Phil Gramm

Mr. GRAMM

Mr. GRAMM. Will the distinguished majority leader yield?

Mr. GRAMM. Mr. Chief Justice, we are eager to get on with the debate. We have a quorum present. The Senator can make a point of order that a quorum is not present, but it is obvious to the naked eye that a quorum is present.

Mr. GRAMM

Mr. GRAMM. Can we turn this up? Mr. Manager HUTCHINSON. I don't think the question is audible. Well, that is a different--it's not as sophisticated a sound collection system as the U.S. Senate used in the depositions here, so I apologize for the fact that that was inaudible but the question was asked of the President: Q. After you gave her the gifts on December 28, did you speak with your secretary, Ms. Currie, and ask her to pick up a box of gifts that was some compilation of gifts that Ms. Lewinsky would have? His answer: No, sir, I did not do that. His denial and then the facts presented by Ms. Lewinsky and the circumstantial evidence, the question was asked of Ms. Lewinsky: Q. Did the President ever tell you to turn over the gifts? A. Not that I remember. But when I say that she that testified unequivocally, whenever Ms. Lewinsky was asked ``Did you later that day receive a call from Ms. Currie,'' the answer was, ``Yes, I did,'' and she goes ahead and explains it. There is no hesitation. There is no question. But their memory is clear that the call came from Betty Currie. Now, how could Betty Currie know to go pick up the gifts? I think you understand there is only one way that could have come about, and that would be through a communication from the President to her. Now, let's go on down the path. After we see the meeting on December 28, there was a meeting at the Hyatt on December 31. We could play this video--I would like to--with Vernon Jordan and with Ms. Lewinsky. This is a meeting at the Hyatt that Mr. Jordan totally denied ever happened in his first few testimonies before the grand jury. But in his most recent testimony before the Senate, in the deposition, he was confronted with receipts from the Hyatt, and the testimony of Ms. Lewinsky which was clear, and the corroborating facts. And he said yes, in fact, it did happen. And not only did he recall the meeting, but then he recalled what was discussed, that yes, in fact, notes were discussed there. And Ms. Lewinsky testifies that she raised the issue of other evidence that would be possibly in her apartment, notes to the President. According to her testimony, she was told that: You need to get rid of those. Now, Mr. Jordan totally denies that. But the point is, there is more evidence at risk for the President. Mr. Jordan, who is doing the work for the President, has this conversation with Ms. Lewinsky that he earlier denied ever happened. So, I think you look at credibility there. You believe Ms. Lewinsky? If you accept the testimony of Ms. Lewinsky, then you have more evidence that is at issue, and that is being urged to be destroyed and not available for the truth-seeking endeavor in the civil rights case. I think that is significant. Now, you say that is not the President, that is Mr. Jordan. You have to put this in context. It is Ms. Lewinsky who says that she is talking to the President when she is talking to Mr. Jordan--and I am paraphrasing that, but that is what she was seeing--seeing Mr. Jordan as a conduit to the President. Then we go on after the meeting in the Hyatt, we go into January, where the job search continues. But it is tied directly to the signing of the affidavit, which is false by its nature. If we look at the testimony of Mr. Jordan, in the January 5 timeframe where the affidavit is prepared and discussed with Mr. Jordan: (Text of videotape presentation:) Q Do you know why you would have been calling Mr. Carter on 3 occasions the day before the affidavit was signed? A Yeah, my recollection is, is that I was exchanging or sharing with Mr. Carter what had gone on, what she asked me to do, what I refused to do, reaffirming to him that he was the lawyer and I was not the lawyer. I mean, it would be so presumptuous of me to try to advise Frank Carter as to how to practice law. Q Would you have been relating to Mr. Carter your conversation with Ms. Lewinsky? A I may have. Q And if Ms. Lewinsky expressed to you any concerns about the affidavit would you have relayed those to Mr. Carter? A Yes. Q And if Mr. Carter was a good attorney that was concerned about the economics of law practice he would have likely billed Ms. Lewinsky for some of those telephone calls? A You have to talk to Mr. Carter about his billing. So you have Mr. Jordan discussing the affidavit with both Ms. Lewinsky and her attorney, Mr. Carter. And if you look at the testimony of Mr. Carter, he talks about the fact that he did bill some time for his conversations with Mr. Jordan. Certainly they are matters of substance in relation to the affidavit that was being discussed between the three: Ms. Lewinsky, Mr. Jordan, and Mr. Carter. Now, let's hear what Ms. Lewinsky has to say on the changes that were made in the affidavit: (Text of videotape presentation:) Q OK, have you had an opportunity to review the draft of your affidavit? A I--yes. Q Do you have any comment or response? A I received it. I made the suggested changes. And I believe I spoke with Mr. Jordan about the changes I wanted to make. Now, because of time, I am not going to be able to go completely through all of their testimony but let me tell you time sequentially what is happening here. This is the second page of the time chart that you have. January 5 and 6, the affidavit is prepared and discussed with Mr. Jordan and with the President. On the 7th, the affidavit is signed. You recall Mr. Jordan lets the President know that the affidavit was signed. And he says he was interested, he was obviously interested in this. On January 8 the job came through, the day after