very exciting reports about during a Subcommittee on Children and Families hearing. Others include training for mandatory reporters, families, service providers, and communities and a demonstration program for kinship care as an alternative to foster care placements. Reforms the Basic State Grant by allowing greater flexibility to the States in determining the circumstances and intensity of intervention that is required, while encouraging them to look to other preventative services that can be provided to families, where intensive intervention is not called for. Determining the appropriate level of intervention is a very important consideration. We have studied closely the numbers of abuse and neglect reports that have been filed. Of the close to 3 million reports that have been filed, only one-third are eventually substantiated. This means that over 2 million are either unsubstantiated or false. And while I know that these numbers and their interpretation are the source of some disagreement, the fact remains that for whatever reason, over 2 million investigations at some level, are occurring, and possibly resulting in inappropriate interventions--including removal of the child from the home. Members of the Labor Committee may recall the testimony of Jim Wade who spoke of his three year ordeal, in which his daughter was wrongfully removed from his home. I have received many such reports and complaints, and while we should be mindful not to legislate by anecdote, these stories involve real people and are chilling. With the State grant, we have worked to find ways to improve reporting so that caseworkers are able to assess and effectively respond to cases of abuse and neglect with an appropriate response. S. 919 stresses the importance of case workers using risk assessment procedures to ensure that priority attention is given to those children who are at great risk of harm. I think particularly of the tragic case of Elisa Izquierdo of Brooklyn, the 6 year-old girl brutally murdered by her mother on the day before Thanksgiving this past year. Elisa was well known to the overburdened case workers who were assigned to monitor her, however it appears that they simply didn't have enough time to keep a close watch on Elisa, nor maybe enough training to realize the tremendous seriousness of her situation. S. 919's focus on better training and the use of risk assessment procedures should help to improve the safety of children. We have also ensured that persons who maliciously file reports of abuse or neglect will not longer be protected by CAPTA's immunity for reporting. Only good faith reports will be protected. Finally, we have clarified the definition of child abuse or neglect to provide additional guidance and clarification to states as they endeavor to protect children from abuse and neglect. Let me briefly mention the other programs authorized in the 1995 CAPTA Amendments: the Community and Family Resource Grants is the result of nearly a full year's effort to consolidate the Community Based Prevention Grant, Respite Care Program, and Family Resource Programs; the Family Violence Prevention and Services Act which provides assistance to States primarily for shelters; the Adoption Opportunities Act which supports aggressive efforts to strengthen the capacity of States to find permanent homes for children with special needs; the Abandoned Infants Assistance Act which provides for the needs of children who are abandoned, especially those with AIDS; the Children's Justice Act; and the Missing Children's Assistance Act and Section 214 of the Victims of Child Abuse Act. Mr. President, I would like to thank the Members for their attention. These are important programs and they will affect many children and families. I urge the adoption of the 1995 CAPTA Amendments.

Mr. COATS

Mr. COATS. Mr. President, I wonder if I can inquire of the Senator from Alaska whether he anticipates there will be any time for additional morning business, or does he have a full schedule on appropriations?

Mr. COATS. I want to thank the Senator from Alaska for yielding this time.

Mr. COATS. Mr. President, I ask unanimous consent a staffer of mine, Maj. Sharon Dunbar, be granted the privilege of the floor during debate on the defense appropriations bill.

Mr. COATS. Mr. President, 5 minutes at most.

