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 that reading of the amendment be dispensed with.

Mr. FEINGOLD. Mr. President, I rise today to offer an amendment to the regulatory reform bill legislation that will improve equal access to justice under what is known as the Equal Access to Justice Act. I think the thrust of this bill, the thrust of regulatory reform, is to rethink the relationship between Government and business and to make our system of regulation both more effective and less burdensome, and, in some cases, I think we have to stay the hand of Government when we believe it reaches too deeply into the daily affairs of the American people. As many of us have said on this floor, I think these are goals that everyone supports, even though sometimes we may differ on the way to actually achieve them. The Equal Access to Justice Act is one effective means for achieving a measure of reform and should be part of our plans to reduce the level of unnecessary Government intrusion in our lives. The Equal Access to Justice Act as it now exists was enacted in 1980, with the idea that small businesses and individuals who have to get into the ring with the Federal Government over enforcement of regulations should be able to recover their legal fees and certain other expenses if they end up winning the case. They are tied in this litigation with Government and one party has to win and one party has to lose. And if it is the Government that loses, especially after they have brought the case, I think the Government should bear the burden of the attorney's fees and not the small business and not the individual. It is one of a number of fee-shifting statutes in Federal law. I am as proud to say that much of the work on the original equal access law was done by the former Congressman from my home district, the Second Congressional District of Wisconsin, Representative Robert Kastenmeier when he served on the House Judiciary Committee. I offered the same kind of bill, and got it passed in the State Legislature in Wisconsin. That is now the law, and has been since 1985, and it is the State Equal Access to Justice Act which has been very helpful to businesses and individuals who have been sued by the State government or some of its agencies. The Equal Access to Justice Act gives prevailing parties in certain kinds of litigation against the Federal Government the right to seek reimbursement of attorney's fees and other costs of litigation from the Government. The intent of the law has always been to make taking on the Federal Government in court somewhat less intimidating although it is always going to be somewhat intimidating. To that end, the act is specifically targeted at assisting individuals and businesses who do not have ready access to the kinds of resources available to the Federal Government when it goes to court. Under the current law, the law gives this kind of option--or protection--to a person whose net worth does not exceed $2 million or a business that does not have net worth greater than $7 million, or which does not employ more than 500 people. And there are a couple of other minor exceptions. There was another motive for the bill, and that was to help restrain the regulatory hand of the Federal Government when it was going to trial. The authors of the bill believe that if the agency faced the prospect of not only having decisions nullified but also having to actually pay the attorney's fees of the entity or individual they went after, maybe the agency would think twice before it started the lawsuit or the administrative action in the first place. I cannot say for sure in the past 10 or 15 years that this second goal has been reached. However, the Equal Access to Justice law has proved to be a bargain based upon the estimates that we have seen. Originally the estimates were that the Equal Access to Justice law would cost about $68 million a year. But according to the Administrative Office of U.S. Courts, annual fee reimbursements have totaled from the Federal Government only about $5 to $7 million between 1988 and 1992. This is despite the fact that litigants are actually more successful in terms of the active percentage of wins than was originally anticipated. A study done on this examined 629 Federal District and Appellate Court decisions involving EAJA fee award claims during the 1980's. The professors who did the study pointed out that the Congressional Budget Office in making its estimates had assumed that parties seeking fee reimbursement under the act would actually be successful in about 25 percent of the claims filed against the Federal Government. However, the professors found that they even had a higher level of success, 36 percent and were able to win fees in those cases. Yes. Mr. President, some may well claim that EAJA has had a scant effect on controlling overreaching regulation. But I believe it is clear that it is another arrow in the quiver of the individual citizen or a small business owner when they have to tangle with the Federal Government in court or in an administrative proceedings. The EAJA generally has served its function well. The purpose of my amendment this evening is that the act over the course of several years has come to the point where it needs some updating to speed up the process of awarding attorney's fees to prevailing parties and thereby lower the cost of litigation to taxpayers. Mr. President, briefly, this amendment has three major elements. First, my bill raises the current cap on attorney's fees in these kinds of situations under the act from the current limitation of $75 to $125 per hour. That would bring the rate somewhat in line with the real world. My bill retains the cost-of-living increase as a possible element in determining an attorney's fee award but it strikes the current language that permits further increasing an award on the basis of a special factor defined by example in the statute as ``the limited availability of qualified attorneys or agents for the proceedings involved.'' Mr. President, I believe these improvements will actually make suits against the Government more attractive to attorneys and appropriate cases, which in turn should create a larger pool of attorneys available to private litigants to try to handle these cases. Therefore, we should see less need for this special factor language, and I think it will help simplify the process. In addition, my bill makes the method of computing cost-of-living increases to fee awards more specific. And I could detail on that, if anybody wishes. But I will move on to say that the second major change my amendment makes in the current law is to eliminate the language that allows the Government to escape paying attorney's fees, even if the Government has lost in court, if the Government can successfully argue that it had a substantial justification for its action. Mr. President, I am not generally a supporter of the loser pays concept. But I believe that if a small business owner or an individual American wins in court--not against another private litigant but against the Federal Government--and, if the law provides for the Government to reimburse you for your expenses, then the Government should ante up. I think we should have in effect a loser pays provision when the Federal Government sues a private party and the private party ends up winning the case. I realize some people are concerned that eliminating this provision will open the floodgates of our Treasury. But let me refer to a study that by Professor Krent which indicates that this is not the case. He indicates that fee awards in the cases we have had during this act were denied in only a small number of cases on the basis of successful substantial justification argument. Apparently that is because this technique of the Government to try to avoid paying fees in these cases in court is routinely raised by Government attorneys as a way to sort of block the private litigant from getting their attorney's fees even though they [[Page S 9893]] have prevailed in the underlying case against the Government. So this extra way out for the Government really allows the creation of another issue at least to more litigation over whether or not there was a substantial justification for the lawsuit to be brought in the first place, even though the Government lost. The professor suggests that there may even be some cost savings offset any increase in awards due to the elimination of the substantial justification defense. He admits it is impossible to make an exact determination of the expense of litigating this issue in case after case. But he believes, based on the evidence of 1 year--between 1989 and 1990--that whatever is saved by raising the substantial justification defense is not enough to justify the cost of litigating the issue. That is one reason why Professor Krent believes that this extra way out for the Government, in his words, ``probably creates a perverse incentive to litigate'' on the part of Government attorneys. My amendment specifically addresses the issue of cost by making it plain that there is to be no new direct spending to cover these fee awards. The amendment also makes it clear that agencies who are required to pay fee awards have to look to their own budgets. They cannot go to the Federal Claims and Judgment Accounts to find the necessary sums. That is in keeping with the original intent of the bill. That intent again is to make an agency think twice before it creates regulations and before initiating certain enforcement actions pursuant to them. I cannot think of anything more consistent with the overall purposes of legislation before us than that. The third major change in any amendment sets up a settlement process to give the parties a method of resolving the fee issue without resorting to further litigation. It creates an opportunity for the Government, similar to the process in Rule 68 of the Federal Rules of Civil Procedure, to make an offer of settlement up to 10 days prior to the hearing on the fee claim. If that offer is rejected and the party applying for fees later wins a smaller award, there is a negative consequence to the party that did not accept the offer of settlement. That party is not entitled to receive fees or other expenses that are incurred after date of the offer. My amendment does not specifically expand the reach of the EAJA. But it does require the review of the act and looks ahead to possible future expansion. We asked both the Justice Department and the Administrative Conference to review various aspects of where the law could be expanded. My amendment also requires the Administrative Office of the U.S. Courts to submit a report within 180 days as it does for the Justice Department. The U.S. Supreme Court in a 1991 decision, Ardestani versus INS, held that EAJA fees are available only in cases where hearings are required by law to conform to the procedural provisions of section 554 of the Administrative Procedures Act. However, Congress had already created a statutory exception. In 1986, Congress extended the coverage of the EAJA to include the Program Fraud Civil Remedies Act. I think it is reasonable to investigate whether certain agency proceedings such as deportation cases that are nearly identical to proceedings covered by 554 should also be covered by the EAJA. Mr. President, let me just conclude my comments at this point by indicating that recently a friend of mine I had not seen since high school just came to visit me in my office here and did not come, apparently, for any reason other than to visit. But during the course of our visit, he told me a story about what had happened to him recently that made him quite down about pursuing the business he is in. He told me that his agency declined to fight a case against the Department of Education, a case their attorneys believed was winnable, because the board of directors of his group did not believe it was worth paying large litigation costs over a claim worth about $32,000 even if the agency had a good case. The Department of Education, he told me, had reviewed his rehabilitation center, which provided job training and placement services for mentally and physically handicapped people, in 1992. The Department's reviewer found 10 problem areas, which were later actually whittled down, Mr. President, to just one item. All the Government had left in their case, after they went through this process, was saying that my friend's group had inadequate time sheets. For this and this alone, the Department wanted the center to pay a reimbursement of about $115,000. That was later negotiated down to $32,000. My friend told me that had he known about the EAJA law, he would have pressed the directors to fight, and because he did not know about it, he just gave up. A few weeks ago, the White House Conference on Small Business discussed this issue. Mr. Carl Schmieder, a Phoenix, AZ, businessman and deputy chairman of the Arizona delegation to the small business conference, helped spearhead a resolution endorsing the type of changes I am talking about for the EAJA. He said the array of resources available to the Government in litigation can be overwhelming to a small business owner, and he called the amendment that we are offering here tonight a tremendous step forward. Mr. Schmieder's resolution attracted a lot of support among the delegates to the conference. Although it did not appear on the shortest list of recommendations that came out of the conference, when the delegates drew up a list of priorities, these kinds of changes were ranked in the top 20 percent of all issues considered. I think individuals and small business owners deserve all the help we can give them, and before I close, let me acknowledge the work of the Administrative Conference of the United States which has been very helpful by conducting research into this issue, making many of these recommendations and providing valuable assistance in preparing the amendment. We all know unnecessary or overburdening Government regulations can be an obstacle to doing business. The Equal Access to Justice Act was conceived to overcome that obstacle, and we in this update that this amendment provides allow the act to work better than it has in the past. I thank the Chair and reserve the remainder of my time.

