Phil Gramm

Mr. GRAMM

Mr. GRAMM. That is exactly right. We have a time-sensitive system for decisionmaking. But beyond that, we give the people, if they are not happy with their HMO, the ability to go somewhere else. As you know, Mr. Leader, nothing makes somebody providing a service do a better job than to know that you can say to them, if they are not doing the job: You're fired.

Mr. GRAMM. Let me give you a concrete example. Under the Kennedy bill, if you are not happy with the kind of health care you are getting, you can meet with a Government bureaucrat. You may have come back----

Mr. GRAMM. Sure I would.

Mr. GRAMM. If I may, what I first have here is the Kennedy bill that we call the Clinton health care bill which, as our leader will remember, we debated on the floor for 2 years. This bill was their bill where, if we would just force every American to go into a health care purchasing collective and let Government make the decision for them, they were going to guarantee that everybody would have coverage. This is what they wanted 3 years ago. We defeated that because we did not want our mama talking to some bureaucrat when she got sick. What they want to do is set up a system where if you have a patient who wants to be in the room with their doctor, they find themselves in a room with their doctor and a gatekeeper. Senator Kennedy would help them by putting a bureaucrat and lawyer in the examining room with them.

Mr. GRAMM. Madam President, we have had a health care debate for the last couple of weeks. The problem is that we are on appropriations bills. We are trying to pass a bill that will help stabilize the condition of farms and ranches all over America. However, our colleagues on the Democrat side of the aisle have seemed determined to talk about health care. I will talk about health care today. I begin by saying, first of all, this is not the beginning of the health care debate. Here are some bills we have debated on health care since President Clinton has been in office. This is the Clinton health care bill. We were told in 1993 there was a crisis in America and we needed to deal with it. The way to deal with it was setting up health care collectives where every American would be forced to buy their health care from one in their geographic region that would be set up with a local collective leader, appointed by the Government. Then all the doctors would work for this health care collective and the Government from Washington would issue mandates. Then people such as myself said that this is a terrible loss of freedom. When you adopt the Clinton health care bill that I have on the desk, when my mama is sick, she will end up talking to a bureaucrat instead of a doctor. We were told by Senator Kennedy and by President Clinton we have to give up this freedom because we have 30 million American families who have no health insurance. So in 1993, we were told if we would pass these bills and let Government run the health care system, if we would force every American into a health care collective where Government could run it efficiently and where Government could guarantee our health care, that we would lose some freedom, but we would deal with the problem of lack of coverage. We were told that the problem in 1993 was access. We had a big debate. At one point 82 percent of the American people thought these health care collectives were a great idea. Finally, a few Members of Congress stood up and said, ``Over my cold, dead political body.'' It was like somebody had taken a pin and stuck it in a big, fat inflated balloon. It just went whoosh, and suddenly everybody decided this was not a debate about health care; this was a debate about freedom. The reason I go back to this history is two things. First of all, please remember when we are debating the so-called Health Care Bill of Rights, it has the same authors who wrote the Clinton health care bill setting up health care collectives. They have not changed their minds about what kind of American health care they want. They really believe the Government knows best. They really believe if the Government ran the health care system that everybody could have access and everything would be better because the Government, through these health care collectives, could make decisions for us and we are basically ignorant people and we do not know how to make decisions for ourselves. This was and is still their goal. We defeated the Clinton health care bill because the American people decided it may have been Senator Kennedy's goal, it may have been Bill Clinton's goal, but it was not their goal. In fact, I would have to say that during the months I debated this bill by talking about cost and about efficiency, it was similar to throwing rocks at a tank. But suddenly when the issue changed to freedom and the right to chose, we blew the tank up. The same people who several years ago said give up your freedom because the problem is access changed their minds once we defeated them. Now they have a new health care bill they call the Patients' Bill of Rights. Oh, it does have something I guess you could call rights. Let me explain the basic problem and then I want to explain what they call rights and then I want to explain what I call rights and what I think Main Street America would call rights. Here is the problem in a nutshell. First of all, having spent 2 years trying to sell us on the idea we should give up our freedom to get access, they now say: Access is not a problem. Forget the 30 million people who do not have health insurance. In fact, Senator Kennedy's bill would take health insurance away from another 1.4 million Americans by driving up costs. These are estimates by the Congressional Budget Office. For the people who did not lose their health insurance, they would pay $57.2 billion more in costs. And by losing their health insurance--by the way, that would mean next year, if we pass the Kennedy health care bill this year, there would be 150,220 fewer breast examinations given to people who might have breast cancer; it would mean there would be 42,194 fewer mammograms; it would mean there would be 107,628 fewer Pap tests; it means there would be 18,458 fewer screenings for prostate cancer. When I am saying Senator Kennedy's bill, by the CBO estimates, would take insurance away from 1.4 million people, and for the people who got to keep their insurance because they had enough income, it would cost them $57.2 million, don't think I am just talking about money. Don't think I am just talking about a piece of paper that says ``Insurance Policy.'' I am talking about breast examinations, mammograms, Pap tests, and prostate screenings. I am talking about lives. I am talking about families. I am talking about your mama. I am talking about people you care about. This is a big issue. It is an important issue. What is the problem that Senator Kennedy wants, or tells us he wants, to deal with this year. The problem several years ago was too much freedom, and we had to get people in these health care collectives where Government could provide health care. Now the problem is the private HMOs, after which these Government collectives were modeled, are not giving people enough choices. The same things the Kennedy bill denied when it was the Clinton health care bill, such as the right to sue the Government when it was providing health