Phil Gramm

Mr. GRAMM

Mr. GRAMM. I am happy to yield.

Mr. GRAMM. Mr. President, let me begin by talking about immigration. I am a strong supporter of immigration. I am proud that my grandfather came to this country right before the turn of the 20th century. I am proud that my wife's grandfather came to America as an indentured laborer to work in the sugar cane fields in Hawaii. In fact, this summer, I had the very happy experience of our family donating to the Institute of Texan Cultures in San Antonio a photograph of my wife's grandmother that was a picture in a picture book that men went through to pick out what was called a ``picture- book bride'' to send for her to come to America. This pioneer came to America to marry a man she had never met in a strange country whose language she did not speak; she came seeking opportunity and freedom, and found both. That is a story of America in action. Her granddaughter, under Presidents Reagan and Bush, became Chairman of the Commodity Futures Trading Commission, where she oversaw the trading of all futures, including futures on the same cane sugar that her grandfather came to America to cut by hand. I am as strongly committed to immigration as you can be committed to immigration. I also remind my colleagues that the bill before the Senate was co- authored by Senator Abraham, by the distinguished chairman of the Judiciary Committee, Senator Hatch, and by myself. This bill seeks to allow highly skilled people--many of them in graduate school in America--to stay in our country, to help us be competitive in the world market, to help us dominate the information age, and to help us create more jobs for our own people. I challenge anyone to point to a more committed position in favor of immigration than I have taken as a Member of the Senate. In fact, our Presiding Officer may remember a speech I gave once about a young man who worked for me on my staff named Rohit Kumar. I was debating, I believe, Senator Kennedy at the time. I took this young man's family--his father is a research physician; his mother is a doctor; his uncle is an engineer--and I simply went through a list of Kumars in America--his parents had come here as immigrants. And I talked about the contributions they made and the taxes they paid. The conclusion of my speech was this: America needs more Kumars. By the way, lest anyone be confused by what has now become an American name, the Kumars came from India. Why do I say all this? To make it clear that America is not full. I believe there is still room in America for people who come and bring new genius and new energy and new creativity. But I draw a bright line--it is as bright as the morning Sun--and it is on one issue: People should come to America legally. People should come to America to be part of the American dream. In coming to America, people should not violate the laws of our country. Apparently, our Democrat colleagues feel so comfortable that it is a salable political position to take that they want to change the law to say that people who violated the laws of our country are welcome to America. I reject that. I reject it because it is patently unfair. Our Democrat colleagues even have the arrogance to call this the ``Latino and Immigrant Fairness Act,'' as if the label would make it so. I wonder how many people who are waiting in line to come to America--the several million people who have applied to come legally; people whose spouses have applied to come--I wonder how fair they think it is that they are going to bed every night dreaming of coming to America, and we are going to put somebody who violated the laws of the country in front of them. I do not call that fair. Quite frankly, I am happy to label the idea outrageous and condescending, that if someone is a Latino that they must therefore favor changing the laws to allow people who violated the immigration laws to come and to stay and to invite others to do the same. I remind my colleagues that in 1986 we passed a landmark immigration bill. The fundamental tenets of that bill were, one, we were going to enforce employer sanctions--we have not done that, as everybody who lives in America knows--and two, that if you came before 1982 and you were in good standing, you could apply and become a permanent resident alien and eventually you could become a citizen. But if you came afterward, the commitment of that bill was that was the last general amnesty we were ever going to provide. Now our Democrat colleagues obviously think it is good politics that we should go back on the commitments we made in that bill. Hence, we have the bill that is before us. Let me explain the issue of how we came to be here, then the procedure that is being used. Finally, I will talk about this threat by President Clinton that if we don't adopt a bill legalizing illegal acts, he is going to shut down the FBI and the Justice Department by not funding their appropriations. Let me begin by explaining that we have before us a bill called the H-1B program. Most Americans, I am sure, don't know what H-1B is, but basically this is a procedure in immigration law that allows us to employ uniquely skilled, high-income workers, principally, as it has turned out, in this new area of high technology and computer science-- many of these people are actually graduate students in our country; half of the students in the high-tech areas at American universities are foreign born, as I am sure many people know. Because we have such critical shortages in this area, this provision allows these people to stay in America and work and help us create jobs for people who are already here. Our Democrat colleagues claim they are for this bill. The problem is, they won't let us vote on it. But when it gets right down to it, they want to be paid tribute. The tribute they are seeking is passage of another bill that would let people who violated the law to stay in our country. Now we have made it very clear that we are not going to pay tribute. Their problem is, they have gone to Silicon Valley, they have gone to Austin, TX, they have gone to the high-tech centers of America, and they have told people in the high-tech industry: We are with you; the Democrat Party is with you; we are for the H-1B program. The problem they have is, their actions do not comport with their words. And that is why we are here simply saying, if you are for the H-1B program, pass it. I have believed for a couple of days that we are coming to the end of this charade. I don't believe our Democrat colleagues can sustain the American public--that is, the relatively small number of people who are interested in this bill--watching Democrats every day delay a bill which they are out trumpeting their support. You can confuse some of the people some of the time, but people cannot be confused under these circumstances. Meanwhile, our Democrat colleagues are on the verge of throwing in the towel on H-1B by saying, well, we want another bill on another issue. To that end, they have adopted a very unusual procedure of trying to change the rules of the Senate in order to accomplish what they want, and we are going to vote on that at 4:30. That is going to be defeated, soundly defeated. Let me turn to President Clinton. I wonder if, in these waning hours of the Clinton administration, our President has not become so deluded by his power and the semblance of power he has exercised in the last 8 years in beating Congress into submission. I wonder if the President has not started to believe he is King, that somehow he can say to us, if you don't pass a law legalizing illegal activities in America, I will shut down the FBI and the Justice Department. That is what the threat is. The threat is, if we don't pass a bill that says people who violated the law in coming to America can stay here, he will veto an appropriations bill that funds the FBI, the DEA, the Justice Department, and the Federal prison system. It seems to me those aren't the words of a President, those are the words of a King. Does he believe we are so weak in our commitment to the constitutional principle? The Congress is given the power under article I of the Constitution to appropriate money, not the President. I will say to the President, if he wants to veto the Commerce-State- Justice appropriations bill--I know the bill well because I once had the privilege of chairing that subcommittee --if he wants to veto that bill and risk shutting down the FBI and the Justice Department and the DEA because we are not going to pass a bill that has nothing to do with those appropriations but simply a bill that legalizes illegal activity, then I would have to say to the President he had better get his pen out and he had better be sure it has ink in it. You never know what is going to happen around here, but let me tell you, from one Senator's point of view, a private in the Army, as long as there is any possibility of resisting this I am never, ever going to sit by without using every right I have as a Senator to stop that from happening. What an outrageous, deeply offensive threat. Are none of our Democrat colleagues offended? I will be interested to see how the sage of the Senate, our colleague from West Virginia, ranking member of the Appropriations Committee, former majority leader, former chairman of the Appropriations Committee, how he feels about a President who has become so deluded about his powers that he believes he is King and that he can say to us, you either legalize illegal acts in America or I will shut down the FBI and the DEA and the Justice Department. I understand we are simple people here in the Senate. We have demonstrated over and over that we don't have President Clinton's ability to communicate with the public. We don't have the ability to stand for one thing one day and the next day do a 180-degree reversal and everybody thinks it is great. But if we don't have the ability to stand up to a President in telling us that unless we pass legislation legalizing illegal activity, he is going to shut down the FBI and the DEA and the Justice Department and the prison system by vetoing an appropriations bill forum--if we can't stand up and debate that, we might as well eliminate Congress and just let Bill Clinton rule. I don't intend to see that happen. It may be we will get run over here, but we are not going to get run over without one great fight. I am going to be surprised in the end if there is not at least one Democrat who is going to join us in this fight. Now, let me turn to the heart and soul of this issue, the belief by our Democrat colleagues that it is good politics to make it legal for people to engage in illegal activity in coming to America. Our Democrat colleagues believe they are going to gain votes in this election by saying that if you violated the law in coming to America, if you jumped in line in front of the several million people who have applied to come legally, don't worry because we intend to legalize what you did. And don't worry about the spouses of people who are already here, who are waiting and praying for the day they can come to America legally, just jump ahead of them, violate the law, come to America, because once you get here, we will embrace you and legalize your actions. I know our Democrat colleagues believe this is good politics. I know our Democrat colleagues believe, because of the way they named this bill, that every immigrant and especially Latinos support illegal immigration. What an outrageous, offensive name for this bill, the ``Latino and Immigrant Fairness Act.'' What is fair about a bill that sanctions illegal activities? What is fair about saying to several million people--more of them Latinos than any other ethnic extraction or origin--that it is fair for somebody to violate the law and come to America ahead of you, but it is fair to make you wait month after month, year after year, to join the people you love? That is the Democrats idea of fairness? What is fair about that? I think immigrants--and, quite frankly, I still consider myself one-- I don't think most people who are immigrants to America believe this is about fairness. They believe this is a raw political act, and they are right. This is putting politics ahead of people. This is about trying to single out a group of people, as if every Hispanic in my State believes that it is OK to let someone violate the law. I reject that. That is not the way Texans feel, no matter what their ethic origin. I think when people really look at this, they are going to see that this for what it is, an outrageous political act. Since I am going to stand for reelection in a State where many Hispanics are going to vote--and I am proud of the fact that when I ran in 1990, I got about half of the Hispanic vote in my State--I, obviously, do not believe that this is the great political ploy that our Democrat colleagues believe it to be.

