Alfonse D’Amato

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I ask unanimous consent on behalf of the Governmental Affairs Committee to meet on Tuesday, November 4, at 9:00 a.m. for a Nomination Hearing on the following nominees: Ernesta Ballard, to be a Member, Postal Board of Governors; Dale Cabaniss, to be a Member, Federal Labor Relations Authority; and Susanne T. Marshall, to be a Member, Merit Systems Protection Board.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I rise to submit a concurrent resolution on the human rights situation in Turkey. This resolution is prompted by that country's desire to host the next summit meeting of the heads of state or government of the Organization for Security and Cooperation in Europe [OSCE]. This summit meeting is scheduled to take place in 1998. The issue is which country will host this most important OSCE gathering. Last November, the Republic of Turkey--an original OSCE participating state--first proposed Istanbul as the site for the next OSCE summit. At that time, I wrote to then-Secretary of State Christopher, together with Commission Co-Chairman Christopher Smith, urging that the United States reject this proposal based on Turkey's dismal human rights record. I also wrote to Secretary Albright in July to reiterate my concerns regarding the state of human rights in Turkey and Ankara's failure to improve its implementation of OSCE commitments. Ankara has squandered the past year, failing to meaningfully address a series of longstanding human rights concerns. Regrettably, there has been no meaningful improvement in Turkey's implementation of its OSCE human rights commitments in the 11 months since our original letter to the State Department. Despite a number of changes in Turkish law, the fact of the matter is that even these modest proposals have not translated into improved human rights in Turkey. Mr. President, my resolution does not call for outright rejection of the Turkish proposal. Rather, the resolution calls for the United States to refuse consensus to such a plan until the Government of Turkey had demonstrably improved implementation of its freely undertaken OSCE commitments, including action to address those human rights concerns I will describe in more detail later in my remarks. Under OSCE rules, decisions require that all participating states, including the United States, give their consensus before a proposal can be adopted. The resolution we introduce today calls upon the President to report to the Congress by April 15, 1998, on any improvement to Turkey's actual human rights performance. Expert witnesses at a Commission briefing earlier this year underscored the continued, well-documented, and widespread use of torture by Turkish security forces and the failure of the Government of Turkey to take determined action to correct such gross violations of OSCE provisions and international humanitarian law. Even the much heralded reduction of periods for the detention of those accused of certain crimes has failed to deter the use of torture. The fact is that this change on paper is commonly circumvented by the authorities. As one United States official in Turkey observed in discussion with Commission staff, a person will be held in incommunicado for days, then the prisoner's name will be postdated for purposes of official police logs giving the appearance that the person had been held within the period provided for under the revised law. Turkish authorities also continue to persecute those who attempt to assist the victims of torture, as in the case of Dr. Tufan Kose. Despite revisions in the Anti-Terror Law, its provisions continue to be broadly used against writers, journalists, publishers, politicians, musicians, and students. Increasingly, prosecutors have applied article 312 of the Criminal Code, which forbids ``incitement to racial or ethnic enmity.'' Government agents continue to harass human rights monitors. According to the Committee to Protect Journalists, at least 47 Turkish journalists are in jail in Turkey today--more than in any other country in the world. Many human rights abuses have been committed against Kurds who assert their Kurdish identity. The Kurdish Cultural and Research Foundation offices in Istanbul were closed by police in June to prevent the teaching of Kurdish language classes. In addition, four former parliamentarians from the now banned Kurdish-based Democracy Party [DEP]: Leyla Zana, Hatip Dicle, Orhan Dogan, and Selim Sadak, who have completed three years of their 15-year sentences, remain imprisoned at Ankara's Ulucanlar Prison. Among the actions cited in Leyla Zana's indictment was her 1993 appearance before the U.S. Commission on Security and Cooperation in Europe here in Washington, DC. The Lawyers Committee for Human Rights has expressed concern over the case of human rights lawyer Hasan Dogan, a member of the People's Democracy Party [HADEP], who, like many members of the party, has been subject to detention and prosecution. The Government of Turkey has similarly pursued an aggressive campaign of harassment of nongovernmental organizations, including the Human Rights Foundation of Turkey and the Human Rights Association. An Association forum on capital punishment was banned in early May as was a peace conference sponsored by international and Turkish NGO's. Human Rights Association branch offices in Diyarbakir, Malatya, Izmir, Konya, and Urfa have been raided and closed. Mr. President, last week the Congress honored His All Holiness Bartholomew, the leader of Orthodox believers worldwide. The Ecumenical Patriarchate, located in Istanbul--the city proposed by Turkey as the venue for the next OSCE summit--has experienced many difficulties. The Patriarchate has repeatedly requested permission to reopen the Orthodox seminary on the island of Halki closed by the Turkish authorities since the 1970's despite Turkey's OSCE commitment to ``allow the training of religious personnel in appropriate institutions.'' As the State Department's own Country Report on Human Rights Practices for 1996 concluded, Turkey ``was unable to sustain improvements made in 1995 and, as a result, its record was uneven in 1996 and deteriorated in some respects.'' While Turkish civilian authorities remain publicly committed to the establishment of rule of law state and respect for human rights, torture, excessive use of force, and other serious human rights abuses by the security forces continue. As our resolution points out, the United States should encourage the development of genuine democracy in the Republic of Turkey based on protection of human rights and fundamental freedoms. Mr. President, it is most unfortunate that Turkey's leaders, including President Demirel--who originally signed the 1975 Helsinki Final Act on behalf of Turkey--have not been able to effectively address these and other longstanding human rights concerns. The privilege and prestige of hosting such an OSCE event should be reserved for participating states that have demonstrated their support for Helsinki principles and standards--particularly respect for human rights--in both word and in deed. Turkey should not be allowed to serve as host of such a meeting until and unless that country's dismal human rights record has improved. While some may argue that allowing Turkey to host an OSCE summit meeting might provided political impetus for positive change, we are not convinced, particularly in light of the failure of the Turkish Government to meaningfully improve the human rights situation in the months since it offered to host the next OSCE summit. We note that several high-level conferences have been held in Turkey without any appreciable impact on that country's human rights policies or practices. Mr. President, promises of improved human rights alone should not suffice. Turkey's desire to host an OSCE summit must be matched by concrete steps to improve its dismal human rights record. I ask unanimous consent that the two letters I mentioned earlier, to Secretary Christopher and Secretary Albright, and a copy of the State Department's August 13, 1997, reply signed by Assistant Secretary of State for Legislative Affairs, Barbara Larkin, be inserted in the Record. In closing, I urge my colleagues to join in supporting this concurrent resolution and to work for its passage before the end of this first session of the 105th Congress.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Friday, October 31, 1997, at 10 a.m. to hold a hearing.