the affidavit was signed. And of course it had to come through, the personal call of Mr. Jordan to Mr. Perelman to ``make it happen--if it can happen.'' Once that job is secured, the President is informed: Mission accomplished. January 15, there are some inquiries from the news media about the gifts that had been delivered to the White House. This makes Betty Currie nervous enough that she has to go see Mr. Jordan about it. You go to the 17th; the President gives his deposition in which that false affidavit is presented on behalf of Ms. Lewinsky and the President's attorney. And then the next day, after that deposition is given, you go to January 18, where he is very concerned because he mentions Betty Currie's name so many times. We were not able--we did not ask for the deposition of Betty Currie. We wish that we had had that opportunity. We would like to call her here. But that is one of the most critical and important elements of the structure in which the truth is so critically clear, because it happened not just on one day, because it happened on a couple of days. We see on the 17th, the President is deposed. This is the third chart that you have. The 18th, the President coaches Betty Currie, going through the series of questions. On the 19th, there is this dramatic search for Ms. Lewinsky. On the 20th, the Washington Post story becomes known, because the President's counselors get calls and the OIC investigation becomes known. On the 21st, at 12:30 a.m., the Post story appears on the Internet. At 12:41, the President calls Bruce Lindsey. At 1:16 a.m, the Post story appears. The President calls Betty Currie for 20 minutes, discusses the Post story. And then, according to Betty Currie, on the 20th or the 21st, it was the second incident of coaching that took place, where the President calls her in and goes through that series of questions: I did nothing wrong; she came on to me; we were never alone. And so that was the second time that it happened. And that, ladies and gentlemen of the Senate, is another example of witness tampering: A known witness clearly going to be testifying, a subordinate employee who is called in and coached. Now, the President says, ``I was trying to gain facts.'' You determine that. You are the ones who have to defend that question as to whether, under common sense, the President was gaining information on two separate occasions or whether he was actually trying to tamper with the testimony of a witness. The 21st, she is subpoenaed by the OIC. The 23rd, she is added to the Jones witness list. Now I want to play the last video clip that I am going to move to on Ms. Lewinsky, some things that she said that are different with regard to the President: (Text of videotape presentation:) Q The President did not in that conversation on December 17 of 1997, or any other conversation for that matter, instruct you to tell the truth; is that correct? A That's correct. * * * * * Q But the--the pattern that you had with the President to conceal this relationship, it was never questioned that, for instance, that given day that he gave you gifts you were not going to surrender those to the Jones attorneys because that would-- A In my mind there is no reflection; no. We have one more here we would like you to listen to. (Text of videotape presentation:) A Sure, gosh, I think to me that if the President had not said to Betty in letters us--cover--let us just say if we refer to that which I am talking about in paragraph 4 of page 4, I would have known to use that. So, to me, encouraging or asking me to lie would have, you know if the President had said now listen you better not say anything about this relationship, you better not tell them the truth, you better not--for me the best way to explain how I feel what happened was, you know, no one asked or encouraged me to lie, but no one discouraged me either. It is very important to understand that we want you to know very clearly that Ms. Lewinsky says that the President never told her to lie. There is no question about that. There is no dispute about that, either. I think you have to look at all the context of this. What the President did suggest to her was to use an affidavit to avoid truthful testimony, to stick with the cover stories under legal context. Is the issue here whether Ms. Lewinsky believed the President was encouraging her to lie, that's what the President was trying to do here? Or is the issue what the President was trying to do? It is your determination. You have to make the decision whether the President, in talking to a 24-year-old ex-employee, whether he is encouraging her to come forward and to tell the truth or, in a legal context, to use the old cover stories, to lie, to use false affidavits, to avoid the truth from coming out. It is not Ms. Lewinsky's viewpoint that is important. It is what the President intended. What did the President intend by this conversation when he told her on December 17, ``Guess what, bad news; you're a witness''. Then he proceeded to suggest to her ways to avoid truthful testimony. I really don't care what is in Ms. Lewinsky's mind at that point. The critical issue is what is in the President's mind at that point as to what he was intending. Was it an innocent conversation, or was it a conversation with corrupt intent? I believe that if you put all of this in context--from the affidavit to the job search, to the coaching of Ms. Betty Currie, to all of the other conversations with the aides--that it was the President's intent to avoid the workings of the administration of justice, to impede the flow of the truth in the administration of justice for his own benefit, and that is what obstruction of justice is about. That is what people go to jail about, and that is what we are presenting to you as a factual basis for this case. I now yield to my fellow manager, Mr. Rogan. recess

