Alfonse D’Amato

Mr. D'AMATO

Mr. D'AMATO. Mr. President, we will consider the conference report, as was indicated, to H.R. 1058, the securities litigation bill. There is an 8-hour time limitation on the conference report. We will recess from 12:30 to 2:15 for the weekly policy conference meetings. Following the securities litigation, we will resume consideration of H.R. 1833, the partial-birth abortions bill. Rollcall votes, therefore, will be expected during today's session.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, our Nation has always been willing to fight for the values and freedoms that our Nation, our flag, and our Constitution represents. We have always met that test. America and Americans have always stepped forward. My father served in World War II, my uncles, our neighbors, sons, daughters. That was a time and a war when every American understood that our basic way of life was being threatened. There was a direct obligation for each and every American to do his or her part, and Americans met that challenge, and individuals were willing to face the dangers of loss of life to protect and preserve the freedoms that the next generation of Americans share today. Mr. President, I submit, there is no compelling American interest in Bosnia that meets that standard that would jeopardize or put our children and our grandchildren in such a dangerous situation. It is an unwinnable, untenable civil war in a place called Bosnia. As a parent, I do not wish my sons or daughters put in harm's way, and I cannot imagine that any other parent would be willing to risk the lives of their children in a peacekeeping operation in Bosnia. The President has not made a compelling case to sacrifice one American life, let alone place 20,000 U.S. troops in a dangerous, dangerous situation. Sending American troops to Bosnia is unnecessary, it is wrong, and I will oppose it with every fiber in my body. Mr. President, I will have more to say about that. But let me suggest to you, getting 20,000 troops in may look somewhat grand as they come marching off, as the tanks roll in, as there will be crowds well orchestrated for the TV cameras to see them cheering, but how long will they have to serve? How will they get them out? Do we really believe they are going to come out in 1 year? The administration is already wiggling on this. How many lives will be lost? This administration's track record in being able to keep its promises and meet its obligations in similar situations has not been a good one. Certainly, it was a disaster in Somalia, when a mission that started out as one for peacekeeping and one to give food to people was changed. Certainly, as things are unraveling today in Haiti, we have every reason to believe that upon the withdrawal, if our American troops are withdrawn on time, there will be an unraveling, once again, and the citizens of Haiti will find themselves, once again, at war. I think it is naive to really think that by putting 20,000 troops-- and by the way, there are going to be about 40,000 troops in that region, 20,000 in Bosnia. The cost is astronomical, not to mention the danger to our troops. I think it is absolutely disingenuous for the administration to now come forward and say the United States will lose prestige abroad because they brokered this peace on the basis of sending U.S. troops there. They were warned repeatedly by this Congress, by this body, by the House of Representatives, that clearly we were opposed to sending troops there, and to say now that we are going to be having them there and for us to be less than supportive, and that this would embarrass the President, embarrass the Nation, endanger our relations with NATO is to ignore the fact that the President deliberately undertook this operation, was well aware of the opposition of the citizens of the United States and of the Congress and does not--and does not--deserve at this point in time our support. Our support should be to protect the lives of our U.S. troops, to see to it that if we are going to enter a conflict--and this is a conflict that has been brewing for hundreds of years--that there is a vital national interest. Should we work to bring about peace? Yes. But I suggest putting 20,000 troops in and promising to take them out in 1 year is not going to end over 500 years of hostility. It is wrong. Mr. President, I yield the floor and suggest the absence of a quorum.

Mr. D'AMATO

Mr. D'AMATO. The Senator raises something that I feel very strongly about. Frankly, I am extremely worried about the health impacts associated with exposure to pesticides, and I am deeply concerned that they may lead to diseases such as breast cancer. At the same time I think that the women of Long Island and elsewhere have suffered enough anguish, and I do not want to scare people unnecessarily.

Mr. D'AMATO. Of course. While it is our intent to require broad screening of active and inert pesticide ingredients, we recognize that there are biologic substances, and perhaps other substances, that the Secretary will find do not warrant testing because she concludes that they do not mimic estrogen in humans. Subsection g(4) would allow her to exempt such substances from the screening program called for under this amendment. We expect the Secretary to rely upon the best available scientific information in identifying substances to be exempted. Would the Senator like to comment on why the amendment requires that the testing requirements and communication strategies be reviewed by the Science Advisory Panel and Science Advisory Board, and any other review group the Administrator deems appropriate before finalizing the requirements.

Mr. D'AMATO. Does the Senator know just what kinds of follow-up studies will likely need to be conducted and how much they will cost?

Mr. D'AMATO. Could the Senator discuss the potential followup actions that might be recommended?

Mr. D'AMATO. I recognize the concern that environmental estrogens and other hormone mimics may cause significant effects on nonhuman species. However, the top priority of this amendment is to learn more about substances that may lead to breast and other related forms of cancer in humans. It is silent about the possibility that effects may occur in other species and leaves that judgment to the Administrator.

Mr. D'AMATO. Yes. For example, if the Administrator so chose, she could include screening for male reproductive effects, effects to the immune system, and so forth. Would the Senator address a question about the scope of the amendment?

Mr. D'AMATO. Mr. President, I want to commend and thank the managers of this bill for including in the manager's amendment package our amendment establishing an estrogenic chemicals screening program at EPA. This amendment is identical to an amendment that was adopted unanimously by the Senate when offered by my senior colleague from New York and myself during consideration of the Safe Drinking Water Act in the 103d Congress. The amendment requires EPA to gather information that may prove essential in the war against breast cancer. Specifically, this amendment will require the EPA to develop and implement a testing program to identify pesticides and other chemicals that can cause estrogenic and other biological effects in humans, and to report their findings to Congress within 4 years. This amendment is critical in view of growing evidence linking environmental chemicals that are capable of mimicking or blocking the action of the hormone estrogen to a host of developmental and reproductive abnormalities in wildlife and humans. The most alarming findings suggest a link between exposure to these chemicals and the dramatic increase in human breast cancer that has become so tragically apparent in our Nation over the past several decades. In 1960, the chances of a woman developing breast cancer were 1 in 14. Today, they are one in eight. This year alone, breast cancer will strike an estimated 182,000 American women, and will take the lives of over 46,000. It has become the most common female cancer and the leading cause of death among American women between the ages of 35 and 54. For years, researchers have understood that breast cancer is influenced by how much estrogen a woman produces. If you take the existing known risk factors--including early puberty, late menopause, delayed childbearing, or having no children at all--they have one thing in common: they all contribute to a high lifetime exposure to estrogen. There is clear evidence that the more estrogen a woman is exposed to in her lifetime, the higher her risk of developing breast cancer. Recently, scientists have been taking a close look at the relation between so-called xeno-estrogens and increased breast cancer risk. It is theorized that these estrogenic materials--which include pesticides and other chemicals capable of affecting the internal production of the hormone estrogen--may hold the key to explaining some of the 70 percent of all breast cancer cases not associated with any of the existing known risk factors. The research is compelling. Perhaps the most startling findings are those of Dr. Mary Wolff of Mt. Sinai Medical Center, whose research involved the estrogenic chemicals PCB and DDE, which is a breakdown product of the pesticide DDT. Dr. Wolff tested the blood of 58 women with breast cancer and compared it to that of 171 women who were cancer-free, taking pains to ensure that the women were identical when it came to age, childbearing history, and every other characteristic known to influence breast cancer risk. She found that the women who had developed breast cancer had PCB levels in their blood that were 15 percent higher than the cancer-free women, and DDE levels that were 35 percent higher. She also discovered that as the level of DDE increased, so did the risk of developing breast cancer--to the extent that the women with the highest DDE levels were four times as likely to get breast cancer as those with the lowest levels. A subsequent study by Canadian researchers, published on February 2, 1994, in the Journal of the National Cancer Institute, found a further link between DDE levels in breast tissue and the development of breast cancer. [[Page S 17750]] In this case, higher DDE levels were associated with a higher risk for a particular-type of breast cancer which feeds on estrogen--a type of breast cancer which, according to researchers, has made up a larger and larger portion of the increase in breast cancer in recent years. In the words of the study's authors, ``this study supports the hypothesis that exposure to estrogenic organochlorine may affect the incidence of hormone-responsive breast cancer.'' The women of Long Island, NY, have long suspected a connection between the region's unusually high breast cancer rates and the exceptional concentrations of DDT and other potentially estrogenic pesticides that were once applied in an effort to rid former potato fields of a parasite known as the golden nematode. Women who have grown up and raised families in residential subdivisions that were built on top of these abandoned potato fields have good reasons to be suspicious. Not least of these is the recent finding that if you are a woman and you have lived in Nassau County for more than 40 years, your risk of getting breast cancer is 72 percent greater than a woman of the same age who has lived in the county for less than 20 years. The National Cancer Institute is now in the process of further examining the connection between breast cancer and xeno-estrogens as part of a comprehensive study into the causes of Long Island's high breast cancer rates. Their findings--expected within the next several years--will contribute greatly to our knowledge base about this important issue. As we wait for the results of this and other studies, it is vital that we begin to systematically identify those pesticides and other compounds present in the environment that possess estrogenic properties. We must do this so we will be ready, should further research confirm a clear link between these substances and breast cancer, to take appropriate steps to protect the public. This amendment will give us some of the information needed to begin taking these steps should they become necessary. The amendment would require the EPA to utilize appropriate, scientifically validated test systems as part of a screening program to identify pesticides and other substances capable of altering estrogenic activity in the human body. Several quick and inexpensive test systems have been developed in recent years which could potentially be utilized in such a screening program. Examples include tests developed by Dr. Ana M. Soto of Tufts University School of Medicine in Boston and Dr. Leon Bradlow of the Strang-Cornell Cancer Research Laboratory in New York, as well as a third test utilizing state-of-the-art biotechnology techniques described recently in Environmental Health Perspectives by Dr. John McLachlan of the National Institute of Environmental Health Sciences. Because these tests are simple, inexpensive and quick, they are well suited for the kind of large-scale screening needed to identify potentially hazardous estrogenic compounds. Since reproduction requires complex interactions between hormones and cells in the intact body, the tests are not intended to replace existing animal testing models, but to complement them by quickly flagging suspect compounds which can then be targeted for additional testing or public health approaches. Given the availability of these new techniques, I was shocked when I learned 2 years ago that EPA does not routinely screen pesticides for estrogenicity. I raised this concern in testimony before a joint hearing of House Subcommittee on Health and the Environment and the Senate Committee on Labor and Human Resources on September 21, 1993. In my testimony I called for a much more aggressive EPA response to the evidence which has been put forward linking estrogenic chemicals and breast cancer. The EPA has now become more interested in this area--for which I commend and encourage them. But I would like to encourage them further by requiring them to undertake the kind of widespread screening program that our Nation's breast cancer epidemic demands, utilizing appropriate, scientifically validated testing techniques, coupled with a research program to understand the health risks associated with exposure to xenoestrogens. This amendment would ensure that such a program is underway within 1 year, and would give the EPA Administrator a deadline of 2 years to implement a peer-reviewed plan, with a report to Congress due in 4 years detailing the program's findings and any recommendations for further action the administrator deems appropriate. Mr. President, we simply cannot afford to wait until we have a smoking gun before we act to identify those chemicals in the environment that are estrogenic. Breast cancer is claiming the lives of women in this country at a rate of one death every 11 minutes. It would be unconscionable not to arm ourselves with crucial knowledge about chemicals that may be contributing to this scourge so that we can rapidly implement appropriate public health measures when scientific research indicates they are warranted. Mr. President, this amendment will ensure that we are armed with this crucial information, and I again thank the managers for agreeing to accept this amendment. Pesticide Chemical Screening Amendment

Mr. D'AMATO. When the results of the screening study become available, subsection g(6) directs the Administrator to ``. . . take such action, including appropriate regulatory action by rule or by order under statutory authority available to the Administrator, as is necessary to ensure the protection of public health.'' Is the intent that the Administrator regulate all substances found positive in the study under the amendment?

Mr. D'AMATO. Certainly.

