Bob Graham

Mr. GRAHAM

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 President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, we have been receiving a disturbingly consistent and an increasingly high volume of bad economic news. Even what appeared to be good news at its base is bad news. In today's Washington Post, is an article--and I ask unanimous consent that this and the other articles to which I will refer be printed in the Record immediately after my remarks.

Mr. GRAHAM. There was considerable enthusiasm a couple of weeks ago when the Federal Reserve Board reduced interest rates for short-term interbank borrowings by .5 percent. Today, we learn why the Federal Reserve Board acted in that manner in an unusual format between its regularly scheduled meetings. The background is that the Federal Reserve Board Chairman, Alan Greenspan, had, for weeks, directed the Federal Reserve staff to closely track company earnings announcements and business executives' comments about their plans for such things as capital spending. Staff members have been working the phones, asking companies specific questions about their future intentions. What the Federal officials and the staff found out by early April was a disturbingly sour attitude among corporate executives, suggesting that many of them were hunkering down, concentrating on cutting costs and slashing investment plans. The policy planners concluded that quick Federal Reserve Board action was needed to try to break the psychological mindset lest it undermine the drag we pick up in economic growth later this year. Many Federal officials are hoping there will be a turnaround and that this action was necessary in order to turn that hope into reality. Unfortunately, today we have received some additional bad economic news. To quote from the report of the New York Times: The Nation's unemployment rate shot up by 4.5 percent in April, the highest level in 2.5 years. Businesses slashed their payrolls by the largest amount since the recession of 1991. The Labor Department report of Friday--today--was the freshest evidence that the economy, which started to slow in the second half of the last year, continues to weaken. The increase of .2 percentage points in the unemployment rate marks the second straight month the jobless rate had gone up. In March, it had ticked up by 4.3 percent. April's rate was the highest since October of 1998 when unemployment also stood at 4.5 percent. Similar reports are in today's online news reports from USA Today, the Washington Post, all of which I have submitted for the Record. Nobody likes to talk about bad news. I think what we need to be talking about now is common sense. What are likely to be the consequences of this accumulation of bad news? I am afraid the consequences will include a further assault upon consumer confidence, which has already declined precipitously, and a further assault on the willingness of consumers to undertake serious expenditures. We know that about two-thirds of our economy is predicated on consumer spending. As the willingness of consumers to spend is undermined by the kind of bad news they received this morning, that will have an immediate and significant adverse effect on our economy. How have we been reacting--we Members of Congress and the new administration--to this bad news? In my judgment, we have been responding inadequately. We have been responding based on a denial of the changes that are occurring in our economy and an unwarranted commitment to pursue the ideas that were the product of a different economic era. I believe we should be seriously looking--not only looking but acting--to provide new levels of economic assurance to the American people and the economic capability to take advantage of that reassurance. We should immediately institute a tax stimulus designed to encourage consumers to increase their spending and, therefore, begin to counter the softening consumer demand in our economy. Unfortunately, the tax stimulus has been the stepchild of tax policy. Why has it been the stepchild? I think, first, it has been the stepchild because there has been an undue commitment to policies that were developed in another time. I remember a statement made by President Bush, which was a statement made to indicate his constancy, his degree of unwavering support, for his $1.6 trillion tax plan. That statement started with the fact that the President indicated when he first announced his tax plan during the winter of 1999, in preparation for the 2000 Iowa caucus, that he first proclaimed his commitment to a $1.6 trillion plan and that commitment had continued throughout the Republican primary process, the Republican Convention, and the general election, and has continued until that date in February of 2001. What has happened is that while the plan has continued to be the same from the winter of 1999 to the now almost summer of 2001, the economic stage has changed. Stagehands have come on the stage and removed the booming stock market, which in the winter of 1999 was giving us almost daily new highs in stock market prices. The stagehands have also removed what was almost an all-time low in unemployment and replaced it with the unemployment circumstance we find today, which is 4.5-percent unemployment, up three-tenths in just the last 60 days. We also have replaced the gross domestic product, which had been running at rates of 5 or 6 percent, with one in which we now are approaching an anemic 2- percent growth rate in our GDP. The second stage, which began in the late winter of this year, was that at least we started with the rhetoric that we were interested in tax stimulus, but no change in the tax plan. We were saying the same plan that had been developed in the winter of 1999, which was defined as a plan to give a rebate, refund, to the American people for excessive taxes--that the same plan now was relabeled as being a tax stimulus. There was a glimmer of hope. That glimmer of hope occurred just within the last few days when we heard that the conference committee that was working on the melding of the House and Senate budget resolutions was proposing that there be a $100 million tax stimulus and that that tax stimulus was to start immediately. That glimmer of hope was quickly shattered, because now we see that in the conference report on the budget resolution, there is no $100 billion for a tax stimulus-- the $100 billion was folded into the $1.25 billion overall tax cut. A tax cut of $1.25 trillion over 10 years has now absorbed the $100 billion that was supposed to be the tax stimulus and has grown. So we have a tax reduction proposal in the budget resolution of $1.37 billion, but no specific tax stimulus. Another source of disappointment is that in the budget resolution that passed the Senate, we were talking about two tax bills between now and October 1. There would be one in mid-May and another one prior to September 30. That raised the hope, and there was some public comment that that first tax bill would be the tax stimulus bill; it would be the means by which we would respond rather than passively observe that accumulation of very troubling economic news. That, too, has now been eliminated in that the budget resolution apparently will only call for a single tax bill. It is being suggested that tax bill should be basically the winter of 1999 tax bill with minor modifications. I am discouraged and disappointed at the current state of affairs, but I am hopeful there will be a new day. Maybe that hope can be found in the fact that we learned late last night that the conference report on which the House was supposed to have voted and which we were assumedly going to be debating some today and again on Monday and vote on Tuesday was deficient; that there were, in fact, two pages of the conference report that were mysteriously missing. The hope is those two pages are the two pages that contain some commitment toward an intelligent tax stimulative policy. If that is not the case, then it is incumbent on us to come to our senses and to take constructive action before it is too late. I analogize the situation we are in to a business which has just learned there is going to be built in close proximity a gasoline tank farm. The business owner is looking at his insurance policy and asking the question: Given the fact that I am now going to have a heightened risk of a fire in the neighborhood in which my business is located, would it not be prudent to acquire some additional fire insurance? We are getting the message that there is additional vulnerability in our economic neighborhood, and would it not be prudent under these circumstances for us to buy some additional insurance, an insurance policy against recession or an insurance policy against a deepened, prolonged recession? I believe, just like the business person, yes, it would be prudent for us to do so. I suggest in doing so we should reexamine the proposal that will soon be before us and say, first, it is not prudent to be attempting to pass one gigantic tax bill, most of which benefits do not occur until 5 years from now; rather, what we should be doing is passing immediately an economic stimulus tax bill which will deal with the No. 1 economic challenge to this Nation and most of our people, and that is how to provide some additional economic encouragement and sense of hope for Americans at a time of a sliding economy, increasing unemployment, and declining gross domestic product. I believe that first tax bill we pass should have the following characteristics: It should be an immediate tax bill. It should be front loaded with substantial benefits available immediately after enactment. The President's original tax bill had only $187 million of tax benefits in the calendar year 2001. I believe we need to have a substantial tax cut of at least $60 billion in 2001 and in each successive year. We need to place that tax cut primarily in the hands of all American families through a reduction in their withholding tax. This would result in the greatest likelihood that tax cut would, in fact, be used to stimulate demand. This plan needs to be simple. We are about to consider what will be a very complicated plan, a plan that will have multiple provisions, most of which will not have a significant economic impact until after the year 