Christopher Dodd

Mr. DODD

Mr. DODD. Madam President, I rise to join my colleagues in supporting the passage of S. 1815, the Securities Investment Promotion Act of 1996. Let me first offer my congratulations to Senators Gramm, Bryan, and Moseley-Braun, all of whom worked very hard with me in drafting this balanced, thoughtful, and bipartisan bill. I particularly would like to acknowledge the efforts of Senator D'Amato, the chairman of the Banking Committee, who not only was deeply involved in drafting this bill, but who also did his utmost to move the bill quickly and smoothly through the legislative process so that we were able to come to the floor today. The U.S. capital markets are vitally important for the good economic health not only of virtually every American company but for millions and millions of individual investors who have placed some of their assets either directly in securities or, as has become more and more common, into mutual funds. We must recognize that sustained economic growth is heavily dependent upon the continuing ability of our capital markets and financial services industry to function efficiently and with integrity. If companies find impediments to obtaining capital, they will not grow. If individuals find impediments to their access to securities and other investments, they will not save. Taking steps to enhance the access of both corporations and individuals to the securities markets is prudent means by which Congress can help sustain or even increase the Nation's rate of economic growth. Furthermore, the American capital markets are the envy of the world. No other nation enjoys the international reputation of our capital markets and it is necessary for Congress periodically to review and modernize, where necessary, the laws that make our markets and our financial services industry the world's leader. The legislation under consideration today is the culmination of a lengthy bipartisan effort to reform those aspects of the securities laws that are an outdated impediment to the efficient functioning of the securities industry. The bill will also provide clearer statutory directives to both State and Federal regulators so that the integrity of, and confidence in, our capital markets and financial services industry is enhanced. Without going into excruciating detail, let me just highlight the main areas that this legislation covers: It improves the regulation of investment advisors by clarifying the proper roles of the SEC and the State regulators; it modernizes and streamlines the regulation of mutual funds on the one hand, and provides badly needed modernization of the statutes covering hedge funds and venture capital funds on the other hand; it provides for clarification on a host of technical matters ranging from treatment of church pension plans to the access by U.S. journalists to foreign issuer press conferences. And, significantly, the bill creates the mechanisms for increased regulatory flexibility so that the SEC will have the ability to keep pace with needed regulatory changes as the needs and demands both of investors and the financial industry develop over time. Madam President, the hearing held on this legislation on June 5 amply demonstrated that the bill will have a salutary effect upon our financial markets. Not only will the legislation remove anomalous and antiquated regulations that impeded the efficient functioning of the markets, but the legislation will clearly improve the ability of investors, both institutions and individuals, to invest and save their hard-earned dollars. I believe that the legislation, through our qualified purchaser provisions as well as the business-development company sections, will not only provide an immediate benefit to the ability of small businesses to access needed capital, but that these provisions will also provide a future benefit in the event of another credit crunch similar to the one we saw in 1992 and early 1993. At the committee markup, we adopted a manager's amendment that will make good improvements to the bill and I would like to take note of a few particularly important provisions. I am pleased that the Banking Committee included new authority for the SEC to require that mutual funds make updated disclosures and that they maintain certain kinds of books and records beyond the minimal amount currently required by law. I commend my colleague, the ranking member of the Banking Committee, Senator Sarbanes, for advocating the inclusion of these provisions and I am very glad that the committee wholeheartedly supported these commonsense and nonburdensome investor protections. I am also pleased that the Banking Committee will require the commission to study the impact of recent judicial and regulatory rulings that have limited the ability of shareholders to offer proposals at shareholder meetings regarding a company's employment practices. The ability of shareholders to offer such kinds of resolutions such as the ``Sullivan principles'' for South Africa and the ``MacBride principles'' for Northern Ireland have had a direct impact on ensuring that United States corporations do not participate in the loathsome discriminatory practices that occurred, or still occur, in those nations. I look forward to the results of the commission's study in a year's time. In all, this is a carefully balanced bill that improves our Nation's securities laws to allow the markets to function more efficiently, but balances those reforms by maintaining, and in some cases enhancing, the full strength of investor protections that have made our markets the best in the world. I urge my colleagues to support passage of this important legislation.

Mr. DODD. My friend makes many good points. I know the pressures that the Appropriations Committee faces and we are all too familiar with the Government shutdowns that occurred this year. I would note that our goal on the Banking Committee is to pass a securities reform bill that the President will sign. And, the administration has expressed many of the same concerns that the Senator from South Carolina has raised. In its June 18 Statement of Administration Policy, the White House said it would support the securities reforms but oppose the House proposed changes in financing the SEC. The administration's letter states: Although the Administration supports provisions in H.R. 3005 that would protect investors and reduce the cost of State and Federal regulation of the markets, the Administration would have serious concerns with the bill if it were amended to include reauthorization provisions which would reduce or eliminate certain securities registration and transaction fees. These fees are currently used to offset almost two thirds of the SEC's appropriation. Eliminating or reducing the fees, in a time of declining discretionary resources, would require the SEC to compete for funding with other worthy programs, including criminal justice programs, immigration initiatives, and research and technology programs. The Administration's continued support for H.R. 3005 is contingent on the retention of these improvements and keeping the bill free of any reauthorization provisions which would reduce or eliminate certain SEC fees. Senator D'Amato and I intend for this bill to become law, and I assure the Senator from South Carolina that, absent an agreement among all the appropriators, the administration, and the SEC, we will not agree to the House language that lowers registration fees which are used to run the SEC and offset appropriations. While I believe that there is merit on both sides of this funding issue, I believe that the important and difficult questions of how best to fund the SEC--at which levels and through what means--should be reserved for another forum.

Mr. DODD. I thank my friend. The Senator from South Carolina is essentially correct regarding this funding issue. I would note, however, the current situation is that the SEC collects in total more through fees than the agency's total budget. Of course, a majority of these funds go to the Treasury as general revenues.

Mr. DODD. Would my friend from South Carolina yield?

Mr. DODD

Mr. DODD. Mr. President, I rise today to voice my strong support for the Faircloth-Kennedy Church Arson Prevention Act. As I come to the floor today, it is difficult for me to imagine a more outrageous and disgraceful act of violence than the destruction of a house of worship. Our religious institutions, be they churches, synagogues or mosques are more than just bricks and mortar. They are the cultural, spiritual, and physical lifeblood of our communities and our society. To attack a church is to attack more than a building; it is to strike at the heart of our faith as a Nation and as a people. A recent article in the New York Times, in my view, accurately describes church burnings for what they are; ``an act of a singular profanity.'' This article goes on to say of these church burnings: Its violence lies in the attempt to disrupt a community of believers, desecrate their altars and smash the spiritual rhythm of their lives. The arsonist attacks not just planks and shingles but the space where life's most important transitions are marked, where babies are baptized, marriages celebrated and the dead eulogized. What may be most tragic about these events is that they were aimed primarily at African-American churches. To attack a black church is to attack an institution that throughout our history has been at the forefront of our Nation's struggle on behalf of civil rights for all Americans. One would hope that with all the progress we've made as a Nation, church burnings would be a distant memory, relegated to our history books and not the front pages of our newspapers. Like many Americans who lived through the civil rights era, I am haunted by the memory of the terrible fire bombings that often characterized that period. In particular, it is difficult to erase from our collective memories the four young girls killed in a Baptist Church in Birmingham, AL, by a racist bombing, in 1963. Lamentably, those incidents, of what I believed was a bygone era, are eerily similar to approximately 30 church burnings of the past 18 months. Regrettably, the evil forces of racism continue to find shelter in our midst. To our great misfortune we cannot change the anger in the hearts of those who committed these deeds. Indeed, I urge all Americans when they attend their houses of worship to take the opportunity to pray for the souls of those who would practice such heinous acts. While we cannot legislate attitudes, as a Nation governed by the rule of law, we must do all we can to make clear that these acts of violence will not go unpunished. The legislation before us today would make clear to those who would take up arms against a house of worship; you can burn down a building, but you cannot avoid the opprobrium of the American people. The Faircloth-Kennedy bill would make it easier to prosecute those charged with desecrating a place of worship, it would provide additional resources for law enforcement agencies investigating these crimes, it would allow the Department of Housing and Urban Development to extend loan guarantees for rebuilding churches and it would reauthorize the Hate Crimes Statistics Act, of which I was a co- sponsor. I believe it is shameful and unfortunate that the acts of a cowardly few have forced this Congress to spend its time on such legislation. We should be talking about balancing the budget, raising the minimum wage and dealing with the economic issues that affect each and every American. But part of our role as leaders is to take action when our national values are threatened. In fact, if there is a silver lining to be found in this whole situation, it is the outpouring of support among the American people to lend a hand in rebuilding these burned churches. In my State of Connecticut, two congregations, the Kensington Congregational Church and Spottswood A.M.E Zion Church came together and have pledged to raise $10,000 on behalf of the rebuilding efforts. Additionally, the sense of outrage, seemingly felt among all Americans is a palpable sign that the vast majority of people see these events for what they are: Blatant acts of racist hatred. In fact, if the American people need any better indication of the strong sense of consensus on this issue I urge them to look at the two Senators co-sponsoring this bill--Senator Faircloth and Senator Kennedy. These are two Senators who probably don't see eye to eye on too many issues. But, when it comes to church burnings they came together on behalf of the American people. Their cooperation sends a strong signal to the American people that this is truly one issue that is above partisan wrangling. Religious freedom is one of the bedrocks of our democracy, and these acts subvert all that we hold dear as a Nation. However, the spirit of religious individualism lives on. I think Reverend Terrence Mackey, whose Mt. Zion A.M.E Church was burned down last June said it best: They didn't burn down the church. They burned down the building in which we hold church. The church is still inside all of us. I urge all my colleagues to support this legislation and lend our voices in the struggle against racial and religious intolerance in our Nation.