Mr. GRAMM. Mr. President, in light of this agreement, Members can expect two back-to-back votes at 4:30 p.m. today.

Mr. GRAMM. Basically, what their bill is, is that you will be rewarded by being put in front of the 7 million people who have applied to come to America legally because they weren't willing to violate America's laws to become Americans and you were. If I may say this, and I then will yield the floor------

Mr. GRAMM

Mr. GRAMM. Mr. President, I am tempted to jump into the debate about education. The problem is not people taking courses. It is learning something from the courses you are taking. I remind my colleagues that the SAT test changed several years ago so that the minimum requirements to play football in division 1 went up from 700 to 840. You might think: Rejoice, we have raised academic standards in athletics in college. The truth is, the test was recentered so that everybody's score was raised by 140 points at that level. I do not look at Senator Kennedy's test scores and rejoice that we now have achieved the level we had in 1961. Can you imagine any other debate in America where people say: We have great success; we have equaled what America did in 1961. I don't call that success. I call that failure. I call that failure because with all the resources we are spending, the fact that we have yet to achieve what we had achieved in 1961 is the greatest indictment of our education bureaucracy and a failed system that believes that Federal control and Federal money is the answer. But I am not going to discuss that right now. I want to remind people of what has happened all day today here in the Senate. Our Democrat colleagues say they are for the H-1B program. They say they want to allow high-tech workers to come into the country to help us continue to dominate the world in high-tech jobs so that we can continue to have economic growth. They go out to Silicon Valley and say: We are with you. We are for the H-1B program. Yet they have spent all day filibustering it. I don't understand it. You are either for it or you are against it. Now they say: Well, we are for it, but you have to pass a whole bunch of bills doing other things before we are going to let you adopt it. I think it is time for those who need this bill to say to our Democrat colleagues: If you are for the bill, let us vote on it. We have all heard the cliche, ``if you have friends like that, you don't need enemies.'' The point I want to remind people about is that all day long, the Democrats have been filibustering the H-1B program. So if anybody thinks they are for it, the next time they stand up and say they are for the program, I think the obvious thing to ask is, if you are for it, why are you holding it up? We need this bill because we want to keep America growing. I believe our Democrat colleagues are putting politics in front of people. This bill is important to maintain economic growth. It is important to maintain our technical superiority. I want people to know, with all the thousands of issues that have found their way to the floor of the Senate this afternoon, that what this debate is about is that our Democrat colleagues say they are for the H-1B program, but they are preventing us from voting on it. If you are for it, let us vote on it then. If you are for it, end all these extraneous debates. If you want to debate giving amnesty to people who violated America's law, then offer that somewhere else. Propose a bill, but let us vote on the H-1B program. Why do we need it? We need it because we want to maintain the economic expansion that is pulling people out of poverty. We want to maintain our technological edge. But we can't do those things if the Democrats don't let us pass this bill. If you are following this debate, don't be confused. They say they are for H-1B, the passage of this bill, but they are working every day to throw up roadblocks, to stop it, and to demand some payment for letting us pass it. Let me make it clear, no tribute is going to be paid on this bill. There is not going to be a deal where they get paid off to pass this bill. They go to California and to Texas and other places and say: We are for the high-tech industry. We are for the H-1B program. But the cold reality is that on the floor of the Senate today, we did not get to vote on it. We did not get to pass it. We did not make it law. We did not do what we need to do to maintain this economic prosperity and to maintain our edge in the high-tech area because the Democrats are filibustering H-1B. They say they are for it, but when it gets right down to it, actions speak louder than words. I yield the floor and suggest the absence of a quorum.

Mr. GRAMM

Mr. GRAMM. As I understand the schedule of the Senate, I think there would be no problem, as long as it didn't exceed 30 minutes.

Mr. GRAMM. Mr. President, does that reserve my 20 minutes?

Mr. GRAMM

Mr. GRAMM. Mr. President, it is my understanding that Senator Biden has time reserved to speak. He is not here. I ask unanimous consent that the Senator from Maine and the Senator from Kansas be recognized for 20 minutes; that if Senator Biden is here at that point, he then be recognized; and that I be recognized for 20 minutes when Senator Biden has completed his remarks.