Mr. GRAMM

Mr. GRAMM. Mr. President, the Committee on Banking, Housing, and Urban Affairs held its organizational meeting for the 106th Congress on Tuesday, January 19, 1999. At that meeting, the full committee adopted rules of procedure for the committee for the 106th Congress. In accordance with Rule XXVI of the Standing Rules of the Senate, I am submitting those rules, as adopted, for printing in the Congressional Record. I ask that they be printed in the Record. The rules follow:

Mr. GRAMM

Mr. GRAMM. A quorum is present.

Mr. GRAMM

Mr. GRAMM. I object.

Mr. GRAMM. I object.

Mr. GRAMM

Mr. GRAMM. Mr. President, I would like the record to show that that was Senator Graham of Florida. (Laughter.)

Mr. GRAMM

Mr. GRAMM. Just tell us. Mr. Manager HUTCHINSON. I will tell it to you then. Thank you. Exhibit C--which I hope you have; we asked them to distribute that-- is a statement that Mr. Ruff portrayed, from me, which in my presentation I said: ``The judge--the witness list came in, the judge's order came in, that triggered the president into action and the president triggered Vernon Jordan into action.'' Now there are two things that I am pointing to as the trigger mechanisms for the job search intensification. One of them is the witness list that comes in on December 5, the President knows about, at the latest, on December 6. The other thing that intensified that effort was the judge's order on December 11. They went through this long circumstance of Mr. Jordan being in Holland and the time of the phone call with the judge and all of that, showing that the judge's order of December 11 could not have triggered any action on the 11th. There is no question about that. That is obvious from the facts, as it was obvious when I made my presentation. The meetings on the 11th, with Vernon Jordan and Monica Lewinsky, were triggered by the witness list coming on the 5th, that the President knew about on the 6th, that he discussed with Vernon Jordan as well. Now, we say that the judge's order of the 11th, which was filed that day--the only thing that was filed on the 12th was their memorandum of that telephone conversation--that triggered additional action down the road. The job search was not over; the activity continued into January. And, so, that all put pressure on the ultimate fact, in January when the job was obtained, the false affidavit was filed. Now let me just point to a couple of other things along that line. We need to look at this because they basically make the point that there is not any connection between the false affidavit--and that is my characterization--that was filed, and the job search. But if you look at the testimony of Vernon Jordan, and that is exhibit--I think they are giving them out now--F, that I am presenting to you, the sworn testimony of Vernon Jordan which was on March 3 of 1998, he testifies in answer to a question: Counselor, the lady comes to me with a subpoena in the Paula Jones case that I know, as I have testified here today was about sexual harassment. . . . you didn't have to be an Einstein to know that that was a question that had to be asked by me at that particular time because heretofore this discussion was about a job. And then he says, ``The subpoena changed the circumstances.'' And I think this is important, that Mr. Jordan, who is filled with common sense, he says you don't have to be an Einstein. You don't have to be learned, like Mr. Ruff or any of the other White House counsel, to apply common sense. Common sense tells you that whenever he knew about the subpoena, it escalated to a new arena and obviously the witness list would have the same impact. And, so, Mr. Jordan himself makes the connection, the job search was one thing but whenever she became a witness in the Jones case, that changed everything. That changed the circumstances. And let me tell you, that is a friend of the President who is making that statement. And, so, we have to take this picture, that they were related as they were going two tracks, they became interconnected and became one track. The final point--and this was raised on the job search issue--that the call by Mr. Jordan to Mr. Perelman, the CEO of the parent company of Revlon, really had no impact on Monica Lewinsky getting a job because there is a misinterpretation as to how well she did on the interview. But if you look back to the testimony, the grand jury testimony, there was a connection, because Mr. Jordan calls Mr. Perelman and, as he characterized it: Make it happen if it can happen. Mr. Perelman then calls Mr. Durnan, and then Mr. Durnan calls Ms. Seidman, who was actually doing the interview the next day with Monica Lewinsky. So the person who was going to make the decision whether to hire Monica Lewinsky got the word down through the channel before that interview took place and before the decision was made. And of course the important thing is: What was the intent? Not the result, but the intent. And I think that you can see that there was an intent to make sure that Monica Lewinsky was taken care of. Again she was on board, part of the team, before she actually would have to give testimony or the President would have to give testimony.