2005. I believe we need to have a simple, straightforward plan which will have an impact immediately. The proposal Senator Corzine and I have developed which we submit as meeting these characteristics will be accomplished by taking a recommendation of President Bush, which is that we add a new bracket to our income tax code, and that be a bracket at the 10-percent level--that the first taxable dollars earned by Americans would be at a 10-percent rather than a 15-percent level. The President's suggestion should be modified in two regards. First, the 10-percent bracket, as he has suggested it, will not go into full effect until the year 2006. We suggest it ought to be in full effect as of January 1, 2001. Second, his proposal is limited to the first $6,000 of earnings for an individual and the first $12,000 for a married couple. We increase those numbers to $9,500 for an individual and $19,000 for a married couple. The effect of that is to provide a $60 billion tax stimulus reflected through reductions in withholding taxes and immediately available to the American people. We offer this as a commonsense solution to a very serious and disturbing set of economic changes that are occurring. We offer this as a means of providing to the American people the kind of support the Federal Government can and should be providing at this time. We offer it as a statement that we are not so disconnected from the lives of Americans that we are unable to appreciate the anxiety which many of our fellow citizens are suffering and the opportunity we have to provide a constructive and immediate source of relief. I suggest that we, the Members of Congress, are about to be tested. Are we isolated, stuck on some plan that is now almost 2 years out of date, or are we engaged with the American people; that we appreciate the implications of the declining economy to their lives, and we are prepared to act in a way that will give them the confidence that will, in turn, be beneficial to all Americans because it is their confidence converted into actions in the marketplace which have the best chance of beginning to place some concrete under our economy and begin to lift us out of this series of declines. We are going to be tested. Next week is going to be the testing date. I hope this Congress will receive positive grades on the report card we are going to be issued because if we fail to do so, and if that tank farm of declining economic statistics explodes this summer or fall, the question is going to be asked of us: What did you do when you had the opportunity to buy an economic insurance policy to help avoid this consequence? We do not want to say we were blind and deaf to the circumstances of the American people and failed to act. I hope this news, as disappointing and distressing as it is, will serve as a shock signal to this Congress to act and next week we will show that we have heard the alarm. I thank the Chair. Exhibit No. 1 [From the Washington Post, May 4, 2001] Fed's Legwork Led to Quick Rate Cut firms surveyed before april surprise (By John M. Berry) When Federal Reserve policymakers surprise financial markets with an unexpected change in interest rates, investors and analysts often wonder, ``What do they know that we don't?'' Usually, the answer is nothing. But when the Fed caught the markets off guard on April 18 with a half-percentage-point reduction in short-term interest rates, Fed Chairman Alan Greenspan and other central bank officials did have some vital, privately gathered information that convinced them an immediate rate cut was needed. The chairman had expressed concern earlier this year that businesses, worried about falling profits in a sluggish economy, might cut their spending on new plants and equipment so much that they would prolong the slump and forestall an eventual rebound in growth. Anecdotal evidence reaching the Fed suggested that could be the case. To get a better reading, Greenspan had for weeks directed Fed staff to closely track company earnings announcements and business executives' comments about their plans for such capital spending. Some staff members also had been working the phones, asking companies specific questions about their spending plans. What Fed officials and the staff found by early April was a disturbingly sour attitude among corporate executives that suggested many of them were hunkering down, concentrating on cutting costs and slashing investment plans. The policymakers concluded that quick Fed action was needed to try to break that psychological mind-set lest it undermine the gradual pickup in economic growth later this year that many Fed officials expect. And the officials decided they could not wait until their next regular meeting, scheduled for May 15. So on April 18, Greenspan convened an 8:30 a.m. conference- call meeting of the Federal Open Market Committee, the Fed's top policymaking group. That group lowered the Fed's target for overnight interest rates by half a percentage point, to 4.5 percent. In a separate action, the Fed board reduced the discount rate, the interest rate financial institutions pay when they borrow directly from one of the Fed's 12 regional reserve banks, by the same half-point. This picture emerges from interviews with sources who spoke on the condition of anonymity, Wall Street analysts and public comments by several Fed officials. The Fed's moves surprised financial markets, for two reasons. First, the most recently published economic statistics suggested that, while the U.S. economy was still weak, some sectors had begun to improve. Some private forecasters had even begun to revise their predictions for growth upward modestly. Second, several presidents of the regional Fed banks had made recent speeches noting the signs of improvement, which the markets interpreted as suggesting that urgent action on rates was not needed. For some investors and analysts, the clincher came from William Poole, president of the St. Louis Federal Reserve Bank, on April 10. After a speech in Dyersburg, Tenn., Poole told reporters that the Fed's target for overnight rates should be changed only at the FOMC's eight regularly scheduled meetings each year, except in ``compelling'' circumstances. ``There are compelling times when quick action is necessary, but this is not one of them,'' Poole asserted. Remarks the same day in a speech by Jack Guynn, Poole's counterpart at the Atlanta Federal Reserve Bank, also implied a desire to act at regularly scheduled meetings rather than at other times. And two weeks earlier, Anthony Santomero, president of the Philadelphia Fed, had said, ``I do not think the Fed should routinely take policy actions for the sole purpose of boosting expectations or merely to affect confidence.'' A few weeks earlier, at its March 20 meeting, the FOMC had cut its rate target by half a point and hinted clearly that it might cut rates again if necessary before the May meeting. In the statement, the committee said that, given the weak and uncertain economic outlook, ``when the economic situation could be evolving rapidly, the Federal Reserve will need to monitor developments closely.'' The FOMC had used similar wording in an announcement after its mid-December meeting, intending to signal that it would consider making a rate cut before its next regular meeting. But more market participants did not pick up that signal and were therefore very surprised when the Fed lowered its rate target by half a point on Jan. 3. The reappearance of that language in March initially convinced many investors and analysts that another reduction was likely during the long eight-week period between the March and May meetings. But as April wore on, and the tone of new economic data improved a bit and some Fed officials suggested no Fed action was in the offering, market expectations for a rate cut evaporated. So when the Fed moved on April 18, some analysts concluded that Fed officials must have decided that a rate cut would have a greater impact if it came as a surprise to investors and business executives. If that were the case, then the president's remarks must have been part of a coordinated plan intended to mislead market participants, the analysts said. To most Fed officials, the notion of coordinating statements of all the policymakers is almost laughable. Public statements by one policymaker or another often leave others in the group shaking their heads. That clearly was the case when Poole so specifically ruled out an inter-meeting move. Furthermore, historically there has always been a certain tension between Fed officials in Washington and the 12 Federal Reserve Bank presidents scattered across the country. Some of that tension has involved issues of who has what powers within the system, which is largely dominated by the chairman. The bank presidents carefully guard their limited independence, even to the point of rarely conferring with one another on monetary policy outside of formal meetings. Some of the presidents do send drafts of the speeches to Washington, where the Fed board and staff read them and may make some suggestions for changes. But there is no attempt to coordinate statements and the presidents are free to ignore suggestions. This geographic separation contrasts with the weekly Fed board meeting in Washington, usually on Monday mornings, at which reports on the state of the economy are presented by the staff and discussed by the board members. Fed officials would not discuss the extent to which the reserve banks' presidents were apprised of the board staff's findings as it gathered up details of corporate announcements and made telephone inquiries about business investment plans. Nor has there been any public indication of whether there were any dissents registered during the April 18 conference call. The minutes of that meeting, along with those from the preceding regular FOMC session March 20, will be released two days after the upcoming May 15 meeting. The Fed's announcement following last month's unexpected rate cut highlighted the policymakers' concerns about business attitudes and spending plans, and mentioned other uncertainties about consumer spending and the demand for U.S. exports. After noting some of the same positive economic signs the bank presidents had mentioned in their speeches, the FOMC said: ``Nonetheless, capital