care, now, all of a sudden, Senator Kennedy wants to give you the right to sue your doctor. So under the Kennedy plan, if your baby is sick and running a 104 fever, you may not be able to get a doctor, but you can sue. For most people, that is not what they want. But it is interesting that Senator Kennedy, who denied you the right to sue when he was going to let Government run the health care system, now is willing to attack the private sector and to expand lawsuits. What does he claim he wants to deal with? What he claims he wants to deal with is the following problem. People join HMOs to try to hold down medical costs. You have two people who are working, they have three children, they are trying to make ends meet in their family, they are sitting down the first day of the month at the kitchen table writing those checks, trying to figure out how they are going to pay the bills. So they join an HMO because it is cheaper. The one thing they are very much unhappy about is that the HMO too often gets in between them and their doctor. Let me just do a little analogy, if I may. It is similar to going into the examination room with your doctor--even with your doctor you feel a little bit uncomfortable taking off your clothes; everybody has had that experience. But with an HMO it is almost like the HMO gatekeeper is in the examination room with you. What you really want is to get him out of the room and leave you just with your doctor. What you want is what we show here--if you will just forget the symbols for a minute and just look at this stethoscope--what you want is you at one end of the stethoscope and your doctor's ears at the other end and you want to get any HMO gatekeeper out of the examining room. Senator Kennedy looks at this problem and here is his solution. His solution to the problem is: OK, you are unhappy because you are in the examining room and you have this gatekeeper in there with you and your doctor. Here is how he solves the problem: He solves the problem by saying, OK, you have your doctor in there, you have your HMO in there, and then what he calls your rights--his Patients' Bill of Rights--your right is not to get the gatekeeper from the HMO out of the examining room. That is not your right. Your right is to have a Government bureaucrat join the HMO gatekeeper and your doctor in the examining room with you, and then to have a lawyer join the Government bureaucrat who joins the HMO gatekeeper in getting between you and your doctor. So Senator Kennedy's solution to your problem is he puts two more people in the examining room with you. What kind of freedom does he give you? It is an interesting concept of freedom. I do not want to sound too partisan, but it sure defines the difference between the two parties. Freedom to Senator Kennedy is having a Government bureaucrat who is there who might take your side. Freedom to Senator Kennedy is freedom to hire a lawyer and sue somebody. That is not the freedom most Americans are talking about when they talk about freedom. Freedom is the right to choose. Freedom is the right to fire your HMO. Freedom is the right to make your own decisions. That is what freedom is about. This so-called Kennedy Patients' Bill of Rights may be about rights, but it is not about freedom. The Republican alternative, which we would like to debate and hope to adopt--in fact, to facilitate the debate, our leader has suggested over and over the most eminently reasonable proposal I can imagine. The eminently reasonable proposal is, let the Democrats write the best bill they can write, where they pick exactly the bureaucrat they want who will be there with the gatekeeper in the examining room with you, and then set up the system where you can hire the best lawyer you want to be there, all of them listening to your heartbeat with your doctor--the bureaucrat ready to regulate and the lawyer ready to sue. Let them write the best program they can write, and let us write our best program, and then let's put them before the Senate and let Members choose. Our Democrat colleagues do not want to do that because they know what will happen. They know that ours will be chosen. Now we have spent weeks and weeks fooling around with this thing. To get to the point I want to make, because I know our leader is coming over in a minute to start the debate, the Democrat bill is not what people want. This is not freedom. What people want is the right to fire their doctor, if they want to fire their doctor, to fire their HMO, if they want to fire their HMO, and choose for themselves. On a dark night when their baby has a 104-degree fever, they do not want to be given the freedom to call a lawyer, they want to be given the freedom to call a doctor. What good does calling a lawyer do after the fact? They want the ability to call a doctor to get the best medical care they can for their child. Our bill goes back to this chart. That is, there are two people in the examining room, and you choose to put both of them there under our bill. No. 1, you choose to put yourself there; and, No. 2, you choose the doctor who is in the examining room with you. How does it work? Under our bill, we give people freedom. We give people the right to choose. One of the choices--and I can go through many provisions of our bill. I am just going through one today, and it has to do with medical savings accounts. When we first started debating medical savings accounts, a lot of our Democrat colleagues were for them, but now that they understand them, they hate them, and they hate them because they empower people. They empower mothers and they empower fathers to make decisions rather than governments or HMO's. This is how it works. You have a choice, and one of the choices you can exercise is to set up a medical savings account. You would buy an insurance policy, and you would choose that insurance policy from the company you want to provide the services. It would guarantee your medical expenses beyond, say, $3,000 of expenditures, so that if somebody gets really sick, you have an insurance policy. But then you and your employee would together over time put $3,000 into a medical savings account, and that money would belong to you. Each year, if you had medical expenses, you could spend it out of the medical savings account, where you choose how to spend it on health care and who provides the service, and if at the end of the year you have not spent the money, it belongs to you. So you have an incentive to be cost conscious and efficient and to have a stake in your health care system. But also, you have the right to choose. Here is how Senator Kennedy's plan works. Under his plan--and let me take the Washington phone book because it is on top--under his plan, you have total freedom to look under ``lawyer'' and hire any lawyer you want to sue, but you do not have the total freedom to look under ``physician'' and hire any physician. Under Senator Kennedy's plan, assume, to make a long story short, it is 2 o'clock in the morning. My youngest son Jeff, let's say he is 3 years old--actually he is 22 now, but he was 3--and let's say he has a 103-degree fever. I am never spooked fever until when I see it in my own children. When my children are sick, like any father, I begin to get nervous. Under Senator Kennedy's plan, I get out the telephone book and I look under ``physician.'' I am not