William Cohen

Mr. COHEN

Mr. COHEN. The focus of debate today has been on what to do about Medicare. I think all of us share the concern over the grim news that the Medicare trustees announced a few weeks ago, namely, that the Medicare trust fund is going bankrupt. I support the budget resolution that calls for a bipartisan commission to devise a plan to basically pull Medicare out of its financial crisis. Just as we restored public confidence in the Social Security system over a decade ago through a bipartisan panel, the only way to fix Medicare is also through a bipartisan panel. The amendment I am offering today for myself, Senators Dole and Bradley, urges the bipartisan commission to give high priority to a problem that is costing the Medicare Program, senior citizens, and taxpayers across the country billions of dollars every year: health care fraud in Medicare. For the past 3 years, the staff on the Senate Special Committee on Aging has been investigating the explosion of fraud and abuse throughout the U.S. health care system. Nearly a trillion dollars is spent on health care each year, and roughly 10 percent is lost through abusive practices and fraudulent activities. Over the past 5 years, the estimated losses from health care system fraud total $418 billion. That is four times the amount lost to the savings and loan crisis--all those scandals, four times the amount just in the past 5 years. A major victim of this health care fraud is the American taxpayer. In 1993, spending on Medicare and Medicaid totaled some $272 billion, or over 30 percent of all the moneys we spend on health care in this country. The Federal Government loses as much as $30 billion a year due to fraud in the Medicare and Medicaid systems and as much as $44 billion from fraud when we take into account all of the Federal health care programs. Taxpayers are losing $44 billion a year today through health care fraud. I think this only represents a tiny fraction of the problem. These are the ones that we know about, the ones that are being caught and prosecuted. I think they represent a tiny fraction of the level of fraudulent activity taking place in this country. Mr. President, it is shockingly simple to defraud the current system. The payors are running as fast as they can to process the over four billion claims that are filed every year, and law enforcement simply is lacking in the resources necessary to really detect and prosecute this fraudulent activity. Recently the Aging Committee heard, I think, some compelling testimony on the extent of the fraud in this country. FBI Director, Louis Freeh, testified ``We see cocaine dealers turning into health care fraud entrepreneurs'' because that is where the money is big--but enforcement is little. Russian mafia and other organized criminal groups from every corner of the globe are now engaged in creative schemes to siphon off money from the Government and private health care funds. Mr. President, padding claims and cost reports, charging the Government beneficiaries outrageous prices for unbundled services, and billing Medicare for program costs that have nothing to do with patient care are but a few of the schemes that are currently ruining our system. The Medicare system is the one that is being targeted because of its sheer size and complexity. At our hearing, the Aging Committee heard testimony that we are experiencing ``a feeding frenzy'' on the Medicare and Medicaid Programs, equivalent to ``unprecedented white collar wilding in which wave after wave of multimillion dollar frauds have swept through nursing homes and hospitals, clinics and pharmacies, durable medical equipment, radiology and labs, and more recently, home health care.'' I would like to share with my colleagues just a few examples of how Medicare is being exploited and how fraudulent providers are draining Medicare, siphoning off these precious dollars from the Medicare trust fund and increasing the costs for senior citizens. A chain of health home care companies were discovered by Medicare auditors to have been billing Medicare for over $16,000 in alcoholic beverages at conferences, over $9,800 in personal travel for the owner's family, and over $3,200 in golf shop expenses. The home care companies also allegedly charged the Medicare Program for over $100,000 in promotional items given to doctors and others to encourage them to use the company's home health care, including $85,000 in gourmet popcorn provided to doctors. Let me repeat that: $85,000 for gourmet popcorn going to doctors to promote the use of these home care companies. Mr. President, it is difficult to call on our senior citizens to bear cuts in Medicare when they learn that their Medicare taxes and premiums are being used to pay for gourmet popcorn. It is not limited to gourmet popcorn and golf shop fees. Let me give a couple of other examples of the costs that are driving Medicare close to bankruptcy. We have the case of a phantom laboratory allegedly cheating Medicare out of $300,000 for lab tests that were never performed. The so-called lab submitted the bills that were really no more than a rented mailbox and a Medicare billing number. We had a medical equipment supplier billed Medicare close to $1,300 apiece for wheelchair pads that cost about $50 to $100 to manufacture, representing a markup of roughly 2,500 percent. We have an equipment supplier that allegedly billed Medicare for $4,000 apiece for compressors used to treat swelling. The devices cost less than $500 each. We have a chiropractor and his wife who defrauded Medicare and private insurers by billing for services never provided. One time bills were submitted for 169 patients supposedly treated in a single day. We had four companies who peddled liquid nutritional supplements by offering ``free medical milk.'' These companies then billed Medicare for over $14 million for the supplements that were not medically necessary, and that were often not even delivered to the Medicare patients. While I want to emphasize that by far most health care providers are honest professionals with only the best interest of patients and Medicare beneficiaries in mind, without a doubt there is fraud in each segment of the health care industry. The cases I have mentioned are just a small example of the kinds of rip-offs that are being perpetrated day in and day out in our Medicare Program, and indeed, throughout the entire U.S. health care system. Mr. President, we cannot wait any longer. I have tried for the past 2 years to introduce legislation that would deal with Medicare fraud. Each time it has been blunted. On the one hand, the Senate passed an amendment to the crime bill containing some of the provisions of my legislation, only to have the House strip them out saying that this anti-fraud legislation does not belong on the crime bill. It belongs on health care reform. Of course, we did not have health care reform last year. I tried every single way to attach the health care fraud legislation to appropriations bills last year, including the D.C. appropriations bill, but others sought to amend it, because they wanted to load down this amendment with other issues. Mr. President, as a result of this, we have had to wait for health care fraud reforms. What we are doing is we are losing roughly $11.5 million to health care fraud every hour. That is precisely what is being lost through fraud. We are losing $11.5 million an hour, $275 million a day, $100 billion a year. Mr. President, this legislation that I have introduced the past 2 years was included in virtually every health care bill that was circulating last Congress: The Dole bill, the President Clinton bill, the so-called Mainstream Coalition bill. These provisions in the legislation that I have introduced had the support of the Justice Department, the Director of the FBI, and the Department of Health and Human Services' inspector general. I believe the White House is now also advocating health care fraud enforcement measures. Now is the time to move forward with the bill. It has been introduced and will be considered as separate, free-standing legislation, hopefully in the very near future. In the meantime, what we have to do is at least go on record as saying we have to put a stop to the level of fraud taking place in our health care system today, particularly in Medicare and Medicaid. This resolution calls upon the bipartisan panel to look at ways in which we can reduce the perpetration of fraud against our system, that those moneys can be saved. Perhaps we will not be able to recover all the dollars lost to health care fraud in Medicare, but we will be able to recover some of these billions that are now being lost to fraud and abuse. Hopefully, the amounts recovered will be used to increase our health care fraud enforcement efforts, to reduce the deficit, and to apply to the Medicare trust fund itself. It seems to me that would be an appropriate recommendation for the trustees of the Medicare trust fund to endorse. I am hoping that we will use the same sort of bipartisan commission to restore public confidence in the solvency of Medicare that was formed in the wake of the declaration over a decade ago that Social Security was going broke. I mentioned this morning during my remarks that the issue was exploited by the Democratic majority at that time. They waited until after the 1982 elections were over and exploited the issue and then came back in and said, ``Let us form that bipartisan panel.'' We did. The Social Security trust fund is solvent at least until the year 2020 or 2030. We need to do precisely the same thing now. We have to call together a bipartisan panel to look at what is taking place in our health care system. The FBI has identified areas of fraud. We can look at the New York Times on Sunday's edition and find another example of the kind of scams that are being perpetrated against our elderly-- not confined just to health care, but scams that target the elderly in general--and we have to put a stop to it. We have an opportunity to take a big step toward cracking down on scams targeting the elderly and programs serving the elderly by passing legislation that will give the tools and resources necessary to law enforcement officials to accomplish that end. There should be no political disagreement on this issue. This cannot be delayed another day, another week, another year, or else the very people that we are trying to help who are now facing the prospect of having their Medicare trust fund go broke within a 6\1/2\ year period of time will be the ultimate losers. We will be the ultimate losers. We have an opportunity to prevent that from taking place through reforms contained in the budget resolution itself, which Senator Domenici as chairman is calling for so we do not see the growth of 10.5 percent but rather 7 or 7.1 percent. In that 7.1 percent, we can save billions of dollars by adopting the legislation that everyone says that we need. Mr. President, I will not take a great deal of time today since time has now been limited. Let me say that this is an bipartisan and perhaps even unanimous support, so we can all go on record as in favor of giving this panel an opportunity to consider ways to shape legislation to prevent the kind of fraudulent activity that is robbing our senior citizens of their trust funds and driving up the costs of Medicare and the entire health care system. Mr. President, I reserve the balance of my time.

