Bob Graham

Mr. GRAHAM

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, today I have the distinct pleasure to introduce legislation that would redesignate the Old Federal Courthouse in Miami, FL, the ``David W. Dyer Federal Courthouse.'' Residing behind the bench for over 30 years, Judge Dyer distinguished himself as one of the finest jurists in the State of Florida, and his commitment to public service dates back to his service in the U.S. Army during World War II. In 1961, President John F. Kennedy appointed him to the District Court for the Southern District of Florida. At the time the Southern District included Tampa, Jacksonville, and Miami. The following year the district was pared down and he became the initial chief judge of the reconfigured Southern District. Judge Dyer would continue to serve in this capacity for the next 4 years. President Lyndon Johnson then appointed him to the U.S. Court of Appeals for the Fifth Circuit in 1966. This marked the first time that anyone from Miami had been honored with the opportunity to serve on the court of appeals. In 1977, Judge Dyer rose to the position of senior judge for the fifth circuit and carried this status over into the Eleventh Circuit Court of Appeals. During the turbulent 1960's, Judge Dyer participated in a number of civil rights cases. This period was an era when the Federal courts were called to implement the constitutional ideal of equal justice under the law for all Americans. It was a proud time in our legal history and Judge Dyer is part of that legacy. In one such case, he was responsible for the desegregation of the restaurants on the Florida Turnpike. Judge Dyer served his community in a variety of other capacities. He is a former member of the board of governors and executive committee of the Florida Bar, as well as the board of governors of the Maritime Law Association. He also served as president of the Dade County Bar, the largest in Florida. Judge Dyer has been an inspirational model for two generations of lawyers. He has shown through his example what integrity of character, sound judgment, and courage of conviction can achieve in implementing our highest ideals. Mr. President, Judge Dyer spent much of his life working out of the Old Federal Courthouse in Miami. Passage of this legislation to redesignate the building in Judge Dyer's name would be a small, but fitting token of appreciation that America and its judicial system owe Judge Dyer for his years of distinguished service. I urge my colleagues to support me in enacting this measure.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, today I have the distinct pleasure to introduce legislation that would redesignate the Old Federal Courthouse in Miami, FL, the ``David W. Dyer Federal Courthouse.'' Residing behind the bench for over 30 years, Judge Dyer distinguished himself as one of the finest jurists in the State of Florida, and his commitment to public service dates back to his service in the U.S. Army during World War II. In 1961, President John F. Kennedy appointed him to the District Court for the Southern District of Florida. At the time the Southern District included Tampa, Jacksonville, and Miami. The following year the district was pared down and he became the initial chief judge of the reconfigured Southern District. Judge Dyer would continue to serve in this capacity for the next 4 years. President Lyndon Johnson then appointed him to the U.S. Court of Appeals for the Fifth Circuit in 1966. This marked the first time that anyone from Miami had been honored with the opportunity to serve on the court of appeals. In 1977, Judge Dyer rose to the position of senior judge for the fifth circuit and carried this status over into the Eleventh Circuit Court of Appeals. During the turbulent 1960's, Judge Dyer participated in a number of civil rights cases. This period was an era when the Federal courts were called to implement the constitutional ideal of equal justice under the law for all Americans. It was a proud time in our legal history and Judge Dyer is part of that legacy. In one such case, he was responsible for the desegregation of the restaurants on the Florida Turnpike. Judge Dyer served his community in a variety of other capacities. He is a former member of the board of governors and executive committee of the Florida Bar, as well as the board of governors of the Maritime Law Association. He also served as president of the Dade County Bar, the largest in Florida. Judge Dyer has been an inspirational model for two generations of lawyers. He has shown through his example what integrity of character, sound judgment, and courage of conviction can achieve in implementing our highest ideals. Mr. President, Judge Dyer spent much of his life working out of the Old Federal Courthouse in Miami. Passage of this legislation to redesignate the building in Judge Dyer's name would be a small, but fitting token of appreciation that America and its judicial system owe Judge Dyer for his years of distinguished service. I urge my colleagues to support me in enacting this measure.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I ask unanimous consent that the privilege of the floor be extended to Jason Zotalis, an intern in my office, for the remainder of today's morning business.

Mr. GRAHAM. I thank the Chair. (The remarks of Mr. Graham pertaining to the introduction of legislation are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'') Mr. HOLLINGS addressed the Chair.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I wish to speak this afternoon about an initiative which has been designed to increase American's access to college education. Today, Senator McConnell and I, along with numerous cosponsors, are introducing the College Savings Act of 1997. This bill would clarify the tax treatment of State-sponsored prepaid college tuition and savings programs and would clarify them in a manner that will allow States flexibility to offer their citizens plans to pay for college on a tax-free basis. Why are we discussing these programs? We are discussing these State programs because they have flourished in the face of spiraling college costs. As shown on this chart, which was produced by the General Accounting Office, tuition at colleges and universities has increased 234 percent since 1980. During the same period, the general rate of inflation has increased only 85 percent and household income has increased only 82 percent. There has been a growing gap between the cost of higher education, in terms of tuition, and the ability of families to support their children's desire to continue their education beyond high school. Higher education inflation has been almost triple the rate of general inflation and the increase in Americans' ability to pay for that higher education. The causes of this dramatic increase in tuition is the subject of a significant debate. But whether these increases are attributable to increased costs of colleges and universities, reduction in State funding for public institutions, or the increased value of a college education, the fact remains that affording a college education has become increasingly difficult for American families. Although the Federal Government has increased its aid to college students over the years, it is the States that have engineered innovative ways to help citizens afford college. One of the most innovative of those measures has been the prepaid college tuition plan. The first of these plans was adopted in Michigan in 1986. Since that first program was adopted, today 15 States have such prepaid college plans, and an additional 4 States have adopted plans which will be in effect by 1998. The States shown in green are those which currently offer plans. The four States shown in yellow will initiate their plans this year. All of the remaining States shown in red are currently considering legislation to establish a prepaid college tuition plan. From these State laboratories, two types of programs have emerged: prepaid tuition programs and savings programs. Under either of these two, a family pays money into a State fund. In future years, the funds which have been accumulating will be distributed to the college or university of the child's choice and the child's ability to secure admission under the academic standards of that institution. The State pools the funds from all participants, invests those funds in a manner that will match or exceed the rate of higher education inflation. Under a prepaid tuition plan, the State and the individual family enter into an advanced tuition payment contract naming a student as the beneficiary of the contract. The amount the family must pay depends on the number of years remaining before the student enrolls in college. In most States, purchasers can choose a lump-sum payment or installment payments. Twelve States currently follow this tuition model. Let me explain with an example. Today, if a Florida child is 7 years old and his family enrolls him in the Florida prepaid tuition plan, they can enter into a contract and pay a lump sum of $5,900. Then in the year 2008, when the child reaches the age of 18 and enrolls in college, the State will transfer the cost of tuition for 120 credit hours of instruction which has a currently estimated value of $14,350 to the college or university the student chooses to attend. Under a State savings plan, individuals transfer money to a State trust which, in turn, invests the funds and guarantees a certain rate of return. Typically, the earnings on the account are exempt from State taxation. Three States follow the State savings fund model. One of the attributes of these programs is that just as States establish institutions of higher education to meet the educational needs of their States' citizens, each State program differs in its emphasis. As an example, the Alaska plan allows individuals to direct a portion of the State oil revenues to pay for their contracts. In Alabama, money can be used to take accredited college courses while a student is still attending high school. The Massachusetts plan allows nonresidents to enroll in its plan. Louisiana provides matching grants for certain low-income participants in its plan. The tax problem that lies before us today, Mr. President, is whether or not the student should be taxed when the student redeems the funds upon enrollment. Until 1996, the Federal tax treatment of these plans remained murky. In the spring of 1996, the Internal Revenue Service indicated its intent to tax families annually on the earnings of funds transferred to these State plans. I thought this was wrong, counterproductive and would discourage what has been a very positive commitment of American families to save for their children's college education. So I worked with Senators McConnell, Breaux, Shelby, and the leaders of the Senate Finance Committee to address the issue in the Small Business Job Protection Act of 1996. Provisions we developed were included in the bill that President Clinton ultimately signed into law. The four basic provisions in the 1996 reform were, first, any prepaid or savings entity established by the State is tax exempt. Two, the earnings on money transferred to these State programs are not taxed until distribution. Three, upon distribution, the appreciation on the contracts or accounts will be taxed to the student beneficiary over the time the student attends college. And fourth, these tax rules apply only to contracts and accounts used to fund the cost of tuition, fees, books, and required equipment. Mr. President, despite the fact I offered the proposal in the Finance Committee, I have always thought that the right answer was that participation in these programs should be 100 percent tax free. In other words, no taxation upon distribution unless the funds were used for purposes other than qualified educational purposes. The legislation that Senator McConnell and I are introducing today will amend section 529 of the Tax Code in two significant respects. First, the bill provides that if distributions from a State fund are used for qualified educational purposes, then there will be no taxation to the student. In other words, there would be no Federal income tax for participation in these State-sponsored programs. Second, the bill would expand the definition of qualified higher education expenses. Last year's legislation provided that tuition, books, fees and required equipment were tax exempt. Under the new proposal, we would also include the cost of room and board as qualified educational expenses. The bill also makes a number of technical and other changes to assure that States have sufficient flexibility to manage their successful programs. There are several policy-related questions in enacting this legislation, and I will turn to them in a minute. But before doing so, I would like to offer an example of the positive influence of these programs from my State of Florida. I would like, Mr. President, to introduce to you Sean and Patrick Gilliland who are in the gallery today. Sean and Patrick Gilliland are respectively a senior and junior at the University of Florida. In 1988, the first year the prepaid program was offered to Floridians, Mr. and Mrs. Gilliland purchased prepaid contracts for Sean and Patrick. Two years after purchasing the plan, Mr. Gilliland tragically died, unexpectedly leaving Mrs. Gilliland, Sean and Patrick with a single income. Mrs. Gilliland is a nurse. As a result of the change of income, she attests that without the foresight of having purchased a Florida prepaid college program for her two sons, she would not have been able to provide a college education for Sean and Patrick. Sean will graduate in 2 weeks from the University of Florida, majoring in business administration with an emphasis in Asian studies. Sean has applied for several overseas positions in Japan, Taiwan, and Korea, with hopes to enter the field of technology in the business world. Patrick is currently a junior at the University of Florida, the School of Health and Human Performance, majoring in exercise and sports science. He is a member of Golden Key National