Dianne Feinstein

Mrs. FEINSTEIN

Mrs. FEINSTEIN. I heard an interesting comment by a Senator yesterday. He said: Well, at least I will only have to do half the number of fundraisers to raise the amount of money that is required. Now the question is, Is that good or bad? I happen to think it is great.

Mrs. FEINSTEIN. If the Senator will yield for a moment.

Mrs. FEINSTEIN. In the big States, that is impossible to do. Your campaign, getting your message out, has to depend to some extent on large-scale communication, big speeches, large direct mail, television, radio, those things that reach large numbers of people. It is a fact of life. As these prices go up, the candidate can buy less and less. This is what opens the field, then, to the very wealthy candidate who can come in and spend tens of millions of his or her own money and preempt the field just because of that.

Mrs. FEINSTEIN. I actually agree with it strongly. Most people in California find that they can't win statewide the first time out. Money is one of the issues here. The State is so big. I harken back to a conversation I had with Alan Simpson. He said he could go home and have lunch at the grill in Cody and he would see all 200 people in Cody. He would campaign that way.

Mrs. FEINSTEIN. That is correct. As I said, this really affects very few people. We believe it is a good, healthy reform.

Mrs. FEINSTEIN. That is healthy. It is all hard dollars. It is regulated. It is all disclosed.

Mrs. FEINSTEIN. Mr. President, on behalf of the senior Mississippi Senator, Mr. Cochran, the senior Senator from New York, and myself, I send a second-degree perfecting amendment to the desk.

Mrs. FEINSTEIN. I think the evidence is that very few people essentially max out to parties. So we make it easier to contribute to parties by creating a separate account. That is my answer.

Mrs. FEINSTEIN. Yes.

Mrs. FEINSTEIN. You are correct. It does not. We simply believe the amount in this for PACs and parties, which is the $35,000 out of the $70,000--$35,000 a cycle out of the $70,000--can be given to parties. Now, of course, this is not $40,000 a calendar year, but, again, there is a limit on the individual in hard dollars. I think most of the party building today comes from soft dollars rather than hard dollars, in any event.

Mrs. FEINSTEIN. All the giving to the political parties would have to be with hard dollars. So the way we approach it is that we create these split accounts. In other words, over the cycle an individual can contribute up to $30,000 to candidates and $35,000 to PACs and party committees. So that is a specific requirement.

Mrs. FEINSTEIN. I would like to try to answer the distinguished Senator from Kentucky. Essentially, today, under current law, the aggregate limit that anyone can give in a calendar year to anything--to all of these--is $25,000 or $50,000 a cycle. McCain-Feingold, as you know, increases that to $60,000 a cycle or $30,000 a calendar year. We increase that further to $65,000 a calendar year. And we tried to create an incentive. Again, we are replacing soft dollars with hard dollars.

Mrs. FEINSTEIN. Mr. President, I reserve the remainder of my time.

Mrs. FEINSTEIN. How much time is remaining on my side?

