William Cohen

Mr. COHEN

Mr. COHEN. Did not go broke, but it had real serious problems for several years thereafter. Those on the other side said, ``We made a mistake. We tried to get the rich. We got the working men and women.'' We have got to stop the notion that somehow only Democrats preserve the interests of those who are working and we are just protecting the rich. What we are trying to do is generate an economy in which everybody benefits. So I must say this notion, this dangling conversation that never seems to end, that the Democrats are the only ones concerned about working men and women, it does not correlate to the background that I come from. It is not the background that the Senator from New Mexico comes from. My folks do not have anything. They do not have any retirement plans, nothing but Social Security and what they are able to produce day in and day out from their hard labor. So the notion that somehow I am out here advocating programs for the rich really strikes me as offensive. And so I want to commend the Senator from New Mexico once again. The conference report to House Concurrent Resolution 67 is not a perfect plan; it is one that I will disagree with in some instances in the future with regard to the details, but I think he has done an outstanding job. And I wanted to rise and advocate my support for it.

Mr. COHEN

Mr. COHEN. Mr. President, I rise today to express some concerns I have regarding S. 240, the Securities Litigation Reform Act of 1995, as reported by the Banking Committee. The laudable goal of this legislation has been to reform the Securities Litigation System to curb frivolous lawsuits. I strongly support the goal of deterring meritless securities class action lawsuits and believe that there is room for constructive improvement in the current Federal securities litigation process. In some instances, meritless class action cases can be costly to defend against and may impose large and unnecessary costs on issuers and other participants in the market. In other cases, small investors themselves are taken advantage of by overzealous attorneys. Nevertheless, in our quest for reform, it is crucial that we do not undermine the right of investors, particularly small investors, to protect themselves against unscrupulous swindlers who use grossly exaggerated claims to lure investors. Private litigation under Federal securities laws is an important complement to the SEC's Enforcement Program. We must not curtail legitimate rights of the investor to litigate. Over the past several weeks, an intense battle has been waged over the airwaves on the merits and motives of this legislation. At times, these assaults have been aimed not only at the bill's provisions, but at its sponsors as well, with insinuations that supporters of S. 240 are intentionally protecting securities fraud and are against senior citizens. Unfortunately, once again mass media lobbying campaigns have distilled a complex, and I believe earnest, reform effort into a white hat or black hat screenplay, casting any one who supports this branded bill an enemy of senior citizens. Somewhere in this heated debate, I believe that a balance must be achieved that protects the rights of defrauded investors while also providing relief to above board companies who might find themselves the target of meritless or frivolous lawsuits. Mr. President, as chairman of the Senate Special Committee on Aging, and as a strong advocate of consumer protections against the elderly, I suggest that there can and should be some middle ground. I am extremely concerned about issues that affect the welfare of our senior citizens and, in particular, about fraudulent and abusive practices that are directed against them. The Aging Committee has held a series of hearings on the special needs and issues facing the small, and often unsophisticated, investor. As interest rates declined over the last decade, the quest for higher yields has intensified, particularly among senior citizens who often rely on their investments as a principal means of support. Many of them are low- and middle- income retirees who have worked hard for their pensions, and who must now make these pensions stretch over two or even three decades. Retirees and others know they can invest in CD's with long periods of maturity, but they are reluctant to tie up their money fearing that they may have to tap into their savings for a major operation, expensive drugs, or some other emergency. As a result, the lucrative securities market became a popular choice for the small, but often financially unsophisticated and inexperienced, investor. For the first time in American history, investment company assets have surpassed commercial bank deposits. The percentage of U.S. households that own mutual funds has more than quadrupled since 1980, with over 38 million Americans investing in those funds. One out of three American families now have investments in mutual funds or the stock market. While this mass movement into the securities market has provided new opportunities for investors, it has also increased risk, led to a great deal of confusion, and, unfortunately, created opportunities ripe for fraud by securities dealers who misrepresent risks to unsuspecting investors. Our Aging Committee hearings showed that low interest rates create an environment in which small investors are susceptible to outright investment fraud and abusive sales practices. Senior citizens are not the exclusive prey of these market manipulators, but one factor makes scamming the senior citizen small investor particularly odious: Younger Americans can restore some or all of their losses through new earnings, while seniors' savings are not a renewable resource. Accordingly, scammed seniors living on fixed incomes cannot write their losses off as a lesson learned for the future. Instead, their financial losses may be the loss of their entire future. Our Aging Committee investigation and hearings revealed a wide range of small investor frauds, from penny stock scams to large mutual fund companies deceptively peddling junk bonds. Our hearings also examined the questionable marketing practices of some banks that sell uninsured investments, such as mutual funds, annuities and stocks. While we should not close the door to banks wanting to sell securities, the hearing pointed out the special dangers and problems that this trend in banking presents, namely that there is tremendous potential for confusion by bank customers about the safety and nature of the investments they are buying. As bank customers are swayed more toward uninsured investments, we must ensure that they are fully informed of the risks inherent in some of these investments and have adequate opportunity to seek redress remedies if they are intentionally misled into these investments. I cosponsored S. 240 as introduced to indicate my support for securities litigation reform efforts. Frivolous lawsuits have become all too common. I have concerns, however, that the bill reported by the Banking Committee does not strike the appropriate balance between securities litigation reform and investor protection. First, I question whether the safe harbor provisions of the revised S. 240 may make it very difficult to sue when intentionally misleading information clauses investors to suffer losses. The original S. 240 directed the SEC to develop regulatory safe harbor rules for forward- looking statements. The new version of S. 240, however, establishes statutory safe harbor rules. I am concerned that these rules would unwisely protect even some fraudulent statements that were made knowingly. I have concerns that the revised version of S. 240 would leave defrauded investors with the nearly insurmountable task of establishing a corporate executive's actual intent, and that a few carefully placed disclaimers could provide a legal protection for misleading statements that were made knowingly. I believe that the SEC should be given an opportunity to fashion a safe harbor that strikes the proper balance. Finally, S. 240 as reported dropped the extension of the statute of limitations for private securities fraud actions contained in the original bill. I believe that the extension should have been retained in order to tip the balance of reform more toward investor protections. I believe that the Banking Committee deserves much credit for addressing some of the major concerns with the original S. 240. The bill before us, for instance, contains no loser-pays provision, a provision of the original bill which caused me concern. Mr. President, the challenge before us today is to identify ways to make the legal system more balanced and efficient. We must sift through the dueling advertisements and challenges of ``pro-Keating'' and ``antisenior'' on one side and challenges of ``antibusiness'' and ``antireform'' on the other. An appropriate balance between the rights of investors to hold companies responsible for wrongdoing and the need of the companies to be protected from costly, meritless litigation must be achieved. I believe that the safe harbor rules should be implemented by regulation rather than statute. The regulatory process allows for full and fair comment by all sides to determine appropriate safe harbor rules. Also, once established, regulatory safe harbor rules offer greater flexibility than would statutory ones. In the fast-changing world of investment finance, this flexibility is important. I wish that S. 240 retained the original safe harbor provision; because it does not, however, I regret that I can no longer support this bill.