interested in a lawyer. A lawyer cannot do me any good. If I do not get help quickly, I may want to look up and call a preacher. I figure he might do me good, but a lawyer is not going to do me any good. Under Senator Kennedy's plan, I get out the phone book and look up ``physician'' and ``services.'' Under his plan, I have to call people up and say: I know it is 2 o'clock in the morning, but I am in such and such HMO. Are you a member of my network? Do you participate in the program I participate in? They may or they may not. Most of them do not. In fact, if one goes down the list and picks the biggest network available in Washington, DC, only a very small fraction of the doctors listed in the phone book are members of that network. How does our plan work? My wife and I have put money into our medical savings account. We can have it in one of three forms. We can do it with a checking account. This is an actual medical savings account program by Golden Rule Insurance. They give you a checking account, out of which you pay medical bills. This card is through Mellon Bank, and this is a medical savings account. It is a MasterCard. This is through Visa, and it is a medical savings account from American Health Value. It is 2 o'clock in the morning, and I have a sick child. Under our plan, I call up and I have to ask only one question: Do you take a check? Do you take MasterCard? Do you take Visa? If he does, that doctor is my doctor. I picked a page of the phone book and had my trusty aides call. This is on page 1017 of the DC phone book. On page 1017 of the DC phone book, there is not one doctor on that page who will not take a check. There is not one doctor on that page who will not take a MasterCard. There is not one doctor on that page who will not take Visa. In other words, under the Republican plan, if your baby is sick, you can go to any doctor. If your baby is sick, you choose. What is freedom? Freedom in health care is not the ability to have a Government bureaucrat second-guess the HMO which is second-guessing your doctor. That is not what freedom is about. Freedom is not being able to have a lawyer who can sue the HMO which is second-guessing the doctor and sue your doctor. That is not what freedom is about. Freedom is about the ability to fire your HMO. Freedom is about the ability to choose. Why don't we have a situation where we make everybody go to one kind of grocery store and we have the Government regulate it? We can set up the ability to sue them. We do not do that because, basically, it does not work. That is how we run Government, and that is why it works so poorly. If a grocery store does not sell what I like, I do not go there. If people do not clean my shirts or if the gas I put in the car makes it run poorly, I go to another station and buy another kind of gasoline. All through my life I exercise my freedom to choose. What the Republican plan brings to health care is the freedom to choose. We have gone so far down this road, where we are making American health care look like this, that even our hometown doctors are talking about joining labor unions because they want somebody to help them negotiate with the bureaucrat, they want somebody to help them negotiate with the HMO, and they want some ability to protect themselves from lawsuits. Is that what we want in American health care? I don't think so. I think we want freedom. We want people to have the right to choose. What our bill does is do that. It gives you an opportunity to hire anybody you want to hire, to pick up any phone book in any city--I have here a phone book from Atlanta, GA. Again, you open up the part of the phone book that has to do with the listing of physicians, and any time you pick up the phone, when you have a medical savings account, you can say: Do you take a check? Do you take MasterCard? Do you take Visa? If they do, you are in. Under our bill, you do not find yourself without health care because you are a member of some medical group in Washington but you happen to be in Atlanta when you get sick. Under our plan, the basic currency we use, which is U.S. currency, is taken everywhere. So that is the choice I think people want. This Democrat bill is not freedom. It almost abuses the English language to call this a Patients' Bill of Rights. What kind of right do you have in health care when you are guaranteed the right to pick your own lawyer? The right you want in health care is the right to pick your own doctor. The right you want in health care is the right to pick your hospital. The right to choose in health care is the right to say: I don't like how I am being treated. I don't like the kind of service being provided. I think your cost is too high, I think your quality is too low, and I am going to leave. Those are not freedoms guaranteed in Senator Kennedy's Patients' Bill of Rights. His freedoms are: Look, if you are not happy with the quality of service, then you wait right here--it may take several hours or you may have to come back on Tuesday at 4 o'clock--but we will have a person from Health and Human Services, and they will listen to you and they will talk to you. If you are not happy, you can meet with them. You will have to sign some forms. They will want to look at your medical records; they will go through them. It may take weeks and weeks and months and months and years and years, but under Senator Kennedy's bill you will have these bureaucrats who will be protecting you. That is freedom to Senator Kennedy. Then if that fails, Senator Kennedy said: Well, another freedom you have, you have the freedom to sue. So let's say you have this terrible health care problem, and you or someone you love may be on the verge of death. What Senator Kennedy's freedom is that first of all, you can talk to this bureaucrat. You may have to come back next Wednesday. You may have to wait in line. You will have to fill out a lot of forms, but he will be there for you at some point. But if that doesn't work, then you can hire a lawyer, and you can sue. You may die, your loved one may die, but you will have a bureaucrat who will have been there. Maybe they did not make it in time--they meant to be there--but they were there for you. And then you can sue somebody if all that happens. That is what their ``freedom'' is about. Our freedom is the right to choose, not a lawyer, but a doctor. If your baby is sick, you have the right to choose the doctor. You can pick up the phone, pick up any Yellow Pages across America, look up in the Yellow Pages under ``physician,'' and then you can pick whoever you want. Under our bill, you can call them up and say: Do you take a check? Do you take MasterCard? Do you take Visa? If you are covered under our plan, you have the right to choose a program that will let you choose a doctor. So if you think your HMO is doing a good job, you can stay in your HMO. But if you do not think they are doing a good job, you do not have to wait in line to talk to a bureaucrat, you do not have to hire a lawyer, you just simply say to them: You are not doing a good job, and you're fired. If you like Senator Kennedy's freedom, you want his bill. If you like our freedom, then you want our bill. What is real freedom? It is the right to choose. I thank my colleagues for their patience. I see the leader is here on the floor. I yield the floor. Mr. LOTT addressed the Chair.

