Russell Feingold

Mr. FEINGOLD

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

Mr. FEINGOLD. Mr. President, I ask unanimous consent to set aside the pending amendment and offer Senator Durbin's amendment No. 2521, which he discussed and filed this morning, and that the Durbin amendment No. 2521 then be immediately set aside.

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

Mr. FEINGOLD. Mr. President, I send my amendment No. 2522 to the desk.

Mr. FEINGOLD. Mr. President. In a moment I am going to offer an amendment to address one of the many unfairnesses of the means test in this bill. This amendment is focused particularly on expenses that a family might incur because it is paying for medical care for a non- dependent family member. These kinds of expenses often are referred to in our discussions as expenses for long term care. Long-term care, and particularly fundamental long-term care reform, has been a special focus of mine since I was first elected to the Wisconsin State Senate in 1982. As I discovered when I began working on this many years ago, long- term care is greatly misunderstood. Even today, when people hear long- term care many think of nursing homes and the elderly. But that is not the whole story. According to the Long-Term Care Campaign, while the majority of the over 11 million severely disabled Americans needing long-term care services are elderly, nearly half are either working-age adults or children. And while many do receive their long-term care services in a nursing home, the vast majority of those needing long-term care receive that care at home. Long-term care touches many more than just those needing services. Nearly 6 of every 10 Americans have already experienced a long-term care problem in their own family or through a friend, and more than half of these have provided care to someone who needs services. The National Family Caregivers Association estimates that between 80 and 90 percent of all long-term care is provided by families. Caregiving can be an enormous burden on families--physically, emotionally, and financially. As we found in Wisconsin two decades ago, that burden not only takes its toll on families, but on government budgets and taxpayers since all too often the reason an individual enters a nursing home is not due to their condition, but because the family member caregiver is simply no longer able to care for them. Though I will not speak at length today about the reforms we need to make to our long-term care system, I do want to note this critical point--we need to build on the informal long-term care that families already provide, not only to allow those needing long-term care services to remain where they prefer, at home with their family, but also because the alternative places a huge burden on State and Federal budgets. Families that provide personal assistance and other forms of care to loved ones not only help that loved one, they help the taxpayer. Families provide an estimated $200 billion in long-term care services every year--services that help keep loved ones at home, and out of expensive institutional settings. But when families are no longer able for physical, emotional, or financial reasons to care for that loved one, changes are that individual will end up in a nursing home on the joint State-Federal program Medicaid. When taxpayers pick up the Medicaid tab for nursing home care, it isn't cheap. According to the Long-term Care Campaign, nursing homes cost an average of $46,000 a year, and for those with severe disabilities or dementia, the costs can be even greater. Mr. President, much as I might like to, we can't use this bankruptcy bill to reform our long-term care system. But at the very least, we should not be making the current long-term care crisis worse than it already is. And that, I fear, is exactly what the bill in its current form does. In particular, we should not be discouraging families from caring for a disabled or chronically ill loved one. If a family facing financial difficulties can continue to care for a loved one at home, and keep them out of more expensive taxpayer-funded settings, all of us will benefit. It is for that reason that I offer this amendment--to make sure that a family's ongoing expenses to provide care for a loved one will be recognized as reasonable and legitimate living expenses for purposes of calculating how much a family is capable of contributing toward repayment of debt. The means test in the bill provides that a debtors are ineligible for a Chapter 7 discharge if they can supposedly repay 25 percent of their debts or $15,000, which ever is less, over a period of 5 years. Basically, the trustee has to analyze the ability of debtors to repay their debts, looking at their monthly income and their monthly expenses. But the expenses are not actual expenses, they are the expenses set out in IRS standards designed for a wholly different purpose. And these standards do not include as necessary expenses amounts paid for the care of non-dependent family members. So people who file for bankruptcy are presumed to have abused the system if they don't meet the means test using the IRS standards. And they can rebut that presumption only by showing special circumstances that justify additional expenses. To do so, they have to provide documentation and ``a detailed explanation of the circumstances that makes the expenses necessary and reasonable.'' So under this bill, debtors with significant long term care expenses are deemed abusers of the system, and they may have to litigate to prove that they are not spending too much to care for their family. The bankruptcy courts are going to be called on to pass judgment on whether the expenses for long term care are reasonable. Some people may be forced to forgo bankruptcy because they cannot afford to both hire a lawyer to fight the presumption of abuse and continue to care for their family members. This is only one of many examples of how use of the IRS standards makes the means test draconian and unfair. I hope as we debate and amend this bill we will make major changes in how this means test operates. And we should start here, with long term care expenses. This amendment simply provides that the monthly expenses to be analyzed under the means test may include the continuation of actual expenses paid by the debtor for the care of household or immediate family members who are not dependent. Let's think about the alternative for a moment. Imagine a scenario where someone is in the position of filing for bankruptcy and has significant long term care expenses of a aging parent that are for some reason deemed to be not reasonable. If that individual is prevented from filing for bankruptcy, the need for the long term care doesn't go away. It stays. It may be the reason that the person has to file for bankruptcy in the first place, because the additional burden of the long term care expenses makes it impossible to make ends meet and keep up with payments on accumulated debt. What choice does this person have if the protection of the bankruptcy laws is unavailable? No choice at all. The care must stop, and the person being cared for goes into a public institution with higher costs to the taxpayers and, more important, untold damage to the family. I challenge my colleagues to tell us how the simple exception to the rigid IRS standards set out in this amendment will lead to abuse. Are people going to go out and arrange for unreasonably extravagant care for their family members in order to file for bankruptcy and get out of debt? I don't think so. In fact, I think it is insulting. No, the millions of Americans who selflessly care for their loved ones make a sacrifice that we should honor and encourage. Passing this amendment would be a small step toward recognizing that crucial service to our country that they provide. I urge my colleagues to step back from the misery that this bill might very well inflict and adopt this amendment. Mr. President, I ask unanimous consent that the pending amendment be set aside so I may offer this amendment.