Honor Society. He also holds a dean's list grade point average. Patrick is looking forward to continuing his education in a graduate program to prepare him for a profession in cardiological rehabilitation. I wish to both of them the very best in their future endeavors. Sean and Patrick Gilliland exemplify the reasons that we need to encourage the expansion of these State-based prepaid college tuition programs. Let me outline several of the policy reasons why it is appropriate and urgent that Congress enact the legislation that we introduce today to clarify the Federal tax treatment of these programs. First, Congress needs to support State innovation. Here is an example of a national problem: how to deal with the escalating cost of higher education. The States have provided the energy to address that problem. During the late 1980's and early 1990's, with the Federal Government responding to spiraling college costs in an inadequate manner, States experimented and engineered these programs. The Federal Government should encourage the States by getting the Internal Revenue Service out of the way. Second, State plans increase college enrollment, especially among low- and moderate-income families. Experience demonstrates that the discipline and the security offered by these prepaid tuition plans provide the exact incentive that many families need to save for college. For example, in Florida, the median income of families with a college student is $50,000. This chart indicates, in ``Who goes to college in Florida,'' that 22 percent of the families who have children in our State college and university system have incomes of less than $30,000; 26 percent between $30,000 and $50,000. On the question, ``Who buys contracts for Florida's prepaid college tuition program,'' we find that 8 percent are purchased by families with incomes of under $20,000; 17 percent by families between $20,000 and $30,000; and 23 percent by families between $30,000 and $40,000; and 24 percent by families between $40,000 and $50,000. So almost three-quarters of those families who purchase contracts have an income which is at or below the median income of all students attending Florida's colleges and universities. This program is providing a powerful incentive for moderate- and low- income Florida families to think about and prepare for their children's education. Third, State plans help prepare students psychologically. A family that regularly sets aside money for a child's college education converts the focus of their student child from, ``Will I be able to go to college,'' to ``Will I be sufficiently prepared to be admitted to college and which college do I wish to attend?'' Fourth, savings is a far superior approach to financing higher education than incurring additional individual and family debt. A prepayment or a savings plan is better economically, both for the family and for the Nation. These programs can also boost the Nation's savings rate. For example, Virginia's program has just completed its inaugural enrollment. It signed contracts of over $200 million for Virginia families saving for their children's college education. Finally, an expansion of programs will promote downward pressure on tuition rates. Increased participation in State tuition programs not only will provide participants with a guaranteed hedge against education inflation, but it will also produce downward pressure on tuition rates for all students at all colleges. States sponsoring these programs, in essence, guarantee that if earnings on the funds do not exceed increases in tuition rates, then the State will fund the difference when the student enrolls in college. Thus, a State has an incentive to encourage cost efficiency throughout its State system. The pressure will also promote moderate tuition hikes at private schools which must compete with public colleges for students. This has been true in Florida. Since the inauguration of the Florida prepaid program in 1988, State tuition has risen by an average of 6 percent per year. That is 2 percent less than the national average of 8 percent a year. You may say, Mr. President, that, well, 2 percent difference between a particular State's average annual rate of increase in tuition and what is the national average is not a significant amount. Let me put this in dollar terms. In 1988, the average tuition in the Nation was $1,827. In Florida, it was $1,163. That is a difference of $664. By last year, with the average annual increase of 8 percent, the national average for tuition at State universities had grown from $1,827 to $3,358. Florida's tuition increasing at 6 percent per year had gone from $1,163 to $1,888. That, Mr. President, is a difference of $1,470 per year between the cost of college education in Florida and the average for the Nation. I am not saying that Florida's tuition increases have been less than the national average solely because of the Florida prepaid program, but it has been a significant factor. We need to do everything we can to hold college costs in check. The expansion of these programs can make a noticeable contribution in that effort. And clarifying the tax consequences of participation will help to facilitate additional States beyond the current 19 who have or will have these programs and increase the number of participating families. Mr. President, I would like to particularly thank Senator McConnell for the leadership which he has displayed in making the College Savings Act of 1997 a reality. With enactment of this legislation, parents and children will be able to rest easier knowing that Congress has done the right thing by making a college education more accessible. I urge my colleagues in the Senate to join Senator McConnell and me to assure enactment of this important new opportunity for American families to save and plan for the college education of their children.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I wish to speak this afternoon about an initiative which has been designed to increase American's access to college education. Today, Senator McConnell and I, along with numerous cosponsors, are introducing the College Savings Act of 1997. This bill would clarify the tax treatment of State-sponsored prepaid college tuition and savings programs and would clarify them in a manner that will allow States flexibility to offer their citizens plans to pay for college on a tax-free basis. Why are we discussing these programs? We are discussing these State programs because they have flourished in the face of spiraling college costs. As shown on this chart, which was produced by the General Accounting Office, tuition at colleges and universities has increased 234 percent since 1980. During the same period, the general rate of inflation has increased only 85 percent and household income has increased only 82 percent. There has been a growing gap between the cost of higher education, in terms of tuition, and the ability of families to support their children's desire to continue their education beyond high school. Higher education inflation has been almost triple the rate of general inflation and the increase in Americans' ability to pay for that higher education. The causes of this dramatic increase in tuition is the subject of a significant debate. But whether these increases are attributable to increased costs of colleges and universities, reduction in State funding for public institutions, or the increased value of a college education, the fact remains that affording a college education has become increasingly difficult for American families. Although the Federal Government has increased its aid to college students over the years, it is the States that have engineered innovative ways to help citizens afford college. One of the most innovative of those measures has been the prepaid college tuition plan. The first of these plans was adopted in Michigan in 1986. Since that first program was adopted, today 15 States have such prepaid college plans, and an additional 4 States have adopted plans which will be in effect by 1998. The States shown in green are those which currently offer plans. The four States shown in yellow will initiate their plans this year. All of the remaining States shown in red are currently considering legislation to establish a prepaid college tuition plan. From these State laboratories, two types of programs have emerged: prepaid tuition programs and savings programs. Under either of these two, a family pays money into a State fund. In future years, the funds which have been accumulating will be distributed to the college or university of the child's choice and the child's ability to secure admission under the academic standards of that institution. The State pools the funds from all participants, invests those funds in a manner that will match or exceed the rate of higher education inflation. Under a prepaid tuition plan, the State and the individual family enter into an advanced tuition payment contract naming a student as the beneficiary of the contract. The amount the family must pay depends on the number of years remaining before the student enrolls in college. In most States, purchasers can choose a lump-sum payment or installment payments. Twelve States currently follow this tuition model. Let me explain with an example. Today, if a Florida child is 7 years old and his family enrolls him in the Florida prepaid tuition plan, they can enter into a contract and pay a lump sum of $5,900. Then in the year 2008, when the child reaches the age of 18 and enrolls in college, the State will transfer the cost of tuition for 120 credit hours of instruction which has a currently estimated value of $14,350 to the college or university the student chooses to attend. Under a State savings plan, individuals transfer money to a State trust which, in turn, invests the funds and guarantees a certain rate of return. Typically, the earnings on the account are exempt from State taxation. Three States follow the State savings fund model. One of the attributes of these programs is that just as States establish institutions of higher education to meet the educational needs of their States' citizens, each State program differs in its emphasis. As an example, the Alaska plan allows individuals to direct a portion of the State oil revenues to pay for their contracts. In Alabama, money can be used to take accredited college courses while a student is still attending high school. The Massachusetts plan allows nonresidents to enroll in its plan. Louisiana provides matching grants for certain low-income participants in its plan. The tax problem that lies before us today, Mr. President, is whether or not the student should be taxed when the student redeems the funds upon enrollment. Until 1996, the Federal tax treatment of these plans remained murky. In the spring of 1996, the Internal Revenue Service indicated its intent to tax families annually on the earnings of funds transferred to these State plans. I thought this was wrong, counterproductive and would discourage what has been a very positive commitment of American families to save for their children's college education. So I worked with Senators McConnell, Breaux, Shelby, and the leaders of the Senate Finance Committee to address the issue in the Small Business Job Protection Act of 1996. Provisions we developed were included in the bill that President Clinton ultimately signed into law. The four basic provisions in the 1996 reform were, first, any prepaid or savings entity established by the State is tax exempt. Two, the earnings on money transferred to these State programs are not taxed until distribution. Three, upon distribution, the appreciation on the contracts or accounts will be taxed to the student beneficiary over the time the student attends college. And fourth, these tax rules apply only to contracts and accounts used to fund the cost of tuition, fees, books, and required equipment. Mr. President, despite the fact I offered the proposal in the Finance Committee, I have always thought that the right answer was that participation in these programs should be 100 percent tax free. In other words, no taxation upon distribution unless the funds were used for purposes other than qualified educational purposes. The legislation that Senator McConnell and I are introducing today will amend section 529 of the Tax Code in two significant respects. First, the bill provides that if distributions from a State fund are used for qualified educational purposes, then there will be no taxation to the student. In other words, there would be no Federal income tax for participation in these State-sponsored programs. Second, the bill would expand the definition of qualified higher education expenses. Last year's legislation provided that tuition, books, fees and required equipment were tax exempt. Under the new proposal, we would also include the cost of room and board as qualified educational expenses. The bill also makes a number of technical and other changes to assure that States have sufficient flexibility to manage their successful programs. There are several policy-related questions in enacting this legislation, and I will turn to them in a minute. But before doing so, I would like to offer an example of the positive influence of these programs from my State of Florida. I would like, Mr. President, to introduce to you Sean and Patrick Gilliland who are in the gallery today. Sean and Patrick Gilliland are respectively a senior and junior at the University of Florida. In 1988, the first year the prepaid program was offered to Floridians, Mr. and Mrs. Gilliland purchased prepaid contracts for Sean and Patrick. Two years after purchasing the plan, Mr. Gilliland tragically died, unexpectedly leaving Mrs. Gilliland, Sean and Patrick with a single income. Mrs. Gilliland is a nurse. As a result of the change of income, she attests that without the foresight of having purchased a Florida prepaid college program for her two sons, she would not have been able to provide a college education for Sean and Patrick. Sean will graduate in 2 weeks from the University of Florida, majoring