investment has continued to soften and the persistent erosion in current and expected profitability, in combination with rising uncertainty about the business outlook, seems poised to dampen capital spending going forward. This potential restraint, together with the possible effects of earlier reductions in equity wealth on consumption and the risk of slower growth abroad, threatens to keep the pace of economic activity unacceptably weak. As a consequence, the committee agreed that an adjustment in the stance of policy is warranted during this extending intermeeting period.'' In addition to economic worries, the condition of the stock market likely helps explain some of the timing of the April rate cut. While Greenspan and other Fed officials maintain they are not in the business of targeting stock prices, they readily acknowledge that the market can have a significant impact on the economy and that does concern them. For example, the weakness in the stock market over the past year is a factor in business investment decisions because the market can be a source of inexpensive funding for new plants and equipment. But if investors were still driving stock prices downward-- as appeared to be the case until the first part of April--a surprise rate cut might have had little impact on the market. Like an intervention in foreign exchange markets to affect the value of a currency, officials felt it would be better to wait until the market appeared to have hit bottom and was on its way up. As the market began to improve during the week before the rate cut, another factor came into play--Easter. The market was to be closed on Friday, April 13, and was to close early the day before, and under such circumstances trading volume is usually low. So if one goal, likely a subsidiary one, was to give the market a boost, the following week was probably a better bet. Now, of course, attention has turned to what the Fed will do May 15. Most analysts expect a further reduction in the target for overnight rates, by either a quarter of a point or a half-point. The latter would bring the rate target down to 4 percent, it lowest in seven years. Some analysts think the Fed will stop at 4 percent, whether it gets there in one step or two. That could well be the case since a significant member of Fed officials believe economic growth will gradually improve in the second half of the year, though they generally stress the uncertainty of the outlook. A smaller group of analysts thinks the economy will prove stubbornly weak and that the target for overnight rates will bottom out at 3.5 percent. But with rates as low as they are likely to be after May 15 and only six weeks until the subsequent FOMC meeting in late June, a third surprise rate reduction between meetings this year can be only a very remote possibility.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, as those of us from our Nation's southern and eastern coastal areas know, living in the sunshine of summer can be a double-edged sword. As Floridians enjoy the best weather Mother Nature has to offer, we must not neglect preparations for the start of hurricane season on June 1, 2001. I am pleased to join my colleague from Florida, Senator Nelson, and my colleagues from Texas in introducing legislation that will help protect Florida from economic devastation as sunny days and warm water are accompanied by the potential for catastrophic disaster. Our legislation amends section 501(c) of the Internal Revenue Code to grant tax-exempt status to State chartered, not-for-profit insurers serving markets in which commercial insurance is not available. In Florida, this legislation will assist the Florida Windstorm Underwriting Association, FWUA, and the Florida Residential Property and Casualty Joint Underwriting Association, JUA. The Florida Windstorm Association was created in 1970. Twenty-two years later, in 1992, the legislature authorized the Joint Underwriting Association. These organizations operate as residual market mechanisms. They provide residential property and casualty insurance coverage for those residents who need, but are unable to procure, insurance through the voluntary market. The JUA was created in direct response to $16 billion in covered losses during Hurricane Andrew. The destructive force of Andrew rendered a number of property insurance companies insolvent. Other firms reacted to the catastrophe by withdrawing from the Florida market. During those fortunate years when Florida is not hit by major hurricanes or other natural disasters, the FWUA and JUA take in more premiums than are paid out in claims and expenses. Florida law prevents those funds from being distributed so that needed reserves will accumulate in preparation for disasters we know will come in the future. Unfortunately, the Internal Revenue Code penalizes Florida for this responsible, forward thinking practice. It requires that 35 percent of those funds be sent to Washington, as Federal income taxes rather than be used to accumulate reserves. Designating State chartered, non-profit insurers as tax-exempt entities will help Florida amass the necessary reserves to pay claims brought on by a catastrophe. State law also authorizes the FWUA and the JUA to assess property insurance policyholders for losses generated by natural disasters. Tax exemption will reduce the frequency and severity of assessments levied against individual policyholders, because higher reserves will be available to cover losses. Mr. President, though nearly a decade has passed, Hurricane Andrew is still a nightmarish memory for Floridians. The National Weather Service expects this hurricane season to be another active storm season. It is imperative that the Federal Government avoids the comfortable habit of ignoring lessons presented by Andrew and other recent catastrophes. Similar legislation has been introduced in the House of Representatives and enjoys bipartisan support from Florida's congressional delegation. Our legislation is extremely important to homeowners and businesses throughout Florida, all of whom are subject to assessment if reserves are not sufficient to pay claims in the event of a catastrophe. Florida remains sensitive to the perils of nature. Enactment of this legislation will permit our State to prepare for the next Hurricane Andrew while alleviating some of the economic hardship exacted on Florida property owners.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, today I am delighted to recognize an outstanding group of men and women from Broward County. The dedication and compassion demonstrated by these 10 inspiring senior citizens who have been nominated to the Dr. Nan S. Hutchison Broward Senior Hall of Fame is truly exceptional. The selfless efforts of these nominees to address the needs of individuals in all walks of life serve as an example for others throughout our Nation to emulate. This year's honorees are Ilo Cox, Sydney Dworkin, Flora Fasciani, Ena Henry, Edward Levy, Johnnie McCray, Elizabeth Phillips Scheuerman, Bert Soft, Lotte Stein, and Ralph Weinstein. Ilo Cox has endeavored to improve the quality of life for Floridians by promoting such diverse initiatives as crime prevention, community development, advancement of the arts and funding research to find a cure for cystic fibrosis. In addition, she has held positions of leadership with the Fort Lauderdale Woman's Club. Sydney Dworkin has given generously of his time to the Florida Lakes Alzheimer Care Center since its inception in 1993. At the center he brings warmth and light into the lives of all those whom he assists. He has recognized the importance of a friendship in the life of someone afflicted by a mentally debilitating disease. Flora Fasciani has been a steadfast supporter of children's programs and charities, coordinating and supervising several fundraising Salvation Army balls in Broward. She also acts as a spokesperson for the University of Miami Organ Donor Program and organizes the biannual Red Cross blood drive. Ena Henry has been an active member of her church community; volunteering her time in programs aimed at educating the youth and fostering a bond between the younger and older generations. In addition, she provides relief to disaster victims and aids indigent families of prisoners during the holiday season, supplying them with food and gifts. Edward Levy uses his own experience as a wounded ex-soldier to aid fellow ex-servicemen. For the last 25 years he has generously volunteered countless hours assisting veterans, widows, and dependents. He also participates in the Broward Meals on Wheels program, delivering meals to homebound seniors. Johnnie McCray is an invaluable asset to her community. She has acted as a key fundraiser for the executive board of the Sylvia Poitier T. Williams Senior Center. Moreover, she has been active in a multitude of area organizations, including the Negro Chamber of Commerce, the South Florida Association of Woman's Clubs and the Florida Association of Women's and Girl's Clubs. Elizabeth Phillips Scheuerman has been a champion of literacy in the Broward area. Through the efforts of this former Florida State president of the American Association of University Women, the community was able to obtain its first bookmobile. In addition, she has been active in the Symphony Society, the Gold Circle of NOVA University, and the American Cancer Society. Bert Soft is a woman of valor. Overcoming personal tragedy, she founded the Frank Soff Chapter of the Alzheimer's Family Center. Under her leadership, the chapter's membership has grown from 13 to 170 members. Her initiative and persistence have earned her acknowledgment as the Deborah ``Woman of the Year'' and the Florida Association of Non-Profit Organizations' ``Woman of Valor.'' Lottie Stein has been instrumental in implementing community improvement and awareness programs. She is actively involved with citizen crime-watch organizations and has been commended for her efforts in launching the GIVE program, which attempts to attract people to the volunteer experience. Ralph Weinstein was a key actor in the foundation and incorporation of the first Alzheimer's Day Care Center in Broward County at the Northeast Focal Point Center. Through this organization he addresses the physical and emotional needs of children, adults, seniors, and Alzheimer's patients. Florida and Broward County are fortunate to have these exceptional men and women who have given so much of themselves to the community. I congratulate them today and wish for them many more productive and healthy years.