Mr. GRAMM

Mr. GRAMM. Mr. President, I congratulate our dear colleague from Florida, the distinguished chairman of the Joint Economic Committee, for his remarks. I identify myself with what he said. The steel quota bill is a trade war starter and a job killer. It is imperative that this bill be defeated on the floor of the Senate today. Let me just try to outline a few reasons why I think that is absolutely essential. First of all, America is the world's largest steel user. We have 40 times as many jobs in America using steel as we have jobs in making steel, so if we decide we are going to effectively, through this quota, impose a tax on steel, for every 1 worker we help we are going to hurt 40 workers. In fact, it has been estimated that to save one job through protectionism in steel it will cost Americans about $800,000. How can it make sense to impose a cost of $800,000 to save a $50,000 or $60,000 job? It makes absolutely no sense. It would be an irrational decision for an individual or a family to make such a decision. And what is wisdom for an individual or family cannot be folly for a great nation. You might ask yourself, if, in fact, everybody knows we have 40 steel-using jobs for every 1 steel-producing job--and we are debating imposing a quota on imports which will hopefully protect a few jobs while destroying many jobs--why are we doing it? We are doing it because the steel workers are very organized and are very tied in politically. That is what this is about. The important thing to remember, however, is it costs not only about $800,000 per worker to protect a steel job, but because the steel quota is World Trade Organization illegal, it means that our competitors around the world, who will find these quotas being imposed on their steel, will be able to impose similar quotas and tariffs on American manufactured products, American agricultural products, American services that we sell around the world. So the first point I want people to understand is that, by the most conservative estimate, when you take into account 40 jobs in steel using for every 1 job in manufacturing, when you take into account that this steel quota is illegal and therefore will produce countervailing quotas and tariffs against American products where we clearly are competitive on the world market, we are going to end up paying, as American consumers, over $1 million for every job in steel we might protect under this quota. The next point I want to make is that the problem in steel is largely not imports. In 1980, we had 459,000 people employed in the steel industry. Today, we have 163,000 people employed in the steel industry. You would think, in looking at these numbers, that steel production in America had fallen right through the floor; but, in fact, steel production since 1980 is up 56 percent. In fact, steel production in America was at an all-time high in 1997, even though we had reduced the number of people working in steel production from 459,000 to 163,000. How do you reduce the number of workers from 459,000 to 169,000 and have production go up by 56 percent? You have that occur because of modernization and because of the implementation of new technology. In fact, since 1980, on average, America has reduced the number of people working in steel production by 9,000 a year, and they have done that not because of foreign competition but because of the implementation of new, modern technology. Senator Mack mentioned it, but we have trade law section 201 that allows an industry that is suffering from foreign competition, where it can prove that job loss is due to the foreign competition, to get granted relief under current law. The steel industry, which has a record of filing more unfair trade practice suits and more complaints under the trade laws than any other industry in America, has not availed itself of 201. Why? Because if you look back to 1980, the primary reason they are losing jobs is not foreign competition. In fact, in 1997 we had a record level of steel production in America--105 million tons. We had a record level of demand; hence we had a surge in imports and we had the demand because we are producing more cars, more trucks, more heavy equipment, and we are producing more washing machines, more dryers, more dishwashers than ever in history. And I can't think of a happier time, in terms of the economy, than we are looking at today. In fact, in 1998--the last year we had data--steel production in America was near the all-time record, at 102 million tons. So the second point is that there is not a lot of data to suggest that the problem is with imports. The third point I want to make is that the import crisis, if there ever was one, has passed. Steel imports are down from November 1998 to April of 1999--the last month we have data--by 28 percent. So if this ever was a problem, it is a problem that has largely been eliminated. Finally, where is the evidence that the steel industry is on its back? The steel industry earned $1.4 billion in 1998. Of the 13 largest steel makers, 11 earned a profit in 1998. The bankruptcy of the three steel companies that are largely discussed as part of this bill, most analysts estimate, would have happened without regard to imports because of their high level of debt and because of the failure of investment that they made in new technology. Now, no one is unconcerned when 10,000 Americans lose jobs in a year. That is a very real human story, and to be opposed to the quota bill is not to say that you don't care about the 10,000 people who lost their jobs. But it is important to remember that 9,000 people a year have lost their jobs due to technological change since 1980, and nobody wants to stop that change because it has created more jobs; it has produced better products; and it has produced products at lower prices, which have raised the real wages and living standards of every working family. Finally, we are creating 7,500 jobs a day in America. We are the envy of the world. We are the world's most open market. We are the world's largest importer and, as a result, every day in America we are creating 7,500 new permanent, productive, taxpaying jobs for the future. We are creating them in industries that are going to grow and prosper, where these jobs represent jobs that will be there 20, 25, 30 years from today. Why in the world would we, the greatest beneficiary of international trade, want to start a trade war over 10,000 jobs when 9,000 of them were probably lost due to technological change, and in the process, jeopardize the creation of 7,500 jobs a day? So the question we have to ask ourselves is: Do we want to risk 7,500 jobs a day in job creation in America due to being the world's greatest trading Nation? Do we want to put those jobs at risk for 10,000 jobs in the steel industry that will cost us over a million dollars, in terms of consumer cost, individually to protect? And, finally, there is no guarantee that technological improvement will not end up eliminating these jobs in any case. I think our choice is clear. I think we have to reject this bill. This bill will kill jobs. This bill will start a trade war, and since we are the greatest trading Nation in the history of the world, we will lose more than anyone else. So I urge my colleagues to vote no on this bill, and to vote no because we are the richest, freest, and happiest people in the history of the world because we are the one Nation in the world that believes in trade and practices it every day. Why we would want to change our minds on trade in the midst of an economic boom that is virtually unprecedented in the history of the world is a great mystery to me. Why this bill is even on the floor of the Senate is a testament to the level of economic illiteracy in America. Why it would make any sense whatsoever to impose an effective tax on steel and destroy 40 jobs for every one job that you save is a great mystery, and only politics can explain it. This is a bad bill. It could not come at a worse time. It is totally unjustified. It threatens the economic future of America, and I urge my colleagues to reject it.

Mr. GRAMM

Mr. GRAMM. Mr. President, in the last 12 months, America has created 1,950,000 new permanent, productive, tax-paying jobs for the future. We have created 7,500 jobs in every working day for the last 12 months. If we want to continue to benefit from being the world's greatest trading nation, we have to have politicians that are willing to stand up and fight for those principles by saying no on bills such as the bill before the Senate. Though the bill before the Senate may be well intended, the bill before the Senate is a job killer, a trade war starter, and it is a bill that will destroy 40 jobs in steel-using industries for every one job it saves in steel producing. Last year, we exported $222 billion worth of products that used steel; 40 jobs were created in those industries for every one job in steel. It is estimated that the passage of this bill would save about 1,700 steel jobs at a cost of about $800,000 a job for the American consumer. But that is not counting the jobs we would lose in steel- using industries. It is not counting the jobs we would lose because of retaliation from our unfair trade practice. If we want to create 7,500 jobs a day, we have to have the courage to stand up and defend the system that creates those jobs. I urge my colleagues to resist the siren song of well-organized groups that have their special interests and look at the general interest of America. When we are creating more jobs than the rest of the world combined, more jobs than in all of Europe, Japan, China, and every developing country in the world combined, why should we be attacking the very system that created those jobs? I urge my colleagues to reject this bill.