Mr. D'AMATO. What happens once the screening study called for in this amendment is completed? [[Page S 17751]]

Mr. D'AMATO

Mr. D'AMATO. Mr. President, on behalf of myself and Senator Moynihan, I wish to thank Senator Chafee and Senator Kempthorne for accepting this crucial amendment--an amendment that will protect the drinking water of 9 million persons. New York City is home to our Nation's largest unfiltered surface water supply delivering 1.5 billion gallons per day. It is also, arguably, our Nation's best drinking water. To many, it would seem implausible that our Nation's largest city could have such high quality water and not require extensive filtration. However, extensive measures have been taken over the years to ensure the purity of New York City's water. New York City's watershed actually consists of three distinct geographic areas that cover some 1,900 square miles in 8 counties in New York State--an area approximately the size of Rhode Island. Due to an act of the New York Legislature in 1907, and further amendments in 1953, New York City has been able to regulate activities that affect water quality in the watershed area. This capability caused its share of suspicion among farmers, homeowners, and local elected officials in the upstate watershed. As one might suspect, these individuals did not necessarily appreciate the city having a say as to how they could utilize their land. With development creeping out of the metropolitan area and into the watershed area, many became concerned about the consequences of such growth on water quality. Echoing that concern, under the auspices of the 1986 Safe Drinking Water Act amendments, the EPA required New York City in 1989 to either further protect the watershed or filter. It was apparent that enhanced protection efforts would be necessary if the water supply for the city was to be preserved without spending billions of dollars to build filtration plants. This set in motion the impetus to negotiate a filtration avoidance plan that would meet the approval of the EPA, provide safe drinking water to New York City residents, and preserve the rights of upstate New Yorkers to prudently utilize their land. Until recently, the ability to balance all of these needs had not proven entirely successful and watershed protection efforts stalled. In early November, though, New York Governor George Pataki announced what many had thought impossible. In an unprecedented agreement, the State of New York, the city of New York, environmentalists, local elected officials within the watershed and the Environmental Protection Agency all gave their approval to a plan to protect the New York City watershed and avoid large-scale filtration. Under the terms of the agreement, a total of $1.2 billion will be spent by the city of New York over the next 15 years for water quality protection programs while upstate communities will continue to be able to grow and prosper in environmentally responsible ways. Specifically, the city expects to increase its landholdings in the watershed threefold spending a minimum of $260 million for purchases in the most sensitive areas from willing sellers. Also, the city will spend close to $400 million on water quality protection programs in the watershed communities in addition to the programs required to be undertaken by EPA for the city to avoid filtration. Also, a new regional watershed council will be created to serve in an advisory role. The city will continue its plans to spend over $600 million in already committed funds to build a filtration plant for the Croton watershed. Finally, the New York State Department of Health will approve and promulgate new watershed regulations to replace the existing outdated regulations. By undertaking these activities, the city of New York will avoid the construction of a filtration system for the Catskill/Delaware watershed costing upwards of $8 billion. The construction of such massive filtration plants would have likely dramatically increased water payments for each household in New York City. While this historic agreement will lay the groundwork for the protection of New York's watershed, it will only be successful if effective and sophisticated monitoring is in place. It would not be fiscally wise to spend over $1 billion without an ability to determine whether the protection efforts are working. To address this concern, Senator Moynihan and I have offered this amendment that will allow the EPA to spend up to $15 million per year for 7 years in the State of New York in order to monitor and implement a host of watershed protection programs in the New York City watershed. Some of the projects that will be undertaken and in need of Federal assistance are: a phosphorus offset program designed to reduce the total amount of phosphorus in sensitive watershed basins; wastewater diversion; wastewater micro-filtration treatment; enhanced stormwater control activities; and agricultural and forestry best management practices. Federal funding could be utilized for up to 35 percent of a project's total cost. Should water quality decline, the EPA will have the ability to demand appropriate changes. Our amendment is a perfect complement to the efforts being undertaken in New York State to protect the watershed in a scientifically sound and fiscally responsible manner. Under our amendment, scientists will be better able to monitor the quality of the drinking water of some 9 million people and prevent degradation of this vital watershed before it becomes a matter of concern. This will be able to be done at a spend-out rate of $12 to every $1 spent by the Federal Government. I am pleased that the managers of this bill agree with the need to protect this precious resource. With the passage of this amendment, the State of [[Page S 17766]] New York will be given an opportunity to further protect its valuable watershed. I am confident that the efforts undertaken in New York will be able to serve as a model for similar activities in other parts of the country.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I am pleased to be a cosponsor of S. 978, the Charitable Giving Protection Act of 1995, introduced by Senators Hutchison and Dodd. Charitable organizations serve a vital and unique role in meeting the needs of the American people. Religious, educational, benevolent, fraternal, and other charitable organizations depend on donations to fund their operations. Congress must see to it that charitable giving is encouraged to ensure that these critical donations continue. Charitable gift annuities enable individuals to make a donation to charity and receive lifetime interest payments based on the donation's return. The SEC has determined that these types of donations do not involve an investment strategy and thus are not securities that would otherwise have to be registered. Recently, however, a lawsuit has put into question whether charitable income funds need to be registered under the Federal securities laws. The threat of litigation would deter individuals from making this type of donation and prevent charitable organizations from raising funds in this manner. S. 978 will allow charitable institutions to continue raising vital funds through special investments and charitable gift annuities--without the threat of litigation. The Charitable Giving Protection Act clarifies that the charitable income funds are not required to register under the Federal securities laws. This legislation would codify the long-standing SEC practice of exempting charitable organizations from registration requirements. This legislation maintains critical investor protection provisions of the Federal securities laws. It does not exclude charitable organizations from the antifraud or disclosure provisions of the Federal securities laws. These important investor provisions must be retained to protect individuals who make the donations to charitable organizations. This legislation provides the appropriate relief to charities so they can raise and manage their money without compromising investor protections. The chief watchdog of the securities markets, the SEC, also supports the goals of this legislation. During House Commerce Committee hearings on a companion bill, the SEC's Director of the Division of Investment Management, Barry Barbash, testified: ``the Commission believes that the Philanthropy Protection Act provides an appropriate level of investor protection while not encumbering charitable organizations with the burdens of full compliance with the securities laws.'' I am pleased to be a cosponsor of S. 978. Last night, the House companion bills, H.R. 2145, the Philanthropy Protection Act and H.R. 2525, the Charitable Gift Annuity Antitrust Relief Act of 1995 passed by a unanimous vote of the House of Representatives. I urge the Senate to act quickly on this important legislation.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I rise today to comment briefly on the aftermath of the assassination of Israeli Prime Minister Yitzhak Rabin. Following this tragedy, there was a great hue and cry as to who was responsible for the assassination. I would like to state that this is not a time for finger pointing, it is a time for investigating all those responsible for this murder and then, and only then can we accurately ascribe blame. At any rate, we must concur on one point: reasonable people can disagree, but murder is not a recourse or solution to a problem. In light of this, I would ask that the text of a message of thanks from the Conference of Presidents of Major American Jewish Organizations to all those who offered their condolences be printed in the Record at the conclusion of my remarks. The text of the message follows: [From the New York Times Nov. 21, 1995] Thank You to All Who Joined in Saying ``Shalom Chaver'' (By the Conference of Presidents of Major American Jewish Organizations, Leon Levy, Chairman, Malcolm Hoenien, Exec. Vice Chairman) We deeply appreciate the outpouring of condolences and solidarity from the bipartisan leadership of our country led by the President and our fellow Americans of all faiths, races and walks of life following the tragic assassination of Israel's Prime Minister Yizhak Rabin. This was a remarkable demonstration of the American spirit and the bonds of humanity that link us all. It also reflects the special relationship with the state and people of Israel and support for the peace process. The countless expressions of concern and caring will be a lasting remembrance and an inspiration for the future. This ad made possible by a grateful Jewish American.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I rise today to deplore Iran's abominable human rights practices, and to remind my colleagues that Iran's continued abuse of the fundamental rights of its own citizens is one of the reasons why I have offered legislation intended to increase economic pressure on this outlaw regime in Tehran. Human rights organizations all over the world have been deploring the Islamic Republic of Iran's human rights abuses against women, religious and ethnic minorities for years. This is a country that sentences women to death for adultery, and then carries out the death penalty by bundling them into a postal sac and throwing them from the roof of a 10-story building. This is a country that still carries out public stonings, and even has a strict legal code to govern the size stones citizens are to use to stone their fellow citizens. Stones too large are not to be used, because death will be inflicted too quickly. Stones too small are to be avoided, because death doesn't come at all. The stones have to be just the right size to allow the victim to suffer for a very long time, and to ensure that they will die of their wounds. This is a country that continues to use paramilitary security forces to harass and intimidate people in the street, and that closes newspapers because of a political cartoon comparing the Supreme Leader to a comic strip figure. This is a country where to be a candidate in an election you must first be deemed to be a supporter of the sitting Government. And this is a country, Mr. President, that continues to be cited, year after year, by the Special Representative of the U.N. Subcommission on Human Rights for its systematic use of torture, arbitrary arrests, and summary executions. These practices were described in an article appearing in a Paris- based newsletter nearly 5 years ago, which I ask to have printed in the Record at the conclusion of my remarks, along with more recent material supplied to my office by the Foundation for Democracy in Iran, a human rights advocacy group. Mr. President, I would like to call your attention to a few of the lesser known human rights abuses of the clerical regime in Tehran: its repression of religious and ethnic minorities. As cited by the 1995 report of Middle East Watch, and the February 1994 report of U.N. Special Representative on Human Rights for Iran, the Iranian security forces conduct arbitrary arrests of Kurdish, Balouch, Turkomen, and other ethnic minorities, and to subject these minorities to cruel and degrading punishments in Iranian jails, including torture and summary execution. Similarly, as the State Department's February 1995 Report on Human Rights points out, the clerical regime discriminates against citizens of other religious persuasions than the dominant Shiite Moslem faith. Baha'is, Jews, and Sunni Muslims have been arrested over the past year for no other reason than their faith, and some of these individuals have been executed. In fact, the Islamic Republic has engaged in a deliberate policy to suppress the rights of its Sunni minority, and in particular members of the Balouchi tribes in eastern Iran. On February 1, 1994, riots broke out in Zahedan, Mashed, and Khaf after 500 municipal workers demolished a Sunni mosque in the Zahedan district. On January 10, 1993, Iranian Revolutionary Guards troops attacked Balouchi residents in the village of Robat, when the homes of an estimated 50 families were set on fire in an attempt to secure a single individual, Haji Pirdad. The U.N. Special Representative for Human Rights reported on February 2, 1994 that 20 Balouchis were executed in December 1992 and February 1993 in Zahedan prison, while Amnesty International reported that 42 Balouchis including minors were executed between November 1991 and March 1992. I believe, Mr. President, that this behavior by the Islamic Republic just goes to show that we are dealing with an outlaw regime that cares little about its own people. If it cares so little about its own people, how will it act toward others? Iran is isolated and universally viewed as a pariah state. Its actions are abhorrent to the civilized world. As long as this warped, terroristic regime continues to punish the Iranian people with its misrule, this condition will continue. The tyrants in Tehran must understand their aggression and abuse of the good people of Iran will not last, and one day they will be brought to task for their actions. While the tyrants continue to rule in Tehran, sanctions are a clear way to keep up the pressure on Iran and to deny them the ability to carry out their aggression on the outside world as well as against their own people. We do not take these issues lightly. It is a pity that the regime cannot act like a civilized country and not be so abusive. If only Iran would not conduct these brutal actions, we would not have to place sanctions on it. The article follows: [From Mednews, No. 4.4, Dec. 3, 1990] Human Rights Abuses in Iran The ``moderate'' regime in Tehran so dear to Washington policymakers has failed the test again--the test of human rights. Three recent reports on human rights abuses in Iran show beyond a doubt that extreme caution is still needed in dealings with the current regime in Iran. The reports were prepared independently by Amnesty International, the United Nations, a Paris-based Iranian exile group, the Foundation for the Independence of Iran. All three conclude unequivocally that human rights abuses have increased markedly since the end of the Gulf war, despite Iranian government claims to the contrary. In his second report in thirteen months, which was released in late November, the UN's Reynaldo Galindo Pohl confirms that at least 113 Iranians have been executed since March 21, the start of the Iranian New Year. In fact, Pohl's figures fall far short of the mark--once again. Accounts published in the official Iranian media alone show more than 600 deaths by execution since March 21. Last year, that figure reached 2,500. When he questioned the Iranian authorities about the executions during his first visit to Tehran during the fall of 1989, Mr. Pohl was told that the victims were ``ordinary criminals,'' not political