Mr. DODD

Mr. DODD. Mr. President, I thank the Senator. Mr. President, let us be very clear. I think we all get a sense of what is going to happen here in about 3 hours and 45 minutes, and that is cloture, instead of being invoked, is not going to be invoked. Everyone ought to understand this. This is the vote. This will be your vote in this Congress on campaign finance reform. It is going to come down to this. It will get obscured so much because it is a procedural vote. But how you vote on this will be determined on how you are judged on the issue of campaign finance reform. The idea that we ought to reject the effort to invoke cloture here because we want to make perfect the enemy of the good, I think is a great tragedy. I think it is so transparent that anyone watching this will see right through it--to come up and say, ``I don't like this aspect or that aspect,'' therefore denying the opportunity for cloture to be invoked. As I listened to our distinguished colleague from Utah suggest an amendment that might have something to do with whether or not organized labor would be able to participate with soft money, or that independent campaigns will not be allowable in a postcloture environment, it is ridiculous on its face. So I want to commend our colleague from Arizona and our colleague from Wisconsin for bringing this up. I am proud to be a cosponsor of it. I have believed for years that we had to move directly and aggressively in this area of campaign finance reform. Mr. President, in Connecticut, it is $16,000 a week. That is what you have to raise over a 6-year period every week, week in and week out, if you are going to be successful in taking on or waging an effective campaign. We know today--quite candidly, all of us in this Chamber know--that the respective leaders of our campaign committees are out recruiting affluent candidates. Go out and buy a candidate who is well-heeled financially, and you have a pretty good candidate, someone who can write their own checks. Why seek those kind of candidates? Why? Because you understand that it is money. It is money that allows you to ante up and to get an entry fee into the contest. There is a woman by the name of Linda Sullivan who a few weeks ago in Rhode Island--and I do not know much about it, what the issues are or what she stands for--said: ``I took my race out of Congress because Mr. and Mrs. Smith can no longer be candidates of the Congress of the United States on an average basis in their finances.'' So we all know her situation. Every single one of us knows that the debates around here are directly affected by it. Positions people take are directly affected by this issue. This is not a sweeping piece of campaign finance reform legislation, but it is the first effort we are going to have to make a difference in this area. After years of talking about it we now have a chance to do something about it. Mr. President, I am general chairman of the Democratic National Committee. I just want to say, while not everyone in my party agrees with this, that I happen to believe this is important. This is the one opportunity we are going to have to make a true difference on how we wage campaigns in this country. I plead with our colleagues on both sides of the aisle. We have never had a bipartisan proposal here before. It has always been partisan. This is a chance to go on record. This is a vote on campaign finance reform. Mr. President, I rise on the floor today for what I believe is a truly historic debate. As America's elected leaders we play a critical role as guarantors and protectors of our Nation's democratic institutions. And with this legislation today, we have a unique opportunity to fulfill that mandate as leaders--by beginning the long and arduous process of restoring the American people's faith in their Government and their democracy. The McCain-Feingold bill will not change the American people's seemingly inherent cynicism toward their Government overnight. That is an ongoing process--and one that should be of paramount concern to every Member of this body. However, by reducing the role of money in our campaign system, this legislation takes a critically important first step toward cleaning up our political process. In my view, there are few issues we in Congress consider that have as overwhelming and direct an impact on the functioning of our democracy than the laws governing how we run campaigns in this country. For many of us, campaigns are often the most direct means by which we, as elected representatives, communicate with our constituents. But, today those lines of communications are frayed by a political process that rewards those with money and influence, rather than working families and Americans struggling to make ends meet. Created as a Government of the people and for the people, our Government today seems to operate more for the well-connected few than the country as a whole. That's why, more than any other time in our history, the American people's confidence in their Government and its elected leaders is abysmally low. Poll after poll provides ample evidence that the American people believe special interests and lobbyists have a greater influence on our endeavors than the will of the voters. I believe wholeheartedly that the vast majority of those who serve in the U.S. Congress are well-intended and responsive to the varied needs of their constituents. However, I think I speak for many of my colleagues when I say it is becoming more and more difficult to make that argument to the American people. Because, when the American people look to Washington they do not always see citizen-legislators who focus their full energies on tackling the problems impacting America's working families. Instead, they see corporate lobbyists working hand-in-hand with lawmakers to turn back the clock on 25 years of environmental protection. They see special interest lobbyists with unfettered access to committee rooms drafting legislation that fails to keep our workplaces safe and protect the food we eat. When they look to Washington, they hear politicians in positions of great power and influence bemoaning the lack of money in our political process. They see leaders who insist that the political process is starving even though $724 million was consumed on House and Senate campaigns in 1994 alone. When they look to Washington they see unlimited access and influence given to the fewer than 1 percent of Americans who can, and do, give more than $200 a year to political campaigns. And, when they look out on the campaign trail they see a political process dominated by candidates with deep pockets, instead of those with new ideas. Whatever one may think of Steve Forbes' ideas on the flat tax or economic growth, it is doubtful that most Americans would know about them if he were not a multimillionaire. Consider that in his run for the Republican Presidential nomination, Forbes spent $400,000 per delegate that he won in the Republican primaries. Our colleague Senator Phil Gramm, spent $20 million to win 10 delegates. For Bob Dole, his victory in the Iowa caucuses cost him about $35 a vote. In fact, Presidential candidates spent more than $138 million by the end of January 1996--all before a single American voter had stepped into the voting booth to cast their ballot. Is it any wonder the American people are cynical and disenchanted with their elected leaders? But, the vast sums of money needed, for even unsuccessful runs for public office, are simply out of reach of the average American. Eighty-five years ago, former President Theodore Roosevelt said ``the Representative body shall represent all the people rather than any one class of the people * * * .'' But today, not only are we becoming more responsive to one class of citizens, but the reins of leadership are increasingly available to only a select few Americans. Throughout my more than 21 years of public service, it has been my great privilege to serve the people of Connecticut in the U.S. Congress. Every time I come to the floor of this body I am humbled by the great men and women who came before me: Daniel Webster, Henry Clay, Everett Dirksen, Lyndon Johnson, Richard Russell, and the list goes on. But today in America, I genuinely fear that the next generation of Clays, Websters, Doles, and Byrds will be excluded from a process that favors the privileged few. This is not just partisan rhetoric. There are real Americans who are being thwarted from seeking public office. Just a few weeks ago, I read about Linda Sullivan, president of the Warwick City Council in Rhode Island. Ms. Sullivan considered seeking the Democratic Party's nomination for the seat of Congressman Jack Reed, who is running for the Senate. But, she decided against it because she simply couldn't raise the $450,000 needed to seek the nomination. And I want everyone to hear what she said, because it says a lot about our current campaign system. Unfortunately, my campaign has come face to face with the financial reality that governs today's politics in America. Sadly, Mr. and Mrs. Smith cannot go to Washington anymore. Now, I do not know Ms. Sullivan personally. I do not know anything about her ideas, her policy prescriptions or her capability as an effective legislator. But, what I do know is that the exclusion of an entire segment of the population from the political process threatens to undermine the whole notion of participatory democracy in this country. What is more, it fundamentally limits the choices of the American people to politicians who, more and more, are incapable of understanding the problems of working class Americans. Aristotle once said that; ``Democracy arises out of the notion that those who are equal in any respect are equal in all respects.'' But, when it comes to political campaigns in this country and the access that working Americans have to their lawmakers, those words ring hollow. Mind you there are no silver bullets for ending the American people's inherent cynicism or feeling of disempowerment toward their government. But the legislation we are debating today is the foundation by which we must begin this process of change. First of all, by limiting overall campaign spending, the McCain- Feingold bill would allow candidates to focus less time on raising money and more time on tackling the issues that truly affect the American people. Now, I know some of my colleagues argue that this provision of the bill violates the 1976 ruling that political campaign spending is a form of political speech, and thus protected by the first amendment. But, this legislation imposes only voluntary limits on campaign spending. No candidate would be mandated to accept them. In fact, no provision in this legislation would prevent a candidate from spending as much money as they wanted to. However, if they chose to abide by these voluntary limits, candidates could receive free television time, could purchase advertisements at lower rates, and could send out mail at cheaper rates. Additionally, the bill would tackle the issue of millionaire candidates by exempting candidates from the bill's benefits if they spend more than $250,000 of their own money. The McCain-Feingold bill is by no means perfect. In particular, we need to be sure that working people are not restricted from participating in the political process and that grass-roots and volunteer activities are not constrained. However, it is an excellent place to start in reforming the means by which we fund political campaigns in this country. Let me clear on one point: I am not a Johnny-come-lately to this debate. In 1985, I sponsored one of the first legislative proposals to reform campaign finance laws. And as a Congressman, Senator, and now general chairman of the Democratic party I have flourished within the framework of the current system. But, after 20 years of public service I am more convinced than ever that the current approach to funding political campaigns in this country is broken and desperately in need of reform. Time after time, we have talked about reform--particularly when it is an election year--but in the end we have done nothing. We have appointed commissions, we have proposed legislation, we have ordered reports, analyses and studies, and yet in the end, it seems that it is just business as usual. Well today, I call on all my colleagues to chart a new course, to put aside their partisan differences, to ignore how this bill affects our reelection chances and put first and foremost in our deliberations the good of the Nation. Let us not forget that a Government that is viewed with suspicion and mistrust by its own people cannot sustain our Democratic institutions. As Henry Clay, a former Member of this body once said: Government is a trust, and the officers of the government are trustees; and both the trust and the trustees are created for the benefit of the people. Let us remember that: our democracy exists for the benefit of the people--and not their elected leaders. As leaders, we must not shirk our responsibility to do all we can to restore that sense of trust to the American people. The McCain-Feingold bill begins that process and I believe that as a body we have a solemn responsibility to embrace this legislation.