Mr. FEINGOLD. It is my understanding this side still has 10 minutes.

Mr. FEINGOLD. I only have 1 minute remaining. If there is going to be any opposition, I would like to reserve that for a response.

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 that the reading of the amendment be dispensed with.

Mr. FEINGOLD. Mr. President, there are many principles I can support in the Dole-Johnston legislation, but I do have a serious concern about part of the peer review proposal. It is not one of the larger issues at work here, but it is one I feel could have a great deal of impact on the integrity and credibility of the Federal regulatory process. Section 633 of the Dole-Johnston legislation includes a provision that requires the Federal agencies to develop a systematic program for balanced, independent and external peer review that is to be utilized to review the scientific risk assessments performed under the requirements of the legislation. I understand that several Senators have serious concerns about the larger issue of peer review and how it is treated in this legislation. There may be a broader amendment offered on that later, though. But the concern of this particular amendment has to do with the few lines contained in the peer review section of the bill that will put new guidelines and requirements on Federal agencies as they go about determining who will serve and who will not serve on these peer review panels. It is my understanding that, periodically, a Federal agency is faced with a situation where an individual has been selected as a possible peer reviewer and later it is learned that the individual may stand to benefit financially, depending on the outcome of that particular peer review. For example, the person might be a scientist under the employment of a company or industry that has a considerable financial interest that is dependent on the outcome of the review. That is a conflict of interest, and the type that I understand is not all that uncommon of an occurrence in our regulatory process. It is kind of important to understand how current law operates with respect to these kinds of situations. Mr. President, under current law, the agencies have the discretion to determine if someone with a direct conflict of interest should be able to serve on a peer review. As I said, this is permitted sometimes because there are instances where it may be appropriate and necessary to allow individuals with conflicts of interest to serve on a particular peer review panel. However, the Dole-Johnston legislation would go further. It would actually usurp the discretion currently enjoyed by the agencies and expressly state that an agency cannot actually disqualify someone merely because they may stand to benefit financially from the outcome of the review. This language is on page 57 of the bill. There are three effects of this section. The first effect--the one I am trying to amend--is that an agency will no longer have the discretion to determine on their own whether an individual with a conflict of interest should or should not be permitted to serve on the panel. The second effect is that should an individual have a conflict of interest, the individual must be permitted to serve on the peer review panel so long as the conflict of interest is disclosed and is made part of the record. The result of this is, I believe, at least an improvement that you are going to have the disclosure. I credit the folks that put this together in that regard. But there is an area where I think the agencies should have discretion. The bottom line is that if someone has a conflict of interest and is serving on a panel, that should be part of the record. But there is a further effect. The third effect of the Dole-Johnston language is that the only instance where an agency could exclude an individual with a conflict of interest is in the very narrow situation where the result of the review would have a direct and predictable effect on a substantial financial interest of such person. Now, what is a direct and predictable effect? That is a good question. Under current law, agency officials would be permitted to take a close look at this case and determine if there was enough cause placed on the ties of the individual and the industry being regulated to perhaps exclude the individual from the peer review panel. But under this legislation, as it now stands, the only instance in which an agency could exclude such an individual is to establish that the individual would predictably and directly benefit from the outcome of the peer review panel. The fact is that not all financial benefits are predictable and/or direct. The amendment I am now offering will change the Dole-Johnston language on this issue so that agencies will be allowed to continue to employ peer reviewers with a conflict of interest, at their own discretion, provided that the conflict of interest is disclosed and made part of the record. So the agencies would continue to be allowed to determine on their own when it is appropriate or not to allow someone with a conflict of interest to serve on a review panel. However, [[Page S 9897]] should the agency decide to allow such an individual to serve on a review panel, my amendment would make it mandatory for the conflict of interest to be disclosed and be made a part of the record. Finally, my amendment makes clear that there is just one circumstance in which the agencies will have no discretion as to who can be included or excluded from serving, and that in the situation I mentioned before, where a potential peer reviewer will directly and predictably benefit from the outcome of the review. In that case, the agency has to exclude the person. I am afraid that the Dole-Johnston bill, as currently written, will undermine the part of the regulatory process that is responsible for ensuring that risk assessments are performed in an objective and impartial manner. My amendment is strongly supported by the Clinton administration. Mr. President, how much time do I have remaining?