prisoners, and that all had been ``treated in confirmity with the Ta'zirat and the standards of Islamic law.'' Allegations of torture and summary execution were groundless, Pohl explained, since Iran did not maintain that its laws adhered to the universal declaration of human rights. Amnesty International recently quoted Iran's ``Islamic'' law on lapidation and concluded: ``In Iran, stoning someone to death isn't against the law. Using the wrong stone is.'' [See illustration.] Yet another Amnesty report on Human Rights abuses in Iran is scheduled for release on December 5. The Foundation for the Independence of Iran has chosen to stick to accounts published in the Iranian press, and recently presented a detailed report to the French government on human rights abuses in Iran. Here are just a few of the more startling examples the Foundation discovered: July 26: Keyhan announces that forty women have recently been stoned to death. ``Whippings, sectioning of fingers and hands are common punishments'' in Iranian prisons. August 17: The Iranian Press Agency (Irna), quoted by Nimrooz, acknowledges that 14,000 persons have been arrested during the past two months, mostly for drug trafficking. On the personal orders of President Rafsanjani and Intelligence Minister Fallayian, they were deported to work camps on the Island of Endourabi. August 24: Nimrooz reported that a woman accused by her husband of infidelity was sentenced to an unusual death in Tehran. She was sewn into a burlap bag and thrown off the roof of the Ministry of Justice. August 30: Keyhan reports that 45-year old Ebaolollah Kiani was condemned to death by stoning in the central square of the town of Nahavandi, for having had intercourse with a woman. [[Page S 17535]] August 31: Nimrooz reports that anti-government slogans chanted during a football match in Tehran led to mass arrests. Two thousand persons received prison terms ranging from 5 years to life, while many others were executed, [Opposition sources believe as many as 400 were sentenced to death]. September 7: Nimrooz reports that a fight between two men in the town of Rey ended in blows and the death of one of the men, Hassan Ahmadi. As punishment, the mollahs of the town ordered that his assailant, Nader Zandi, be taken to the town square and beaten to death by the crowd, under the principle ``an eye for an eye . . .'' September 13: Keyhan lists the names of 51 persons who were hanged in a single day in the cities of Mashad and Khach, on charges of drug-trafficking and illegal possession of weapons. October 4: Keyhan lists the names of 65 persons executed by hanging in the towns of Mashad, Zahedan, Malayer, Busheir, Ardebil, and Sabzevar. In Kermanshah two petty criminals had fingers chopped off as punishment for theft. Meeting with members of the French government's Human Rights Commission on November 22, the Foundation's President, Colonel Hassan Aghilipour, noted that the new European Charter just signed by 34 heads of State in Paris ``devoted 45 lines to human rights,'' while in Iran executions and deportations were occurring daily. ``There are 150,000 Iranians now condemned to Islamic gulags in the southeast of Iran and on the Persian Gulf islands,'' Aghilipour said.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I rise this afternoon to strongly support and endorse the underlying resolution, House Joint Resolution 122, called the continuing resolution. I doubt if the American people really know what a continuing resolution is, but let me say one thing. I have no doubt that the American people are absolutely fed up with what they see going on. I have no doubt that the American people do not want us to continue doing business as usual. Some want us to just continue our merry way--spend and spend, tax and tax for programs that they have decided are good for the American people whether they like them or not. We have colleagues here who have said we are going to give the American people health care whether they like it or not. That is the kind of attitude. That is why the people are angry. People voted for change. They voted for change in 1992. They did. And in 1994, when they saw that it did not happen, they said, by gosh, we want you to change things. We want you to really keep your commitment. Now, President Clinton, for all his noble politicking--and he is good at it--has a happy facility of forgetting what he says. He will say just about anything to get your vote or to go up in the popularity polls, and then when it becomes a little tough, he goes the other way or conveniently forgets when the pressures from his party come up. When he ran in 1992, he was the new Democrat. He was going to change things. He was going to cut taxes for working middle-class families. That was his promise. Not only was he going to cut taxes, he was going to balance the budget in 5 years--not 7 years, not 10 years--5 years. Promises made; promises broken. And that is why in 1994 you saw a revolution. People said, we are sick and tired of it. And we want people who are going to go down and do the job. All over the country they sent a message. [[Page S 17141]] Wherever there was an open seat, they elected Republicans who said, yes, we are going to cut taxes, cut spending, we are going to let middle-class working families keep their money, and we are going to have less Government--that was the message--and balance the budget over 7 years. Here you have a President that said, ``I'm willing to balance the budget in 5 years.'' And yet he is having trouble saying, ``Yes, I'll do it in 7.'' Here is a President who said we are going to use the real legitimate figures to ascertain what economic growth is, how much money we owe, how much money we do not. That is called the Congressional Budget Office, CBO. Most Americans do not understand, but here is the President, and he says, ``I'm going to balance the budget in 5 years. And I'm going to give tax cuts to working middle-class families. We're going to use the Congressional Budget Office to be the official accounter for whether or not a budget is in balance,'' and now, 1995, he has forgotten that. I am proud that those men and women who were elected for change are down here fighting for change. I do not think we are doing a good job in getting the message out. I think we are doing a terrible job. I think the President is beating our pants off. And the media loves him and they play his score. What do we hear? We hear the President sanctimoniously saying, ``I have to tell you I'm not going to allow them to cut programs for the senior citizens, Medicare, Medicaid, and give tax breaks to the wealthy.'' That is hokum, Mr. President. That is just simply an overstatement and an exaggeration that comes down to being untruthful. It is disingenuous. As a matter of fact, the cuts he has proposed in Medicare, or reducing the rate of growth, in many cases, parallel those that we have put forth, in many cases. Now, let us take a look at the so-called tax cuts for the wealthy. We have proposed, and the President will not even come to the table to discuss it, a package of $245 billion worth of tax cuts. Here is a famous Governor from my State, a Democrat, who said something many years ago that we should refer to. He said, ``Let's look at the record.'' So we look at the record to see exactly where the so-called tax cuts go. We will find they do not go to the wealthy people. Indeed, 70 percent, $171.46 billion, 70 percent, goes to family relief. I hear all of this jargon and all this talking and all the crocodile tears about ``we care about families.'' Well, we do. We really do. And that is what this tax package puts forth, $171.46 billion in tax relief for the working middle-class families of America. And indeed, the child tax credit, if you are talking about one person, it is phased out at $70,000; a couple it is phased out at $110,000. So we are talking about giving relief for families under $100,000. Most of them, the bulk of them, fall in this $50,000 to $70,000, $45,000 to $70,000 area. They are not wealthy people. So 70 percent--and let me give you a breakdown. When we talk about the child tax credit, that means if you have a child you will get back $500 in taxes that you would otherwise pay. A family of three, $1,500. That is pretty good. Families earning $45,000 a year, that means they can keep $1,500 that they can invest, that they can spend, that they can save. They will make a determination, not some bureaucrat down in Washington. I like that. That is $147 billion of the total of $245 billion that just goes to families who have children. Mr. President, I heard a lot of talk about the marriage penalty. I daresay, many people will say, what are you talking about, a marriage penalty? Under the Tax Code, if a couple gets married, they can have the same incomes, they join, and they wind up paying more than if they lived separate and apart or lived together and were not married. It is called a marriage penalty. We are talking about trying to bring American families together, helping families. Government cannot do it by way of stepping in itself. But it can relieve some of the inequities, some of the burdens. They can say, if you have children, you are to get $500; if you are going to get married, we are not going to penalize you for getting married. We begin to phase it out. That is a small step. That is $8 billion worth of relief. Let me ask you, Mr. President, is a child tax credit for the wealthy or is it really going to most working middle-class families? Is phasing out the marriage penalty for the wealthy or is it going to working middle-class families who are being penalized for doing, I guess, that which we want to encourage--people getting married--as opposed to people living together who do not get married paying less taxes? We penalize people for getting married? There was this--ever since I was a kid I heard politicians talking about doing away with this, phasing it out. Here we start to do it. That is $8 billion. We talk about the homeless and we talk about abandoned children and we talk about those who need help. And almost $2 billion, $1.9 billion, in this family package--you know, you hear ``family friendly''--this is a tax-friendly package. It is a tax-friendly package for families. And $2 billion is to be provided for those families who want to adopt children. It seems to me we have had so much in the way of discourse and disagreement as it relates to children, those who are unwanted. And here we provide an opportunity for those families who are willing to take in children, to make it possible for them to pay the cost that otherwise, in many cases, would keep poor families and working middle- class families from adopting a youngster who would have no home, who would be in foster care, who would be a charge of the State. That is $2 billion. I do not hear anybody--Mr. President, why do you not tell the American people? Do you support giving credits for families who are going to adopt children or are you opposed to it? Are you opposed to a $500 tax credit for children for working families? Are you for it or against it? Do you want to keep the marriage penalty in place? Are you for it or against it? Is that for the wealthy families or is that for middle-class Americans? Student loans: We provide $1 billion to help. I would like to see it more. And maybe if we got to compromise and sat down with the President, began the work, we would find some more money for students. Mr. President, $1 billion. Tax deductions for elderly parents living with their children: Do we want to see elderly parents placed as charges of the State who are poor or do we want to provide some incentive for youngsters to keep their elderly parents in their homes? That is almost $1 billion. We add that up, it is almost $160 billion, Mr. President. Now, let me tell you, I said $171 billion. And 70 percent of all the taxes go to families. I am a little bit short, $11.8 billion short. IRA's, individual retirement account: One of the things we do is we say, for those spouses who are taking care of children, who are taking care of the home, should they not be entitled to an IRA and not be able to put $2,000 aside for their retirement for the days when they become elderly? Is that something that is used by the wealthy or is it something that will be used by working middle-class families? The vast bulk of that will be working-class families. So $11.8 billion in individual retirement accounts is made available. So, Mr. President, we come up to $171.46 billion, and 70 percent of the so-called tax cut for the wealthy goes to families. If you make more than $110,000, you do not qualify for most of that or any of that. Where does the balance go? Let me talk to you about some of the balance. Long-term care insurance: a deduction. All right. Should people be permitted to go out and buy insurance for their long-term care if they have a catastrophe or do you want them to be Government charges? We provide $5.7 billion. A 50 percent deduction for small business insurance, $1 billion. That is $6.7 billion. Small business being able to deduct expenses for purchases of equipment, $3 billion. Mr. President, I submit to you that when President Clinton says that we are cutting programs to advantage the wealthy, that is just not true. It is disingenuous. And I would debate with the President any time on the business of whether or not we should have a tax cut that is going to help create jobs, because let me tell you something, I--think we do need that. I think we need a capital gains tax cut. And we do provide for that, and it does and will help creativity, job expansion, capital formation. It will [[Page S 17142]] bring about more in the way of jobs and more in the way of revenue. And, indeed, as Al Smith said, ``Let's look at the record.'' It was John F. Kennedy who brought in a capital gains tax cut that produced revenue. Somehow our colleagues like to forget that. If you give business the opportunity to expand, reward people for investment, they will do exactly that, you will get more economic activity, you will get more jobs, you will get more growth. So, Mr. President, with any reasonable calculations, more than 80 percent of tax cuts that we have provided will go to individuals earning less than $100,000, and those tax breaks that go for capital gains tax cuts, I submit to you, in the fullness of time, will advantage more working people, more middle-class people, more poor people than bigger spending, than larger deficits I think that President Clinton has an obligation to sign the balanced budget act into law and stop playing political games with the economic well-being of our country, and that is exactly what he is doing. He will be taking a poll in about 2 hours, and his pollster will come in and tell him whether or not he is gaining on extending this politically. If they say he continues to gain, he is going to draw this out. At some point in time the people are going to really make it known they are holding him responsible, too, and maybe then he will begin to bargain in good faith. I think that is a heck of a way to run Government or make policy. I submit to you that is exactly what is taking place. The American people want us to balance the budget, and what this continuing resolution says is we will give you until December 5 to do exactly that. Listen to the great commitment it has. It is a commitment that anybody should be willing to sign off on. It continues Government basically at the same spending levels. Oh, you can make an argument that there is a little percent here or there that is out of whack, but it continues the essential programs that people want and need. Then it says in section 301(a): The President and the Congress shall enact legislation in the 104th Congress to achieve a unified balanced budget no later than the fiscal year 2002 as scored by the non-partisan Congressional Budget Office. Putting aside the legalese, that means the President would be committed, he will be making a commitment that he is going to work for a balanced budget over the next 7 years. That is the basis on which we go forward. We do not say it is our numbers, our programs, he has to agree with all our tax cuts and tax programs. But we do say we have to have an honest method of accounting, not pie in the sky. By the way, I have been here when I have seen pie in the sky. I have been here when Dave Stockman cooked the books and projected economic growth that was unrealistic and interest rates that could absolutely not be achieved. If you want to balance the budget, predict a 4-percent economic growth when, indeed, it is 2.3. That will bring you in tens and tens of billions of dollars of extra revenue. Therefore you say, ``I balanced the budget.'' You predict the interest rates are going to