Mr. GRAMM

Mr. GRAMM. Mr. President, I thank the leader for allowing me the opportunity this morning to talk about Medicare and about pharmaceutical benefits. I will talk about these issues, recognizing two things: One, that Medicare is second only to Social Security as the most important government program in operation today; and two, recognizing that in 1965, when Medicare came into existence and it was focused primarily on hospital care, physician care, and surgery, that reflected the practice of modern medicine in 1965. Today, Medicare is still focused on 1965 medicine. However, pharmaceuticals have taken the place, in many cases, of hospital stays and surgery, and yet Medicare does not pay for pharmaceuticals. What I will address is the cold reality of where we are, what we want to do, but the dangers we face if we do it wrong. I view this as a statement on the problems we face in trying to provide pharmaceuticals in Medicare. I hope to do this with a series of charts. I begin with the good news. The good news--the glorious news--is that 68.8 percent of all Medicare recipients already have some form of prescription drug coverage--68.8 percent. That level of coverage is a level of coverage virtually unmatched in terms of the structure of private health insurance. What it means is that almost 69 percent of people in America already have some form of pharmaceutical coverage when they are under Medicare. Obviously, what this says is, whatever we do, we don't want to do anything that imperils the 69 percent of people who already have pharmaceutical coverage in our effort to try to provide it to the 31 percent of people who don't. Where does this coverage come from? If we look at this chart, we can see that 44.6 percent of the people who have pharmaceutical coverage in Medicare are getting it through their employer. This is part of the benefit for which they worked a lifetime. They are getting it through an employer-sponsored program. Obviously, we don't want to do anything to induce employers to drop that coverage, nor do we want to do anything to substitute taxpayer money for the private money that is currently going into private health insurance to cover our seniors for pharmaceutical coverage. There are 15.2 percent of those who have pharmaceutical coverage who get it from Medicaid; 11.9 percent get it from HMOs as part of Medicare; 10.6 percent who switched coverage during the last year and went from one form of coverage to another, so they are not counted as being in one category for the year that they had it. Then finally, 15.2 percent get pharmaceutical coverage through Medigap policies. That is the way my momma, for example, gets her pharmaceutical coverage--through a Medigap policy. What is the point of all this? What does this mean? Why should anybody care about this? The point is, 69 percent of Americans already have something we want to provide to 31 percent of Americans. We want to be very sure--we might even have a bipartisan agreement on this at some point--we want to be very sure we don't do anything, in trying to help the 31 percent, that could endanger, destroy, eliminate, or replace the coverage that 69 percent of those on Medicare already have. What is it going to cost for the various plans that have been proposed? My colleagues will remember--I am sure the Presiding Officer remembers--that when Lyndon Johnson sold the Senate on passing Medicare, it was going to cost less than $1 billion a year. Medicare has now become the second largest program in America. It is on its way to becoming the most expensive program in the history of America or the history of the world. The point being, we don't always have the ability to predict what costs are going to be. Nothing shows this more clearly than the official estimates that have been made of the Clinton-Gore drug plan. When they first introduced their plan, the Office of Management and Budget estimated that the plan would cost $118.8 billion over the first 10 years. By April of that year, the official estimate from CBO was $149.3 billion. By May, the estimate by the Congressional Budget Office had risen to $160 billion. By July, the estimate from CBO had risen to $337.7 billion. The point is, what happened to the program between the first estimate made when it was proposed and July? Well, the program was never implemented. What happened is--the President made some changes in it, but what really happened is people started looking deeper and deeper into the program. The plain truth is, we don't know what the actual cost is going to be. But we know if you are going to have the federal government take over and basically federalize pharmaceuticals so that you are going to have the taxpayer paying for benefits, when currently 44.6 percent of the people who have pharmaceutical coverage are getting it from their former employer--when you have the government take it over and pay for not just the 31 percent who don't have it but for the 69 percent who do, obviously it is going to cost a lot of money. Secondly, remember that the level of usage clearly is affected by who pays. There are many different figures you can use, but let me just use one figure. For those on Medicare who do not have third party coverage for pharmaceuticals--that is, they don't have somebody else paying their pharmaceutical bills in total or in part--they are spending, on average, less than $400 a year. But for Medicaid beneficiaries where the federal government is paying for all of their pharmaceutical bills, they are spending over $700 a year. Now some people would say, you either need pharmaceuticals or you don't. The point is, as is true in anything, it makes a difference whether there are copayments, whether there are deductibles, and who is paying. The point this chart makes very clearly is that we have already seen, in one year, the estimated cost of the Clinton-Gore drug plan rise from $118.8 billion to $337.7 billion, and it is not implemented. The point is, we really don't have any idea about how much it is going to cost. As costs go up, what happens? As costs go up, first premiums go up, and then there is political resistance to premiums. What happened in England with a program similar to the Clinton-Gore plan? What happened in Canada? What happened in Germany? As costs rise, with political pressure to keep premiums down, what happens? In every country in the world that has adopted a one-size-fits-all government program, one thing has happened--and it is not as if it were different in Germany from in Britain, or different in Britain from in Canada. One thing has always happened: When you have a one-size-fits-all government program and costs explode, they ration health care. Great Britain is a good example. They delay the implementation of new drugs until the cost of those drugs comes down. That may make sense in controlling government costs, but if your mama is sick or your baby is dying, that is rationing health care. And every country in the world, to try to deal with this exact problem of exploding costs, when they have the government take over with a one-size-fits-all program, they end up rationing pharmaceuticals. So we have people in the Senate who stand up and say that in Great Britain you can get X drug cheaper. What they don't explain is that it wasn't introduced for 2 years because of the cost, because it was rationed by the government. That is something we have to be concerned about because nobody in America wants to be in a situation where, when their mama is sick, they end up talking to some bureaucrat about cost instead of to a doctor about health care. This is the greatest dilemma we face in doing something about pharmaceuticals. This is not a problem of anything other than arithmetic. Today, half of the people who receive Medicare spend less than $500 annually on prescription drugs. That is a fact. When people hear on television that we are debating having the government set up a program to pay for their pharmaceuticals, they think we are talking about the government paying for their pharmaceuticals. But the plain truth is--as anybody who has actually looked at the plan that has been proposed by Clinton and Gore knows--the first thing they discover is that when it is fully implemented, you are going to have to pay $662.40 in annual premiums for a plan that pays for half of your pharmaceuticals up to, ultimately, $5,000. Here is the point. Half of all of the seniors are in the position today where their pharmaceutical bills are $500 or less. If we implement a program that has the government take over prescription drugs so that we don't have 68.8 percent of people covered by other health insurance, as we have today, but we have everybody in a government-run program, the premium cost of this is very high. And remember, this is based on a cost estimate which, if we know anything about these programs, is a gross underestimation. The annual premium cost is $662.40, and for that the government pays half of your pharmaceutical costs. So here is the point. If the government is paying half of a Medicare beneficiaries prescription drug costs, most Medicare beneficiaries are going to get out of this program less than $250 of benefits, but they are going to pay $662.40 in premiums just to be in the program. Now how many seniors understand that half of them are going to get $250 or less worth of benefits, but are going to end up paying $662.40 a year in premiums? What kind of bargain is it to pay $662.40 to get a benefit worth $250 or less? It is a very bad bargain, which explains why it is mandatory--why either you have to take it the first day you are eligible or you can never get into the program. They have to find ways of forcing people into this bad deal because they are not content to try to help the 31 percent of the people who don't have the insurance. They are trying to force everybody into one program run by the government, of course; and in doing so, for every one person to whom you provide new coverage, you in essence take away coverage that two people already have, which is not funded by the government. That is why these cost