Mr. FEINGOLD. In short, let me say that my amendment preserves what works in current law and combines it with the progressive disclosure requirements of the Dole-Johnston bill. This will ensure that we have a review process that is fair, equitable and free from any unnecessary influence from the industries and entities that are the subject of the regulation. I yield the floor and reserve the remainder of my time.

Mr. FEINGOLD. Mr. President, if I may respond, the version that we have submitted is different than the one the Senator has before him. The language we have submitted indicates the following: The agency may exclude any person with substantial and relevant expertise as a participant on the basis that such person has a potential financial interest in the outcome, or may include. . . So the agency is allowed the option of either including or excluding a person who has a conflict of interest in the version we sent up to the desk.

Mr. FEINGOLD. Mr. President, that is correct. I want to be fair and make it clear, there is only one exception to that. That would require that the agency not be allowed to let the person stay on in the case where the result would have a direct, predictable effect. So a more extreme case, there is no discretion, but we restore the discretion in the more common conflict-of-interest case. That provision is in the Dole-Johnston provision.

Mr. FEINGOLD. I thank the Senator.

Mr. FEINGOLD. Mr. President, I yield back my remaining time.

Mr. FEINGOLD

Mr. FEINGOLD. I did ask unanimous consent it be printed in the Record.

Mr. FEINGOLD. I thank the Senator from Louisiana. I know he truly has made a good-faith effort to improve these provisions. I ask unanimous consent to have printed in the Record at this point a letter from the U.S. Department of Justice to the majority leader, dated July 11, 1995, from Mr. John Schmidt.