Mr. COHEN

Mr. COHEN. So, on the one hand we had the President and the First Lady talking about the need to reduce the growth rate in Medicare. And I have taken pains over their 2\1/2\ years in office to praise them in their effort to focus attention on health care reform. I think we need it. It is as necessary today as it was 2 years ago. It will be even more important tomorrow than it is today. As a matter of fact, I have introduced health care reform legislation on three occasions so far this session. So I think they were right in trying to focus our attention on the need to reform the health care system. I did not agree with the solution they proposed but they deserved credit for putting it on the front burner. Once this budget resolution debate is over, we will put it back on the front burner where it belongs. But you cannot have it both ways. You cannot say on the one hand we cannot sustain 10-percent annual growth and then, on the other hand, criticize Republicans for saying you are right, we are going to try to sustain a 7- or 7.5-percent growth. To label that as a savage cut when, in fact, that is precisely what they themselves had in mind for their own reduction in the growth of Medicare, seems to me to be rather outlandish. [[Page S7038]] I believe there is a moral dimension to the argument we are having here today, the debate. I think there is a moral imperative to resolving the dispute on the national debt, on the annual deficits of $200 billion. Right now we are spending roughly $235 billion a year just in interest payments on the debt. Soon that sum will exceed what we spend for our entire National security effort. Interest payments are likely to climb well above $300 billion, $325, $340 billion a year if we do nothing. So I think there is a moral dimension to this entire debate. There is a moral imperative that we take action that is responsible, that is not filled with smoke and mirrors, as has been done in the past; that we look to Senator Domenici, a man, as I indicated, of great decency and courage, for putting forth a budget blueprint which will put us on the road to a balanced budget by the year 2002. Maybe there are some who do not want that. Maybe there are some who say just let us continue doing what we have been doing because it pays political dividends. That is the way you stay elected in this country, just keep saying yes. Just say to every group that comes in, you want more? How can we help you? Rather than dealing with the future of this country. We have had Jefferson quoted many, many times. One of my favorite quotes of his that I call upon is this: he said, ``Whenever one generation spends money and then taxes another to pay for it, that first generation is squandering futurity on a massive scale.'' What we have been doing is squandering the future of our children on a massive scale and the time has come for us to reverse this. The time has come for us to stop borrowing from our children, to start paying our own debts, to have something for them available for a better way of life than we are leaving them if we continue on this course. I also recall the words of Walter Lippmann, who spoke on a different subject some years ago. It was in 1940, on the eve of our involvement in World War II. He was giving, I believe, a speech to his classmates on the 30th anniversary of their graduation from Harvard. What he said at that time, I think, has relevance to what we are doing here today. Lippmann was concerned about how the country had allowed itself to degenerate into a slothful, wasteful, cowardly Nation, that we had failed in our responsibilities to measure up to the great heritage we had at that time, that we were squandering the present, and certainly the future, because we took the easy way out whenever there was a hard choice to make. Lippmann said at that time: Upon the standard to which the wise and honest will now repair, it is written. You have lived the easy way; henceforth, you will live the hard way * * * you came into a great heritage made by the insight and the sweat and blood of inspired and devoted and courageous men; thoughtlessly and in utmost self-indulgence you have all but squandered this inheritance. Now only by the heroic ventures which made this inheritance can you restore it again. It is written: You took the good things for granted. Now you must earn them again * * * for every right you cherish, you have a duty which you must fulfill. For every hope you entertain, you have a task you must perform. For every good you wish to preserve, you will have to sacrifice your comfort and your ease. There is nothing for nothing any longer. Mr. President, that is precisely what the chairman of the Budget Committee has said to all of us. ``There is nothing for nothing any longer.'' He deserves our support for the effort he has undertaken. I yield the floor. Mr. DORGAN addressed the Chair.

Mr. COHEN. I ask I be permitted an additional 5 minutes.