Mr. COHEN

Mr. COHEN. Mr. President, during the ongoing debate about autos and autoparts, much has been said about how our domestic companies have been denied a chance to compete in Japan on the basis of quality and price. I rise today to describe to my colleagues a similar problem faced by United States companies seeking to enter the trade carrying automobiles between Japan and the United States under the United States flag. At present, only three United States-flag vessels operate in the United States-Japan trade. I understand the Department of Defense and our trade negotiators are aware of proposals to increase United States- flag participation in this trade, including a significant one to construct a fleet of 10 refrigerated car carriers to carry vehicles from Japan to the United States and produce and other refrigerated products, as well as automobiles, to Japan at commercially competitive rates. I am particularly interested in this type of proposal because it would lead to the construction of new ships in U.S. shipyards. As my colleagues no doubt appreciate, we must do something to help our shipyards supplement their military work with commercial orders. The president of the American Shipbuilding Association, for example, recently pointed out in a letter to Members of Congress that ``[c]onstruction of military sealift ships is critical to the Nation's defense, to sustaining the Navy's shipbuilding base, and to our industry's efforts to supplement declining orders with commercial work.'' By encouraging the entry of new U.S.-built vessels equipped with national defense features in this trade, Congress and the administration can help preserve rapidly dwindling seafaring manpower and skills, save or create a significant number of jobs in the shipbuilding and supplier industrial base, and assist U.S. shipyards in reentering the commercial shipbuilding market. At my request, the Department of Defense recently completed a study of the costs and benefits of an active Ready Reserve Force Program employing privately owned commercial ships equipped with national defense features as an alternative to the currently inactive Ready Reserve Force fleet. The report demonstrates that an active Ready Reserve Force Program, comprised of newly U.S.-built commercial vehicle carriers equipped with national defense features, would have important benefits and would be substantially more cost effective than acquiring and converting existing foreign-built ships. The report noted, however, that securing entry into the commercial market will be a critical element for the success of the program. In my view, entry of these vessels into the United States-Japan trade would enhance our national security. Equipped with national defense features, such as hoistable strengthened decks, these vessels would be well adapted for carrying both heavy equipment and ammunition. Moreover, a fleet of this size in normal commercial operation in the United States-Japan auto trade would ensure vessels would be available for loading at designated ports of embarkation within the time demands for the Ready Reserve Force contemplated in an emergency. I therefore urge the Department of Defense and our trade negotiators in ongoing discussions and negotiations to emphasize to the Government of Japan the importance of augmenting American participation in this trade as a means of advancing the mutual defense and security interests of our two nations.

Mr. COHEN

Mr. COHEN. Mr. President, I ask unanimous consent that I be allowed to proceed as in morning business.