Mr. FEINGOLD. I would like to begin, Mr. President, by stating my support for the consideration of appropriate regulatory reform legislation in the U.S. Senate. I do believe our regulatory process is in need of repair. I would like to compliment the majority leader and the Senator from Louisiana for trying to craft a bill that will reform a regulatory process that, no doubt, has and will continue to serve an important purpose, but has too often infuriated and frustrated a growing number of Americans. Mr. President, I have held over 175 town meetings in my home State of Wisconsin during the past 2\1/2\ years. Many times I have had constituents stand up at the meetings and express their tremendous frustration and anger with the regulatory process that, too often, really, is impractical and impersonal and needlessly burdensome and, of course, many times, costly. The regulatory process affects just about every American one way or another. It may be the factory owner who is trying to comply with a Federal workplace safety regulation. It might be a young couple shopping for a car safety seat for their child. Or it may be the millions of Americans who sit down every April and have the pleasure of trying to decipher the Rube Goldberg guidelines and rules known as our Federal Tax Code. It is clearly in all of our interests to make sure we have a regulatory structure that is effective, efficient, and sensible. Mr. President, though this does not mean that we should entirely dismantle the regulatory process--that is not a solution, because the regulatory process serves as a protective watchdog over the health and safety of every person in this Nation. It is responsible for [[Page S 9756]] helping to ensure that we have cleaner air, cleaner water, and safer products. I am constantly reminded of the need for regulatory reform by constituents who approach me with their concerns with the process. Unfortunately, I am also occasionally reminded by other kinds of incidents, Mr. President, incidents in my home State that illustrate just how important appropriate Government regulation really is. Mr. President, it was just 2 years ago, in 1993, when an outbreak of cryptosporidium in the Milwaukee municipal water supply left 104 people dead and over 400,000 people seriously ill. Over 100 people, Mr. President, died from a single incidence of a water supply that became contaminated. That was a tragic reminder of how just one little crack in the regulatory process can have devastating consequences for a huge community that until then had never experienced any problems of any proportion of that kind. Mr. President, that is why I am equally concerned about the impact of this legislation on future regulations. I am particularly concerned about the Government's ability to protect our drinking water, as it is clear that cryptosporidium, considered Milwaukee's problem in 1993, is now the country's problem. On June 16, 1995, the Washington Post reported that cryptosporidium is now commonly found in lakes, rivers, and reservoirs all across this country. The Centers for Disease Control has warned that drinking tap water could be fatal to Americans with weakened immune systems, which the center estimates could number as many as 6 million Americans. The city of Milwaukee itself now notifies at-risk populations of detections of cryptosporidium in municipal water, contacting hospitals, AIDS care facilities, institutions that service the metropolitan area's elderly, informing all those with fragile immune systems, so they may be able to protect themselves. The city of Milwaukee is engaged in a multitier approach to investigating whether cryptosporidium is present in the drinking water: Testing occurs at the facility for the parasite, particulates, and turbidity of the water are used as indicators, and the city has established a network to monitor disease outbreaks that suggest individuals have been exposed to cryptosporidium. However, it is not only those with fragile immune systems that experience health problems when exposed to cryptosporidium. As I said, over 400,000 people of all states of health became ill in Milwaukee itself. That is a very significant percentage of the population. And over 100 died following the city's cryptosporidium outbreak in April 1993. So I have observed firsthand the lingering health problems Milwaukee citizens continue to face. Solutions to the problem of cryptosporidium will have to address nonpoint sources of pollution, and both the new $50 million threshold contained in the original draft of this legislation or the $100 million, and the assumptions that are made about risk characterization may impair our abilities to address this problem and sufficiently protect our water supply. It is problems such as this that illustrate the consequences-- sometimes fatal consequences--that are in store for the American people if a stranglehold is applied to the regulatory process. We should also remember that there are scores of other regulations that go through without controversy and should not be caught in a big net that would require needless scientific evaluation and analysis that would impede their promulgation. Indeed, sometimes Government regulations can be deregulatory in nature, such as those regulations that would clarify and simplify the Federal Tax Code, or regulations that might be associated with Federal legislation to reduce paperwork burdens for small businesses. That is the direction of many of our regulations today. Last year, the Federal Election Commission promulgated a regulation that prohibits Members of Congress from converting campaign contributions into their own personal rainy day slush funds. That is a good regulation and the sort that should not be impeded by unnecessary cost-benefit analyses and risk assessments. The Department of Veterans Affairs will soon be issuing guidelines for determining eligibility for certain benefits for veterans of the Gulf war who have experienced symptoms of the mysterious illness known as the Persian Gulf syndrome. Again, this is a regulation that I do not think anyone would want to be slowed by new process requirements. The Consumer Product Safety Commission has thankfully kept thousands of dangerous toys off the market that could be harmful to children. The Department of Agriculture is considering long overdue regulations to improve and modernize the Federal meat inspection system. I think such changes are crucial if we are to improve the level of protection provided to the American people from bacterial food-borne diseases that can in the worst cases result in death for our most vulnerable population. There are clearly a large number of regulations that need to be implemented and should be implemented in a relatively quick and efficient manner. Such regulations are critical for protecting the health and safety of this Nation. As others have correctly pointed out, this issue has a tradition of being handled in a bipartisan fashion in the U.S. Senate. In 1982, the Senate approved S. 1080, the Leahy-Laxalt legislation by a 94 to zero margin. Then, just 3 months ago, the Government Affairs approved a bill by a margin of 15 to zero that the senior Senator from Maine, Senator Cohen, referred to as a restoration of common sense. Unfortunately, the bill that was considered by the committee I serve on, the Judiciary Committee, was much more than any sort of reform bill. I had the feeling it was not a reform bill--it was a dismantling bill. A dismantling of our regulatory framework. It is not the sort of bill that I believe the American people would support if they knew all the details. I am pleased that some of the excessive provisions of that legislation have been dropped and are not a part of the latest Dole- Johnston package. Unfortunately, the Dole-Johnston proposal, as I understand how it currently stands, does contain several provisions that I believe could hamstring the ability of Government agencies to adequately protect the health and safety of the American people. I know the Senator from Louisiana has strong feelings about this, but let me just mention a couple of my concerns. I will certainly listen to any responses he has, as the days goes on. I think the issue of judicial review and how it has been addressed in different proposals best illustrates the difference between how you can improve the regulatory process and how you can paralyze the regulatory process. Let me say at the outset that I support the ability of a person subject to a government regulation to ask a court to review the rulemaking record and determine if an agency has followed the proper procedures for issuing a regulation. I have always supported the concept of expanding an individual's access to our judicial system. What I do not support is allowing a well-financed business interest with a legion of attorneys to file continuous lawsuits to paralyze an agency and prevent that agency from issuing a rule that will benefit the consumers, working people, children, and families of this country. I find it interesting that just a couple of months ago this body found itself in a frenzy to clamp down on the supposed litigation explosion in product liability cases. So when we are talking about defective products that a manufacturer knowingly markets, those on the other side want to limit an injured consumer's access to the judicial system.

Mr. FEINGOLD. Mr. President, that does certainly acknowledge--in fact, I will read the language--the fact that [[Page S 9758]] there is improvement but there are still complexities involved. The letter states, in part, on page 2, that: Section 625 provides for judicial review of an agency's compliance with S. 343's subchapters on cost/benefit and risk analyses. The language in the substitute appears to be a significant improvement over that contained in the bill reported by the Judiciary Committee; however, it will continue to allow litigation over complex procedural requirements to be filed on every major rule. So, Mr. President, I recognize the Senator from Louisiana is attempting to address this. I have not finally concluded that he has not addressed it completely. But the Department of Justice still believes the complexity involved here, I think it is fair to say, could invite a great deal of litigation and, I fear, give quite an advantage to the large interests that are more likely to have the attorneys and the wherewithal to fight these battles and jam up the regulatory process.