Mr. GRAMM

Mr. GRAMM. Will the Senator yield?

Mr. GRAMM. I know the Senator from Arizona wants to vote on his amendment, but I want to ask you a question, having sat here and listened. You are talking about Glacier Bay, and you showed a map of it. This is a far off place where, except for a very short period of the year, it is cold and frozen; right?

Mr. GRAMM. You have Native Americans who live by fishing and gathering and eating sea gull eggs; right?

Mr. GRAMM. Yes. Certainly.

Mr. GRAMM. Mr. President, you are going to hear an announcement in a moment from the two authors of the bill that is pending that we have worked out an agreement on the four amendments that were discussed earlier. I will leave it to them to talk about it. It appears we would have this vote on an extraneous matter, and then either accept the vote on the four previous matters discussed or have a rollcall vote. But before we get into all of that, I wanted to say that I am supportive of the amendment offered by the Senator from Arizona. One of the problems we increasingly have in the Senate is that it is so hard to pass an authorization bill that we are reaching the point where almost every legislative action originates in one of two committees--the Finance Committee, which engages in direct spending through entitlements, and the Appropriations Committee, which appropriates money. We have before us a bill that really should be under the jurisdiction of the Banking Committee. We are for all practical purposes appropriating without authorizing, or, one could say, authorizing within the Appropriations Committee. As I said to Senator Stevens, maybe I ought to start reporting appropriations bills to the Banking Committee and try to bring them to the floor of the Senate. But Senator McCain's amendment really brings home a very important point; that is, we have committees that have jurisdiction in these areas. We undercut the Senate when we don't recognize it. A policy, I think, that is ultimately quite independent of the issue we are talking about today but relevant to this amendment is that the sooner we can get back to having authorizing committees authorize and having appropriations committees appropriate the better off we will be. I am in support of this amendment.

Mr. GRAMM. You have bureaucrats in Washington who may have never been to Glacier Bay suggesting that maybe, instead of eating sea gull eggs, they might raise chickens?