Mr. D'AMATO. Mr. President, I ask unanimous consent that the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, be authorized to meet during the session of the Senate on Friday, October 31, 1997, at 9:30 a.m., to hold a hearing entitled ``Oversight Review of the Treasury Department's Inspector General.''

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I rise in support of the A plus Education Savings Accounts Act which will provide families--an estimated 14.3 million families by 2002--with the opportunity to save for their children's education, an investment by parents for their children's future. Education savings accounts allow parents, grandparents and scholarship sponsors to contribute up to $2,500 a year per child for an account that will be used for a child's education. The interest accrued will be tax-free as long as the funds are used to further the best possible education for their children. The funds saved by parents must be used for educational purposes--and can include expenses for home computers, tutoring for children with special needs or tuition for a private school. The money will be used in the most efficient manner because it will be the parents who make the decision on how to use the money. These education savings accounts leave public resources in public schools and let parents use their own money to augment education for their most precious investment--their children. This is a common sense approach--an education reform that gives control back to parents, improving education for their children. We must encourage parental involvement in their child's education, and this is an excellent way to allow that involvement, making the education system more responsive to parents. Ms. MOSELEY-BRAUN addressed the Chair.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I rise to speak again on an issue of, I think, paramount importance, and that is the education of our children. Mr. President, unless we bring about fundamental reform in education, we are just going to continue to nibble at the margins. We are going to have great intellectual discussions and not be able to help our children. The needs in our schools are great. We need better textbooks. We need to update computer facilities. We need to insist on teachers teaching the basics. And we need merit pay for good teachers. Our children deserve an oasis of calm in order to learn. We have to be able to get violent and disruptive juveniles out of the classroom, and ``fast track'' them out of the classroom. We hear about fast track for trade; what about fast tracking violent, disruptive students out of the classroom? Most importantly, we need to listen to parents in the local communities. This afternoon, I am going to touch on a few examples, horrendous examples, that all too often are being repeated in the educational systems throughout this country. Time after time, we see the education system supporting administrators, school principals and teachers at the expense of our children. We have to encourage parental involvement in education. When parents speak out, they have a right to be heard. They have a right to be listened to. One of the things that parents are clearly calling for is an end of a system of lifetime tenure, lifetime job protection regardless of whether the teacher or the school principals are doing the job. Eliminating tenure and reforming it is a desperately needed measure. The tenure system guarantees a lifetime job to teachers and school principals, regardless of their performance. Let me give you examples of how children suffer. These are real cases, these are our children. In junior high school 275 in Brooklyn, reading school scores have plummeted 21.5 points in the past 5 years. Sadly, this is a school that is failing our children, and they are getting hurt. So parents in the community, recognizing that problem, came together. The parents and the local school board wanted to deny tenure to the junior high school 275 principal, Priscilla Williams. I think we ought to applaud those parents for coming together and becoming involved and speaking out, as well as the local school board. Instead of listening to the parents, instead of listening to the school board, the local superintendent granted permanent tenure to principal Williams. While those scores were plummeting, the school's principal was rewarded with a lifetime guarantee, a lifetime job. So instead of correcting the situation and bringing in a principal who would turn that around, we now have children being held captive. That means these children will continue to suffer, and the school's leaders cannot be held accountable. The scene is repeated throughout the system, unfortunately. Let's take a look at another district, Brooklyn's district 23. The school board pleaded--pleaded, and these are the elected representatives--to block tenure for five principals at failing elementary and junior high schools. What is their motivation? Their motivation is to give their kids a better educational opportunity. Mr. President, sadly, all five were granted tenure anyway. So what does that mean? That means thousands of children are going to be trapped in a system that is failing them. Parents know that the tenure system rewards failures. Why don't we listen to these parents who are crying out for reform, who are crying out to give their children a better education? They know that the business-as-usual tenure system is hurting their children. Instead of granting tenure to Principal Williams at junior high school 275 where the reading scores are dropping like a rock, she should have been fired, replaced, and they should have brought in somebody who had the educational experience and the ability to raise those scores. As tragic as the failing levels are at junior high school 275, there is something more devastating that took place more recently at another school. Again, these are real children involved. This was a school in the Bronx, PS 44, where two 9-year-old girls were brutally sexually assaulted by four boys----9-year-old children at school. The girls reported this incredibly horrendous assault to their teacher. The teacher, in turn, reported it to the school principal, Anthony Padilla. Now, what did Mr. Padilla do? Did he call the police when a teacher reports an assault on two 9-year-old children? No. Did he take any steps to assist the victim, to contact the parents? No. But he did send a letter. He sent a letter to the parents which stated, ``No inappropriate behavior took place.'' Imagine that--doesn't call the authorities but sends a letter to the parents saying, ``No inappropriate behavior took place.'' Well, the police did investigate the case. Juveniles have been arrested and charged with this horrendous act. But what was done with or to the principal as a result of his failure to confront and deal with this situation in an orderly manner, a brutal attack against two 9-year-old girls? I'll tell you what happened--he was reassigned to a different administrative position within the district. Now, let me point out something else. Padilla didn't even have tenure. He has previously been denied tenure. Why is he being protected? Why is he being kept in such a position of such responsibility where the lives of hundreds of youngsters are under his control? You have a system that protected him when he should have been fired. It is another example of a system supporting administrators and principals instead of parents and children. Now, Mr. President, parents know that a principal who doesn't respond to violence within a school should be fired and not just reassigned. He should have been fired. But he is reassigned. Why? Because we have a system that is more interested in protecting the rights and the perks and the privileges and has become a hiring hall. It is an employment center, as opposed to being a center of learning, of knowledge. Something is seriously wrong when they are more concerned with the perks and privileges of the union members, regardless of how they are performing. Mr. President, let's set the record straight. I believe the vast number of our teachers are good, are dedicated, are great professionals. We should reward them and we should pay them for that and we should recognize that. But the incompetent who are receiving lifetime job security are eroding this system both at the administrative level and, yes, in the classrooms. Something is seriously wrong when parents try to get involved in their children's education--in the examples I pointed out to you, where the school boards are begging for changes--and the system refuses to respond to them. That is exactly what has happened when school principals are granted lifetime tenure over the objections of parents and in spite of the record of the failing schools. The tenure system has kept some principals in schools for 25 years while the academic performance has continually declined. That is wrong and has to be stopped. I want to congratulate the parents for getting involved in their children's education. Nothing is more important. We have an obligation to reform our educational system. We have to get rid of today's system that ignores parents and rewards failing principals with lifetime tenure and replace it with a new system, a system that listens to parents and rewards their involvement and thinks about the education of the children first, not the perks and privileges of those who work in the system. I yield the floor, and I thank my colleagues for granting me this additional time.