Mr. FEINGOLD. I thank the Senator from Ohio. I recognize that the Senator from Louisiana made a real effort to improve this process. I think he made a fair comment earlier today. It is not a sufficient response to his effort to simply say this bill goes too far. You have to be able to point out where it may go too far. I agree with the Senator from Ohio. Perhaps the guidance of the Department of Justice identifies those areas of continuing concern that we have to address before we make a final judgment about whether this bill is in the right shape to be the vehicle for regulatory reform that we all wish. Let me continue. I have noticed in the 104th Congress the tremendous desire in this body when it came to product liability to limit litigation, to unclog the courts. That was the real focus of that bill. That was the justification frankly for something I thought took away the rights of a lot of people to potentially sue for damages and get their fair return and being made whole after they have been hurt by a product. I notice that those who support changing our habeas corpus laws believe that a prisoner awaiting execution should be given one shot and one shot only at having his case reviewed by a high court. So apparently when we are ready to take a person's life away--and in too many cases an innocent person's life--the other side wants to again limit access to courts. But when corporate America and well-financed business interests are involved, those on the other side--I want to be cautious here--suddenly want to enable those interests to file lawsuit after lawsuit after lawsuit. There is something wrong here. Do we try to unclog the courts or not? When you take a close look at some of the judicial review proposals that are out there, you begin to wonder what the litigation departments of the Federal agencies are going to begin to look like should any of these proposals become law. How many attorneys are the agencies going to have to hire as they find themselves becoming more familiar with a courtroom than they are with their own offices? How many attorneys and other staff are the agencies going to have to hire to deal with the mountain of petitions that will pour into the agencies should the wrong bill be passed? We do not know the exact answers to these questions. But considering the tremendous effort that the Clinton administration has made to shrink the size of Government--the smallest it has been since the Kennedy administration--considering the tremendous gains made by the Vice President's reinventing Government effort and considering the legislation passed last year that will reduce the size of the Federal work force by 250,000 employees, I think we should be extremely careful not to pass legislation that will nullify the progress that has been made on cutting back on the size of the Government. I do not want to make these Federal agencies bigger than they need to be. I do not want to have to vote on larger appropriation bills each year to finance new Government bureaucrats and all of these procedural requirements and scientific analyses they must complete to meet the requirements of this bill. And to get the work of the Government done. I do not think that is what the American people had in mind when they hear words such as ``reform'' and ``efficiency.'' I am also concerned about the several provisions in this bill that seem to have little to do with the notion of reforming the regulatory process. In fact, S. 343, the Comprehensive Regulatory Reform Act of 1995, as introduced by the majority leader on February 2, was just 32 pages long. That bill contained what many believe are the key ingredients of a strong regulatory reform bill. It contained requirements for cost- benefit analyses, it contained requirements to perform risk assessments. It had judicial review and it had a mechanism for those who are being regulated to petition an agency to review an existing regulation. Interestingly enough, the underlying legislation we are considering today has bloated to nearly 100 pages. It still has cost-benefit analyses, risk assessment, judicial review, a petition process and many other provisions originally a part of S. 343 as it was first introduced. But a host of new provisions, many of which have little or nothing to do with reforming the regulatory process, have been thrown into this pot luck legislation that has tripled in length since originally introduced. One example is the effective repeal of the Delaney clause in this legislation. The Delaney clause, as many observers agree, is no longer consistent with modern scientific methods of detecting residues of pesticides, fungicides and insecticides on processed foods. The zero-risk standard prevents use of chemicals that have been used for many years simply because new technology allows us to more easily detect minute levels of residues. It provides for an inconsistent standard for EPA to set tolerances for pesticide residues in processed foods versus raw foods. The current law does not provide for consideration of actual consumption patterns of various foods nor does it take into account the dietary intakes of different segments of our population. And it only addresses cancer risk, rather than other potential health effects of food additives. These are problems that should be addressed. However, despite these problems with the Delaney clause, a stand alone repeal of the provision--as included in the Dole-Johnston legislation--will do nothing to improve the safety of our food supply and simply does not belong in legislation intended to address the inadequacies of the existing regulatory process. The fact is that there are incredibly complex and important issues that should be considered as a package of pesticide reform legislation in the appropriate committees. When I served on the Agriculture Committee, I had a change to hear very compelling testimony on the types of ranges of issues that should be included. For example, farmers fear that more and more of their crop protection chemicals will be taken without adequate alternatives. This issue needs to be addressed. But repealing Delaney only allows some chemicals to remain on the market--it does nothing to address the environmental side of the [[Page S 9759]] equation that farmers are faced with on a regular basis. Farmers also want to know that so-called minor use pesticides will continue to be available--they want reregistration to be made less burdensome and yet consumers want to be assured that those chemicals are safe despite potentially expedited registration processes. Repealing Delaney does not address this so-called ``minor use'' issue. Consumers also want to know that the way in which we set tolerances for chemicals used in food production takes into account the needs of our most vulnerable populations infants and children. This is what we heard so much about in the Agriculture Committee. A lot of studies and flies are based on adult males, not necessarily on the tolerances that children can absorb of certain pesticides and substances. Again, repealing Delaney does not address that issue. Consumers want to know that all health risks have been addressed in the process of setting tolerances for chemicals, reproductive and developmental impacts as well as carcinogenic risks. Repealing Delaney does not solve that problem. The bottom line, Mr. President, is that there is a lot of work that needs to be done with respect to the regulation of chemicals used in food production and processing by the EPA and the FDA. But that sort of reform needs to be done as part of a comprehensive package that addresses the issues of importance to manufacturers, food processors, farmers and consumers. It should not be inserted as a phantom paragraph in a hundred-page bill that seeks to reform the process by which regulations are issued. In closing, I want to reiterate my sincere and spirited support for reforming the regulatory process that is currently in place. I do not believe that the current system is acceptable--the need for reform is clear and imperative. I think what we need is to rededicate ourselves to finding that proper balance between needed health, safety and environmental safeguards, and granting greater relief to those who are being regulated by rules that have little or no rational basis. I hope that as this bill is considered now and in the coming days, that Members from both sides of the aisle can get together, roll up our sleeves and find an alternative that really does achieve the balance that I think we can support. I thank the Chair, and I yield the floor. Mr. GLENN addressed the Chair.

Mr. FEINGOLD. I will be happy to yield.

Mr. FEINGOLD. I am happy to yield to the Senator from Ohio.