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

Mr. COHEN

Mr. COHEN. Mr. President, I would like to offer a few comments on the nomination of Dr. Foster to be Surgeon General. We are going to have further debate this afternoon. We are going to have one more rollcall vote in terms of whether or not the proceedings should come to a close and a vote take place on Dr. Foster. I must say that this is one of those issues which has really galvanized the American people, those who are interested in this issue. We have letters and calls pouring into our offices from those who are strongly in favor, and those who are equally determined to oppose his nomination. The rhetoric is hot. It is, in fact, intemperate. I think the passion of the letters finds its voice right here in the U.S. Senate. That voice, at times, is angry, raw, and even ugly. Mr. President, the charge has been made that we are sacrificing Dr. Foster on the altar of right-wing radicalism. I must say that there have been a number of good and decent people who have found their integrity and character shredded on the altar of left-wing liberalism. That is one of the problems that I see taking place in this Chamber and elsewhere. There seems to be a double standard on display, what we might call a case of situational ethics. What comes to mind is the debate that took place when Ronald Reagan, for example, nominated Robert Bork to be a member of the Supreme Court. I recall that debate very well. Judge Bork's writings were plucked from the past. Those writings were provocative. He was, in fact, a provocative professor who challenged conventional wisdom. He disagreed with the rationale that was found and articulated in Roe versus Wade. He found no right of privacy lurking or hidden in the penumbra of the Constitution. What took place with Bob Bork is that he was demonized. It was charged that he would take us back to the boneyard of conservatism, to the dark ages, maybe even to hell itself. I say that by virtue of a photograph that I remember that was on the cover of Time magazine. It was a portrait, a photograph, of Robert Bork with his judicial robes on looking much like a cape. Of course, he had the beard. There was a red glow to the entire cover. And one could almost see the hint of horns emerging from the top of his head. One would have thought that Mephistopheles himself was about to be appointed to the Court, would corrupt the Court, would rip up the Constitution and shred our rights of privacy. I might point out, sometime thereafter Judge Ruth Bader Ginsburg, who actually was endorsed by Robert Bork, also found fault with the Court's reasoning in Roe v. Wade. She said the Court had reached the right result but for the wrong reason. Yet we did not hear much criticism coming from the left, the liberal element in our society, at that time. I mention that because I think we are reaching a point in the confirmation process in which it is going to be very difficult to have good and decent people willing to step forward and subject themselves to the confirmation process. My own friend, John Tower --I think what took place in this Chamber against John Tower was a disgrace. I saw a good man who had his character shredded by allegations and innuendo and false charges. He was so bloodied up that the critics said, ``He has been too damaged to be a successful Secretary of Defense. President Bush, why don't you just cut him down from that tree that he is swinging from and take him back to Texas?'' So we saw another challenge to an individual which I felt was unwarranted. How many Republican nominees were rejected because of membership at all-white clubs? It did not matter that they were not racist. It did not matter that they had employed blacks or Hispanics or other minorities in their businesses or even in their homes. If they were members or had memberships in an all-white club, that was enough to bring down their nomination. The same rule, however, was not applied when it came to people like Webster Hubbell, who also belonged to an [[Page S 8855]] all-white club at that particular point. But we had a different standard imposed. So I suggest we have to get away from this double standard that when those who raise questions about someone's nomination by virtue of their difference of philosophy, that we not charge it is based upon right- wing radicalism any more than it is based on left-wing radicalism. We have to put a stop to this situation. We have to remember that Bill Clinton won the election. He is the President of the United States. It is my own judgment he is entitled to the nominees of his choice. We may disagree with those nominees, but every time we disagree with Bill Clinton's philosophy, President Clinton's philosophy, or that of the individuals he nominates, we should not then, by virtue of our disagreement with their ideology or practice, turn it into a character issue and then begin an all-out assault on character. We obviously have a duty to challenge philosophy and policies when they are fundamentally in conflict with our own. But we also have to deal fairly with these individuals. We have to remember, also, the axiom that bad appointments make bad politics. The President of the United States, when he makes an appointment, is held accountable for that individual's record, that individual's character, that individual's performance. And, barring evidence of incompetence as far as technical qualifications are concerned, professional qualifications, barring clear and convincing evidence of moral deficiencies that would prevent that person from occupying that position, I think we have an obligation to confirm the President's nominees. What we have to stop in this system is, really, shredding the character of the individuals who come before the body for confirmation. If we disagree philosophically, let us be very up front about it and base it on that. What I see taking place is something of a variation of what Senator Moynihan of New York talked about in his brilliant piece a couple of years ago, called ``Defining Deviancy Down.'' What he was talking about at that time was events that took place in the 1920's or 1930's, some decades ago, that we would look at and say, ``What a horrible thing that was.'' The Saint Valentine's Day massacre was one he pointed to. There were, as I recall, seven people involved in that. Four were killed by three others, or vice versa. That incident made worldwide news. It has gone in the history books. Today, it is likely that might not appear in bold headlines in the Metro section of the New York Times or the Post or elsewhere. We have seen so much violence spread in our society we have become inoculated against it, almost. We have been immunized against a sense of outrage about the level of deviancy because we defined it down. It seems to me we have to also talk about defining civility down. We have, I think, lost some of our moorings. We now resort not only to challenges of philosophy but to challenges of character. In doing so, I think we have lowered the standard for civil debate and discourse in this country. The anger we see outside of these Chambers is being reflected inside the Chambers. We do not want to tolerate or promote barbarism outside the gates. We do not want to promote it inside the gates. I think what we have to do is lower the rhetoric and the charges and the countercharges about who is sacrificing whom on which altar and stop imposing double standards and situational ethics and come back to what I believe to be the correct standard. Either we find Dr. Foster to be medically, professionally unqualified to serve in this position, or we find him to be so morally bankrupt that it would be a discredit and an injustice to have him serve in that position. Frankly, I do not find that we have measured up to that burden of proof. I believe Dr. Foster is a good and decent man. I believe President Clinton is entitled to have his nominee confirmed, even though we might disagree or I might disagree with his particular views or practice. Nonetheless, that is not the test that should be imposed. The test should be, Is he professionally qualified and does he have a moral character to serve in that position? There are those on this side who believe fundamentally he has misrepresented the number of abortions that he performed during the course of a long practice. That is, perhaps, a legitimate issue to be raised. But I do not think we ought to be engaged in savaging each other, in attacking each others' motives. This is a serious issue and is one that ought to be debated in that fashion without resorting to a lot of hurtling of invective. Mr. President, I hope my colleagues will in fact allow a consideration of Dr. Foster on the merits. That was in fact allowed for Judge Bork. He was defeated. It was allowed for Senator Tower, whose nomination was also defeated, and others whose names never really made it to the floor by virtue of their membership in what were described as racist clubs or organizations. My hope is that we can return to a level of civil discourse in this society of ours, rather than the shouting and the anger that we see being displayed from day to day, and really try to deal with these issues on the merits. I think Dr. Foster is entitled to have his name considered on the merits. We hope there will be enough Members who will vote to terminate any attempt to filibuster his nomination. Seeing the hour of 11:30 is about to be reached, I yield the floor. Mr. President, I suggest the absence of a quorum.