Mr. D'AMATO

Mr. D'AMATO. As my friend knows, no specific appropriation was provided in the fiscal year 1998 conference agreement to allow CAST to go forward in this fiscal year. Therefore, I would like to work with the Chairman, the Long Island Congressional delegation and the Department of Transportation in an effort to find a source of funding to continue work on CAST in this fiscal year.

Mr. D'AMATO. Mr. President, I rise to engage the distinguished Chairman of the Senate Transportation Appropriations Subcommittee, Senator Shelby, in a colloquy.

Mr. D'AMATO. I thank the Senator. I first would like to commend my friend and colleague from Alabama for the fine leadership he has shown in crafting the fiscal year 1998 Transportation Appropriations bill. He has done a wonderful job in allocating scarce federal resources equitably for New York and the entire nation for highway, transit, rail and other infrastructure needs. I ask my colleague if he is familiar with an intermodal transportation simulation and technology project on Long Island called the Center for Advanced Simulation and Technology (CAST)?

Mr. D'AMATO. I thank my friend and colleague.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I ask unanimous consent that I might proceed for up to 5 minutes as if in morning business.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, last night, the Hong Kong stock market lost 10 percent of its value. In the past week it has dropped 25 percent of its value. Panic stock selling has taken over the Hong Kong market. All stock markets around the world are declining very heavily. And as of 2:30 this afternoon the Dow Jones industrial average was down 215 points. This is no coincidence. This is not just the normal fluctuation of the stock market. This is a warning sign of what could be yet to come in Hong Kong now that the Communist Chinese have taken over. I have spoken out before on this floor about the dangers of the Communist takeover in Hong Kong and, regrettably, my fears appear to be coming true. There is a simple but profound lesson here for Americans and for all freedom-loving people around the world. Until recently, Hong Kong was an oasis of economic vibrance and freedom surrounded by the Communist dictatorship on the Chinese mainland. Hong Kong was economically strong because Hong Kong was free. Freedom knows no boundaries. Whether it is in America or Europe or Africa or Latin America or Asia, freedom is what creates the opportunity for people and ideas to prosper, but wherever the Communists have ruled freedom dies. Mr. President, the collapse of communism in Russia and Eastern Europe is one of the epic stories of our time, a true triumph of the human spirit against the forces of oppression. Unfortunately, the brave people of Hong Kong are suffering a reversal. It is tragic to see a free people come under the yoke of Communist rule. There is still freedom of Hong Kong today, but the warning signs are ominous. We Americans, as the world's foremost champions of freedom, must remain vigilant in our efforts to prevent the Chinese Communists from imposing the full force of their dictatorship on the people of Hong Kong. I pledge to do that, and I encourage all of my colleagues to join me in this noble effort to be vigilant and not to permit the compromise of freedom on the altar of greed and profits. I yield the floor.

Mr. D'AMATO

Mr. D'AMATO. I urged upon Senator McConnell in the strongest terms to seek an end to this financing in the fiscal year 1998 foreign operations bill. If, indeed, we are going to have a situation where, on one hand we have a law that says you cannot do business with these countries, and on the other hand we are indirectly financing a corporation which is going to be undertaking these activities, then I think this is wrong. How can the United States provide $800 to $850 million worth of Export-Import Bank credits allowing U.S. companies to do more business with companies whose actions violate U.S. law and damage U.S. security? So we certainly have an obligation to look into this. In fact, Gazprom is a company that is closely tied to the Russian Prime Minister, Victor Chernomyrdin. And when the Vice President, Vice President Gore, was in Russia several weeks ago, he reportedly spoke at length, to Mr. Chernomyrdin, about the Russian company's providing missile technology to Iran. It is my understanding Mr. Chernomyrdin said he had no knowledge of this, and that he could not do anything about it. What are we talking about? I mean, the fact of the matter is the Russians have been providing this technology to Iran. It seems to me this situation is like the parent who doesn't want to acknowledge that a son or daughter may have some problems with substance abuse, but they look the other way. All the signs are there, but they look the other way. All the facts are there, but we don't want to have an acknowledgment. Let me be clear, Iran is the foremost sponsor of international terrorism. They threaten our national security, the interests of our citizens and our allies, and it is unconscionable that we provide aid to them to do so. For the Russian Prime Minister to say we should stop worrying about this threat is incredible. I think we should start worrying about the damage that will be done if this kind of contract is carried out by us acting as willing consorts. For Russian companies to be providing missile aid to Iran and then helping finance gas deals which will make it possible for the Iranians to undertake more terrorist activities, I think is simply impermissible. Are we supposed to really be quiet? Sit back? Are we going to really read the editorials that say that now I have somehow created a terrible situation by coming forth and saying ``let's look at this, let's examine this--I believe this is wrong.'' As far as Total and Petronas are concerned, I hope the administration understands the only correct course to take is to implement the law and to impose the sanctions to their fullest and to sit down with our allies and say to them: Instead of poking us in the eye deliberately and publicly, we should be working together; not for one to advantage oneself and make a quick buck. We cannot fail to take this initiative and implement the law the way it was intended--it was intended to bring sanctions upon those who deal with countries that promote terrorist activities unless and until those countries change and mend their ways. Failure to act now will only come back to haunt us in the future. It will only bring more in the way of conduct that can be detrimental to world peace and to our security and to the national interests of the United States. I hope we have the courage to stand and act, instead of listening to those in the corporate and business sector come down and say: ``Oh, well, if they take this action today against Total that tomorrow it may impact against us.'' This is a battle. It is a war. It is a different kind but in many ways it is even more dangerous, more pernicious, more evil than the kinds of wars where nations may declare themselves against another nation. There, you know where the battlefields lie and you understand what is taking place. But this is a savage one, which is waged against innocent civilians, children--people throughout the world. That is why we need to employ all of the economic power and legal and moral authority that we have in bringing our allies together with us. Mr. President, I yield the floor and I suggest the absence of a quorum.