Mr. FEINGOLD. Mr. President, I am pleased to have the opportunity to speak generally on the bankruptcy legislation that is now before the Senate. First, I praise my friend and colleague from Illinois who has, on all issues, been extremely dedicated, hard-working, and effective on this bankruptcy issue. This is an important issue and a complex area of the law that has an impact on millions of Americans and, of course, on businesses all across the country. This is an important debate, and I expect we will be on the floor for some time, because many of us have serious concerns about this bill and expect to offer quite a number of amendments to try to improve it. As I said, the issues raised by bankruptcy legislation are extremely complicated. The stakes are high. The different viewpoints are passionately expressed by all of the players involved, from the different types of creditors to bankruptcy judges, trustees, and practitioners, to consumers and potential debtors. We have a long legislative history to contend with here. We have been working on bankruptcy reform legislation for some time now, beginning with the appointment of the National Bankruptcy Review Commission in 1994, and the issuance of the commission's report in 1997. In the last Congress, the Senate passed reform legislation by an overwhelming margin. That bill was itself a compromise among the various interests. But a conference committee sent a much different, much more one-sided bill back to us, and I am happy to say, that bill died at the end of the session. My view is that the legislation before us is only slightly less objectionable than the legislation that came out of conference last year. S. 625 is not a balanced piece of legislation. It tilts the scales too far in favor of certain types of creditors, and denies reasonable protections of the law not just to those trying unfairly to evade financial obligations they really can afford to meet, but also to honest hardworking families and single parents, who have come upon hard times and need the fresh start and breathing room that our bankruptcy system offers to give them a chance to survive. In too many cases, I am afraid, that will hinder families' ability to meet other obligations, particularly their obligations to their own children and to local taxing authorities. In many ways, this is a bill at war with itself. Many of the provisions are designed to shift more money into the hands of unsecured creditors, while other provisions are designed to shift that same pot of money back to car lenders and different unsecured creditors. The bill is supposedly intended to move more debtors from the complete discharge of debts available under chapter 7 of the code into chapter 13 repayment plans. But chapter 13 trustees and others have testified that many provisions in the bill will decrease the success of chapter 13 repayment. The bill supposedly increases personal responsibility, and yet it would favor people who have two new cars over people who own older cars or who take public transportation. And the bill is said to be aimed at deadbeats and abusers of the system, not honest but financially troubled low-income people, and yet it penalizes renters, as opposed to homeowners. And whereas we often try to promote small business entrepreneurship in legislation, in this bill we sometimes seem to impose stricter rules on small businesses than we do on large businesses. So, does the Senate really want to endorse these policies? Is it really our goal to send these mixed messages? I urge my colleagues to pay close attention to this very important debate. We do a lot in this body that in the end seems to just be symbolic. This bill is not symbolism. We cannot simply pass this bill and say we have struck a blow for personal responsibility. Because this bill will have real consequences in the real lives of real people. And I fear that in too many cases those consequences will be very damaging. I do want to comment for a moment on the process that has brought us here. I mentioned before that the Senate considered bankruptcy legislation in the last Congress. But in this Congress, we didn't have a single hearing on this bill. Let me repeat that because it is so disturbing for a bill of this magnitude and complexity. The Senate Judiciary Committee did not have a single hearing on bankruptcy reform or S. 625--not one. Now, to be fair, there was one joint hearing that was held over at the House with two subcommittees of jurisdiction--one hearing. And it occurred on a day that Senators happened to be involved in a very long series of votes--I believe it was one of our so-called ``vote-arama'' sessions--which meant that none of the Senators on the subcommittee could take advantage of the lone opportunity for public discussion of this bill. Other than that one hearing, the Senate of the United States had no hearings whatsoever on bankruptcy reform this year. I did not understand the rush to report this bill from committee without hearings, and I still don't. Why didn't we hear from the bankruptcy judges, and the trustees, and the disinterested academics, and the practitioners about how and whether this bill will work? Why didn't we get their views in a formal and considered way, and try to address their concerns? To say that this bill is just a repeat of last year's bankruptcy debate is just not right. This legislation is far too complicated and far too reaching to make that facile claim. This bill is actually different from last year's Senate bill in more ways than it is similar. In many ways, it is a brand new piece of legislation for this body. Last year's Senate bill was almost exclusively consumer bankruptcy oriented. This bill not only takes a different approach to consumer bankruptcy, but it has dozens of provisions affecting a variety of tax issues, municipal bankruptcy cases, single asset real estate cases, small business cases, and health care cases, in addition to a host of changes to general chapter 11 bankruptcy that may dramatically change the rules governing the reorganization of our Nation's largest businesses. We never discussed most of these issues at the committee level. We have received many warning signs from those who understand the bankruptcy system far better than any of us do. I am afraid to say, what is being done here is actually irresponsible. Why has this happened? Well, the sad truth is that all of us know why. A very wealthy and powerful industry has pushed and pushed and pushed for this bill, and so far the Congress has ignored the experts and done the industry's bidding. The credit card industry wants this reform because it wants protection from its own excesses. You see, the industry has flooded the mailboxes, and the phones, and the e-mail in boxes of America with offers of easy credit. Americans received over 3.45 billion credit card solicitations in 1998. Anyone can get a credit cared, even children, even people who have just filed for bankruptcy. I favor empowering citizens and broadening their options using credit to bring more convenience to their lives as consumers. But the industry has been irresponsible in extending credit to those who cannot handle it. And now the industry has come to Congress for help. Now the industry wants the bankruptcy system to protect it. I say to you, Mr. President, that is not right. The industry hasn't come to us hat in