in business administration with an emphasis in Asian studies. Sean has applied for several overseas positions in Japan, Taiwan, and Korea, with hopes to enter the field of technology in the business world. Patrick is currently a junior at the University of Florida, the School of Health and Human Performance, majoring in exercise and sports science. He is a member of Golden Key National Honor Society. He also holds a dean's list grade point average. Patrick is looking forward to continuing his education in a graduate program to prepare him for a profession in cardiological rehabilitation. I wish to both of them the very best in their future endeavors. Sean and Patrick Gilliland exemplify the reasons that we need to encourage the expansion of these State-based prepaid college tuition programs. Let me outline several of the policy reasons why it is appropriate and urgent that Congress enact the legislation that we introduce today to clarify the Federal tax treatment of these programs. First, Congress needs to support State innovation. Here is an example of a national problem: how to deal with the escalating cost of higher education. The States have provided the energy to address that problem. During the late 1980's and early 1990's, with the Federal Government responding to spiraling college costs in an inadequate manner, States experimented and engineered these programs. The Federal Government should encourage the States by getting the Internal Revenue Service out of the way. Second, State plans increase college enrollment, especially among low- and moderate-income families. Experience demonstrates that the discipline and the security offered by these prepaid tuition plans provide the exact incentive that many families need to save for college. For example, in Florida, the median income of families with a college student is $50,000. This chart indicates, in ``Who goes to college in Florida,'' that 22 percent of the families who have children in our State college and university system have incomes of less than $30,000; 26 percent between $30,000 and $50,000. On the question, ``Who buys contracts for Florida's prepaid college tuition program,'' we find that 8 percent are purchased by families with incomes of under $20,000; 17 percent by families between $20,000 and $30,000; and 23 percent by families between $30,000 and $40,000; and 24 percent by families between $40,000 and $50,000. So almost three-quarters of those families who purchase contracts have an income which is at or below the median income of all students attending Florida's colleges and universities. This program is providing a powerful incentive for moderate- and low- income Florida families to think about and prepare for their children's education. Third, State plans help prepare students psychologically. A family that regularly sets aside money for a child's college education converts the focus of their student child from, ``Will I be able to go to college,'' to ``Will I be sufficiently prepared to be admitted to college and which college do I wish to attend?'' Fourth, savings is a far superior approach to financing higher education than incurring additional individual and family debt. A prepayment or a savings plan is better economically, both for the family and for the Nation. These programs can also boost the Nation's savings rate. For example, Virginia's program has just completed its inaugural enrollment. It signed contracts of over $200 million for Virginia families saving for their children's college education. Finally, an expansion of programs will promote downward pressure on tuition rates. Increased participation in State tuition programs not only will provide participants with a guaranteed hedge against education inflation, but it will also produce downward pressure on tuition rates for all students at all colleges. States sponsoring these programs, in essence, guarantee that if earnings on the funds do not exceed increases in tuition rates, then the State will fund the difference when the student enrolls in college. Thus, a State has an incentive to encourage cost efficiency throughout its State system. The pressure will also promote moderate tuition hikes at private schools which must compete with public colleges for students. This has been true in Florida. Since the inauguration of the Florida prepaid program in 1988, State tuition has risen by an average of 6 percent per year. That is 2 percent less than the national average of 8 percent a year. You may say, Mr. President, that, well, 2 percent difference between a particular State's average annual rate of increase in tuition and what is the national average is not a significant amount. Let me put this in dollar terms. In 1988, the average tuition in the Nation was $1,827. In Florida, it was $1,163. That is a difference of $664. By last year, with the average annual increase of 8 percent, the national average for tuition at State universities had grown from $1,827 to $3,358. Florida's tuition increasing at 6 percent per year had gone from $1,163 to $1,888. That, Mr. President, is a difference of $1,470 per year between the cost of college education in Florida and the average for the Nation. I am not saying that Florida's tuition increases have been less than the national average solely because of the Florida prepaid program, but it has been a significant factor. We need to do everything we can to hold college costs in check. The expansion of these programs can make a noticeable contribution in that effort. And clarifying the tax consequences of participation will help to facilitate additional States beyond the current 19 who have or will have these programs and increase the number of participating families. Mr. President, I would like to particularly thank Senator McConnell for the leadership which he has displayed in making the College Savings Act of 1997 a reality. With enactment of this legislation, parents and children will be able to rest easier knowing that Congress has done the right thing by making a college education more accessible. I urge my colleagues in the Senate to join Senator McConnell and me to assure enactment of this important new opportunity for American families to save and plan for the college education of their children.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I rise today in support of the nomination of my good friend Pete Peterson, and I urge his swift confirmation as our Ambassador to Vietnam. There is no better person for this job. Just over 3 years ago I joined the majority of my Senate colleagues in encouraging President Clinton to lift the trade embargo against Vietnam. I did do because I was convinced that it would strengthen and expand joint United States-Vietnamese efforts to determine the fate of those POW's-MIA's still unaccounted for in Vietnam. I was less certain about the establishment of full diplomatic relations with Vietnam. I feared that such a step would remove an important incentive to completing our efforts to determine the fate of every POW-MIA. But people like Pete Peterson and John McCain convinced me that reestablishing diplomatic relations was the best way to achieve our objectives in Vietnam--a full accounting of all POW's-MIA's; the implementation of democratic reforms and economic modernization; and respect of basic human rights and fundamental freedoms. There is no person more qualified to achieve these noble objectives than Pete Peterson. After spending 6\1/2\ years as a prisoner of war in Vietnam--and having left so many of his friends behind--we all can take comfort in knowing that Pete will not rest until every single American POW and MIA is fully and honestly accounted for. This fact was recognized by the Veterans of Foreign Wars, who last year endorsed Pete's nomination. Pete's qualifications as an advocate for economic freedom and U.S. business are also quite remarkable. He has served as a member of the House Small Business Committee, fighting for average Americans who are seeking the American dream by building their own businesses. Pete has demonstrated that he will be a fantastic advocate for American business in Vietnam. Pete's experience as a prisoner of war gives him unique qualifications to speak frankly and honestly about human rights. As someone who lost every human right, every freedom, and nearly his life in Vietnamese prisons, Pete can speak from the heart on the importance of these basic human values in a way that few of us can. And I know that he will do a superb job. And who could be more qualified to heal the wounds of the war, and to build bridges between the peoples of our two nations. Pete has often said that he ``left the bitterness at the gate'' when he left his prison in Vietnam. His leadership is a major reason that the United States and Vietnam are poised to begin a new era of friendly relations. I have had the honor of working with Pete for the past 6 years. Pete represents everything that is great about our country. He is selfless-- having served bravely in the Air Force, flying 67 combat missions over Vietnam, and 6\1/2\ years as a POW--Pete came home and went to work to make our country a better place. He has faced personal tragedy--losing his wife Carlotta to cancer--and moved on to make good come out of his suffering. And after 26 years in the U.S. Air Force, Pete felt compelled to continue a life of public service. Now having served for 6 years in the House of Representatives, Pete will return to Vietnam under very different circumstances than those under which he left. But he will continue his lifelong commitment to the American people, and I am honored to speak on behalf of this great American. There is another quality that Pete possesses that I think will serve him well in his position as our Ambassador to Vietnam. That quality is patience. Pete has waited patiently for over a year for his nomination to come to the floor of the Senate. I am very pleased that Pete's long wait is about to come to an end, and I urge my colleagues to join me in voting to confirm Pete Peterson as the United States Ambassador to Vietnam.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I rise today as a proud cosponsor of the Drug Free Communities Act. The objective of this bill is to protect our greatest national resource--our children--from the deadly scourge of drug abuse. And it protects them in a way that has been proven through the centuries--by strengthening communities. This bill gives local communities the support they need to keep drugs away from their young people. And it allows them to use it in a way that has proven to be effective in their community, and not as some Washington bureaucrat dictates. Unfortunately, recent studies of drug use in America demonstrate the need for a program such as this. The statistics on substance abuse among our Nation's children are particularly disturbing: According to the University of Michigan's 1996 study ``Monitoring the Future,'' half of all high school students have tried some type of illicit drug by the time they graduate. Drug use among eighth graders has risen 150 percent in the last 5 years. Overall, drug use for children between the ages of 12 and 17 has increased more than 100 percent, from 5.3 percent in 1992 to 10.9 percent in 1995. The drug most often used by these children continues to be marijuana. More children are smoking marijuana and they are starting to do so at a younger age. According to the ``Monitoring the Future'' study, almost 25 percent of high school seniors had used marijuana during the previous month. Between 1994 and 1995, the rate of use among 12- to 17- year-olds increased 37 percent, from 6 percent to over 8 percent. And the use of marijuana often leads to the use of stronger and more dangerous drugs. A study completed by Columbia University's Center on Addiction and Substance Abuse found that children who smoke marijuana are 85 times more likely to try cocaine than children who have never tried marijuana. The use of cocaine and heroin among our children is also on the increase. Among high school seniors in 1996, over 7 percent had tried cocaine at some time. And the number of younger children experimenting with these drugs is alarming. During the last 5 years, heroin use among 8th to 12th graders and the number of 8th graders who had tried cocaine had doubled. So what can we do to help our youth reject the temptation to use drugs? We can help families to convince kids that they must never even try illegal drugs. That is why I am proud to be a cosponsor of the Drug-Free Communities Act of 1997, which we are here to introduce today. This bill will help communities reduce drug use among youth by providing matching grants of up to $100,000 to community coalitions for the establishment of programs designed to prevent and treat substance abuse in young people. These grants will be used to provide support to local communities who have proven their long-term commitment to reducing drug use among youth. It includes provisions for an advisory commission of substance abuse experts to oversee the program, to ensure that grants go only to those programs that have demonstrated success in keeping our children and grandchildren off drugs. There are several reasons why every Member of Congress should support this bill: This program helps local communities in a way that is consistent with the 1997 strategy of the Office of National Drug Control Policy. The No. 1 goal of the strategy is to encourage America's youth to reject illegal drugs by assisting community coalitions to develop programs that will accomplish this goal. The grants provided for in the Drug Free Communities Act will establish a partnership between the Federal Government and local communities. There are safeguards to prevent abuse of the program. Only established groups that can provide matching funds will be eligible to receive funding. This ensures that only programs that have a proven track record of success in fighting drug abuse among our young people will receive funding. I urge my colleagues to join me in supporting this important bill. Our children's future depends on keeping them free of drugs, and this legislation will help those groups who can make a difference in the lives of our youth. There is no greater service that we can provide to our country than to keep our children drug-free.