Mr. D'AMATO. Mr. President, on September 30, Total, a French company, and Petronas, a Malaysian company, and Gazprom, a Russian company, signed a $2 billion agreement to develop the South Pars oilfields in Iran. This contravenes the Iran-Libya Sanctions Act which passed the Senate unanimously, and passed the House of Representatives with I think all but four votes, and which was signed into law August 5, 1996, by President Clinton. Mr. President, the history of the Iran-Libya Sanctions Act is one that, unfortunately, it seems to me, too many are ready to forget. Too many are ready to forget the 300-plus American citizens who were killed in PanAm 103, or that two Libyan agents have been indicted in connection with that terrorist attack and provided a safe harbor by the Libyan Government. Too many of us are fickle, it seems to me, and are ready to forget past acts of terrorism committed by these two countries because of political expedience, on the altar of corporate profits and greed. Let us bring their arguments right out here: ``Oh, if we don't participate in this, others will. If we don't provide the bullets for the killers, others will, so why don't we sell them. Oh, forget the fact that this legislation was passed unanimously because, when this bill passed it was in close proximity to another tragedy that took place, the TWA flight that inexplicably exploded off the shores of Long Island.'' When the legislation passed, people were concerned whether or not it might have been a terrorist bomb or missile. I am not suggesting that it was terrorism, but there was that concern, and so the Congress was quick to respond. I think we responded correctly. We said to those who are going to do business with countries that export terrorism, that are in the business of financing the fanatical kinds of acts that result in a terrorist attack at the World Trade Center in New York where 6 people are killed, that result in the bombing of the barracks in Riyadh in Saudi Arabia where our troops are killed, that engage in the kind of terrorist attack sponsored by the Libyans where 300-plus Americans are killed; we are not going to help promote trade with those countries that played a role in these attacks. And if companies and countries want to enter into agreements that will promote the financial resources and development of Iran and Libya, then they cannot have free access to the marketplace in America. Is that a sacrifice? Yes, it is. Is it a sacrifice that we have a right to expect? I believe it is. Should it be greeted by the French Prime Minister standing up and cheering on the day that Total enters into this agreement, an agreement that our State Department was aware of and attempted to intercede and to get the French to work with us? I don't believe so. What does that sanction bill provide? It has a litany of opportunities for the Libyans and the Iranians to escape punitive measures; if they act in conformity with the world community and stop sponsoring terrorist attacks, if they begin to show actions that they will live and let live, then the President does have the ability to relax and alter those sanctions. But, Mr. President, to date there has not been one showing, not one, that any of those countries, the Libyans or the Iranians, are willing to cease and desist from promoting terrorist attacks against the United States, against our interests and against those who seek peace and want to live in peace. Indeed, if anything, they have become more violent. By the way, I say to those who argue that this agreement or this arrangement or this law has not worked, it has worked. We know that there have been billions of dollars of investments that would have gone into promoting the economy of Iran so that they would have more resources to export terrorism that has been precluded. For the leader of France to stand up and cheer, I believe, is horrendous. For him to say that this is extraterritorial legislation flies in the face of common sense. Are you really saying that the United States cannot take a position; ``that we are not going to support terrorist nations, that there will be sanctions, and that you cannot do business with us as if everything is fine and well and that you are comporting yourself as a good world citizen?'' Let me suggest to you that many of those who decry the U.S. position were the same who were so quick to come in and say a recent corporate merger that was about to take place should not take place. Oh, yes, the European Community, led by, once again, our friends the French, were ready to step in and say that the agreement between two American companies, McDonnell Douglas and Boeing, be invalidated. What about extraterritoriality in that situation? And in that case we are talking about two companies that are not exporting terrorism right here within the United States. Yet today we have the European Common Market talking about sanctioning the United States if we were to proceed in allowing those two aircraft manufacturers to merge and not ask for waivers and not work out a situation, because this would be competition that would be difficult for a European company, Airbus. So let us not have a situation where there are those who are willing to condemn us for fighting terrorism--and by the way, how do we take on those who promote terrorism? We cannot bomb them. I am not suggesting that we do. But should we not deny them the financial resources with which to fuel the engine for exporting terrorism? Of course, we should. It takes a little courage. I think that our administration has not done the kind of things that it should do behind the scenes, working with our allies to make this policy one that is easier to enforce. We have not told the Europeans to stand up to the Iranians, and say ``if you want to be able to have commerce and trade like others, then you have to behave. There is a code of conduct that we expect of you, or otherwise, there will be sanctions.'' We have simply not told them to tell the Iranians that. There was once a time not too long ago when we imposed sanctions of all kinds on our current allies, the Russians, before the wall of communism came down. Sanctions that related to human rights, related to their anti-democratic activities. We didn't have pure free trade and commerce under the sanctions of yesterday, so the sanctions of today aren't anything new. For those who say somehow this is terrible, I'll tell you what is terrible: I think it is terrible that we have not laid our cards on the table with our allies and told them we expect them to join with us in the battle against terrorism. I received a letter from our colleagues Senator Brownback and Senator Kyl, asking that the Banking Committee hold a hearing on the question of offering $1 billion of convertible bonds on the U.S. markets. And what were these bonds to be used for? They were to be used for helping to finance a company by the name of Gazprom; Gazprom, the very Russian company that helped bring about this deal promoting the exploration and development of the oil fields in Iran. Owing to the fact that Gazprom is clearly one of those companies that is in violation of the Iran- Libyan Sanction Act, and it can be sanctioned, I have a difficult time understanding--along with my colleagues Senator Kyl and Senator Brownback who have raised the question whether or not we should permit financing under our law--whether these financing activities wouldn't be in violation of our national security. Do these activities require a waiver from the President? We will be holding a hearing next week, next Thursday, to ascertain this. In addition, I have learned from a number of accounts that Gazprom is now negotiating with our Export-Import Bank to get something in the area of $800 to $850 million worth of Export-Import Bank credits. This is incredible. Today I have written a letter to Senator McConnell in which I have asked him to take the appropriate actions to see to it that this is not business as usual, that he puts a hold on this as he is marking up the appropriations bill dealing with the Export-Import Bank. I ask unanimous consent the letter dated October 22 be printed in the Record.

Mr. D'AMATO

Mr. D'AMATO. I ask unanimous consent that I might proceed for up to 15 minutes as if in morning business.