Mr. DODD

Mr. DODD. Mr. President, in my nearly 16 years as a U.S. Senator few accomplishments have given me as much pride as the day in February 1993 when President Clinton signed into law the Family and Medical Leave Act. Passage of this legislation was an exhausting, lengthy, and sometimes exasperating process. But in the end, through the hard and courageous work of Senators from both sides of the political aisle, the vast opportunities for family and medical leave were made available to millions of Americans. In an era when the American people bemoan the lack of bipartisanship and compromise in Washington, when they decry the blatant and nasty partnership, the Family and Medical Leave Act stands in sharp contrast. Family and medical leave is an issue that truly goes beyond partisan political differences. It is something that every American, be they Democrat or Republican, can relate to and understand. Enactment of the Family and Medical Leave Act in 1993 threw millions of struggling Americans a lifeline. It made it easier for people to balance the responsibilities of work with their responsibilities to their family. And most important, it said to the American people: If you or a loved one becomes ill, you won't be forced to choose between your family and your job. But, my involvement with the issue of family and medical leave did not end with its enactment. There is more work to be done. Across America, working families, teachers, and school boards continue to lament the lack of parental involvement in their children's lives. With more and more families working outside the home, with mothers and fathers too busy and too stressed from working long hours, children are losing the guiding hand they need from their parents. The Family and Medical Leave Act performed a genuine need among America's working families to allow them take leave in times of medical and family emergency. This legislation would continue that process by providing parents with the time they need to make a difference in their children's education. For that reason, I am today introducing legislation that would build on our earlier successes while at the same time offering greater leave opportunities and flexibility to our Nation's families. First, it would lower the threshold of coverage to include worksites with 25 or more employees. Today, 40 percent of private sector employees remain unprotected by the Family and Medical Leave Act because their worksite does not meet the current 50-or-more employee threshold. Second, the bill would grant eligible parents 24 hours of unpaid leave per year to participate in their children's school or community group activities. Parents would provide their employers with at least 2 weeks notice and could take only 4 hours per month, unless otherwise agreed to by the employer. These are commonsense reforms that build on the successes of the Family and Medical Leave Act while providing expanded opportunities for American families. For those of my colleagues who doubt the success of the Family and Medical Leave Act, I urge them to examine a recent bipartisan report, which indicates that the success of the Family and Medical Leave Act is clear cut. When this legislation passed in 1933, provisions of the bill established a commission to examine the impact of the act on workers and businesses. The commission's analysis spanned 2\1/2\ years, including independent research and field hearings across the country to hear first hand about the act's impact from individuals and businesses. Additionally, through the Bureau of Labor Statistics, we commissioned two major research surveys to gauge the impact of family leave policies on employees and employers. These surveys provided us with the first statistically valid, nationally representative data on the impact on the legislation. And, the overall findings of this commission are quite clear--family and medical leave is an overwhelming success. What's more, according to the commission's final report, the law represents ``A significant step in helping a larger cross-section of working Americans meet their medical and family caregiving needs while still maintaining their jobs and economic security.'' Due to this legislation, Americans have significantly greater opportunities to keep their health benefits, maintain job security, and take leave for longer and for greater reasons. While the American people have seen expanded opportunities under this legislation, there is plenty of good news for America's businesses as well. The conclusions of the bipartisan report are a far cry from the concerns that were voiced when this law was being considered in Congress. The vast majority of businesses--over 93 percent--report little to no additional costs associated with the Family and Medical Leave Act. More than 92 percent reported no noticeable effect on profitability. And nearly 96 percent reported no noticeable effect on growth. Additionally, 83 percent of employers reported no noticeable impact on employee productivity. And of those that have seen an effect nearly as many are as likely to note a positive effect as a negative one. In fact, 12.6 percent actually report a positive effect on employee productivity from the Family and Medical Leave Act. While the benefits of family leave have been clear, millions of Americans continue to face painful choices involving their competing responsibilities to family and work. Those not covered by FMLA are still often told that they must choose between sick family members and their jobs. And parents, who want to participate in their children's school and community activities, even to attend parent-teacher conferences, find their employment responsibilities are forcing them to make impossible choices. More and more parents are simply too busy to take the time necessary to play an active role in their children's education. This comes at a time when not only is a strong education so important to our Nation's youth, but ample evidence indicates that parental involvement in school activities has a dramatic impact on academic performance. Studies have shown that academic achievement is much higher at schools when parents are strongly involved. In fact, a recent study by the Department of Education found that parental involvement is a key factor in the development of children's reading skills. And a Carnegie Corp. study released this spring found that, ``Parents who want their children to do well in school must remain involved in their education through the middle and high school years.'' So many parents, however, simply don't have the time to participate in school and community activities while balancing responsibilities to their job. A survey of 30,000 PTA leaders found that 89 percent of parents do not get involved in their children's education because they do not have enough time. Yet another study indicates that 66 percent of employed parents report that they don't have enough time for their children. And as the number of single-parent families, and families where both parents have to work, continues to rise the constraints placed on parents are only going to increase. The bill that I introduce today represents a genuine and commonsense effort to tackle these problems. It would take a giant step toward widening the opportunities provided under the Family and Medical Leave Act while giving parents the chance to play a greater role in their children's education. While I'm fully aware this is an election year, I introduce this legislation with the hope and expectation that we can put aside our political differences and build on the success of the Family and Medical Leave Act. It's common sense that hard working people should not only be able to play a role in their children's lives, but face family crises without losing their jobs. The American people understand the need for these provisions and I urge all my colleagues to join me in supporting this critically important legislation for our Nation's working families. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. DODD