Mr. COHEN

Mr. COHEN. If that were the case, then it seems to me that the States which had the mandatory helmet laws would have the best safety records. But that, I think, as Senator Snowe has clearly pointed out, does not seem to be borne out by the facts. We would assume those who have the mandatory helmet laws have the best records. In fact, over one half of the States with the lowest fatality rates per 100 accidents over the past several years have not had helmet laws. Even though Texas, California, and other States have mandatory helmet laws, we cannot draw a causal connection in this case, because Maine, which does not have a mandatory helmet law, had the second lowest fatality rate in the country in 1993, which is the last year for which statistics are available. I think a lot of it is due to the fact that we have safety education programs. Senator Snowe has talked at length about this, but back in 1991, Maine started requiring all applicants for a motorcycle learner's permit to take an 8-hour safety course. Anyone who offers the safety instruction must be certified by the State. Senator Snowe has talked about the United Bikers of Maine [UBM]. UBM members have taken the lead in developing and offering the safety course to beginners. They have augmented it with a road training course, which most beginners take, although the State does not require it. Now, the UBM offers refresher and advanced safety courses and road training for experienced riders, as well. So I think what we have in Maine is a very serious education program and, as a result of that program, we have seen fatalities drop. In 1991 we had 30 motorcycle fatality accidents. In 1992, the number dropped to 21. In 1993, fatalities declined to 10. We had the second lowest fatality rate per 100 motorcycle accidents in 1993. It is due, in my judgment, to motorcycle safety training, these courses that are being conducted. I have met with the UBM members on a number of occasions, I must tell you, both here in Washington and back home. I would say I have been struck, as I know my junior colleague has, by the seriousness with which they approach motorcycle riding. These are serious-minded men and women who take what they are about very, very seriously. They have taken the leadership role in our State to ensure that concomitant with motorcyclists' freedom to ride without a helmet is the responsibility to ride safely. They have pointed out that there is great division within their own membership. Many of the members wear motorcycle helmets all on their own. They are not required to do so. They wear them. But there are others who maintain that wearing a helmet obscures their vision, it obscures their hearing, it produces fatigue and whiplash, and induces a false sense of security, especially among younger, less experienced riders. You can debate that. They are out riding. You and I are not out there on the bikes riding every day. Were I to do so, in all likelihood I would probably wear a helmet. But I must defer to those who ride on a regular basis, since there is a division of opinion on this. If we look at the record, the record would seem to indicate that Maine does all right. Maine does all right by any standard. The question is, Why is it necessary now for the Federal Government to mandate that Maine impose a mandatory helmet law or divert funds necessary for road repair and maintenance to a safety programs that is sufficiently self-financed by motorcyclists already? Why are we going to penalize the State of Maine? Maine needs all of the money it receives to address a growing backlog of road repair, maintenance and improvement projects, a backlog that threatens all motorists. We want to penalize the State in order to force its compliance with this law, when the State is making pretty good progress all on its own? The State of Maine is doing all right in terms of its safety programs. So I intend to support the Senator from Maine, Senator Snowe, when she offers her amendment later today or tomorrow, because I believe the States feel an obligation to look after their citizens. Many of them feel the same commitment to safety as we do here in Washington. It would seem to me Senator Snowe makes a valid point when she talks about what the elections of last November revealed. Many people feel that we in Washington intrude too frequently upon decisions that they feel they can make at the local or State level just as adequately or better than we can. So when she offers her amendment, I intend to support it at that time. I yield the floor.