estimates on a one-size-fits-all government- run program are so cataclysmic and why, if you ask people, Do you want government to provide pharmaceutical coverage in Medicare? the vast majority of people say yes. But when you explain to them that half of the people on Medicare today spend less than $500 on prescription drugs and, when the program is fully implemented, the annual premium is going to be $662.40 that will pay for only half of your pharmaceuticals up to the point you spend $5,000, people will look and see that half the people are getting $250 in benefits, and they are spending $662.40 initially when the program is fully implemented and see it isn't a good deal. But does anybody doubt the program will be at least twice that when it is ultimately in place? I don't think so. In this political environment we are in, people are always talking about risky schemes. We have all heard it. It is amazing to me that people will talk about spending trillions of dollars, but if you want to give half that amount in tax cuts, it is a risky scheme--spending it is not risky, but giving it back to working families is risky. Let me talk about how risky this government takeover of the pharmaceutical benefits in America for seniors is. The Clinton-Gore plan is back-end loaded. What do I mean by that? I mean that the first year it is very cheap because it doesn't even go into effect for 2 years from now. Then it becomes very expensive. The first year of the program advertises that it will cost only $13.5 billion. When the program is fully implemented, it costs $59.7 billion, or almost $60 billion a year. When we run this out over a 10-year period and we look at the estimates that are being made when fully implemented, whereas the initial estimate by the Office of Management and Budget was the program would cost $118.8 billion, when we take its cost at full implementation and what we already know, its actual cost is $597 billion over 10 years. How are we going to make up this difference? Britain has a government-run benefit on pharmaceuticals. Germany has one. Canada has one. How did they make it up? They made it up by raising the premiums initially, and when political resistance occurred, they start rationing health care. That is what we would be buying into here. There is one other difference, and this is from the Congressional Budget Office ``Analysis of the Health Insurance Initiatives in the Mid-Session Review'' that they published on July 18. I urge my colleagues to look at it. They analyzed the Clinton-Gore drug plan. Most people are obviously focused on, what is it going to cost? The Congressional Budget Office, the nonpartisan budgeting arm of Congress, finds that not only is it going to cost a tremendous amount more than what is being claimed, but equally disturbing to me is this quote: The Congressional Budget Office estimates that after 10 years, the average price of drugs consumed by the Medicare beneficiaries would be 8 percent higher if the President's proposal was enacted. In other words, not only will taking over pharmaceutical coverage for all Medicare beneficiaries, when only 31 percent don't have it, cost a tremendous amount of money, but it will drive up the cost of pharmaceuticals to everyone. This is not just to seniors, this is to everyone. What is the alternative? Interestingly enough, the best alternative is a bipartisan proposal from a bipartisan commission that was led by Senator Breaux, a Democrat, from Louisiana. I have a very revealing chart. I will give Michael Solon on my staff credit for this. I think this is one chart that tells a very important story. Here is what it is based on. The question it asks is the following: If you left everything exactly as it is, and you held the growth of government discretionary programs to the budget, how long could the government pay Medicare and Social Security benefits as they are currently promised? In other words, when would the government run out of money to pay for Medicare and Social Security benefits under the best of circumstances? He finds, under the current system, the federal government would run out of money in the year 2027. If we don't spend the money or use it for anything else, we keep spending in real terms where it is, and we use all the money in the budget to fund just Social Security and Medicare, the federal governments runs out of money in 2027. That means everybody 40 and over would, for all practical purposes, be covered, but everybody under 40 would be vulnerable to the federal government's inability to pay Medicare and Social Security benefits. If you adopted the Clinton-Gore plan, what you would do is, by driving up costs, move this doomsday or day of reckoning--whatever you want to call it--from 2027 to 2022, which means that only people 44 and above would have their Medicare and Social Security benefits secured. Stated another way, 17 million people who are between 40 and 44--those 17 million middle-aged people in that 4-year bracket--would have their Medicare benefit and their Social Security benefit imperiled by the adoption of the Clinton-Gore plan. What is the alternative? The alternative is a bipartisan proposal. The estimates that were done of the bipartisan commission--and I remind my colleagues, people were appointed by the Speaker and the minority leader, by the majority leader and by the minority leader, and by the President--they put together a proposal that a majority supported. But because all of President Clinton's appointees voted against the final package, it did not get the supermajority needed to make a formal recommendation. However, the majority supported the Breaux proposal. The Breaux proposal basically reformed Medicare and provided pharmaceutical benefits to the 31 percent of the people, or most of them, who don't have Medicare, don't have coverage for pharmaceutical benefits. The important thing was that the reform of Medicare contained in the Breaux commission report--by reforming Medicare, extended its lifetime from 2027 to 2059, which would mean anybody over 8 years old would have their benefits guaranteed if we adopted the bipartisan Breaux commission report. What is the point of this speech? The whole point of this is the following, and I think these points were very important and I want to just run through them real quickly. Point one, you have 69 percent of all seniors who have some pharmaceutical coverage already. Why would you want to have the government come in and pay for that, especially when 44 percent of them are having it paid for by their former employers? That doesn't make any sense. The only case in which you would want to do that is if you had some political agenda that said we ought to have a government-run health care system. I submit, based on the record of this administration, when they tried in 1993 and 1994 to have the government take over and run the health care system, that is exactly what their agenda is. But, notice--and this is easy to explain--if you have a problem with 31 percent of the people but you have 69 percent who already have a benefit, don't tear up what they have trying to help the people who need it. That is the first point. The second point is that when you try to have a program that covers everybody, and you start substituting government dollars, tax dollars for other health insurance that 69 percent of the people already have, you are forced into a system where most seniors will not benefit. As I explained earlier, today over half of all Medicare beneficiaries spend less than $500 a year on prescription drugs. Yet under this one- size-fits-all, government-runs-it, government-controls-it plan that has been proposed by the President and endorsed by the Vice President, when that plan is phased in, in order to get coverage where the government will pay half of your prescription costs up to you spending $5,000, it costs you $662.40 a year in premiums. But half of all Medicare beneficiaries would only get benefits of $250 or less. Needless to say, when you say to seniors, ``We have a great deal for you, we are going to give you a benefit for $662 a year that half of you will find to be worth less than $250 in any given year,'' they are not excited about it. So how do you deal with that? You deal with that by trying to mislead people about what it is going to cost. You don't phase in the whole program. You don't even start the program for 2 years, so, boy, it is cheap for the first 2 years because you don't have a program. Then you phase it in. The point is, when you do that, you start out cheap--$13.5 billion. But when you get it fully phased in, even based on the estimates of the Congressional Budget Office--and we know the real costs will be higher--you are already up to about $60 billion a year when you get it fully implemented. Obviously, anybody who is trying to be critical of what is being proposed has the obligation to propose an alternative. Fortunately, as a member of the Medicare Commission with Senator Breaux and Senator Kerrey--the two Democrat members who worked on the majority position-- there was a proposal made. That proposal was a comprehensive reform of the system. That comprehensive reform, which provided pharmaceuticals for moderate-income people but let the 69 percent of the people who already had pharmaceutical coverage keep it, didn't substitute tax dollars for General Motors' money on retirement health care. What happened was, whereas the Clinton-Gore plan would actually endanger the Medicare and Social Security benefits of people between the ages of 40 and 44 by driving up costs and by forcing those systems into insolvency or into fee increases or into tax increases sooner, the bipartisan proposal of the Breaux commission would have actually expanded the life of Medicare to 2059. That would mean everybody 8 years old and older would be protected. It would give us an opportunity to further refine the system. I thank my colleagues for giving me this opportunity. These are important issues. They deserve prayerful consideration. I urge my colleagues to look at them before we change Medicare. I yield the floor.