Mr. DODD. Mr. President, in my nearly 16 years as a U.S. Senator few accomplishments have given me as much pride as the day in February 1993 when President Clinton signed into law the Family and Medical Leave Act. Passage of this legislation was an exhausting, lengthy, and sometimes exasperating process. But in the end, through the hard and courageous work of Senators from both sides of the political aisle, the vast opportunities for family and medical leave were made available to millions of Americans. In an era when the American people bemoan the lack of bipartisanship and compromise in Washington, when they decry the blatant and nasty partnership, the Family and Medical Leave Act stands in sharp contrast. Family and medical leave is an issue that truly goes beyond partisan political differences. It is something that every American, be they Democrat or Republican, can relate to and understand. Enactment of the Family and Medical Leave Act in 1993 threw millions of struggling Americans a lifeline. It made it easier for people to balance the responsibilities of work with their responsibilities to their family. And most important, it said to the American people: If you or a loved one becomes ill, you won't be forced to choose between your family and your job. But, my involvement with the issue of family and medical leave did not end with its enactment. There is more work to be done. Across America, working families, teachers, and school boards continue to lament the lack of parental involvement in their children's lives. With more and more families working outside the home, with mothers and fathers too busy and too stressed from working long hours, children are losing the guiding hand they need from their parents. The Family and Medical Leave Act performed a genuine need among America's working families to allow them take leave in times of medical and family emergency. This legislation would continue that process by providing parents with the time they need to make a difference in their children's education. For that reason, I am today introducing legislation that would build on our earlier successes while at the same time offering greater leave opportunities and flexibility to our Nation's families. First, it would lower the threshold of coverage to include worksites with 25 or more employees. Today, 40 percent of private sector employees remain unprotected by the Family and Medical Leave Act because their worksite does not meet the current 50-or-more employee threshold. Second, the bill would grant eligible parents 24 hours of unpaid leave per year to participate in their children's school or community group activities. Parents would provide their employers with at least 2 weeks notice and could take only 4 hours per month, unless otherwise agreed to by the employer. These are commonsense reforms that build on the successes of the Family and Medical Leave Act while providing expanded opportunities for American families. For those of my colleagues who doubt the success of the Family and Medical Leave Act, I urge them to examine a recent bipartisan report, which indicates that the success of the Family and Medical Leave Act is clear cut. When this legislation passed in 1933, provisions of the bill established a commission to examine the impact of the act on workers and businesses. The commission's analysis spanned 2\1/2\ years, including independent research and field hearings across the country to hear first hand about the act's impact from individuals and businesses. Additionally, through the Bureau of Labor Statistics, we commissioned two major research surveys to gauge the impact of family leave policies on employees and employers. These surveys provided us with the first statistically valid, nationally representative data on the impact on the legislation. And, the overall findings of this commission are quite clear--family and medical leave is an overwhelming success. What's more, according to the commission's final report, the law represents ``A significant step in helping a larger cross-section of working Americans meet their medical and family caregiving needs while still maintaining their jobs and economic security.'' Due to this legislation, Americans have significantly greater opportunities to keep their health benefits, maintain job security, and take leave for longer and for greater reasons. While the American people have seen expanded opportunities under this legislation, there is plenty of good news for America's businesses as well. The conclusions of the bipartisan report are a far cry from the concerns that were voiced when this law was being considered in Congress. The vast majority of businesses--over 93 percent--report little to no additional costs associated with the Family and Medical Leave Act. More than 92 percent reported no noticeable effect on profitability. And nearly 96 percent reported no noticeable effect on growth. Additionally, 83 percent of employers reported no noticeable impact on employee productivity. And of those that have seen an effect nearly as many are as likely to note a positive effect as a negative one. In fact, 12.6 percent actually report a positive effect on employee productivity from the Family and Medical Leave Act. While the benefits of family leave have been clear, millions of Americans continue to face painful choices involving their competing responsibilities to family and work. Those not covered by FMLA are still often told that they must choose between sick family members and their jobs. And parents, who want to participate in their children's school and community activities, even to attend parent-teacher conferences, find their employment responsibilities are forcing them to make impossible choices. More and more parents are simply too busy to take the time necessary to play an active role in their children's education. This comes at a time when not only is a strong education so important to our Nation's youth, but ample evidence indicates that parental involvement in school activities has a dramatic impact on academic performance. Studies have shown that academic achievement is much higher at schools when parents are strongly involved. In fact, a recent study by the Department of Education found that parental involvement is a key factor in the development of children's reading skills. And a Carnegie Corp. study released this spring found that, ``Parents who want their children to do well in school must remain involved in their education through the middle and high school years.'' So many parents, however, simply don't have the time to participate in school and community activities while balancing responsibilities to their job. A survey of 30,000 PTA leaders found that 89 percent of parents do not get involved in their children's education because they do not have enough time. Yet another study indicates that 66 percent of employed parents report that they don't have enough time for their children. And as the number of single-parent families, and families where both parents have to work, continues to rise the constraints placed on parents are only going to increase. The bill that I introduce today represents a genuine and commonsense effort to tackle these problems. It would take a giant step toward widening the opportunities provided under the Family and Medical Leave Act while giving parents the chance to play a greater role in their children's education. While I'm fully aware this is an election year, I introduce this legislation with the hope and expectation that we can put aside our political differences and build on the success of the Family and Medical Leave Act. It's common sense that hard working people should not only be able to play a role in their children's lives, but face family crises without losing their jobs. The American people understand the need for these provisions and I urge all my colleagues to join me in supporting this critically important legislation for our Nation's working families. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. DODD

Mr. DODD. Mr. President, this is a fair and balanced compromise. The committee took into account the unique benefits generic drug manufacturers receive under the FDA process. Generic drug manufacturers are given the use of the safety and efficacy data that is developed over years of research and at an average cost of $500 million by the brand name pharmaceutical manufacturer. The generic drug industry, in contrast, spends an average of less than $1 million on their products. The cornerstone of our intellectual property system is that one person or company should not be able to profit unfairly from another's investment, be it in time or money, at the expense of the original person or company. This compromise protects that fundamental right, and I urge my colleagues to support it. Exhibit 1 May 20, 1996. Hon. Orrin Hatch, Chairman, Committee on the Judiciary, U.S. Senate, Washington, DC. Dear Senator Hatch: We are concerned that the Senate may soon consider legislation that would diminish the strong patent terms for pharmaceuticals that resulted when Congress implemented the General Agreement on Tariffs and Trade (GATT). We thank you for your leadership and efforts to preserve strong intellectual property protection. It is vital that all Members of Congress share your understanding of the importance to our patients of strong intellectual property protection, and we ask that you share our concerns with your colleagues. As gastroenterologists, we have seen first hand the tremendous power of pharmaceutical innovation to forge unparalleled advances in medical care. Prior to the discovery and development of the acid-reducing medicines called H2 antagonists, many patients suffering from peptic ulcer disease had to endure expensive corrective surgery. Since 1977, when the first H2 antagonist was introduced, the incidence of ulcer surgery as well as ulcer-related morbidity has dropped dramatically. This decline in surgery and morbidity has not only benefited our patients, but it has also reduced the overall health care costs for our country since drug therapy is substantially less expensive--not to mention less painful--than ulcer surgery. The argument in support of changing the GATT patent benefit for pharmaceuticals seems to rest primarily on the potential cost savings to consumers of accelerating the availability of a generic version of one anti-ulcer drug. Such an argument totally ignores the fact that the anti-ulcer marketplace is highly competitive with a wide range of choices, including generics, for patients and physicians. This argument also ignores the significant cost savings to consumers from advances in medical research. There are new medicines available and coming to the market that can cure peptic ulcer disease. The senior citizen on a fixed income will save far more from the availability of medicines that eradicate the cause of his/her ulcer after a few weeks of therapy than from a less expensive version of a medicine they must continue to take on a daily basis. Fortunately for the patient, the strong patent protection on existing anti-ulcer products has helped fund the research that has made these new medicines possible. We firmly believe that it is in the best interest of patients to provide strong patent protection. The results of innovative bio-medical research funded by patent protection for existing products benefit patients directly. Any attempts to determine the incentives to further research and development is short sighted and leaves patients short changed. Sincerely, John H. Walsh, M.D., Professor of Medicine, UCLA, Los Angeles, CA. Jamie S. Barkin, M.D., Professor of Medicine, Univ. of Miami, Miami, FL. Rosemarie L. Fisher, M.D., Professor of Internal Medicine, Yale Univ., New Haven, CT. Stanley B. Benjamin, M.D., Professor of Medicine, Georgetown Univ., Washington, DC. Malcolm Robinson, M.D., Professor of Medicine, Univ. of Oklahoma, Oklahoma City,

Mr. DODD. Mr. President, I rise today in support of the compromise that the Senator from Utah and chairman of the Judiciary Committee, Senator Hatch, has offered on the GATT pharmaceutical patent issue. I commend him for his leadership on this subject--a subject that is fundamentally an intellectual property issue and that is clearly in the purview of the Senate Judiciary Committee. This is not the first time we have had this discussion. Earlier this year, the Senator from Arkansas agreed to allow the Senate Judiciary Committee to consider this issue. On February 27 and March 5, the committee held hearings on this issue with a balanced set of witnesses, and reported out a compromise bill on May 2, 1996, on a bipartisan vote of 10 to 7. The Judiciary Committee bill would allow the FDA to approve a generic drug for marketing prior to expiration of the GATT patent extension, but only after a generic drug manufacturer complied with requirements spelled out in both the GATT implementing law and the generic drug approval process in the 1984 Hatch-Waxman law. Under this compromise, generic drug manufacturers would not be treated differently than any other generic manufacturer. Like other generic manufacturers, generic drug manufacturers would be required to prove in court that they had made a substantial investment in their product before June 8, 1995. Court determination of substantial investment and the establishment of equitable remuneration to the patent holder is required under the GATT implementing law prior to generic infringement of patents in all industries. A generic drug company would have to make substantial investments in purchasing land, building a plant, or other capital investments comparable to what generic companies in other industries would have to make in order to qualify under the transition provision. The investment would have to be more than merely the filing of an abbreviated new drug application [ANDA] for regulatory approval with the FDA, although the generic company would be able to include these costs in proving their investment. At the same time, this compromise provides unique protection to generic drug companies from the cost of potential delays from the court process prior to entering the market. If a generic drug company wins the determination of substantial investment, the court could order the patent holder to compensate the generic company for the delay in selling their product caused by litigation. What's more, Senators have heard from dozens of patient and physician groups who point out that without the strong patent protections provided by the law, the investments that have yielded critical, life- saving drugs and biomedical products would not have been made. And unless that patent protection is preserved, pharmaceutical companies will have no incentive to continue their vital research. Indeed, Daniel Perry, executive director of the Alliance for Aging Research wrote that . . . Patent rights are the cornerstone of America's biomedical research enterprise. Patents provide a critical incentive for all companies, particularly pioneer pharmaceutical manufacturers, to conduct ground breaking biomedical research. I would ask unanimous consent that Mr. Perry's and other letters be printed in the Record following my remarks.