hand, however. It has come with an open checkbook. As you know, Mr. President, from time to time on the floor in recent months, I have noted that contributions of different players in the legislative process that seek to influence our work here with campaign contributions. This bill is a poster child for the ``Calling of the Bankroll.'' Like so many issues, bankruptcy reform has been transformed from a policy debate to a vehicle for a special interest agenda. The key ingredient in that transformation is money, plain and simple. In the last election cycle, according to the Center for Responsive Politics, the members of the National Consumer Bankruptcy Coalition, an industry lobbying group made up of the major credit card companies such as Visa and MasterCard and associations representing the Nation's big banks and retailers, gave nearly $4.5 million in contributions to parties and candidates. How can a single mother in West Allis, WI, for example, who faces overwhelming debt from medical bills and the loss of child support, compete with the might and financial power of this industry? Her family, and her future will be affected by this bill every bit as much as the credit industry, yet she is not represented in the campaign finance game. And I am afraid that this bill in its current form very much reflects her lack of power. Some of the campaign contributions from these companies seem to be carefully timed to have a maximum effect. It is very hard to argue that the financial largess of this industry has nothing to do with its interest in our consideration of bankruptcy legislation. For example, on the very day that the House passed the conference report last year and sent it to the Senate, MBNA Corporation gave a $200,000 soft money contribution to the National Republican Senatorial Committee. In connection with the joint hearing that was held earlier this year, I submitted a written question to Bruce Hammond, the chief operating officer of MBNA. I asked him about the $200,000 contribution to the NRSC in October 9, 1998, just days after the conference committee reached agreement on a version of this bill that everyone agreed was more favorable to the credit card companies than the bill that the Senate had passed. This is what I asked him: (A) As CEO, are you involved generally in the decisions to make soft money contributions to the political parties? (B) Were you involved in the decision to make this particular donation? (C) How are decisions on soft money contributions made in your company? Who participates in such decisions? What criteria are followed in making such decisions? (D) Why did MBNA make a $200,000 donation to the NRSC on October 9, 1998? Mr. Hammond's written response to the questions was very illuminating. Basically, he decided to ignore these direct and simple questions about the soft money donations of his company, and instead wrote the following: I find the premise for this question troubling, I hope there is no intention to place bankruptcy reform in a partisan political context. All of us who have worked in support of these legislative reforms have been pleased by the support, cooperation and encouragement we have received on both sides of the political aisle. It has been particularly pleasing to note that in this Congress both the House and Senate bills have had as their original co-sponsors prominent and respected Members of Congress from both political parties. With all due respect, Mr. Hammond has made my point for me. As I noted, the soft money contributions of this industry have gone to both parties. Actually, MBNA Corp. has only given to the Republican party committees in the last few cycles. But other big lenders, such as Visa USA, BankAmerica Corp., and Citigroup, are giving to both parties. That is what is so insidious about these contributions. They aren't about politics, they are about policy. These companies don't just want to influence elections, they want to influence legislation directly. So the premise of my questions to the chief operating officer of MBNA Corp. was not to suggest that this bankruptcy bill was partisan, it was to get at the bipartisan problem of soft money and its insidious relationship to the legislative process. I'm sorry that Mr. Hammond decided not to answer my questions directly. I suspect that one of the reasons that he didn't is that direct honest answers to these questions would not be something he would want in the legislative history of this legislation. So he chose to simply ignore the questions. That is unfortunate. Mr. President, in the current Congress we are seeing another influx of campaign contributions from banks and lenders seeking to influence this bill. Incredibly, PAC contributions from National Consumer Bankruptcy Coalition members totaled $227,000 in March of this year alone. That's a full 20 months before the next election. But guess what. March 1999 was a month during which the Judiciary Committees of both the House and the Senate were considering the bill. Members of the coalition gave nearly $1.2 million in PAC and soft money contributions in the first 6 months of 1999. During that time period, MBNA Corp. gave $85,000 in soft money to the Republican Party committees, while Visa USA Inc. gave $30,000. Now I want to be clear here once again. Republicans are not alone in taking in hundreds of thousands of dollars from banks and lenders in this election cycle: During the first 6 months of 1999, the Democratic party committees took in more than four times the soft money from banks and lenders than they did during the first 6 months of the last presidential election cycle in 1995. Soft money contributions overall are up by about 80 percent, but the banks and credit card companies have quadrupled their contributions to my party. Mr. President, we need to keep in mind as we debate this bill, and the many amendments that will be offered, the extent to which bankruptcy reform has come to be seen as a gift to special interests, particularly the credit card companies. In light of that, we bear an even heavier burden to make sure that we are serving the public interest with this kind of far reaching legislation. We must open our minds to the recommendations of nonpartisan experts in this field. We haven't done that yet, although some progress certainly has been made between the time this bill left the Judiciary Committee and today. I am pleased, for example, that the requirement that debtors attorneys bear personal financial responsibility for the trustee's cost and fees if the debtor loses a motion to convert a chapter 7 filing to chapter 13 has been eliminated. That provision would have had the result of denying many honest American families adequate legal representation, making them even more subject to abusive and predatory practices by creditors. But we have a long way to go to make this a balanced bill, rather than a wish list for credit card companies. If we don't do that, we will have filed in our duty to the public and will come to regret our actions. I sincerely hope that once again we can work together to develop a product that will win a near unanimous vote in the Senate as last year's bill did. A bankruptcy reform bill should be the product of a considered and well-informed debate, not a political dance, where money calls the tune. Amendment No. 2522 (Purpose: To provide for the expenses of long-term care)