Mr. COHEN. I am happy to yield to the Senator.

Mr. COHEN. Mr. President, I would like to address the issue of motorcycle helmet laws just referred to by my colleague from New Jersey. Senator Snowe apparently plans to offer her amendment at a later time to the legislation, an amendment to repeal the penalties levied under section 153 of the Intermodal Surface Transportation Efficiency Act [ISTEA] on the States that do not impose mandatory helmet use by motorcyclists. I find the statement just made somewhat ironic: What about all of the fatalities suffered by those who ride motorcycles, what about the loss of a limb, the serious accidents, the productivity losses attributable to accidents? It would seem to me that States would have an equal interest. States are not immune to concern for their citizens. Why is it that one-half of all the States in this country do not have mandatory helmet laws? They have a vested interest in keeping Medicaid expenses from being excessive and going up. They have an interest in not having their citizens become paraplegics. They have an interest, it seems to me, in helping to protect their citizens' lives. Why is it that they have refused to impose helmet laws? I think it is because there is a division of opinion on the issue of helmet laws. With regard to safety belts, there seems to be a general consensus that they do, in fact, help reduce fatalities and the severity of injuries in serious accidents. But there still is dispute with respect to motorcycle accidents and helmets. Between 1980 and 1993, motorcycle accidents and fatalities declined by some 53 percent each, Mr. President. Now, these downward trends in accidents and fatalities were well underway before we passed ISTEA and section 153 in 1991. So the decline in the accidents and the fatalities cannot be attributed to the passage of a law in 1991.