Mr. COHEN. Mr. President, I thank Senator Domenici for yielding me these 15 minutes. Mr. President, last week I had occasion to listen to the Senator from Nebraska, Senator Robert Kerrey. I thought he made a very passionate and thought-provoking presentation. He called for the return of some sense of civility during the course of the debate on this budget issue. Frankly, I find myself in great empathy with what Senator Kerrey had to recommend. I think things have gotten out of control. Certainly they have around the country, in terms of the rhetoric we are hurling at one other, back and forth, not only across political aisles, but indeed, between regions and interest groups. I took Senator Kerrey's call for return to civility and responsible discourse to heart. I think he is quite on the mark. I think we would all do well to follow his example. In that light, I would like to commend Senator Domenici from New Mexico. Frankly, Mr. President, I do not know a more decent human being, certainly in the Senate and maybe this country, than Pete Domenici. I have heard charges leveled against him that as chairman of the Budget Committee he wants to wreak havoc against the elderly, he wants to plunder their savings, he wants to deprive them of hospital and medical attention. I doubt very much whether many people in this Chamber, or indeed the other Chamber as well, could claim the kind of support that he has enjoyed over the years from our senior citizens' communities. I doubt very much whether many Members have, in fact, the kind of compassion that he has demonstrated over the years toward those who are less fortunate than ourselves. He is concerned about senior citizens. He is concerned about the middle aged, certainly. But also he is concerned for children. He is concerned deeply about children. He has eight of his own. In fact, I think one is going to be married this coming Saturday. I think if we look at what Pete Domenici has been focusing upon--this spiraling debt--and it affects all the age groups from the very young, to those who are aspiring business men and women, to the labor force, to those in middle age, and to our elderly community. I really think that we do a great disservice to him when we see the kind of attacks leveled against his efforts by saying that he is simply out to finance tax cuts for the rich by pulling money out of the pockets of the elderly and the poor. I think it does a tremendous disservice to him and also to the entire debate surrounding this issue. I remember reading a column a couple years ago that David Broder wrote for the Washington Post. He is a respected syndicated columnist. He said he had just finished reading President Clinton's budget. There were two figures--after going through that 1,400-page document--that Mr. Broder thought were missing: The number of $1 trillion and the second number of 58 cents. He looked throughout that entire, massive document and could find those two numbers nowhere in the document. He said the $1 trillion figure came from the fact that if we were to grant President Clinton's assumptions in the budget, that is, that we have sustained growth during his 4 years in office, that we have low inflation, and that the recommended tax increases and budget cuts play out as budget analysts had projected--assuming all that were to occur-- at the end of that first term, we would have increased the national debt by $1 trillion. That is the rate at which we are adding to the debt in this country. Give President Clinton the benefit of the doubt. Assume everything will work out as he projected, and we were still going to add another $1 trillion to the national debt. That is a number which, I think, should prove frightening to most people. It means that we are going to be sacrificing the future for the present, that we are going to encumber our children with debts for which they have not been responsible. We are going to tie a ball and chain around their necks, as such, and throw them off into this void of trillion dollar debt increases every 4 years. Then the other number that was missing from the budget was 58 cents. The projection was that 58 cents of each $1 that we as individuals pay--everybody in this Chamber, and the citizens who are watching from the gallery and from around this country--58 cents out of every $1 paid in personal income taxes would go not for the defense of the country, not for education in the country, not for Medicare or Medicaid, not for highways and bridges, not for science and technology, not for Superfund, not for any of these programs--but rather exclusively to pay interest on the debt. Since interest on the debt compounds, that will climb exponentially in the coming years unless we do something dramatic to reduce that escalating debt. Those two figures, I think, should be recalled. They are precisely what Senator Domenici, as chairman of the Budget Committee, has tried to come to grips with. It is time, I think, for us to stop politicizing the debate to such an extent that we camouflage the issues and the importance of what those issues mean to the American people. More recently, the same columnist, David Broder, wrote another piece in the Washington Post, now, some 2 years later. He said really this debate [[Page S7037]] is all about what Government should do in today's society. Americans are starting now to reevaluate exactly what Government should do on behalf of its people. Not only what should it do, but at what level should Government act. Should it be at the local community or municipal level? Should it be at the State level? Or should it be here in Washington? These are legitimate issues that we have to work our way through. There is a reassessment taking place through the country. People are not too sure. They have an anger, we are told. Certainly, a high level of anxiety about political events and political policies. There is, as we have witnessed, a good deal of anger that can in fact prove to be explosive in this country. We saw it in what one writer called Beirut, Oklahoma: a form of domestic terrorism taking over that I think poses a severe threat to our security in the coming months and years. So, this is a legitimate issue for us to debate and, in fact, come to legitimate disagreements. But let us not resort to the kind of class warfare that we see taking place here in this Chamber. Time and time again, every time the Republicans try to come to grips with the budget those on the other side of the aisle accuse Republicans of being miserly, of being mean-spirited, of being cruel, of being heartless because we are trying to protect the future for future generations. I recall the debate several years ago when the then-majority offered an amendment to tax and somehow punish the rich. We passed a luxury tax. It sounded great. We were really going to go after those people who had the money to buy luxury cars, furs, jewels, and boats. We imposed a luxury tax on boats. Do you know what it did? Do you think it hit the rich? It was aimed at the rich. It did not hurt the rich. It hit the pocketbooks of the middle class. People of my State got hurt. The workers, the craftsmen, the people who build these boats, these luxury boats, were put out of work. The same thing will take place as long as we try to wage class warfare. The attack is: Republicans are only concerned about the rich, the wealthy. They could not care less about the middle class. They could not care less about the poor. Those are unfounded charges. I think they are outrageous charges. And I think all that these charges have done is to pollute the atmosphere in which we have to conduct this debate to such a degree that the American people are confused about the issues and simply are responding out of fear. So let us not engage in class warfare. There are some legitimate differences of opinion in terms of how we go about trying to achieve a balanced budget. It may be that those on the minority side do not care about balancing the budget. It may be that the debt is an issue too abstract for the American people to grasp, and therefore they see no political benefit in joining in this effort. Not all, but some, may try to exploit this issue. Back in 1981-82--President Reagan had just come into office in 1981--the trustees of the Social Security System came to Congress and said the Social Security System was in trouble. Payments out to the beneficiaries were exceeding its revenues. Unless Congress took action, it would become bankrupt relatively soon. I recall at that time President Reagan came into office and he made some recommendations for changing the Social Security Program. I, frankly, did not think it was a wise course of action. We supported the President because it was an effort made to reform the system, to save it and make it solvent. I also understood the risks that were involved politically. Whenever you talk about Social Security, that has been described as the hot rail of politics. Touch it and you invite your own mortality, at least politically speaking. Nonetheless, we voted to reform that system in 1981, and guess what happened. During the 1982 elections, prominent members of the Democratic Party went on television. They held up a facsimile of a Social Security card and they said, ``Here is the card. Here is your Social Security card right here. Do you know what Republicans want to do? They want to just tear it up. That is what they want for your Social Security card.'' It proved to be dynamite politically. It was very effective. We lost elections at every level of government all across the country, from State legislatures to gubernatorial races, to House and Senate races. It was very, very effective. So they exploited the issue during the 1982 campaign. And then what happened? Guess what happened. Immediately after the elections were over the same people who were tearing up the facsimile of a Social Security card came back and said, ``Do you know something, we have a problem. Social Security is in trouble. Why do we not form a bipartisan commission to see if we cannot fix it?'' And that is precisely what happened. We formed a bipartisan commission to fix it, after the politics were taken out of it by the election. It seems to me the same line of argument is being offered right here today and will be offered throughout the debate on this budget. The Medicare trustees have advised us that Medicare is going broke; that the revenues coming in will be less than the payments going out; that by the year 2002, a short time away--6\1/2\ years--there will be no money at all left in the trust fund to pay for anyone's hospital or doctor bills. The system will be absolutely broke at that time; nothing will be paid. In either today's paper or yesterday's paper, a front-page article in the New York Times said, ``Those in the heartland are worried about Medicare, what this budget might do to Medicare.'' It is ironic. Of course people are worried about what is going to happen to Medicare. But if we do nothing it is going broke. There will be no money in 6\1/2\ years. No one will receive payments, no hospital, no community health service, no doctors--none of them will receive anything. And all the people who will need assistance at that time will be left to look at their Government and say, ``Why did you not do something about it? Why did you wait these 6\1/2\ years? Why did you wait until after the 1996 elections were over before you came forward and said let us work together to try to save the Medicare System?'' But that is what is going on right now. We have not heard one single proposal during the deliberations in the Budget Committee on how the minority would like to see the trust fund protected and preserved and saved. Not one. All they can do at this point is point to the Republicans and say, ``Look, you are trying to gut the Medicare Program.'' We are trying to save it. It is growing at a rate of 10 or 10.5 percent a year. We cannot sustain 10.5 percent a year growth in the Medicare Program. President Clinton recognized this. When he submitted his health care reform proposal he said we cannot sustain this. Mrs. Clinton did, too. They said we cannot sustain 10.5 percent growth each and every year.

Mr. COHEN

Mr. COHEN. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

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

Mr. COHEN. Yes, I yield for a question.

Mr. COHEN

Mr. COHEN. Mr. President, let me just proceed very briefly. I was somewhat taken by surprise by the Senator from Iowa suggesting we ought to look [[Page S6966]] to the IRS as an example of how they can audit their particular systems. Just a few years ago the IRS came before the Government Affairs Committee and said it needed more agents because there was $125 billion unaccounted for in uncollected taxes. It turned out that many of those uncollected taxes belonged to people who were dead, bankrupt, in jail or otherwise unable to pay. The IRS came in finally and fessed up that maybe there was only $60 billion in uncollected taxes. But they could not even prove that particular figure. Do you know why? Because the IRS does not have books that can be audited. This is a great irony that should not be lost on the American people. Imagine how the Internal Revenue Service would treat a small business or an individual who made a comparative mistake on their tax return? For the Senator from Iowa to point to the IRS as an example of how we should proceed, I think misses the point entirely. There may be, in fact, some explanation for Dr. Hamre's suggestion as to why we ought to forego this particular matter, but I think it is premature to condemn his approach without at least having some illumination on the facts. I will try to abide by my 1 minute, but I wanted to make it clear for the record we should not point to the IRS as a model.

Mr. COHEN

Mr. COHEN. Mr. President, I wish to announce that the Subcommittee on Oversight of Government Management and the District of Columbia, Committee on Governmental Affairs, will hold a hearing on Wednesday, May 24, 1995, on Aviation Safety: Do Unapproved Parts Pose a Safety Risk? The hearing will be at 9:30 a.m., in room 342 of the Dirksen Senate Office Building.