Mr. FEINGOLD

Mr. FEINGOLD. Mr. President, after years of persistent lobbying and a flood of political donations, three industries may soon have a lot to celebrate--the insurance, banking and securities industries will have a huge victory if we pass this conference report today. I do want to note that some of those Senators who helped to craft this legislation are among the very best Members of the Senate. While I oppose this measure, I certainly commend them for their dedication and hard work on this bill. Nevertheless, with this legislation, this Congress is declaring the ultimate bank holiday--giving banks, insurance companies and securities firms a permanent vacation from the Glass-Steagall Act and other Depression-era banking law reforms. Advocates of this legislation will tell you that it is terrific for consumers, offering them one-stop shopping for all their financial and insurance needs. But the reality is far more complicated and far less appealing--it is likely to cause a merger-mania in the industry that could severely limit consumer choice and spur a rise in banking fees. This conference report also raises serious issues about consumer privacy. Privacy advocates worry that it will give bankers, insurers and securities firms virtually unlimited license to share account data and other sensitive information. To top it all off, this legislation undermines the Community Reinvestment Act. Higher bank fees, reduced consumer choice and fewer protections for low-income loan assistance--these don't sound very good to most consumers, Mr. President. But they sound good to the industries that will benefit from this legislation. This conference report is music to the ears of the industries that have been lobbying for these changes for decades. And this lobbying campaign has left a trail of political contributions that is nothing short of stunning. A recent study by Common Cause put the political contributions of these special interests at $187.2 million in the last ten years. That is why I am going to take this opportunity to Call the Bankroll. This lobbying effort for so-called financial services modernization is truly breathtaking, because it combines the clout of three industries that on their own are giants in the campaign finance system, particularly the soft money system. Together the power of their combined pocketbooks were a powerful force propelling this legislation through Congress. One of these industries, the securities and investment industry is a legendary soft money donor, and I will just highlight a few such firms that have lobbied on behalf of this legislation. Merrill Lynch has long called for banking deregulation. The company, its subsidiaries and executives gave more than $310,000 in soft money during the 1998 election cycle. Morgan Stanley Dean Witter, which gave more than $145,000 in soft money in 1997 and 1998, was also a key part of the lobbying team on this issue. In fact the Washington Post reported that the company's chairman, along with several other corporate heads, made calls to White House officials the very night the conference hammered out an agreement on this bill. Lobbyists lined the halls outside the room where the conference met to reconcile the House and Senate version of the bill, and as we know, that is standard procedure on Capitol Hill. As usual, corporate lobbyists lined the halls, while the consumers who will bear the impact--and consumer advocates agree it will be an adverse impact--of this bill, were left out in the cold. The banking industry was also there that night, of course, since this legislation is a bonanza for them too, revolutionizing the kinds of services that banks can offer. Citigroup was there, and so was the presence of the more than $720,000 that Citigroup and its executives and subsidiaries gave in soft money to the political parties in the 1998 election cycle. That is a huge sum, Mr. President, especially for an election cycle in which there was not even a presidential election. And in the current election cycle Citigroup is off to a running start with $293,000 in soft money from Citigroup, its executives and subsidiaries. That is more than $1 million from Citigroup, it's executives and subsidiaries in just two and a half years. The powerful banking interest BankAmerica, its executives and subsidiaries also weighed in with more than $347,000 in soft money in the 1998 election cycle, and more than $40,000 already in the current election cycle. And let's not forget the insurance industry. They have a massive stake in this legislation as well, an interest that is well-reflected by the size of the industry's soft money contributions. For instance, there is the Chubb Corp and its subsidiaries, which gave nearly $220,000 in soft money contributions in 1997 and 1998, and has given more than $60,000 already in 1999. Then there is the industry lobby group, the American Council of Life Insurance, which also gave heavily to the parties with more than $315,000 in soft money contributions in 1997 and 1998, and more than $63,000 so far this year. In the end, what do all these contributions add up to? They add up to tremendous access to legislators and broad influence over the process by which this legislation was crafted--access and influence that the average consumer can't even begin to imagine, let alone afford. This is a serious problem, and I think everyone in this Chamber knows it. The American people certainly know it. They think our votes are on the auction block, and who can blame them. Who can blame them, and more than that, who can show them why they should think otherwise? That is a question I ask my colleagues, and I think we all know the answer.

Mr. FEINGOLD

Mr. FEINGOLD. It covers a range of topics that have nothing to do with yesterday's amendment. It expands the number of products and trade and an alternative provision of what should be done. The Senator is correct that a couple of provisions are the same. I think many other provisions are of substantial importance, and I hope people regard this as an alternative approach.

Mr. FEINGOLD. Mr. President, I hope Senators are not confused by the comments of the Senator from New York. Certainly, the 90-percent requirement with regard to workers in Africa is one of many provisions in this. This is not the same amendment as yesterday. This involves labor protections, human rights protections, environmental protections, expanding the list of goods. This is a much broader alternative. In fact, it is essentially the HOPE alternative. So I hope the Senators vote for this. Although we received 44 votes on the transshipment amendment, this is by no means a vote on this particular provision. I want to be clear about that.

Mr. FEINGOLD. Mr. President, I ask unanimous consent to speak for 30 seconds.