Mrs. FEINSTEIN. Mr. President, let me begin quickly by going over current law, McCain-Feingold, the Thompson amendment, and the Feinstein-Cochran-Schumer amendment. Under current law, candidates in hard money are limited to $1,000 per election or $2,000 a cycle. PACs are limited to $5,000 a calendar year, State and local parties to $5,000, national parties to $20,000, and the aggregate limit that any individual can contribute to all of the above is $25,000 a year. That is present law. McCain-Feingold keeps the $1,000 limit, keeps the limit on PACs at $5,000. State and local parties are doubled to $10,000 per calendar year. National parties remain the same at $20,000 per calendar year. And the aggregate limit that an individual can contribute to all of the above is $30,000 a calendar year, or $60,000 a cycle. The Thompson amendment changes that. The limit on an individual contribution goes to $2,500 an election or $5,000 a cycle. PACs go to $7,500 per calendar year. State and local parties stay the same as McCain-Feingold at $10,000. National parties double to $40,000 a calendar year or $80,000 a cycle. The aggregate limit is a substantial change. It goes from $50,000 per calendar year to $100,000 a cycle. What Senators Cochran, Schumer, and I propose is as follows: that a candidate limit go to $2,000. That is a doubling of the $1,000 limit of current law. The PACs remain the same as McCain-Feingold and as present law at $5,000 a calendar year. The State and local parties remain the same as McCain-Feingold, and the national party's contributions remain the same as McCain-Feingold. We differ with McCain-Feingold, and I will make clear why. We raise the aggregate per cycle, which is $60,000, under McCain-Feingold, to $65,000 a cycle. So we are just $5,000 more than McCain-Feingold. What we do in this cycle to allow for flexibility and also to allow for party building, we say of that $65,000, it is split as follows: $30,000 per election cycle can go to candidates, and $35,000 per election cycle to party committees and PACs. We also say the $2,000 cap on individual contributions would be indexed for inflation. So the substantial differences between McCain-Feingold and Feinstein- Cochran-Schumer are on the candidate cap, which is doubled, which is from $60,000 to $65,000 with a split to encourage both giving to candidates as well as to parties, and indexing per election to inflation, which I happen to believe is extraordinarily important. Right now, individuals may contribute $1,000 to a House or Senate candidate for the primary and another $1,000 for the general. As I said, we double that. We believe our amendment is necessary for the simple reason the $1,000 limit was established in 1974. It hasn't been changed since then. That was 27 years ago. Ordinary inflation has reduced the value of a $1,000 contribution to about one-third of what it was in 1974. The costs of campaigning have risen much faster than inflation. In 1996, the Congressional Research Service cites figures to the effect that $4 billion was spent on elections in 1996, up from $540 million in 1976. So that is an eightfold increase in spending; an 800- percent increase in spending between 1976 and 1996. Let me give some examples of how the cost of campaigning has soared since that thousand dollar limit was established three decades ago. The bulk mailing permit rate in 1974 was 6 cents per piece. Today it is 25 cents per piece. If you send out mail, that is a substantial increase in cost. In 1990, when I ran a gubernatorial campaign in California, a 30-second television spot run in the Los Angeles media market at 6 o'clock at night cost $1,800, one spot. Last year, when I ran for reelection to the Senate, the same spot cost $3,000. That is a 67- percent increase in the cost of one television spot in 10 years. In 1990, a 30-second spot run in the Los Angeles media market during prime time cost about $12,000; by 2000, it cost $22,000. That is an 83- percent increase. So bulk mail has gone up dramatically, television advertising has gone up dramatically. If you come from a large State, you cannot run a campaign without television advertising and without some bulk mail. The hard money contribution limits have been frozen now for 27 years. What has been the result? Is that result good or bad? Candidates, incumbents, and challengers have had to spend more and more time just raising money. What gets squeezed out in the process? Time with constituents or, in the case of challengers, prospective constituents. I don't think that is good for our democracy. Personally, in just this past election alone we have had to have over 100 fundraisers, and that took a lot of time--time to call, time to attend, time to travel, time to say thanks. That was time I could not spend doing what I was elected to do. So the task of raising hard money in small contributions, unadjusted for inflation, is indeed increasingly daunting. Particularly in the larger States, it is not uncommon for Senators to begin fundraising for the next election right after the present one, as they often find themselves dialing for dollars instead of attending to other duties. In my book, that is bad. I think that presents us with a problem. Let's be honest with each other and the American people. Campaigning for office will continue to get more and more expensive because television spots are getting more and more expensive. Meanwhile, one of the effects of McCain-Feingold is that as we ban soft money, which I am all for, the field is skewed because one has to say: Can you still give soft money? Some would say no. That is wrong. The answer is: Yes, you can still give soft money. But that soft money then goes toward the independent campaign; into so- called issue advocacy. I think it is a very dangerous skewing of the field. Spending on issue advocacy, according to CRS, rose from $135 million just 5 years ago, 1996, to as much as $340 million in 1998. Then it rose again to $509 million in the year 2000. So there has been almost a 400-percent increase in unregulated, undisclosed soft money-type dollars going into independent issue advocacy campaigns. That is the danger I see. Remember, these figures are only estimates and are probably very conservative, since issue advocacy groups do not have to disclose their spending. It is likely that spending on so-called issue advocacy, most of which is thinly disguised electioneering, probably is going to surpass all hard money spending, and very soon. It has already passed soft money spending. If we do not raise the limit on hard money contributions to individual campaigns, the pressure on the candidate and the party will grow exponentially. Between 1992 and 2000, soft money jumped from $84 million to $487 million. In just 8 years, soft money increased sixfold. Hard money has not. Clearly, that indicates the skewing of the playing field that I am trying to make the case against. Clearly, what that indicates is more and more people are turning to the undisclosed, unregulated, independent campaign which, increasingly, has become attack oriented. There are some who do not want to increase hard dollars at all. To them I say if you do not increase hard dollars, you put every candidate in jeopardy. You put political parties in jeopardy. What we have tried to do in this amendment is create an incentive for contributions to political parties for party building in the aggregate limit, for contributions to the individual within the aggregate limit, and also to give the candidates the opportunity to better use their time, to increase the hard cap, the contribution limit from $1,000 to $2,000. Additionally, what the Feinstein-Cochran-Schumer amendment will do is move campaign contributions from under the table to over the table. Our amendment will make it easier to staunch the millions of unregulated dollars that currently flow into the coffers of our national political committees and replace a modest portion of that money with contributions fully regulated, fully disclosed under the existing provisions of the Federal Election Campaign Act. That is the value of this split, the raising from $60,000 per cycle provided for in McCain- Feingold to $65,000, providing that $30,000 per election would go to candidates and $35,000 for PACs and party committees. McCain-Feingold is meaningful reform. I have voted for versions of it at every opportunity over the past several years. I commend both Senators McCain