Mr. GRAMM. I thank Senator Domenici and say, in complying with his wishes, that what I will do is simply go through and talk about four areas that I think we need to work on to improve the bill. Then I want to talk a little bit about the underlying amendment and about steel and about my different perspective on the problem than Senator Byrd has. First of all, this bill has an emergency designation in it. What does that mean? What it means is this bill will be exempt, because of that emergency designation, from the budget caps that we set out in law and that we reinforced when we adopted the budget this year. To the degree to which that emergency designation allows us to spend beyond the cap, that expenditure will take money away from the budget surplus, every penny of which is Social Security trust fund money. The way the bill is written, it is written in such a way that it does make some effort to try to deal with the cost of the program. In doing so, it is not effective, because it doesn't lower the spending caps to pay for this bill. My first objection--without getting into all of the delicacies of the budget which aren't really important to this--is the following: We have a surplus today in terms of the books of the Government. But we do not really have a surplus in the sense that if we had to keep our books like the private sector does, where we had to take into account all the liabilities that we are incurring by guaranteeing Social Security benefits in the future, if we had to use what accountants call ``accrual accounting,'' we would be running a huge deficit. It creates a problem because now, as virtually everybody in America, I hope, knows, we are collecting more in Social Security taxes than we are spending on Social Security, so we are running a surplus and the Social Security trust fund would tend to grow as a result of that surplus. But much to my distress, and I believe it would be distressing to the American people, if everybody understood it, it seems like weekly we spend more money, every penny of which comes out of Social Security, so that effectively we are plundering Social Security to pay for other programs. Now, you can argue the merits or the demerits of this loan program. I will tend to argue the demerits. But even if you thought this program had great merit, I think it is bad policy, and wrong, to take the money out of Social Security to pay for it. So the first effort that Senator Nickles and I will undertake is that there is a budget point of order in the budget against any emergency designation for non-defense discretionary spending, when that discretionary spending would, in this case, take money out of Social Security. So the first thing we intend to do, or at least we intend at some point during this process, is to raise that budget point of order to strike the emergency designation out of this bill. Let me make two points about that. No. 1, it won't kill the bill. What it will say is: You have to pay for the bill, because every penny you spend on these loan guarantees is money that you are not going to have to spend on something else. If we do not strike the emergency designation, then the money we spend on the loan guarantees will basically come out of Social Security; and since we have on several occasions, and will again, be debating whether or not to put the Social Security money in a so-called lockbox, I can't, in good conscience, keep voting to say we are putting it in a lockbox when we keep turning around and spending it. I have a little bit of trouble taking a position one day that we are protecting Social Security money and, a day or two later, supporting spending it. So the first issue we need to deal with is the issue of whether we should eliminate any possibility that this money would come out of Social Security. We can do that by raising the point of order that the bill has an emergency designation, and if that is successful, or if an agreement should be reached to simply take the emergency designation out, then any money this bill spends is money under the spending caps that can't be spent on anything else. So if we are successful there, what we will have done is, for all those who believe this bill is a very good idea, or even a good idea, we will have set up a situation where it has to be paid for. I believe that is prudent public policy, and I think it should be done. The second amendment we would be offering is an amendment to change the makeup of the board that will be making the loans. Let me remind my colleagues, and anybody else who is following this debate, that the reason these loan guarantees cost money is that we don't expect some of the loans to be repaid. The whole reason this loan guarantee package costs money--the reason we expect it to cost $140 million--well, that is the steel number. One of the reasons we expect this program, in total, to cost $270 million over the next 2 years is that we expect many of these loans not to be paid back. That recognition leads to three changes we want to make in these loans, and they are the other three amendments. No. 1, we don't think these loans ought to be made by the Secretary of Labor and the Secretary of Commerce. We believe we should have a board that is made up of people who have expertise in finance and who can guarantee two things: One, that we maximize the chances that the taxpayer will be paid back--I don't know how anybody can object to that--and, two, to the maximum extent we can, that we take politics out of the decisionmaking. So a proposal we will make will be a proposal to change the board that will end up making the loan and overseeing the credit transaction, overseeing the payment of the loans when they are due, and the collection of the principal and interest. Rather than having the Secretary of Labor and the Secretary of Commerce, we would propose to have the chairman of the board of the Federal Reserve Bank and the Chairman of the Securities and Exchange Commission, and then have them, together with the Secretary of the Treasury, giving us a three-person board, all of whom will have expertise in finance and loans and investments. So that we can try to achieve two objectives, both of which are important: No. 1, try to make the loans in such a way that we maximize the chances that they are going to be paid back, because that saves the