Mr. DODD

Mr. DODD. Mr. President, as I come to the floor today to speak on this budget conference report I am reminded of the immortal words of Yogi Berra: ``It feels like deja vu all over again.'' Because, contrary to my colleagues' protestations of moderation, this conference report repeats the same mistakes of last year's failed budget process, which twice shut the Government down. Last year's plan gutted Medicare, Medicaid, education, and the environment and was soundly rejected by the American people and this conference report seems to be no different. Frankly, I'm amazed that after the lessons of last year the Republicans would try to hoodwink the American people into thinking that they have changed their stripes. But this budget does just that by presenting the thin veneer of compromise and moderation, while at the same time maintaining draconian spending cuts in America's priorities and tax cuts for Americans who don't need them. But the American people will not be fooled. They learned long ago that when it comes to the Republican's budget-cutting efforts, ``All that glitters is not gold.'' Unfortunately, the only thing that shines in this budget is the repetition of the same mistakes that gave us 13 continuing resolutions and 2 Government shutdowns last year. For example, on Medicare this conference report calls for cuts of up to $168 billion. These reductions would leave seniors with an increasingly second-class health care system. The enactment of the accompanying profound policy changes would leave the sickest and poorest Americans in a weakend and toothless Medicare program. This conference report also represents a $123 billion reduction in part A. These cuts would limit beneficiary access to hospital health services and limit payments to hospitals. These reductions could result in cost-shifting, affect quality and leave in serious jeopardy the continuing viability of many rural and urban hospitals. But, Republicans don't stop with Medicare. Medicaid, too, would be gutted by $72 billion in cuts and block grants that would threaten this Nation's guarantee to provide health care for children and the poor. In fact, under the Republicans' block grant approach, these Medicaid reductions could total $250 billion if States spend only the minimum required. If this conference report were enacted, more than 36 million Medicaid beneficiaries, including 18 million children, more than 6 million people with disabilities and millions of older Americans who rely on Medicaid, would lose their guarantee of adequate health care. But these Medicaid costs are an integral part of a conference report that finds more than 42 percent of its savings by cutting priorities that affect low-income Americans. Is this any way to balance the budget--on the backs of America's poorest citizens while at the same time including sizable tax cuts for wealthy Americans? Additionally, I hear a lot of rhetoric from across the aisle about moving Americans from welfare to work and making the opportunity of the American Dream available to millions of Americans. Maybe one of my Republican colleagues could explain to me how we are supposed to do that when we're taking away the tools to make those dreams a reality? In my opinion, there is no better example of the Republicans' insensitive attitude to the working poor than their proposed cuts in the earned income tax credit. [EITC]. Here we have a program that benefits millions of America's working poor that in the past has had sweeping bipartisan support and that provides an essential lifeline for those Americans trying to escape poverty. But, while most Americans would look at the earned income tax credit and say ``Here's a Government program that works,'' my Republican colleagues look at the EITC and say, ``Here's a place to save money.'' This is akin to raising taxes on the working poor. At at time when growing wage inequalities threaten to segregate Americans by economics, it is beyond my ability to understand how my Republican colleagues could pass a conference report that raises taxes on the working poor while cutting taxes for wealthy Americans. But, it seems those kind of skewed priorities have become the norm is this body. Additionally, this budget continues the Republican assault on education and job training. The overwhelming desire of the American people to see Congress maintain our national commitment to education has led my Republican colleagues to increase funding. But, Americans won't be fooled by these hollow increases. In real terms,this conference report would mean $25 billion less in education and training spending over the next 6 years. On the other hand, President Clinton understands the need for maintaining our commitment to education and job training. That's why his budget includes nearly $60 billion, more than the GOP budget, in new investments in priorities such as Head Start, Goals 2000, Pell grants, school-to-work, summer jobs, and dislocated worker training. The President's budget also maintains our national commitments to the environment and to crime fighting, which suffer serious blows under the GOP conference report. For example, the Republican budget cuts nearly $4 billion, from the President's request for environmental priorities such as energy conservation and EPA enforcement and maintains the GOP commitment to open up one of America's last great environmental treasures, the Arctic National Wildlife Refuge, to oil and gas drilling. On the crime front, while Republicans like to portray this President as soft on crime, it is Republicans who are actually cutting money that helps keep our streets safe from the scourge of drugs and violent crime. For example, the Violent Crime Reduction fund would see serious cutbacks and the total funding for the Administration of Justice function would be cut by more tan $2.5 billion than the President requested. Yet, at the same time they're cutting money for crime, education, the environment and job training, this conference report still finds enough money to provide $11.3 billion more in defense funding than the Pentagon even requested. This additional, unrequested funding, along with another $60 billion boondoggle for a Star Wars missile system serves as a vivid reminder of where the priorities of my colleagues across the aisle lie. And to be honest with this much in additional spending it's hard to take seriously Republican assertions that they truly want to balance the budget. There's an inherent hypocrisy in suggesting that on one hand we need to balance the budget--even amending the Constitution if need be--while on the other hand calling for additional, unrequested defense spending and a repeal of the gas tax, which will only drive up the deficit. What's more, these spending increases come on the heels of Republicans' continued insistence that this Congress pass tax cuts for wealthy Americans who don't need them. Last year's budget devoted 47 percent of its tax cuts to people making more than $100,000 and there is little reason to believe that this year is any different. Stop me if this agenda sounds familiar. As one of the 11 Senators to vote against the 1991 Reagan budget plan that cut taxes, raised defense spending and plunged this Nation into deeper and deeper debt the similarities are all too familiar. It was that plan that brought this Nation to the point we're at today. If we hadn't exploded the deficit during the 1980s this debate would not necessary. But, it seems some people never learn. If my Republican colleagues were truly intent on balancing the budget in a fair and equitable manner they might want to look down Pennsylvania Avenue to the White House. President Clinton has presented a budget that puts our fiscal house in order while protecting our values and priorities as a Nation. But, it seems Republicans are more intent on playing politics with this issue, rather than taking up the President's offer to continue the negotiations. This conference report puts us in the wrong direction toward compromise, but more importantly it puts us on the wrong path toward making a better future for our children. It is my intention to vote against this conference report and I urge all my colleagues, Democrats and Republicans, to reject it as well.

Mr. DODD

Mr. DODD. Mr. President, I wanted to take a few moments today to speak about a wonderful and inspiring event, which took place on The Mall in Washington this past Saturday. Mr. President on June 1, 200,000 Americans from across the country; blacks and whites, Jews and Gentiles, rich and poor, male and female, liberals and conservatives came together to stand up for the rights of our nation's most vulnerable citizens--America's children. I applaud the efforts of all those who came to Washington to make a principled stand for the rights of children. But as the Hartford Courant noted, ``the world's most prosperous democracy shouldn't require a rally to focus on deprivation of its young.'' Children don't vote. They don't have a political action committee. Instead, they must rely on the benevolence of adults to assure that they have the tools and opportunities to succeed. Unfortunately, it seems we as adults are failing to hold up our part of the bargain. Consider the enormous adversities facing our youngest Americans. One in five children in this country is mired in poverty. Every day, 2,600 American children are born into a life of poverty. And children remain this Nation's poorest group of Americans. Every day, 15 kids are homicide victims. Every 90 minutes, a gunshot ends the life of one of America's children. When our nightly newscasts and newspapers focus on the most heinous violent crimes committed in our Nation it is children who seem to often be the perpetrators. Additionally, more than 8,400 of America's young people are victims of abuse or neglect. Another 12 million lack health insurance, and child care workers toil at the bottom of U.S. wage scales. The evidence is clear that children in our Nation face innumerable difficulties. But, events of the past weekend demonstrate that there exists in our Nation a groundswell of support for a political agenda that protects children. Two hundred thousand Americans came to The Mall in Washington because they believe that everything we do in Congress should help, not hinder, the growth and development of children. They came to Washington because they believe that America should never shirk its commitment to providing health care for children. They came to Washington because they believe that children have a right to play in streets and on playgrounds free from the scourge of guns and drugs. They came to Washington because in a time when education is essential to succeeding in the global economy of the 21st century, they believe that every child must have the opportunity of a good education. These are not, and should not, be partisan issues. And, it's with great dismay that I see some on the right attacking the intentions and goals of the organizers of Stand for Children. They claim that the event was simply an excuse to increase the size of Government. I couldn't disagree more. As Marian Wright Edelman, head of the Children's Defense Fund and organizer of the march said, ``We do not stand here advocating big government. We stand here advocating just government.'' I certainly agree that government is not the answer to all of the problems of America's children. It can't steady the hand of an abusive parent. But, it can help to protect the child. Government can't teach a child a skill. But, it can provide educational opportunity through Head Start, good public schools, or student loans. It can't save a child's life. But it can take murderous assault weapons off the street and throw criminals in prison. Government can't put food on the table. But government can help provide child care, raise the minimum wage or provide economic opportunities so that parents, on their own, can focus their energies on making a better future for their children. Only in our Nation's communities, neighborhoods and homes can we truly create an environment conducive to the good of our children. But these cost-effective, common sense measures invest in our children's future and they should enjoy bipartisan support. I've long supported child care initiatives in Congress, such as the 1990 Child Care and Development Block Grant and the Family and Medical Leave Act. And each time, Members from both sides of the aisle have joined in co-sponsoring and supporting these measures. Because, children's issues are not partisan issues. They are American issues and they affect each and every one of us. Stand for Children is a clear demonstration that we need to go beyond the rhetoric of protecting our children's future to concrete and unequivocal action. I urge my colleagues to heed the call of the 200,000 Americans who came to Washington this past Saturday and make a similar stand for children here in Congress.