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I rise today with my colleague, Senator Bill Nelson, to introduce legislation that will protect the coast of Florida in the future from the damages of offshore drilling. In past Congresses, I have introduced similar legislation that sought to codify the annual moratorium on leasing in the Eastern Gulf of Mexico and ensure that state's receive all environmental documentation prior to making a decision on whether to allow drilling off of their shores. Today, I am introducing legislation that takes these steps, plus several others. The Outer Continental Shelf Protection Act will protect Florida's fragile coastline from outer continental shelf leasing and drilling in three important ways. First, we transform the annual moratorium on leasing and preleasing activity off the coast of Florida into a permanent ban covering planning areas in the Eastern Gulf of Mexico, the Straits of Florida, and the Florida section of the South Atlantic. Second, the Outer Continental Shelf Protection Act corrects an egregious conflict in regulatory provisions where an effected state is required to make a consistency determination for proposed oil and gas production or development under the Coastal Zone Management Act prior to receiving the Environmental Impact Statement, EIS, for them from the Mineral Management Service. Our bill requires that the EIS is provided to affected states before they make a consistency determination, and it requires that every oil and gas development plan have an EIS completed prior to development. Third, our bill buys back leases in the Eastern Gulf of Mexico which are an immediate threat to Florida's natural heritage and economic engine. What does this bill mean for Florida? The elimination of preleasing activity and lease sales off the coast of Florida protects our economic and environmental future. For years, I have taken my children and grandchildren to places like Grayton Beach so that they can appreciate the natural treasures and local cultures that are part of both their own heritage and that of the Florida Panhandle. We have a solemn obligation to preserve these important aspects of our state's history for all of our children and grandchildren. Much of our identity as Floridians is tied to the thousands of miles of pristine coastline that surround most of our state. The Florida coastline will not be safe if offshore oil and gas resources are developed. For example, a 1997 Environmental Protection Agency, EPA, study indicated that even in the absence of oil leakage, a typical oil rig can discharge between 6,500 and 13,000 barrels of waste per year. The same study also warned of further harmful impact on marine mammal populations, fish populations, and air quality. In addition to leakages and waste discharges, physical disturbances caused by anchoring, pipeline placement, rig construction, and the resuspension of bottom sediments can also be destructive. Given these conclusions, Floridians are unwilling to risk the environmental havoc that oil or natural gas drilling could wreak along the sensitive Panhandle coastline. Because the natural beauty and diverse habitats of the Gulf of Mexico, the Florida Keys, and Florida's Atlantic Coast attract visitors from all over the world and support a variety of commercial activities, an oil or natural gas accident in these areas could have a crippling effect on the economy. In 1996, the cities of Panama City, Pensacola, and Fort Walton Beach reported $1.5 billion in sales to tourists. Florida's fishing industry benefits from the fact that nearly 90 percent of reef fish caught in the Gulf of Mexico come from the West Florida continental shelf. For the last several years, I have been working with my colleagues, former Senator Connie Mack and now Senator Bill Nelson, Congressman Joe Scarborough, and others to head off the threat of oil and natural gas drilling. In June of 1997, we introduced legislation to cancel six natural gas leases seventeen miles off of the Pensacola coast and compensate Mobil Oil Corporation for its investment. Five days after the introduction of that legislation and two months before it was scheduled to begin exploratory drilling off Florida's Panhandle, Mobil ended its operation and returned its leases to the federal government. While that action meant that Panhandle residents faced one less economic and environmental catastrophe-in-the-making, it did not completely eliminate the threats posed by oil and natural gas drilling off Florida's Gulf Coast. Florida's Congressional representatives fight hard each year to extend the federal moratorium on new oil and natural gas leases in the Gulf of Mexico. But that solution is temporary. Today we are introducing the Outer Continental Shelf Protection Act to make permanent our efforts to protect Florida's coastlines. I look forward to working with my colleagues on the Energy and Natural Resources Committee to move this legislation forward and protect the coast of future generations of Floridians and visitors to Florida.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I rise today with my colleague, Senator Bill Nelson, to introduce legislation that will protect the coast of Florida in the future from the damages of offshore drilling. In past Congresses, I have introduced similar legislation that sought to codify the annual moratorium on leasing in the Eastern Gulf of Mexico and ensure that state's receive all environmental documentation prior to making a decision on whether to allow drilling off of their shores. Today, I am introducing legislation that takes these steps, plus several others. The Outer Continental Shelf Protection Act will protect Florida's fragile coastline from outer continental shelf leasing and drilling in three important ways. First, we transform the annual moratorium on leasing and preleasing activity off the coast of Florida into a permanent ban covering planning areas in the Eastern Gulf of Mexico, the Straits of Florida, and the Florida section of the South Atlantic. Second, the Outer Continental Shelf Protection Act corrects an egregious conflict in regulatory provisions where an effected state is required to make a consistency determination for proposed oil and gas production or development under the Coastal Zone Management Act prior to receiving the Environmental Impact Statement, EIS, for them from the Mineral Management Service. Our bill requires that the EIS is provided to affected states before they make a consistency determination, and it requires that every oil and gas development plan have an EIS completed prior to development. Third, our bill buys back leases in the Eastern Gulf of Mexico which are an immediate threat to Florida's natural heritage and economic engine. What does this bill mean for Florida? The elimination of preleasing activity and lease sales off the coast of Florida protects our economic and environmental future. For years, I have taken my children and grandchildren to places like Grayton Beach so that they can appreciate the natural treasures and local cultures that are part of both their own heritage and that of the Florida Panhandle. We have a solemn obligation to preserve these important aspects of our state's history for all of our children and grandchildren. Much of our identity as Floridians is tied to the thousands of miles of pristine coastline that surround most of our state. The Florida coastline will not be safe if offshore oil and gas resources are developed. For example, a 1997 Environmental Protection Agency, EPA, study indicated that even in the absence of oil leakage, a typical oil rig can discharge between 6,500 and 13,000 barrels of waste per year. The same study also warned of further harmful impact on marine mammal populations, fish populations, and air quality. In addition to leakages and waste discharges, physical disturbances caused by anchoring, pipeline placement, rig construction, and the resuspension of bottom sediments can also be destructive. Given these conclusions, Floridians are unwilling to risk the environmental havoc that oil or natural gas drilling could wreak along the sensitive Panhandle coastline. Because the natural beauty and diverse habitats of the Gulf of Mexico, the Florida Keys, and Florida's Atlantic Coast attract visitors from all over the world and support a variety of commercial activities, an oil or natural gas accident in these areas could have a crippling effect on the economy. In 1996, the cities of Panama City, Pensacola, and Fort Walton Beach reported $1.5 billion in sales to tourists. Florida's fishing industry benefits from the fact that nearly 90 percent of reef fish caught in the Gulf of Mexico come from the West Florida continental shelf. For the last several years, I have been working with my colleagues, former Senator Connie Mack and now Senator Bill Nelson, Congressman Joe Scarborough, and others to head off the threat of oil and natural gas drilling. In June of 1997, we introduced legislation to cancel six natural gas leases seventeen miles off of the Pensacola coast and compensate Mobil Oil Corporation for its investment. Five days after the introduction of that legislation and two months before it was scheduled to begin exploratory drilling off Florida's Panhandle, Mobil ended its operation and returned its leases to the federal government. While that action meant that Panhandle residents faced one less economic and environmental catastrophe-in-the-making, it did not completely eliminate the threats posed by oil and natural gas drilling off Florida's Gulf Coast. Florida's Congressional representatives fight hard each year to extend the federal moratorium on new oil and natural gas leases in the Gulf of Mexico. But that solution is temporary. Today we are introducing the Outer Continental Shelf Protection Act to make permanent our efforts to protect Florida's coastlines. I look forward to working with my colleagues on the Energy and Natural Resources Committee to move this legislation forward and protect the coast of future generations of Floridians and visitors to Florida.