Mr. COHEN

Mr. COHEN. Mr. President, today I rise to introduce the Federal Information Technology Reform Act of 1995. This legislation will provide much needed reform to the way the government acquires and uses computers and information technology. This legislation is critical to the future of Government as information technology becomes increasingly important in the way we manage Federal programs and responsibilities. It was not all that long ago--less than two decades--when the business tools in most offices consisted of rotary dial telephones, IBM Selectric typewriters, sheets of carbon paper, and gallons of white- out. Today, however, it is a much different world. Offices now rely on digital telephone systems, voice and electronic mail, personal computers, and copy and fax machines. And while the office tools in Government and the private sector are similar, the Government is finding itself falling further and further behind the technology curve The disparity between the tools of the private sector and the tools of Government is growing daily; especially in the area of information management. The Government is the largest information manager in the world. The IRS collects more than 200 million tax forms a year. The Department of Defense has warehouses of information containing everything from declassified battle plans from the Spanish American War to financial records for the Aegis Destroyer. The Department of Veterans Affairs has medical, educational, and insurance records for tens of millions of veterans scattered throughout the country. The Social Security Administration has hundreds of millions of records dealing with disability claims, educational benefits and payment records. In addition, all of these agencies have records dealing with personnel, travel and supply expenses. The list is endless. The ability of Government to manage this information has a profound affect on the daily lives of all of us. When senior citizens receive their Social Security checks, it is because a Government computer told the Treasury Department to send a check. When we pay taxes or receive a refund, it is a Government computer that examines our tax forms, checks our math, and determines if we have paid the right amount or if we are due a refund. When we fly, we rely on Government computers to keep planes from crashing into one another. When we watch weather reports on the evening news, the information comes from Government computers. Government computers also keep track of patents, Government-insured loans, contractor payments, personnel and payroll records, criminal records, military inventory, and Medicaid and Medicare billings. In short, the Government keeps track of information that ensures our financial well being and is also critical to our public safety and national security needs. But these Government information systems are headed for catastrophic failure if we fail to address the challenge of modernization. The Federal Aviation Administration, for example, relies on 1950's vacuum tube technology to monitor the safety of millions of airline passengers on a daily basis. Occasionally this antiquated technology fails, potentially putting airline passengers at risk. Other Government computers are also failing to do the job such as failing to detect fraud in the Federal student loan program and preventing excess inventories at the Department of Defense. Inadequate technology is also largely to blame for the Justice Department's failure to collect millions in civil penalties, the Internal Revenue Service's failure to collect billions in overdue taxes, and the Department of Health and Human Service's failure to detect fraud in the Medicare program. The underlying theme in all of the examples is that the Government does not do a good job managing its information. Poor information management is, in fact, one of the biggest threats to the Government Treasury because it leaves Government programs susceptible to waste, fraud, and abuse. When the average taxpayer hears horror stories such as the Federal payroll clerk who was paying phantom employees and pocketing the money, or the case of the finance clerk who billed the Navy for ship parts that were never delivered, or the tax preparer who stole millions from the IRS through fictitious filings, they may not think about information management. But they certainly lose confidence in the Government's ability to manage. My purpose in relating these incidents is not to simply recite a litany of Government horror stories. We have all heard too many of those. Instead, my purpose is to highlight how Government technology affects the lives of ordinary citizens, and to demonstrate [[Page S 8686]] that the common denominator in these examples is the Government's failure to effectively manage information. The problems are clear. It is equally clear that focusing on reforming how the Government approaches and acquires information technology can have a profound impact on the way Government does business in much the same way it has changed corporate America. Last fall, I issued a report examining the Government's purchase and use of information technology. While I do not want to rehash all of the findings and recommendations, I do think some key observations are worth repeating. Government is falling further behind the private sector in its ability to successfully apply information technology. First, the Federal Government rarely if ever examines how it does business before it automates. I recently held hearings which examined how the Pentagon could save more than $4 billion over 5 years simply by changing the way it processed travel vouchers. Automating the current voucher processing system will neither achieve the projected savings nor the efficiencies that are accomplished through reengineering. Second, the Federal Government has wasted billions of dollars by maintaining and updating so-called legacy or antiquated computers from the 1960's and 1970's which are ill-suited for the Government's needs and by today's standards will never be efficient or reliable. Third, the Government wastes additional billions when we do buy replacement systems because we try to do too much at one time. These so-called megasystems are difficult to manage and are rarely successful. Without exception, megasystems cost much more than envisioned and when completed, which is rare, are generally years behind schedule. The private sector recognizes the megasystem approach as too risky and instead takes an incremental and more manageable approach. We need only look to the IRS and FAA to see examples of old systems that continue to deteriorate but have yet to be replaced because of failed modernization efforts. Fourth, the process for buying Federal computer systems takes too long, largely because the process is inflexible and bureaucratic. In most cases, technology is obsolete by the time the new system is delivered. In a world where technology doubles every 18 months, Government can no longer afford systems that take 3 and 4 years to procure. In addition, once systems are finally delivered, agencies are then at the mercy of winning vendors for needed upgrades. These upgrades are purchased noncompetitively and any savings derived from the earlier competition are lost. Finally, protests and the threat of protests add further delay and cost. In some cases, protests are lodged to obtain information that was not disclosed at debriefings, to interrupt revenue flow to competitors, or to gain other competitive advantages. The current approach to buying computers is outdated and takes little account of the competitive and fast-changing nature of the global computer industry. Markets and prices change daily, yet Government often gets locked into paying today's prices for yesterday's technology. It is time to move Government information technology into the 21st century. That is why today I am introducing the Information Technology Management Reform Act of 1995. This legislation will significantly alter how the Government approaches and acquires information technology. The legislation would repeal the Brooks Act and establish a framework that will respond more efficiently to the needs of Government now and in the foreseeable future. Mr. President, this legislation will make it easier for the Government to buy technology. More importantly, it is intended to make sure that before investing a dime in information technology, Government agencies will have carefully planned and justified their expenditures. Federal spending on information technology will be treated like an investment. Similar to managing an investment portfolio, decisions on whether to invest will be made based on potential return, and decisions to terminate or make additional investments will be based on performance. Much like a broker, agency management and vendor performance will be measured and rewarded based on managing risk and achieving results. One of the most important features of the bill is that it changes the way Government approaches technology. Agencies will be encouraged-- indeed required--to take a hard look at how they do business before they can spend a dollar on information technology. The idea is to ensure that we are not automating for the sake of automation. The greatest benefit from an investment in information technology can come from automating efficient processes. The bill will make it easier to invest in information technology by replacing the current procurement system with one that is less bureaucratic and process driven. The new system is designed to allow Government to buy technology faster and for less money. This will enable us to make significant progress in replacing the inefficient and unreliable legacy systems which currently waste a significant portion of the Federal Government's $27 billion annual information technology budget. Specifically, the bill eliminates the delegation of procurement authority at the GSA, and establishes a National Chief Information Officer at OMB and Chief Information Officers at the major Federal agencies whose jobs are to emphasize up front planning, monitor risk management, and work with vendors to achieve workable solutions to the Federal Government's information needs. The legislation will also fundamentally change the Government's focus of information technology from a technical issue to a management issue. We have seen how failing to recognize information technology as a management issue has resulted in billions of dollars lost to inefficiency and abuse. From now on, Government information technology will have the attention of top management because the CIO's will have seats at the top levels of Government. My legislation will also discourage the so-called megasystem buys. Following the private sector model, agencies will be encouraged to take an incremental approach that is more manageable and less risky. We can no longer afford Government-unique systems. My bill makes it easy for agencies to buy commercially available products. While I understand that there are some unique needs, standard commercially available systems should be utilized for payroll and travel operations that are similar in both business and Government and for other operations whenever practicable. The bill eliminates the current system for resolving bid protests involving information technology. Consequently, all protests will be resolved by the agencies, General Accounting Office, or the courts. While some are concerned that without the current system fairness cannot be ensured, I believe that other improvements in the procurement process required by the legislation eliminate the need for this redundancy. I am excited about the prospect of this legislation to transform the way the Government does business. If Government is going to regain the confidence of taxpayers, it must successfully modernize. And, as you know, we cannot successfully modernize unless we can buy the tools which will enable us to automate. My legislation will lay the foundation to fundamentally change how the Government approaches the application and purchases of information technology. If passed and implemented properly, this legislation can save taxpayers hundreds of billions of dollars by reducing overhead expenses and enabling our Government to become significantly more efficient. Changing the way Government does business and realizing the full promise and potential of technology, we can reduce the financial burden for this and future generations of Americans. Mr. President, I urge my colleagues to support this legislation and move swiftly toward its adoption. We simply cannot afford to miss this opportunity to improve the delivery of services to the public; to increase detection of waste and fraud; and significantly reduce the cost of Government. I ask unanimous consent to have the full text of my statement and Senator Levin's statement printed in the [[Page S 8687]] Record as if read, and that the bill and section-by-section analysis be included in the Record.