Mr. COATS

Mr. COATS. Mr. President, earlier this afternoon the Senator from Massachusetts, Senator Kennedy, spoke on the floor indicating his concern and expressing his criticism of remarks that Senator Dole made today in Minneapolis. I want to take just a few moments to respond to those remarks. I thank the Senator for yielding the time for me to do that. What Senator Dole said today in Minneapolis was that this country needs education reform, not education reform as defined by this administration and by some in this Congress, but real education reform. Education reform that ensures that parents have authority to be involved in their children's education, and in their curriculum, and in the formation of educational programs for their children. Education reform that would break up the monopoly that dominates public education. Education reform that gets money into the classroom instead of the bureaucracy. Education reform that rewards teachers, and rewards the Governors who run effective programs, and rewards mayors and school boards. Education reforms that try new approaches, and education reform that loosens Washington's grip on this country's schools. For a decade or more now, the Congress and the public have been debating how we can improve our public education system, and a number of proposals have been made. But there is an entrenched bureaucracy that insists on making no real changes, on perpetuating the status quo. What Senator Dole was talking about was shaking up that status quo and bringing about reform that brings real results. One of the issues that was discussed and was criticized earlier is the question of choice for low-income students. This is an issue that I have been involved with for some time. I have offered amendments, on a bipartisan basis with Senator Lieberman, allow test programs, or pilot programs, for vouchers for low-income parents which would allow us to test the concept of school choice. It seems hypocritical for those of us who have the means to afford school choice, whether by moving to another school district because we are unhappy with the public school where we currently are situated, or by enrolling our children in private schools or parochial schools, to deny that freedom of choice to those families who do not have the resources to send their children to a private school. The voucher demonstration program is an attempt to understand the impact of enabling families choice over their children's educational opportunities. Many of these families have children who are consigned to some of the most violence-prone, educationally challenged schools in America. Mothers and fathers know that the only way to successfully give their children a chance to escape a lifetime of these difficult environments is to get a better education. Yet the Congress and this administration have repeatedly blocked attempts at even the most minor of reforms to allow low-income children to escape their poor- performing, violent schools. The reform Senator Lieberman and I proposed was a 3-year demonstration grant. We proposed trying it in 10-20 school districts around the country--costing a very modest amount of money--to see if it works. Even that small of a reform effort is rejected, time after time. My Project for American Renewal includes an expansion of that concept to provide experiments in up to 100 school districts. By trying a demonstration program, we'll be able to see if what the opponents of school choice say is right, but the only way to test their arguments is to get some objective evidence to evaluate school choice. I fear, Mr. President, that the opponents know that school choice would work: they know it would pose a challenge to the existing system. I suggest that that is exactly what the existing system needs--a challenge, a challenge to improve its educational efforts. That challenge will come through competition. Public schools and private schools and parochial schools can exist side by side. The competition among the three of them provides better education for all students involved. This has been demonstrated in my hometown of Fort Wayne, IN, on a number of occasions. We ought to move in that direction. To criticize Senator Dole for calling for education reform because he has failed to support the status quo initiatives provided by this administration that make no major change, efforts of the Clinton administration and the status quo that is perpetuated by Members of this body and call that educational reform--I think the American people know better. Call this what it is, and that is an attempt by a Presidential candidate to bring about some change in our educational system that will benefit the children--not the bureaucracy, not the unions, not the administration--the children that are actually receiving the education, or would like to receive the education. I commend Senator Dole for his remarks, for his initiative in this area. I hope he has the opportunity to carry it out. I regret we cannot seem to get beyond the status quo of what in many cases is a failed education system, particularly in areas where children live in poverty, the District of Columbia being the prime example. We have struggled and struggled and struggled to try to give the young people opportunities that others of us have and they do not have. It is regrettable that we cannot discuss this on a rational basis and cannot support the efforts of someone trying to bring about this change. I thank the Senator from Alaska for his patience and his time on this. I yield the floor.