Mr. GRAHAM

Mr. GRAHAM. I thank the chairman and ranking Democratic member for that clarification. I believe that since the federal government required these dipping vats to be constructed, the individuals who complied with that federal requirement should be excluded from all liability under Superfund. However, I also believe that the brownfields legislation we are considering today is a critical step forward in our ability to clean-up sites around the country. I look forward to working with both of you and our colleagues on the Environment and Public Works Committee to take additional steps forward in the months to come. alaska native corporations eligibility

Mr. GRAHAM. Mr. President, I would like to confirm with the chairman and ranking Democratic member of the Environment and Public Works Committee that certain sites in my State would be eligible for the benefits of this important brownfields legislation. In several States, including my State of Florida, there are a number of sites that were contaminated in the early to mid-1900's by chemicals used for tick- prevention measures required by the United States Department of Agriculture. So-called cattle dipping vats were used to eliminate ticks that threatened our Nation's cattle. It is my understanding that these sites would be eligible for the benefits of this important brownfields legislation. Is that your understanding?

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I applaud my colleague from Arkansas for the very excellent description that he gave. Essentially, we are asking for a 1-year bridge between the time that these supplemental funds will expire in the fall of 2001 and the time that we reauthorize the total Welfare-to-Work Program in 2002. It is a very important amendment for those States that already start off getting the least amount of funding to meet their welfare-to-work requirements. Because of the growth in low per-capita income, they are particularly in need of this support. Congress recognized that it would continue the program until we reauthorize Welfare-to-Work.

Mr. GRAHAM. It is. We made that modification.