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I rise today as a proud cosponsor of the Drug Free Communities Act. The objective of this bill is to protect our greatest national resource--our children--from the deadly scourge of drug abuse. And it protects them in a way that has been proven through the centuries--by strengthening communities. This bill gives local communities the support they need to keep drugs away from their young people. And it allows them to use it in a way that has proven to be effective in their community, and not as some Washington bureaucrat dictates. Unfortunately, recent studies of drug use in America demonstrate the need for a program such as this. The statistics on substance abuse among our Nation's children are particularly disturbing: According to the University of Michigan's 1996 study ``Monitoring the Future,'' half of all high school students have tried some type of illicit drug by the time they graduate. Drug use among eighth graders has risen 150 percent in the last 5 years. Overall, drug use for children between the ages of 12 and 17 has increased more than 100 percent, from 5.3 percent in 1992 to 10.9 percent in 1995. The drug most often used by these children continues to be marijuana. More children are smoking marijuana and they are starting to do so at a younger age. According to the ``Monitoring the Future'' study, almost 25 percent of high school seniors had used marijuana during the previous month. Between 1994 and 1995, the rate of use among 12- to 17- year-olds increased 37 percent, from 6 percent to over 8 percent. And the use of marijuana often leads to the use of stronger and more dangerous drugs. A study completed by Columbia University's Center on Addiction and Substance Abuse found that children who smoke marijuana are 85 times more likely to try cocaine than children who have never tried marijuana. The use of cocaine and heroin among our children is also on the increase. Among high school seniors in 1996, over 7 percent had tried cocaine at some time. And the number of younger children experimenting with these drugs is alarming. During the last 5 years, heroin use among 8th to 12th graders and the number of 8th graders who had tried cocaine had doubled. So what can we do to help our youth reject the temptation to use drugs? We can help families to convince kids that they must never even try illegal drugs. That is why I am proud to be a cosponsor of the Drug-Free Communities Act of 1997, which we are here to introduce today. This bill will help communities reduce drug use among youth by providing matching grants of up to $100,000 to community coalitions for the establishment of programs designed to prevent and treat substance abuse in young people. These grants will be used to provide support to local communities who have proven their long-term commitment to reducing drug use among youth. It includes provisions for an advisory commission of substance abuse experts to oversee the program, to ensure that grants go only to those programs that have demonstrated success in keeping our children and grandchildren off drugs. There are several reasons why every Member of Congress should support this bill: This program helps local communities in a way that is consistent with the 1997 strategy of the Office of National Drug Control Policy. The No. 1 goal of the strategy is to encourage America's youth to reject illegal drugs by assisting community coalitions to develop programs that will accomplish this goal. The grants provided for in the Drug Free Communities Act will establish a partnership between the Federal Government and local communities. There are safeguards to prevent abuse of the program. Only established groups that can provide matching funds will be eligible to receive funding. This ensures that only programs that have a proven track record of success in fighting drug abuse among our young people will receive funding. I urge my colleagues to join me in supporting this important bill. Our children's future depends on keeping them free of drugs, and this legislation will help those groups who can make a difference in the lives of our youth. There is no greater service that we can provide to our country than to keep our children drug-free.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, today I join my colleague Senator Chafee in support of the Historic Homeownership Assistance Act. This bill would spur growth and preservation of historic neighborhoods across the country by providing a limited tax credit for qualified rehabilitation expenditures to historic homes. An understanding of the history of the United States serves as one of the cornerstones supporting this great nation. We find American history reflected not only in books, films, and stories, but also in physical structures, including schools, churches, county courthouses, mills, factories, and personal residences. The bill that Senator Chafee and I are cosponsoring focuses on the preservation of historic residences. The bill will assist Americans who want to safeguard, maintain, and reside in these homes which chronicle America's past. The Historic Homeownership Assistance Act will stimulate rehabilitation of historic homes while contributing to the revitalization of urban communities. The Federal tax credit provided in the legislation is modeled after the existing Federal commercial historic rehabilitation tax credit. Since 1981, this commercial tax credit has facilitated the preservation of many historic structures across this great land. For example in the last two decades, in my home State of Florida, $238 million in private capital was invested in over 325 historic rehabilitation projects. These investments helped preserve Ybor City in Tampa and the Springfield Historic District in Jacksonville. The tax credit, however, has never applied to personal residences. It is time to provide an incentive to individuals to restore and preserve homes in America's historic communities. The Historic Homeownership Assistance Act targets Americans at all economic levels. The bill provides lower income Americans with the option to elect a Mortgage Credit Certificate in lieu of the tax credit. This certificate allows Americans who cannot take advantage of the tax credit to reduce the interest rate on their mortgage that secures the purchase and rehabilitation of a historic home. For example, if a lower-income family were to purchase a $35,000 home which included $25,000 worth of qualified rehabilitation expenditures, it would be entitled to a $5,000 Historic Rehabilitation Mortgage Credit Certificate which could be used to reduce interest payments on the mortgage. This provision would enable families to obtain a home and preserve historic neighborhoods when they would be unable to do so otherwise. Mr. President, the time has come for Congress to get serious about urban renewal. For too long, we have sat on the sidelines watching idly as our citizens slowly abandoned entire homes and neighborhoods in urban settings, leaving cities like Miami in Florida and others around the nation in financial jeopardy. For example, according to U.S. Census data, in the decade from 1980 to 1990, Chicago lost 41,000 housing units, Philadelphia 10,000, and St. Louis 7,000. The erosion of a sense of community and culture once shared by our urban neighborhoods and towns further magnifies the loss. By addressing years of neglect and a general decline in investment in our older neighborhoods, this bill will empower families and individuals with the financial incentives needed to revitalize historic housing in our urban communities. Recognizing that the States can best administer laws affecting unique communities, the act gives power to the Secretary of the Interior to work with states to implement a number of the provisions. The Historic Homeownership Assistance Act does not, however, reflect an untried proposal. In addition to the existing commercial historic rehabilitation credit, the proposed bill incorporates features from several state tax incentives for the preservation of historic homes. Colorado, Maryland, New Mexico, Rhode Island, Wisconsin, and Utah have pioneered their own successful versions of a historic preservation tax incentive for homeownership. At the Federal level, this legislation would promote historic home preservation nationwide, allowing future generations of Americans to visit and reside in homes that tell the unique history of our communities. The Historic Homeownership Assistance Act will offer enormous potential for saving historic homes and bringing entire neighborhoods back to life. I urge my colleagues to support this bill for the preservation of history.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I rise today with my distinguished colleague and fellow Florida Gator, Senator Connie Mack, to congratulate this year's national champions and one of the top football programs in the history of the Southeastern Conference, the University of Florida Gators. The Gators clinched their first national championship in football on January 2, 1997 when they defeated the Florida State University Seminoles in the Louisiana Superdome in New Orleans. This year's triumph is indeed special and came on the heels of a perfect nine win season in the Southeastern Conference, which is, as my colleagues know, one of the toughest leagues in college football. The Gators defeated the Florida State football team by a score of 52- 20 in the Sugar Bowl on January 2nd. It was truly an impressive and memorable display of leadership, dedication and teamwork by a college football team. This historic victory by the Gators not only brought with it the team's first national championship, but the Gators also set an unprecedented number of bowl records including the largest margin of victory against a No. 1 ranked team and the most points scored in a Sugar Bowl game. I would also like to commend Florida State's Head Coach, Bobby Bowden and his fine team of football players for their magnificent season and for earning the right to play in the national championship. Although Florida State didn't win the game on January 2nd, they had a great season and they and their fans should be proud of their accomplishments. The Gators managed to play its full complement of players during the season and devastated their opponents by averaging: 46.6 points per game, 333.9 yards passing per game and 503.9 yards total offense per game. Among their numerous record breaking achievements on the football field, the Gators' players also managed to bring home the Heisman Trophy, the Maxwell Award, the Unitas Award, the Davey O'Brien Award and the Thorpe Award to name just a few. Under the extraordinary tutelage and superior leadership of Head Coach Steve Spurrier, the University of Florida football program rose above all others on the field in 1996. Prior to his arrival in 1990, no Florida Gator football team had captured an official Southeastern Conference championship in 56 years even though the university was a charter member of the league. That trend changed in 1990, and Coach Spurrier's Gators have won at least nine games in each season since his arrival. The 1996 Florida Gators have the distinct honor of winning an unprecedented fourth consecutive Southeastern Conference championship and their fifth since Coach Spurrier's arrival. Over the past seven seasons, Coach Spurrier and his talented staff of assistants have posted a remarkable record of 73 wins on the football field, and in the always tough, Southeastern Conference, the Gators have achieved a remarkable record of 53 wins. During his tenure, the Gators have lost exactly two games at Ben Hill Griffin Stadium, an 80,000 seat fortress that Spurrier has dubbed ``the swamp.'' It is clear that the University of Florida Gators have been winners on the football field, but their winning doesn't stop there. Academically, the Gators have excelled equally as well. They have achieved a tremendous graduation rate for an NCAA Division I football program, and 16 members of this year's team were named to the Southeastern Conference's Academic Honor Roll. In addition to their awards for athletic achievement, Lawrence Wright and Danny Wuerffel both received Scholar-Athlete Awards from the College Football Association. Their achievements don't stop on the football field, however. The Gators have also been major contributors to the greater Gainesville community where they volunteer countless hours in support of worthy causes like a literacy program, an international youth education program and support students with disabilities. As a Gator and a graduate of the University of Florida, I am extremely proud of the 1996 Florida Gators and Head Coach Steve Spurrier for their outstanding achievements both on and off of the football field.