Mr. DODD

Mr. DODD. Mr. President, I rise today in strong opposition to this constitutional amendment to balance the budget. Let me first say, I am well aware that the notion of balancing the budget and forcing this Government to live within its means is a popular idea both in Congress and across the Nation. If working families have to do it, why can't the Government? I agree. That's one of the main reasons that I was 1 of 11 Members of the U.S. Senate to vote against the Reagan tax plan of 1981. In case we've all forgotten, it was that plan, which cut taxes for the wealthy, increased spending and exploded the deficit to the heights it reaches today. It is why I sponsored the first pay-as-you-go plan in 1982. According to the CBO, the enactment of that proposal would have brought a budget surplus by 1985, making this entire debate today irrelevant. Additionally, it is why I was the second Member from this side of the aisle to support the Gramm-Rudman-Hollings Act. And it is why I supported President Clinton's 1993 deficit reduction plan. Because of that plan the latest deficit projections are down to $130 billion, from more than $300 billion when the President took office. It is also why I have long been an advocate for real deficit reduction and not the various accounting gimmicks that so often tarnish our budget cutting efforts here in Congress. But, at the same time, I have also fought for deficit reduction that protects our national priorities while forcing Congress to accept fiscal responsibility. But, the measure before us today would meet none of those essential criteria. Instead it would only increase the use of budgetary gimmickry by allowing the Congress to avoid making the critical decisions necessary for balancing the budget. What's more, it would not make it any easier for this or any Congress to accept our fiscal responsibility. Instead it would include in the organic law of our land a constitutional amendment that would remove from the legislature the historic and mandated role of making budgetary decisions. Contrary to the arguments of its supporters, this amendment is not a lightning bolt that would suddenly give the Congress the courage it has so often lacked when it comes to cutting the deficit. Instead it would constitutionally mandate possibly massive spending cuts in education, the environment, Medicare and Medicaid and other priorities that make a real difference in the lives of the American people. And in the end we would have a foolproof excuse for those draconian cuts: ``The Constitution made me do it.'' And if Congress could not effectively reach compromise a constitutional amendment could place the budgetary decisionmaking process squarely in the lap of the Supreme Court. The Supreme Court is an unelected body whose job is to interpret our Nation's laws, not enforce them. But, if this amendment passes, the Supreme Court could be deciding whether the requirement of a balanced budget has been achieved. If the conditions of this amendment were not met then our Federal judiciary could be making the decisions on budgetary allocations. For the Congress to go along with such a proposal represents an absolute abdication of our responsibilities and obligations as legislators and elected representatives of the American people. That's no way to balance the budget and it's no way to run the Federal Government. But, while there are many reasons why I believe this amendment is truly bad public policy and bad for the American people, I also believe that it is wholly unnecessary. Because, over the past year and a half, Democrats and Republicans reached compromise on the means for balancing the Federal budget. Let me repeat that, because I think sometimes it is conveniently ignored by my Republican colleagues: Both President Clinton and the leadership here in Congress are in agreement on balancing the Federal budget in 7 years. Both sides have proposed the necessary spending cuts to put our fiscal house in order. And both sides agree that this budget balancing can be done by the year 2002. While I certainly think that the President's plan does a better job of protecting our national priorities, the facts remain evident for all those in this body who wish to open their eyes and see: We can work together to balance the budget. We don't need a constitutional amendment. We have the outlines for an agreement right here. If my Republican colleagues would simply walk down Pennsylvania Avenue, meet with the President and in good faith negotiate a compromise solution there would be absolutely no need for a constitutional amendment to balance the budget. But my colleagues across the aisle seem to prefer making campaign speeches on the Senate floor and embarking upon the momentous act of amending the Constitution of the United States rather than sitting down with the President and working out a deal. They seem more inclined to avoid compromise and instead use the President's principled stand against this amendment as a means to score political points. But, amending the Constitution should not, and must not, be a political tool. It is one of the most sacred and essential duties of our elected office. There is a very good reason why, in the more than 200 years since this Nation adopted the Constitution, we have seen fit to amend it only 27 times. Twenty-seven times in more than 200 years. In fact, in those 200 or so years, we've seen approximately 11,000 proposed amendments to the Constitution. Only 33 passed the Congress. And the Bill of Rights notwithstanding, only 17 are now part of the Constitution. What's more, amending the Constitution remains an incredibly difficult task. Two-thirds of the Congress, and three-fourths of the State legislatures must agree before we change the law of the land. Our Founding Fathers made clear that amending the Constitution would not be an easy or brazen decision. Changing the Constitution is not like adopting a simple statute that can be modified or repealed somewhere down the road. Indeed, the language we insert into the Constitution will very likely stay there long after all of us have left this Earth. Generation after generation will live with the consequences of our constitutional decisions. As Henry Clay said 145 years ago, ``The Constitution of the United States was made not merely for the generation that then existed, but for posterity--unlimited, undefined, endless, perpetual posterity.'' But frankly, over the last year and a half, the sacrosanct nature of our Constitution and the amendment process has been largely ignored by the majority. I fear that the sacred, fundamental nature of our Constitution has been lost on some of our Republican colleagues. The Congressional leadership is advocating one of the most sweeping rewrites of the U.S. Constitution since the enactment of the Bill of Rights. The Constitution is not simply a set of fraternity bylaws to be amended with each new pledge class. It should reflect not the popular winds of the time, but the sacred principles of our republic. Nonetheless, in the 104th Congress alone, several amendments to the Constitution, all of which would have an incalculable impact on the social, political and economic life of our nation have been proposed. First, we have the balanced budget amendment, which we are discussing today. But, there are also proposed amendments requiring a super majority for raising taxes, limiting the terms of Congressman and Senators, providing for a line-item veto, preventing unfunded mandates, allowing school prayer, making flag burning a crime, and the list goes on and on. Other than the Bill of Rights, ratified in 1791, these constitutional changes would be utterly unprecedented in our Nation's history. Unfortunately those changes are an integral part of the Republica agenda. Now, I ve heard all the rhetoric from across the aisle about how essential this amendment is for protecting our children from a lifetime of crushing debt. I've heard the rhetoric about providing opportunity for working families. I've heard the rhetoric about cutting the deficit so as to increase economic growth. Well to all my colleagues who constantly invoke children when calling for the enactment of this amendment, I ask how do you plan pay for this balanced budget amendment? Will Head Start, Medicare, Medicaid and our environmental safeguards escape the budgetary ax? Now my Republican colleagues want to spend an additional $60 billion to build another star wars system. How are they going to pay for that, while trying to balance the budget? Are they going to raise taxes? Hardly. This body can't even swallow a 4.3 cents gas tax, which as part of the President's deficit reduction plan in 1993 cut the deficit in half. A plan, by the way, that failed to receive even a single Republican vote. But that's another story. In 1995, the Federal Government spent more than $1.519 trillion, while receiving in revenues approximately $1.355 trillion. That represents a Federal deficit of just over $150 billion. If we passed this amendment tomorrow, this body would have to cut more than $150 billion in 7 years. And if history is any indication, my Republican colleagues would do it by shredding the social safety net. They would enact draconian cuts in education, Medicare, Medicaid, and the environment to name a few. Is that how my Republican colleagues propose to protect children? By cutting money for education and health care for children. That is the part of the balanced budget amendment that you don't hear about too often: the part where the Congress would be constitutionally mandated to unravel the fabric of America's social safety net. I didn't run for this office to be a party to those kind of spending cuts. When I became a U.S. Senator I took an oath of office to uphold and protect the Constitution of the United States. And that is why I'll be voting no on this balanced budget amendment and I urge my colleagues to join me.

Mr. DODD

Mr. DODD. Mr. President, I am proud to sponsor this very important legislation with my colleagues, Senators D'amato and Frist. In my view, the legislation is necessary to protect the American public, and particularly our Nation's youth, from what amount to common street drugs. The makers of these products make no attempt to sell them as products to improve health or nutrition. The products carry names like ``Herbal Ecstacy,'' ``Ultimate X-Phoria,'' and ``Cloud 9.'' One product claims ``It is a carefully formulated and thoroughly tested organic alternative to actual MDMA or Ecstacy.'' I hardly think any of us believe that our Nation's children should be able to go into any novelty store and buy the equivalent of a powerful, dangerous, and I might add, illegal street drug. Let me share with you the claims and promotional language of these products, lest there be any doubt what there purpose is for: The effects of Herbal Ecstacy beyond smart drug capacity include: Euphoric stimulation; highly increased energy levels; tingly skin sensations; enhanced sensory processing; mood elevations. Herbal Ecstacy acts on the same basis as MDMA, triggering similar but not identical physical reactions in the body. Our herbs are 100% natural and are uniquely formulated to give you a floaty, energetic, mind expanding, euphoric experience. And listen to what is presented on a brochure as endorsements by users: They don't call it ``ultimate'' for nothing! This puts everything else I've tried to shame!! Now, Mr. President, I guess we might feel differently if we knew these products were without risk. But the fact is, they have proven deadly. Peter Schlendorf, a 20-year-old from York, FL, died because he took one of these products. The cause of death was identified by the medical examiner's office in the Florida town where Peter died. The makers of these products claim they are nutritional supplements, legitimately sold and promoted. They point to a law passed a couple of years ago that was meant to govern legitimate dietary supplements, that improve health and nutrition. But make no mistake. These products do nothing to improve health and nutrition. So, the legislation we are proposing today is very simple. It says that products claiming to produce euphoria, heightened awareness or similar mental or psychological effects shall be treated as a drug. It would make the products subject to the same review, by the U.S. Food and Drug Administration, as other drugs. The products are not banned. And the bill will have no effect on legitimate dietary supplements. It only will affect products that are marketed and sold as alternatives to powerful street drugs. Mr. President, it is my hope that we can act quickly on this legislation and prevent the kind of tragedy experienced by the Schlendorfs.