Mr. GRAMM

Mr. GRAMM. Mr. President, like most people this morning, I read the headline ``Physicist Lee Freed With Apology.'' I want to comment on this. I want to be careful about what I say because I am angered and embarrassed about what has happened to one of our fellow Americans. For the last few months I have been troubled by the case of Wen Ho Lee. I have been troubled because I have had the deep suspicion that Dr. Lee was a victim of scapegoatism by the Justice Department and by the Energy Department. But I tried to follow the old adage we all learn from our mamas--that when you do not have the facts, wait until you get the facts before you have something to say. Today we have the facts. The facts are that the Federal judge in this case said--talking about Janet Reno, the Attorney General of the United States of America, and Bill Richardson, the Secretary of Energy--and I quote the Federal judge: They did not embarrass me alone. They have embarrassed our entire nation and each of us who is a citizen of it. Let me say they certainly embarrassed me. It seems to me that what happened was we had a terrible breach of security. Our Energy Department was asleep at the switch when the nuclear secrets of this country were stolen. That was raised to a level of public awareness. Rather than going out and finding the person who was guilty of stealing these secrets, it now appears that what the Justice Department did, to its great shame and our embarrassment, is engage in racial profiling to identify an Asian American of Chinese ancestry, Dr. Lee, and to use him as a scapegoat for the failure of this administration to protect American national security. This individual citizen ended up month after month in solitary confinement, having been charged in a 59 count indictment, and then when it was clear that there was no case, they plea bargained to release him on a minor offense. I say ``minor'' only as compared to the selling of nuclear secrets of the United States to the Chinese, or giving such information to them. Dr. Lee transferred secure data to a nonsecure source, a charge for which John Deutch, in a much higher position of government in this administration, was never prosecuted. In return for admitting guilt to this charge, this man, who was denied his freedom and who was on the verge of having his life ruined, is now exonerated by a Federal judge. I would like to say this: First of all, I don't understand an administration that stands up and damns racial profiling and yet engages in it when it suits their political agenda. I don't understand scapegoating when you are talking about a man's freedom and when you are talking about a man's life. I think if our Attorney General, Janet Reno, had any honor and any shame, and I think if Bill Richardson had any honor and any shame, they would resign as a result of this outrage to the American people. The idea that this man was in solitary confinement month after month, deemed a public enemy, and vilified, it seems to me, at least, based on everything we know--and it seems if the Justice Department had any facts, they would have presented them to this court and to this judge-- because of his race. I think it is an outrage. And I think an apology is due from the President of the United States. I think this is a terrible wrong and an outrage. I have for months been suspicious that this was happening, but I didn't want to say anything until we had the facts. I hope my language hasn't offended anybody. But I just do not understand people who, to get political cover for their own failings, don't seem to care that we are talking about the life of a real person. Our system is not based on my rights, or Bill Clinton's rights, it is based on the rights of each individual citizen. The idea that this man has had his good name and his family so attacked and has been in solitary confinement when the only thing the Justice Department ended up getting him to plea bargain on was that he took material out of a secure setting to a nonsecure setting when another official of this Government, by his own admission, did exactly the same thing and was never prosecuted--this is a terrible outrage. I just didn't feel comfortable not saying something about it. I just wanted to go on Record as saying that there is something very wrong in America. This is not the America I grew up in when this kind of thing happens. Somebody in the Senate needed to say something about it. I decided that was me. I yield the floor.

Mr. GRAMM

Mr. GRAMM. Mr. President, I ask unanimous consent to speak in morning business.

Mr. GRAMM

Mr. GRAMM. Mr. President, I ask unanimous consent that when the Senator from California finishes, I be recognized for 10 minutes.

Mr. GRAMM. Mr. President, I rise in strong opposition to the Thompson amendment. I oppose it because it is a bad amendment. Its logic is flawed. It would hurt America more than it would punish China. Let me try to explain why. First of all, the Thompson amendment goes far beyond denying China access to American dual-use technology that could have defense applications. The Thompson amendment would take American capital markets and inject politics into them by denying access, for the first time, to a nation that is not engaged in a direct conflict with the United States of America, under our traditional definition of conflict. Some people seem to have the idea that by adopting PNTR we will be having a marriage with China--that somehow, because we are endorsing normal trade relations with China, we would in effect be endorsing Chinese policies on how they treat their workers, how they protect religious freedom, how they protect the environment, and how they conduct their foreign policy. We are not doing any of those things. Every criticism of China that has been made is valid. Senator Thompson talked earlier about not wanting to irritate the Chinese. I am perfectly willing to irritate the Chinese. But this legislation is about establishing normal trade relations--the same relations we have with virtually every country in the world except countries directly involved in terrorism--with China. We are not talking about a military alliance or a political marriage. We are talking only about normal trade relations. The Thompson amendment to the PNTR bill would impose political controls on the American capital market with regard to China. Federal Reserve Chairman Greenspan says that the Thompson amendment's financial sanctions ``would undercut the viability of our own system and would harm us more than it would harm others.'' The Securities and Exchange Commission says the Thompson amendment is ``antithetical to the United States approach to capital market access and free movement of capital.'' The Securities Industry Association, which represents securities markets nationwide, says the Thompson amendment ``could seriously disrupt investor confidence in United States markets and jeopardize their continued vitality, debt and liquidity.'' Senator Thompson says he wants a vote on his amendment. I have no objection to Senator Thompson having a vote. But he doesn't want anybody else to have a vote on it. If we are going to consider major legislation like the Thompson amendment, as chairman of one of the committees with jurisdiction over major elements of that amendment I would like to have an opportunity to offer my own amendments to it. I know we can get carried away with amendments. And Senator Thompson makes a good point. Committees of jurisdiction aren't everything. But I think it is important that we get Alan Greenspan and other people who understand our financial markets to give us input before we take a major step like instituting controls on America's capital markets. The capital markets and financial institutions controls in the Thompson legislation go against what we have been trying to achieve with the Chinese for many years. For years we negotiated with the Chinese to get them to open their markets to American financial services companies. We want citizens in China to be able to own a piece of the rock and to invest in retirement accounts in America. Senator Thompson's amendment would set up a mechanism to deny them the very rights for which we negotiated so long and hard. I am not here to endorse China's practices--far from it. I condemn their policies with regard to the environment, with regard to their workers, with regard to religious freedom, and with regard to proliferation. But that is not what we are talking about here. We are talking about establishing normal trade relations. And the key point is: Does anybody believe any one of these areas of concern will be better if we reject PNTR? I remind my colleagues that in 1948 there were 23 countries that signed the agreement that founded the GATT, now called the WTO. Their common goal was to expand economic trade. One of those 23 countries was China. But one year later, China turned to the dark side. They wanted to remake their society. They wanted to build a ``ladder to heaven.'' They wanted to create equality, except for their political leaders. And they did it--they made everybody poor. Chinese per capita income nosedived. By 1978, Taiwan, which started with fewer economic resources, had a per capita income of $1,560 a year. China's was $188. Today, Taiwan has a $13,000 per capita income, while China's is just $790. But the good news is that fifty-two years later, China wants to reverse the terrible decision she made back then, and re-enter the world of trade. China is turning away from the dark side. She is back knocking on the door. Now the question is, Are we going to slam the door in their face? I say no. Trade promotes freedom. If you are concerned about workers rights in China, do you believe that workers will have more rights in a growing private sector, where they can work for somebody other than the Government? I don't see how you can help but believe that. And if you believe it, then you are going to be for normal trade relations with China. If you want political and religious freedom in China, then give people economic freedom, which ultimately promotes political freedom, as we have seen in Korea and in Taiwan. Developing economic growth in China, so that people have a stake in economic freedom, will ultimately produce a demand on their part for political freedom. And in the process they will begin to change China. The Thompson amendment is legislation that needs dramatic changes. If we don't table this amendment, it is not going to be adopted. We are going to offer amendments to it. I would be perfectly happy to see this amendment brought up as a freestanding bill, but I want the opportunity to debate it and to amend it. Senator Thompson wants to have a vote on his legislation, but he doesn't want anybody else to have a vote on their amendments to his legislation. I think that is what ultimately brought us to where we are now. There are security concerns with China. They need to be dealt with. But they cannot be dealt with within the context of PNTR, with a bill that has never been through a committee, that has never had a hearing on its impact, that has not been looked at it to see whether it makes sense. Will it do what we want it to do? Will it hurt us more than it hurts other people? So I urge my colleagues to reject this amendment and to adopt normal trade relations with China. We are not endorsing China. We are trying to trade with them. We are trying to promote economic freedom because we know economic freedom not only enriches us and them, but ultimately produces an irresistible demand by people to have political freedom. When they have economic freedom, China will change. This is a bad amendment. It is not ready to be adopted. I hope we table it. As I said, if we don't table it, we are going to amend it; and then we are going to be in a long debate about a subject that is relevant and important. But it is a subject that does not have to do with establishing normal trade relations with China, which is the point of the underlying legislation and which I support. I will, therefore, vote to table this amendment. I urge my colleagues to do the same. I yield the floor.