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I join my friend and colleague from Arizona, Senator Kyl, in cosponsoring the Internet Gambling Prohibition Act introduced today, which is intended to address a growing problem in the United States as our technology continues to modernize our modes of communication. This legislation is an attempt to take a step forward in meeting the needs of State law enforcement organizations and officials. With the development of the Internet World Wide Web, the ability of Americans to access information for their personal and professional use has taken a quantum leap. It is safe to say that the Internet is one of the more important technological advances of the late 20th century with respect to the influence that the technology can have on the lives of so many Americans. The number of American Internet users has grown from 1 million in 1992 to over 50 million today. This number is expected to grow to several hundred million users by the year 2000. As we bring Internet technology into our schools, we will see greater use of the Internet particularly among our youth, many who are already adept at using their home computers and surfing the Internet for educational and recreational purposes. With this convenience and easy access to a variety of information sources, many of which are of great educational, cultural and professional value, come certain expected problems. The one that I want to speak to briefly is that of the increasing use of the Internet for the purposes of gambling. The National Association of Attorney Generals has recently studied the problem of Internet gambling. In a 1996 report, ``Gambling on the Internet,'' the Association cited the following: The availability of gambling on the Internet * * * threatens to disrupt each State's careful balancing of its own public welfare and fiscal concerns, by making gambling available across State and national boundaries, with little or no regulatory control. There are literally hundreds of gambling-related sites on the Internet. Dozens more are being added monthly. Let me make several key distinctions that must be understood with respect to this legislation. First, it is important to note that the number of actual online gambling operations are few at this time due to electronic commerce and technical limitations. Advancements in technology, however, make such shortcomings temporary. Only 6 months ago, there were only 17 active Internet gambling sites on the World Wide Web. Today, there are over 200. And, today, there are hundreds of advertisements for gambling as well as informational how-to sites on the Internet. In short, the Internet's ability to serve as an information conduit for the gambling industry has been recognized. Second, States have historically been the primary regulator of gambling activities. However, the widespread use of the Internet and its potential to serve as a conduit of gambling activities across national and State borders, serves to undermine States' regulatory control. Our legislation is not intended to disrupt this prerogative, but rather to assist States' ability to enforce its own gambling laws. Finally, the legislation would not hold Internet access providers-- such as America Online--liable for gambling activities that occur on the Internet. However, the Internet access providers are required, once notified by a State or law enforcement agency of the illegal activity, to discontinue Internet services to the malfeasor. Mr. President, there is growing awareness of the importance of this issue in my State of Florida. The attorney general of the State of Florida wrote me on February 17, 1997, urging strong support of this legislation. I am committed to providing strong support in the Congress for Florida law enforcement concerns. It is timely and necessary for the Congress to assist States on this growing problem which undermines States' jurisdiction and control. We should support the efforts of our State and local law enforcement officials so that they can prevent the growth of activities which are illegal in that State. I thank my colleague from Arizona for his work in drafting this important legislation. I look forward to working with him this year in support of passage of this bill. Mr. President, I ask my colleagues in the Senate to join us in supporting this measure.

Mr. GRAHAM. Mr. President, I rise today to introduce the Puerto Rico Self Determination Act of 1997. I am proud to cosponsor this important legislation with Senator Larry Craig and a bipartisan coalition of eight other distinguished colleagues. Mr. President, on December 10, 1898, through the Treaty of Paris that ended the Spanish-American War, Puerto Rico became part of the United States. Next year marks the 100th anniversary of this union. Mr. President, there is no better way for us to commemorate this special occasion than to give the U.S. citizens of Puerto Rico the same right that their counterparts in all 50 States and the District of Columbia enjoy--the right to choose their political destiny. In 1917, the Jones Act gave the people of Puerto Rico U.S. citizenship, but it was less than complete. Though they are citizens, Puerto Ricans can only vote in Presidential elections if they are registered in a State or the District of Columbia. They have a delegate in Congress--a position currently held by Congressman Carlos Romero- Barcelo--who does not have voting privileges. But this lack of political rights is not due to a lack of communication. Throughout their history as part of the United States, Puerto Ricans have expressed their desire to achieve full political rights. They have on various occasions let Congress know of their desire to be full participants in our democracy. And their actions speak even louder than their words. Puerto Ricans have contributed in all aspects of American life,--in the arts, in sciences, in sports, and especially in service to the Nation. Their record of service to this country speaks for itself. In World War II alone, more than 65,000 Puerto Rican men and women served in the Armed Forces. In Vietnam, over 60,000 served. The first United States soldier killed in Somalia was Puerto Rican. One of the airmen shot down over Libya in 1986 was Puerto Rican. And it was a soldier from Puerto Rico who sounded the alarm--and saved lives--in the 1983 bombing of the Marine barracks in Beirut. I recently received a letter from retired U.S. Army Lt. Col. Dennis Freytes, a Puerto Rican who resides in Orlando. He states in his letter: As an American Puerto Rican, who has proudly served our country, I think that Puerto Rico's political status should be promptly resolved, so we don't have second class citizens in our democratic form of government. Puerto Ricans voluntarily joined our Armed Forces and have given their lives in defense of our country and democratic way of life. I emphasize ``our'' because U.S. citizens must have the same rights no matter where they were born or where they choose to live. In 1996 and 1997, the Legislature of Puerto Rico, the democratically elected representatives of 3.7 million U.S. citizens, overwhelmingly approved resolutions requesting that the Congress and the President of the United States respond to their legitimate democratic aspirations. They requested that a plebiscite be held not later than December 31, 1998, almost exactly 100 years after Puerto Rico gained territorial status. There have been similar referendums in the past, but those were locally mandated--Congress gave no direction as to how, if at all, the results might affect Puerto Rico's political status. It is time for the people of Puerto Rico to have a referendum process which defines the choices in a manner which are constitutionally valid, and that Congress is willing to uphold. Mr. President, I want to particularly stress this latter point. Congress needs to understand that if it passes this bill--and I share the hope of my friend and colleague, Senator Craig that we will and that we will do so expeditiously--it is assuming an important political, and moral obligation to the American citizens of Puerto Rico. This is not a bill without significant consequences. If Puerto Ricans ask to remain a Commonwealth, we need to respect their wishes. If they want to become a State, we must begin the process of incorporation. And if they desire independence, we must take steps to meet that request. To do otherwise would be to seriously undermine our credibility with the 3.7 million citizens of Puerto Rico and the nearly 300 million residents of Latin America. Mr. President, for the last 100 years, the United States had given Puerto Ricans status as citizens but withheld some of the rights, privileges, and responsibilities that come with that privilege. It is time for that to end. Puerto Ricans do not deserve second-class political status. For all that they have done to enrich our culture and defend our Nation from external threats, they have earned the right to decide their own political destiny. Mr. President, since the early 1900's, self-determination has been a cornerstone principle of our Nation's foreign policy. As we approach the century mark of the union between Puerto Rico and the United States, this bill will serve as a model of American democracy at its best--providing citizens with their right to decide their own futures.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I rise today to introduce the Puerto Rico Self Determination Act of 1997. I am proud to cosponsor this important legislation with Senator Larry Craig and a bipartisan coalition of eight other distinguished colleagues. Mr. President, on December 10, 1898, through the Treaty of Paris that ended the Spanish-American War, Puerto Rico became part of the United States. Next year marks the 100th anniversary of this union. Mr. President, there is no better way for us to commemorate this special occasion than to give the U.S. citizens of Puerto Rico the same right that their counterparts in all 50 States and the District of Columbia enjoy--the right to choose their political destiny. In 1917, the Jones Act gave the people of Puerto Rico U.S. citizenship, but it was less than complete. Though they are citizens, Puerto Ricans can only vote in Presidential elections if they are registered in a State or the District of Columbia. They have a delegate in Congress--a position currently held by Congressman Carlos Romero- Barcelo--who does not have voting privileges. But this lack of political rights is not due to a lack of communication. Throughout their history as part of the United States, Puerto Ricans have expressed their desire to achieve full political rights. They have on various occasions let Congress know of their desire to be full participants in our democracy. And their actions speak even louder than their words. Puerto Ricans have contributed in all aspects of American life,--in the arts, in sciences, in sports, and especially in service to the Nation. Their record of service to this country speaks for itself. In World War II alone, more than 65,000 Puerto Rican men and women served in the Armed Forces. In Vietnam, over 60,000 served. The first United States soldier killed in Somalia was Puerto Rican. One of the airmen shot down over Libya in 1986 was Puerto Rican. And it was a soldier from Puerto Rico who sounded the alarm--and saved lives--in the 1983 bombing of the Marine barracks in Beirut. I recently received a letter from retired U.S. Army Lt. Col. Dennis Freytes, a Puerto Rican who resides in Orlando. He states in his letter: As an American Puerto Rican, who has proudly served our country, I think that Puerto Rico's political status should be promptly resolved, so we don't have second class citizens in our democratic form of government. Puerto Ricans voluntarily joined our Armed Forces and have given their lives in defense of our country and democratic way of life. I emphasize ``our'' because U.S. citizens must have the same rights no matter where they were born or where they choose to live. In 1996 and 1997, the Legislature of Puerto Rico, the democratically elected representatives of 3.7 million U.S. citizens, overwhelmingly approved resolutions requesting that the Congress and the President of the United States respond to their legitimate democratic aspirations. They requested that a plebiscite be held not later than December 31, 1998, almost exactly 100 years after Puerto Rico gained territorial status. There have been similar referendums in the past, but those were locally mandated--Congress gave no direction as to how, if at all, the results might affect Puerto Rico's political status. It is time for the people of Puerto Rico to have a referendum process which defines the choices in a manner which are constitutionally valid, and that Congress is willing to uphold. Mr. President, I want to particularly stress this latter point. Congress needs to understand that if it passes this bill--and I share the hope of my friend and colleague, Senator Craig that we will and that we will do so expeditiously--it is assuming an important political, and moral obligation to the American citizens of Puerto Rico. This is not a bill without significant consequences. If Puerto Ricans ask to remain a Commonwealth, we need to respect their wishes. If they want to become a State, we must begin the process of incorporation. And if they desire independence, we must take steps to meet that request. To do otherwise would be to seriously undermine our credibility with the 3.7 million citizens of Puerto Rico and the nearly 300 million residents of Latin America. Mr. President, for the last 100 years, the United States had given Puerto Ricans status as citizens but withheld some of the rights, privileges, and responsibilities that come with that privilege. It is time for that to end. Puerto Ricans do not deserve second-class political status. For all that they have done to enrich our culture and defend our Nation from external threats, they have earned the right to decide their own political destiny. Mr. President, since the early 1900's, self-determination has been a cornerstone principle of our Nation's foreign policy. As we approach the century mark of the union between Puerto Rico and the United States, this bill will serve as a model of American democracy at its best--providing citizens with their right to decide their own futures.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, first, I wish to add to the remarks that have been made this afternoon in recognition of the first speech given as a Member of the U.S. Senate by our new colleague, the Senator from Georgia. He has represented this Nation with great distinction throughout his life, and we are gratified that he has now joined us in the Senate. I am confident that the remarks he made a few minutes ago will be illustrative of the contributions he will make throughout his Senate career. I am proud to call him a friend and colleague.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I ask unanimous consent that Ms. Delia Lasanta, a fellow in our office, be allowed privileges of the floor during consideration of the legislation that I will be introducing this afternoon with my friend and colleague, the Senator from Idaho [Mr. Craig].