Mr. FEINGOLD

Mr. FEINGOLD. Mr. President, I rise today in full support of the amendment proposed by my colleague from Wisconsin [Mr. Kohl]. I cannot express to my colleagues in the Senate the significant urgency with which regulations on cryptosporidium, other waterborne parasites, and disinfection byproducts, need to move forward. EPA has negotiated a series of regulations with the cooperation of water utilities and public interest groups to require public water systems to test for cryptosporidium and other parasites and issued them as a proposed rule package. Using information from these negotiations, the EPA has also indicated its intent to prescribe particular treatment and filtration techniques to prevent waterborne disease outbreaks. Mr. President, this regulatory reform bill should support, not hinder, the results of negotiated rulemaking. Bringing the potentially regulated community together with the regulatory agency to discuss in a constructive way the content and scope of governmental requirements in negotiated rulemaking is the type of process that helps to ensure our objectives in regulatory reform. Lest anyone in this body think that cryptosporidium is either just Milwaukee's problem, or an unfortunately vogue parasite brought into the limelight 2 years ago, cryptosporidium has been widely detected in public water systems, including here in Washington, DC, in 1994. In a September 30, 1994, Congressional Record statement, I described the contents of a three-part NBC news ``Dateline'' series that ran on cryptosporidium. Though the news show time limits prohibited a listing of all the cases of concern, the program reported that between 1986 and 1992, the Centers for Disease Control reported a total of 102 drinking water disease outbreaks linked directly or indirectly to microscopic parasites, viruses, and bacterium striking 34,155 people in 35 States. Concerns with cryptosporidium outbreaks continue. On June 15, 1995, the CDC and EPA issued additional guidance for people with weakened immune systems, such as people with HIV and AIDS, cancer and transplant patients taking immunosuppressive drugs, and people with genetically weakened immune systems, to take extra precautions in consuming municipal water such as boiling their water or using a cyst-certified water filter to protect against cryptosporidium. Some 400,000 people, of all States of health, became ill in Milwaukee and my colleague from Wisconsin and I have seen firsthand the ongoing health problems and the significant institutional response and coordination challenges that Milwaukee citizens continue to face, in the absence of regulation. I also remain concerned about the health risks posed by disinfection byproducts, rules that were proposed to control the amount of disinfectant byproducts allowed in drinking water at the same time that safeguards would be strengthened against disease-causing microorganisms such as cryptosporidium. According to the fall 1994 EPA Journal, chemicals used to disinfect drinking water, such as chlorine, form byproducts that can harm human health. For example, chronic exposure to excessive amounts of trihalomethanes, a class of byproducts, can cause cancer, liver and kidney damage, heart and neurological effects, and effects on fetuses. The proposed rule would lower the maximum contaminant level for total trihalomethanes from 100 micrograms per liter to 80 and address 6 other by-products. In conclusion, our efforts to reform the regulatory process should not thwart rules that are needed and consensus-based, such as the rules on cryptosporidium. The citizens of Milwaukee, and indeed the citizens of many other major cities, are asking for the Government to respond to this public health concern. I believe exempting these rules from this bill is both the responsible public policy course, and the right thing to do.