Mr. GRAMM. Will the Senator yield for a unanimous consent request?

Mr. GRAMM

Mr. GRAMM. Mr. President, reserving the right to object, I have a great deal of respect for Senator Thompson and the issues he has raised. The problem is these issues fit more closely on the Export Administration Act. They have not been considered in committee. I think they represent a very real problem in this bill. I think it is important that if we are going to debate issues such as this, they be not just fully debated but they be subject to amendment. On that basis, let me yield. Senator Enzi wants to be recognized.

Mr. GRAMM

Mr. GRAMM. Mr. President, I move to reconsider the vote.

Mr. GRAMM

Mr. GRAMM. And within 5 years, American banks will be able to do banking business in Chinese currency. I cannot imagine how the world won't be better off when people working in China can bank in American banks, and use American banking products. If that is not the essence of freedom, I don't know what is. It's a similar story for our securities industry. Today, there are very real limits on American securities firms' activities in China, and on the ability of U.S. companies to invest and to have clear operating ownership. Those restrictions will be significantly modified for the benefit of our industry as well as the Chinese. To sum up, with the implementation of the November 15 agreement and the adoption of this PNTR legislation, the American financial sector as well as our industry and agricultural sectors will have an extraordinary opportunity to compete in a growing market of 1.2 billion consumers. It is seldom in the Senate that you vote on something that represents history in the making. A lot of what we do here--and a lot of what everybody does in every job in the world--is a bunch of little things about which they don't necessarily get excited. Today, we have an opportunity to work on something that is critically important, something that truly will dramatically improve the world in which we live. I am very strongly in favor of the pending PNTR legislation. I am opposed to amending this legislation. There are many good ideas for amendments, but the bottom line is this is something that is important. This is something that is historic. We need to get on with it, without tacking on amendments. I thank our colleague very much for yielding me the time. Mr. ROBERTS addressed the Chair.