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

Mr. D'AMATO. I thank the Chair.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I would like to speak to an issue which confronts us nationally and which we, as a nation, seem to be ducking. I am talking about terrorism. I am talking about the need for this country to stand up and be counted in its fight against international terrorism whenever and wherever it occurs. Today, Americans are threatened by two very distinct but serious kinds of terrorism. The first is international terrorism. Mr. President, I am proud of my efforts that helped to pass the Iran- Libya Sanctions Act, a law designed to stop two renegade nations from having the means necessary to finance international terrorism--by punishing those companies who do business with them. The French oil company, Total, is trying to test our resolve. Total has struck a lucrative oil deal with Iran. This company is thumbing its nose at the United States. I believe it is incumbent upon us to remain strong in the face of these efforts to undermine our fight against terrorism. I call upon the French Government to join the fight against international terrorism, not to thumb its nose at the United States, not to applaud the efforts of Total. I believe that our laws must be enforced and its strict sanctions must be brought to bear on Total. Every Member of this body, Mr. President, voted for the Iran-Libya Sanctions Act. It is only when we see planes being shot down, it is only when the victims and their families come and say, What are you doing? that we stand up and take action. Every Member of this body should be outraged that Total has thumbed its nose at this ban. They did so deliberately. Its actions are an insult not only to this body but to all of the nations of the world who should be working together in a united front against terrorism. Fighting international terrorism requires every nation to unite together, and it requires that we remain resolute. It requires that we put corporate greed and profits on the back burner. Many of our own companies are so worried about international profits. But let me tell you, when terrorism strikes here, when you see what takes place, then an aroused American public gets us to do something. Only when we see the bombing at the World Trade Center--that is real; impacting people's lives--and when we see the Iranians and the Libyans give sanctuary to terrorists, only then will we maybe do something. But then some say, Not when corporate profits get in the way. Or our allies may say, Oh, no, don't do this, knowing that these are renegade governments and countries who sponsor terrorist attacks, who are responsible for over 300 U.S. citizens being killed--and the Libyans were and they now give sanctuary to two men who have been indicted. No. Sadly, we have to do something. I am very concerned that the administration will shirk its responsibility. Sadly, I also rise today to describe another kind of terrorism, Mr. President. It is one that is too often seen but little done. It is one that permeates our Nation's school systems, particularly inner-city schools. It is a terrorism in which violent juveniles prey upon good kids. And it has to stop. Just as we must be united and remain resolute in our fight against international terrorism, we must be united and remain resolute in the fight at home. Once again, each and every one of us has a responsibility to stand up and fight this terrorism to make a difference. Business as usual is no longer acceptable. There is no more fundamental right in our democracy than the right of our children to have a good education. That requires that they be safe. That requires that a school be an oasis for learning. Many people have asked me why I have taken such a public and outspoken position as it relates to education reforms. New Yorkers may have been shocked when they read yesterday's newspapers of gang violence in the public schools. I point to those headlines. ``Probe Rips Principals for Turning Blind Eye to the Gangs.'' The story in the New York Post turns to the issue of the gangs which have taken over schools. The Daily News: ``Fear Stalks Hallways as Hoods Take Over.'' One student says that he feels at times safer--safer--in dangerous neighborhoods at night than he does walking in the hallways. We are not talking about violence in streets and alleys. This violence is taking place inside our schools, which should be sanctuaries to our children. That means that the real victims are our children. Just as we must stand up to Total and other companies who give aid and comfort to international regimes, we must stand up to the terrorism that is occurring in our classrooms. We must get violent and disruptive juveniles out of the classrooms so good kids can learn. We need fundamental sweeping reforms throughout our educational system. In addition to getting violent and disruptive juveniles out of the classrooms, Mr. President, we need to give merit pay to the outstanding teachers, those who are dedicated, those who want to make a difference and those who do make a difference. We have to see that we have tenure reform in order to get those teachers who are not performing, who are bad teachers out of the classroom. We need school choice so that parents can make educational decisions instead of Government bureaucrats. Finally, Mr. President, we have to stand up to the teachers unions and tell them to put our children first. Unfortunately, the unions are more interested in their perks and privileges than they are in providing a good education for our children. Above all, we must get violent and disruptive juveniles out of schools. I want to see more power given to our school principals to remove violent juveniles from the classrooms. We cannot tolerate the kind of situation that is taking place in more and more of our schools in more and more of our cities to more and more of our children. Principals should have fast-track authority. You want to talk about fast-track authority for trade? Give our principals fast-track authority to expel gang members and other violent offenders. That is what we really need to be doing to help this country and to help the educational system. Just like in the fight against international terrorism, more pressure has to be brought to bear on terrorism in our schools. The fight against terrorism in our schools must be a united fight. The teachers unions, who opposed every commonsense reform, surely can agree with the notion that violence in schools must be stopped. Instead of pushing for more pay and less work for teachers, the teachers unions should join me and others in a united effort to combat violence in our schools. That is why I have been standing up to those who ask the question, ``Why do you talk about this?'' We have had debates about educational reform and getting more money directly to the District so they can spend it on students, not bureaucrats. We have had debates about giving parents choice so they can give their kids an opportunity to receive a quality education. But let me say something. In every one of those situations we have seen the teachers unions come down and oppose this. They are against merit pay. They are against getting bad teachers out. They want to ensure lifetime contracts. They are interested in perks and privileges. By gosh, for one time, join with us and see to it that we have meaningful reforms so that we can fast track violent students out of the schools, so that good and decent kids have an opportunity to have a good education, so that children can learn in safety. Mr. President, I do not think there is a more important fight against terrorism that we can and must and should win than that which confronts our children every day, unfortunately, in too many of the schools throughout this country. I yield the floor. Mr. President, I suggest the absence of a quorum.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I once again thank my colleague for his clarifying remarks and I offer my congratulations to him on the passage of legislation which is fair, balanced and very effectively serves the needs of the American people.