Mr. GRAMM

Mr. GRAMM. President, I rise today with Senator Gorton to introduce a Balanced Budget Constitutional Amendment which is designed to protect Social Security. Since we last considered a balanced budget amendment in the Senate, we have achieved balance in the unified federal budget for the first time in 30 years, and have made substantial progress toward achieving balance without relying on the surpluses currently accumulating in Social Security. For 1998, the Department of the Treasury reports that the federal government ran a unified budget surplus of $70 billion, and an on-budget deficit of $29 billion when the $99 billion surplus in Social Security is not counted. This on- budget deficit is projected to disappear by 2002 under current budget policies. The Balanced Budget Constitutional Amendment I am introducing today is identical to S.J. Res. 1 of the 105th Congress, which received 66 votes in the Senate on March 4, 1997, except that surplus revenues in Social Security are not counted in determining compliance. The President and a majority of Congress have expressed support for balancing the budget without counting Social Security surpluses, and now that goal is within our reach. We should take this opportunity to approve this Constitutional amendment and send it to the States for ratification. This Constitutional amendment would provide the structure and enforcement mechanism to allow us to achieve this bipartisan goal.

Mr. GRAMM

Mr. GRAMM. Mr. President, let me now turn to home health care, R&D tax credit and the world economy. Home Health Care We put together a bill in the Finance Committee to provide $1 billion to the home health care industry, which has been hit by a failure of HCFA to implement a workable program to try to control the exploding cost of home health care. As my colleagues will remember, we passed a bill to have a simple $5 copayment for home health care. That copayment would not apply to moderate-income people who would have their cost paid by Medicaid. The administration said, no, that they could save the money in another way, that they could reform the system. So in the omnibus reconciliation bill for the 1997 budget last Congress, we gave them the ability to do that. Now they have come up with a totally unworkable program which they say they can't fix. We responded in two ways: No. 1, we in the Senate Finance Committee came up with a bill to provide $1 billion for home health care, and we paid for it by going back and correcting a technical error in the 1997 bill. We meant in that bill to require the Federal Government to reduce payments to health care providers for bad debt because it was producing perverse incentives where they were not trying to collect debts, since the Government paid them off 100 cents on the dollar, and where they were basically extending credit where there was no hope of collection because, again, it wasn't their money. We meant to do that for every health care provider, but by a technical drafting error, it only applied to hospitals. So we were going to expand it to every other health care provider. It saved us about $1 billion from current law, and we were going to provide $1 billion for home health care relief to give the administration another year or 18 months to try to fix the problem that they have created. We have now had Members of the Senate--at least one Member--object to that funding mechanism. Look, I don't object to the fact that Senators have a right to stop a bill in the waning hours of the session. I think that represents part of the strength of the Senate and, quite frankly, if you are going to make laws in the last hour of the session, you ought to have unanimous agreement. I am disappointed, because I thought that was a reasonable way to try to fix the problem. We now have many other people trying to come up with ways of funding this $1 billion, including some proposals that we have a bunch of little tax increases. I don't think that is the way to go. I hope we can work out a compromise, but there has been so much said about this issue that I wanted to come to the floor and go on record as saying I am for the solution that we reached in the Finance Committee that would pay for another $1 billion of aid to home health care by changing the 1997 law to stop payments for bad debt so that if you don't collect your bills, you have to pay for it, and not the taxpayer. I hope we can work out something. I certainly believe it is possible to come up with a solution. I thought we had a good one. Someone objected to it. So now we are scrambling trying to find another solution. R&D Credit I am for the R&D tax credit. I think it should be extended. I think the House has come up with a good extender bill. I am for the House bill. I am afraid that if we fool around trying to add items, like tax credits for biomass energy, which I think is a wasteful subsidy, that we are going to end up with one bill in the Senate, one bill in the House, and we are not going to get the tax extenders. I hope we can just adopt the House bill which deals fundamentally with the major issue in the tax extenders, and that major issue is the R&D tax credit. World Economy Finally, in the few minutes I have left, let me say a little bit about the world economy. I think that something fundamentally is getting lost in all of this discussion in the last couple of weeks about the world economy. One would think in listening to the administration and the many commentators that the problem in the world economy is that there is some economic equivalent to the flu which is going around the world and it is being caught randomly. The plain truth is, the collapse of the economies in Asia was due to crony capitalism where government was directing capital politically rather than economically. That system failed. As a result, it pulled down the economies, first of Thailand, and now several countries in Asia, including Japan. The solution to the problem is to end crony capitalism. The solution to the problem is to open their markets for competition from American goods and goods produced all around the world, and eliminate the crony capitalism in places like Japan, where American goods had been kept out and in the process it has weakened their economy and it has hurt the world economy. The solution is not to engage in capital controls. And the solution is not to simply have the world use its money to support economic systems that do not work. So I think it is important to remember that the problem in the world economy is that we had countries practicing crony capitalism. I think in the end this can turn out to be a good thing, not a bad thing. I think if we reform economies in Asia, if we learn the lesson in America that the Government should not be deciding where investments are made, I think the world economy can come back and be strong. I am very concerned about the International Monetary Fund. It was set up at the end of World War II as part of the Bretton Woods agreement. In those days, we had fixed exchange rates, and the IMF was supposed to provide financing to make the system work. The United States, in 1969, went on flexible exchange rates. The Bretton Woods agreement died. We have not had an international financial crisis come out of America since. So IMF has been scrambling to try to find something to do. I do not believe they have done a good job. I think in Russia they provided money most of which was simply stolen. I think they did not get the economic reforms they sought, and they squandered their money and ours. I am very concerned about what is happening in much of Asia. But I have decided, with some concrete reforms, to go along with additional money for IMF. But they are going to have to make the reforms to get the money. The reforms are: If you want to use your money, you can do anything you want to do economically in the world. If you want to shoot your economy in the foot, or someplace worse, you have a right to do it, but you do not have a right to do it with our money. If you want our money, you are going to have to set out a plan to open up your economy for world trade, you are going to have to have movement toward free trade and free capital movement, you are going to have to set up a system where you give everybody equal justice under the law in areas like bankruptcy, and you are going to have to end crony capitalism where the kinfolks of rulers, where politically favored members of political parties, end up getting ownership of property and end up getting investment under their control. The point is, these reforms are critically important if we are to avoid a world financial crisis. And these reforms are going to have to be made if we are going to provide the IMF the money. I just want to respond very briefly to the representative from France, and others, who said, ``How dare the United States of America try to tell us what to do.'' Let me make it clear, we do not care what they do with their money. But if they are going to spend our money, they are going to have to use it on programs that we believe can work. And if they do not want to do it our way, that is great, just do not take our money; and they are not going to get it unless they do it our way. Finally, I think in some ways we are adding to the world financial crisis by using rhetoric that seems akin to the sort of ``The sky is falling'' logic. Crony capitalism failed. Government does not work as an allocator of capital. That is hardly a surprise, but it is a lesson that is proven in Japan and all over Asia. I remember not long ago sitting down with a President and with a Cabinet Member and another Member of the Senate, and there was really a discussion about our Government funding high-definition television as part of industrial policy; the Japanese were doing it, and we could lose our cutting edge in technology. Well, what happened? Fortunately, we did not do it. I opposed it. The Japanese invested over $1 billion in their technology, which failed. The world adopted our private technology, and we now dominate the world market. Crony capitalism does not work in America, it does not work in Japan, it certainly did not work in Korea and Thailand, and the sooner they change their system, the better off they are going to be. If they want to set their economy right by using a system that we know works--capitalism and democracy--then we want to help. If they want to keep trying crony capitalism and socialism, we wish them good luck, we will include them in our prayers, but we will not fund that experiment, because we know it does not work. I yield the floor. Mr. SPECTER addressed the Chair.