and Feingold. I support the soft money ban in S. 27. I support the Snowe-Jeffords provision in S. 27. I support the bill's ban on foreign contributions and the ban on soliciting or receiving contributions on Federal property. Doubling the hard money contribution limit to individual candidates and creating these two new aggregate limits that are just $5,000 more than what is already in McCain-Feingold per election cycle will help level the playing field and better enable candidates to run for election with dollars that are all disclosed and regulated. On March 20, on the floor of the Senate, Senator Feingold remarked: We used to think that [$10,000] was a lot of money. Unfortunately, given this insane soft money system, it is starting to look as if it is spare change. To an extent that is what has happened to the $1,000 limit. It is very likely that candidates and their campaigns are going to have to live with what we do today for more than likely another 30 years, and costs are not going to drop in the next three decades. Therefore, some ability to account for inflation, we believe, is both necessary and achievable. Additionally, we believe that increasing the limit on individual contributions to Federal candidates would also reduce the need for political action committee--or PAC--funding by reducing the disparity between individual contributions and the maximum allowable PAC contribution of $5,000. The concern about PACs almost seems unimportant now compared with the problem that soft money, independent expenditures, and issue advocacy presents. But we shouldn't dismiss the fact that PACs retain considerable influence in our system. Again, from 1974 to 1988, PACs grew in number from 608 to a high of 4,268, and PAC contributions to House and Senate candidates from $12.5 million to $148.8 million--that is a 400-percent rise in constant dollars--and in relation to other sources, from 15.7 percent for a congressional campaign committee to 33 percent. So, today, one-third of all congressional campaigns are fueled by PACs. The amendment Senators Cochran, Schumer, and I are offering would also diminish the influence of PACs. The underlying Thompson amendment would increase the PACs. And that takes us back to where we were a few years ago, which is a mistake. The Feinstein-Cochran-Schumer amendment would reinvigorate individual giving. It would reduce the incessant need for fundraising. I believe it compliments McCain-Feingold. Let me conclude. As I pointed out last Monday when I spoke in support of the Domenici amendment, I just finished my 12th political campaign. For the fourth time in 10 years, I ran statewide in California, which has more people than 21 other States. These campaigns are expensive. I have had to raise more than $55 million in those four campaigns. And I can tell you from my personal experience that I am committed to campaign reform. And I am heartened to see that we are considering this bill, and I believe we will pass it on Thursday. I believe this amendment will make that bill stronger. I believe it will help to level the playing field. I believe if we pass a campaign spending bill without adding additional dollars of hard money to political parties and increasing the individual campaign limits, we skew the playing field so dramatically that the issue of advocacy and the independent campaign has an opportunity with unregulated large soft dollars to occupy the arena entirely. That is a very deep concern to me. With this amendment, a candidate has an opportunity to respond to an attack ad. With party building, a candidate has an opportunity to tell their political party they need help, that they are being attacked by the X, Y, or Z group that is putting in $5 million in attack ads against them, that they need the party's help. Individuals can respond through the party on an increasing basis with flexibility because the limit is for the election cycle and not the individual calendar year. That gives an opportunity for parties to raise disclosed regulated hard dollars. Without this--again, as one who has done a lot of campaigns now--the playing field becomes so skewed that the independent campaign and the attack issue advocacy effort has an opportunity to dominate the political arena. Mr. President, I would like to yield the floor and hope that you will recognize my cosponsor, the distinguished senior Senator from the State of Mississippi.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Thank you very much, Mr. President. I thank the Senator from Tennessee, the Senator from Wisconsin, the Senator from Arizona, the Senator from Connecticut, the senior Senator from Mississippi, as well as the senior Senator from New York--all who participated in this negotiation. Essentially the question was around whether we could bring enough people together to settle what is a question that has become a major problem; that is, how do we account for inflation in hard money because it is likely we will not address this issue for another 20 or 30 or 40 years. Therefore, this is a bill that has to stand the test of time. Many of us are deeply concerned that once you restrict soft money in campaigns and in parties, you create an opportunity for this soft money to go into the issue of advocacy of independent campaigns. It is undisclosed. It is unregulated. So what we want to try to avoid as much as we can is a transfer of millions of dollars of soft money from campaigns into millions of dollars of soft money into independent campaigns. The way we do this is by trying to find a modest vehicle by which we can come together and agree on how much an individual contribution limit should be raised. I am very pleased to say that contribution limit in the bipartisan agreement is $2,000. That $2,000 would be indexed, as will the other indexes I will speak about in a moment, for inflation from a baseline that is provided for in the statute. We came to agreement on the PACs--that PACs should remain the same; they should not be increased in amounts; they should remain at $5,000 a calendar year. We came to agreement on continuing State and local parties at the same amount as McCain-Feingold--$10,000. That was clear in the Thompson amendment, the Feinstein amendment, as well as the McCain-Feingold bill. Also, where we had the major discussion--I say a difference of viewpoint--was on the aggregate limit and the national party committees. The people who were negotiating are people who wanted to see a bill. And it was very difficult because each of our proposals was at the outer limits of our own political party. So it was very difficult to find a way to move forward. We did, however, in the Thompson amendment, which had $50,000 per calendar year for the aggregate limit, and it was agreed that we would drop that to $37,500 per year for the aggregate limit and that we would drop out of that the split I had proposed earlier in my statement. With respect to national parties, that would go from $20,000--just by $5,000 a year--to $25,000. Additionally, there are four things in this bill that are indexed. Again, the indexing is not compounded. It goes to the baseline in the statute for the candidate, for the national party per year amount, and for the aggregate amount. Also, there is a provision in Thompson we agreed to which would double the amount that national parties can give to candidates from $17,500 to $35,000. That would be indexed on the same baseline formula as the other items. In my view, and I hope in Senator Thompson's view, this gives us an opportunity to meet the future and to see that there is a modest increase. It is not a tripling of the individual limit. It is simply increasing it from $1,000 to $2,000 and then indexing it to inflation, but that there is a the basis now, we hope, where both sides can come together and vote for this bill. I, for one, happen to think the indexing is healthy. I think it gives us an opportunity that we don't come back again, to reopen the bill, but that we live by the bill as it is finally adopted. I really thank the Senator from Mississippi who began this fight with me. I thank the Senator from Tennessee for our ability to sit down together and have a turkey sandwich and also come to this agreement. I think it is a very important step forward for the bill. I thank the Senators from Wisconsin and Arizona for their persistence in moving this bill along. I yield the floor. May I ask if the modification is available?