Mr. GRAMM. Mr. President, I thank our dear colleague from Iowa for yielding. While my time will be charged against the majority time on the Byrd amendment, I want to talk about the bill itself. Mr. President, you run for a high office such as the Senate because you want to have an opportunity to have an effect on people's lives. You hope that effect you have is going to be a positive one. What we have political parties and debate for is to determine which policies are positive and which are negative in terms of their impact on people. I would have to say I have seldom had an opportunity to speak on an issue or to vote on legislation that I think is more important for the future of every American and more important for all the people who live on this planet than the issue of establishing normal trade relations with China. I would like to try to look at this in more of a historic context, to try to define why I think this is such a big deal and why this is so important to every person living on the planet. In 1948, from the rubble of World War II, a group of 23 nations got together to form an organization that became known as the GATT. What that organization was trying to do was to learn from the experiences of the 20th century, to learn from the experiences of the Great Depression where we turned a recession into a depression with protectionism and protective tariffs, to learn from the terrible experiences of a world war. Those nations had a vision, in 1948, to set up a world trading system so that people could produce goods and services and sell them all over the world so that countries would not end up getting into wars over resources, because resources would be freely traded. And since people living anywhere could specialize doing the things they did best, those nations believed the welfare of each individual citizen and all citizens combined would be enhanced. Remarkably, those 23 nations that set up what we know today as the world's trading system included China. In 1948, 52 years ago, China joined the United States, Great Britain, and other countries with a dream of promoting world trade. But then, in 1949, just 1 year later, something happened. What happened was China took the wrong turn. China turned to the dark side. China listened to politicians who said they were for the people and not for the privileged. China thought they could create wealth by tearing down wealth. China thought you could build up somebody by tearing down somebody else. So they set about creating what Chairman Mao called a ``ladder to paradise.'' The net result was the destruction of capital, the destruction of private property, the destruction of any kind of modern system for economic development--and untold suffering and poverty for the Chinese people. Remarkably, a country with among the most able people in the world found itself among the poorest countries on the planet. China had achieved the Marxist dream of making people equal--but it was an equality in poverty and hopelessness. I should say that it was equality for everybody except a small number of political leaders; they seem to never be equal. If anybody needs any numerical examples of what a difference economic freedom makes, listen to these numbers. In 1949, mainland China and Taiwan had roughly equal per capita incomes. The mainland had all the natural resources, and obviously they had the same kind of people. By 1978, by promoting world trade, protecting private property, and increasingly allowing people to make economic choices for themselves, the per capita income of Taiwan had risen to $1,560 a year. In contrast, per capita income on the mainland was a wretched $188 a year. Today, the per capita income of Taiwan is over $13,000 a year. And while China has started to turn from the dark side, while dramatic changes are underway in China, per capita income there is currently only $790 a year. Why is this vote so important? The vote is so important because in 1948 China was one of 23 nations that shared our dream of an open world with relatively free trade. Then in 1949 they turned to the dark side, and the Chinese people paid a terrible price for that decision. Today, 52 years after helping to found what now is the World Trade Organization, China is back knocking on the door, in essence saying we did the wrong thing by turning to the dark side 51 years ago, and now we want to come back and join the rest of the world in the free exchange of goods and services. This is an important occasion, it seems to me, because we have to answer the question: Are we going to open the door or are we going to slam the door in their face? We often get carried away around here in thinking that if people are not perfect, they are not good enough. We have heard a lot of criticisms about China on the floor of the Senate, and they are the same criticisms heard around the country. Based on the facts I would say the criticisms are absolutely correct. The two arguments we have heard more than any other argument in this debate are, No. 1, there is relatively little religious freedom in modern China. Obviously, that is true. I remember when Senator McCain and I were in Beijing and we were visiting with the President of China. We had raised the question about Tibet and about religious freedom. He said: We do not object to people practicing religion. It is proselytizing we object to. I said: Mr. President, you don't know proselytizing. Wait until the Baptists and the Mormons get over here. You haven't seen proselytizing. When people think they have found something in religion, they want to share it. But in China they do not have a conception of what religious freedom is. If we are going to trade only with countries that have granted its people the full range of religious freedom, China today fails on that account. But that is not the right question. The right question is, Will there be more religious freedom in China tomorrow than today if we reject this agreement, or will there be more religious freedom if we accept it? I tried during that meeting, and have on several subsequent occasions in meeting with Chinese leaders, to explain that freedom is like pregnancy. You cannot have just a little of it. It takes on its own life. When people have economic freedom, they want political freedom. When people have a right to own property and make decisions about their own future, they want the ability to make decisions about their own leaders. We have seen it in Taiwan. We have seen it in Korea. It is changing the world, and it will change China. For our colleagues who say they object to religious suppression in China, so do I. I object to it, and that is one of the reasons I am for normal trade relations with China. I believe that based on all of our historic experience, trade will change China. The ability of people to trade and, in the process, to experience prosperity and have the economic freedom that comes from the ability to buy American products, to know the joy of wearing cotton underwear made out of Texas and American cotton, to get the ability to own stock in America, to get the ability to own bank accounts denominated in U.S. dollars--all of that is provided in this agreement. Once you have a bank account with U.S. dollars in it, you are fundamentally changed forever. You want your right to have your say, and you want the right not only to make decisions in your family, but you want the right to ultimately affect decisions of your country, and you want the right to worship God as you choose. When you have economic freedom and the prosperity it brings, you ultimately have the power to get religious freedom. Many of our colleagues say that the Chinese do not respect workers' rights, and they do not. If one was going to judge this agreement based on how workers are treated, how do you expect a country to treat workers when most people work for the government? How do you think this country would treat workers if we all worked for the government? Workers end up being treated well because they have opportunities, because if they do not like how they are being treated on this job, they can quit and go to work somewhere else. We hear the AFL-CIO talk about workers' rights in China. If they really cared about workers' rights in China, they would be for this agreement because what this agreement is going to mean is more trade, more capital, more competition, more freedom, a larger number of employers in China and, therefore, the freedom that people will have to quit working for the government and government-sponsored enterprises and work in the private sector. I am not here to argue today that we ought to agree to normal trade relations with China because China treats its workers well. I am here to argue for normal trade relations with China because if we have normal trade relations with China, workers will be treated better because they will have more opportunities, they will have more freedom. There are some people who make the most fraudulent argument of all, and that is the argument that they oppose normal trade relations with China because China does not protect its environment, or because China makes decisions about its environment to which we object. If you really care about the environment in China--and they are part of the environment of the planet on which we live--you should be for this agreement because what poor country protects its environment? What country with a per capita income of $790 a year has the luxury of being concerned about its environment? I can answer that. None. If you want the environment to be better protected in China, you want more economic growth, more economic freedom, more prosperity so that people have the luxury of being concerned about the environment. I am not here today to say people who say there is no religious freedom in China are wrong. I am not here today to say that the people who say workers' rights are not respected in China are wrong. I am not here to say people are wrong when they say that China does not protect their environment. They are right. The question is not what is China like today; the question is what will China be like tomorrow. The answer will be based on what we do in terms of either opening this door to let them into the world of trade, or slamming the door in their face. There are other people who say if we let China in, ultimately that is going to mean that when we go to Wal-Mart, that shirts are going to be cheaper, that sweaters are going to be cheaper, that clothing is going to be cheaper, that implements are going to be cheaper, and that that is a bad thing because they could be made in America. I reject that. I think it is a plus. I thank God every day that people can go to Wal- Mart and buy clothing that is inexpensive. Few benefactors in the history of America or the world have done more than Wal-Mart to benefit ordinary people. The Chinese can produce quality goods that the people of Texas want to buy. I believe in freedom, and part of freedom is the right to buy something if it is legally traded and if it benefits your family. What do we get from these agreements? We have heard a lot of talk about the fact that we get a 17-percent reduction in average tariffs on agriculture. I can assure you that is going to be good news for our corn producers in Texas. It is going to be good news for our cotton producers. We believe that as the Chinese get an opportunity to eat Texas beef, they are going to like it, and as their income grows, they are going to want a lot more of it. We also believe that lowering industrial tariffs in China from an average of 25 percent to an average of 9 percent is going to be a dramatic boom to U.S. manufacturing, especially the manufacturing of high-quality items in high-wage industries, such as our high-tech industries. We believe we will benefit. As chairman of the Banking Committee, I wish to touch on three other industries that are also going to benefit. My colleagues know that we in America produce financial services better and more efficiently and more abundantly than any other country in the world. Needless to say, this is a high-wage industry. It is one in which we dominate the world, and we want to continue it. I will touch briefly on a couple of these industries. In the insurance market in China today, there is an ad hoc system where U.S. and foreign insurers get a license to operate based on political favor, on good fortune, or having been there first. And as an insurer, you have very real limits on where you can sell your products. Under the November 15 agreement, China will grant licenses without quantitative limits or needs testing to qualified foreign insurers. American insurance companies will be able to sell in China. And China's geographic limits on where foreign insurers can sell insurance products will be phased out over a 3-year period. Don't you think it will be good for people in China to get an opportunity to own a piece of the ``rock''? It seems to me that if anything ties us together and promotes peace and trade, it is having people in China be able to invest in American insurance companies, or buy IRAs, or enter into 401(k) retirement programs where the money is invested in the United States of America and around the world. Clearly we all benefit from that. Today, foreign banks in China can engage only in commercial banking if they are located in 20 specific cities. Foreign banks can only offer banking products in foreign currency. That means that for most people in China, they do not have access to American banks. It's an extremely limited ability to operate. Basically, what foreign banks have to do is to get Chinese partners, which means they basically must give part of their business away for the right to operate in China. But under the November 15 agreement, all geographic restrictions on foreign banking in China will be lifted within 5 years. American banks will be able to own 100 percent of their banking operations in China. Mr. President, I ask unanimous consent for 2 additional minutes.