Mr. GRAMM

Mr. GRAMM. Mr. President, thank you for the recognition. I guess before I speak I need to thank several people. I thank Senator Byrd, who has left the floor, for insisting on a unanimous consent request that allowed me to have the opportunity to speak today. Senator Byrd is a Member who always reminds us that we do well to be courteous to one another. I appreciate his generosity. Second, I am going to speak today on education and on other subjects. Much of the material that I am going to use was developed by Senator Frist in the Budget Committee Task Force on Education. I want to be sure to give Senator Frist credit for developing much of this material. Mr. President, today, as we reach the end of the term, I want to say a little bit about four different subjects. I rarely get up and speak on more than one subject because many Senators, myself included, have trouble doing one subject justice. But I need to say a few words about education. I want to say a few things about home health care. I want to talk a little bit about R&D tax credits that are now pending in both Houses. And, finally, I want to talk about the world economy and what I see the lessons to be, and say a little bit about IMF.

Mr. GRAMM. Mr. President, I yield to the Senator from Pennsylvania for the purpose of a unanimous consent request.

Mr. GRAMM

Mr. GRAMM. Mr. President, I ask unanimous consent that the Senator from Oklahoma might speak, and that at the conclusion of his remarks, I be recognized.

Mr. GRAMM

Mr. GRAMM. Mr. President, I understand the Senator from Wyoming has cleared a bill. Knowing how hard it is in the waning hours to do that, without losing my right to the floor and my full time when he is finished, I would like to yield him 5 minutes.