Mr. FEINGOLD. Mr. President, I thank the two floor leaders--the chairman and ranking member of the Finance Committee--for allowing me to make this modification to my amendment. I understand they will be opposing it, but I very much appreciate their willingness to allow me to offer it in the form I want. The African Growth and Opportunity Act is all about increasing our level of trade with sub-Saharan Africa. That's a worthy goal, because the current level of trade between the American and the African people is depressingly small. Africa represents only 1 percent of U.S. imports, 1 percent of U.S. exports, and 1 percent of U.S. foreign direct investment. AGOA's supporters want to see those numbers increase, and that is what I want as well. However, the principal trade benefit appearing in AGOA is temporary preferential access to the U.S. market for textiles and apparel. This kind of legislation discourages the economic diversification that Africa needs to build economic strength. AGOA does renew the GSP program, but does not amend it to provide duty-free benefits for many of Africa's primary exports. This amendment, if accepted, will make the African Growth and Opportunity Act much more meaningful in terms of potential trade, while at the same time ensuring that this legislation does no harm. It expands the list of African products eligible for duty-free access to U.S. markets, while at the same time adding important qualifications to ensure that growth does not come at the expense of human development. My amendment would make goods listed under the Lome Convention eligible for duty-free access, provided those goods are not determined to be import-sensitive by the President of the United States. Products covered include all of sub-Saharan Africa's industrial products, all primary mineral products, and most of Africa's agricultural products, such as fruits, nuts, cereals, cocoa, and basketware. These provisions mean more trade opportunities for more African people. That's an important idea--opportunities for African people. In fact, unlike the African Growth and Opportunity Act as it stands now, this amendment would ensure that Africans themselves are employed at the firms receiving benefits. My amendment requires that any textile firm receiving trade benefits must employ a workforce that is 90 percent African. In addition, my amendment requires that 60 percent of the value-added to a product comes from Africa. These provisions hold out an incentive to African governments, businesses, and civil societies to develop their human resources. And that would not only be good for Africa, but it would be good for America as well, as our trade partners in the region gain economic strength. At the same time that this amendment does more for Africans, it also takes important steps to protect American jobs from being lost to transshipment. Trans-shipment occurs when textiles originating in one country are sent through another before they come to the United States. In this way, the actual country of origin can ignore U.S. quotas. Approximately $2 billion worth of illegally transshipped textiles enter the United States every year. The U.S. Customs Service has determined that for every $1 billion of illegally transshipped products that enter the United States, 40,000 jobs in the textile and apparel sector are lost. Those who think that transshipment isn't going to be a problem in Africa had better think again. An official website of China's Ministry of Foreign Trade and Economic Cooperation quoted an analyst as saying that: Setting up assembly plants with Chinese equipment, technology and personnel could not only greatly increase sales in African countries, but also circumvent the quotas imposed in commodities of Chinese origin imposed by European and American countries. The Chinese know that standard United States protections against transshipment are weak and easy to defeat. The African Growth and Opportunity Act, as it currently stands, relies on the same old weak protections that have led to these statistics--the same textile visa system that China and the other countries have manipulated in the past. This inadequate system requires government officials in the country of manufacturing to give textiles visas before those textiles can be exported, in order to certify