Mrs. FEINSTEIN. I think I have said what I needed to say. Maybe we can concede the rest of our time and have a vote.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I join with my colleagues in expressing my strong support for the Local Law Enforcement Act of 2001, legislation of which I am an original cosponsor. Popularly known as the ``Hate Crimes Prevention Act,'' this legislation would expand current federal protections against hate crimes based on race, religion, and national origin; amend the criminal code to cover hate crimes based on gender, sexual orientation, and disability; authorize grants for State and local programs designed to combat and prevent hate crimes; and enable the federal government to assist State and local law enforcement in investigating and prosecuting hate crimes. While past efforts to enact this legislation have received strong bipartisan support, we have not been able to get it to the President's desk for his consideration. We must now work to ensure that this legislation is not simply supported, but actually passed and signed into law by the President. This important legislation would enhance current hate crimes law and enable the federal government to offer assistance to states and localities in investigating and prosecuting bias-motivated crimes. Even with the strides we have made in combating hate crimes thus far, these crimes are still frequently under-reported and therefore go unprosecuted. In California, I have seen, first-hand, the devastating impact these crimes have on victims, their families and their communities. Hate crimes divide neighborhoods and breed a sense of mistrust and fear within communities. This is why I have long supported legislation aimed at protecting citizens from crimes based on races, ethnicity, religion, gender, disability, or sexual orientation. Prior to 1990, while we knew that hate crimes existed, we had no tools to measure the number of instances in which such crimes were committed. In 1990, Congress enacted the Hate Crimes Statistics Act. Because of this law, we are now able to quantify the extent of the problem. What we found was disturbing. For the first time, data was collected and analyzed on the incidence of hate crimes. In 1991, the first year after the Act took effect, 4,588 hate crimes were reported nationwide. In 1998, the last year for which we have statistics, that number rose to 7,755. These statistics provide federal and state law enforcement officials the tools to recognize the problems particular to their communities and have encouraged many to come up with solutions. In 1993, I sponsored the Hate Crimes Sentencing Enhancement Act in 1993, which was subsequently signed into law as part of the Violent Crime Control and Law Enforcement Act of 1994. This act increased penalties for hate crimes targeting individuals because of their race, color, religion, national origin, gender, disability or sexual orientation. While current hate crime laws help us better understand the problem and penalize those who would resort to such violent acts, these laws do not extend to the thousands of people who are victimized because of their gender, sexual orientation or disability. Nor are they broad enough to help those who were not engaging in such federally protected activities as attending school, or voting, when they were victimized. In New Jersey, for example, a mentally disabled man was tortured by eight different people at a party. The man was burned with cigarettes, beaten, choked, and then left alone in the wilderness. Investigators found that this man was tortured only because of his disability. This was the third time this man had been attacked at a party. Just recently, my staff met with a constituent who is a teacher at a Beverly Hills high school. The teacher expressed concern about the safety of gay students, many of whom had been targeted and attacked by other students on account of their sexual orientation. She felt that teachers like herself did all they could to protect the students while they were on school property. She feared for their safety, however, once the students were off school grounds. Even within the school, the teacher, explained, some officials did little to create an environment of tolerance and mutual respect for the students. As a result, the bias-motivated acts committed against them often went unreported, whether they took place in the school or within their communities. My constituent's appeal for help on behalf of her young students amplifies the need to send a strong message of mutual tolerance and respect to our youngsters. Nearly two-thirds of these crimes are committed by our nation's youth and young adults. In many ways, reinforcing the strength of our diverse nation must begin with our youth. As these stories illustrate, the perpetrators of hate crimes have no respect for boundaries. They are neither confined to any one region of the country, nor any one age group. The perpetrators of these crimes target individuals not because of what the victims have, or what they have done, but for who they are. Hate crimes are not like other crimes of violence. Their impact is pervasive. Opponents of hate crimes legislation argue that these crimes are no different from any other crime; that they should be treated like other crimes of violence. Research by the American Psychological Association, APA, suggest otherwise. According to the APA, hate crime victims and their communities are often left with psychological wounds that run deeper and take significantly longer to heal than the wounds of victims of non-bias related crimes. Much like victims of non-bias related crimes, victims of hate crimes are likely to exhibit symptoms of depression, post-traumatic stress disorder, anxiety, high levels of anger, and a decreased sense of control. Unlike victims of non-bias related crimes, however, hate crime victims experience psychological after-effects at a much higher level. According to the APA, hate crime victims need ``as much as five years to overcome the emotional distress of the incident,'' compared with ``victims of non-bias crimes who experience a drop off in crime- related psychological problems within two years of the crime.'' The financial costs for mental health and medical treatment following an attack only add to the psychological stress of the victim. Hate crimes pose a very real threat to the social health of the community. Individuals who live in communities where hate crimes have occurred often experience an increased sense of fear and intimidation. They also tend to feel a heightened sense of vulnerability and are much less likely to report such crimes should they occur again, for fear of retaliation. Hate crimes also breed mistrust within the community. Members of the victimized groups are likely to believe that law enforcement agencies are biased against their group and, that when needed, the law enforcement community will not respond. In essence, hate crimes have been shown to produce deep psychological wounds in the victim. They engender a sense of disunity and division within the community, which undermines the basic tenets on which this nation was founded. As a country that prides itself on its diversity, our nation cannot continue to withstand these acts of hatred and intolerance. No individual or group should be targeted for violence and no such act of violence should go unpunished. No American should have to live in fear because of his or her perceived race, sexual orientation, ethnicity or disability. No American should be afraid to walk down the street for fear of a gender- motivated attack. No American should be deterred by intimidation from living in the home of his or her choice. And certainly, no American should be deterred from reporting a hate-based crime because they are afraid that the police lack the will or the resources necessary to protect them. This legislation is not only overdue, it is necessary for the safety and well being of millions of Americans. It is necessary for our National unity. Certainly, none of us in this body would condone an act of brutality based on an individual's race, religion, sexual orientation, disability, ethnicity or gender. None of us would be willing to send the message that today, basic civil rights protections do not extend to every American, but only to a few and under certain circumstances. By introducing this legislation today, we are sending a signal that we are unwilling to turn a blind eye to this epidemic of hate that threatens to envelop our Nation. I urge my colleagues to join in this message by supporting the enactment of ``The Local Law Enforcement Enhancement Act of 2001.''