Mr. COHEN

Mr. COHEN. Mr. President, I rise today to pay tribute to Theo J. Pozzy, a close friend of mine who passed away on May 29 at the age of 94. Theo was a longtime community volunteer in my hometown of Bangor and was revered by everyone in the community. In 1919, while still a teenager, Theo came to the United States from France. Even toward the end of his life, his voice contained the telltale sign of a French accent. His love for his adopted country, however, could not have been stronger. Theo served admirably in World War II under the command of Gen. Douglas MacArthur. After the war, he helped carry out the Marshall plan in Europe, working closely with Ambassador Averill Harriman. On the recommendation of French President Charles DeGaulle, Theo was awarded the French Medal of the Legion of Honor for his work abroad. After returning from Europe, Theo dedicated much of his life to helping others through volunteer work. Toward the end of his life, he was very active with programs that helped individuals cope with drug and alcohol addictions, and he was the treasurer of the Eastern Regional Council on Alcohol and Drug Abuse in Bangor. Some may ask what kept Theo going all these years. After all, many people view their golden years as a time to relax, and they eagerly look forward to enjoying themselves after a lifetime of working for and rewarding others. I truly think that Theo Pozzy knew nothing other than giving of himself. While most people slow down in retirement, Theo sped up. While many people are anxious to celebrate themselves, Theo celebrated others. While some ask for something in return for their charity, Theo was much more comfortable as a benefactor than a beneficiary. These are some of the things that made him great. Mr. President, I and many others lost a very close friend last month. Theo Pozzy will truly be missed.

Mr. COHEN

Mr. COHEN. Right. Many, many homes, as you know, in the rural areas do not necessarily have the cable-ready type of television.

Mr. COHEN. Mr. President, just before our time expires, I want to indicate that this amendment certainly is not a partisan issue, as you can see from the debate that has taken place, with the Senator from Nebraska joining the Senator from Maine, and others who have expressed support for this amendment. I also point out that in the other body, Congressman Bliley, the chairman of the House Commerce Committee, and also Congressman Markey, the ranking member on the House Telecommunications Subcommittee, have endorsed the legislation and, in fact, have reported it out of the committee. So the legislation is bipartisan in the House. I hope the bipartisan support for this amendment will be reflected in the vote here this evening. I suggest the absence of a quorum.

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

Mr. COHEN. I thank the Senator for raising the issue. It highlights the nature of the problem whereby one company can suddenly come in and decide it wants to give you a different type of service and you must rent this box in order to get what you are already paying for. Sure, there was an outcry, an outrage expressed by consumers. They were told to relax, this is for the future. We are preparing you for interactive television. They got interactive alright with the consuming public, and they were forced to take it down. The FCC is not in the business to try and stifle developments. As a matter of fact, can we argue today that as a result of the standards developed by the private sector and incorporated by the FCC, that technology has been stifled in the telephone industry? I do not think so. We are seeing tremendous progress being made. I point out to the Senator from Kentucky that while some people might get hurt, a whole lot of people get helped when you make progress. We are trying to help millions of people in this country acquire the technology cheaper and with greater choice, and hopefully with greater quality. That is the purpose of the amendment. So the telephone industry is a good example of what can take place with the set-top box market. I might point out that on page three of the amendment, it indicates, ``Such regulations shall take into account the needs of owners and distributors of video programming and information services to ensure system and signal security and prevent theft of the programming or services; and, secondly, the need to ensure the further deployment of new technology relating to converter boxes.'' I say to those who are arguing that this is being raised to stifle technology, it is just the opposite. Those against this amendment want to stifle competition. Those who vote for this amendment will vote for the Consumer Federation of America and the Consumers Union. When the vote comes at 7:30, those people here that are concerned about getting more choice to the public, getting better quality, and getting more competition will vote to support the amendment. I reserve the remainder of my time.