Mr. COHEN

Mr. COHEN. Mr. President, I am pleased to be an original cosponsor of S. 790, the Federal Reports Elimination and Sunset Act of 1995, legislation to eliminate or modify over 200 statutory reporting requirements that have outlived their usefulness and sunset many others. Senators Levin, McCain, and I offered the text of this bill as two separate amendments, which were accepted by the Senate, during the debate on the Paperwork Reduction Act earlier this year. Because of the concerns of House conferees that the House Committees had not had adequate time to review the various reports targeted for elimination or sunset, the amendments were dropped in conference. The House conferees assured us, however, that the House would act quickly to take up separate legislation combining the two amendments. The issue of eliminating unnecessary government reporting requirements is an area that Senator Levin and I have worked on for a number of years in our capacity as chairman and ranking minority member of the Governmental Affairs Subcommittee on Oversight of Government Management. The text of the amendment that Senator Levin and I offered to the Paperwork Reduction Act was based on legislation we introduced last Congress which CBO estimated would reduce agencies' reporting costs by $5 million to $10 million annually. The legislation was the product of more than a year's worth of discussions with Government agencies and congressional committees. An example of the type of report this legislation will eliminate is an annual Department of Energy report on naval petroleum and oil shale reserves production. The same data in this report is included in the Naval Petroleum Reserves Annual Report. Other provisions of the bill will consolidate information to reduce the number of reports required. For example, the Department of Labor's annual report will be modified to include the Department's audited financial statements and, thereby, eliminate the need for a separate annual report for all money received and disbursed by the Department. Finally, the bill will also eliminate reports that are simply no longer necessary--reports that were useful at the time they were required but stopped serving a useful purpose and were kept on the books because no one was looking closely enough at them. The bill also sunsets in 4 years reports made on a regular basis. Under the bill, the sunset will not apply to reports triggered by specific events such as a report to Congress required under the War Powers Act as a result of certain actions. The sunset will also not apply to reporting requirements required by the Inspector General Act or the Chief Financial Officers Act. The sunset provision will force Congress to periodically review mandated reporting requirements and reauthorize those that are still serving a valid purpose. The sunset is based on legislation introduced by Senator McCain and will save additional taxpayers' dollars. In closing, I believe this legislation is a reasonable approach to eliminating unnecessary reporting requirements and it is consistent with efforts by the Congress to reinvent Government and make it more efficient. The legislation is intended to reduce the paperwork burdens placed on Federal agencies, streamline the information that flows from these agencies to the Congress, and save millions of taxpayers' dollars. I hope the congress will act expeditiously to pass this legislation.

Mr. COHEN

Mr. COHEN. Mr. President, in recognition of the 45th anniversary of the Leadership Conference on Civil Rights, I believe it is appropriate to reflect upon this country's history on the issue of civil rights and express some thoughts about the direction the country is heading today. In 1950, when the Leadership Conference was first formed, we essentially had a system of racial apartheid in many parts of the country. It was illegal for black and white children to attend school together, it was illegal for black and white adults to marry. Black Americans were shut out of the political system--they were not permitted to serve on juries, run for office, or, in many cases, cast a ballot. There was no meaningful equal protection of the laws, especially the criminal laws. Blacks who dared to assert their political rights or buck the mores of the racial caste system, were beaten or lynched. The police and formal legal system always looked the other way. Blacks could not receive a fair trial in a court of law as racial prejudice clouded the normal American presumption that justice is blind. Through Federal court litigation, and eventually legislative action by the U.S. Congress, many of these barriers were cast aside, the chains of Jim Crow were unlocked, and the Constitution's promise of equal opportunity began to become a reality. As the decades passed and progress was made on many fronts, other groups of American citizens-- women, racial minorities, religious groups, and the physically disabled, to name a few--rose to assert the rights that accrue with American citizenship. Their claims have been simple, clear, and powerful: treat us opportunities to succeed that other Americans are given as a matter of birthright, let us participate in the mainstream of American life. So we have made progress. When in the past Jackie Robinson was spit upon and received death threats over the phone, today Michael Jordan can give genuine happiness to millions of Americans, of all creeds and colors, merely by deciding to trade in his baseball cleats for a pair of sneakers. When one of our country's greatest institutions, the U.S. Army, once had to be desegregated by Presidential decree, in modern times Colin Powell rose to lead that institution and now is one of our most popular public figures. When minorities were once threatened and intimidated from exercising the franchise, now hundreds of minorities hold public office throughout the country and dozens of minority legislators sit here in the U.S. Congress. The Leadership Conference on Civil Rights has been at the forefront of this march of progress. The principles of equality, inclusion, and tolerance that it promotes are reflected in the structure of the organization, as it is comprised of 180 different groups representing people from all walks of life, all shades of skin color, and all denominations and ethnicities. The legislative achievements of the conference are monumental--not only for the importance of the bills on American life, but for the bipartisan support that they achieved. The Voting Rights Act Amendments of 1982, the Americans With Disabilities Act, and the Religious Freedom Restoration Act are but a few of the conference's noteworthy achievements. But one cannot look back fondly at successes without also thinking about our past shortcomings as well. Here we stand, a generation after the civil rights revolution, and we must ask how history will judge us. Have we done all we could to make our society more just, opportunities more available, tolerance and understanding more pervasive, violence less prevalent? Have poverty, intolerance, and ignorance been marginalized or have our actions or omissions led to the marginalizations of the poor, the uneducated, and others occupying the bottom rung of society? Any honest appraisal must conclude that our record is mixed. Progress has been made in many areas, but we are going backward in others. Our problems were once simple and clear issues of equal justice that could be solved merely by changing the law. Our current problems now bear on complex social conditions that few can explain and even fewer know how to solve. There is also new unrest in the country that is manifesting itself in ugly ways. Extremists seek to place at odds peoples and communities that have been traditional and genuine allies. The ethos of tolerance, dialog, and reconciliation are being subverted by those who, appealing to baser instincts, seek to balkanize America. And remarkably, there are those who now want to move to a color-blind society, based on the make-believe view that racism and intolerance are things of the past and that our centuries of overt discrimination have had absolutely no bearing on the current condition of the least fortunate members of society. It is as if many believe that the Emancipation Proclamation and Civil Rights Acts were written at the time of the Magna Carta and the beating of Rodney King happened centuries, not just years, ago. But rather than be discouraged in the face of our failures, and lament about the difficult challenges ahead, we must find hope in the progress that has been made and summon the resolve to redouble our efforts to remake our society to bring us closer to the ideals we hold dear. The work of the Leadership Conference is not done. We are a better society as a result of its 45 years of dedication to equality and we will be a better society due to its work in the future.

Mr. COHEN

Mr. COHEN. Madam President, I rise today to pay tribute to the captain and crew of Young America, which as many of my colleagues know, is the yacht that came very close to winning the Defenders' series of the America's Cup competition on April 26. Young America, owned by the Maine-based PACT '95 syndicate and originating out of my hometown of Bangor, was very strong in the competition but was beaten in the finals by America's Cup veterans and past victor, Dennis Conner and his boat, Stars & Stripes. While Young America's captain, Kevin Mahaney, did not have Dennis Conner's experience, he sailed boldly and impressively and displayed the kind of leadership and perseverance for which Mainers are renowned. Kevin had captured the silver medal in sailing at the 1992 Olympics, but it was his first America's Cup competition. He and his crew sailed with excellence throughout the competition. Last summer, before Kevin even had a boat to compete in, he started to assemble a crew with John Marshall, head of the PACT '95 syndicate. Marshall was an experienced sailor and former crew mate of Dennis Conner in past America's Cup bids. Even so, many people on the sailing circuit did not assign much credibility to their efforts and saw little threat from their entry. However, Mahaney and Marshall and the crew they assembled soon made yachting enthusiasts begin to take notice of the boat from Bangor. This is not to say that Young America encountered smooth waters during its assent to the top ranks of yachting. Mahaney had to rely heavily on the tenacious crew that he assembled to overcome obstacles and make it as far as they did. Young America's bid for the cup was threatened last January when a tornado ripped through the compound where it was stored, causing extensive damage to the boat. In March, bad luck struck again when Young America suffered significant structural damage while being towed through heavy waves. This damage was particularly ill-timed, and the crew had to rush to make repairs in the final days before the Defender semifinals. John Marshall saw the silver lining in these clouds and commented that the times of hardship were when the crew really came together as a team. Ironically, the crew that worked so hard to bring Young America to the forefront of the yachting world had the bittersweet experience of now seeing their boat compete against New Zealand in the America's Cup finals without them aboard. Shortly after his victory, Dennis Conner, full of admiration for Mahaney's triumphs, asked John Marshall if he and his crew could sail Young America in the final competition. Diplomatic to the last, Marshall honored his request. He said that both the crews from Stars & Stripes and Young America will emerge as victors if the Americans beat New Zealand. The quiet but determined efforts of Kevin Mahaney and his crew justifiably make Mainers proud. While they are not manning the boat that is competing against the New Zealand vessel this week, everyone's mind will be on the come-from-behind boat known as Young America.