Mr. GRAMM

Mr. GRAMM. Mr. President, my dad was a sergeant in the Army. I have always believed in a strong defense, and I have always prided myself on the fact that at least, in my opinion, no one in the Senate was a stronger supporter of national defense and a stronger supporter of the men and women who wear the uniform of this country and who keep us free. I, therefore, thought it was incumbent on me to explain why I am going to vote against this Defense appropriations bill. Let me start by giving you a little history because I think it explains why we are at this extraordinary point with a bill that seems so very hard to explain. It started with President Clinton. It is, unfortunately, a standard pattern that, from time to time, we have Presidents who come into office and cut defense, and then as they are on the verge of waving goodbye, they propose massive increases in defense spending. My dear colleague from Arizona will remember that the largest period of increases in defense spending in the peacetime history of the country did not start while Ronald Reagan was President. It, in fact, started the last year Jimmy Carter was President, even though Jimmy Carter cut national defense expenditures consistently during his Presidency. President Clinton, in the first 5 years he was President, cut defense spending every single day. In the first year of his Presidency, real defense spending fell by 5.8 percent. In 1994, real defense spending again fell by 5.8 percent. In 1995, it fell by 4.7 percent; in 1996, 4.9 percent; in 1997, 0.5 percent; in 1998, 2.8 percent. In every one of those years, real resources that we committed to national security and to the well-being of the men and women who defend America declined. Then, in 1999, finally, as we were looking at the 1999 budget, the Joint Chiefs of Staff finally stopped toeing the line for President Clinton, stopped apologizing for the decimation of the military, and pointed out that the military had been hollowed by Bill Clinton. It was a revelation that was late in coming, and it is a shame on the Joint Chiefs of Staff that they let it run for so long. So in 1999, led, I am proud to say, by the Republican Congress, we actually increased defense spending in real terms for the first time since Bill Clinton had been President. Now, in his final budget submission, President Clinton, as he is heading toward the exit, having cut defense consistently since he became President--even counting the increase Congress added last year, real defense outlays have been cut by 17 percent--now, in his parting budget, President Clinton proposed $16 billion of increases in defense spending. We might have celebrated that fact--having written a budget that added $16 billion and expanded our modernization programs, improved health care for our active duty military and for our retirees--there are many good things we could do with that $16 billion--but Congress was not going to be outdone. How dare Bill Clinton, in the final hours that he has in the White House, submit a massive increase in defense spending and have Congress just say yes. So remarkably, we find ourselves today in a situation where the President proposed a $16 billion increase, Congress has raised that by another $14 billion, and, as a result, we have over a 10-percent increase in defense spending in 1 year. I would submit that this is political upmanship that makes absolutely no sense. What has happened is, the surplus is literally burning a hole in our pockets. The picture is actually worse because there are all kinds of gimmicks in the bill that would allow more to be spent. You might wonder how $2 billion that nobody voted on in either House of Congress could be added in conference. Let me explain how it happened. In fact, I am sure people wonder: Where do these emergencies come from? Every week or so now, they are seeing Congress pass an emergency funding bill. And they might ask: Where do these emergencies come from? On page 54 of this Defense appropriations bill, we have an emergency created. This is how it happened. The Appropriations Subcommittee on Defense, in section 8166, cut spending for the Overseas Contingency Operations Transfer Fund by $1.1 billion. They took the $1.1 billion out of the appropriations bill, and then, in title IX, they added it back, but this time as an emergency. So, in the middle of page 54, an emergency is created, by taking money away from needed expenditures on American overseas contingency operations-- we take the money away in the middle of page 54--then we spend this money on all of these programs that Senator McCain is talking about, and then, at the bottom of page 54, we add it back because we have an emergency. Well, where did the emergency come from? The emergency came from the fact that they took the money from overseas operations to spend on other things. That is where the emergency came from. So they created the emergency in the middle of page 54, and then at the bottom of page 54, having created a crisis--we might have to bring troops home from Kosovo as a result of the money taken in the middle of page 54--so at the bottom of page 54, having created the emergency in the middle of the page, they then solve the emergency by taking exactly the same amount of money, declaring it an emergency so it does not count under the budget, and adding it back. It, I think, speaks volumes that Senator McCain looked at this bill, and I looked at this bill, and we both came up with a list of programs that we thought were indefensible. We never talked about our choice of programs, but there is not a single overlap on our lists. That tells me we were picking from a large bushel basket full of add-ons. Let me give you a few that I think deserve a prize. Five million dollars is earmarked out of Army operations and maintenance. I remind my colleagues, this is an area where we have a critical shortage of funding, where we have provided emergency money in the past. In clear violation of the base closing law--which says, when you close a military base you can't keep building infrastructure on that military base; when you have closed it, when you have transferred it to the civilian sector, you can't keep spending defense money on it--in clear violation of the base closing law, we provide $5 million, which we transfer to the National Park Service, to build infrastructure on a base that has been closed. No. 2, we provide $4 million to monitor desert tortoise populations. Remember, we are taking $4 million out of the defense budget. In fact, we declared an emergency when we took the money away from overseas operations, and then we put it back in for an emergency so we could fund programs such as monitoring desert tortoise populations. It is interesting, when you press, to learn what the justification is. The justification, you will be happy to know, is that we may, at some point, want to expand a military base, and the desert tortoise population might be relevant. I remind my colleagues, we are closing military bases. Nevertheless, in this bill, with all of our needs, we found room to provide defense money to monitor the desert tortoise population in California. Because we have a huge backlog in depot maintenance for our ships in the Navy, this Congress has provided $362 million of emergency money to try to deal with this backlog in ship maintenance so our ships can perform their missions. In this bill, we take $750,000 out of that emergency money and use it for renovations on the U.S.S. Turner Joy. Senator McCain will be one of the few people here who will remember the U.S.S. Turner Joy. It is a destroyer. It is well known because it was involved in the Tonkin Gulf action that got us deeper into Vietnam. But it has been out of the Navy since 1982. We are providing $362 million on an emergency basis to catch up with ship maintenance, and yet we are basically giving a tourist bureau money to do renovation on a ship that has been out of the Navy since 1982. There is $5.5 million for an Army research and development project. This is money meant for modernization so if we have to send men and women into combat, they will have technological superiority. We use this $5.5 million for laser vision correction. Laser vision correction is a miracle. They can come in and do it, and you don't have to wear glasses anymore. But the point is, what does that have to do with national defense? Why are we funding medical research out of the national defense budget? Then there is $2.8 million to buy new office furniture for the Defense Language Institute in Monterey, CA. At first you might say, OK, we built a new building; we have to buy new furniture. But there isn't a new building. We are not building a new building at the Defense Language Institute in Monterey, CA. The question is: Why do we need new furniture now? What is wrong with the old furniture? The answer: The surplus is burning a hole in our pocket. This is a grab bag. It is like one of these sales you see on television where they dump the clothes on a table and they are on sale, and everybody grabs a piece of it. Finally, $3.5 million is added in Army research, development, test, and evaluation for artificial hip research. Now look, artificial hip research is important. There are people who have deteriorating joints. We fund research at the National Institutes of Health to deal with health problems. What are we doing taking $3.5 million out of defense to fund this kind of activity? I will conclude on this: We took $1.1 billion out of defense. We declared an emergency because we didn't have enough defense money. Then, having declared an emergency and gotten the money, then we take the $1.1 billion that was supposed to be spent on defense and spend it on other things. As a result, we literally have an almost endless list of projects exactly like these. You have to ask yourself, is this really the best use for the taxpayers' money? I say to my colleagues, I am going to vote against this Defense bill because this is runaway spending at its worst. I voted against other bills because of the obscene way we literally are throwing money at these appropriated accounts. In this election year, with many close elections, we literally are spending money on anything that might have a constituency. This process has got to stop. I think it undermines the good work we are doing. I thank Senator Stevens. We have been working to resolve a disagreement over two unnecessary pay shifts. Senator Stevens has agreed--graciously, I might add--to fix that. But I am going to vote against this bill on the basis under which we are today considering it. I am going to vote against this bill because you cannot defend this kind of runaway spending. The only defense I've heard is that, in a big bill, you are going to take on some spending. I don't think that is good enough.

Mr. GRAMM. The Germans tried that.

Mr. GRAMM

Mr. GRAMM. Parliamentary inquiry. Is this a strike-and-insert amendment?

Mr. GRAMM. I suggest the absence of a quorum.

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

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

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