Mr. D'AMATO. Mr. President, I wish to express my strong support for the inclusion of the Senate's ``Mark to Market'' reform legislation in the Fiscal Year 1998 VA-HUD Appropriations Conference Report. The conference report effectively incorporates The Multifamily Assisted Housing Reform and Affordability Act of 1997 (S. 513), as passed by the Banking Committee and full Senate with minor modification. This legislation averts a serious affordable housing crisis by restructuring the Department of Housing and Urban Development's [HUD] Federal Housing Administration [FHA] insured section 8 project-based assisted portfolio. This legislation will save taxpayer money by reducing above-market rents on section 8 properties, will protect residents, and will help maintain a stock of affordable housing which will remain available for the future. The financial viability of assisted projects will be protected by refinancing and restructuring mortgages which are insured by the FHA. I salute my friend and colleague Senator Connie Mack, Chairman of the Subcommittee on Housing Opportunity and Community Development, for his outstanding efforts in crafting this legislation and ensuring its swift enactment. Through his extraordinary leadership this legislation has been developed in a bipartisan, measured and thoughtful manner. I thank my friend Senator Kit Bond for the critical role he played in the development of this bill as a member of the Banking Committee in the last Congress and for his leadership as chairman of the VA-HUD Appropriations Subcommittee in bringing this measure to final passage. Mr. President, this legislation is supported by a broad range of interest groups including resident organizations, owners, nonprofit housing associations, the National Governors Association, the National Affordable Housing Management Association, the National Housing Conference, the National Association of Home Builders, and the National Council of State Housing Finance Agencies. The New York Housing Conference and the New York State Tenants and Neighbors Coalition have been instrumental in the development of this bill and I thank them for their valuable input and support. This legislation addresses the escalating costs of the HUD section 8 program and achieves fiscal year 1998 savings of $562 million. Importantly, this legislation will save the American taxpayer $4.6 billion over the next 10 years by reducing exorbitant rents in the section 8 program. At the same time, the legislation will protect the FHA multifamily insurance fund from losses due to defaults. The mortgage restructuring provisions contained in this bill will allow projects to continue to operate effectively with reduced rent levels. Mr. President, millions of needy Americans depend on section 8 housing to provide them with affordable shelter. The average income of these families, elderly and disabled persons is similar to those in Federal public housing--approximately 17 percent of the local area median income. In addition, over 35 percent of these persons are elderly. Many more are disabled or families with children. It is essential that we protect these residents. Mr. President, the legislation protects residents from displacement and provides them with a meaningful voice in the restructuring process. Resident involvement is essential to prevent physical deterioration of buildings, identify criminal activity and threats to health and safety, and contribute to the long-term viability of the affected buildings and communities. The legislation provides for a strong role on the part of residents to participate in activities such as the determination of eligibility for restructuring, decisions to renew project-based contracts, the formation of the rental assistance assessment plan, capital needs and management assessments, and physical inspections. In addition, resident involvement in the decisions which affect their communities and lives will be further ensured by the selection of resident-friendly participating administrative entities [PAE]. The legislation mandates that any organization selected as a PAE must have a demonstrated track record of working directly with residents of low- income housing projects and with community-based organizations. It is imperative that these PAE's provide for resident input that is meaningful. This will be achieved by the PAE providing residents timely, adequate and effective written notice of proposed decisions, timely access to relevant information and an adequate time period for analysis and provision of comments to the PAE and HUD. The PAE and HUD will take into account resident comments in a thoughtful and constructive manner. Mr. President, the bill seeks to preserve affordable housing throughout our nation for the benefit of current and future residents. Criteria have been developed to assess whether a project should maintain project-based assistance or be converted, in whole or in part, to tenant-based assistance. Projects in disrepair will be rehabilitated, where feasible, and their proper maintenance will be ensured. The legislation contains important new enforcement tools for HUD to employ to crack down on fraud, waste and abuse by unscrupulous landlords. Landlords who break the rules will be banned from the program. New protections against equity skimming, as well as expanded civil money penalties will greatly assist efforts to eliminate owners who have cheated the Federal Government. In addition, the legislation refocuses HUD's efforts on oversight and enforcement. By devolving the primary responsibility for conducting mortgage restructurings to the State and local level, HUD staff will be able to concentrate on rooting out abuses within the system. Rents on restructured properties will be set at local market rates based on comparable properties, or where comparables are unavailable, at 90 percent of HUD's Fair Market Rent [FMR]. The legislation provides that up to 20 percent of a given PAE's inventory may receive budget- based rents, capped at 120 percent of FMR, in order to maintain the financial viability of the projects. The HUD Secretary may waive the 20 percent limitation upon a demonstration of special need. Report language accompanying The Balanced Budget Act of 1997 (S. 947), which passed the Senate on June 25, 1997, states: The Committee expects that the Secretary shall utilize this important discretionary tool to address the unique circumstances of various communities and regions throughout the nation. The Secretary should consider relevant local or regional conditions to determine whether good cause exists in granting such a waiver. Such factors should include, but should not be limited to: (1) whether the jurisdiction is classified as a ``high cost area'' under other federal statutes or programs; (2) prevailing costs of constructing or developing housing; (3) local regulatory barriers which may have contributed to increased development costs; (4) State or local rent control or rent stabilization laws; (5) the costs of providing necessary security or services; high energy costs; the relative age of housing in a jurisdiction; or (6) other factors which may have contributed to high development or operational costs of affordable housing in a given jurisdiction.'' By providing a priority to State and local housing finance agencies [HFA] to serve as PAE's, we recognize and build upon the increasing financial and housing management expertise of these public entities. HFA's are accountable to State and local governments and the public and are dedicated to increasing the availability of affordable housing. In addition, they have extensive experience with the section 8 portfolio itself and will be able to leverage additional resources for its benefit. Mr. President, this legislation protects the interests of the Federal taxpayer, the security of our residents and the future of affordable housing. It is with great pride that I commend my colleagues in the Senate for working together to avoid the social and fiscal crisis which would have occurred had HUD's multifamily inventory not been reformed. This legislation was carefully crafted with the spirit of bipartisanship for over 2 years. I salute all who contributed to this important and essential effort and support immediate passage.

Mr. D'AMATO. Mr. President, I would like to engage in a colloquy with the distinguished chairman of the VA-HUD Appropriations Subcommittee, Senator Kit Bond, for the purposes of clarifying the intent of the VA- HUD Conferees in regard to several aspects of the section 8 reforms included in the conference report. First, I would like to clarify the intent of the conferees regarding determination of market rent levels. In my home State of New York, there are some 1.2 million apartments which are covered by State rent control and rent stabilization laws. It is particularly important that the participating administrative entities [PAE] which conduct mortgage restructurings in New York have the flexibility to consider the rents of these apartments, particularly those subject to rent stabilization or rent control regulation, in making determinations of market rents. Mr. President, I note with regret that the Fair Market Rent [FMR] System currently used by HUD has numerous flaws, especially when applied to a metropolitan area as large and diverse as New York City and its surrounding suburbs. For instance, HUD utilizes a single Fair Market Rent estimate for the entire municipality which fails to take into account the various differences in true market rents between such disparate markets as Queens, Brooklyn, Manhattan, and Rockland County. These markets are vastly different, but HUD's FMR system does not reflect these variations. This legislation, which originated in the Banking Committee, takes into account the shortcomings and limitations of the FMR System. Instead of relying on this flawed system, the bill adopts an approach which would allow participating administrative entities to estimate true market rents based on comparable properties. While it is true that rent levels which are subject to State and local rent regulation may not fully reflect true market rents, nevertheless they can often form the basis for estimating such true market rents. Indeed, many rent stabilized apartments in New York City are far closer to true market rent levels than HUD's FMR estimates. Mr. President, I thank the conferees for including legislative amendments to the original Senate bill, S. 513, in the final legislation which will allow participating administrative entities to consider rent stabilized units for the purposes of estimating local market rents. I would ask my friend, Senator Bond, if my statements are consistent with the intent of the conferees?