Mr. COHEN

Mr. COHEN. Mr. President, I wish to announce that the Special Committee on Aging will hold a hearing on Thursday, May 11, 1995, at 9:30 a.m., in room 562 of the Dirksen Senate Office Building. The subject of the hearing is long-term care financing.

Mr. COHEN

Mr. COHEN. Mr. President, I wish to address a few comments on the underlying bill, the Product Liability Fairness Act, which attempts to address some of the abuses that have occurred in the civil justice system. Unfortunately, the cure being offered is worse than the disease itself. I am struck by the irony that many, particularly on this side of the aisle, have been calling for the deregulation of our economy, for returning power to the States, for empowering the people, and for trusting the judgment of our citizens. They invoke the 10th amendment as if remembering the Alamo--remember the 10th amendment. Yet, at the very same time we are calling for this deregulation, this demassification--if I can use Toffler's phrase --of the power structure in Washington by returning power back to the States and local communities, we are now calling for the passage of another Federal piece of legislation. At a time when we are searching for ways to streamline the civil justice system and to make litigation less cumbersome and costly, this bill is going to complicate the law and make litigation even more expensive. At a time when we are trying to improve the lives of hard-working middle-class Americans, this bill is going to make it more difficult for these citizens to obtain compensation when they are injured, at work or at home, from defective products. I am well aware that there have been cases involving abuse of our civil justice system. We have seen cases of outrageous jury awards and frivolous lawsuits, and they have undermined public confidence and interest in our legal institutions. Unfortunately, the bill before the Senate is not narrowly tailored to root out these abuses. Rather, it is an unprecedented and unwarranted Federal takeover of a core State responsibility. Our system of federalism is based on the principle that the national government should address problems that confront the Nation as a whole, and State governments, which are closer to the people in both distance and temperament, should be responsible for local concerns. Writing of ``Our Federalism'' almost 25 years ago, Justice Hugo Black stated that: The concept . . . represents . . . a system in which there is sensitivity to the legitimate interest of both State and National Governments, and in which the National Government, anxious though it may be to vindicate and protect federal rights and federal interests, always endeavors to do so in ways that will not unduly interfere with the legitimate activities of the States. No less of a proponent of a strong national government than Alexander Hamilton fully understood the genius of a system that divided powers between the national and State governments. He wrote in Federalist No. 17 that ``Commerce, finance, negotiation and war,'' should be the prerogatives of the national government, while ``the administration of private justice . . . [is] proper to be provided for by local legislation.'' There are few areas of law that are more appropriate in State legislation than the law of torts. In essence, tort laws deal with the duties and responsibilities that members of a community have toward one another. Tort law is, as Alexander Hamilton put it, ``private justice.'' It is an inherently local issue. That is the reason, for the past two centuries, from the beginning of our Republic, that we have delegated this responsibility of tort law to the State legislatures and courts. The same is true of the product liability law, which emerged as a key element of tort law in the 1960's. Through time-tested methods of common law adjudication and legislative adjustments, the courts and legislatures in each State have worked together to develop laws that strike the appropriate balance between the needs of plaintiffs and defendants and those of consumers and business. Over the past decade, many States have begun to reform their tort systems by experimenting with alternative dispute resolution, limiting punitive damages, and changing liability standards. The States continue to experiment with product liability reforms to achieve a balance between the demands of the modern economy and the need to ensure the products that enter that marketplace are safe. This is the way the Federal system is supposed to work. As Justice Louis Brandeis noted, ``It is one of the happy incidents of the Federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel, social, and economic experiments without risk to the rest of the country.'' The bill before Congress would bring the experimentation that is taking place in our States to a grinding halt by wiping most of the State product liability laws off the books and replacing them with one- size-fits-all Federal law developed right here in Washington. This is the same Washington that has been so demonized as late for passing too many Federal laws. Now, suddenly, it is in the interests of manufacturers to have a one- size-fits-all piece of legislation. It appears as if Congress, which has had virtually no experience in legislating in this area over the past two centuries, believes it has found the single answer to the ills of the civil justice system. It has decided to impose that system on the entire Nation. Ironically, it is occurring at a time when the Federal Government is already said to be too large. The public already resents its intrusion into affairs that properly belong before the States. Congress ought to be focusing on health care reform, the budget deficit, and entitlement reform, not to mention terrorism and nuclear proliferation. These are appropriate concerns of Congress. The time Congress spends wading in the minutiae of product liability law, a subject the States are fully capable of regulating, will be time that should be spent on more pressing national concerns. The supporters of this legislation maintain that a national product liability law is necessary to provide uniformity and to increase predictability. I believe this bill will have precisely the opposite effect. Litigants are no longer going to be able to rely upon well- established State law. Instead, they will be faced with the uncertainty of a Federal statute loaded with undefined, untried, and untested legal principles. This bill is going to make the law more complicated. Since certain aspects of the State laws are going to be preempted and others are not, litigation is going to proceed under an amalgam of State and Federal law. I will give you an example, Mr. President. S. 565 creates a new standard of liability for product sellers but does not change the law pertaining to the manufacturers of those products. So in a case brought both against a manufacturer and a seller of an allegedly defective product, the court is going to be required to apply the Federal law to one defendant and the State law to another. This unnecessary complexity will lead to greater litigation expenses, not less. Mr. President, one of the great legal scholars of this century, Prof. Herbert Wechsler of Columbia University, once wrote that ``national action has * * * always been regarded as exceptional in our polity, an intrusion to the ordinary case.'' This presumption against Federal involvement in local affairs has not been overcome by the evidence that has been presented to this body. The so-called litigation crisis that is often cited by the sponsors of this legislation simply does not exist. The most comprehensive study to date of product liability suits indicates that they comprise 0.36 percent of all civil filings--hardly a litigation explosion. If you take away the asbestos cases, which I think are unique in our history, the number of Federal product liability cases declined by over 35 percent during the late 1980's. Proponents of the bill also claim that there is an explosion of punitive damages and rely heavily upon horror stories of irresponsible jury awards as a justification for Federal preemption. Putting aside the fact that for every punitive damage horror story, there is a more compelling story of manufacturer misconduct, we should not legislate on the basis of anecdote. Listen to the Wall Street Journal, an open advocate of reform, which reports that the debate is largely ``driven by anecdote'' and ``truth [has been the] first casualty of tort- reform.'' I think the case for punitive damages has been overstated. The objective facts demonstrate there have been few punitive damage awards in product liability cases in the recent past. One widely cited study indicates that only 355 punitive damage awards were entered by juries during the years 1965 to 1990. And 25 percent of these verdicts were reversed or remanded on appeal. So there is no evidence that runaway punitive damage verdicts have wreaked havoc, certainly not in my State of Maine. Punitive damages were imposed in only three product liability cases during a 25-year period--just three cases. The juries in Maine have acted responsibly. They have applied State law in a commonsense fashion and reserved the sanction of punitive damages for extreme cases in which there has been either malicious or wanton disregard for public safety on the part of some companies. Maine does not need a Federal solution for a problem that does not exist in our State. Yet, this is precisely what this law would do--force Maine to abandon its law. Our product liability laws have been subject to sweeping criticism, but it cannot be denied that the system has been a very important protection for American consumers. From the Ford Pinto to the Dalkon shield, product liability laws and suits have caused dangerous products to be taken off the market, products that have caused horrific injuries and multiple deaths. Without product liability, including the threat of punitive damages, American consumers would be at far greater risk than they are today. Let me recall a program I saw that involved a lobbyist for tobacco companies. He indicated that he would stop at nothing whatsoever. It did not matter what study was concocted; it did not matter whether it was truthful or untruthful. He used every conceivable trick in the book in order to defeat any legislation that would protect the American people from the effects of tobacco. This man is now suffering from cancer. I believe he had cancer of the throat and it spread to his hip. This may account for his change of heart in terms of revealing the kinds of tactics that have been applied by the company. I do not know if the allegations he made on this program are true. But if they are-- if companies have deliberately lied, deliberately falsified documents, and concocted studies in order to defeat consumer protection legislation--is that not a case in which we want to see punitive damages that are not limited by the amounts set forth in this bill? Let me give another example. Suppose a manufacturer of children's toys learns that a product has a dangerous defect that is likely to cause, let us say, 10 deaths over the lifetime of the product. Under current law, the company would probably recall the product. It would fix that defect, regardless of the cost, because it could not possibly risk the punitive damage award or suits that might follow. But under this bill, that company would know that, since children have little or no wages, the maximum punitive damage award would be $250,000 per fatal injury. If the toy makes $20 million to $30 million in profit, the company might well decide that it makes economic sense not to recall a dangerous product. I suspect this may have been the line of thinking by Ford Motor Co. when it put the Pinto on the market. And without punitive damages, many other dangerous products may be unleashed on the unsuspecting American consumer. This does not mean the system is free of abuses. In a recent case from Alabama, a jury awarded $4 million in punitive damages because BMW failed to disclose that a car sold as new had in fact been damaged, and then repainted on the way from the factory to the showroom. Even though BMW may have acted wrongly in this case, in my judgment this punitive award was well out of proportion to the seriousness of the misconduct on the part of the company. So we have examples of excessive jury awards that are outrageous from time to time. They undermine public support for the civil justice system. A narrowly tailored bill designed to curb runaway jury verdicts may be deserving of support. This bill, however, is not targeted at this problem. It uses a sledgehammer where a scalpel may be more appropriate. Regardless of the outcome of this debate, I think the legal profession has to undertake a concerted effort to address a major premise that underlies this legislation--that the law and the legal profession no longer serve a valid public interest. Lawyers are no longer held in as high regard as some once were. Books, plays, and movies were written about Clarence Darrow for his dedication to providing justice for the common man. Lawyers like Thurgood Marshall and Ruth Bader Ginsburg are revered for striking down legal barriers based on race and gender. However, the esteem which the legal profession once held has fallen quite substantially in recent years. Attorneys are often portrayed as being more interested in making profits than promoting the interest of justice. I believe that it is a minority of the profession that casts aspersion on the broad majority of lawyers who are dedicated to the best tradition of the profession and volunteer much of their time to public service. It is up to a majority of the profession to discipline those who file frivolous lawsuits, who sue parties only because they have a deep pocket, or who run up the cost of litigation solely to induce a settlement. One of the great virtues of our civil justice system is that everyone has a right to have his or her grievance heard before a court of law. When that principle is abused, the very foundations of the system are called into question. So I think the legal profession has to take swift and meaningful action in order to rebuild the public's confidence in our civil justice system. The legislation now pending before the Senate is not the right answer to these problems. It is a one-size-fits-all Federal solution that will end State experimentation in tort reform. It will impose uniformity on regions of the country with different needs and values. The entire bill, in my judgment, is an affront to the principle of federalism. State governments have demonstrated the capability of both developing and reforming product liability law. There is no need for the Federal Government to infringe on yet another area of State sovereignty. Mr. President, over the weekend, I, like the Senator from Massachusetts, saw many advertisements on television, some dealing with medical malpractice, others with the impact of product liability litigation on small businesses. Of course, small companies as well as large companies have the ability to purchase insurance to cover themselves for liability suits. Manufacturers have the ability to purchase insurance to cover their exposure to liability. But when companies put into the stream of commerce a product that is inherently dangerous or has a defect and that defect causes an injury to the citizens of this country, the manufacturer should bear that responsibility, not the consumer. This bill seeks to put a limitation on the ability of consumers to recover for the damages that have been inflicted companies that either act willfully or in wanton disregard for public safety. These cases demand that punitive damages be imposed in order to discourage and deter manufacturers and the distributors of dangerous products from continuing to inflict harm upon the public. Commercials that I saw over the weekend said we are addressing this problem of medical malpractice in California. The State legislature passed a medical malpractice reform law and guess what? Those lawsuits have now declined. We have also passed a medical malpractice reform law in the State of Maine. We have prelitigation screening panels. We set statewide standards for doctors and hospitals. States can--in fact, have--adopted changes in their tort law to deal with their particular problems. But in a State like Maine, which, over a 25-year period, has actually awarded punitive damages in three product liability cases, do we need a Federal law to tell us what to do? It is an insult to the people of this country to say that the 12 men and women sitting in the jury cannot be trusted to weigh the evidence and decide to impose or not impose damages. This legislation sets a uniform national standard for damage awards. It says: You juries cannot go above this, your judgment cannot be trusted. We are saying that no matter how egregious the offense, no matter how defective the product, no matter how wanton the disregard for public safety, we do not trust you, ladies and gentlemen of the jury, to do what is right, to exercise common sense. And we here in the Halls of Congress we are going to tell you exactly how far you can go. To me, Mr. President, it is an insult to all the people of this country to say that we no longer have faith in their judgment, that only Congress can determine exactly how high they can go in terms of compensating citizens of their community who have been injured by defective products. I think this contravenes everything that is being said on this side of the aisle about limiting the scope of government, reducing the power of Washington, returning power to the people, deregulating the economy, and revering the 10th amendment. I yield the floor and suggest the absence of a quorum.