Mr. COHEN. No, because the--

Mr. COHEN. It does not prevent any other company in any other State from doing precisely the same thing.

Mr. COHEN. They withdrew it only after great protest was raised, precisely the problem when you have a company who can come in and say, ``The signal you are getting now you have to pay more for it. Now it is roughly $3 more and you are going to get just precisely the same thing you were getting before.''

Mr. COHEN. I correct myself. You may still need a set-top box, even though you have a cable-ready television set. That is what happened in southern Maine recently where a major company as a matter of fact, said, ``This box you have to rent. Even though you are currently getting our signal, this is something we are going to now prepare for the future in terms of interactive television and you must now rent this box, in order to get the signal you were getting previously through your television sets.''

Mr. COHEN. If I can.

Mr. COHEN. Mr. President, I will respond briefly to the comments of the Senator from Kentucky. He mentioned that he is from a rural State. So am I. I do not know what the population of his State is, but we have little over 1 million people in the State of Maine. I used to be the mayor of the third largest city in Maine--38,000 people. So we have a rural population in my State as well. I doubt very much whether there are many States--no matter how rural--that do not have a Radio Shack or a Wal-Mart or a Sam's or some other major type of outlet in their States. That really is not the issue. If you live in a rural area and you do not have a Wal-Mart, Sam's, Circuit City, or Radio Shack, what you do is just keep renting your box from your cable company. That is all you have to do. You have a choice. You do not have to buy anything. You can continue to pay the rent for the box. Your small cable company rents the box to you, and you continue to pay the rent. If you get unhappy with it, you may decide you want to make the trip 12 miles to buy another converter box. What I am saying is consumers cannot take that signal of the cable company and steal that signal by virtue of having access to the box. That was the purpose of having the private sector develop a standard whereby cable operators protect their signal. What the FCC does is turn to the private sector, just as they did with the phone jack. The standard for the telephone jack was developed by the private industry. That is what we are talking about here. If you are talking about theft, what do we tell Hewlett-Packard, Compaq, or IBM or any of the other major computer developers and manufacturers today? You know something, we have a big problem--hacking. We have hackers all over the country, all over the world. They can get into the computers at the Pentagon. The Senator from South Carolina knows about this. All the people who are here, the Senator from Kentucky and all of you, have had access to information. They can gain access to the computers in the Pentagon. What do we do? Shut down the computers? We said, ``No, let's do better. We have to develop better standards for protecting the signals, protecting the technology.'' That is what is going on in the private sector today. We all have been briefed on what is going on in the private sector, the kind of standards designed to prevent hackers from getting access. What is the largest growing market today? The direct satellite television. Do you think people are putting millions or billions of dollars into developing direct satellite television if they are worried that they cannot protect their signals? That is what is going on. The industry will develop the equipment to protect the signals. Why are you going to give cable companies, not mom-and-pop cable companies, major cable companies the opportunity to run a monopoly? For the small rural State that may have only one cable company and no marts where consumers can go to purchase a set-top box, there will be no problem. Consumers will just keep renting that same box. Mr. President, the Senator from South Dakota said that what we really have to do is jawbone the industry. The difficulty is the jawbone is not connected to the hip bone. They are not walking, they are not running, they are not doing anything. What they are doing is holding on to a monopoly, and they are saying, ``Take our box or don't get any signal, period.'' What we are saying is here is an opportunity to put competition into the business so that people have a choice with lower prices and the cable company still protects its signal. Mr. President, that is why the Consumer Federation of America and the Consumers Union endorse this particular amendment. It is why ITI supports the amendment. They also support it because they see this as an opportunity to get more competition in the field that we are supposed to be trying to get competition in--telecommunications. I want to say to the Senator from Kentucky, I represent a small State, too. I have small cable companies. They are not particularly concerned they are going to be put out of business. Their signal is protected--maybe not well enough from somebody stealing the boxes. But the private sector will develop a standard to protect the signals. The FCC can adopt the standard, as they have with the telephone jack, to allow any individual to go into any store--rural, urban, big mall, little shop--to buy a telephone, to buy a VCR, to buy a computer, to buy an organizer. A standard ought to apply to the set-top box as well. That is what this amendment is designed to do, to allow the private sector to get into the business of lowering the prices for consumers so they do not have the consumer at the mercy of the cable operator saying, ``Take this box or else you get no signal. Rent this box or rent this telephone; you can't buy your own.'' What we are saying is let us give the consumer a choice to buy a set- top box or rent one, whether you live in an urban or rural State. I reserve the remainder of my time.

Mr. COHEN. Mr. President, I ask unanimous consent that Senator Hutchison and Senator Leahy be added as cosponsors.

Mr. COHEN. How much time does the Senator need?

Mr. COHEN. This side has?

Mr. COHEN. Mr. President, how much time remains?