Mr. GRAHAM. Mr. President, briefly, this amendment fulfills a commitment that the Congress made in 1996 to the States upon the adoption of Welfare-to-Work, and that is that we would support the Social Services Block Grant Program which is a program within Social Security which has provided for a number of important programs that have assisted people on welfare, getting to work, and particularly child care programs. This has broad support. Senators Hutchison, Grassley, Collins, Snowe, Rockefeller, Carnahan, Murray, Schumer, Wellstone, Kennedy, Landrieu, Kerry, and Bingaman are some of the cosponsors of this amendment. I believe it has broad bipartisan support. I urge its adoption.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I rise today along with Senators Grassley and Baucus to introduce the Retirement Security and Savings Act of 2001. I am honored to be here today, in a bipartisan group, and especially with my colleague Senator Grassley, who has put a tremendous effort into crafting many parts of this bill. He and I recognize that for our nation to solve what will be one of this generation's greatest challenges, building retirement security for today's workers, we need to move in a common sense, bipartisan fashion. Many of the original cosponsors have dedicated their years in the Senate to crafting key sections of this legislation. Senator Grassley's efforts have expanded fairness for women and families, and highlighted the benefits of retirement education. Senator Baucus has also been a prime contributor to this legislation, fostering the proposals to expand pension coverage and ease the administrative burdens on America's small businesses. We have come here today, from both sides of the aisle, to ensure that future generations have a strong and viable retirement security system. Retirement today is a much different prospect than it was a generation ago. Retirees can expect to live much longer. Their health care needs are different and they are much more likely to need long- term care. Planning for retirement has also changed. Thirty years ago retirement planning consisted of picking an employer with a good pension plan and sticking with that company for 30 years. Traditional pensions, with their clockwork monthly checks in return for a defined term of service, are becoming nostalgic memories. Increasingly, employers are turning to defined contribution plans-- 401(k)s and the like. For example, twenty-five years ago nearly 31 million American workers were covered by a pension plan. Of those, 87 percent had a defined benefit plan, according to the Department of Labor. Today, less than one-half of workers covered by a retirement plan have a defined benefit plan, while 54 percent are covered by a defined contribution plan. An employee with a 401(k) account can count on getting only one thing each month--a statement tracking account investments that rise and fall with financial markets. The burden of ensuring that there are sufficient assets in their 401(k) plans falls upon them. And these are the lucky workers. Many employers--small businesses in particular--do not offer any kind of employer-sponsored retirement plan. Workers at these businesses are left to fend for themselves. Recent statistics from the Social Security Administration illustrate the importance of each component of retirement income. 38 percent of retirees' income came from Social Security, 19 percent from employer- sponsored savings plans or pensions, and 19 percent from savings. The rest was unidentified income or earnings from work. Clearly, Social Security alone is not sufficient basis for a solid retirement plan. Adequate retirement security these days involves planning and coordinating three principal sources of income: Social Security, employer-based pensions and personal savings. Pensions and personal savings will make up an ever-increasing part of retirement security. Today, if a worker retires with no savings and no pension, nearly 40 percent of his/her retirement income is lost. Even as retirees are becoming more heavily reliant on pensions, statistics show that 45 million working Americans are still not covered by any type of retirement plan. There are a number of reasons why fewer and fewer working Americans are earning retirement benefits. First, job tenure has fallen. Today's workers no longer dedicate their entire working life to one company. Now, the average worker will have had 7 employers in a 40-year work career. The mobility of working Americans, and the necessity of businesses to restructure their workforce, can create tremendous obstacles in ever being able to fully vest, and obtain retirement benefits. Second, small businesses, the most dynamic part of our economy, are the least able to offer their workers retirement benefits. Studies indicate that small businesses are responsible for a large portion of the country's job growth, and that this trend will accelerate in the future. Third, our economy has shifted away from manufacturing jobs, which tend to offer pensions, to service and retail jobs, which tend to have shorter job tenure, more part-time workers, and less likelihood of providing pension and retirement benefits. And finally, there are fewer union workers. Collective bargaining agreements are the most likely to contain retirement benefits. There are fewer union workers than 20 years ago, and the number is still declining. Therefore, less people will have important lifetime retirement security. It is imperative that Congress take action to improve the private side of retirement security and encourage personal savings. Our bill, the Retirement Security and Savings Act, will help hard-working Americans build personal retirement savings through 401(k)s and IRAs. To achieve this goal, we focused on six areas: simplification, portability, expanded coverage for small business, pension security and enforcement, women's equity issues, and expanding retirement planning and education opportunities. This legislation benefits both employers and workers. Employers get simpler pension systems with less administrative burden, and more loyal employees. And workers build secure retirement and watch their savings accumulate over years of work. A large section of this legislation deals with expanded coverage for small businesses. It's such an important component of this bill because small businesses have the greatest difficulty achieving retirement security. The problem: statistics indicate that only a small percentage of workers in firms of less than 100 employees have access to a retirement plan. We take a step forward in eliminating one of the first hurdles that a small business faces when it establishes a pension plan. On one hand, the federal government encourages these businesses to establish pension plans. Yet on the other hand, we turn around and charge the small business, at times, up to one thousand dollars to register their plan with the Internal Revenue Service. The solution: our bill eliminates this fee for small businesses. We need to encourage small businesses to start plans, not discourage them with high registration fees. This legislation also addresses the inadequacy of retirement security for women and families. Generally speaking, women live longer than men, and therefore, need greater savings for retirement. Yet our pension and retirement laws do not reflect this. Women are more mobile than men, moving in and out of the workforce due to family responsibilities; thus, they have less of a chance to become vested. Our legislation offers a solution--shrinking the five-year vesting cycle to a three- year cycle. As I mentioned earlier, the current U.S. worker will have seven different employers over their lifetime. We have the possibility of creating a generation of American workers who will retire with many small accounts--creating a complex maze of statements and features, different for each account. This is a problem--pensions should be portable from job to job. Unfortunately, our tax laws contain barriers to retirement-account portability and so the major benefit of defined-contribution plans are often rendered unusable. Workers changing jobs are often given their savings back in a lump sum that doesn't always make it back into an Individual Retirement Account or their new employer's 401(k). The result is that retirement savings get spent before retirement. Our bill provides a solution to this problem. It allows employees to roll one retirement account into another as they move from job to job so that when they retire, they will have one retirement account. It's easier to monitor, less complicated to keep track of, and builds a more secure retirement for the worker. Portability is important, but we must also reduce the red tape. The main obstacle that companies face in establishing retirement programs is the administrative burden. For example: for small plans, it costs $228 per person per year just to comply with all the forms, tests and regulations. We have a common sense remedy to one of the most vexing problems in pension administration: figuring out how much money to contribute to the company's plan. It's a complex formula of facts, statistics and assumptions. We want to be able to say to plans that have no problem with underfunding: to help make these calculations, you can use the prior year's data to help make the proper contribution. You don't have to re-sort through the numbers each and every year. Companies will be able to calculate, and then budget accordingly--and not wait until figures and rates out of their control are released by outside sources. I have said time and time again that Americans are not saving. But those who are oftentimes hit limits on the amounts they can save. The problem is that most of these limits were established more than 20 years ago. Currently, for example, in a 401(k) plan the IRS limits the amount an employee can contribute to $10,500 a year. Our solution is to raise that limit to $15,000, along with raising many other limits that affect savings in order to build a more secure retirement for working Americans. Building retirement security will also take some education. One of the principal reasons Americans do not prepare for retirement is that they don't understand the benefits that are available to them. One solution to this dilemma is regular and easy to read benefit statements from employers reminding workers early in their career of the importance of retirement savings. These statements would clarify what benefits workers are accruing. With this information each American will more easily be able to determine the personal savings they need in order to build a sound retirement. The new retirement paradigm requires Congress and individual workers to rededicate themselves to the goal of retirement security. If we fail, the consequences will be harsh. That's particularly true in Florida, a popular retirement destination that could be devastated by an influx of seniors inadequately prepared for their retirement. While Florida would be hit first, the nation as a whole will eventually feel the pain as the population ages faster than the workforce. To those who would suggest this is the distant future, remember how far high school seemed when you were in the sixth grade, how 30 once loomed eons from 25, and how we once thought our parents would be young and healthy forever. With the introduction of this legislation today it is my goal to ensure that each American who works hard for thirty or forty years has gotten every opportunity for a secure and comfortable retirement. I thank my colleagues who have worked so hard with me on this measure, and ask for the support of those in this Chamber on this important legislation.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, the issue is not whether we are going to have a tax cut or what the specific details of the tax cut will be. The question is, Are we going to take this historic opportunity with over $5.5 trillion of surplus available in the next 10 years and make decisions on how to allocate that surplus in the most rational manner? One of the issues, I am afraid, that will be trampled upon if we do not defeat this amendment, and deny us the opportunity for full debate, is the question of how we will finance a prescription drug benefit through Medicare. Virtually every Member of the Senate, on both sides of the aisle, has voted in favor of a prescription drug benefit. Virtually every Member has also voted that that benefit should be in the range of $300 billion to $311 billion over the next 10 years. Where we disagree is how we should pay for it. This side of the aisle has voted to pay for it in the traditional manner, general revenue and premiums paid by the beneficiaries. The other side of the aisle has voted to pay for it by taking the excess funds that are in the hospital trust fund. For 35 years, there has been a contract between the people of the United States and their Federal Government. That contract has said: You pay me every month 1.5 percent of your salary, and when you reach retirement age, we will provide you a range of benefits that includes hospital, skilled nursing home, and home health care.

Mr. GRAHAM. I yield the remainder of my time to my distinguished colleague from Michigan.

Mr. GRAHAM. That contract is now about to be broken. We should have a full debate in the Senate before we engage in that unilateral abolition of a 35-year commitment by the American people. Before I yield the remainder of my time to the Senator from Michigan, I ask unanimous consent that a letter from the American Hospital Association dated today be printed in the Record, which states: We believe the Part A Trust Fund should be used for the purpose for which it was intended.

Mr. GRAHAM

Mr. GRAHAM. I ask for an additional 10 minutes.