Mr. COHEN

Mr. COHEN. Yes it is. Any recommendation made by the authority to the District government which either the Mayor or the Council has the authority to adopt, may itself be adopted by the Financial Responsibility and Management Assistance Authority, if rejected as I described previously, and if the authority first consults with the Senate Committee on Governmental Affairs and the House Committee on Government Reform and Oversight. This includes the authority to enact local legislation, which would go into effect after a congressional review period, under the same conditions as if it had been enacted by the District government itself. It also includes such matters as personnel actions and structural reforms to the District government. It is clearly the intent of this section to give the authority as broad a range of legislative, executive, and administrative powers as the Mayor and Council possess, while expecting that the District government will be given the opportunity to act first.

Mr. COHEN. The full scope of the authority's power to implement its rejected recommendations is well stated in the House report that accompanied the legislation. First of all, any non-response to a recommended action is deemed a rejection under the act. Likewise, if the District government does respond that it will adopt the recommendation, but then fails to do so to the satisfaction of the Authority, this shall be considered the same as if it had originally rejected the recommendation under section 207.

Mr. COHEN. Mr. President, the District of Columbia's financial situation is in a state of crisis. The District government does not have sufficient funds to pay its bills which threatens the continued delivery of services to the residents of the District of Columbia and the many Americans that work in or visit our nation's capital. I am pleased that we were able to reach agreement earlier today with the House on a package of amendments that we believe will improve the House-passed bill and enable the Senate to pass this important legislation before the Congress adjourns for the April recess. The bill establishes the District of Columbia Financial Responsibility and Management Assistance Authority to aid the city in achieving financial stability while still preserving Home Rule. The concept of a financial control board is not new. A number of U.S. cities facing fiscal crisis have established similar boards. The new Authority will work with the Mayor and the Council toward resolving the city's financial and management problems. The Authority will have the power to act, following consultation with congress, on recommendations it believes are necessary to ensure the financial stability and operational efficiency of the District. I want to commend Congressman Davis and D.C. Delegate Norton, the Chair and Ranking Minority Member of the House D.C. Subcommittee, and Congressman Walsh and Congressman Dixon, Chair and Ranking Minority Member of the House D.C. Appropriations Subcommittee, who have worked hard to craft a bill which received strong bipartisan support in the House. The financial recovery of the nation's capital is important to all Americans and I urge my colleagues in the Senate to move expeditiously to pass this important legislation .

Mr. COHEN. I believe it is correct to say that the drafters of this legislation, in both Houses of Congress, understand that the authority is to have the full authority to adopt any recommendation that it deems appropriate, as submitted under this section of the act, if the District itself does not adopt such a recommendation, subject to the conditions that I have already mentioned.