Mr. FEINGOLD

Mr. FEINGOLD. Mr. President, I am pleased to introduce S. 1022, legislation to eliminate percentage depletion allowances for four mined substances--asbestos, lead, mercury, and uranium--from the Federal Tax Code. This measure is based on language passed as part of the Energy Policy Act of 1992 by the other body during the 102d Congress. I am joined in introducing this legislation by my colleague from New Jersey, Mr. Bradley, and my colleague from Minnesota, Mr. Wellstone. Analysis by the Joint Committee on Taxation on the similar legislation that passed the House estimated that, under that bill, income to the Federal Treasury from the elimination of percentage depletion allowances in just these four mined commodities would total $83 million over 5 years, $20 million in this year alone. These savings are calculated as the excess amount of Federal revenues above what would be collected if depletion allowances were limited to sunk costs in capital investments. These four allowances are only a few of the percentage depletion allowances contained in the Tax Code for extracted fuel, minerals, metal, and other mined commodities--with a combined value, according to 1994 estimates by the Joint Committee on Taxation, of $4.8 billion. Mr. President, these percentage depletion allowances were initiated by the Corporation Excise Act of 1909. Provisions for a depletion allowance based on the value of the mine were made under a 1912 Treasury Department regulation, but difficulty in applying this accounting principle to mineral production led to the initial codification of the mineral depletion allowance in the Tariff Act of 1913. The Revenue Act of 1926 established percentage depletion much in its present form for oil and gas. The percentage depletion allowance was then extended to metal mines, coal, and other hardrock minerals by the Revenue Act of 1932, and has been adjusted several times since. Percentage depletion allowances were historically placed in the Tax Code to reduce the effective tax rates in the mineral and extraction industries far below tax rates on other industries, providing incentives to increase investment, exploration, and output. However, percentage depletion also makes it possible to recover many times the amount of the original investment. There are two methods of calculating a deduction to allow a firm to recover the costs of their capital investment: cost depletion, and percentage depletion. Cost depletion allows for the recovery of the actual capital investment--the costs of discovering, purchasing, and developing a mineral reserve--over the period which the reserve produces income. Using cost depletion, a company would deduct a portion of their original capital investment minus any previous deductions, in an amount that is equal to the fraction of the remaining recoverable reserves. Under this method, the total deductions cannot exceed the original capital investment. However, under percentage depletion, the deduction for recovery of a company's investment is a fixed percentage of gross income--namely, sales revenue--from the sale of the mineral. Under this method, total deductions typically exceed, let me be clear on that point, Mr. President, exceed the capital that the company invested. The rates for percentage depletion are quite significant. Section 613 of the United States Code contains depletion allowances for more than 70 metals and minerals, at rates ranging from 10 to 22 percent--which is the rate used for all uranium and domestic deposits of asbestos, lead, and mercury. Lead and mercury produced outside of the United States are eligible for a percentage depletion at a rate of 14 percent. Asbestos produced in other countries by U.S. companies is eligible for a 10-percent allowance. Mr. President, in today's budget climate we are faced with the question of who should bear the costs of exploration, development, and production of natural resources: all taxpayers, or the users and producers of the resource? Given that we face significant budget deficits, these subsidies are simply a tax expenditure that raise the deficit for all citizens or shift a greater tax burden to other taxpayers to compensate for the special tax breaks provided to some industries. Mr. President, the measure I am introducing, despite the fact that taxes seem complicated, is fairly straightforward. It eliminates the percentage depletion allowance for asbestos, lead, mercury, and uranium while continuing to allow companies to recover reasonable cost depletion. Though at one time there may have been an appropriate role for a Government-driven incentives for enhanced mineral production, there is now a sufficiently large budget deficit which justifies a more reasonable depletion allowance that is consistent with those given to other businesses. Moreover, Mr. President, these four commodities covered by my bill are among some of the most environmentally adverse. The percentage depletion allowance makes a mockery of conservation efforts. The subsidy effectively encourages mining regardless of the true economic value of the resource. The effects of such mines on U.S. lands, both public and private, has been significant--with tailings piles, scarred earth, toxic byproducts, and disturbed habitats to prove it. Ironically, as my earlier description highlights, the more toxic the commodity, the greater the percentage depletion received by the producer. Mercury, lead, uranium, and asbestos receive the highest percentage depletion allowance, while less toxic substances receive lower rates. Particularly in the case of the four commodities covered by my bill, these tax breaks create absurd contradictions in Government policy. The bulk of the tax break shared by these four commodities goes to support lead production. Federal public health and environmental agencies are struggling to come to grips with a vast children's health crisis caused by lead poisoning. Nearly 9 percent of U.S. preschoolers, 1.7 million children, have levels of lead in their blood higher than the generally accepted safety standard. Federal agencies spend millions each year to prevent lead poisoning, test young children, and research solutions. At the same time, the percentage depletion allowance subsidizes the mining of lead with a 22-percent depletion allowance. Lest we think that our nearly 15-year-old ban on lead in paint, or the end of the widespread use of lead in gasoline has solved our lead problems, exposure problems still exist. In 1993, 390 million tons of lead were produced in this country, with a value of $275 million, according to the U.S. Bureau of Mines. Some 82 percent of the production came from 29 plants with annual capacities of more than 6,000 tons. There continue to be major uses of lead in the production of storage batteries, gasoline additives and other chemicals, ammunition, and solder. Even more ironic, Mr. President, though the recovery and recycling of lead from scrap batteries was approximately 780 tons--twice the newly mined production--the recycling industry received no such tax subsidy. To cite another example, hardly any individual in this body has not been acutely aware of the public health problem posed by asbestos. These compounds were extensively used in building trades and have resulted in tens of thousands of cases of lung cancer and fibrous disease in asbestos workers. As many as 15 million school children and 3 million school workers have the potential to be exposed because of the installation of asbestos containing materials in public buildings between 1945 and 1978. The EPA has already banned the use of asbestos in many building and flame retardant products, and will phase out all other uses over the next 5 years. Asbestos fibers are released at all stages of mining, use, and disposal of asbestos products. The EPA estimates that approximately 700 tons per year are released into the air during [[Page S 9719]] mining and milling operations. It certainly seems quite peculiar to this Senator, that a commodity, the use of which the Federal Government will effectively ban before the year 2000, continues to receive a hearty tax subsidy. Mr. President, the time has come for the Federal Government to get of the business of subsidizing business in ways it can no longer afford-- both financially and for the health of its citizens. This legislation is one step in that direction. Mr. President, in our efforts to reduce the Federal deficit and achieve a balanced budget, it is critical that we look at tax expenditures that provide special subsidies to particular groups, such as those proposed to be eliminated in this legislation. Tax expenditures are among the fastest growing parts of the Federal budget. According to the General Accounting Office, these tax expenditures already account for some $400 billion each year. GAO has recommended that Congress begin scrutinizing these areas of the budget as closely as we do direct spending programs. Earlier this year, the Senator from Minnesota [Mr. Wellstone] and I introduced a sense-of-the- Senate resolution calling for imposing the same kind of fiscal discipline in the area of tax expenditures that we do for other areas of the Federal budget, an issue that the Senator from New Jersey [Mr. Bradley] has championed for some time as well. I am particularly pleased to have the Senator from New Jersey and the Senator from Minnesota join me in this effort today. As GAO noted in its report last year, ``Tax Policy: Tax Expenditures Deserve More Scrutiny'', many of these special tax provisions are never subjected to reauthorization or any type of systematic review. Once enacted, they become enshrined in the Tax Codes and are difficult to dislodge. Of the 124 tax expenditures identified by the Joint Tax Committee in 1993, about half were enacted before 1950--nearly half a century ago. Clearly, in this case, the economic conditions which may have once justified a special tax subsidy have dramatically changed. Eliminating these kinds of special tax preferences is long overdue. Mr. President, in 1992 I developed an 82+point plan to eliminate the Federal deficit and have continued to work on implementation of the elements of that plan since that time. Elimination of special tax preferences for mining companies was part of that 82-plus-point plan. Achievement of a balanced budget will require that these kinds of special taxpayer subsidies to particular industries must be curtailed, just as many direct spending programs are being cut back. Finally, Mr. President, in conclusion I want to pay tribute to several elected officials from Milwaukee, Mayor John Norquist, State Representative Spencer Coggs, and Milwaukee Alderman Michael Murphy, who have brought to my attention the incongruity of the Federal Government continuing to provide taxpayer subsidies for the production of toxic substances like lead while our inner cities are struggling to remove lead-based paint from older homes and buildings where children may be exposed to this hazardous material. I deeply appreciate their support and encouragement for my efforts in this area. Mr. President, I ask unanimous consent that a copy of the legislation be printed in the Record.