the goods' country of origin. But often, corrupt officials simply sell visas to the highest bidder. My amendment would create a new system--one that makes the U.S. importer responsible for certifying where textiles and apparel were produced. This gives U.S. entities a strong financial stake in the legality of their imports. Instead of relying on foreign officials, this standard relies on the American companies who operate right here, under American law. This amendment also requires foreign governments to cooperate with Customs Service investigations into transshipment, or risk losing their trade benefits. If we pass this amendment, countries that want to skirt U.S. trade regulations will have to re-think their designs on Africa. As the Senate moves to increase the levels of legal trade between the United States and Africa, we must think carefully about the context in which we conduct our trade relations. Labor rights, human rights, and environmental protections are given short shrift by the current version of the African Growth and Opportunity Act. This is a recipe for social unrest and distorted development, and it is clearly in the United States' best interest to address these issues. We are all affected when logging and mining deplete African rainforests and increase global warming. We are all degraded when the products we buy and use are created by exploitation and abuse. And we all reap the benefits of an Africa where freedom and human dignity reign, creating a stable environment in which business can thrive. American ideals and simple good sense require that we be vigilant in this regard. This amendment contains provisions to address labor rights, human rights, and environmental protection. Mr. President, Africa labor unions have been opposing AGOA for good reasons. This amendment takes their concerns seriously. It clearly spells out the labor rights that our trade partners in Africa must enforce in order to receive benefits. These include the right of association, the right to organize and bargain collectively, a prohibition on forced labor, minimum age of 15, and provisions for acceptable conditions with respect to wages, hours, and safety. This amendment also provides for a monitoring procedure that involves the Africa Region branch of the International Confederation of Free Trade Unions in compliance reporting. These provisions go far beyond the labor protections in the current bill, which are linked to GSP--and they do so for a reason. GSP labor rights provisions are rarely enforced. Some African countries--such as Equatorial Guinea--receive GSP currently yet do not allow the establishment of independent free trade unions. Clearly, GSP is not enough to ensure the growth and opportunity are not exchanged for abuse and exploitation. This amendment would also deny benefits to countries engaging in significant human rights abuses. Mr. President, that is stronger language than AGOA currently contains, and it sends a clear signal about the kinds of partners the United States is seeking in Africa. As it stands, AGOA contains no environmental provisions whatsoever. Yet in some African countries like Tanzania, 85 percent of the population lives directly off the land. Clearly, development in Africa is contingent on environmental sustainability. My amendment grants additional trade benefits to U.S. and other foreign investors from developed countries when they use the same environmental technology and practices in Africa that they use at home. This amendment makes AGOA more important and more responsible. If we are serious about engaging in Africa, let's make a genuine effort, rather than a token one. Let's make a responsible effort rather than an indifferent one. Mr. President, I ask for the yeas and nays.

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

Mr. FEINGOLD. I say to the Senator, we have worked this out with you and your staff. What it does is add a certain number of items, goods, to the Lome Treaty product list of items that could be covered under this agreement. Actually, it makes it consistent with the legislation we have before us. I believe we worked this out in advance with the Senator.

Mr. FEINGOLD. Mr. President, I call up amendment No. 2427 and ask unanimous consent that it be modified with the language I send to the desk.