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I join with my colleagues in expressing my strong support for the Local Law Enforcement Act of 2001, legislation of which I am an original cosponsor. Popularly known as the ``Hate Crimes Prevention Act,'' this legislation would expand current federal protections against hate crimes based on race, religion, and national origin; amend the criminal code to cover hate crimes based on gender, sexual orientation, and disability; authorize grants for State and local programs designed to combat and prevent hate crimes; and enable the federal government to assist State and local law enforcement in investigating and prosecuting hate crimes. While past efforts to enact this legislation have received strong bipartisan support, we have not been able to get it to the President's desk for his consideration. We must now work to ensure that this legislation is not simply supported, but actually passed and signed into law by the President. This important legislation would enhance current hate crimes law and enable the federal government to offer assistance to states and localities in investigating and prosecuting bias-motivated crimes. Even with the strides we have made in combating hate crimes thus far, these crimes are still frequently under-reported and therefore go unprosecuted. In California, I have seen, first-hand, the devastating impact these crimes have on victims, their families and their communities. Hate crimes divide neighborhoods and breed a sense of mistrust and fear within communities. This is why I have long supported legislation aimed at protecting citizens from crimes based on races, ethnicity, religion, gender, disability, or sexual orientation. Prior to 1990, while we knew that hate crimes existed, we had no tools to measure the number of instances in which such crimes were committed. In 1990, Congress enacted the Hate Crimes Statistics Act. Because of this law, we are now able to quantify the extent of the problem. What we found was disturbing. For the first time, data was collected and analyzed on the incidence of hate crimes. In 1991, the first year after the Act took effect, 4,588 hate crimes were reported nationwide. In 1998, the last year for which we have statistics, that number rose to 7,755. These statistics provide federal and state law enforcement officials the tools to recognize the problems particular to their communities and have encouraged many to come up with solutions. In 1993, I sponsored the Hate Crimes Sentencing Enhancement Act in 1993, which was subsequently signed into law as part of the Violent Crime Control and Law Enforcement Act of 1994. This act increased penalties for hate crimes targeting individuals because of their race, color, religion, national origin, gender, disability or sexual orientation. While current hate crime laws help us better understand the problem and penalize those who would resort to such violent acts, these laws do not extend to the thousands of people who are victimized because of their gender, sexual orientation or disability. Nor are they broad enough to help those who were not engaging in such federally protected activities as attending school, or voting, when they were victimized. In New Jersey, for example, a mentally disabled man was tortured by eight different people at a party. The man was burned with cigarettes, beaten, choked, and then left alone in the wilderness. Investigators found that this man was tortured only because of his disability. This was the third time this man had been attacked at a party. Just recently, my staff met with a constituent who is a teacher at a Beverly Hills high school. The teacher expressed concern about the safety of gay students, many of whom had been targeted and attacked by other students on account of their sexual orientation. She felt that teachers like herself did all they could to protect the students while they were on school property. She feared for their safety, however, once the students were off school grounds. Even within the school, the teacher, explained, some officials did little to create an environment of tolerance and mutual respect for the students. As a result, the bias-motivated acts committed against them often went unreported, whether they took place in the school or within their communities. My constituent's appeal for help on behalf of her young students amplifies the need to send a strong message of mutual tolerance and respect to our youngsters. Nearly two-thirds of these crimes are committed by our nation's youth and young adults. In many ways, reinforcing the strength of our diverse nation must begin with our youth. As these stories illustrate, the perpetrators of hate crimes have no respect for boundaries. They are neither confined to any one region of the country, nor any one age group. The perpetrators of these crimes target individuals not because of what the victims have, or what they have done, but for who they are. Hate crimes are not like other crimes of violence. Their impact is pervasive. Opponents of hate crimes legislation argue that these crimes are no different from any other crime; that they should be treated like other crimes of violence. Research by the American Psychological Association, APA, suggest otherwise. According to the APA, hate crime victims and their communities are often left with psychological wounds that run deeper and take significantly longer to heal than the wounds of victims of non-bias related crimes. Much like victims of non-bias related crimes, victims of hate crimes are likely to exhibit symptoms of depression, post-traumatic stress disorder, anxiety, high levels of anger, and a decreased sense of control. Unlike victims of non-bias related crimes, however, hate crime victims experience psychological after-effects at a much higher level. According to the APA, hate crime victims need ``as much as five years to overcome the emotional distress of the incident,'' compared with ``victims of non-bias crimes who experience a drop off in crime- related psychological problems within two years of the crime.'' The financial costs for mental health and medical treatment following an attack only add to the psychological stress of the victim. Hate crimes pose a very real threat to the social health of the community. Individuals who live in communities where hate crimes have occurred often experience an increased sense of fear and intimidation. They also tend to feel a heightened sense of vulnerability and are much less likely to report such crimes should they occur again, for fear of retaliation. Hate crimes also breed mistrust within the community. Members of the victimized groups are likely to believe that law enforcement agencies are biased against their group and, that when needed, the law enforcement community will not respond. In essence, hate crimes have been shown to produce deep psychological wounds in the victim. They engender a sense of disunity and division within the community, which undermines the basic tenets on which this nation was founded. As a country that prides itself on its diversity, our nation cannot continue to withstand these acts of hatred and intolerance. No individual or group should be targeted for violence and no such act of violence should go unpunished. No American should have to live in fear because of his or her perceived race, sexual orientation, ethnicity or disability. No American should be afraid to walk down the street for fear of a gender- motivated attack. No American should be deterred by intimidation from living in the home of his or her choice. And certainly, no American should be deterred from reporting a hate-based crime because they are afraid that the police lack the will or the resources necessary to protect them. This legislation is not only overdue, it is necessary for the safety and well being of millions of Americans. It is necessary for our National unity. Certainly, none of us in this body would condone an act of brutality based on an individual's race, religion, sexual orientation, disability, ethnicity or gender. None of us would be willing to send the message that today, basic civil rights protections do not extend to every American, but only to a few and under certain circumstances. By introducing this legislation today, we are sending a signal that we are unwilling to turn a blind eye to this epidemic of hate that threatens to envelop our Nation. I urge my colleagues to join in this message by supporting the enactment of ``The Local Law Enforcement Enhancement Act of 2001.''