Mr. COHEN

Mr. COHEN. Mr. President, today I am introducing S. 699, legislation on behalf of myself and Senator Levin to reauthorize the Office of Government Ethics (OGE). To quote American statesman John C. Calhoun: ``The very essence of a free government consists in considering offices as public trusts, bestowed for the good of the country, and not for the benefit of an individual or party.'' This sums up the way we expect our government officials to conduct themselves. Government service is a privilege that carries with it tremendous responsibilities. Public servants in all three branches of government have an important obligation to the citizens who have put their faith and trust in them. Government officials should abide by a certain code of conduct and adhere to high ethical standards so that our citizens may have confidence in the integrity of their government. Unfortunately, however, many Americans are disenchanted with their public officials. As a result, the need for strict ethical standards, and vigilant oversight of compliance with our ethics laws, is as great as ever. Almost daily headlines purport allegations of ``unethical'' or ``inappropriate'' conduct by government officials in one form or another. These stories only further erode the public's confidence in the integrity of their government officials which is already at one of the lowest points in our recent history. Senator Levin and I have long been proponents of strong ethics laws. We serve as the Chairman and the Ranking Minority Member on the Subcommittee on Oversight of Government Management which has jurisdiction over ethics matters within the Executive Branch. Senator Levin and I have made many changes to strengthen the ethics laws since the Ethics in Government Act of 1978, which created OGE, was passed. We authored the Independent Counsel provisions of the Ethics in Government Act which provides for the appointment of an independent counsel to investigate allegations of criminal wrongdoing by top level Executive Branch officials, and we worked together to strengthen the revolving door laws. Moreover, Senator Levin and I have consistently sought to aid OGE in its mission of providing overall direction to the Executive Branch in developing policies to prevent conflicts of interest and ensure ethical conduct by Executive Branch officers and employees. The reauthorization bill Senator Levin and I are introducing today is nearly identical to the legislation we introduced last Congress which was passed by the Senate in October. Unfortunately, however, no action was taken by the House of Representatives prior to Congress' adjournment. OGE's authorization expired on September 30 of last year. It is very important, therefore, that the Congress move as quickly as possible to reauthorize the agency. The bill will reauthorize OGE for seven years. This is a slightly longer reauthorization than we have sought in previous years. As in the past, we want to avoid the need to reauthorize OGE during the firs year of a Presidential term when a large portion of OGE's resources are devoted to the nominee clearance process. The bill would also, for the first time, grant OGE gift acceptance authority to address the problem that arises when federal government facilities are not adequate either in terms of size or equipment resources to accommodate OGE's ethics education and training programs which are held around the country. This authority is intended to enable OGE to accept the use of certain non-federal facilities, such as an auditorium that might be offered by a State or local government or a university, which may be better suited for OGE's needs. As I have often noted in the past, the Office of Government Ethics is a small office with large responsibilities. Over the years, we have imposed more responsibilities on OGE and we haven't always provided the necessary staff or resources to carry out those responsibilities. Specifically, I would note the additional functions OGE had to perform when it became an independent agency in 1989 and in complying with the Ethics Reform Act of 1989. Congress moved to make OGE a separate agency because it was believed that OGE was not independent enough. In addition, Congress wanted to enhance the agency's prestige and authority within the Executive Branch given its important and sensitive responsibilities. While OGE's budget has increased rather significantly since we last reauthorized the agency in 1988, OGE still has a lean budget with which to operate when you consider the critically important responsibilities of the agency. That said, in light of looming budget deficits, OGE, like all agencies will be called upon to meet its responsibilities in the most cost-effective manner possible. The bill also contains a number of technical changes to the ethics laws. OGE's mission is critically important in ensuring strict ethical standards in government. I hope my colleagues will move expeditiously to pass this legislation and reauthorize this important agency.

Mr. COHEN. Mr. President, at the request of the City of Waterville, Maine, I am introducing S. 698, legislation to name a federal building in Waterville the ``George J. Mitchell Federal Building.'' As most of you know, George Mitchell and I shared more than the position of Senator from Maine. We both grew up in similar circumstances with very similar backgrounds. George Mitchell is half Irish and half Lebanese. I am half Irish and half Jewish. Both of us graduated from Bowdoin College and both became lawyers before entering public service. We worked together over the years on many issues of concern to Maine people and wrote a book together on the Iran-Contra Affair. From a quiet young lawyer in Waterville, Maine, came a great leader who has done his country and his State proud. George Mitchell was born in Waterville in 1933. Waterville is located 18 miles north of the State capitol on the west bank of the Kennebec River. It was settled in 1764 and became Maine's 137th town in 1802. Waterville is home to Colby College, Hathaway Shirt Company, and the Redington Museum which exhibits a number of 18th and 19th century artifacts from the region including the revolver used by Lieutenant Charles Shorey, of Waterville, at the Battle of Gettysburg. George attended St. Joseph's grammar school and graduated from Waterville High School in 1950. He graduated from Bowdoin in 1954; served in the U.S. Army Counterintelligence Corps in Berlin, Germany, from 1954-56; and then went on to Georgetown University to get his law degree. George Mitchell's litany of accomplishments are many: lawyer, trial attorney in the Antitrust Division in the U.S. Department of Justice in Washington, D.C.; executive assistant to U.S. Senator Ed Muskie; U.S. Attorney for Maine; and U.S. District Judge for Maine. In 1980, he was appointed by Governor Brennan to fill the unexpired term of Senator Muskie who was appointed by President Carter to be Secretary of State. There is a Chinese proverb that says ``when drinking the water, it is important to remember those who dug the well.'' To really understand George's success, one need look no further than to the fact that Ed Muskie was his mentor. Ed, like George, began his political career in Waterville as a young lawyer and state legislator. Ed provided George with the basic principles of public service which have guided him over the years. It was no surprise that George Mitchell demonstrated many of the qualities which typify Senator Muskie and Maine: intelligence, integrity, and independence. Senator Mitchell was elected Senate Majority Leader in 1988 and served his colleagues and the institution with distinction. George Mitchell was a gifted public servant. His voice reminds us that public service is a noble calling. It was both a pleasure and an honor to have served with him. I hope my colleagues will work with me in passing this legislation as a means of paying tribute to the many years of outstanding service Senator Mitchell has given to the State of Maine and the country.

Mr. COHEN

Mr. COHEN. Mr. President, all consumers like choice. When companies are allowed to compete and consumers are given more choices, products and services inevitably become more affordable and of higher quality. For this reason, the major thrust of the various telecommunications bills that have been offered this year is to create a more competitive environment for communications products and services. I support this goal. Today, I am introducing legislation that is focused on one particular area of telecommunications that I believe truly needs more competition--cable television. Less than 20 years ago, we had little choice as to where we could obtain our phones. Each of us rented a standard, ordinary phone from our local telephone company. This monopoly ended with the break-up of AT&T. Today, most people own their telephones, and the types of phones we can choose are endless. Callers, for example, can go to any number of local retailers to buy phones that are more sophisticated than those previously offered by the telephone company. Consumers now can purchase car phones, phones that are connected to an answering machine, or cellular phones. Moreover, today's phones are considerably cheaper than the rotary dial phones of the 1950's. Innovation, greater choice, and lower prices have been the result of intense competition in the telephone market. Unfortunately, consumers today do not have the same choices with regard to the devices necessary to obtain cable television. Cable customers are in the same situation phone customers found themselves 20 years ago. Virtually all cable users get their cable set-top boxes and other hardware, which have security features, only from one source--the local cable company. There is no competition for these devices. The bill I am introducing today would allow cable customers to buy their converter boxes and other communications access devices from their local retail stores. Cable users in Maine and elsewhere in the country would no longer be at the mercy of cable operators to get their cable boxes. They could buy or rent them from anyone they choose--just as they do currently with telephones. This bill, which is identical to legislation already introduced in the House by Representative Bliley, would require the Federal Communications Commission [FCC] to adopt regulations to ensure that converter boxes and other interface equipment could be sold commercially by non-cable operators. Cable users, of course, could still choose to rent boxes from their cable operator if they desired. In the near future, the Senate will consider legislation designed to increase competition in all telecommunications markets. My bill would bring competition to a segment of the telecommunication market that desperately needs it. By allowing consumers to choose how they get their cable box, prices on the boxes and other interface equipment will likely drop, and manufacturers and retailers of converter boxes will become more innovative and responsive to the needs of consumers. Cable companies argue that they need a monopoly over cable devices to protect against theft of cable programming. I fully agree that cable operators should be able to protect their signals so that only paying customers get the benefit of their services. I do not, however, believe that a monopoly over the cable device market is necessary to achieve this purpose. It should be noted that the phone companies once made the same argument. They argued that if phone customers were allowed to purchase phones from anyone other than the phone company, there would be widespread theft of phone services. This, however, has not turned out to be the case. Likewise, I am confident that the sale of cable devices by non cable businesses would not lead to the theft of cable programming. Today's technology will allow cable operators to protect their signals without monopolizing the hardware and restricting consumers' ability to choose how they will get a box. Cable companies can prevent theft of their signals without controlling the distribution of converter boxes. For example, the Electronic Industries Association has developed a draft standard that would allow codes to be put on magnetic cards, similar to credit cards. This card, which could be used with a commercially sold box, would ensure that only those customers who have paid for services actually get them. Under my legislation, the FCC would determine the rules--after significant public comment--that would promote competition in the cable device market while safeguarding against the theft of cable programming. My legislation gives the FCC significant discretion in meeting this goal, but requires them to make it a high priority. Competition for converter boxes and other devices can only benefit consumers. As it did in the telephone market, competition will lead to innovation, greater choice, as well as lower prices for converter boxes.