Mr. GRAHAM. Mr. President, before I turn to the specific issues raised by the amendment offered by my friend and colleague from Montana, myself, and others, I will make a couple of general comments about the context of this discussion of the budget resolution. We are looking at the world as if it ended exactly 10 years from the end of this fiscal year. That is a very artificial restraint. At a meeting of the Senate Finance Committee on March 29, a former Director of the budget office during the administration of the first President Bush made this statement in response to a question about the artificiality of the 10-year limit. Dr. James Miller stated: I think the timeframe does matter. We sort of lull ourselves into, when I was budget director, in 5-year timeframes, and now you are looking at 10-year timeframes, and it is appropriate to look beyond that. And what we know, of course, is that they'll be running big surpluses until about 2020, whatever. And then we will be running deficits again. During that hearing, I used the important historical fact that on March 30, my daughter Suzanne's triplet daughters had their sixth birthday. I can report it was a happy celebratory occasion. If my daughter and her husband were to view the economic consequences relative to their triplets as we are about to do with this budget, they would stop the clock 10 years from now when their triplets had their 16th birthday. That would give a very false impression of what the true cost of raising triplets in the 21st century is going to be because 2 years after their 16th birthday will be their 18th birthday, the year in which, hopefully, they will all be entering college. Any family who has some idea of what college costs for one child in the year 2001 can calculate what the costs are going to be for three children and project what they are likely to be in another 12 years from now. In many ways our Nation is similar to my daughter's family. We have some very big expenses that are coming just beyond this 10-year timeframe. What is driving those big expenses is a contract. Actually, it is a series of contracts between the American people and their Federal Government. Those contracts provide that when Americans reach retirement age, they will become eligible for economic assistance in the form of Social Security, a contract they have been paying for throughout their working life through a payroll deduction plan, and they will also become eligible for Federal assistance in paying their health care costs, a contract which in part, through the Part A hospital trust fund, they have also been paying for throughout their working life. The numbers of Americans today who are cashing in that contract are relatively modest. I happen to be 64. In November of this year, I will become fully eligible for Social Security and Medicare. When I become eligible, I will place a relatively modest burden on the trust funds because, frankly, there were not a lot of people born in 1936. It was the depth of the Depression and most people did not see that as a propitious time to be adding to the size of their family. Right after World War II, Americans started having babies in record numbers. It is those babies who will begin to become eligible for Social Security and Medicare in about the year 2011, just after this 10-year window shuts down, and they will rapidly increase in numbers. As Dr. Miller said, by the time of 2020, whatever, then we will be running deficits again. In my judgment, the context in which we need to look at all of the issues we are discussing is not the 10-year context but the generational context of the next 25 years so that we will be taking into account this enormous number of Americans who will be eligible for the contract rights they have been paying for in Social Security and Medicare. Another thing is going to be happening to that population. Not only will it be reaching retirement age, but that generation is going to start living longer. The average life expectancy of an American when Social Security was established in the mid-1930s, after one reached 65, was about 7 years. Today, the average age for an American female who reaches 65 is almost 20 years, and it is almost 16 years for an American male. During this century, those ages beyond 65 will continue to grow. So we are going to have a much larger population over 65 and that population will live substantially longer, placing additional economic challenges to the Federal Government. In my judgment, the key step we should be taking now to prepare for that is to save every dollar of the trust funds of Social Security and Medicare for their intended purposes. We should do this to the maximum extent possible by paying down the national debt, and then we need to be creative after we have reached the point that we have paid off the national debt fully or to the extent feasible, as to how we can continue to reserve those funds so that they will be available when this tidal wave of retirement comes in the next decade. Those are some of the contexts for the discussion on the issue that will dramatically affect this generation that will soon be retiring, and that is the quality of the Medicare program they will become eligible to receive. I strongly support the addition of a prescription drug benefit to Medicare. Frankly, if anyone were to suggest that a Medicare program be fashioned today and not include prescription drugs, they would be considered to be a dinosaur in terms of what is a modern health care system. This belief that Medicare should include prescription drugs is now widely accepted by the American people. Both the candidates for President in the year 2000 committed to work for a prescription drug benefit for older Americans. I have been conducting a poll on my Senate Web site for over a year on the question of Medicare prescription drugs. The first question we ask is, Should Medicare coverage include a prescription drug benefit? I have no professions as to the statistical appropriateness of this poll. It is just anybody who logs on to our site and takes advantage of the opportunity to express their opinion. But of those who have done that--this, as I said, represents over a year of citizens who have taken advantage of this poll--88 percent have answered the question: Yes; Medicare coverage should include prescription drugs. I think that is close to representative of what the American people believe about this issue. The challenge is before us this week to make a determination: Are we going to provide in this budget resolution a sufficient amount of funds to provide an affordable, comprehensive, realistic prescription drug benefit within Medicare? I submit the proposal which is contained in the budget resolution as submitted is not an adequate proposal to provide that comprehensive benefit.