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, today, I am introducing a bill to require health insurance plans to cover medically necessary reconstructive surgery for congenital defects, developmental abnormalities, trauma, infection, tumors, or disease. This bill is modeled on a California law and responds to reports that insurance plans are denying coverage for reconstructive surgery that doctors say is medically necessary. Too many plans are too quick to label it ``cosmetic surgery.'' The American Medical News has called the HMOs stance, ``a classic health plan word game. . . .'' Dr. Henry Kawamoto, testifying before the California Assembly Committee on Insurance stated: It used to be that if you were born with something deforming, or were in an accident and had bad scars, the surgery performed to fix the problem was considered reconstructive surgery. Now, insurers of many kinds are calling it cosmetic surgery and refusing to pay for it. Many doctors have told me that before the heavy penetration of managed care, repairing a person's abnormalities was considered reconstructive surgery and insurance companies reimbursed for the medical, hospital, and surgical costs. But today, many insurance companies and managed care organizations will not pay for reconstruction of many deformities because they deem them to be ``cosmetic'' and not a ``functional'' repair. This bill is endorsed by the March of Dimes, Easter Seals, the American Academy of Pediatrics, the National Organization for Rare Disorders, the American College of Surgeons, the American Society of Plastic and Reconstructive Surgeons, the American Association of Pediatric Plastic Surgeons and the American Society of Maxillofacial Surgeons. The children who face refusals to pay for surgery are the true evidence that this bill is needed. Here are some of the examples that were brought to the California legislature: Hanna Gremp, a 6-year old from California, was born with a congenital birth defect, called bilateral microtia, the absence of an inner ear. Once the first stage of the surgery was complete, the Gremp's HMO denied the next surgery for Hanna. They called the other surgeries ``cosmetic'' and not medically necessary. Michael Hatfield, a 19-year old from Texas, has gone through similar struggles. He was born with a congenital birth defect that is known as a midline facial cleft. The self-insured plan his parents had only paid for a small portion of the surgery which reconstructed his nose. The HMO also refused to pay any part of the surgery that reconstructed his cheekbones and eye sockets. The HMO considered some of these surgeries to be ``cosmetic.'' Cigna Health Care denied coverage for surgery to construct an ear for a little California girl born without one and only after adverse press coverage reversed its position saying that, ``It was determined that studies have shown some functional improvement following surgery.'' Qual-Med, another California HMO, initially denied coverage for reconstructive surgery for a little boy who also had microtia, authorizing it only after many appeals and two years delay. The bill uses medically-recognized terms to distinguish between medically necessary surgery and cosmetic surgery. It defines medically necessary reconstructive surgery as surgery ``performed to correct or repair abnormal structures of the body caused by congenital defects, developmental abnormalities, trauma, infection, tumors, or disease to (1) improve functions; or (2) give the patient a normal appearance, to the extent possible, in the judgment of the physician performing the surgery.'' The bill specifically excludes cosmetic surgery, defined as ``surgery that is performed to alter or reshape normal structures of the body in order to improve appearance.'' Examples of conditions for which surgery might be medically necessary are the following: cleft lips and palates, burns, skull deformities, benign tumors, vascular lesions, missing pectoral muscles that cause chest deformities, Crouson's syndrome (failure of the mid-face to develop normally), and injuries from accidents. This bill is an effort to address the arbitrariness of insurance plans that create hassles and question physicians' judgments when people try to get coverage under the plan they pay premiums for every month. We need our body parts to function and, fortunately, modern medicine today can often make that happen. We can restore, repair, and make whole parts which by fate, accident, genes, or whatever, do not perform as they should. I hope this bill can make that happen.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, today, I am introducing the Health Benefits Integrity Act to make sure that most health care dollars that people and employers pay into a managed care health insurance plan get spent on health care and not on overhead. Under my bill, managed care plans would be limited to spending 15 percent of their premium revenues on administration. This means that if they spend 15 percent on administration, they could spend 85 percent of premiums revenues on health care benefits or services. This bill was prompted by a study by the Inspector General (IG) for the U.S. Department of Health and Human Services reported under a USA Today headline in February, ``Medicare HMOs Hit for Lavish Spending.'' The IG reviewed 232 managed care plans that contract with Medicare and found that in 1999 the average amount allocated for administration ranged from a high of 32 percent to a low of three percent. The IG recommended that the Department establish a ceiling on the amount of administrative expenditures of plans, noting that if a 15 percent ceiling had been place in 1998, an additional $1 billion could have been passed on to Medicare beneficiaries in the form of additional benefits or reduce deductibles and copayments. The report said, ``This review, similar OIG reviews, and other studies have shown that MCOs' [managed care organizations'] exorbitant administrative costs have been problematic and can be the source for abusive behavior.'' Here are some examples cited by the Inspector General on page 7 of the January 18, 2000 report: $249,283 for food, gifts and alcoholic beverages for meetings by one plan; $190,417 for a sales award meeting in Puerto Rico for one plan; $157,688 for a party by one plan; $25,057 for a luxury box at a sports arena by one plan; $106,490 for sporting events and/or theater tickets at four plans; $69,700 for holiday parties at three plans; $37,303 for wine gift baskets, flowers, gifts and gift certificates at one plan. It is no wonder that people today are angry at HMOs. When our hard- earned premium dollars are frittered away on purchases like these, we have to ask whether HMOs are really providing the best care possible. Furthermore, in the case of Medicare, we are also talking about wasted taxpayer dollars since Part B of Medicare is funded in part by the general treasury. One dollar wasted in Medicare is one dollar too much. Medicare needs all the funds it can muster to stay solvent and to be there for beneficiaries when they need it. I was also encouraged to introduce the bill because of annual studies prepared by the California Medical Association, CMA, called the ``Knox- Keene Health Plan Expenditures Summary.'' The March 2001 CMA report covering Fiscal Years 1999 to 2000 found a range of administrative expenditures from plans in my state from a low of 2.7 percent, Kaiser Foundation Health Plan, Southern California, to a high of 22.1 percent, OMNI Healthcare, Inc. If HMOs are to be credible, they must be more prudent in how they spend enrollees' dollars. Administrative expenses must be limited to reasonable expenses. An October 1999 report by Interstudy found that for private HMO plans, administrative expenses range from 11 percent to 21 percent and that for-profit HMOs spend proportionately more on administrative cost than not-for-profit HMOs. This study found the lowest rate to be 3.6 percent and the highest 38 percent in California! In some states the maximums were even higher. The shift from fee-for-service to managed care as a form of health insurance has been rapid in recent years. Nationally, 86 percent of people who have employment-based health insurance (81.3 million Americans) are in some form of managed care. Around 16 percent of Medicare beneficiaries are in managed care nationally (40 percent in California), a figure that doubled between 1994 and 1997. By 2010, the Congressional Budget Office predicts that 31 percent of Medicare beneficiaries will be in managed care. Between 1987 and 1999, the number of health plans contracting with Medicare went from 161 to 299. As for Medicaid, in 1993, 4.8 million people (14 percent of Medicaid beneficiaries) were in managed care. Today, 17.8 million (55.6 percent) are in managed care, according to the Kaiser Family Foundation. In California, 52 percent or 2.6 million out of 5 million Medicaid beneficiaries are in managed care. In California, the state which pioneered managed care for the nation, an estimated 88 percent of the insured are in some form of managed care. Of the 3.7 million Californians who are in Medicare, 40 percent, 1.4 million, are in managed care, the highest rate in the U.S. As for Medicaid in California, 2.5 million people, 50 percent, of beneficiaries are in managed care. And so managed care is growing and most people think it is here to stay. I am pleased to say that in California we already have a regulation along the lines of the bill I am proposing. We have in place a regulatory limit of 15 percent on commercial HMO plans' administrative expenses. This was established in my state for commercial plans because of questionable expenses like those the HHS IG found in Medicare HMO plans and because prior to the regulation, some plans had administrative expense as high as 30 percent of premium revenues. This bill will never begin to address all the problems patients experience with managed care in this country. That is why we also need a strong Patients Bill of Rights bill. I hope, however, this bill will discourage abuses like those the HHS Inspector General found and will help assure people that their health care dollars are spent on health care and are not wasted on outings, parties, and other activities totally unrelated to providing health care services. I call on my colleagues to join me in enacting this bill.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, today, I am introducing a bill to require health insurance plans to cover medically necessary reconstructive surgery for congenital defects, developmental abnormalities, trauma, infection, tumors, or disease. This bill is modeled on a California law and responds to reports that insurance plans are denying coverage for reconstructive surgery that doctors say is medically necessary. Too many plans are too quick to label it ``cosmetic surgery.'' The American Medical News has called the HMOs stance, ``a classic health plan word game. . . .'' Dr. Henry Kawamoto, testifying before the California Assembly Committee on Insurance stated: It used to be that if you were born with something deforming, or were in an accident and had bad scars, the surgery performed to fix the problem was considered reconstructive surgery. Now, insurers of many kinds are calling it cosmetic surgery and refusing to pay for it. Many doctors have told me that before the heavy penetration of managed care, repairing a person's abnormalities was considered reconstructive surgery and insurance companies reimbursed for the medical, hospital, and surgical costs. But today, many insurance companies and managed care organizations will not pay for reconstruction of many deformities because they deem them to be ``cosmetic'' and not a ``functional'' repair. This bill is endorsed by the March of Dimes, Easter Seals, the American Academy of Pediatrics, the National Organization for Rare Disorders, the American College of Surgeons, the American Society of Plastic and Reconstructive Surgeons, the American Association of Pediatric Plastic Surgeons and the American Society of Maxillofacial Surgeons. The children who face refusals to pay for surgery are the true evidence that this bill is needed. Here are some of the examples that were brought to the California legislature: Hanna Gremp, a 6-year old from California, was born with a congenital birth defect, called bilateral microtia, the absence of an inner ear. Once the first stage of the surgery was complete, the Gremp's HMO denied the next surgery for Hanna. They called the other surgeries ``cosmetic'' and not medically necessary. Michael Hatfield, a 19-year old from Texas, has gone through similar struggles. He was born with a congenital birth defect that is known as a midline facial cleft. The self-insured plan his parents had only paid for a small portion of the surgery which reconstructed his nose. The HMO also refused to pay any part of the surgery that reconstructed his cheekbones and eye sockets. The HMO considered some of these surgeries to be ``cosmetic.'' Cigna Health Care denied coverage for surgery to construct an ear for a little California girl born without one and only after adverse press coverage reversed its position saying that, ``It was determined that studies have shown some functional improvement following surgery.'' Qual-Med, another California HMO, initially denied coverage for reconstructive surgery for a little boy who also had microtia, authorizing it only after many appeals and two years delay. The bill uses medically-recognized terms to distinguish between medically necessary surgery and cosmetic surgery. It defines medically necessary reconstructive surgery as surgery ``performed to correct or repair abnormal structures of the body caused by congenital defects, developmental abnormalities, trauma, infection, tumors, or disease to (1) improve functions; or (2) give the patient a normal appearance, to the extent possible, in the judgment of the physician performing the surgery.'' The bill specifically excludes cosmetic surgery, defined as ``surgery that is performed to alter or reshape normal structures of the body in order to improve appearance.'' Examples of conditions for which surgery might be medically necessary are the following: cleft lips and palates, burns, skull deformities, benign tumors, vascular lesions, missing pectoral muscles that cause chest deformities, Crouson's syndrome (failure of the mid-face to develop normally), and injuries from accidents. This bill is an effort to address the arbitrariness of insurance plans that create hassles and question physicians' judgments when people try to get coverage under the plan they pay premiums for every month. We need our body parts to function and, fortunately, modern medicine today can often make that happen. We can restore, repair, and make whole parts which by fate, accident, genes, or whatever, do not perform as they should. I hope this bill can make that happen.