Mr. COATS

Mr. COATS. Mr. President, there is a shadow creeping across the American landscape. It thrives in some of the poorest of our urban and rural communities. It threatens our towns and cities with economic cannibalism. It undermines our political process with a flood of cash into the campaign coffers of our politicians. It preys upon the weakness of the poor, the elderly, and the young with the promise of easy money. It undermines the family with pathological addition and spousal and child abuse, and neglect. Mr. President, what is this menace? We know it all too well. It is gambling. An industry that, just a few years ago, was frequently pursued by law enforcement agencies from the Federal Bureau of Investigation down to rural county sheriffs is today touted as the economic savior of communities across America. And it is increasingly embraced and promoted by State and local government across the country as the answer to chronic government funding problems. Mr. President, the gambling industry is booming. In 1988, only two States--Nevada and New Jersey--permitted casino gambling. By 1994, 23 States had legalized gambling. During this time, casino gambling revenue nearly doubled. In 1993, $400 billion was spent on all forms of legal gambling in American. Between 1992 and 1994, the gambling industry enjoyed an incredible 15 percent annual growth in revenues. Many of my colleagues would look at this performance and say ``good for them.'' Many would cite the gambling industry as an American success story. I am not so enthusiastic. There are many unanswered questions regarding the hidden costs of rolling out the welcome mat for the gambling industry. Many of the promises made by the gambling industry--of jobs, economic growth and increased tax revenues--are dubious at best. The statistics on the devastating impact on our families are beginning to roll in. Concern about teenage gambling addition is growing as more and more teens are lured by the promise of easy money. Crime and suicide numbers are sky-rocking in communities where gambling has taken root. Mr. President, it is time to take a good, hard, objective look at the gambling industry and the gambling commission proposed in this bill is an important step toward getting the facts. Critics of a gambling study commission claim that this is purely a State issue, that there is no Federal role. This claim will not bear scrutiny. Article 1, Section 8 of the Constitution clearly provides Congress authority over issues of interstate commerce. Mr. President, surely a one half trillion dollar-a-year industry, in which parent corporations own and operate facilities in multiple States, can be considered interstate commerce. Further, gambling interests are involved in political campaigns in virtually every State, and crime associated with gambling does often cross State lines. Finally, given the potentially devastating impact of pathological gambling on the American family, it is critical that this Federal commission be established to gather the facts on the explosion of legalized gambling. Opponents of this commission have raised many charges against it. They have claimed that the commission is a tool of the religious right. they have claimed that the commission will become a witch hunt against the gambling industry. Mr. President, these claims are unfounded. The appointment of commissioners will be equally divided between the executive branch and the two Houses of Congress, ensuring that no faction may dominate the work of the commission. Further, Mr. President, the scope of the commission is clearly established within this legislation, which will prevent commission members from embarking on unrestricted investigations of the industry. Finally, this legislation enjoys broad bipartisan support, across both ideological and political lines, in both the House and Senate. President Clinton has indicated his support for this commission. The national media and newspapers across the country have been unanimous in advocating this gambling study commission. Mr. President, in recent years the gambling industry has preyed increasingly on struggling rural communities. These communities have been targeted with millions of dollars in promotional money and lobbying. They are lured by the promise of booming economic development, new jobs and expanded tax revenues. There can be little doubt that this promise has held true in the short-run for some communities. What many communities are beginning to discover, however, is that in the medium and long term, gambling takes a lot more from our communities than it gives. These costs are measured in broken families and broken lives. Our communities are being sold on the vision of becoming another Las Vegas. They are being promised tourist dollars and booming economic growth. The reality is different. The preponderant majority of gamblers on riverboats and in this new breed of casino are from the local community. Essentially, the gambling industry is cannibalizing the local economy. A 1994 study of riverboat gambling in Joliet, IL found that 74 percent of all players came from within 50 miles of Joliet. A similar study of gambling in Aurora found that 70 percent of all players came from the immediate Aurora area, with only 3 percent coming from outside the state of Illinois. Henry Gluck, the CEO of Caesar's World casino firm told a 1994 New York State Senate hearing on gambling that the potential for casinos to attract outside dollars, and I quote, ``truly applies to a few major cities in the United States.'' I doubt that this is the message that the people of Harrison County, IN are getting from the gambling industry. It is becoming increasingly clear that these casinos provide little additional value to local economies and tend to shift money out of local businesses. Casinos are one-stop entertainment. They provide meals, drinks and everything else. Players simply take entertainment dollars that would normally be spent at local restaurants, bowling alleys, baseball parks, and movie theaters and spend them at the casinos. This is not economic growth. It is economic churning. Crime is another critical issue that this Commission will examine. Traditionally, organized crime has been synonymous with the gambling industry. There is every indication that its influence is still present. However, just as important are the more local concerns of dramatic increases in theft and violence that has followed the growth of gambling in America. A study conducted by ``U.S. News and World Report'' found that crime rates in communities with gambling are nearly double that of the national average. Examining assault, burglary, and larceny, the report found 1,092 incidents per 10,000 population in 1994 in communities where gambling is present. The national average for these crimes is of 593 per 10,000 people. U.S. News concluded that ``* * * towns with casinos have experienced an upsurge of crime at the same time it was dropping for the Nation as a whole. They recorded a 5.8 percent jump in crime rates in 1994, while crime around the country fell 2 percent.'' This same study found that in 31 locations that got new casinos crime surged 7.7 percent in the first year following the introduction of the casino. Deadwood, SD legalized casino gambling in 1989. Five years later serious crimes had increased by 93 percent, forcing the community to double the size of its police force. In Central City, CO assaults and thefts increased by 400 percent in the first 2 years after gambling's introduction. Mr. President, our Nation is all too aware of the toll that crime takes on