Mr. FEINGOLD. In light of the concerns raised by the chairman, I will withdraw the amendment.

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

Mr. FEINGOLD. Mr. President, with regard to amendment No. 2409, I urge Members to look at the Statement of Policy in the text of the African Growth and Opportunity Act. In this section the bill asserts congressional support for a series of noble causes, such as supporting the development of civil societies and political freedom in the region, and focusing on countries committed to accountable government and the eradication of poverty. But then those causes seem to disappear. The implication is that the United States plans to support for these worthy goals--goals that are in our own self-interest--through a series of limited trade benefits. Nowhere does AGOA mention the role that development assistance plays in pursuing the very ends that it advocates--the eradication of poverty and the development of civil society. This omission sends an alarming signal. It suggests that the United States may delude itself into thinking that trade alone will stimulate African development. Trade alone cannot address the crippling effects of the HIV/AIDS epidemic, which has lowered life expectancies by as much as seventeen years in some African countries. Striking at the most productive segment of society--young adults--HIV/AIDS has dealt a brutal blow to African economic development, and has left a generation of orphans in its wake. And trade alone will not provide sufficient access to education or to reproductive health services for African women--yet both elements are crucial to developing Africa's human resources. This amendment expresses a sense of Congress that the HIV/AIDS epidemic and chronic food insecurity should be key priorities in U.S. assistance to Africa. It also prioritizes voluntary family planning services, including access to prenatal healthcare; education and vocational training, particularly for women; and programs designed to develop income-generating opportunities, such as micro-credit projects. This amendment also mandates that the Development Fund for Africa be re-established for aid authorized specifically for African-related objectives. The DFA allows USAID more flexibility in its Africa program. Perhaps most importantly, it is symbolic of U.S. commitment to African development. In addition, my amendment requires USAID to submit a report to help the United States to get smarter about how it administers development assistance, and will ensure that our assistance fosters dynamic civil societies across the diverse nations of Africa. This amendment sends an important signal. Even as the United States considers closer trade relations with sub-Saharan Africa, this country will not abandon its commitment to responsible and well-monitored development assistance. Mr. President, I understand that a point of order is likely to be raised to this amendment. I understand the consequence of that. But I want to offer the amendment. I call up amendment No. 2409.

Mr. FEINGOLD. Mr. President, I would like to very much thank the chairman and manager of the bill for accepting amendment No. 2408, which I offered and was cosponsored by Senator Durbin of Illinois, with regard to anticorruption efforts and the desire to do something about the fact that bribery is an important problem worldwide. It poisons the business environment and distorts the normal practices of the marketplace. Bribery undermines democracy and leads to a lower global economy, and when corruption goes unchecked, everybody loses. To pass the U.S. trade package without addressing corruption simply doesn't make sense, particularly if the package claims to actually promote growth and opportunity in Africa. Of the 16 sub-Saharan African states rated in the Transparency International 1999 Corruption Perception Index, 12 ranked in the bottom half. The amendment Senator Durbin and I have offered expresses a sense of Congress that the United States should encourage the accession of sub- Saharan African companies to the OECD Convention combating bribery of foreign officials in international business transactions. The OECD Convention criminalizes bribery of foreign officials to influence or retain business. Some have had said OECD standards are too demanding for the developing economies of Africa. But if we are going to engage in a new economic partnership with Africa, I think we need to leave this double standard behind. Transparency, integrity, and the rule of law are as important in Mali and Botswana as they are right here at home. Ever since Congress passed the Foreign Corrupt Practices Act of 1977, under the leadership of one of my predecessors, Senator William Proxmire of Wisconsin, we have shared a consensus in this country that economic relations depend upon a foundation of fair play. This amendment incorporates that reality in African trade regulations. This anticorruption amendment also sends an important signal. It tells sub- Saharan states that responsibilities come with benefits in any trade partnership. If this Congress is serious about engaging Africa economically, we have to make these responsibilities crystal clear. I, again, thank the Chair for accepting this amendment. I also commend Senator Durbin, who has taken the lead--and I joined him--on another amendment having to do with this corruption issue. I am hopeful and optimistic that item will be accepted as well. We have provided two different important provisions that will move forward with regard to the corruption problem in general and specifically with regard to the African nations. Amendment No. 2409 (Purpose: To establish priorities for providing development assistance)