taxpayers money. Secondly, to the maximum extent possible, we don't want politics to play a role in who gets these loans if you want them made. It is one thing to say they should be made, but it is another thing, I think, to set up a structure where we are almost guaranteeing that the announcements of these loans will be political announcements rather than financial decisions that are made where the board represents, in a fiduciary way, the interest of the American taxpayer. So the second amendment we will undertake will be to change the makeup of the board to go to Alan Greenspan, Chairman of the Federal Reserve Bank, as the effective chairman of the board; and then we will have the Chairman of the Securities and Exchange Commission and the Secretary of the Treasury serving on the board. I think by doing that we will maximize the chances of achieving our objective of maximum fiscal responsibility and minimum politics. A third amendment we will offer is an amendment having to do with the maximum guarantee of a loan. It is virtually unheard of for the Government to guarantee 100 percent of the loan, because by guaranteeing 100 percent of the loan, we take any risk away from the lender. If the lender is not responsible for any portion of the loan, the lender has no effective monetary interest in trying to see that the borrower has the ability to pay it back--has both the capacity and the will. In virtually every program in the Federal Government that I am aware of, loan guarantees are such that the Government does take on some of the risk in order to encourage lenders to lend, but it always-- in virtually every case--leaves the lender with some residual risk, to try to encourage them to be responsible. The proposal we will make is that no loan will ever be guaranteed for more than 80 percent, so that anybody who is making this loan will have to incur a risk of 20 percent. Needless to say, if you are making a $10 million loan and you are going to have to eat $2 million of it if it is not paid back, you are going to be a lot more judicious in making the loan than if somebody else is going to absorb the entire $10 million of loss if it is not paid back. So I think this is simply a good Government amendment. Again, if you believe these loans should be made, then they should be made in a way that doesn't take money from Social Security, which has an oversight board made up of people who have fiduciary responsibility, and who have the expertise and knowledge related to it, and who won't be political; and, finally, the loans themselves should be such that the actual lender has some stake in the loan being paid back. The fourth amendment we will offer today will be an amendment aimed at the minimum loan level. For some reason--and I don't understand it-- the authors of this amendment have put a minimum on the amount of loan that could be made. The minimum is quite large. So the net result of that, it seems to me, would be to tilt the lending toward specific would-be borrowers and to arbitrarily take loans away from small companies that might qualify but that might not be either willing or able to borrow the minimum amount. So the fourth amendment we propose offering today would be an amendment that says we will strike the minimum amount and then we will let the Secretary of the Treasury, the Chairman of the Securities and Exchange Commission, and the Chairman of the Federal Reserve Bank Board decide, based on the applications that are available, who has the best creditworthiness, not who would be the biggest borrower. So those are the four issues that, it seems to me, there should be relatively little debate about. No. 1, don't take the money out of the Social Security trust fund. No. 2, appoint a board of people who know something about lending and who will be good stewards of the taxpayers' money and who won't play politics in making the loans. No. 3, don't guarantee 100 percent of the loan. When a bank is making a loan, require them to undertake some of the risk. After all, they are going to get the benefits of the interest payments. We propose not guaranteeing more than 80 percent of any loans. The additional advantage of that is that we could lend more money. If you think this lending is a good idea, then I don't see how you could be against spreading it more widely. Finally, we strike the provision of the bill that sets the minimum amount, since there is no logic to saying that we will not lend to small business. I mean, if there is any modern entity that has taken on the same political appeal that Thomas Jefferson's independent farmer had in 1800, it is a small independent businessperson. If you think making these loans is a good idea, how can it make any sense to deny those loans to small business? Those are the four amendments that we would like to deal with today. There are other amendments we are looking at, but these four are so clear-cut and so necessary that I wanted to put them out on the table early this afternoon. It is my understanding that perhaps Senator Domenici and Senator Byrd would want to sit down and talk about these. I think the sooner we can do that, the sooner we can start moving. Finally, I want to respond to Senator Byrd on the steel issue in explaining how I see it so differently. It is an interesting thing to me. The longer I live, the more I discover that when people disagree with you, there are almost two reasons. There is generally one of two reasons why they do, and sometimes both reasons. One is they have a different lens through which they see the world and view things and value things, and that leads to a different conclusion. Our founders, Jefferson, for example, recognized that good people with good intentions come to different conclusions. But a second reason that people often differ is a different perception of the facts. Let me just talk for a minute about the facts and why I believe that there will be disappointment if these loans are made, and why it is likely that to the extent that if the problem was real, it probably would not be solved by these loans. Second, I want to argue that at least in terms of steel--I wish I could say the same about oil and gas--but at least in terms of steel I believe that the crisis is past. Let me try, without holding my colleagues up, to just simply run through this real quickly.