our cities and towns. It is critical that we come to understand how gambling acts as a catalyst for criminal activities and provide these facts to communities that face decisions about inviting this industry into their local economies. Another area of concern is that of pathological gambling. For decades now our Nation has struggled with the demon of addiction. In the past, this problem has taken the form of drugs and alcohol. However, the rapid expansion of gambling injected a new narcotic into the Nation's bloodstream. Problem and pathological gambling is on the rise. The National Council on Problem Gambling places the number of Americans with serious gambling problems at around 5 percent. Most studies confirm this estimate. However, as gambling becomes more pervasive, this number is increasing. What does this mean? As with other addictive behaviors, gambling impacts the individual, their families, their job, virtually every aspect of their lives. Marital problems--separation and divorce, spousal and child abuse and neglect, substance abuse, and suicide are all side-effects of problem gambling. Durand Jacobs, an individual who has done outstanding research on the impact of gambling, conducted a study of 850 Southern California high school students. He discovered that ``children with gambler parents experienced almost twice the incidence of broken homes caused by separation, divorce, or death of a parent by the time they were 15 years old.'' Another study, published in the Journal of Community Psychology, found that about 10 percent of the children of compulsive gamblers had been the victim of physical abuse of the gambler parent. Fully one-quarter of the children in the study suffered ``significant behavorial or adjustment problems.'' Ronald Reno, in his study on the ``Dangerous Repercussions of America's Gambling Addiction,'' cites a gamblers anonymous study that found that 78 percent of spouses of gamblers threatened separation or divorce with nearly half carrying through on their threat. Harrison County, MS, an area of intense gambling activity, experienced a 149-percent increase in the divorce rate the year following the introduction of riverboat gambling. A study in Deadwood, SD, found that reports of domestic abuse have risen more than 50 percent since the advent of legalized gambling. Central City, CO, experienced a six-fold rise in child protection cases in the first year following casino gambling's introduction. Mr. President, perhaps the most disturbing fact about the spread of gambling is the danger it poses to children. As with other addictive behaviors, our children are most vulnerable to gambling addiction. The March 1996 edition of ``Policy Review'' tells the story of Joe Kosloski. Joe, then 16, won a little money at a bowling tournament. Taking the money, he and some friends headed for the Atlantic City casinos. Despite being only 16 at the time, these kids got in. Joe got on a roll, and parlayed his winnings into a couple of thousand dollars. Like most gamblers though, Joe's luck did not last. His fever for gambling, unfortunately, did. Once the cash ran out, Joe opened credit accounts in the names of family members and used cash advances and credit cards to gamble. When Joe's scam finally came crashing down on him, he had amassed a $20,000 debt. At 20 years of age, with no previous criminal record, he is in Pennsylvania Federal Prison for credit card fraud. Mr. President, it had been my intention to offer an amendment to S. 704. As currently written, the bill would provide the Commission the power to subpoena documents only. In my view, this substantially limits the Commission's ability to do its work. The gambling industry is a one-half trillion dollar a-year cash business. Many of the insidious tactics used by the gambling industry to bilk people out of their money must be considered by the commission in order to understand fully the modern business of gambling. These techniques range from themeing--the development of themes within the casino to attract and hold people there for longer periods of time--to various techniques to entice people to place more frequent or higher wagers. Here I quote from a ``U.S. News and World Report'' article of March, 1994: A decade ago, most casinos bothered to gather data only on high rollers. Now they use slot-club cards to snare the meat- and potatoes guy, too. After filling out a survey and receiving an ATM-like card, slot junkies insert them into a ``reader'' built into almost all slot machines. In a distant computer room, casinos track the action 24 hours a day, down to the last quarter. Players who use the cards the longest get the most comps, somewhat like a frequent-flier giveback. At the Trump Castle in Atlantic City, an internal document shows that 64 percent of all slot players now use the Castle card. The cardholders lost $109 million to the slots last fiscal year, or about $101 per player per trip. Slot players who never bothered with the card, by contrast, lost $31 per trip on average. Mr. President, it is my strong belief that this Commission should have full subpoena power to encourage the cooperation of gambling industry figures to appear before the Commission. In order to ensure that this bill was brought to the floor and passed, in order to ensure that there is no delay in getting to the facts, I agreed not to offer this amendment. However, I am here to serve notice that, at the first indication that the gambling industry is dodging the Commission, I will be back here to offer legislation to broaden the Commission subpoena power. Finally, Mr. President, I would like to talk briefly about State sponsored gambling. In most States this takes the form of lotteries. However, in many States, including Indiana, the lottery has opened the door to scratch tickets, horse racing, casinos, the works. At last count, 48 States have become involved in some form of gambling. Mr. President, given the concerns I have laid out, there is something very disturbing about States promoting gambling as a solution to economic development and shrinking tax bases. To quote the late Dr. Richard C. Halverson, our former chaplain, this State sponsored gambling is nothing short of a tax on the character of our people. It is dereliction of our public duty to use gambling to solve Government revenue problems. Annual lottery sales now approach $32 billion. Yet the virtue of gambling as a revenue source is dubious at best. Money Magazine estimates that States keep only about one-third of total revenues generated from lotteries. Further, many States rely on lottery revenue to fill revenue gaps rather than lower taxes. Many States claim to use the lottery to fund education. However, the proportion of State spending on education has remained relatively unchanged. Perhaps most disturbing, Mr. President, is that as States are being flooded with gambling cash, the tide of political scandal is rising. Across the country, State legislators are grappling with how to stem the tide of gambling interest dollars and the corruption that follows it. And Congress is no exception. Gambling dollars are also finding their way into our campaigns. Mr. President, I feel strongly that the Commission should examine this problem in detail. In closing, Mr. President, I congratulate Senators Lugar and Simon for getting this bill passed. It was no easy task. In addition, I reiterate my concern and my warning regarding the subpoena issue. If the gambling industry throws its lawyers at the Commission the way they have thrown their lobbyist at Congress, I have little doubt that we will revisit this issue.