be lower and you predict billions of dollars. That is why we insist we use an honest scorekeeper, not your scorekeeper or mine--an honest one. If, when the President took office, he said he was going to use the Congressional Budget Office to be that official scorekeeper, what is wrong today? What has changed? Promises made, promises broken. The President says, ``When I'm elected, I'm going to cut middle-class taxes.'' He raised them. Then he had to say, ``I made a mistake.'' Did he make a mistake when he said we will use the Congressional Budget Office as the official scorekeeper to determine whether or not we are really going to have a balanced budget? What did he mean and when did he mean it? Was he just kidding us when he made that promise to the American people, when he came before and addressed the Congress and said, ``We are going to use the CBO''? Was he kidding then and is he serious now, or is he kidding now and was he serious then? Is he jockeying for partisan political advantage, and I fear he is? I think the American people know that. The American people are not exactly throwing bouquets at us, because I think we have done a poor job in explaining what we are trying to do here. I really do. Whether or not I got off the back of the plane, the beginning of the plane, the side of the plane, they would not even let me on the plane. So what? And let me tell you, I went on a different plane and they did not even want me to go on that plane. They did everything they could to keep me from going. And that is a fact. That is a fact. You want to talk about partisanship, well, let us put the partisanship away. Let us do the business of the people. I want to tell you something, if this goes on much longer--the American people are fed up. They want a balanced budget, they want us to cut taxes, they want us to give future generations the economic opportunity that they are entitled to. They expect us to make the tough decisions, and if we continue this nonsense, they are going to say ``a plague on both your houses,'' and they will be right. That means we have to stand tall and call them the way we see them, and we also have to be open and ready to deal with the President, but to deal with him honestly, and he has to deal with us honestly and not the political sloganeering. So, Mr. President, I support the commitment to go forward, to extend, yes, and to continue spending for a limited period of time basically at the same rate for the next 2 weeks provided that the President says he agrees he is committed to balancing the budget using real numbers, using the Congressional Budget Office as the real referees, not my favorite guy or his favorite guy, not someone who is going to cook the books to disadvantage one side as opposed to the other, but an honest scorekeeper. The American people are entitled to that. I ask the President of the United States, ``You tell us why you have changed your mind now, why you want a new referee, your referee to call the game your way? Are you really serious about doing the business of the people and bringing in that impartial referee and getting down to doing the business of the people?'' That is what they expect. Several Senators addressed the Chair.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I am introducing today the Thrift Charter Conversion Act. I am introducing the bill exactly as it was reported out by the Subcommittee on Financial Services and Consumer Credit of the House Committee on Banking and Financial Services. I am doing this in the spirit of cooperation exhibited during the House and Senate collaboration during the reconciliation process, particularly in recapitalizing the Savings Association Insurance Fund--an action which will increase public confidence in our Federal deposit insurance system and avoid any further costs to the taxpayers. This bill would eliminate the specialized Federal thrift charter, merge the Federal thrift industry into the banking industry, and consolidate the federal thrift and bank regulatory agencies. It would create a safer and sounder and more rational framework for depository institutions. While I do not endorse all of the provisions of the House bill, I am committed to its basic goal of merging the thrift and bank charters. The Senate Banking Committee will commence its consideration of this bill immediately, and I am committed to completing this legislative task as quickly as possible consistent with the other obligations of the Banking Committee. Mr. President, I am committed to the goal of minimizing--and eliminating to the extent possible--the risks to the taxpayer that will inevitably result from the continued existence of the thrift industry. Earlier this year, I took the first step toward this goal by introducing legislation to merge the separate federal deposit insurance funds for banks and thrifts. The introduction of the Thrift Charter Conversion Act is an important final step toward that goal. I want to commend my colleagues in the House for their leadership on this essential next step of merging the thrift and bank charters. The House and Senate Banking Committees considered including charter merger provisions in the budget reconciliation legislation, but Senate procedural rules prohibited us from including such provisions. The House reconciliation bill contained the text of the measure that I am introducing today. I want to commend Representative Marge Roukema, chairman of the Subcommittee on Financial Institutions and Consumer Credit, and full committee Chairman Leach for their work on this bill. Mr. President, our Nation's thrift industry has helped Americans finance their homes for over 160 years--with remarkable success. As we have witnessed during the past two decades, however, it has also experienced serious financial difficulties. These difficulties eventually led to the industry's collapse during the 1980's--a collapse that has cost the American taxpayers more than $150 billion. Despite the massive bailout and the numerous laws enacted to stabilize the thrift industry, serious problems continue to plague our Nation's thrift industry. Congress cannot ignore these problems. Congress must act now before our Nation's taxpayers are asked to pay for another bailout of the thrift industry. I am pleased that under the leadership of the House and Senate Banking Committees, Congress is already taking action to protect the American taxpayer and to avoid another thrift industry crisis. Last week, the House and Senate Banking Committees agreed to a proposal to recapitalize the ailing Federal deposit insurance fund for thrifts-- called the Savings Association Insurance Fund [SAIF]. The SAIF is now so undercapitalized that the failure of one large thrift could bankrupt it. The proposal agreed to last week will recapitalize the fund-using industry--not taxpayer--money. Because the proposal saves the American taxpayers some $900 million, it has been included in Congress' budget reconciliation package--a package designed to eliminate the budget deficit in 7 years. Mr. President, despite the recapitalization of SAIF, the thrift industry continues to pose serious and chronic safety and soundness risks to our Nation's Federal deposit insurance system. In an October 31, 1995 letter to me, Ricki Helfer, Chairman of the FDIC, explained why thrifts pose a greater safety and soundness risk of the Federal deposit insurance system than do banks, even with a recapitalized insurance fund: Relative to the Bank Insurance Fund [BIF], the SAIF faces risks related to the size of its membership, geographic and product concentrations, and inherent structural problems in the industry. The SAIF has fewer members than the BIF and faces greater risks with the failure of any one member. The SAIF also has a geographic concentration on the West coast. The eight largest SAIF-insured thrifts operate predominantly in California, and they hold 18.5 percent of SAIF-insured deposits. By contrast, the eight largest holders of BIF- insured deposits are located in five different states and hold 10 percent of BIF-insured deposits. SAIF members' assets are concentrated in residential real estate . . . to realize certain tax benefits. While traditional residential real estate lending can be managed in such a way as to present relatively little credit risk, substantial concentrations in the area make SAIF members susceptible to interest-rate fluctuations. In an August 29, 1995, report, entitled ``The Thrift Charter: Should It Be Eliminated?'' the Congressional Research Service also noted that their specialization in housing finance makes thrifts more vulnerable than banks to an economic downturn: Support for a more flexible [thrift] charter stems from interest in protecting the Federal deposit insurance system. . . . Lending and deposit options for thrifts have been broadened over the past several years, nonetheless, thrifts' deposit and lending base is still less diversified than banks because of their specialization in housing finance. There is concern that this lack of diversification could cause institutional weaknesses in an unfavorable economic climate. Thus, an important goal of charter merger legislation is to decrease the significant safety and soundness risks posed by thrifts to the Federal deposit insurance system. In addition, fundamental changes in the marketplace have called into question the need for a specialized thrift industry. The role played by thrifts in the housing finance market has declined significantly. Testifying before the House Subcommittee on Financial Institutions and Consumer Credit on August 2, 1995, Alan Greenspan, chairman of the Federal Reserve Board, summarized this development as follows: So far this decade, savings and loans and savings banks have originated 25 percent of residential mortgages--as compared to 50 percent over the previous 20 years--and hold, on average, only 28 percent of outstanding residential mortgage debt, compared to two-thirds during the earlier period. Currently only 2 thrifts are among the top 15 mortgage services and none are among the top 10 originators. Over the last decade, when thrifts' participation in the residential mortgage market receded, the aggregate supply of housing finance was unimpaired and mortgage rates apparently unaffected. The decreased dependence on a specialized thrift industry to originate and fund mortgages is primarily due to the development of mortgage-backed securities and a secondary mortgage market. Mr. President, while the role of thrifts in housing finance is receding, thrifts do continue to provide niche financing that is important to the housing market, including adjustable rate mortgages and mortgages that do not conform to secondary market underwriting criteria. Thrifts could still specialize in this type of financing under current charter merger proposals, however. In this regard, I believe that, as a business matter, many institutions will want to focus on housing finance, despite any charter changes mandated by Congress. To summarize, the continued safety and soundness risks posed by the thrift industry and the receding role of the thrift industry have resulted in proposals to eliminate the thrift charter. Federal banking and thrift regulators have expressed support for these proposals. At a September 21, 1995, hearing held by the House Subcommittee on Financial Institutions and Consumer Credit, Federal Reserve Chairman Greenspan noted: Two conclusions are clear. First, the nexus between thrifts and housing largely has been broken without any evident detriment to housing finance availability. Second, a public policy that induces--let alone requires--thirfts to specialize in mortgage finance threatens the continued viability of many of these entities--particularly those without wide and deep deposit franchises, tight cost controls, and the ability, when necessary, effectively to originate and sell standard mortgages that cannot profitably be held long-term. A broader charter for thrifts--such as a commercial bank charter that lets them hold a wider range of assets--thus would seem to be good public policy. . . . At that same hearing, FDIC Chairman Helfer also expressed support for the elimination of the current thrift charter: The FDIC is not opposed to eliminating the distinctions between bank and thrift charters--far from it. The FDIC believes that the current charter distinctions no longer match economic reality. Moreover, forcibly concentrating a class of institutions--thrifts in this instance--into a limited range of activities with low profit margins is a prescription for trouble, as the savings and loan crisis of the 1980's and early 1990's amply demonstrated. These statements from our Nation's top bank and thrift regulators cannot be ignored by Congress. Mr. President, industry representatives have also recognized the inherent problems of the thrift charter and expressed support for eliminating or reforming their current charter. In a September 12, 1995, Wall Street Journal article, entitled ``Time to Kill the Thrifts for Good,'' a leading thrift industry executive stated: The thrift industry charter is inherently flawed, and the resulting vulnerability of the industry has been demonstrated repeatedly over the past 25 years. . . . These numbers are trying to tell us something--namely the thrift charter is obsolete. Today, a separate thrift industry cannot be justified either by standards of the market or public policy. . . . In formulating public policy, we should not seek to maintain an industry charter that impairs the viability of its institutions, strains the banking system and threatens the American taxpayer. We need to integrate thrifts into the banking industry. It is difficult to imagine a stronger statement in favor of eliminating the thrift charter, and the statement is even more forceful coming from a thrift industry executive. In a September 20, 1995, letter to me, America's Community Bankers, the national trade association for thrifts, also noted that it ``is fully prepared to work . . . toward--thrift--charter reform and modernization.'' Finally, one of the strongest statements in support of eliminating the thrift charter has come from the editorial board of a leading national newspaper. In a September 20, 1995 editorial, the Washington Post stated that ``S&Ls have lost their special purpose--all kinds of institutions now make mortgage loans--and in some respects have become a danger.'' The editorial concluded: ``S&Ls were work horses in their day. The day is gone, and so--as a separate kind of entity--should they be.'' Mr. President, the bill I am introducing today would eliminate the specialized Federal thrift charter, and would force all federally chartered thrifts to convert to banks. It also would require that all State-chartered thrifts be regulated like State-chartered banks. It would also allow some converted institutions and qualified thrift holding companies to engage in certain activities not permitted for banks. These grandfathered activities would be permitted only under strict constraints. Finally, it would create a new Federal charter, called a national mutual bank. This bill also would rationalize the Federal regulation of banks and thrifts. It would merge the Federal banking and thrift regulators, saving taxpayer money, and reducing bureaucratic redtape. There is a broad consensus in favor of this initiative. As Under Secretary of the Treasury for Domestic Finance John Hawke stated, in an October 27, 1995, letter to House Banking Chairman Leach, there is ``broad agreement on the logic of merging the Federal regulation of banks and thrifts.'' Mr. President, resolving the thrift industry's remaining problems will not be an easy task. This is not a project that can be completed overnight. There are numerous, complex legal and public policy issues that must be addressed in a careful, thoughtful way. Congress will need to collaborate with industry representatives, Federal thrift and bank regulators, and the administration. Decisions made today on these issues will have lasting consequences on the shape of our Nation's financial services industry well into the next millennium. I ask unanimous consent that a brief description of the complex legal and public policy issues that must be addressed as we move forward with consideration of this bill be printed in the Record. Some of these issues are addressed by the House bill. Others are not. Mr. President, every process needs a beginning. I believe this bill is an appropriate place for the Senate to start its consideration. I look forward to working with my Senate and House colleagues to address the very important issues raised by this bill. Working together, I believe we can create a safer and sounder and more rational framework for depository institutions.