Mr. GRAMM. The amazing thing is that we are getting the Government involved in allocating credit at a time when we are creating jobs at a record rate on net of 7,500 jobs a week. Finally, I ask the Senator if he is aware that in a Los Angeles Times article in March, it pointed out there is expansion in the steel industry in that seven new plants will come on line this year, but each one of them, very interestingly, will employ 200 or fewer people. What is happening is, these small companies, with a small number of employees producing specialized products, are really outcompeting the bigger companies. In looking at the assessments by Wall Street, they are bullish on steel in general, and the three companies which have gone bankrupt, they say have gone bankrupt because they are too highly leveraged and they bet on technology that did not pay off.

Mr. GRAMM. I would be happy to yield.

Mr. GRAMM. We always win.

Mr. GRAMM. I thank my colleague.

Mr. GRAMM. They have never tried going to Glacier Bay and raising chickens, have they?

Mr. GRAMM. I thank the Senator.

Mr. GRAMM. I intend to vote with the Senator. I hope everybody will. Your amendment really makes the point that there is no end to the arrogance of people in Washington who are trying to tell people in a completely different part of the country, which they know nothing about, how to live their lives and claiming that somehow this bay belongs more to them than it does to people who have lived there for a thousand years. Not only are you representing your constituency, but you are speaking out on behalf of a concern, not in as clear a way, not in as glaring a way, but that many people in other parts of the country share. The last time I looked, there was no shortage of sea gulls on the planet.

Mr. GRAMM. To make a long story short, what you are really saying is you have Native Americans who are trying to eke out a living by fishing and by eating sea gull eggs, and you have bureaucrats in Washington who may have never been there, certainly would never go live there, who are saying that somehow they have the right to force them to change their way of life, with the idea that somehow it is more their business what happens in Glacier Bay than it is the business of people who live there; right?

Mr. GRAMM. I congratulate the Senator. His remarks were excellent. I agree with every point he made, and I believe a couple of things are important. This is not going to be the last one of these we do if we do this one. If we have already expanded this to iron ore, and we have steel and it was expanded in committee to oil and gas, does anybody doubt, if we pass this one, that 2 weeks from now, we are going to be back passing another one and another one and another one?

Mr. GRAMM. The second thing I want to know, is the Senator aware that mining has been added to where the loans can now go to iron ore companies as well with a $6 million minimum?

Mr. GRAMM. I want to be quick because I know our dear colleague is waiting. When the Senator talked about the minimum, he may have misplaced a decimal point. Under this bill, the minimum loan is $25 million for steel.