Mr. COATS

Mr. COATS. Mr. President, I suggest the absence of a quorum.

Mr. COATS

Mr. COATS. Mr. President, this is an enormously complicated issue with very board implications. I understand that the Judiciary Committee has held hearings on the issue and that as a result, voted 10 to 7 to report out a bipartisan compromise. The compromise reached would allow the FDA to approve a generic drug for marketing prior to expiration of the GATT patent extension, but only after a generic drug manufacturer demonstrated in court that they had made a substantial investment before June 8, 1995. This requirement is contained in both the GATT implementing law and the generic drug approval process in the 1984 Hatch-Waxman law and applies to all generic manufacturers. The investment of a generic drug manufacturer would have to be more than merely the filing of an abbreviated new drug application [ANDA] for regulatory approval with the FDA, although the costs of an ANDA could be included. There have been a lot of questions raised concerning how this transition would work and why, for example, certain industries have been singled out and required to meet special criteria before they can bring their product to the market. In reality, under both current law and the Judiciary Committee compromise, a generic company in any industry must go to court to prove substantial investment, in order to bring its product to market. There is a prevalent misconception that no other industry has to go to court to prove substantial investment. This is simply not true. Others have asked why the Committee bill fails to permit expenses related to filing of an abbreviated new drug application [ANDA] to be counted toward the determination of a substantial investment. The expenses related to the filing on an ANDA are unique to the generic pharmaceutical industry. These activities would constitute patent infringement for any other industry. The intent of the GATT transition provisions is to allow those companies which had made capital expenditures--like building or expanding a plant, to market their imitator product during the patent extension period. A generic pharmaceutical company should only benefit from the same type of expenses available to all industries. Finally, the opponents of the Judiciary Committee compromise argue that the Judiciary bill treats generic pharmaceutical companies unfairly. This could not be farther from the truth. In fact, the Hatch compromise offers the generic pharmaceutical industry special protections not available to any other industry. The Judiciary bill would permit a generic pharmaceutical company to collect damages from the innovator company if litigation between the innovator and generic companies caused an unwarranted delay an imitator drug to the market. No other industry is afforded a similar benefit. Mr. President, it seems to me that the compromise reached by the Judiciary Committee is both thorough and fair. It answers the questions that have been raised and does so in a very well thought out manner. This is a difficult issue and I appreciate the enormity involved in reaching an agreement. While I would have preferred using the normal Committee route to bring this legislation to the floor, I intend to support it.

Mr. COATS

Mr. COATS. Mr. President, ours is too often a cynical age. When we hear the phrase ``public servant'' we have come to think of cartoon characters, much like those depicted 100 years ago: Overblown figures in dark suits wearing top hats, spats, and smoking cigars. These were people on the take and on the make; serving the public was far from their minds. While the scourge of widespread cynicism is unfortunately alive and well in our Nation, so too is countervailing spirit of truly tireless public service. That is good news, very good news, indeed. As U.S. Senators, our first duty is to the people: To represent their interests, to listen to their opinions, to do what is in the best interest of our country and our States by taking into consideration what our constituents believe. Service, truly dedicated public service, is our mission and our call. To meet that goal, we must have around us people of like mind, people who are unapologetically committed to high ideals, people who are principled, and who have a sense of moral imagination. For more than half my time in public life, and from my first day as a Member of the House of Representatives, I have been privileged and deeply honored to have work for me in my Fort Wayne regional office a woman named Kitty St. George. Kitty is the beau ideal of public service. She is committed. She is dedicated. She has worked many 7-day weeks. She is cheerful. She is unfailingly kind. We have shared many laughs. We have shared a few tears. And through it all, Kitty has been the Webster's Dictionary definition of a gentlelady. Would it were there were more public servants of Kitty's caliber. As Senators, we are often placed on a pedestal as opinion-makers and opinion-leaders. It can be a heady place to spend part of your life. But what makes it so meaningful, at least in large measure, is to be able to take away from your constituents, your colleagues, and your staff some glimpse of joy and contentment. From Kitty, I take away a deeper sense of dedication, a renewed sense of hope, and perhaps most importantly, the ability to find the winsome in everyday life. As Kitty prepares to move from Indiana to the warmer climes of the South, I wish her much love and Godspeed.