Mrs. FEINSTEIN. Mr. President, today, I am introducing the Health Benefits Integrity Act to make sure that most health care dollars that people and employers pay into a managed care health insurance plan get spent on health care and not on overhead. Under my bill, managed care plans would be limited to spending 15 percent of their premium revenues on administration. This means that if they spend 15 percent on administration, they could spend 85 percent of premiums revenues on health care benefits or services. This bill was prompted by a study by the Inspector General (IG) for the U.S. Department of Health and Human Services reported under a USA Today headline in February, ``Medicare HMOs Hit for Lavish Spending.'' The IG reviewed 232 managed care plans that contract with Medicare and found that in 1999 the average amount allocated for administration ranged from a high of 32 percent to a low of three percent. The IG recommended that the Department establish a ceiling on the amount of administrative expenditures of plans, noting that if a 15 percent ceiling had been place in 1998, an additional $1 billion could have been passed on to Medicare beneficiaries in the form of additional benefits or reduce deductibles and copayments. The report said, ``This review, similar OIG reviews, and other studies have shown that MCOs' [managed care organizations'] exorbitant administrative costs have been problematic and can be the source for abusive behavior.'' Here are some examples cited by the Inspector General on page 7 of the January 18, 2000 report: $249,283 for food, gifts and alcoholic beverages for meetings by one plan; $190,417 for a sales award meeting in Puerto Rico for one plan; $157,688 for a party by one plan; $25,057 for a luxury box at a sports arena by one plan; $106,490 for sporting events and/or theater tickets at four plans; $69,700 for holiday parties at three plans; $37,303 for wine gift baskets, flowers, gifts and gift certificates at one plan. It is no wonder that people today are angry at HMOs. When our hard- earned premium dollars are frittered away on purchases like these, we have to ask whether HMOs are really providing the best care possible. Furthermore, in the case of Medicare, we are also talking about wasted taxpayer dollars since Part B of Medicare is funded in part by the general treasury. One dollar wasted in Medicare is one dollar too much. Medicare needs all the funds it can muster to stay solvent and to be there for beneficiaries when they need it. I was also encouraged to introduce the bill because of annual studies prepared by the California Medical Association, CMA, called the ``Knox- Keene Health Plan Expenditures Summary.'' The March 2001 CMA report covering Fiscal Years 1999 to 2000 found a range of administrative expenditures from plans in my state from a low of 2.7 percent, Kaiser Foundation Health Plan, Southern California, to a high of 22.1 percent, OMNI Healthcare, Inc. If HMOs are to be credible, they must be more prudent in how they spend enrollees' dollars. Administrative expenses must be limited to reasonable expenses. An October 1999 report by Interstudy found that for private HMO plans, administrative expenses range from 11 percent to 21 percent and that for-profit HMOs spend proportionately more on administrative cost than not-for-profit HMOs. This study found the lowest rate to be 3.6 percent and the highest 38 percent in California! In some states the maximums were even higher. The shift from fee-for-service to managed care as a form of health insurance has been rapid in recent years. Nationally, 86 percent of people who have employment-based health insurance (81.3 million Americans) are in some form of managed care. Around 16 percent of Medicare beneficiaries are in managed care nationally (40 percent in California), a figure that doubled between 1994 and 1997. By 2010, the Congressional Budget Office predicts that 31 percent of Medicare beneficiaries will be in managed care. Between 1987 and 1999, the number of health plans contracting with Medicare went from 161 to 299. As for Medicaid, in 1993, 4.8 million people (14 percent of Medicaid beneficiaries) were in managed care. Today, 17.8 million (55.6 percent) are in managed care, according to the Kaiser Family Foundation. In California, 52 percent or 2.6 million out of 5 million Medicaid beneficiaries are in managed care. In California, the state which pioneered managed care for the nation, an estimated 88 percent of the insured are in some form of managed care. Of the 3.7 million Californians who are in Medicare, 40 percent, 1.4 million, are in managed care, the highest rate in the U.S. As for Medicaid in California, 2.5 million people, 50 percent, of beneficiaries are in managed care. And so managed care is growing and most people think it is here to stay. I am pleased to say that in California we already have a regulation along the lines of the bill I am proposing. We have in place a regulatory limit of 15 percent on commercial HMO plans' administrative expenses. This was established in my state for commercial plans because of questionable expenses like those the HHS IG found in Medicare HMO plans and because prior to the regulation, some plans had administrative expense as high as 30 percent of premium revenues. This bill will never begin to address all the problems patients experience with managed care in this country. That is why we also need a strong Patients Bill of Rights bill. I hope, however, this bill will discourage abuses like those the HHS Inspector General found and will help assure people that their health care dollars are spent on health care and are not wasted on outings, parties, and other activities totally unrelated to providing health care services. I call on my colleagues to join me in enacting this bill.