Mr. FEINGOLD

Mr. FEINGOLD. Mr. President in 1974 Congress passed the Jackson-Vanik amendment to the 1974 Omnibus Trade Act establishing a linkage between human rights and most-favored-nation [MFN] trade status for nonmarket economies. The legislation was largely responsible, in my view, for the fantastic success of United States efforts to secure the freedom of movement for over 1 million Jews and other persecuted minorities from the Soviet Union. Since 1989, when the Chinese military brutally gunned down hundreds of protectors in Tianmen Square and cracked down on the blossoming dissident movement in China, there have been efforts to link Chinese MFN to human rights improvements. In 1991, legislation to set conditions for the extension of MFN to China was passed by overwhelming majorities in both the House and the Senate, only to be vetoed by President Bush. The House overrode the veto, but the Senate sustained it by a mere one vote. In 1992 Congress again passed bills to revoke MFN status for products manufactured by Chinese state-owned companies. President Bush vetoed that as well, and once again the Senate sustained the veto. When President Clinton came to office in 1993, he issued an Executive order specifying seven areas in which the Chinese would need to make ``significant progress'' if MFN were to be extended in 1994. I was one of those who strongly condemned the action of the administration when it abandoned this position in 1994, because I believe it undermined the President's own credibility on human rights, and relegated U.S. human rights advocacy from a policy with teeth to one of rhetoric and symbolism. For the same reasons, I am disappointed that despite a year in which freedoms further diminished in China, President Clinton announced on June 2 that he would seek to extend MFN status to China again this year. I am most outraged, though, Mr. President, that the United States would even consider extending MFN to China at precisely the moment that the Chinese have arrested a prominent human rights activist and American citizen, Mr. Henry Wu, and threatened to try him for espionage and subject him to the death penalty. This is yet another disgraceful mark on China's human rights record, and will hopefully compel us to respond finally with the toughest human rights policy possible. Mr. President, that is why I am introducing today a joint resolution of disapproval, consistent with the Jackson-Vanik amendment of 1974, of the extension of nondiscriminatory treatment to products of the People's Republic of China. There is no evidence, Mr. President, that the granting of unconditional MFN status to China--an element of a so-called policy of ``constructive engagement''--has improved China's human rights behavior at all. Both Assistant Secretary of State for Asia and Pacific Affairs Winston Lord and Assistant Secretary of State for Human Rights and Humanitarian Affairs John Shattuck have said publicly that the human rights situation has not improved in China. The State Department's own 1994 report acknowledges that ``In 1994, there continued to be widespread and well-documented human rights abuses in China.'' From the events of the last 6 months, in fact, one can only conclude that the situation has worsened--even with MFN and robust trade. The Chinese Government continues to exercise significant control on opposition and dissent; to abuse systematically is prisoners, including the use of slave labor and the alleged organ transplant of executed prisoners; and to impose harsh regulations in Tibet, while refusing to engage in any dialog with Nobel Peace prize laureate the Dalai Lama. In the last 2 months alone, several prominent intellectuals have been detained while their homes have been searched simply for signing petitions in support of more political openness. More have been taken into custody and interrogated about their activities. Some have been questioned, released, and then sent away from Beijing, while others have just disappeared, including China's most prominent dissident, Wei Jeisheing, whose whereabouts since February are unknown, except to the extent that he is confirmed to be in police custody. Two weeks ago, Chen Ziming, another well-known prodemocracy activist, was suddenly reimprisoned after being released on a medical parole last year. Stricter security laws have been adopted by the Politburo, and Beijing seems intent on limiting access of Chinese citizens to the tens of thousands of international nongovernmental organizations that will be in China this September for the U.N. Fourth World Conference on Women. As the leader of the free world, the United States has the responsibility to work to protect human rights worldwide. The most recent action of the Chinese Government against an American citizen makes it a personal issue for many us. On June 19 Mr. Harry Wu entered northwest China, with a legal Chinese visa and with a valid United States passport, and was immediately detained by Chinese officials. For several days, China refused to confirm that it was in fact holding an American citizen, and in effect denied United States officials the access to our citizens that is supposedly protected under a United States-China Consular Convention. A U.S. diplomat was even sent on a wild goose chase throughout the northwest provinces earlier this month in search of Mr. Wu. The announcement this weekend that Mr. Wu is going to be tried as a spy and potentially subject to the death penalty is the one of the most egregious [[Page S 9641]] violations I can think of. After spending 19 years in Chinese prison camps, and then seeking refuge in the United States, Mr. Wu has been actively researching the abuse of Chinese prisoners, including the trade of human body parts from executed prisoners to party officials. He has produced a film which was aired on the British Broadcasting Corp., published articles on the subject, and testified before congressional committees. He has publicized what can happen when the State has the will and instruments to take these actions, and has fought to halt this gruesome practice in China. Mr. President, no one can possibly be deceived into thinking that Mr. Wu was arrested by Chinese officials for any other reason except to silence him. He is being threatened with death for uncovering horrid human rights abuses in China. The U.S. and international reactions must be anything but muted or conciliatory. Earlier this year, the administration was willing to play hardball with trade when it came to Chinese piracy of software, and threatened to impose $1 billion worth of sanctions against products of specific state-owned industries. The threat worked, and the United States achieved its goals. I would entreat the administration to address the plight of a human being just as seriously. My joint resolution is intended to send the message that we cannot have business as usual with China when human rights advocates, such as Harry Wu, are under the threat of death. In my view, MFN should not have been extended to China this year at all given its human rights record, but now, especially, we cannot offer conciliations of this kind. China's human rights record is deteriorating, despite MFN, and there is little, if no, evidence that economic engagement is improving the human rights situation in China, as was earlier promised. Though China's economy is expanding brilliantly, political change is not coming: in fact, the Chinese Government appears to be doing everything within its power to ensure that economic development does not bring political liberalization. If anything, the Chinese need MFN to continue the trade and investment on which its economic development depends. For this reason, we must use MFN as a lever to protect human rights in China, and an American human rights crusader who is facing death. I ask unanimous consent that the text of resolution be printed in the Record.

Mr. FEINGOLD

Mr. FEINGOLD. Mr. President, I say to my friend from Connecticut, there is no fairness in it. And the only way they are getting away with it is if the American people do not find out what is being done here. We found out what we have to do on the floor of the Senate. We have to say it over and over again on the floor of the Senate. That is what we are going to do. I have done that since last December, when I found out what the plans were for the crown jewel of the Republican contract: To deliver this tax cut even though the American people are not falling for it and even though it is totally unfair.

Mr. FEINGOLD. I thank my colleague. I have had a very nice week here, meeting some of my constituents from Wisconsin, my home State, a lot of kids with farm backgrounds, rural backgrounds, kids from Future Farmers of America and 4-H. These are all groups that have helped produce the backbone of our State throughout our history and it continues today, with the very hard times of farm families. The interesting thing I noted was that the concern was consistent with regard to the rural kids and the urban kids. Their question was, what is this budget going to do to my opportunity to go to college? What is this going to mean in terms of student loans, in terms of Pell grants? It is bad enough as it is. Families even before we started looking at the Republican budget were worried sick about paying for college education, even at a State institution such as the University of Wisconsin. When I went to the University of Wisconsin, a 4-year education with all the trimmings, the apartment, everything, the food, the whole thing was only $10,000. We thought that was quite a bit of money in those days. Now you cannot even get a year at most institutions--maybe just tuition--for that. So they asked me: What is going to happen in the budget? And I had to tell them that there were three areas that were being completely protected by the Republican budget, a small portion of which would have taken care of all those issues having to do with student loans and a lot of other things that the Senator from Washington has mentioned. Let me just mention what I like to call three sacred cows, because I come from a State where cows are very important, but these are sacred cows. And the first sacred cow is a $245 billion tax cut that has been sealed in this budget resolution. As the Senator from Connecticut has pointed out, $245 million just dwarfs the amount of money that is needed to restore some of the family issues we are talking about. These cuts are proven to be not necessary in most cases by the very reality that the Republicans feel compelled to deliver a huge tax cut at the same time when this horrible sacrifice is being asked of our young people who are just asking for a decent future and the opportunity to come out of college without being hopefully in debt or maybe not being able to go to college.