Mr. COATS

Mr. COATS. Second, Mr. President, let me state that there are a number of programs in the past that the Department of Defense has not requested, which this Congress has determined are important to be added to the Department of Defense budget. And we have done so. Looking back, in hindsight it is a good thing that we did. Strategic sealift: Now the Department of Defense comes and says it is one of their top priorities. They did not require it, nor request it before, maybe because the administration said do not do it. They are darned glad that we did not abide by their request. Some of the C-17's, the V-22, countermine efforts--we find that we were seriously underfunded and underprepared in the past in terms of dealing with countermine activity. This Congress made a decision to go forward and fund some of that. We are darned glad they did, and the Defense Department is darned glad that they did. So let us be realistic on this. I urge my colleagues to vote against the Wellstone amendment for the reasons stated. It is simply a misstatement of what the request is from the Department of Defense. It is more a statement of what the administration would like out of defense, which is to cut it, to cut it, and cut it so that they can take the money and fund their favorite programs and not provide for adequate security for this country. Mr. President, how much time is left?

Mr. COATS. I regret that because I am just getting warmed up. I will cease and desist. Thank you, Mr. President. Mr. President, I note the absence of a quorum.

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

Mr. COATS. Mr. President, I notice that the negotiations are still going on. I am prepared to stop talking as soon as they are prepared to go forward. In the meantime, rather than dead air, I thought I would say one more thing about the Wellstone amendment. I have had the opportunity in the last few years as a member of the Senate Armed Services Committee and chairman of the Personnel Subcommittee to examine our military housing that we provide for soldiers, sailors, airmen, and marines, both married personnel and their families, as well as single personnel. It is a shocking statistic to note that more than 60 percent of current military housing, family and single housing, is substandard by military standards. Military standards are generally lower than civilian standards. The houses that you and I live in, the apartments that the single individuals live in, are built to a far higher quality and standard than what the military enjoys. It is part of the nature of the military that they salute and serve and do not complain. But it is virtually a disgrace to note the condition of some of this housing: Deteriorating ceilings, leaking pipes, asbestos-lined pipes in the ceilings, falling plaster, crumbling stairways, inadequate space for families and for children. I commend the Secretary of Defense and the Department of Defense for recognizing this problem and taking some initiative to deal with it. But we are a long way from solving this problem. In fact, if we stayed at the current pace of renovation, it would take 30 years to bring military housing up to the standard level. Of course, by that time all housing that is standard today would be substandard. So it is a never-ending cycle. We need to accelerate that process, and we hope we will accelerate that process. But to suggest that defense is overfunded when we are asking our service families to live in substandard housing and when we are asking our service members to live in substandard barracks and are asking them to live in the conditions that they live I think it is misunderstanding the situation as it currently exists in the United States military. Just recently I was touring some barracks and housing facilities in Georgia. I was informed by the commander of a number of units that the soldiers were on their off time on Saturdays and Sundays and weekends going out to Home Depot to purchase materials and voluntarily giving up of their time to repair some of their facilities just so that they can take showers and live in some kind of decent housing situation. So I think it is important to recognize that this continual 12-year decline in real terms in defense spending is not only affecting our ability to fight future wars, to have the technology, research and modernization necessary but it is eroding the quality of life of our service personnel which is going to affect our ability to attract the kind of people we want to serve in the military. I hope my colleagues will take that into consideration in considering the vote on the Wellstone amendment. Mr. President, I yield the floor.