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I join my friend and colleague from Arizona, Senator Kyl, in cosponsoring the Internet Gambling Prohibition Act introduced today, which is intended to address a growing problem in the United States as our technology continues to modernize our modes of communication. This legislation is an attempt to take a step forward in meeting the needs of State law enforcement organizations and officials. With the development of the Internet World Wide Web, the ability of Americans to access information for their personal and professional use has taken a quantum leap. It is safe to say that the Internet is one of the more important technological advances of the late 20th century with respect to the influence that the technology can have on the lives of so many Americans. The number of American Internet users has grown from 1 million in 1992 to over 50 million today. This number is expected to grow to several hundred million users by the year 2000. As we bring Internet technology into our schools, we will see greater use of the Internet particularly among our youth, many who are already adept at using their home computers and surfing the Internet for educational and recreational purposes. With this convenience and easy access to a variety of information sources, many of which are of great educational, cultural and professional value, come certain expected problems. The one that I want to speak to briefly is that of the increasing use of the Internet for the purposes of gambling. The National Association of Attorney Generals has recently studied the problem of Internet gambling. In a 1996 report, ``Gambling on the Internet,'' the Association cited the following: The availability of gambling on the Internet * * * threatens to disrupt each State's careful balancing of its own public welfare and fiscal concerns, by making gambling available across State and national boundaries, with little or no regulatory control. There are literally hundreds of gambling-related sites on the Internet. Dozens more are being added monthly. Let me make several key distinctions that must be understood with respect to this legislation. First, it is important to note that the number of actual online gambling operations are few at this time due to electronic commerce and technical limitations. Advancements in technology, however, make such shortcomings temporary. Only 6 months ago, there were only 17 active Internet gambling sites on the World Wide Web. Today, there are over 200. And, today, there are hundreds of advertisements for gambling as well as informational how-to sites on the Internet. In short, the Internet's ability to serve as an information conduit for the gambling industry has been recognized. Second, States have historically been the primary regulator of gambling activities. However, the widespread use of the Internet and its potential to serve as a conduit of gambling activities across national and State borders, serves to undermine States' regulatory control. Our legislation is not intended to disrupt this prerogative, but rather to assist States' ability to enforce its own gambling laws. Finally, the legislation would not hold Internet access providers-- such as America Online--liable for gambling activities that occur on the Internet. However, the Internet access providers are required, once notified by a State or law enforcement agency of the illegal activity, to discontinue Internet services to the malfeasor. Mr. President, there is growing awareness of the importance of this issue in my State of Florida. The attorney general of the State of Florida wrote me on February 17, 1997, urging strong support of this legislation. I am committed to providing strong support in the Congress for Florida law enforcement concerns. It is timely and necessary for the Congress to assist States on this growing problem which undermines States' jurisdiction and control. We should support the efforts of our State and local law enforcement officials so that they can prevent the growth of activities which are illegal in that State. I thank my colleague from Arizona for his work in drafting this important legislation. I look forward to working with him this year in support of passage of this bill. Mr. President, I ask my colleagues in the Senate to join us in supporting this measure.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I wish to speak today on the nomination of Anthony Lake to be Director of the Central Intelligence Agency. This nomination has raised a troubling issue, an issue that has nothing to do with the candidate's qualifications. Rather, that issue is the credibility of the Senate Select Committee on Intelligence to conduct a fair, nonpartisan examination of this nominee. That committee, of which I have been a proud member for 4 years, has a well-earned reputation for bipartisanship. But that hard-won reputation is being jeopardized by the committee's conduct in this matter. In a speech before the Senate last night, Chairman Shelby said he wants to treat the Lake confirmation ``in a serious, thorough and fair manner.'' That is a laudable goal. It is a goal I fully support. I commend the chairman for establishing a high standard. The position of Director of Central Intelligence is an extremely sensitive one. We have a responsibility to the American people to subject the nominee to close scrutiny. I accept and welcome the responsibility as a member of the committee. Unfortunately, it is a responsibility my colleagues and I have been unable thus far to exercise. The reason for this failure is that the committee, although having officially received this nomination on January 9, has yet to conduct its first hearing on the nominee. Meanwhile, the Senate has acted judiciously but swiftly on two other members of the President's foreign policy team, the Secretary of State and the Secretary of Defense. Mr. Lake remains the exception. Indeed, his hearings have been postponed not once, but twice. In the first instance, the chairman postponed the hearings ``dependent upon the status of the Justice Department's investigation'' into Mr. Lake's stock transactions and his role in the Iran-Bosnia arms sale. The Department of Justice completed its investigation on February 7, giving Mr. Lake a clean bill of health in regard to the arms sale and determining there was no evidence that he ever took any action to conceal or misrepresent his or his wife's financial holdings. Nevertheless, the chairman again postponed the hearings, this time asserting that the Department of Justice investigation ``is only a small part of the Senate Select Intelligence Committee's overall, ongoing investigation * * *'' He now cites new concerns. After two delays, the chairman is now committed to a hearing on March 11. I welcome that commitment. Mr. President, I fear, however, that the March 11 hearing is only a prelude to what is turning into an extended fishing expedition. If anyone doubts that, they only have to read the February 27 issue of the Washington Post, which reported that the Senate Intelligence Committee has now requested White House documents involving Haiti--documents which our House colleagues requested last year as part of their extensive investigations into the administration's Haiti policy. Those investigations have so far produced rather paltry results, despite extensive hearings, document reviews and testimony. The International Relations Committee was able to generate only a majority staff report. The members of that committee--neither Republican or Democrat--signed the report--not exactly a vote of confidence. The Republican majority of the House Permanent Select Committee on Intelligence has yet to produce any report at all. In each case, the administration made available literally hundreds of documents for congressional review. Although withholding approximately 50 documents, citing executive privilege, the administration did offer to brief House Members and provide certain redacted versions of those documents. Republicans rejected the proposal. The administration has made the same offer to our committee. It is a reasonable one that balances congressional rights and executive privilege. I urge the chairman to accept it, rather than creating a pretext for further delay. Mr. President, the Haiti issue is just one of several the committee is pursuing. The implication of the chairman's remarks are that the committee now intends to investigate the Department of Justice's investigation of Mr. Lake's divesture of stock. The Justice Department, as I mentioned earlier, found no evidence that Mr. Lake ever took any action to conceal or misrepresent his or his wife's financial holdings. It found no fault in his conduct of the Iran-Bosnia matter. With regards to Mr. Lake's FBI file and the Tower nomination, the chairman has requested Mr. Lake's complete FBI file, based on the purported precedent of the nomination of former Senator John Tower for Secretary of Defense in 1989. As my colleague from Michigan, Senator Levin, stated yesterday, ``neither the Armed Services Committee nor the full Senate ever had access to the raw investigative files used by the FBI to compile its summary of the background investigation of Senator Tower.'' In his statement, Senator Levin further cites Senator Nunn's comments in 1989. Senator Nunn stated on the Senate floor that, ``What we have in S-407 is the summary of interviews the FBI conducted. They prepare the summary. We do not see nor do we have the underlying interviews.'' In the case of Mr. Lake, that summary has already been provided to the chairman and vice chairman of the Senate Intelligence Committee. I am concerned that we are engaged in a fishing expedition in which the hearings are being used to determine if some malfeasance can be found, rather than to develop information on a credible hypothesis of inappropriate behavior. Mr. President, I am also concerned that the goalposts are clearly being moved on this nominee. Questions are asked; responses are given; and then new, different questions are asked. If members of the committee have inquiries, we should all welcome the opportunity to question this nominee in the best possible forum, under oath, during his confirmation hearings. He in turn has the right and the opportunity to respond. That is the purpose of a nomination hearing. Unfortunately, there is a growing public perception, aptly expressed by one commentator, that the committee ``seems to be waiting for something scandalous to turn up to sink the nomination.'' The perception, right or wrong, is that we are leaving Mr. Lake to twist in the wind. I am afraid that that says more about our committee than it does about Mr. Lake. Some history. The Senate Select Committee on Intelligence has a hard- earned and proud tradition of bipartisanship. It is the successor to the Church committee of 1975-76, which was an investigative committee only. The purpose of the Senate Select Committee on Intelligence is both to oversee sensitive intelligence activities and to maintain and improve intelligence capabilities and efficiency. The issues that come before the committee, including