Mr. COHEN

Mr. COHEN. Mr. President, I rise today to introduce the D'Oench Duhme Reform Act. I think it is safe to say that very few Members of this body have ever heard of the D'Oench Duhme doctrine, or understand why the Senate should spend its time reforming this arcane area of Federal banking law. But I submit that the problems that have arisen with respect to D'Oench Duhme are symptomatic of the more general problem that we see today of government acting without regard to the impact of its actions on the citizenry. Governmental arrogance of this sort corrodes public confidence in its political institutions and hinders the ability of government to act in the public interest. So the bill I introduce today has two purposes: It aims to fix a legal doctrine that has victimized hundreds of innocent people. But it also is designed to help restore confidence in government in general by reforming a law that is fundamentally unfair. I am very pleased to announce that Senators D'Amato, Bennett, and Faircloth are joining me as original cosponsors of the D'Oench Duhme Reform Act. I look forward to working with them as the bill is considered in the Banking Committee. The D'Oench Duhme doctrine is based on a 1942 Supreme Court case and a Federal statute enacted in 1950. The original purpose of the doctrine was to protect the interests of Federal bank regulatory agencies by making secret side agreements that do not appear in the records of an insured bank unenforceable when a bank fails and banking agency is appointed receiver. Over the years, however, this salutary purpose has been perverted into a national policy allowing the FDIC and RTC to slam the courthouse door in the face of litigants asserting claims and defenses that have nothing to do with secret side agreements. In many cases, the claimants have been victims of fraud by bank officials. Nonetheless, if the litigants' claims or defenses were based in any way on oral, unrecorded representations, the FDIC and RTC have successfully used D'Oench Duhme to lower the boom and get the claims dismissed. Individuals are abused twice--once by the bank and then again by the Government. The sad fact is that these individuals often think that they have been treated worse by the FDIC or RTC than they were by the bank that defrauded them. In January, the Subcommittee on the Oversight of Government Management, which I chair, held a hearing on the FDIC and RTC's misapplication of this powerful legal doctrine. The subcommittee heard testimony from individuals who have been victimized by the FDIC and RTC's use of D'Oench Duhme, an attorney who has represented dozens of clients against these agencies, and a panel of legal scholars. All of these witnesses documented that the Federal courts, at the urging of the FDIC and RTC, have expanded the doctrine in a way that has led to fundamentally unfair, and unjustifiable, results. I was especially struck by the testimony a professor who had represented the FDIC in a case where an elderly couple had obviously been victimized by officers of a savings and loan. In fact, the officers of the S&L were eventually convicted on 30 counts of bank fraud. Nonetheless, the professor succeeded in getting the elderly couple's civil case against the FDIC dismissed pursuant to the D'Oench Duhme doctrine. The patent unfairness of this result led the professor to write a law review article criticizing the unjustified expansion of the D'Oench doctrine. I also want to remind the Senate of an extraordinary case from Boston involving Rhetta and John Sweeney that I brought to the Senate's attention last summer. After a lengthy trial in State court, in which a jury decided the Sweeney's were liable on a mortgage, the trial court in a separate decision ruled that they had been defrauded by ComFed bank and won a $3 million verdict. But when ComFed failed and the RTC took over as receiver, the case decision was written, and then dismissed based under D'Oench Duhme. Now the Sweeneys are now facing the loss of their family home. For the Sweeneys, D'Oench Duhme has meant just that--doom. These examples are just the tip of the iceberg. D'Oench Duhme has been invoked by the FDIC to bar claims in approximately 5,145 cases since 1989. Countless other claimants probably have not even bothered to file claims based on their knowledge of the sweeping power of the D'Oench doctrine. These claimants may not have valid claims, but at least they should have the chance to have their cases heard on the merits. The current law is unfair and arbitrary. Bank customers are permitted to assert claims and defenses based on oral representations against solvent banks, but a different law--D'Oench Duhme--applies once a bank becomes insolvent. The FDIC and RTC have arrogated to themselves power that has not been granted to them by Congress. They have done so based on the belief that Congress wants them to resolve failed institutions as inexpensively as possible. But Congress did not authorize the FDIC and RTC to trample over individual rights for the purpose of reducing the cost of bank and thrift failures. The whole purpose of the bank insurance system has been secure public confidence in the banking system and spread the cost of bank failures to the public as a whole. D'Oench Duhme undermines both purposes. It degrades public confidence in the banking system by permeating the resolution process with fundamental unfairness. It also places a disproportionate share of the burden of bank failure on individuals who have done nothing wrong but to have had the misfortune of choosing to do business with a bank that eventually failed. The legislation I am introducing today will correct this inequity. Its purpose is to restore D'Oench Duhme to its original, narrow purpose. Consequently, the bill continues to bar claims and defenses based on secret side agreements entered into by bank insiders. But the bill provides relief victims of bank fraud by opening the courthouse doors and allowing them to have their day in court. Reform of the D'Oench Duhme doctrine is necessary to restore fundamental fairness to our banking law. Mr. President, I urge my colleagues to support this measure. Mr. President, I ask unanimous consent that a section-by-section analysis be printed in the Record.

Mr. COHEN

Mr. COHEN. Thank you. Mr. President, we hear a lot of talk about a beltway mentality, but it seems to me that this amendment reflects a Sunbelt mentality. I do not know how many people have spent any time in the Northeast during the winter months, but we have at least 5 months of the year during which the average temperature is below freezing. In many months it is not just subfreezing, it is subzero. When you get to northern Maine, we are talking about 20 or 30 below zero many days. We have a lot of poor people in our State. There are some 62,000 people who are beneficiaries of this particular program. Many of them are elderly. Forty or 45 percent of those that receive LIHEAP benefits around the country are elderly. So we are putting people who have an income of approximately their income, and we are now saying cut the program out, prices are low enough that they can afford it. But they cannot afford it. This is a small program compared to some others that are provided to the citizens of this country. I know it may be nice to live in a warm climate. It has been mild here in Washington, as I am sure it is in the West. In the Northeast, and throughout the industrial belt, it is very cold. I submit to my colleagues that it would be a terrible tragedy to cut this program.

Mr. COHEN. Could I have a minute and a half and then yield 30 seconds to my colleague from Maine?

Mr. COHEN

Mr. COHEN. Mr. President, first let me say that we have heard presentations here this morning by, I believe, two of the most intellectually gifted, eloquent Members of the U.S. Senate, both of whom have a long record in the field of civil rights and affirmative action programs that attempt to rectify policies of discrimination.