Mr. D'AMATO

Mr. D'AMATO. Ten minutes.

Mr. D'AMATO. Mr. President, I ask that the time be continued as if in morning business until I conclude my remarks.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, for months, the Clinton administration and the Mexican Government have told Congress and the American people that the President's $20 billion bailout of Mexico was a success. But the administration and the Mexican Government have been concealing the true facts from the Congress and, more importantly, from the American people. It is wrong and it is outrageous. Particularly in this time of budget austerity when we are having such incredible battles over how to balance the budget and deciding what programs will be cut. I think it is incredible at this point in our history that we are watching tens of billions of dollars go down a sinkhole and do nothing about it. For almost a year, I have warned that the Clinton bailout of Mexico was doomed to failure. Over the last few weeks, it has become clear that the President's Mexican mirage is evaporating. Truth, unfortunately, is not pleasant at times, so there are those who seek to look the other way. But the truth is finally coming into focus. The Clinton administration and the Mexican Government can no longer conceal the real facts. We know that record numbers of Mexicans are out of work, that Mexican interest rates are soaring and that Mexico is reeling under increasing social and political unrest. Before the Mexican peso was devalued last December, it traded at 3.44 against the dollar. On December 22, after the devaluation, the peso was trading at 4.8. Then it went up to 6, and then 7. Yesterday, the peso closed at 7.81. That is a historic low closing rate. Never before has it closed at such a rate--7.81 pesos to the dollar. This morning, it opened at 7.9. That is shocking. That is unbelievable. The peso is in free fall without Mexican Government intervention. Indeed, Mr. President, let me suggest that the only people who are making money are the currency speculators. They know that the Mexican central bank will intervene, and so as the peso is devalued, as it becomes worth less and approaches the 8 mark and 8.1 and 8.2, the money speculators begin to buy it up because they know at some point the central bank will move in and they can sell for a handsome profit. They are making their profit, while the Mexican Government is chewing up billions of dollars. How much longer will we have to wait before we recognize that this program has been a failure? If the Mexican bailout was a success, would interest rates have climbed from 20 percent to over 60 percent? That is exactly what has taken place during this period of time. No economy can survive such crushing interest rates--60 percent. Yet when the Mexican President came to the United States, the Secretary of the Treasury, indeed, the President of the United States, said that the proof that the program was working was Mexico's ``pre-payment'' of some of their debt. In reality Mexico flipped the $1.3 billion remainder of their loan, rolled it over, and could not pay it in spite of their so-called early payment of $700 million. Since February, the United States and the IMF have poured over $23 billion into Mexico. The Mexican Government has used American taxpayer dollars to pay off private investors. The administration should not continue to throw good money after bad. Last week, I offered a Sense-of-the-Senate resolution calling for the public release of an important document, a document prepared by the International Monetary Fund. This report is known as the Whittome Report. The Whittome Report examined the International Monetary Fund's monitoring and response to the Mexican peso crisis. According to news accounts, the IMF's own report concluded that the International Monetary Fund had distorted its reporting on Mexico to placate political pressure from the Mexican Government. I suggest that the American people have a right to see that report. Why is the Treasury Department hiding that report? Secretary Rubin has classified it on ``national security'' grounds. This report talks about the International Monetary Fund's failure. Why should it be classified so that the American people cannot know what is taking place with money that we have invested with the IMF, with money we have sent down to Mexico. It is American taxpayers' dollars. That report should be declassified. The Treasury Department's classification on national security grounds is hokum. What nonsense. This report has been made available to 178 other countries that are members of the IMF. So here we have a report that has been widely circulated and is being held on the arbitrary, obviously sham, excuse that its release would jeopardize national security. It is our taxpayers who are providing the bulk of the funding for this bailout package, a package which is failing. This package is producing record unemployment in Mexico, record high interest rates, and has sent the peso to a record low. This bailout jeopardizes Americans' financial interests. What do we have? We have secrecy from the Treasury Department claiming that release of this report would jeopardize the security of our country, hiding under the pretext of national security grounds. Mr. President, 178 countries, many of which may be allied against the interests of the United States, have copies of this report, but the American people do not. And this Senator is not permitted to disclose the contents of that report? That is just simply wrong. It is obvious that this administration is attempting to hide the debacle and the fact that we should never have entered into this absolutely shameful relationship. What we see taking place today is the currency speculators making billions of dollars of profit. Last evening, the Mexican central bank moved in to support the peso; otherwise, it would have closed over 8. And I have to tell you, as long as they are going to continue to do this, the money speculators will ride that rollercoaster up and down. They will continue to make their fortunes. We are not helping the Mexican people. We are not helping their economy. We are not helping to create job stability. As a matter of fact, the programs that we have insisted upon are creating economic hardship for Mexico. It is just simply wrong, and it is unconscionable. I do not believe that we should put one more U.S. dollar into this sinkhole. Let us use the money, if we have an opportunity to save that $7 billion-plus that has not already been wasted, to reduce the budget deficit. Let us use it to fund programs that reasonable people may say, yes, we want to fund but we do not have sufficient money. If we are talking about providing students with an opportunity to get a better education, let us use the money for that program. If we are talking in terms of reducing the Medicare burden, then let us see to it that we make that money available in that area. If we are talking about not having sufficient funds to carry out some of the needs because of budget constraints in the Medicaid Program in years to come, let us use that $7 billion-plus instead of putting good money after bad and making rich people and speculators richer at the expense of the taxpayers. But let us not hide the truth. Why should the Secretary of the Treasury classify this report and keep it from the American people? I ask the Secretary, ``What do you have to hide, Mr. Secretary?'' One hundred and seventy-eight foreign countries have this report. Some of them put little, if any, money into the IMF, a pittance. The United States of America and the taxpayers have poured in billions. And yet this report is classified on so-called national security grounds? Mr. Secretary, you are telling the people they do not have a right to see what has taken place? I have not read the report, and I have not read it for good reason, because otherwise I would probably want to come down on the floor of the Senate and expose the sham that took place. We all know it is a sham that took place. The administration does not want people to see that the IMF has mishandled and bungled what took place down in Mexico. Indeed, the program that we have imposed on the Mexican people not only robs the American taxpayers, it will not help the Mexican people. We continue blindly along as if the emperor had no clothes and we are afraid to say it. Somehow we are afraid, like the fable about the emperor having no clothes. It took some little boy to say what was wrong. Here they did not want us to have the facts because they do not want people to begin to say, ``How could you continue this incredible fiasco?" Mr. President, let me end on this--the Congress of the United States is reluctant to pull the plug in terms of financing for Mexico because they are justly afraid that President Clinton will turn around and say, ``Aha, you are responsible for the failure of the Mexican rescue bailout package.'' That is exactly what would take place but that is wrong. President Clinton knows it and the American people know it too. But there is no reason for this Congress not to insist at least that the truth be made public. My colleagues, Senators and Congressmen should be demanding the release of this Whittome Report. It should not be left to Senator D'Amato. It should not be left to any one person. This should be something that we want, that we demand. I urge my colleagues to support this resolution. So, Mr. President, I am going to continue to call this to the attention of my colleagues in the Congress. They have a duty to step forward and say, ``Yes, we want this information. The Congress and the American people are entitled to it and they should have it.'' For the Secretary of the Treasury to say on national security grounds he cannot make this information available, is something that is absolutely, totally unreasonable, and not sustainable. Mr. President, I yield the floor.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I am introducing today the Thrift Charter Conversion Act. I am introducing the bill exactly as it was reported out by the Subcommittee on Financial Services and Consumer Credit of the House Committee on Banking and Financial Services. I am doing this in the spirit of cooperation exhibited during the House and Senate collaboration during the reconciliation process, particularly in recapitalizing the Savings Association Insurance Fund--an action which will increase public confidence in our Federal deposit insurance system and avoid any further costs to the taxpayers. This bill would eliminate the specialized Federal thrift charter, merge the Federal thrift industry into the banking industry, and consolidate the federal thrift and bank regulatory agencies. It would create a safer and sounder and more rational framework for depository institutions. While I do not endorse all of the provisions of the House bill, I am committed to its basic goal of merging the thrift and bank charters. The Senate Banking Committee will commence its consideration of this bill immediately, and I am committed to completing this legislative task as quickly as possible consistent with the other obligations of the Banking Committee. Mr. President, I am committed to the goal of minimizing--and eliminating to the extent possible--the risks to the taxpayer that will inevitably result from the continued existence of the thrift industry. Earlier this year, I took the first step toward this goal by introducing legislation to merge the separate federal deposit insurance funds for banks and thrifts. The introduction of the Thrift Charter Conversion Act is an important final step toward that goal. I want to commend my colleagues in the House for their leadership on this essential next step of merging the thrift and bank charters. The House and Senate Banking Committees considered including charter merger provisions in the budget reconciliation legislation, but Senate procedural rules prohibited us from including such provisions. The House reconciliation bill contained the text of the measure that I am introducing today. I want to commend Representative Marge Roukema, chairman of the Subcommittee on Financial Institutions and Consumer Credit, and full committee Chairman Leach for their work on this bill. Mr. President, our Nation's thrift industry has helped Americans finance their homes for over 160 years--with remarkable success. As we have witnessed during the past two decades, however, it has also experienced serious financial difficulties. These difficulties eventually led to the industry's collapse during the 1980's--a collapse that has cost the American taxpayers more than $150 billion. Despite the massive bailout and the numerous laws enacted to stabilize the thrift industry, serious problems continue to plague our Nation's thrift industry. Congress cannot ignore these problems. Congress must act now before our Nation's taxpayers are asked to pay for another bailout of the thrift industry. I am pleased that under the leadership of the House and Senate Banking Committees, Congress is already taking action to protect the American taxpayer and to avoid another thrift industry crisis. Last week, the House and Senate Banking Committees agreed to a proposal to recapitalize the ailing Federal deposit insurance fund for thrifts-- called the Savings Association Insurance Fund [SAIF]. The SAIF is now so undercapitalized that the failure of one large thrift could bankrupt it. The proposal agreed to last week will recapitalize the fund-using industry--not taxpayer--money. Because the proposal saves the American taxpayers some $900 million, it has been included in Congress' budget reconciliation package--a package designed to eliminate the budget deficit in 7 years. Mr. President, despite the recapitalization of SAIF, the thrift industry continues to pose serious and chronic safety and soundness risks to our Nation's Federal deposit insurance system. In an October 31, 1995 letter to me, Ricki Helfer, Chairman of the FDIC, explained why thrifts pose a greater safety and soundness risk of the Federal deposit insurance system than do banks, even with a recapitalized insurance fund: Relative to the Bank Insurance Fund [BIF], the SAIF faces risks related to the size of its membership, geographic and product concentrations, and inherent structural problems in the industry. The SAIF has fewer members than the BIF and faces greater risks with the failure of any one member. The SAIF also has a geographic concentration on the West coast. The eight largest SAIF-insured thrifts operate predominantly in California, and they hold 18.5 percent of SAIF-insured deposits. By contrast, the eight largest