Mr. D'AMATO. Mr. President, I thank the distinguished Senator for his clarifying remarks. I would ask for one additional point of clarification. Mr. President, the section 8 reform provisions include a mandatory renewal of project-based assistance for restructured properties which have a significant number of elderly or disabled persons, or which are located in tight rental markets, such as New York City. In addition, there is a local option to replace project-based assistance contracts with section 8 vouchers, after completion of a rental assistance assessment plan by the PAE with meaningful consultation with the owner of the affected project. This plan, as with all aspects of the overall mortgage restructuring and rental assistance sufficiency plan, shall also be developed with an opportunity for meaningful input by the affected residents as well. It is imperative that residents be kept informed of the process for mortgage restructuring and the possibility of receiving tenant-based assistance, and be offered ample opportunity to voice their preferences as to the type of assistance provided. It would not be outside the authority of the PAE to conduct a survey, on a project-by-project basis, as to resident preferences in this regard. Mr. President, I would like to emphasize the role of State and local decisionmaking in making this determination. It is not the intent of the drafters of the legislation that HUD attempt to micromanage or second-guess the determination of the PAE. Neither is it their intent that the HUD implementing regulations include one-sided interpretations of the statutory language which will force a preference for tenant- based assistance upon the local decisionmakers. The criteria are intentionally objective and neutral and the final decision for applying them rests at the local level. In addition, in interpreting these criteria, the participating administrative entities should, to the fullest extent possible, consider the local experience of the various forms of housing assistance. For instance, the PAE should consider the actual effectiveness of tenant-based assistance. In many cases, voucher- holders are unable to utilize their vouchers. In many areas too, voucher-holders often find their choices constrained to certain areas, neighborhoods and projects. The lease-up rates and need to utilize section 8 reserves in order to improve these rates by the local public housing authorities would be relevant in determining the local effectiveness of the voucher program. Also, in determining the relative affordability of vouchers, the PAE should consider whether a resident's rental contribution could rise above 30 percent of his or her income. Recent data from HUD indicate that a large percentage of voucher-holders pay more than 30 percent of their incomes for rent, and many pay more than half of their incomes in rent. This data is extremely disturbing. The rent burden of voucher- holders is especially relevant in making these determinations. The PAE could consider the impact of reductions in the FMR to the 40th percentile of available units on tenant-choice and rent burden as well. Whenever possible, the PAE should use local experience in making this determination rather than relying on national averages, which often are rendered meaningless when applied locally. PAE's should asses the need for a stock of affordable housing which will be available on a long- term basis, when judged in light of the housing needs identified in the local consolidated plan. PAE's should consider the amount of multifamily housing currently being developed in that area which is affordable to low-income families. Mr. President, it is imperative that PAE's consider the characteristics of specific projects. For instance, a particular project could contain a number of apartments with three or more bedrooms in a geographic area where there is a dearth of such affordable housing available to large families. In all cases, PAE's should consider the long-term consequences of their decisions. I would ask my friend, Senator Kit Bond, whether my statements are fully consistent with the intent of the conferees?