Mr. GRAMM

Mr. GRAMM. Mr. President, let me begin with education. First of all, I want to express some concern about the fact that the administration has decided, in the waning hours of this Congress, to suddenly bring education up as an issue in this omnibus spending bill that we are working on. I want to explain why I have concerns about this. First of all, so far as I am aware, the administration never mentioned education as an issue, despite the fact that we have been negotiating now for several weeks, until last Friday. All the time we were working, trying to finish the business of the American people, the administration never raised education as an issue, and suddenly on Saturday the President brings it up in his radio address, and now every day the President is somewhere doing a photo opportunity, or a press conference, or having a fundraiser on the education issue. I want to say a little bit about that because part of what makes it possible for you to finish your work, under very difficult circumstances at the end of a session, is when you have mutual trust, when you believe that both sides to the negotiation are acting in good faith and that we are trying to do the work of the American people and not gain political advantage. I am afraid that in this case the President is not acting in good faith in dealing with us on this issue. A second reason I was surprised this issue surfaced so late in our negotiations is that the President, in January, proposed in his initial budget that we spend $32 billion in appropriations on education. When we reported our funding bill, we spent $32 billion on education. So it seems strange to me to now have this issue raised about education when, in fact, we have provided almost exactly the amount of money that the President sought in January. But whether we think it is political or not, whether it makes any sense, given that we have funded almost identical levels to those requested by the President, the President has raised the education issue and I thought it was important to give a brief response of what the difference is. The dispute is not about how much money is going to be spent on education. As I said earlier, the President requested $32 billion; we have provided $32 billion. The question is not about how much money is going to be spent but the debate is about who is going to do the spending. Despite all the rhetoric of the President and the administration, the debate is not about the level of spending but who is going to do the spending. They want the Federal Government to do the spending. They want bureaucrats in Washington, DC, to do the spending. And what Republicans have done in the first change in national education policy in over 30 years is, we have voted to pass money back to local school districts so that local parents, local teachers, and locally elected school board members can set education priority. So the debate is not about how much money is going to be spent, the debate is about who is going to do the spending. Since the President has raised the issue, let me tell you our side of the story. Our side of the story first points out that we spend a lot of money on education, and we should. In 1969, we were spending $68.5 billion on primary and secondary education in America. Today, we are spending a whopping $564.2 billion. So, in dollar terms, we have almost increased education funding tenfold. But yet, while education funding has exploded since 1969, we have seen SAT scores, which measure high school achievement, stagnate, we have seen reading stores stagnate, and we have seen, since 1969, a systematic decline of American student performance on international tests, where we have gone from virtually the top of each major learning category to near the bottom on each learning category. In fact, I just pick two here. This last year on international tests on physics, of all the nations that participated in the program, the United States of America ranked dead last. On math, a critically important ability given the modern era we live in--and we all understand the importance of mathematical skills in the information age--America ranked second to last of all nations that participated in the math testing program. This despite the fact that, on a per capita basis, we are one of the largest spenders on education in the world, spending in some cases two or three times as much per student as the nations that achieved the top scores on these tests. One of the reasons we are spending so much money and getting so little for it is really encapsulated in this chart. What this chart seeks to do is to show the 23 different federal government agencies that we have funding education through 300 different Federal programs, in trying to provide money for teachers, for at-risk students, and for young children. As you can see, looking at this chart, what we have created is a massive bureaucracy which has overlapping responsibilities and where we have 300 different programs basically all trying to achieve the same thing. Looking at this chart, you will not be shocked by the next chart. The next chart really is the measure of how efficient we are in getting the dollar we spend in Washington through to the classroom where the child is learning. What this tries to show is, starting out with $1 we spend here--not just through the Department of Education, but all federal education spending--how much of it actually gets to the classroom. Fifteen cents of every dollar we spend never gets to the school district because, for all practical purposes, it never gets out of the State and Federal bureaucracy. It basically is consumed here and in various State capitals, with Federal bureaucracies that we are basically paying