Mr. DODD. Mr. President, I rise today to join Senators Gramm, D'Amato, Bryan, and Moseley-Braun in introducing the Securities Investment Promotion Act of 1996. The U.S. capital markets are vitally important for the good economic health not only of virtually every American company but for millions and millions of individual investors who have placed some of their assets either directly in securities or, as has become more and more common, into mutual funds. We must recognize that sustained economic growth is heavily dependent upon the continuing ability of our capital markets and financial services industry to function efficiently and with integrity. If companies find impediments to obtaining capital, they will not grow. If individuals find impediments to their access to securities and other investments, they will not save. Taking steps to enhance the access of both corporations and individuals to the securities markets is a prudent means by which Congress can help sustain or even increase the Nation's rate of economic growth. Furthermore, the American capital markets are the envy of the world. No other nation enjoys the international reputation of our capital markets and it is necessary for Congress periodically to review and modernize, where necessary, the laws that make our markets and our financial services industry the world's leader. The legislation that is being introduced today is the culmination of a lengthy bipartisan effort to reform those aspects of the securities laws that are an outdated impediment to the efficient functioning of the securities industry. The bill will also provide clearer statutory directives to both state and Federal regulators so that the integrity of--and confidence in--our capital markets and financial services industry is enhanced. Mr. President, let me provide a brief summary of the major elements of this legislation. The three main areas that the bill addresses are: improving the regulation of investment advisors under the Investment Advisors Act of 1940; modernizing and streamlining the regulation of mutual funds under the Investment Company Act of 1940; and, making modest adjustments in the securities laws to account for changes in the financial world over the past 60 years. Title I, the Investment Advisors Integrity Act, would provide much needed clarity to regulators for the regulation of investment advisors under the Investment Advisors Act of 1940. The most important feature of this title is to draw a clear, bright line between those registered investment advisors who should be regulated at the Federal level by the Securities and Exchange Commission, and those advisors who are more properly regulated by the state that is the advisor's principal place of business. The bill would require investment advisors with more than $25 million under management to be regulated by the Securities and Exchange commission, while those with assets under the $25 million threshold would be regulated by the state. This bifurcation is necessary because it is not realistic to expect the SEC to be able to thoroughly supervise the more than 25,000 advisors who are registered under the IAA nor is it reasonable to have the advisor industry burdened by duplicative state and Federal regulation. This change will allow the state and Federal regulators to focus on those parts of the industry that is within their regulatory expertise, while freeing the industry from the burden of duplicative layers of regulation. The second title of the bill is entitled Facilitating Investment in Mutual Funds. While most of my colleagues are aware of the rapid growth in the mutual fund industry, I wonder how many are aware that nearly one out of every three American families has money invested, in some form or another, in mutual funds. Mutual funds, as of 1995, have slightly more than $2 trillion dollars under management, with $800 billion coming from individual investors and $1.2 trillion coming from institutional investors. The significantly increasing importance of the mutual fund industry led to a lengthy review by the Securities and Exchange Commission in 1992, entitled ``Protecting Investors: A Half-Century of Investment Company Regulation,'' which made recommendations for modernizing of the Investment Company Act of 1940. The last time Congress revised the ICA was in 1970, and many believe that it is approriate--a quarter century later--for Congress to take a fresh look at the issue of modernization. Several of the mutual fund provisions of the legislation being introduced today were originally proposed by the SEC in their 1992 report. Other suggestions have been forthcoming since that report and represent a careful balance between the need to make the Investment Company Act fit the mutual fund industry as it exists today, without sacrificing any investor protection. This section of the bill contains two major components: the first is to eliminate unnecessary state regulation of mutual funds, while preserving the state's authority to investigate for fraud and other types of wrongdoing. Mutual funds are highly regulated by the Securities and Exchange Commission through the Investment Company Act of 1940; in fact, this is one of the most successfully regulated industries in America, borne out by the explosive growth in mutual funds since the Act was passed. In 1940, there were 105 registered companies with $2 billion in assets (according to the SEC); today, as I mentioned above, there are more than 5,300 funds holding over $2 trillion in assets. The very success of SEC regulation has rendered most individual state regulations obsolete, not to mention that complying with these duplicative statutes is both expensive and burdensome on the industry. The costs of this regulatory burden are passed onto consumers. The legislation we are introducing today will preempt most state regulation of mutual funds, while preserving the state's necessary ability to protect consumers through anti-fraud and other statutes. Another area that will be modernized through adoption of this legislation will be in the area of smaller funds whose investors are either wealthy individuals--defined in the bill as those with more than $5 million in investments--and institutional investors. These funds, which are exempt from many of the provisions of the Investment Company Act of 1940 because of their smaller size and unique nature, often provide critically needed capital directly to new corporations and generally to America's emerging industries. By modestly expanding the pool of people and institutions eligible to participate in such funds, the legislation seeks to expand the amount of capital available for investment, particularly newer, small and moderate sized companies. There are also enhanced mutual fund disclosure requirements benefiting investors that we are continuing to develop, and I would anticipate that if and when this bill goes to mark-up, they will be added to the legislation. The last title of the bill contains a number of provisions that attempt to remove anomalies that have developed within the securities laws as the financial world has changed over the last sixty years. These changes, while modest in and of themselves, will nevertheless provide significant and needed relief to both investors and industry. In all, Mr. President, this is an extremely balanced and thoughtful bill that has been drafted in close consultation with the Securities and Exchange Commission and the North American Securities Administrators Association, the umbrella group for the fifty state securities administrators. It has been written in bipartisan manner that is increasingly rare in this body, and as a result, the bill provides statutory reform that is needed by investors, corporations and the financial services industry without sacrificing any consumer protections. I hope that the Senate will move expeditiously to pass this legislation.

Mr. DODD

Mr. DODD. Mr. President, I wanted to take a few moments today to speak about the passing of a distinguished citizen of Connecticut and a great American--Henry Healey, Jr. At the time of his death, Henry Healey was the high sheriff of New Haven County. But his legacy was far greater. He was a WWII veteran, a successful businessman, a dedicated member of the Democratic Party, and a close and dear friend. I first got to know Henry Healey because of his relationship with my father, Senator Thomas Dodd. And later, when I decided to leave the House of Representatives and make my own run for the U.S. Senate it was from Henry Healey that I sought counsel. His advice then, as it was every time I spoke to him, helped to guide me in my decision-making process. Because, Henry was a man of great wisdom and shrewd understanding of political history. Like few men I've known, Henry was endowed with a vision that allowed him to presciently see beyond the political machinations of the day to the long-term political currents of the future. It's one of the main reasons why Henry was probably one of the three or four most influential people in the past 30 years of Connecticut political history. But of course there was more to Henry then just his political acumen. He was a man of great loyalty and understanding, who knew how to accomplish things without being flamboyant or self-serving. He wasn't a great ideologue or a firebrand. He was more interested in people's human skills and their ability to work with others. I think his chief deputy sheriff, Frank Kinney, Jr., said it best: ``People with problems in their lives could always open up to him and he never failed to respond, to do what he could for them. That's what I learned from him, and that's what I admired most about him.'' And in his official role as New Haven County sheriff, Henry Healey turned what had been a largely administrative position into a bully pulpit for drug education, crime prevention, and charity. And he was recognized across the country for his innovations in law enforcement. He was one of the first officials in America to advocate neighborhood block watch programs. He was a strong voice in the fight against substance abuse in New Haven County schools. And he was recognized by his peers, when he was appointed president of the National Sheriffs Association, in the late 1980s. But, Henry Healey was also a man of great personal charity. His New Haven scholarship fund helped give hundreds of Connecticut children the opportunity to seek higher education. And, he made it a regular practice of hiring ex-convicts for his car dealerships. In addition, he ended the practice of serving eviction notices at Christmas. This charity was certainly smart politics for an elected official. It was no accident that if you had hopes of a career in politics in Connecticut, it was a good idea to stay on the right side of Henry. But, it also reflected Henry's integrity as a public servant and as a man. He was a throwback to an earlier, simpler age in American politics and he will be dearly missed by the residents of New Haven County and the State of Connecticut. My thoughts and prayers are with his wife Jean and his children Patrick, Henry Bryan, Michael, Constance, Christina, and Irene.

Mr. DODD

Mr. DODD. Mr. President, I would like to take a brief moment to discuss our nation's security and the importance of adequate support for our military infrastructure. I have long supported maintaining the level of military funding necessary to advance American interests, to honor our commitments abroad, and to continue to be an effective advocate for democracy and freedom throughout the world. In my view, we simply cannot expect to maintain our position of world leadership if we do not also maintain the strong military capabilities we have developed in recent years. It was for these reasons that I voted against the amendment recently offered on the floor by my good friend and colleague from Iowa, Senator Grassley. In my view, the cuts proposed in that amendment are simply too deep, and could jeopardize vital programs that are instrumental to protecting our national security. I would like to take this opportunity to make clear my views on this issue. In committee, I voted for a similar amendment offered by Senator Grassley, and I must say in all candor that I was under the wrong impression at that time, Mr. President. My vote in committee was inadvertent. I do not mean to say that efforts to achieve more moderate savings are not worthwhile. Defense spending without limits, and without regard to the recommendations that the Defense Department itself has made, is irresponsible. We must continue to balance the very important priority such as education and the environment. Mr. President, some say that the real threats to our Nation's security are not as great as they once were. I would only respond by saying that the potential threats are greater than ever. The advances in defense technology we have seen in recent years make possible wholly new capabilities for our military forces, but also require even greater effort to avoid losing our edge. Savings are possible, but we must not ignore the necessity of protecting our Nation's interests. For these reasons, I continue to support a level of military spending that maintains the effectiveness of the American fighting force. Mr. DOMENICI addressed the Chair.