Mr. COATS. Mr. President, while we are debating and straightening out a procedural quandary we are in with a number of amendments, let me use up the remaining time on the Wellstone amendment and speak in opposition to it. The assumption behind the amendment is that defense is overfunded. We talk about the adding of additional billions of dollars to the defense bill as if the adding was over and above what the defense ought to be and, therefore, is surplus pork barrel, extraneous money. I think it is important to understand that, first of all, defense has been declining, as has been stated, for 12 straight years. Funding, overall, for defense is down 41 percent in real terms since 1985, at 1950 levels of funding; modernization is at 1975 levels of funding, and the budget resolution funds defense at $7.4 billion below last year's defense level in real terms. Maybe this chart can better illustrate what I am trying to say. In fiscal year 1996, the Appropriations Committee appropriated $264.4 billion in spending for defense for fiscal year 1996. That represented the 12th straight year of decline in defense spending in real terms. Now, the Clinton administration came in and said, even though that is a reduction from previous years, we want to reduce it even further. They brought the level down to $254.4, an additional $10 billion cut. Then we in the Senate brought forward legislation which would fund defense at last year's spending level--adjust it, in other words, to buy the same amount of defense this year that we bought last year. Without increasing it, but just buying the same level, it would have been, because of inflation, $273 billion. What we have proposed in this legislation is a $267.3 billion total, which is, of course, above the President's request. But the President's request was way below just keeping level with defense. Now, this total increase here is $18.6 billion over the President's request, just to buy last year's defense. We did not think we could go that far and meet our obligations to help balance the budget, so we took two-thirds of that and went to $267.3 billion. So the assumption that we are somehow throwing an additional $10 billion into defense is simply wrong. The defense outlays have been reduced 11 percent just since 1993, while nondefense outlays for the same period have increased 23 percent. It is not defense that is overfunded; it is defense that is underfunded. We are just trying to keep part of what we had, without falling further and further behind. The second point that we hear over and over is that the Defense Department did not request this money, therefore implying it is all congressional add-ons. I have two responses to that. No. 1, since when does the Congress simply buy off on the requests from the various departments of the administration without challenging or looking at the requests or going a little further than what their stated public request is? That is our job. We are elected to make the final decision in terms of how much we spend for education, how much we spend for the arts, how much we spend for transportation, how much we spend for defense, and every other item in the budget. That is why we have a Budget Committee, that is why we have Appropriations Committees, that is why we have authorization committees, to determine how much we ought to spend. That is what we are doing here. Second, and probably more important, the Department of Defense--I have 17 pages of quotes here from representatives from the Department of Defense saying we need to spend more. Obviously, what happened here is that the Department of Defense has been told by this administration that ``you will not spend more than $254 billion. Now you salute and make it work and sound like that is all you need.'' So it is false to say that the Department of Defense did not even request the money. I can go down through the 17 pages of the list, from the Secretary of Defense to the Chairman of the Joint Chiefs of Staff, to the chiefs of the various services, and quote from every one of them, saying: We are dangerously below where we ought to be. Modernization is dangerously underfunded. We ought to be funding it at a $60 billion level. Instead, we are funding it at nearly half of that, roughly $38 billion. I do not have time to give all these quotes, Mr. President, so I ask unanimous consent to have printed in the Record excerpts of the quotes from members of the Department of Defense as to why this budget of $254.4 is too low and why we are dangerously underfunding defense needs for the future.

Mr. COATS. Mr. President, I wonder if the Senator from South Carolina will yield me the 5 minutes.

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

Mr. COATS. Mr. President, may I inquire how much time is left on the Wellstone amendment.

Mr. COATS

Mr. COATS. Probably not more than 10 minutes.