holders of BIF- insured deposits are located in five different states and hold 10 percent of BIF-insured deposits. SAIF members' assets are concentrated in residential real estate . . . to realize certain tax benefits. While traditional residential real estate lending can be managed in such a way as to present relatively little credit risk, substantial concentrations in the area make SAIF members susceptible to interest-rate fluctuations. In an August 29, 1995, report, entitled ``The Thrift Charter: Should It Be Eliminated?'' the Congressional Research Service also noted that their specialization in housing finance makes thrifts more vulnerable than banks to an economic downturn: Support for a more flexible [thrift] charter stems from interest in protecting the Federal deposit insurance system. . . . Lending and deposit options for thrifts have been broadened over the past several years, nonetheless, thrifts' deposit and lending base is still less diversified than banks because of their specialization in housing finance. There is concern that this lack of diversification could cause institutional weaknesses in an unfavorable economic climate. Thus, an important goal of charter merger legislation is to decrease the significant safety and soundness risks posed by thrifts to the Federal deposit insurance system. In addition, fundamental changes in the marketplace have called into question the need for a specialized thrift industry. The role played by thrifts in the housing finance market has declined significantly. Testifying before the House Subcommittee on Financial Institutions and Consumer Credit on August 2, 1995, Alan Greenspan, chairman of the Federal Reserve Board, summarized this development as follows: So far this decade, savings and loans and savings banks have originated 25 percent of residential mortgages--as compared to 50 percent over the previous 20 years--and hold, on average, only 28 percent of outstanding residential mortgage debt, compared to two-thirds during the earlier period. Currently only 2 thrifts are among the top 15 mortgage services and none are among the top 10 originators. Over the last decade, when thrifts' participation in the residential mortgage market receded, the aggregate supply of housing finance was unimpaired and mortgage rates apparently unaffected. The decreased dependence on a specialized thrift industry to originate and fund mortgages is primarily due to the development of mortgage-backed securities and a secondary mortgage market. Mr. President, while the role of thrifts in housing finance is receding, thrifts do continue to provide niche financing that is important to the housing market, including adjustable rate mortgages and mortgages that do not conform to secondary market underwriting criteria. Thrifts could still specialize in this type of financing under current charter merger proposals, however. In this regard, I believe that, as a business matter, many institutions will want to focus on housing finance, despite any charter changes mandated by Congress. To summarize, the continued safety and soundness risks posed by the thrift industry and the receding role of the thrift industry have resulted in proposals to eliminate the thrift charter. Federal banking and thrift regulators have expressed support for these proposals. At a September 21, 1995, hearing held by the House Subcommittee on Financial Institutions and Consumer Credit, Federal Reserve Chairman Greenspan noted: Two conclusions are clear. First, the nexus between thrifts and housing largely has been broken without any evident detriment to housing finance availability. Second, a public policy that induces--let alone requires--thirfts to specialize in mortgage finance threatens the continued viability of many of these entities--particularly those without wide and deep deposit franchises, tight cost controls, and the ability, when necessary, effectively to originate and sell standard mortgages that cannot profitably be held long-term. A broader charter for thrifts--such as a commercial bank charter that lets them hold a wider range of assets--thus would seem to be good public policy. . . . At that same hearing, FDIC Chairman Helfer also expressed support for the elimination of the current thrift charter: The FDIC is not opposed to eliminating the distinctions between bank and thrift charters--far from it. The FDIC believes that the current charter distinctions no longer match economic reality. Moreover, forcibly concentrating a class of institutions--thrifts in this instance--into a limited range of activities with low profit margins is a prescription for trouble, as the savings and loan crisis of the 1980's and early 1990's amply demonstrated. These statements from our Nation's top bank and thrift regulators cannot be ignored by Congress. Mr. President, industry representatives have also recognized the inherent problems of the thrift charter and expressed support for eliminating or reforming their current charter. In a September 12, 1995, Wall Street Journal article, entitled ``Time to Kill the Thrifts for Good,'' a leading thrift industry executive stated: The thrift industry charter is inherently flawed, and the resulting vulnerability of the industry has been demonstrated repeatedly over the past 25 years. . . . These numbers are trying to tell us something--namely the thrift charter is obsolete. Today, a separate thrift industry cannot be justified either by standards of the market or public policy. . . . In formulating public policy, we should not seek to maintain an industry charter that impairs the viability of its institutions, strains the banking system and threatens the American taxpayer. We need to integrate thrifts into the banking industry. It is difficult to imagine a stronger statement in favor of eliminating the thrift charter, and the statement is even more forceful coming from a thrift industry executive. In a September 20, 1995, letter to me, America's Community Bankers, the national trade association for thrifts, also noted that it ``is fully prepared to work . . . toward--thrift--charter reform and modernization.'' Finally, one of the strongest statements in support of eliminating the thrift charter has come from the editorial board of a leading national newspaper. In a September 20, 1995 editorial, the Washington Post stated that ``S&Ls have lost their special purpose--all kinds of institutions now make mortgage loans--and in some respects have become a danger.'' The editorial concluded: ``S&Ls were work horses in their day. The day is gone, and so--as a separate kind of entity--should they be.'' Mr. President, the bill I am introducing today would eliminate the specialized Federal thrift charter, and would force all federally chartered thrifts to convert to banks. It also would require that all State-chartered thrifts be regulated like State-chartered banks. It would also allow some converted institutions and qualified thrift holding companies to engage in certain activities not permitted for banks. These grandfathered activities would be permitted only under strict constraints. Finally, it would create a new Federal charter, called a national mutual bank. This bill also would rationalize the Federal regulation of banks and thrifts. It would merge the Federal banking and thrift regulators, saving taxpayer money, and reducing bureaucratic redtape. There is a broad consensus in favor of this initiative. As Under Secretary of the Treasury for Domestic Finance John Hawke stated, in an October 27, 1995, letter to House Banking Chairman Leach, there is ``broad agreement on the logic of merging the Federal regulation of banks and thrifts.'' Mr. President, resolving the thrift industry's remaining problems will not be an easy task. This is not a project that can be completed overnight. There are numerous, complex legal and public policy issues that must be addressed in a careful, thoughtful way. Congress will need to collaborate with industry representatives, Federal thrift and bank regulators, and the administration. Decisions made today on these issues will have lasting consequences on the shape of our Nation's financial services industry well into the next millennium. I ask unanimous consent that a brief description of the complex legal and public policy issues that must be addressed as we move forward with consideration of this bill be printed in the Record. Some of these issues are addressed by the House bill. Others are not. Mr. President, every process needs a beginning. I believe this bill is an appropriate place for the Senate to start its consideration. I look forward to working with my Senate and House colleagues to address the very important issues raised by this bill. Working together, I believe we can create a safer and sounder and more rational framework for depository institutions.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I rise today to discuss the likelihood of a GATT challenge to an embargo on Iran. On December 13, 1994, the Congressional Research Service did a Memorandum for Representative Peter DeFazio entitled ``The Likelihood of a GATT challenge to the Cuban embargo under the GATT 1994 and the WTO.'' This document further backs up my assertion that the United States, under Article 21 of the GATT, the United States has the broad authority to impose sanctions against another country for reasons of national security, and by connection we have that right to do so in the case of Iran. Mr. President, so that my colleagues can read this interesting memorandum, I ask that this memo be printed in the Record at the conclusion of my remarks. I would also like to comment on section 8(a) of the Export Administration Act of 1979, as it relates to S. 1228, the Iran Foreign Oil Sanctions Act of 1995. For purposes of demonstration, I would like to comment on paragraph (1) of this section which reads as follows: (1) For the purpose of implementing the policies set forth in subparagraph (A) or (B) of paragraph (5) of section 3 of this Act, the President shall issue regulations prohibiting any United States person, with respect to his activities in the interstate or foreign commerce of the United States, from taking or knowingly agreeing to take any of the following actions with intent to comply with, further, or support any boycott fostered or imposed by a foreign country against a country which is friendly to the United States and which is not itself the object of any form of boycott pursuant to United States law or regulation. . ..'' This paragraph is very instructive because it prohibits U.S. companies from dealing with a country that abides by an ``unsanctioned'' third-party boycott against another country. However, the stipulations of this paragraph are vital to the argument supporting a ``sanctioned'' third-party embargo against Iran. The intent here is to prevent support for ``* * * any boycott fostered or imposed by a foreign country against a country which is friendly to the United States and which is not itself the object of any form of boycott pursuant to United States law or regulation * * *.'' The phrases ``against a country which is friendly to the United States,'' and ``which is not itself the object of any form of boycott pursuant to United States law or regulation'' are key to the argument. In the case of Iran, I think everyone would agree that Iran is not friendly to the United States and equally so, it is certainly a matter of fact that Iran is subject to sanctions by the United States. Therefore, the opponents of this legislation cannot argue against the Iran sanctions legislation because there are provisions in the bill that would require United States companies to avoid doing business with companies that sell oil and gas equipment to Iran. The ``anti-boycott provisions in the EAA clearly permit the imposition of ``sanctioned boycotts'' against countries which are unfriendly to the United States. The material follows: Congressional Research Service, The Library of Congress, Washington, DC, December 13, 1994. To: Hon. Peter A. DeFazio. (Attention: Peter Tyler). From: American Law Division. Subject: Likelihood of a GATT challenge to the Cuban embargo under the GATT 1994 and the WTO. This memorandum is in response to your inquiry concerning the possibility of Cuba's bringing a challenge to the U.S. embargo against it before the World Trade Organization (WTO) under the terms of the General Agreement on Tariffs and Trade of 1994, the General Agreement as it emerged from the Uruguay Round.\1\ Unless otherwise exempted by other provisions under the GATT 1994, the Cuban embargo is arguably inconsistent with the obligations to extend most-favored-nation (MFN) treatment under Article I: 1, of the GATT 1994,\2\ to extend national treatment under Article II: 4, of the GATT 1994, and to eliminate quantitative restrictions generally under Article XI: 1, of the GATT 1994. The U.S. embargo against Cuba appears to be justifiable under the international law concept of fundamental change in circumstances, i.e., Cuba's change to a communist regime and a non-market economy. The national security exception under Article XXI of GATT 1994 may also exempt the embargo as a national security measure. Also, the United States could request a waiver to permit the embargo, but this may be difficult to obtain. Apparently, there is some concern that the strengthened dispute settlement and enforcement mechanisms under the GATT 1994 may motivate Cuba to bring a challenge to the embargo. You also indicated concern about possible limitations on unilateral quantitative restrictions under the GATT 1994, but it seems these limitations generally involve limitations on quantitative restrictions that have been permissible in the past as a routine matter under textile arrangements, for balance-of-payments reasons, and the like, and not limitations on embargoes that are justifiable under other provisions of the GATT. This memorandum will briefly discuss the history of the embargo and the possible justifications for the embargo under the GATT. Footnotes at end of article. --------------------------------------------------------------------------- Cuba is an original contracting party to the GATT,\3\ yet the United States has had an embargo on Cuba since 1962.\4\ Cuba has from time to time protested or commented negatively on the U.S. embargo as GATT illegal,\5\ indicating that the United States has never formally justified its actions in the GATT context. These comments or protests either concern the Cuban Democracy Act of 1992 or the support of other countries subjected to sanctions by the United States. It is unclear whether Cuba made a formal complaint about the original embargo in the GATT forum.