the nomination of the Director of the Central Intelligence Agency, are extremely sensitive. They demand a high level of bipartisanship. I fear that the committee's bipartisanship is fraying and that fair play is falling victim to partisan gamesmanship. That, Mr. President, should concern all of us, Republican and Democrat alike. Intelligence activities, by their sensitive nature, run counter to Democratic principles of openness. Yet, in my view, good intelligence is essential to our democracy's security. Effective congressional oversight, in turn, is a critical ingredient to maintaining some balance between these two inherently contradictory forces--democratic openness and the necessary secrecy that surrounds intelligence procedures and operations. Oversight is a serious responsibility. The public must have confidence that we are above politics when we deal with intelligence issues. In almost every other area of Federal Government, the public has multiple sources of information. That is what freedom of speech and freedom of press provide in a democratic society. But as it relates to the operations of the intelligence community, the general public must rely on a handful of its representatives to provide the necessary oversight and scrutiny to assure that the operations are being conducted in a manner that advances the public interest and assures that the public interest is not being rendered vulnerable by clandestine operations. So far, the committee has largely succeeded. One measure of the committee's success has been the impressive number of newly emerging democracies that have sought the Senate Intelligence Committee's advice over the past few years. Each of those countries is struggling to establish an intelligence community that will safeguard democracy, not undermine it. They look to us as a model of bipartisan oversight and have come to us for guidance. That expression of confidence is our most valuable asset. We have earned it through hard work, diligence and a determination to play the honest broker. We can ill-afford to fritter it away and give life to the perception that the CIA is becoming an instrument of partisan warfare, that the Lake nomination is simply an attempt to attack the President's foreign policy over the last 4 years. The CIA, in turn, can ill-afford partisan bickering at a time when it is struggling with a painful transition from a cold war where we faced one principal enemy to a new world in which we face multiple threats. Those emerging threats run the gamut from terrorism and biological and chemical weapons proliferation to narcotics trafficking. Each in its own way is as serious and in some ways more challenging a threat than that presented by the former Soviet Union. In attacking these targets, we will need to be focused, creative, and open to new ways of conducting intelligence operations. Whether the CIA successfully meets this challenge of transition depends in a large measure on stable leadership, something that has been in disgraceful short supply. Whether the CIA successfully meets that challenge depends in large measure on stable leadership, something that has been in disgracefully short supply. Four DCI's have rotated through the Agency in the last 5 years. The position of Director of Central Intelligence has become Washington's ultimate revolving door. That's got to stop, and I hope it will with this nominee. Success also depends in no small part on the actions the SSCI and this Senate take in regard to Mr. Lake's nomination. This nomination provides us a valuable opportunity to publicly discuss the role of intelligence and its future in our democracy. A number of important questions call out for answers. With the demise of the Soviet Union, does the CIA have a mission? If so, what is it? And if it has a mission, has the Agency lost its way in pursuing it? How effectively is the community protecting the interests of America and its citizens? Is the culture of the Directorate of Operations hobbling the Agency's effectiveness. If so, how do we change it? Is the Agency ready to be held accountable for its actions and its failures? What role should human rights play in Agency operations? Is the Agency keeping congressional oversight committees and Members of Congress appropriately informed? How effective has it been in this regard? An elevated debate, one marked not by partisan rancor but by honesty and openness, can help answer these questions and contribute to reaching a consensus about the intelligence community's role in our society as we enter the 21st century. More important, such a debate will help educate ourselves and as well as the voters who sent us here about the appropriate role of intelligence in a democracy--its pluses and its minuses. Having said that, there clearly are specific issues regarding this nominee that deserve the committee's scrutiny. I question whether Mr. Lake's opponents have focused on the right ones. His supposed connections with the left and his views as to Alger Hiss' guilt or innocence obviously have enthralled some. But as former Director of Central Intelligence Bob Gates under President Bush wrote in the January 29 issue of the Wall Street Journal, these issues are ``wholly irrelevant and silly.'' I certainly respect the right of any Member to purse these questions during upcoming hearings. Indeed, I would hope that those who find these issues troubling would urge the chairman to deal with this nomination expeditiously so that we can conclude committee hearings and move to floor debate. One question, I intend to ask of Mr. Lake is whether he can provide the President objective intelligence analysis after serving as his National Security Adviser the past 4 years. I also intend to ask him whether, having attempted to curry favor with representatives of the Directorate of Operations in an effort to bolster his nomination, he has weakened his ability to act decivisely as DCI on issues of accountability and reform. I also plan to ask him whether the nomination process and the criticism he has been subjected to will jeopardize his effectiveness if he is confirmed. Has he been so bloodied that he will be unable to perform effectively? Finally, I plan to question him about his management philosophy and skills, his attitude toward secrecy, and the role of human rights in intelligence operations. I am confident that Mr. Lake will acquit himself well before the committee. He has shown himself to be a man of great ability and integrity. Moreover, as National Security Adviser he has been an avid customer of intelligence and will bring that critical perspective to the job. Barring any stunning revelations that may arise during the hearings-- and I see no indication of any occuring--I will vote for Tony Lake. In my view, he will make a fine Director of Central Intelligence. Mr. President, the issue for today is, will we protect the credibility? Will we protect the now almost 20 years of investment that has been made in a credible Senate oversight of this most sensitive of Government activities, or will we allow it to be frittered away and degraded by partisan wrangling? That will be the challenge that our committee will face, commencing with the hearings that will begin on March 11. I trust that the committee will meet its high standard. Mr. President, I ask unanimous consent that a January 29, 1997, column by former Director of the Central Intelligence Agency, Robert Gates, as printed in the Wall Street Journal in support of Mr. Lake's nomination as well as a January 26, 1997, column by Reagan administration official Richard Schifter, as printed in the Washington Times, be printed in the Record.

Mr. GRAHAM. Mr. President, I suggest the absence of a quorum.

Mr. GRAHAM

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

Mr. GRAHAM

Mr. GRAHAM. Thank you, Madam President, and I thank the Senator from New York. I urge the Senate to move expeditiously to confirm Ambassador Charlene Barshefsky as U.S. Trade Representative. She is the right person at the right time for the very difficult task she will be undertaking. I also urge the immediate passage of Senate Joint Resolution 5, without amendment, to extend the waiver for the position which Ambassador Barshefsky currently holds as Deputy U.S. Trade Representative. This waiver as granted under Senate Joint Resolution 5 applies only to Ambassador Barshefsky. It does not change the underlying law, nor does it create a precedent for future waivers. This waiver deserves to pass without amendment. The merits of the issue which are being raised by my friend and colleague from South Carolina deserve to be heard, but I would submit that this is not the forum for the resolution of those questions. There will be other more appropriate times which will not entail endangering the expeditious confirmation of Ambassador Barshefsky to her important post. As Senator Moynihan has just stated, when Ambassador Barshefsky's nomination was presented to the Finance Committee, her record was carefully examined. The result of that examination was a unanimous vote by the committee in favor of her confirmation. Ambassador Barshefsky was referred to at the confirmation hearing as one of the most qualified, seasoned trade negotiators ever to be offered for this position. As Deputy and Acting U.S. Trade Representative, she has been an outstanding advocate of the trade interests of the United States of America. She has proven herself to be a brilliant negotiator. The Finance Committee and, I hope soon, the Senate as a whole will recognize these qualities. Ambassador Barshefsky has demonstrated a consistent focus on opening global markets, opening those markets through bilateral and multilateral trade agreements that increase export opportunities for U.S. businesses and creates jobs for U.S. workers. She has played an instrumental role in solving trade disputes with Japan, China, and numerous other nations on behalf of the United States. Madam President, I was recently in Florida with a group of representatives of important agricultural interests who were looking forward to going to China with Ambassador Barshefsky to open markets for American agriculture in that tremendous nation of population. That is an example of the aggressive pursuit of opportunities for American industry and agriculture that has hallmarked Ambassador Barshefsky's performance in her current positions and will do likewise when she is confirmed as the U.S. Trade Representative. It is a pleasure to give this outstanding nominee my unqualified endorsement. I have no question that Ambassador Barshefsky will be an outstanding representative and leader at the U.S. Trade Representative office. I urge my colleagues to join in voting to confirm her nomination today. We need a timely decision. We have already paid a cost for the delay that has occurred to date. The U.S. trade position is weakened when it does not have a confirmed U.S. Trade Representative representing our interests. We need to transfer that weakness into the strength of steel that will come when Charlene Barshefsky represents the United States as our Ambassador, as the U.S. Trade Representative. I thank the Chair.