Mr. DODD

Mr. DODD. I will be happy to yield.

Mr. DODD. So we share at least our concern about old cases. I appreciate his comments. I will try to be here when he makes them.

Mr. DODD. Our colleagues will appreciate that my friend from New Mexico and I have spent a lot of time working together on old cases.

Mr. DODD. If my colleague will yield.

Mr. DODD. My colleague from New Mexico obviously got a hold of him and straightened him out. I appreciate that. But come on, what else do you rely on, when you get up on a national news program and you say, ``I'll tell you how I'd do it. This is how I'd do it''? Immediately the phones were ringing off the hook. What a foolish thing to say. So immediately they start to backtrack. But if you wonder why the American people get suspicious about what the priorities are, it is statements like that. What are your real intentions? So when we hear statements about Medicare, and we say, ``We will let it wither on the vine,'' or, ``I'm proud I voted against it 35 years ago,'' then everyone gets upset. You can understand the average person in this country gets a little nervous when they hear that. If they are relying on Medicare, relying on Medicaid, in order to meet basic health care costs, they are wondering, which side do we chose here? Who is going to watch out for me? They have one person saying, ``Look, I think it ought to die or we get rid of it. I never thought it worked very well.'' And others say, ``Look, we're going to have to make it work better and make tough decisions so it's there.'' Then you begin to understand the suspicions, the worries, the fears, the insecurities that many people feel. This is not an abstraction to them. We have a good health care program as Members of the U.S. Congress. Thank God for it. We have a good health care program. But millions of Americans outside of Washington, Mr. President, they rely on Medicare. They rely on it. For many, Medicare is the difference between having a life of relative decency and being wiped out financially. It is not an abstraction to them. So when we talk about these numbers and CBO and OMB and percentages and GDP, and so forth, that person out there today watching this debate says, ``What does that mean in terms of me, my kids, our jobs, our health care? Where are we going? Who is on my side?'' So, again, I come back to the point, Mr. President, I tried to make at the outset here. Put aside all the glitter and all the distractions; we are going in the right direction on deficit reduction. It is a major issue. People care about it deeply. This President in 40 months, not 40 years, not 15 years, but 40 months, has moved the country in the right direction on deficit reduction for the first time in decades. At the end of this fiscal year, we will have now had 4 years of deficit reduction, 4 consecutive years. You have to go back to Harry Truman's adminis- tration--Harry Truman's administra- tion--to find another American President who took us through 4 years of consecutive deficit reduction. We have reduced the size of the Federal work force under President Clinton by 270,000 jobs. Now, 30 percent of those jobs were in the military. My colleagues on the Budget Committee pointed that out. That is accurate. But 70 percent of those jobs came from the civilian work force. By contrast, with all due respect, under President Reagan, the Federal work force increased by 188,000 positions; 188,000 positions during the 8 years of President Reagan. Contrast that with 270,000 fewer jobs in 40 months under President Clinton. Under the leadership of Al Gore, the President has ripped out 16,000 pages of the 80,000 pages of Federal regulations, so that businesses in this country can work with less paperwork cluttering their desks. Is it done yet? No; but for the first time, there is a real reduction in paperwork, real reduction in the size of the Federal work force, real reduction in the deficit, getting the unemployment rate down. Those are the things that people care about, seeing to it that Medicare, Medicaid, education, and the environment are going to get proper protection. It is a commonsense budget. That is what has happened under this proposal. That is why I urge my colleagues on the other side in these coming few days to sit down. Let us work out this budget. The President extended the hand to our majority leader. He said, ``Let's come on down, you and I, no staff, no one else, and let's work this out together.'' Our majority leader is going to be here until June 11. I hope he will take him up on that offer. What a great thing it would be, before the majority leader leaves and retires from the Senate, with one of the great issues we have tried to resolve, if an American President and the majority leader, from the two different parties in this country, the two major parties, came together, with no one else in the room, and the two of them sat down and worked out this problem before June 11. What a great achievement that would be. I think both individuals would deserve the sincere praise and credit from the American public. I know we have an election in 25 weeks, but this issue deserves resolution, and we are close to achieving it. You have a President taking us in the right direction. You have a majority leader who is about to retire from here, who I think could close the gap. I urge that that offer the President made to our majority leader be picked up before he retires, and let's see if we cannot complete this work. For those reasons, Mr. President, I urge our colleagues to take a good, strong hard look at the budget that has been proposed by the President. It takes us in the right direction for all the reasons I mentioned. I urge its adoption. With that, Mr. President, I yield the floor. Mr. DOMENICI addressed the Chair.

Mr. DODD. I am on a roll.

Mr. DODD. With some reluctance, I yield to my colleague.

Mr. DODD. I say to my colleague from California, I believe it has, and promises were made in terms of cutting the deficit in half. Those are real numbers. The CBO, the Congressional Budget Office, says they are real numbers. So here is the deficit coming down, job creation is going up, and my colleagues on the other side are treating this like bad news, as if this was some dreadful information. If we are on the right track, if things are working right, why do you not stick with the plan and the program here so that you have a healthy balance--investment in education, investment in our environment, cutting back our spending where we can, trying to have some sense of fairness about all of this so we move into the 21st century as a healthy nation. Today, of the G-7 countries, we are the healthiest economy. We are the healthiest economy of all the great economic powers in the world. We are the healthiest today in terms of job creation and deficit reduction. Why are our markets responding the way they are? The people on Wall Street are not making those investments because they want to help Bill Clinton get reelected. It is not because they are Democrats. They are making cold, hard financial decisions: Are we heading in the right direction or the wrong direction? They are investing because they think things are going in the right direction. It is their money they are putting on the table, and they like the trend lines they see: the deficit coming down, job creation going up. You can dance all around this, you can try to throw out a lot of misinformation about it, but the hard line bottom facts are, we are on the right track, we are going in the right direction. A lot more has to be done. It would be foolish for anyone to stand up here and say our work is over with. It is not. There are going to be some difficult decisions that have to be made. But you cannot argue with the facts. Job creation, deficit reduction, the trend lines of where we are going in this country are on a solid and sound footing. So, Mr. President, I urge my colleagues in the coming days to move away from politics as usual. We need to come together. We have 20 to 25 days to get a job done. There is no debate here about whether or not we ought to balance the budget. I know some hope others will take a position--in fact, I heard someone the other day in the House of Representatives say, ``We don't want to settle this because it is too good of an issue.'' It reminds me of the story of the law clerk who arrives in a law firm and he has only been there a month. He walks in to the senior partner with this huge file, a file that has been around 20 years. He says to the senior partner of the law firm, ``I've got great news, boss. This case that has been here 20 years. I've settled this case. It's over with. It's done. Everybody's happy.'' The senior partner says, ``Why did you do a thing like that for? I've educated four of my children on that file. You don't want to close that case, that's too good a case, keep that case open.'' So we have certain friends who want to keep the case open, because it is a good case politically for them. Do not let it settle. For God's sake, do not come to an agreement, they say. Do not try to resolve your differences. The politics of that are dreadful; they are dreadful politics. Keep the issue alive, keep the debate going. We are here to say today, let us end the debate. We can. We have agreed on balancing the budget in 7 years. We all have agreed to do it according to the Congressional Budget Office numbers. We are on the right track. The differences are not that great. They can be resolved. We can get the work done. I urge my colleagues today on both sides, particularly those on the majority side--it is difficult, I know, to admit when you are wrong. That is a hard thing for anybody to do in this world. It is particularly hard, if you are in politics, to admit you are wrong, but the facts do not lie. The deficit has come down. A young Governor arrives from a small State in January of 1993, gets dumped on his doorstep--dumped on his doorstep--$4 trillion in debt, some $290 billion, $300 billion in an annual deficit. In 40 months, that deficit is down to $144 billion. The Congressional Budget Office now says we are heading in the right direction, going in the right direction now. That is the right direction to be going in. Job creation is up, the basic thing people need. The best social program anybody ever created is a job, a good job in this country. Here we have jobs being produced in the Nation while the deficit is coming down, and intelligent priorities, good priorities. I heard the other day the House majority leader--put aside whether you are for or against a gasoline tax; we can debate that, and will, in the coming days--but, my Lord, to hear the majority leader of the House of Representatives say, I'll tell you how we'll pay for that--we'll cut education. In my State, my working-class families in my State need the Pell grants and the student loans and the Stafford grants and so forth. Otherwise, they could not get an education. We have commencements coming up. I am going to give a commencement speech at Western Connecticut State University, a State university in my State. Fifty percent of their students receive some form of financial help or assistance. Here we have the majority leader of the House of Representatives saying we ought to just pay for that gasoline tax by going after education. You wonder why people are suspicious.