to tell people how to run education. Forty-eight cents out of every dollar can go to support local bureaucracies--support staff, administration staff, people who are not directly involved in classroom instruction. So the bottom line is, from all of this mass of bureaucracy, we are getting 37 cents out of every dollar the federal government is spending on education into the classroom. So no wonder we are spending all this money with such poor results. This is the existing system. It is the 37-cent solution. And the President says, many of our colleagues say, give this system more money. Our answer has been, look, if this system can only get 37 cents out of every dollar to the classroom, this system is fundamentally broken and it needs to be changed. What we would do in changing it is, basically, we want to go to a block grant system which takes much of the money that we spend in Washington, except for the amount that is targeted to critical needs such as children with special learning disabilities, special education programs, and what we would like to do is take $10.2 billion of the money we are spending in Washington and, rather than giving 63 cents out of every dollar of it to bureaucrats, which we do now, we would like to take the $10.2 billion and give it directly to local school systems. So local parents, local teachers, and locally elected school board members would determine how that money is spent. That gives us a 100-cent solution, because then every dollar will go to local teachers, local parents, and locally elected school board members. The President and, obviously, many people in Washington believe we know better; that it is worth having a program where only 37 cents out of every dollar gets to the classroom because the bureaucracy is adding so much value by telling parents and teachers and locally elected school board members, who do not understand education, how to do it. If anybody ever believed that, surely when we are in a situation where our test scores have stagnated, our reading scores are flat or declining, and where we are ranking last, or near last, in every achievement test given internationally, I just think it is unconscionable and hurtful to the country and to the children to stay with a system where only 37 cents out of every dollar we spend gets through to the classroom. That is what the debate is about. When you hear the President say, ``We want Congress to act on education,'' we have already acted. The President wanted $32 billion. We have given the President $32 billion. But where the difference is, the President wanted the Federal Government to spend the money, the President wanted to keep a system where 63 cents out of every dollar gets lost before it gets to the classroom, and what we are trying to do is to give the money directly to local school systems and cut the bureaucrats out of it. When you hear the President talking about this issue, understand that, despite what he appears to be saying, the dispute is not about how much money is going to be spent, the dispute is about who is going to do the spending. Bill Clinton and our Democrat colleagues want the Federal Government to do the spending with an old system where bureaucrats get 63 cents out of every dollar. We want local parents, local teachers, locally elected school board members to do the spending, because we believe that people love their children more than the Government does. We believe that parents know better about education than the Government does. Let me also say for those who say, ``Where are the education bills that have been passed in this Congress?'' let me just remind those who are interested that we passed a bill in this Congress, this year, that provided parents with the ability to set aside tax free up to $2,000 a year to use to send their children to summer school or to get afterschool tutoring or to buy education equipment, like a computer, or to send their children to parochial or private schools, if they choose. The President vetoed that bill. We passed literacy funding. The President vetoed that bill. We passed a teacher merit pay program. The President, standing with the teachers unions and not with the students, vetoed that bill. We passed a bill giving low-income families some choice in education. The President sent his child to private school in the District of Columbia, and he had every right to do it. The point is, however, that we wanted to give working families the same rights the President had, and the President vetoed it. We had tax relief for parents whose children use the State tuition prepaid plan where you can start paying, even before your child is born, for him or her to go to Texas A&M, and you can do it at a discount because your money is building up. If they pass the test and can get in, you have paid for it. We wanted to give tax advantages to encourage families to do that. The President vetoed it. We had tax relief for employer-provided education assistance. We have all heard employers everywhere saying to us, ``The kids who come to work for us out of high school don't have the skills they need. They can't read, they can't write, they can't reason.'' So employers are beginning to pay their own money to reeducate their workers. We wanted to encourage it by making it tax free if they do that, because they know the skills they need. The President vetoed it. Finally, we now are trying to give local school systems more control, to take control away from Federal bureaucrats. The President says he will veto it unless we change it to spend the money his way, which is 63 cents for bureaucrats and 37 cents for classrooms. That is not good enough for America anymore. Mr. President, how much time do I have left?