Mr. GRAHAM

Mr. GRAHAM. Madam President, I want to express my disappointment that we are apparently on a path which will lead to yet another defeat of a balanced budget amendment. This could be seen as a lack of commitment to balance the budget. My hope is that it will be seen instead as a message that a significant minority in Congress does not think a balanced budget amendment is necessary to achieve a balanced budget. That without the discipline of a balanced budget amendment, the President and Congress will redouble our efforts to get to balance in 2002 and to remain in balance in future years. I agree with critics who say we can balance the budget by 2002 without a constitutional amendment. That same statement could have been made at virtually any time since our last balanced budget in 1969. We have not done so. CBO projections indicate that without changes in our current budget policies, the deficit will rise to $280 billion by 2007, nearly reaching the levels we experienced during the late 1980's and early 1990's. The President's budget as submitted for the next 5 years and analyzed by CBO, projects that the deficit will jump from our 1996 level of $107 billion to $145 billion in 1998. The deficit will stay near that level until 2001. This trend line is not a reassuring trumpet blast of commitment to a balanced budget. I hope that my colleagues are correct in saying we can keep the budget balanced without a constitutional amendment. We are about to be put to the test. Most States have a constitutional requirement for a balanced budget. As Governor, I operated under a balanced budget. I can say with experience that it has served my State well. It would also serve our Nation well. There are numerous State legislatures asking that we in Congress submit a balanced budget amendment to them. In the short time that State legislatures have been in session this year, 4 have passed resolutions asking Congress to approve a balanced budget amendment; another 21 States have introduced resolutions asking for a balanced budget amendment to the Constitution. We owe the States an opportunity to decide whether we should amend the constitution to put an end to the growing Federal debt that this country has been building. And although we have made tremendous progress over the past 4 years, we still have a large and expanding annual deficit. Our national debt is expected to reach $5.4 trillion at the end of this fiscal year. One concern that many of my colleagues have expressed is their concern for how Social Security would fare under a balanced budget amendment. My personal feeling is that establishing the principal of a balanced budget during normal periods, such as most of the years since 1982, would strengthen the Social Security system. If we had passed a balanced budget amendment in 1982, the first year in recent history that one was considered and defeated, we would have $2.9 trillion less in debt held by the public than we do today. The interest on this portion of the Federal debt alone totaled $190 billion in 1996. Last year, that amount was more than enough to pay for all Medicare expenses. Instead this money was dissipated on interest payments. That same $190 billion in interest payments on the additional debt accrued since 1982 could have paid for over half of all the money the Federal Government spent last year on Social Security retirement benefits. Let us look at Social Security from another angle--in 1982 the total interest on the Federal debt was $85 billion. In that year, all Social Security benefits were $156 billion. The interest payment equaled about half of the Social Security benefits for that year. In 1996, the total interest in the Federal debt was $241 billion and Social Security retirement benefits were $350 billion. The interest payment in 1996 equaled about three-quarters of the entire outlay for Social Security retirement benefits. Yearly interest payments are growing faster than yearly Social Security payments. This trend is not good and we must put an end to it now. Passing the balanced budget amendment now is critical to the future health of our Social Security system. Let me ask you--would our country be better off spending tax dollars to service the Federal debt or for needed programs like Social Security? I believe the money would be better spent on Social Security. The budget deficit has become a permanent fixture in our Nation's fiscal policy. While there are those who say Congress can, without a constitutional amendment, balance the budget, history has shown this not to be the case. A disturbing example of the lack of resolve to balance the budget occurred last Thursday evening when we extended the aviation tax to September 30--ignoring losses of $5 billion in Federal revenue for the aviation trust fund because of lapses in the aviation tax during 10 of the last 14 months. Five billion dollars lost for American aviation safety. We extended the tax to September 30 knowing that a report on whether the current tax should be replaced by a user fee system is not due to Congress until October 1997. We voted to terminate the ticket tax on September 30, raising the strong possibility of another lapse at the end of this fiscal year with the excuse that we should wait for the report. Why did we do this? We did it for budget scoring purposes. By allowing the tax to expire on September 30 before reinstating it, our Budget rules will claim to create almost $6 billion in ``new'' revenue every year after September 30, 1997, for a total of over $30 billion between then and September 30, 2002. It is for this kind of creative accounting that we send people to jail in the private sector. Some 40 percent of the revenue increases in the President's budget from 1997 to 2002 come from this scoring gimmick. The President and the Congress must be strong in their resolve to achieve balance through tough decisions rather than through creating fictional new revenue or spending cuts. This archaic and destructive maneuver is exactly what undercuts public confidence in our ability to balance the budget with real numbers and rational policies. With failures like this in mind, and after witnessing numerous attempts by Congress to enact legislation to force itself to tighten its fiscal belt, my conclusion is that we must pass an amendment to constitutionally mandate a balanced budget. It is imperative that we not lose this opportunity. Madam President, the failure to pass a balanced budget amendment today would be a grave mistake. For too many years we have delayed the hard decision until tomorrow. Well, Madam President, tomorrow has come. It is our generation's duty to ensure that we pay our national bills rather than asking our children and grandchildren to do so. Mr. HATCH addressed the Chair.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, what concerns me--and why I want to make this statement before we vote it--is the irony of what we are doing at this hour of the night. We have spent the past several days, the past several weeks, debating an amendment of the U.S. Constitution to require a balanced budget. I support that amendment and look forward to voting for it on Tuesday. In the midst of that debate, we now at this hour are going to take up legislation to extend the airline ticket tax, which has been expired for 10 of the past 14 months. I support that. We should reenact the airline ticket tax. In my opinion, we should not have allowed it to expire as we have. But what is significant about what we are about to do is that we are extending the airline ticket tax to September 30, 1997. Why are we doing that? Is it because we do not need the resources of this revenue source beyond September 30, 1997? Clearly not. There are extensive needs in the national aviation system. There are extensive needs in virtually every community which has an airport--a commercial airport or a general aviation airport--which benefits by the resources derived from this tax. In light of that, why are we enacting this extension from now until September 30, 1997? We paid a heavy price because of the fact that this tax has been allowed to lapse twice in the past 14 months. This tax expired on January 1, 1996. It was nearly 8 months later, August 27, 1996, that it was reenacted. That reenactment, however, was only until the end of the calendar year 1996, December 31. It has lapsed since that date until today. So since January 1, 1996 until today, the tax has been in effect approximately 4 months. It has been in a lapse status for 10 months. Every day that this tax is not in effect reduces the revenue to the aviation trust fund by over $15 million; approximately $500 million a month is lost to the support of safety in the air because of our failure to keep this tax consistently, stably in place. In light of that history, I ask again, why today are we only enacting this until September 30, 1997? Why are we not making this a permanent tax today as it has been for most of its history? Well, Mr. President, I must sadly report that we are doing this for exactly the reason that we have gotten into a $5.4 trillion national debt. Here tonight, in the middle of the debate on a balanced budget amendment to the Constitution of the United States, we are about to engage in what I consider to be one of the more hypocritical actions in terms of our real commitment to a balanced budget. What is the significance of having this tax lapse on the 30th of September? The significance is that we are going to count in our budget for the period that will begin October 1, 1997, $6 billion of revenue for the next 10 years, or $60 billion of additional revenue based on the way in which the U.S. Senate scores its legislation. The House, which uses a 5-year rule, is going to score $30 billion of additional revenue because we are allowing this tax to lapse on the 30th of September. Mr. President, I know you are a prominent business person and deal with complex financial matters. You say, how can this be? What has actually happened in the last 14 months is, we have lost $5 billion of real revenue. Four percent of the Federal deficit for fiscal year 1997 will be the loss of revenue by allowing this ticket tax to lapse for 10 of the past 14 months. Yet, Mr. President, we are about to set up a process where it is almost guaranteed to lapse again. The reason we are doing it is because under our arcane budget rules, if the tax is not in place as of the beginning of the fiscal year, we can assume that it is all fresh, new revenue and therefore we have found $60 billion in order to support other spending or to finance tax reductions. It is no real additional money. In fact, every expectation is there will be less real money because there will be a hiatus in this tax after September 30. Why do I feel relatively confident, although sadly so, that there will be a hiatus in this tax after September 30, 1997? The answer is because we have virtually ordained that it shall be. Why have we done so? Because last year we passed an aviation reform bill, and in that bill we provided that the Secretary of Transportation and the Secretary of the Treasury would report to the Congress on their collective recommendations as to what kind of permanent method of taxation we should use for commercial aviation. There is a dispute that has broken out between various segments of the commercial aviation industry as to how the tax should be structured. The interesting thing is that we are about to pass a bill in which the tax will expire on September 30. When do you think the report that we have already requested will be submitted to Congress? The answer is in October 1997. So we are not even going to get the report upon which we are supposed to make a judgment until after this tax has expired. I suggest we are virtually guaranteeing that we will have yet another lapse in this tax, yet another hole in the trust fund that millions of Americans look to, albeit in a distant, obscure way, but they look to it with hopes that that trust fund will help make their period in the skies above America a safer experience. The fact is that we have removed $5 billion of that safety over the last 14 months, and we are about to pass a bill that is virtually guaranteeing that we will remove more of it. And we are doing it solely, in my judgment, in order to be able to create a fictitious $60 billion that we can then use in order to justify other spending--not spending in aviation but spending in any area that we choose to do so, or reduction of taxes. If you want to know why in the last 20 years we have added almost $4.5 trillion to the national debt, you are looking here tonight at an example of the very kind of accounting gamesmanship that has gotten us into our current posture. It had been my original intention to offer an amendment to this bill, as I did in the Finance Committee, to extend this bill at least to the end of the calendar year so that we would have an opportunity to consider the October report, make a reasoned judgment, and enact whatever permanent reforms we want to enact without suffering another lapse in revenue. However, I recognize at this late hour the chances of such an amendment being successfully considered are nil. I also recognize the importance of getting this tax back in place as rapidly as possible so that we can stop the loss of the $5 billion. Now, some might say, isn't it a good idea to have this tax lapse for 10 of the last 14 months. Has that not resulted in a bonanza of savings to American commercial aviation users? The fact is there has been some of that. Some airlines have, in fact, reduced their ticket price by the amount that was represented by the 10-percent tax which is embedded in that price. Others have not done so. So in some instances the American flying consumer has paid the same amount for the ticket but has not received the benefit of investment in the safety of our airways. It will be my intention as soon as possible to introduce legislation that will make this tax permanent and will eliminate the ``Perils of Pauline'' that we have experienced first in August 1996 and now again in February 1997. One of the reasons that we are rushing to enact this now is that the train is almost at the ``damsel in distress.'' The FAA has said that they are in a position now that within the next few weeks, if not days, they will be in a position of having to send out notices to aviation facilities across the country that they cannot meet their obligations because the trust fund will have been depleted. For that reason, I do not believe it is prudent to add one additional absurdity on top of the pile of absurdities that are represented by our actions relative to this aviation tax over the last 14 months. I regret that we are taking this action. I am afraid that it casts a pall on our seriousness of commitment to a balanced budget amendment when we have often used the analogy with a balanced budget that it is like a serial killer who has written on the wall, ``Stop me before I kill again,'' that we need the balanced budget amendment to say, ``Stop us before we commit deficit again.'' Well, this is a good example of why we will need that constitutional amendment because clearly we are not showing that kind of discipline in adopting this legislation tonight. This is not a proud day for the Senate. It is not a happy day for the U.S. taxpayers. I hope that we can indicate to them that they will do better at some future date. I thank the Chair. Mr. LOTT addressed the Chair.

Mr. GRAHAM. Mr. President, reserving the right to object, I would like to make a statement for the Record prior to final disposition of this matter.