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

Mr. FEINGOLD. Mr. President, I rise today to express my strong support for the amendment of the Senator from California to the African Growth and Opportunity Act. First, let me thank Senator Feinstein for her leadership on this critical issue. This very provision is incorporated in my own HOPE for Africa bill, S. 1636, and I am especially pleased she is offering that language as an amendment to this bill today. AGOA's aim is to strengthen economic ties between the United States and the diverse states of sub-Saharan Africa, fostering economic development and mutually beneficial growth. I think that we can all agree that this is a worthy goal. The disagreement is about how we get from here to there. It is my belief that no U.S.-Africa trade bill will succeed unless it addresses the underlying context for growth and development in Africa. The United States needs to pass legislation that will help set the stage for a real economic partnership. The Feinstein-Feingold amendment is a good start because it is impossible to address Africa's economic and social development problems without taking serious action to combat the region's HIV/AIDs epidemic. In 1998, four out of every five HIV/AIDs-related deaths occurred in sub-Saharan Africa. In fact, HIV/AIDS kills over 5,000 Africans each day. Common decency tells us that this is a humanitarian catastrophe. Basic logic also tells us that it is economically devastating. AIDS attacks the most productive segment of society--the young adults who would otherwise be the engine in Africa's economy. And it leaves far too many children orphaned, preparing to take their place in society without the guidance and security that their parents would have provided. And the health-care costs associated with AIDS are astronomical. Life-savings medications can cost $12,000 per year--an impossible burden in countries where average per-capita annual income often barely exceed $1,000. How can the United States expect to find a strong economic partner in Africa if it ignores these facts? This amendment does not hide from these realities. It approaches them head-on, by prohibiting U.S. funds from being used to change the intellectual property laws of African states. That means that taxpayer dollars will not be spent to help pharmaceutical companies undermine the legal efforts of some African states to gain and retain access to lower cost pharmaceuticals. It is important to be clear--this amendment does not allow African states to ``get away with something.'' It explicitly refers to the legal means by which these countries are entitled to address their public health emergencies. These legal methods, which are permitted under the agreement on Trade Related Aspects of Intellectual Property, or TRIPS, lower prices for consumers by creating competition in the market for patented goods through a procedure called compulsory licensing. TRIPS is an agreement administered by the World Trade Organization. Compulsory licensing does not ignore the rights of patent-holders. Pharmaceutical companies holding patents on HIV/AIDS drugs are paid a royalty under these arrangements. This amendment simply prohibits the United States from spending money to undermine an entirely legal fight for survival that is being waged in Africa today. It is legal. It is the right thing to do. And ultimately, it is in America's interest, as healthier African people will undoubtedly lead to healthier African economies.

Mr. FEINGOLD

Mr. FEINGOLD. Mr. President, I wish to respond to both the chairman and the ranking member. They have suggested, it seems to me, that somehow this provision automatically involves imprisonment. That is simply not correct. Under the first offense, there is only a civil penalty involved for the importer in the amount equal to 200 percent of the declared value of the merchandise. A second offense then would involve perhaps up to 1 year of imprisonment. It is only in a third offense that it would be 5 years. It is simply not correct to suggest that if somebody makes a mistake once, suddenly they are going to be imprisoned. It is not nearly as harsh as that. It is a reasonable series of penalties for people who are going to get enormous benefit under this legislation.

Mr. FEINGOLD. Mr. President, this amendment simply intends to try to make sure that the African portion of this legislation does not become a mechanism whereby governments or businesses from China, for example, ship their goods through Africa as a way to evade American quotas. This is another process called transshipment. During the debate, I pointed out that on a web site of the Chinese Government, they essentially say this is exactly what they are going to do. It is what they are already doing. We have put some responsibility on importers. American importers will have the benefit of this bill to make sure they vouch for the legitimate content of this product having some characteristic of being actually from Africa. It is a very important provision to make sure this bill has some balance and it doesn't threaten American jobs. The figures I quoted indicate that for every $1 billion in illegally transshipped goods, it costs about 40,000 American jobs in the textile and related areas. This is a very straightforward amendment that opposes the practice of transshipment I think every Member of this body would like to support. I yield the floor.

Mr. FEINGOLD. Mr. President, in response to that, I recognize the argument regarding American history. Surely there is a different scenario when we talk about African countries. The problem I am trying to address--and I appreciate the Senator's point--is that we are fearful, with good reason, that African countries will be used as a conduit to allow the kind of activity the Chinese entities obviously intend to pursue, which is to essentially run these products through an African country, stamp the label on it, not really let Africans play a significant role in producing the product, and undercut our quota laws. That is the reason for doing this. I don't think it is particularly difficult to administer or to do when we suggest we are talking here about citizenship of an African country without any other criteria. We do allow for migration in Africa. We allow for Africa seeking out opportunities where they find them. We are trying to make sure this is some nexus between this legislation and the opportunities for Africans to benefit, as well as large corporations that may benefit. This is an attempt to make the bill better. I think it is one that is not too difficult to achieve. I yield the floor.

Mr. FEINGOLD. It is the definition of African countries as set forth in the bill. I believe that would be in the list of countries.

Mr. FEINGOLD. If you are suggesting they are citizens of Mauritius, for the purposes of this bill, they would certainly qualify as people who could be counted within the 90 percent.