Mr. GRAHAM. The amendment on which we are debating provides $153 billion in new budget authority in outlays for a prescription drug benefit for the period 2002 through 2011. As my colleague, Senator Baucus, has already indicated, the assessment of the plan that President Bush has submitted would be that it would have a cost over that 10-year time period of $207 billion. So the amount of money requested in the budget resolution would not even be adequate to finance the barebones, available only to low-income elderly, high- deductible plan that President Bush has recommended. If we were to try to take his plan and stretch it as he states he will attempt to do during the last 6 years of this 10-year period to cover all Medicare beneficiaries, the effect of that would be to provide a plan which could require as much as a $1,750 deductible before any beneficiary was eligible for payment under the prescription drug benefit. As Senator Baucus has already demonstrated, the Director of the CBO has described the attempt to stretch a universal benefit under the amount of dollars available as not providing a great deal for any one person. There is a second defect in this plan in addition to its inadequacy. That is the fact that it purports to use Part A funds as the means of paying for this prescription drug benefit. That is quite directly stated in the plan which has been passed by the House, where their budget resolution specifically says prescription drugs will be paid through the Part A trust fund. The Senate resolution is not that explicit, but as you go through the analysis provided by the Senator from North Dakota and the Senator from Montana, you inevitably come to the conclusion that the proposal is to switch the Part A trust fund surpluses to a contingency fund and then use that contingency fund for a variety of purposes, including the payment of prescription drug costs to the Federal Government. The Part A trust fund is one of those contracts between the American people and their Federal Government. That Part A is intended to pay for hospital costs, not for other costs. If we are intending to add to the Part A trust fund a new obligation to pay for prescription drugs, then we are going to have to ask ourselves how are we going to provide the additional dollars that will be required for the Part A to be able to meet its current obligations of paying hospital costs and take on this new, nonactuarially balanced responsibility for prescription drugs. I believe this amendment being offered presents the opportunity to tell the American people we are serious about providing a prescription drug benefit and that we recognize the urgency of doing so. Today, prescription drug benefits for older Americans, which have traditionally been provided from other sources, are rapidly declining. There are four areas in which, traditionally, Medicare beneficiaries have received some prescription benefit. Medigap, which is the purchased insurance, is becoming so expensive that fewer than 5 percent of the Medicare beneficiaries today are purchasing it. Managed care has been dramatically reducing prescription drug benefits. In my State of Florida, it is common for there to be a $500 per year maximum of prescription drug benefits. Many elderly use that in less than 2 months. Retiree plans are becoming less prevalent and less generous, and Medicaid--my State of Florida is an example has restricted prescription drug benefits to just three medications. In every area, the places that the elderly have looked to in the past for benefits are declining. At the same time, the cost of drugs is rapidly increasing. The average yearly drug spending per Medicare enrollee today is $1,756. This is projected to increase to $4,412 by the year 2010. The time is urgent. We face this issue of the necessity of providing a meaningful prescription drug benefit for older Americans, and to do so through the Medicare program. What would be the outline of an appropriate plan? I think an appropriate plan would have the following characteristics: It would be voluntary in the same way the physician benefits which are currently provided through Part B of Medicare are voluntary. It would be comprehensive. It would be available to all Medicare beneficiaries. It would be adequate. Today, the physician component of Medicare is paid 75 percent by the Federal Government, 25 percent by monthly premiums. I propose for this prescription drug benefit it be an equal, a 50/50, division of responsibility between the Federal Government and the Medicare beneficiary. Projections have been that at that level of support we could anticipate substantial voluntary participation in this plan, sufficient participation to maintain its actuarial soundness and to avoid the cherry-picking or adverse selection of only those who were the most in need. This would be within Medicaid--hopefully, a reformed Medicare. It would use an insurance model. It would emphasize to people that this is not just a dollar-for-dollar exchange for products you know you will purchase. It also represents a transfer of the risks that you might become seriously ill and your prescription drug costs dramatically increase. We would provide for a deductible at the beginning of the process, but also very important, a stop loss, once you have expended $4,000. At that point, the Federal Government would pay the full cost of your prescription drugs. We believe this is an affordable plan. Last year, a plan with these characteristics was costed as $245 billion for a 10-year period. Today, it is estimated that the same plan will cost $311 billion for 10 years, which is some indication of how rapidly prescription drug costs, particularly those drugs that are most used by older Americans, have been increasing. The American people want and expect this Congress will provide a prescription drug benefit. They have a right to expect that benefit will not be a sham, that it will provide meaningful, comprehensive, adequate coverage for all seniors who elect to participate in this program. They have a right to expect it will not be done at the sacrifice of their current contractual expectations in terms of hospital benefits. Those hospital benefits have been paid for over the years in their payroll taxes. This is not the time to raid that fund to try to finance a prescription drug benefit. It should be done through a combination of general revenue Federal funds and the premiums paid monthly by the beneficiaries on an equally shared basis. That is what our amendment will finance. I urge my colleagues who are serious about telling their constituents they voted for a prescription drug benefit to vote for this amendment.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, in my 60 seconds let me say there are two areas of agreement. Apparently we have now agreed that it is going to take in the range of $300 billion over 10 years to have a credible prescription drug benefit. That is a significant advance. No. 2, frankly, there is no disagreement with the fact that we should strive to reform Medicare. We all start with exactly the same language, which is on page 49 of the amendment, which talks about the Finance Committee reporting reforms in Medicare. What we also heard in our most recent hearing on this subject is that the most anybody has ever suggested that reform could amount to would be approximately $50 billion in a $3 trillion Medicare program over the next 10 years. Let's not exaggerate what kind of savings we are going to get. Where we disagree is how we are going to finance this.

Mr. GRAHAM. Where we disagree is how we should finance this. What the Republicans are saying is we should do this by essentially using the Part A trust fund. That is the trust fund which people have paid in through their payroll tax and from which they have an expectation of receiving--to read from the Medicare benefits booklet--hospital stays, skilled nursing facilities, home health care, hospice care, and blood care--all the things which are financed out of the Part A trust fund. That is what is going to be raided as we try to now finance a major prescription drug benefit. We should stay with the proposal of the Senator from Montana to finance this responsibly by reducing by less than 10 percent the projected tax reduction.

Mr. GRAHAM

Mr. GRAHAM. For those who do want to make commitments, would it be possible to have a window of a couple of hours with assurance that we not vote within that window?

Mr. GRAHAM. That commitment is important above all.

Mr. GRAHAM. If the majority leader will yield.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, in 1971 when the Senate last visited this issue in earnest, it did so with every belief that the legislation that would be produced would end abuses of our Federal electoral system. It helped for a time until loopholes came to light and new abuses surfaced. In every series of actions on this issue, there have been unintended and unexpected consequences. I want to talk about one of those consequences, and that is the effect that the current Federal campaign finance law has had on American politics. It has converted American politics by requiring and facilitating a fundamental alteration in the conduct of campaigns. It takes candidates into the shadows--the closeted shadows--of an office dialing for big dollars and the flickering shadows of a television studio spending those big dollars on self-serving or, more frequently, attack ads disparaging the opponent. What is given up by going into the shadows? What is given up is the public's open participation in the critical purposes of a political campaign. Let me suggest three of those purposes. First, a purpose of a political campaign is mutual education. Both the voter and the candidate should conclude the campaign with a better understanding of each other. I cite as an example of that mutual education a former colleague and very close personal friend, Senator and then-Governor Lawton Chiles of my State of Florida. In 1970, he commenced a campaign for the U.S. Senate as the most distinct long shot in a large field of candidates. He had no money. He had almost no statewide name recognition. He had no organization. But what he did have was a powerful desire and an idea. His idea was that he was going to take 3 or 4 months in the middle of the campaign, not to dial for dollars or to make TV spots, but to get to know the people of Florida in a very intimate way. He did it by walking almost 1,000 miles from the northwest corner of the State to the Florida Keys. In the course of that walk, Lawton Chiles became a different human being. He had learned from the people of Florida, and then they responded to what he had done by electing him, and he in turn responded by 18 years of outstanding service in the Senate. That is eliminated as people rush to the shadows to both dial and then produce TV ads. A second purpose of a political campaign is to establish a contract between the candidate and the voters as to what is expected once elected. I suggest this contract is especially important in our form of government. We do not have a parliamentary government where, when the people believe that the party elected has drifted away from its commitment, they can overturn that government and install a new government. We are all elected for a fixed term, so it is important that as that term commences and in the process of the development of the relationship between citizen and candidate, there is a clear understanding of what that candidate is going to do if he or she is elected. That contract development is largely abrogated by the process of focusing the campaign exclusively on raising money in order to support 30-second television ads. Finally, a purpose of a political campaign is to test the aptitudes, the character of the candidate should he or she be elected. I believe one of the most telling statements of what kind of a person one would be in office is how they conduct themselves as a candidate. Do they make quality decisions in public, under pressure? Do they exercise self-discipline? The kind of people they surround themselves with in the campaign will be a telling commentary on the kind of people they are likely to surround themselves with in office. Again, what do we learn about the character and aptitude of a candidate if all we see is their own self-financed and self-produced TV ads? The public is telling us of its disgust with the move of the campaigns from the sunshine to the shadow. The American voters are shouting, particularly young voters. How are they shouting? They are shouting by their nonparticipation. Ever since the Constitution was amended to allow 18- year-olds to vote, the message of those 18-year-old voters has gone down at every Presidential election. If that is not telling us what the newest generation of American citizens has to say about the current process, we are deaf. The Hagel amendment would increase the torrent of money into politics. It would increase the time and effort spent on raising and spending money on television ads. It would accelerate the slide of public involvement and interaction in a political campaign. We need to reject this amendment and adopt the legislation offered by Senators McCain and Feingold.