\6\ The United States was apparently motivated by the communist coup and unresolved U.S. compensation claims arising from the expropriation and nationalization of U.S. property holdings in Cuba and also by concerns about human rights abuses and the lack of democracy in Cuba.\7\ the concept of fundamental change in circumstances It appears that justification of the embargo was possible under the international law concept of fundamental change in circumstance. However, this requires notification to the other parties of action taken pursuant to the doctrine. Under the international law concept of fundamental change in circumstances, the United States and other GATT parties could have considered Cuba to no longer be a member of GATT when Castro deposed the Cuban government that had been in power when the GATT 1947 was concluded. This concept, codified in the Vienna Convention on the Law of Treaties,\8\ states that where there has been a fundamental change from the circumstances existing at the time of the conclusion of an international agreement, which was not foreseen by the parties, this change may not be a ground for terminating or withdrawing from the agreement unless the circumstances were essential to the consent of the parties to be bound by the agreement and the change radically transforms the extent of obligations still to be performed under the agreement. A party may not invoke this doctrine if the fundamental change of circumstances was the result of the invoking party's breach of an obligation under the agreement or of any international obligation owed by that party to any other party to the agreement. If a party may invoke the doctrine for termination of or withdrawal from an agreement, it may also invoke it for suspension of the operation of the agreement. A party invoking this doctrine must notify other parties to the agreement.\9\ The original circumstances, that Cuba was controlled by a non-communist regime and was a market economy, were arguably essential to the Agreement. Although non-market economies have acceded to the GATT, they have done so under protocols specifying goals and measures to be met to ensure fair trade. Also, given the international political situation at the time, the cuban change to a communist-style government and the resulting political and military tensions between the two countries could be considered by the United States to constitute a fundamental change of circumstances sufficient to terminate or suspend the operation of an agreement.\10\ The United States and other GATT parties could have notified, and may still be able to notify, the GATT that, under the doctrine, they consider the GATT terminated (or suspended) with respect to Cuba.\11\ There apparently was never any formal declaration by either the United States or Cuba to the GATT Contracting Parties of any inability to continue the application of the General Agreement to each other. Although the United States has not declared a formal suspension regarding agreements with Cuba generally, apparently many agreements are not being applied.\12\ Application of Article XXI The United States could justify its embargo for national security reasons under GATT Article XXI(b)(iii), because of the acts of hostility between the two at the time the embargo was imposed. The national security reasons need not be formally stated to the GATT Contracting Parties.\13\ However, the presidential proclamation declaring the embargo against Cuba gave self-defense and national security as the reasons for it.\14\ Historically, the United States has suspended most-favored- nation treatment for various countries and justified its actions under GATT exceptions, particularly GATT Article XXI concerning security exceptions. Article XXI, provides that nothing in the Agreement shall be construed (1) to require a contracting party to reveal information the disclosure of which is contrary to its security interests; (2) to prevent measures, which a party considers necessary to the protection of its security interests and which are related to nuclear material, related to trade in arms, or taken in time of war or other international emergency; (3) or to prevent a party from taking action pursuant to its obligations under the United Nations Charter for the maintenance of international peace and security. The security exceptions have been applicable in several cases where the United States has suspended MFN treatment, although some parties have felt that the United States has relied excessively on Article XXI in justifying its actions. However, a GATT panel has decided that the underlying justification for a claim of the national security exception will not be questioned. This decision resulted from Nicaragua's GATT challenge to the embargo that the U.S. imposed on it. Nicaragua became a GATT contracting party on May 28, 1950, under the terms of the 1949 Annecy Protocol of Terms of Accession.\15\ In the late 1970s and early 1980s, relations between the United States and the Nicaraguan Sandinista- controlled government deteriorated as the United States cut off aid to the Nicaraguan government and supported Contra rebel efforts to bring about a free and independent government by deposing the Sandinista government.\16\ On September 23, 1983, President Reagan reduced the import quota for Nicaraguan sugar.\17\ Nicaragua brought a complaint before the GATT. A dispute settlement panel found that the quota reduction was in violation of GATT Article XIII, which provides that quantitative restrictions of a product are only permissible where similar measures are applied to all imports and exports of that product and where the import quota shares are distributed among the parties concerned in a way that approximates as nearly as possible the share each party would have had in the absence of restrictions.\18\ The United States did not invoke any exception and seems to have effectively refused to defend itself on GATT grounds, stating merely that any actions taken were not matters of trade policy and could not be properly evaluated in the trade context, and that the United States had not benefitted in any economic manner from the reduction in Nicaragua's quota.\19\ The panel report was adopted on March 13, 1984, but in November 1984, Nicaragua was complaining that the United States still had not restored its sugar quota.\20\ The United States agreed that Nicaragua had rights, but maintained its position that the situation had to be viewed in a political context.\21\ President Reagan imposed an embargo on Nicaragua by executive order on May 1, 1985, pursuant to his authority under the International Economic Emergency Act and the National Emergency Act, among others.\22\ He found that the ``policies and actions of the Government of Nicaragua constitute an unusual and extraordinary threat to the national security and foreign policy of the United States and hereby declare a national emergency to deal with the threat.'' The embargo prohibited all imports of goods and services of Nicaraguan origin and all exports of goods and services destined for Nicaragua except for those destined for the democratic resistance organization. Additionally, Nicaraguan aircraft were forbidden from landing in or taking off from the United States and Nicaraguan vessels were prohibited from entering U.S.ports. The embargo against Nicaragua is notable particularly because Nicaragua brought a formal complaint before the GATT and got the reluctant United States to agree to the formation of a dispute settlement panel.\23\ Although discrete discriminatory measures had been challenged, a virtually total embargo apparently had never before been brought before a dispute settlement panel. Nicaragua also had previously sued the United States before the International Court of Justice (ICJ) and gotten a determination that the military and paramilitary actions taken against Nicaragua, including the embargo, were violations of international law.\24\ The United States claimed an exception under the national security clause of GATT Article XXI.\25\ Nicaragua challenged the validity of the motives of the United States, complaining that it was improperly using a trade forum and trade measures to achieve political ends.\26\ It wanted a panel to examine the validity of the United States' claim to the national security exemption by determining whether the Nicaraguan situation posed a valid national security concern for the United States.\27\ But although the United States consented to the formation of a panel, it insisted that the GATT could not question the validity of a party's national security concerns.\28\ It was a party's prerogative to decide what it considered a threat to national security. The GATT members agreed and did not authorize the panel to examine the justification for the invocation of GATT Article XXI. The panel could only decide whether the measures taken by the United States were consistent or inconsistent with the General Agreement. Therefore, the panel concluded that it could not determine whether the actions of the United States were inconsistent with or in compliance with its obligations under the General Agreement.\29\ Thus, the United States successfully invoked the national security exception under GATT Article XXI and used trade sanctions for political purposes, which it maintained was permissible. However, although many other GATT parties agreed that GATT Article XXI properly left to each party the judgment of what constituted its essential security interests, the parties also regretted the expansive interpretation of the exception by the United States and were concerned that frequent resort to it as an all-purposes defense would erode the GATT rules.\30\ They also noted the 1982 decision regarding GATT Article XXI, indicating that actions under Article XXI, should not be overly broad in scope.\31\ Free elections were held in Nicaragua in February 1990.\32\ President Bush restored the sugar quota in April 1990\33\ and Nicaragua, stating that it had reached an agreement with the United States on economic relations, requested the discontinuation of proceedings to determine reparations in the ICJ case in 1991.\34\ the possibility of a waiver under gatt article xxv: 5 and the wto agreement Article IX:3 of the WTO Agreement\35\ specifies a three- fourths majority vote for a waiver of a multilateral trade agreement obligation ``in exceptional circumstances.'' Article XVI:3 of the WTO Agreement provides that in case of a conflict between a WTO Agreement provision and that of a multilateral trade agreement, the WTO Agreement prevails. GATT Article XXV:5 provides that the Contracting Parties may waive an obligation for a particular party ``in exceptional circumstances not elsewhere provided for in this agreement'' by a two-thirds majority vote of approval where such majority comprises more than half of the parties.\36\ So under the terms of the WTO Agreement, a three-fourths vote is now required. Under GATT Article XXV:V, the GATT parties may also by such a vote define certain categories of exceptional circumstances to which other voting requirements shall apply for a waiver and may prescribe such criteria as may be necessary for the application of Article XXV:5. Article IX:4 of the WTO Agreement provides that a waiver granted for more than one year shall be reviewed annually by the Ministerial Conference which shall examine whether the exceptional circumstances justifying the waiver still exist and whether all terms and conditions for the waiver have been met. Possibly the United States could ask for a waiver of the MFN for Cuba, but the three-fourths majority required for the grant of the waiver would be difficult to meet; the Contracting Parties are unlikely to relax the requirements for such a serious matter. Furthermore, the annual review of the waiver would make it necessary to satisfy the Ministerial Conference that the exceptional circumstances still existed in order to maintain an embargo pursuant to a waiver, thereby making it less likely that such an embargo could be maintained indefinitely. In the 1950s, the United States and Czechoslovakia were granted waivers to suspend application of the GATT to each other. In 1951, the United States suspended application of the GATT to Czechoslovakia, although it was an original signatory to the GATT and accepted the Protocol of Provisional Application\37\ and the United States had not invoked GATT Article XXXV, providing for non-application between parties upon accession, with respect to Czechoslovakia upon the accession of the two to the GATT. Czechoslovakia did not have a non-market economy at the time of its accession to the GATT on April 20, 1948.\38\ But subsequent changes in the government of Czechoslovakia and friction with the United States over U.S. claims to compensation for postwar nationalizations led to a breach in trade relations.\39\ The United States and Czechoslovakia each made declarations, using language found in GATT Article XXIII:1, that the other, through its actions, had nullified benefits which should have accrued to the declaring party.\40\ Although the GATT parties apparently considered the issue to have been resolved through dispute settlement under GATT Article XXIII:2,\41\ it also appears that the Contracting Parties took joint action pursuant to GATT Article XXV:5.\42\ This provides that ``under exceptional circumstances not elsewhere provided for in this Agreement, the Contracting Parties may waive an obligation imposed upon a contracting party by this Agreement; Provided that any such decision shall be approved by a two-thirds majority of the votes cast and that such majority shall comprise more than half of the contracting parties [emphasis added].'' The Contracting Parties declared that, considering ``that a contracting party may not be held subject to the provisions of the General Agreement when the fulfillment [sic] of its obligations is rendered impossible by exceptional circumstances of a kind different from those contemplated under the General Agreement . . . the Governments of the United States and Czechoslovakia shall be free to suspend, each with respect to the other, the obligations of the [GATT] [emphasis added].''\13\ However, more recently where the waiver has been requested by a party for discriminatory treatment of a certain other party, the discriminatory treatment was to the benefit of the other party. For example, the original GATT authority for voluntary tariff preference programs for developing countries, e.g., Generalized System of Preferences (GSP), was done by waiver.