Mr. COATS. Thank you, Mr. President, I say to my colleague that I will not take the full 9 minutes unless I need it. Otherwise, I will yield some back. I rise to question the Department of Defense's recent assertion that the Senate Armed Service Committee authorization for fiscal year 1997 will create huge costs in years to come. This information has come somewhat as a surprise, since the Congressional Budget Office recently reviewed the committee's fiscal year 1997 authorization and found no additional spending attributed to the committee's decision. And so we have somewhat of a disconnect here between the assertions of the Department and the CBO analysis of the committee's action. I know this has been discussed on this floor, and I think it is important for Members to hear the other side of the issue. When Secretary Perry, Deputy Secretary White, and General Shalikashvili met with the Armed Services Committee members last week, Under Secretary White asserted that the funding additions the committee made to the budget request created a $25 billion additional cost in the Future Years Defense Program. The estimate has since been refined down to $20 billion. But since neither Secretary White nor the Comptroller, John Hamre, was able to explain at the time how such additional costs might be incurred, Senator Nunn asked that a report be provided to the committee to explain the rationale and analysis that led to their conclusion. Mr. President, in my opinion, the Department's analysis--and in the opinions of many, including CBO--the Department's analysis of future years' costs is seriously flawed. The Department made assumptions about the effects of any funding restorations, and then did their multiplications, without any reference to the committee's own report, which explained the committee's intention. The method of analyzing research and development accounts was to multiply any committee addition by a factor of four and add up the result. Such an analysis ignores reality. Some of the program elements provided the Department the option to use the additional funds to close out a program, but instead, the program was scored as having an outyear cost of four times the add. There was no analysis, no reference to the committee's report that outlined the committee's intentions. Simply put, the Department assumed the worst-case scenario, assumed no future savings, and did the multiplication, with a predictable result. Recently, John Hamre, the DOD Comptroller has agreed that their analysis was very mechanical and should have considered offsetting savings. As far as the procurement accounts are concerned, the Department's own briefers admitted to having no consistent set of assumptions to score procurement accounts. In fact, briefers from DOD could not explain why they scored no future savings when old equipment was replaced, or modified with more efficient engines. They showed only outyear costs, but no savings in operation costs. This flies in the face of the Department's own information papers provided during the markup on the authorization bill. In one case, the Department's own information paper claiming outyear savings of $1.5 billion if RC-135 aircraft were re-engined. Now, we find no savings were accounted for in the Department's analysis of future year costs. So, Mr. President, let me just outline this for Members. When the committee came forward with the recommendation for purchase of new equipment, say, engines for certain types of aircraft, which engines, if modified, or if they replaced old engines, there would be an outyear savings because of the efficiencies of the new engines. Yet, that was not scored against the cost of the new equipment. That cost was taken and multiplied into outyears and labeled as a gross cost, without a net savings that come back from the efficiencies. Here are a couple more examples: The comptroller's analysis of the two major elements of the National Missile Defense Program are scored as having a $9.3 billion outyear cost through fiscal year 2001. That is the amount that most estimate is required to field a national missile system. Yet, not even the most optimistic projections contemplate deployment of a system until 2003. When asked how this was scored, comptroller analysts had no answer, nor recourse to any consistent assumptions to explain such an assertion. Another example: The committee recommended an authorization of $12 million for material technology because the committee had statements from the Army that $8 million would be used to complete one portion of the program, and another could be finished for an additional $8 million. The committee authorized an additional $4 million for that portion of the program, leaving an outyear tail of $4 million. The comptroller scored the program as having $48 million outyear cost, $44 million above the actual outyear cost. For electronics materials and the space-based infrared program, the same scenario takes place. Space-based infrared was cut in this year's budget request by $19 million, with no changes made to the outyear program. When the committee restored the cut, the comptroller scored it as an outyear add, which was erroneous. Mr. President, real life experience does not support this kind of cost analysis. Anyone in business knows that replacing aging equipment provides operating savings, otherwise, why replace it? Also, anyone with common sense knows that buying systems at economic quantities saves money both now and later. This is what the committee did. In many cases, the committee actually restored cuts in programs made by the Department--cuts that drove up unit costs--and now the Department scores the restorations as having outyear costs. Mr. President, the notion that the committee's authorization will drive the Department to outyear spending does not square with our analysis or square with reality. In fiscal year 1996, the committee authorized spending at a level above the administration's request. This year, the administration forwarded a reduced fiscal year 1997 request to Congress. Following the Department's logic in this analysis, the fiscal 1997 request should have increased, not decreased. Mr. President, the $20 billion outyear tail from this authorization does not exist. The analysis that asserts so is now in its sixth version in the last few weeks. It is no analysis, but rather an assertion that does not square with the facts. We would be better off to take General Shalikashvili's words at face value because when testifying before this year's Defense Department posture hearings, he was asked about last year's authorization, whether it was needed equipment, or whether it was ``congressional pork.'' He answered that: I think that the vast majority of the money was against things that we were going to buy later. They were brought forward as a result of what you did, and in many, probably all cases, in the long run will result in savings, because we are able to get them sooner at a more advantageous price. If you are going to buy it anyway, and you can buy it in a quantity now, which gives you unit cost savings, then why not buy it now? You do not score that as an extra add-on. You score that as a savings, or at least you take the total and offset the savings you gain from buying in quantity. I mean, that is common sense. If you are going to buy one car, you are going to pay a different price than if you buy a fleet of cars. If you know you are going to end up buying the fleet, and you can do the add now and get the unit cost down, it only makes sense to do so. Mr. President, the analysis that says any modernization now is an expense in years to come cannot be taken seriously. More serious thought should be given to the Department's continuing reductions without any changes in its stated goals or strategy. Ad hoc assertions, such as this offering by the Department, should be cause for questions about any underlying framework or analysis for our national security other than what the present administration is willing to request. Mr. President the issue at hand is this: the administration says its strategy is sound but does not provide the resources to carry it out-- and when those resources are authorized, it complains of future costs. This all happens while defense spending declines and operational tempo increases. Mr. President it is time to relook at defense strategy from a more thoughtful vantage point, and to take a careful look at the relation between policy goals and resources. This so called analysis adds nothing useful to the debate. Mr. President, I thank you for the time.