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I rise today with my friend and colleague, Senator Graham of Florida, to introduce long overdue legislation to increase the cap on State authority to allocate low- income housing tax credits--housing credits--to $1.75 per capita, and to index the cap to inflation. The current cap of $1.25 per capita has not been adjusted--not even to account for inflation--since the program was created over a decade ago. This cap is strangling a State's capacity to meet pressing low-income housing needs. Annual cap growth is limited to the increase in State population, which has only been 5 percent nationwide over the past decade. During the same time period, inflation has eroded the housing credit's purchasing power by approximately 45 percent, as measured by the Consumer Price Index. Mr. President, as you may know, housing credits are the primary Federal-State tool for producing affordable rental housing across the country. Since 1987, State agencies have allocated more than $3 billion in housing credits to help finance nearly 900,000 apartments for low- income families, including 75,000 apartments in 1996. In my own State of New York, the credit is responsible for helping finance 44,000 apartments for low-income New Yorkers, including 4,450 apartments in 1996. Earlier this year, the General Accounting Office issued a comprehensive report giving the housing credit a clean bill of health. That report documents that the program in fact exceeds a number of important congressional objectives. For example, though the law allows housing credit apartment renters to earn up to 60 percent of the area median income, GAO documented the average tenant's income at just 37 percent, and found that more than three out of four renters have incomes under 50 percent of the area median income. GAO also found that rents in housing credit apartments are well below market rents, up to 23 percent less than the maximum permitted, and 25 percent below HUD's national fair market rent. The GAO report also documents that States are giving preference to apartments serving low-income tenants longer than the 15 years the law requires. In fact, two-thirds of the apartments GAO studied were set aside for low-income use for 30 years or more. A second major assessment of the credit has been objectively completed by Ernst & Young, reiterating many of the positive findings of the GAO report, demonstrating a tremendous need for additional affordable housing, and documenting the devastating effect of the current cap on States' ability to finance this critically needed housing. Despite the success of the housing credit in meeting affordable rental housing needs, the apartments it helps finance can barely keep pace with the nearly 100,000 low cost apartments which are demolished, abandoned, or converted to market rate use each year. Increasing the housing credit cap, as Senator Graham and I propose, would allow States to finance approximately 25,000 more critically needed low-income apartments each year. Nationwide, demand for housing credits outstrips supply by more than 3 to 1. In 1996, States received applications requesting more than $1.2 billion in housing credits--far surpassing the $365 million in credit authority available to allocate that year. In New York, the New York Division of Housing and Community Renewal received applications requesting more than $104 million in housing credits in 1996--nearly four times the $29 million in credit authority it already had available. When I think of the immense need for affordable housing within my State, I can only characterize this decade-old limit on State credit authority as an overwhelmingly lost opportunity. Mr. President, in 1993, Congress made the housing credit permanent with unprecedented, overwhelmingly bipartisan cosponsorship. In addition, the Nation's Governors have adopted a policy calling for an increase in the housing credit cap.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I rise today with my friend and colleague, Senator Breaux, to introduce long overdue legislation to increase the private activity tax-exempt bond cap to $75 per capita or $250 million, if greater, and index the cap to inflation. The current cap, which has not been adjusted in over a decade--not even to account for inflation--is severely restricting the ability of States and localities to meet pressing housing, economic development, and other needed investments in their citizens and communities. This cap, imposed in 1986, is now $50 per capita or $150 million, if greater. It applies to issuers of tax-exempt bonds for affordable single and multifamily housing, redevelopment of blighted areas, student loans, manufacturing, municipal service, and hazardous waste disposal facilities. Cap growth is limited to State population increases, but not inflation. As a result, inflation has severely eroded capped bonds' purchasing power. The 1987 bond cap, adjusted for the current limit, would have been $14.3 billion. Ten years later, the 1997 cap is $15 billion a mere 5-percent increase--due to population--over a period of far greater inflation. Mr. President, Congress never intended to restrict the growth of this program. In fact, Congress never intended the cap to shrink at all. It allowed the cap to grow with State populations and imposed the cap in the same legislation, the 1986 Tax Reform Act, which terminated by 1989 the two heaviest cap users: mortgage revenue bonds [MRB's] for housing, and industrial revenue bonds [IDB's] for manufacturing. That left plenty of room for the remaining capped bonds. Congress then extended MRB's and IDB's several times past the 1989 expiration dates and finally made them permanent in 1993. What Congress did not do at that time was adjust the cap to accommodate these additional uses. Accordingly, demand for capped bonds now exceeds supply in most States. One example is the overwhelming demand in many States for MRB's, issued primarily by State Housing Finance Agencies [HFA's] to finance modestly-priced first-time homes for lower income families. In 1996, State HFA's issued almost $8 billion in MRB's for nearly 100,000 mortgages, according to the National Council of State Housing Agencies [HCSHA]. Since January 1, 1995, the State of New York Mortgage Agency [SONYMA] has financed more than 1 billion dollars' worth of affordable first- time home mortgage loans with MRB's. SONYMA's Construction Incentive Program has allocated $250 million in MRB funding which will create 2,400 new homes and 6,000 full-time jobs in New York. The State of New York also relies heavily on tax-exempt bond authority for multifamily housing. In 1997 alone, the New York State Housing Finance Agency expects to finance $420 million worth of multifamily mortgage loans with multifamily housing bonds. This investment will create, 2,150 new, privately owned and managed apartments, 430 of which will be affordable to low-income families. In addition to providing desperately needed housing, this investment will promote economic integration in many neighborhoods. Unfortunately, home ownership and a decent apartment remain out of reach for thousands more families whom the MRB and multifamily housing bond programs could serve better than any other. State HFA's could have used an estimated additional $2.4 billion in bond cap authority in 1996, according to NCSHA. SONYMA could have used another $100 million last year. The private activity volume cap also includes tax-exempt bond authority to assist small and midsized companies finance the expansion of manufacturing facilities. These companies often do not have reasonable access to the capital markets and cannot easily finance construction of manufacturing facilities. I used these bonds in my capacity as town supervisor of Hempstead to allow existing businesses to grow and to attract new business. Without this financing, these companies, and their employees, would not be in New York State. Nationwide, over $2.612 billion of tax-exempt manufacturing bonds were issued in 1996. In 1996 alone, New York State issues over $96 million of tax-exempt bonds for manufacturing facilities. The Council of Development Finance Agencies reported that bond issuance increased 32 percent in 1996 from the prior year. In New York, demand for this low- cost financing greatly exceeded the almost $100 million of bonds issued. The Empire State Development Corp., a public agency, reported that demand for tax-exempt bonds to support manufacturing was about 30 percent higher than the over $96 million of bonds actually issued in 1996. Over the years, these bonds created literally thousands of construction and permanent jobs in my home State, and tens of thousands nationwide. It is critical to raise the bond cap to facilitate job creation by small and midsized manufacturing companies. In many cases, these companies cannot obtain reasonable financing to expand, but for tax-exempt financing. Mr. President, nationwide, demand for all bonds under the cap outstripped supply by almost $7 billion last year, according to NCHSA. New York alone faced unmet demand of more than $1 billion for all the investments strangled by the cap. The Nation's Governors have adopted a policy calling for a cap increase. The Nation's State treasurers, National Association of Counties, and Association of Local Housing Financing Agencies [ALHFA] also support raising the cap. One-third of the House Ways and Means Committee and nearly 100 House Members overall already have cosponsored companion legislation--H.R. 979--to increase the bond cap $75 per capita or $250 million, if greater, and index the cap to inflation. The current cap is severely restricting the ability of States and localities from making much-needed investments in their citizens and communities. I urge my colleagues to join Senator Breaux and me in a bipartisan effort to increase the bond cap. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. D'AMATO. Mr. President, I rise today with my friend and colleague, Senator Graham of Florida, to introduce long overdue legislation to increase the cap on State authority to allocate low- income housing tax credits--housing credits--to $1.75 per capita, and to index the cap to inflation. The current cap of $1.25 per capita has not been adjusted--not even to account for inflation--since the program was created over a decade ago. This cap is strangling a State's capacity to meet pressing low-income housing needs. Annual cap growth is limited to the increase in State population, which has only been 5 percent nationwide over the past decade. During the same time period, inflation has eroded the housing credit's purchasing power by approximately 45 percent, as measured by the Consumer Price Index. Mr. President, as you may know, housing credits are the primary Federal-State tool for producing affordable rental housing across the country. Since 1987, State agencies have allocated more than $3 billion in housing credits to help finance nearly 900,000 apartments for low- income families, including 75,000 apartments in 1996. In my own State of New York, the credit is responsible for helping finance 44,000 apartments for low-income New Yorkers, including 4,450 apartments in 1996. Earlier this year, the General Accounting Office issued a comprehensive report giving the housing credit a clean bill of health. That report documents that the program in fact exceeds a number of important congressional objectives. For example, though the law allows housing credit apartment renters to earn up to 60 percent of the area median income, GAO documented the average tenant's income at just 37 percent, and found that more than three out of four renters have incomes under 50 percent of the area median income. GAO also found that rents in housing credit apartments are well below market rents, up to 23 percent less than the maximum permitted, and 25 percent below HUD's national fair market rent. The GAO report also documents that States are giving preference to apartments serving low-income tenants longer than the 15 years the law requires. In fact, two-thirds of the apartments GAO studied were set aside for low-income use for 30 years or more. A second major assessment of the credit has been objectively completed by Ernst & Young, reiterating many of the positive findings of the GAO report, demonstrating a tremendous need for additional affordable housing, and documenting the devastating effect of the current cap on States' ability to finance this critically needed housing. Despite the success of the housing credit in meeting affordable rental housing needs, the apartments it helps finance can barely keep pace with the nearly 100,000 low cost apartments which are demolished, abandoned, or converted to market rate use each year. Increasing the housing credit cap, as Senator Graham and I propose, would allow States to finance approximately 25,000 more critically needed low-income apartments each year. Nationwide, demand for housing credits outstrips supply by more than 3 to 1. In 1996, States received applications requesting more than $1.2 billion in housing credits--far surpassing the $365 million in credit authority available to allocate that year. In New York, the New York Division of Housing and Community Renewal received applications requesting more than $104 million in housing credits in 1996--nearly four times the $29 million in credit authority it already had available. When I think of the immense need for affordable housing within my State, I can only characterize this decade-old limit on State credit authority as an overwhelmingly lost opportunity. Mr. President, in 1993, Congress made the housing credit permanent with unprecedented, overwhelmingly bipartisan cosponsorship. In addition, the Nation's Governors have adopted a policy calling for an increase in the housing credit cap.