\44\ Also, Italy requested permission to give more favorable treatment to certain products from Libya and from Somalia; Australia asked permission to treat certain products of Papua-New Gunea more favorably.\45\ The more developed country was trying to assist the economic development of the lesser developed country or to continue a traditional special relationship. So a waiver to deny MFN treatment to Cuba may be difficult to obtain, particularly since Cuba now, unlike Czechoslovakia in the 1950s, apparently has no interest in a mutual suspension of GATT application, as evidenced by its protests that the embargo is illegal.\46\ conclusion The U.S. suspension of application of the General Agreement to Cuba, embodied by the embargo, is probably justifiable under international law on the grounds of Cuba's change to a communist regime and a non-market economy. The United States may also invoke GATT Article XXI, the national security exception, on the basis of a concern for national security, with our without a mutual declaration of suspension authorized by the Contracting Parties. A waiver to permit the embargo may be requested under Articles IX:3 and IX:4 of the WTO Agreement and GATT Article XXV:5, but may not be readily granted. If we can be of further assistance, please let us know. Margaret Mikyung Lee, Legislative Attorney. footnotes \1\General Agreement on Tariffs and Trade of 1994 as defined in Annex 1A of the Final Act embodying the results of the Uruguay Round of Multilateral Trade Negotiations, concluded April 15, 1994 (reprinted at H. Doc. No. 103-316, Vol. I, 103d Cong., 2d Sess. 1339 (1994)). \2\The article and paragraphs refer to the provisions of the General Agreement on Tariffs and Trade originally concluded Oct. 30, 1947, 61 Stat. (5) & (6), T.I.A.S. 1700, 55 U.N.T.S. 194, and annexed to the Final Act Adopted at the Conclusion of the Second Session of the Preparatory Committee on the United Nations Conference on Trade and Employment (excluding the Protocol of Provisional Application) as amended before the entry into force of the Agreement Establishing the World Trade Organization. Hereinafter, these provisions will be referred to as ``GATT Article ____.'' \3\It accepted the 1947 Protocol of Provisional Application on Jan. 1, 1948. M. Bowman & D. Harris, ``Multilateral Treaties: Index and Current Status'' 133 (1984). \4\Proclamation 3447, 27 Fed. Reg. 1085 (1962) (embargo proclaimed pursuant to Sec. 620(a) of the Foreign Assistance Act of 1961, 75 Stat. 445, authorizing the President to establish and maintain an embargo against Cuba and also pursuant to the Final Act of the Eighth Meeting of Consultation of Ministers of Foreign Affairs, Serving as Organ of Consultation in Application of the Inter-American Treaty of Reciprocal Assistance, which resolved that the present Cuban government was incompatible with the Inter- American system and urged member states to take those steps they considered appropriate for their individual and collective self-defense, in light of the offensive of Sino- Soviet communism with which the Cuban government was publicly aligned). \5\``GATT Activities 1992'' 57 (1992) (Cuba protested the Cuban Democracy Act of 1992 reinforcing the trade embargo of the U.S. against Cuba); Council Hears Cuban Complaint on U.S. Sugar Imports, EC Protest on Manufacturing Clause, 3 International Trade Reporter 723 (BNA 1986) (Cuba complained that the U.S. requirement that sugar beet imports through a Third World country must be certified as not being from Cuba discriminated against Cuba and termed the measure ``a clear case of aggression against Cuba''); Nicaragua Charges U.S. is ``Undermining'' Trading System by Cuts in Sugar Quota, 8 International Trade Reporter 330 (1983) (Cuba supported Nicaragua's protest against the U.S. embargo against Nicaragua, saying ``we, too, have suffered for more than 20 years from U.S. discrimination''). \6\There do not appear to be any statements recorded in the official supplements to the Basic Instruments and Selected Documents nor reference to unpublished documents concerning such a statement. However, at the time of the suspension of MFN treatment for Poland, some GATT parties recalled that the United States-Poland dispute was the first time a suspension of MFN treatment had been brought before the GATT since the United States-Cuba breach in trade relations. Poland Unsuccessful in Attempt to Get GATT Censure of U.S. for MFN Suspension, 7 International Trade Reporter 187 (1982). \7\U.N. Adopts Resolution Favoring Free and Fair Trade with Cuba, 9 International Trade Reporter 2045 (BNA 1992). Although it may seem that expropriation of property requires some sort of compensation under international law, the developed and developing countries have not been able to agree on this point, with the developed countries insisting on an international minimum standard and the developing countries insisting that expropriation is a domestic matter to be regulated by the expropriating country under its own laws. D. Harris, ``Cases and Materials on International Law'' 422-433 (1983). \8\Art. 62, May 23, 1969, UN Doc A/Conf 39/27, 8 I.L.M. 679, 63 A.J.I.L. 875 See also Restatement (Third) of the Foreign Relations Law of the United States Sec. 336 (Am. Law Inst. 1987) [hereinafter Rest. 3rd]. \9\Rest. 3rd. supra note 8, Sec. 337, cmt. f, and337 (Am. Law Inst. 1987) [hereinafter Rest. 3rd]. \10\Rest. 3rd, supra note 8, at Sec. 336(a), cmt. e and Reporters' Note 4 (1987). Although even actual, overt acts of hostility do not necessarily constitute a fundamental change of circumstances sufficient to terminate or suspend the operation of an agreement between the parties engaged in hostilities, where the agreement at issue concerns trade relations and trade is essentially disrupted by political an military tension, the agreement probably could be considered terminated or suspended between the concerned parties. Other types of agreements probably would not be considered terminated by any of the parties because of either overt hostility or political and military tensions. For example, the U.N. Charter prohibits the use of force and was intended to end war as a solution to international disputes, but obviously force is still used to resolve disputes and the Geneva Conventions on the Law of War are considered applicable for humanitarian reasons during hostilities. \11\Ya Qin, China and GATT: Accession Instead of Resumption, 27 J. of World Trade 77, 95-97 and note 89 (1993); Rest. 3rd, supra note 8, at Sec. 336, cmt. f. \12\Rest. 3rd, supra note 8, at Sec. 333, Reporters' Note 3. \13\``Nothing in this Agreement shall be construed . . . to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests . . . taken in time of war or other emergency in international relations. . . .'' \14\See supra note 4. \15\M. Bowman & D. Harris, supra note 3, at 133. \16\Philip Brenner & William M. LeoGrande, Congress and Nicaragua: The Limits of Alternative Policy Making, in ``In Divided Democracy: Cooperation and Conflict Between the President and Congress'' 219, 222-225 (James A. Thurber ed., 1991). \17\Proclamation No. 5104 of September 23, 1983, 48 Fed. Reg. 44057 (1983). \18\Dispute Settlement, United States--Imports of Sugar from Nicaragua, 31 B.I.S.D. 66, 73-74 (1985). \19\Id. at 72. \20\GATT Council Hears Attack on FSCs and Other U.S. Moves, Delays Work Program Evaluation, 1 International Trade Reporter 586 (1984); Impass Occurs at Opening of Annual Meeting as U.S. Threatens to Link Funding to Work, 1 International Trade Reporter 644 (1984). \21\GATT Council Hears Attack on FSCs and Other U.S. Moves, Delays Work Program Evaluation, supra note 20, at 586. \22\Exec. Order No. 12513, 50 Fed. Reg. 18629 (1985). \23\U.S., Nicaragua Unsuccessful in Getting GATT Action on Trade Embargo Dispute, 2 International Trade Reporter 765 (1985); U.S. Again Blocks GATT Dispute Panel Sought by Nicaragua to Investigate Trade Embargo, 2 International Trade Reporter 965 (1985); GATT Council Appoints Panel to Study U.S. Nicaragua Embargo, Reviews Other Disputes, 2 International Trade Reporter 1313 (1985). \24\International Court of Justice: Judgment on Merits in Case Concerning Military and Paramilitary Activities In and Against Nicaragua (Nicaragua v. United States), June 27, 1986, 25 I.L.M. 1023 (1986); ``GATT Activities 1986'' 59 (1987). \25\``GATT Activities 1985'' 47-49 (1986); ``GATT Activities 1986,'' supra note 24, 58-59. See also supra note 23. \26\``GATT Activities 1985,'' supra note 25, at 47; U.S., Nicaragua Unsuccessful in Getting GATT Action on Trade Embargo Dispute, supra note 23. \27\``GATT Activities 1985,'' supra note 25, at 57-49; ``GATT Activities 1986,'' supra note 24, at 58-59; U.S., Nicaragua Unsuccessful in Getting GATT Action on Trade Embargo Dispute, supra note 23. \28\Id. \29\``GATT Activities 1986,'' supra note 24, at 58-59. \30\``GATT Activities 1985,'' supra note 25, at 48. \31\See also Decision Concerning Art. XXI of the General Agreement, Decision of 30 November 1982, 29 B.I.S.D. 23 (1983). The Decision stated that the Contracting Parties should consider the third party interests that may be affected in taking action under Article XXI. When such action is taken, all affected GATT parties retain full rights under the GATT (hereinafter Decision Concerning Art. XXI]. GATT decisions will become part of the GATT 1994 according to the General Agreement on Tariffs and Trade 1994, para. 1(b)(iv), but this provision is hortatory. \32\Philip Brenner & William M. LoeGrande, supra note 16, at 242. \33\Proclamation No. 6120, 55 Fed. Reg. 17744 (1990). \34\International Court of Justice: Judgment on Merits in Case Concerning Military and Paramilitary Activities In and Against Nicaragua (Nicaragua v. United States), June 27, 1986, supra note 24. \35\Agreement Establishing the World Trade Organization, as reprinted in H. Doc. No. 103-316, Vol. I, 103 Cong., Sess. 1327 (1994). \36\See also Article XXV--Guiding Principles to be Followed by the Constructing Parties in Considering Applications for Waiver from Part I or Other Important Obligations of the Agreement, Procedures adopted on 1 November 1956, 5 B.I.S.D. 25 (1957). \37\It signed the 1947 PPA on April 20, 1948. M. Bowman & D. Harris, supra note 3, at 133. The 1947 PPA was laid open for signature from Oct. 1947, to Nov. 15, 1947 for eight principal countries, and until June 30, 1948, for all other signatories to the General Agreement. None of the countries discussed in this section were among the eight who signed by Nov. 15, 1947. \38\M. Bowman & D. Harris, supra note 3, at 133. \39\Article XXI, United States Export Restrictions, Decision of 8 June 1949, II B.I.S.D. 28 (1952) (GATT parties rejected the complaint by Czechoslovakia under Articles I and XXI that U.S. export restrictions did not conform to Article I); Note, East-West Trade: The Accession of Poland to the GATT, 24 Stan. L. Rev. 743, at note 7 (1972); Czechoslovakia Renews Effort to Regain MFN, Says U.S. Firms Losing Out in Modernization, 5 International Trade Reporter 117 (BNA 1988). \40\Suspension of Obligations between Czechoslovakia and the United States under the Agreement, Declaration of 27 September 1951, II B.I.S.D. 36 (1952). \41\See the cumulative index at the back of all B.I.S.D. issues which list the suspension of GATT application between the United States and Czechoslovakia as an action under Article XXIII. \42\J. Jackson & W. Davey, ``Legal Problems of International Economic Relations: Cases, Materials and Text on the National and International Regulation of Transnational Economic Relations'' 916 (2d Ed. 1988). \43\Suspension of Obligations between Czechoslovakia and the United States under the Agreement, supra note 40. \44\18th Supp. B.I.S.D. 24 (1972). \45\Australia and products of Papua-New Guinea, Decision of 24 October 1953, 2 B.I.S.D. 18, 93 (1954); Italy and products of Libya, Decision of 26 October 1951, II B.I.S.D. 10 (1952), Decision of 9 October 1952, 1 B.I.S.D. 14 (1953); Italy and the products of Somalia, Decision of 19 November 1960, 9 B.I.S.D. 40, 229 (1961) and other decisions listed in the cumulative index in every volume of the B.I.S.D. \46\See supra note 5.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I suggest the absence of a quorum.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I introduce The Home Equity Conversion Mortgage Act of 1995 and express my appreciation to Senators Mack and Bryan for their cosponsorship of this important bill. This legislation would provide a 5-year extension for a much needed Federal Housing Administration [FHA] mortgage insurance program which is of great benefit to elderly homeowners. The Home Equity Conversion Mortgage [HECM] Insurance Demonstration Program offers elderly homeowners the opportunity to borrow against the equity in their homes. This effective program is designed to assist our Nation's elderly who have substantial equity in their property but have incomes too low to meet ordinary or extraordinary living expenses. A senior citizen can receive cash through this reverse mortgage in the following four ways: A lump sum; a lifetime guaranteed monthly payment; a line of credit to be accessed by personal checks; or a combination of monthly payment and line of credit options. These mortgages are originated by FHA-approved lenders, insured by the FHA and purchased by the secondary mortgage market. The HECM program represents an ideal public/private partnership in which needy citizens are aided without cost to the Federal Government. The HECM program allows our Nation's elderly to draw an income from their home investment. It offers seniors aged 62 and older the opportunity to support themselves without having to leave the homes they love. Without this program, elderly homeowners with insufficient incomes might be forced to sell their homes and spend their golden years elsewhere. Since the program's inception, over 14,000 loans have been closed or are pending. The median age of program participants is 76 years old. Borrowers are generally low-income and dependent on Social Security benefits. The Home Equity Conversion Mortgage Insurance Demonstration Program was authorized by the Housing and Community Development Act of 1987. The Federal Housing Administration's authority to insure reverse mortgages lapsed on October 1 of this year. The legislation which I am introducing today would reauthorize this successful program and allow it to continue for an additional 5 years, until September 30, 2000. In addition, it would broaden the definition to include one- to four- family homes in which the owner resides and expand insurance authority to cover 50,000 reverse mortgages. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.