Mrs. FEINSTEIN. Mr. President, I rise today with my colleagues Senators Chafee, Durbin, Reed, Murray, and Boxer to introduce a bill to clarify that children receiving health insurance under the State Children's Health Insurance Program, SCHIP, in States like California are eligible for free vaccines under the federal Vaccines for Children, VFC, program. Providing low-income children with access to immunizations is a high priority of mine. I believe that we must work to ensure that our nation's youngsters begin life protected against the diseases for which there are vaccinations available. The Centers for Disease Control, CDC, estimates that in many areas of the U.S. immunization rates continue to fall below 75 percent among children under 2 years old. This is unacceptable. In 1993, the U.S. experienced the largest outbreak of whooping cough in over 20 years. Additionally, from 1989 to 1991, a measles outbreak resulted in 123 deaths and 55,000 cases. These are diseases for which vaccinations are available. While we are doing a better job of educating families about the importance of receiving timely immunizations, we must now focus our efforts on ensuring access to immunizations for those most in need. The federal Vaccines for Children program, created by Congress in 1993, P.L. 105-33, is an excellent example of a program that provides vaccines at no cost to low-income children. To be eligible for the VFC program under current federal law, a child must be a Medicaid recipient, uninsured, or of American Indian or Alaskan Native heritage. The U.S. Department of Health and Human Services, HHS, argues that a child participating in SCHIP, called Healthy Families in California, is not eligible for the free immunizations provided by the VFC program because that child is ``insured.'' I believe the interpretation of ``insured'' is not consistent with Congress's intent in establishing SCHIP. I believe that in defining the term ``insured'' at that time Congress clearly meant private health insurance plans. Children enrolled in SCHIP, or in my State the Healthy Families program, are participating in a federal-state, subsidized insurance plan. Healthy Families is a state-operated program. Families apply to the State for participation. They are not insured by a private, commercial plan, as traditionally defined or as defined in the Vaccine for Children's law (42 U.S.C. sec. 1396s(b)(2)(B). Several California based provider groups agree. For example, in February 1999 the California Medical Association wrote to then-HHS Secretary Donna Shalala: ``As they are participants in a federal and state-subsidized health program, these individuals are not ``insured'' for the purposes of 42 U.S.C. sec. 1396s(b)(B).'' HHS has interpreted the law so narrowly that as many as 630,000 children in California under California's Healthy Families program have lost or will lose their eligibility to receive free vaccines. Approximately 428,641 kids have lost eligibility to date. The VFC program is particularly important to California in ensuring access to life-saving immunizations for two reasons. First, California ranks 40th overall among states having children fully immunized by the age of 19 to 35 months. In 1996, however, California ranked 32nd. Clearly the situation in California is getting worse rather than better. Allowing SCHIP children to access immunizations through the VFC program could increase the number of children receiving vaccinations in the State. Second, in creating SCHIP in California, the State chose to set up a program under which the State contracts with private insurers, rather than providing eligible children care through Medicaid, Medi-Cal in California. The California Managed Risk Medical Insurance Board, which is administering the new program with the Department of Health Services, wrote to HHS in February 1999: ``It is imperative that states like California, who have implemented SCHIP using private health insurance, be given the same support and eligibility for the Vaccines for Children, VFC, program at no cost as States which have chosen to expand their Medicaid program.'' A study conducted by the California Medical Association found that pediatric capitation rates for children ages 0-21 averages $24.24 per child per month. However, a 1998 Towers Perrin Study of physician costs for children ages 0-21 years found averages to be $47.00 per child per month. These numbers demonstrate the discrepancy between payment and costs for children enrolled in a capitation plan, which includes all children enrolled in California's Healthy Families program. Add to this discrepancy in payments the fact that children need 18 to 22 immunizations before the age of 6. This process becomes quite costly! The discrepancy in payment and costs means that many California physicians cannot afford to provide patients with the necessary life- saving immunizations, so children in my State are often going without vaccinations. This reality has caused serious problems for children in California. For example: From 1993 to 1997, Orange County California had 85 hospitalizations and four deaths related to chicken pox. Across the State in 1996 there were 15 deaths and 1,172 hospitalizations related to chicken pox. The Immunization Branch in California reported over 1,000 whooping cough cases, including 5 deaths, in 1998--the largest number of cases and deaths since the 1960s. Whooping cough and chicken pox are two examples of diseases for which there are vaccinations available. We must do more to increase access to vaccinations for our nation's children. In 1998, as many 743,000 poor children in California, who were uninsured or on Medicaid, received these vaccines. This number is down by approximately 32,000 children in comparison to the 1997 immunization figures for California's poor children. What can be so basic to public health than immunization against disease? Do we really want our children to get polio, measles, mumps, chicken pox, rubella, and whooping cough, diseases for which we have effective vaccines, diseases which we have practically eradicated by widespread immunization? Congress recognized the importance of immunizations in creating the VFC program, with many Congressional leaders at the time arguing that childhood immunization is one of the most cost-effective steps we can take to keep our children healthy. It makes no sense to me to withhold immunizations from children who 1. have been getting them when they were uninsured and 2. have no other way to get them once they become insured. According to an Annie E. Casey Foundation report, 22 percent of California's two-year olds are not immunized. Add to that the fact that we have one of the highest uninsured rates in the country. Over 28 percent of California's children are without health insurance, compared to 25 percent nationally, according to the Annie E. Case Foundation. Clearly, there is a need. The San Francisco Chronicle editorialized on March 10, 1998: ``More than half a million California children should not be deprived of vaccinations or health insurance because of a technicality . . .,'' calling the denial of vaccines ``a game of semantics.'' Children's health should not be a ``game of semantics.'' Proper childhood immunizations are fundamental to a lifetime of good health. I urge my colleagues to join me in supporting this legislation, to help me keep our children healthy.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I rise today with my colleagues Senators Chafee, Durbin, Reed, Murray, and Boxer to introduce a bill to clarify that children receiving health insurance under the State Children's Health Insurance Program, SCHIP, in States like California are eligible for free vaccines under the federal Vaccines for Children, VFC, program. Providing low-income children with access to immunizations is a high priority of mine. I believe that we must work to ensure that our nation's youngsters begin life protected against the diseases for which there are vaccinations available. The Centers for Disease Control, CDC, estimates that in many areas of the U.S. immunization rates continue to fall below 75 percent among children under 2 years old. This is unacceptable. In 1993, the U.S. experienced the largest outbreak of whooping cough in over 20 years. Additionally, from 1989 to 1991, a measles outbreak resulted in 123 deaths and 55,000 cases. These are diseases for which vaccinations are available. While we are doing a better job of educating families about the importance of receiving timely immunizations, we must now focus our efforts on ensuring access to immunizations for those most in need. The federal Vaccines for Children program, created by Congress in 1993, P.L. 105-33, is an excellent example of a program that provides vaccines at no cost to low-income children. To be eligible for the VFC program under current federal law, a child must be a Medicaid recipient, uninsured, or of American Indian or Alaskan Native heritage. The U.S. Department of Health and Human Services, HHS, argues that a child participating in SCHIP, called Healthy Families in California, is not eligible for the free immunizations provided by the VFC program because that child is ``insured.'' I believe the interpretation of ``insured'' is not consistent with Congress's intent in establishing SCHIP. I believe that in defining the term ``insured'' at that time Congress clearly meant private health insurance plans. Children enrolled in SCHIP, or in my State the Healthy Families program, are participating in a federal-state, subsidized insurance plan. Healthy Families is a state-operated program. Families apply to the State for participation. They are not insured by a private, commercial plan, as traditionally defined or as defined in the Vaccine for Children's law (42 U.S.C. sec. 1396s(b)(2)(B). Several California based provider groups agree. For example, in February 1999 the California Medical Association wrote to then-HHS Secretary Donna Shalala: ``As they are participants in a federal and state-subsidized health program, these individuals are not ``insured'' for the purposes of 42 U.S.C. sec. 1396s(b)(B).'' HHS has interpreted the law so narrowly that as many as 630,000 children in California under California's Healthy Families program have lost or will lose their eligibility to receive free vaccines. Approximately 428,641 kids have lost eligibility to date. The VFC program is particularly important to California in ensuring access to life-saving immunizations for two reasons. First, California ranks 40th overall among states having children fully immunized by the age of 19 to 35 months. In 1996, however, California ranked 32nd. Clearly the situation in California is getting worse rather than better. Allowing SCHIP children to access immunizations through the VFC program could increase the number of children receiving vaccinations in the State. Second, in creating SCHIP in California, the State chose to set up a program under which the State contracts with private insurers, rather than providing eligible children care through Medicaid, Medi-Cal in California. The California Managed Risk Medical Insurance Board, which is administering the new program with the Department of Health Services, wrote to HHS in February 1999: ``It is imperative that states like California, who have implemented SCHIP using private health insurance, be given the same support and eligibility for the Vaccines for Children, VFC, program at no cost as States which have chosen to expand their Medicaid program.'' A study conducted by the California Medical Association found that pediatric capitation rates for children ages 0-21 averages $24.24 per child per month. However, a 1998 Towers Perrin Study of physician costs for children ages 0-21 years found averages to be $47.00 per child per month. These numbers demonstrate the discrepancy between payment and costs for children enrolled in a capitation plan, which includes all children enrolled in California's Healthy Families program. Add to this discrepancy in payments the fact that children need 18 to 22 immunizations before the age of 6. This process becomes quite costly! The discrepancy in payment and costs means that many California physicians cannot afford to provide patients with the necessary life- saving immunizations, so children in my State are often going without vaccinations. This reality has caused serious problems for children in California. For example: From 1993 to 1997, Orange County California had 85 hospitalizations and four deaths related to chicken pox. Across the State in 1996 there were 15 deaths and 1,172 hospitalizations related to chicken pox. The Immunization Branch in California reported over 1,000 whooping cough cases, including 5 deaths, in 1998--the largest number of cases and deaths since the 1960s. Whooping cough and chicken pox are two examples of diseases for which there are vaccinations available. We must do more to increase access to vaccinations for our nation's children. In 1998, as many 743,000 poor children in California, who were uninsured or on Medicaid, received these vaccines. This number is down by approximately 32,000 children in comparison to the 1997 immunization figures for California's poor children. What can be so basic to public health than immunization against disease? Do we really want our children to get polio, measles, mumps, chicken pox, rubella, and whooping cough, diseases for which we have effective vaccines, diseases which we have practically eradicated by widespread immunization? Congress recognized the importance of immunizations in creating the VFC program, with many Congressional leaders at the time arguing that childhood immunization is one of the most cost-effective steps we can take to keep our children healthy. It makes no sense to me to withhold immunizations from children who 1. have been getting them when they were uninsured and 2. have no other way to get them once they become insured. According to an Annie E. Casey Foundation report, 22 percent of California's two-year olds are not immunized. Add to that the fact that we have one of the highest uninsured rates in the country. Over 28 percent of California's children are without health insurance, compared to 25 percent nationally, according to the Annie E. Case Foundation. Clearly, there is a need. The San Francisco Chronicle editorialized on March 10, 1998: ``More than half a million California children should not be deprived of vaccinations or health insurance because of a technicality . . .,'' calling the denial of vaccines ``a game of semantics.'' Children's health should not be a ``game of semantics.'' Proper childhood immunizations are fundamental to a lifetime of good health. I urge my colleagues to join me in supporting this legislation, to help me keep our children healthy.