Mr. GRAMM

Mr. GRAMM. I ask unanimous consent that I may have an additional 10 minutes.

Mr. GRAMM. I asked for 25 minutes.

Mr. GRAMM. Going back to my robbery occurring on Capitol Hill, the reason it seems to me we are suddenly discussing something that was not an issue all last week is because there is a real issue now that the White House doesn't want to talk about, and that real issue is that we are in the process of seeing a demand from the White House that the Congress spend $25 billion that was never in the President's budget. Many of you will remember in the State of the Union Address when the President stood up and said, ``Save Social Security first; save every penny of the surplus; don't spend any of it; don't give any of it back in tax cuts; save Social Security first.'' Quite frankly, Mr. President, I thought it was a good idea. I have opposed efforts by some in my own party to go ahead and cut taxes now rather than waiting until next year when we can fix Social Security, I believe, permanently and then debate a tax cut. But what happened is that in January, February, March and all through the spring, the President said, don't increase spending and don't cut taxes. Then suddenly during the summer, his message started to change, which was the first giveaway. The message suddenly became: Don't cut taxes, and he stopped talking about spending. Now the President is demanding in the final days of this session that we spend an additional $20 billion to $25 billion, every penny of which would come out of the surplus, and every penny of which would come out of Social Security. So a President who threatened to veto a tax cut that would have taken $6.6 billion away from the surplus is now demanding that Congress, as a price to be able to finish business and adjourn, spend an additional $25 billion. We had a surplus for the first time since 1969 as of October 1. Today is October 12, and so far, if the President's requests are met, we are spending an additional $2 billion a day. In other words, this is going to be the shortest recorded surplus in American history, and I am concerned about it. Let me talk a little bit about education, since the President has raised the subject. First of all, in Senator Kennedy's remarks today, we heard the same old song that people have sung in Washington since 1960. That basic siren song is: If we just had a little more money, we could make it work; that the only thing wrong with education in America is we don't have enough money, and if we spent more money and we let Washington tell you how to spend it, everything would be great. Let me just review a few facts and figures in response to Senator Kennedy. First of all, in 1969, we spent $68.5 billion on education in America. Today, we are spending $564.2 billion on public education, K through 12. What has happened during that period? As spending has grown almost 1,000 percent, SAT scores have stagnated, reading scores have declined and American students have moved from the top of the list in math and science to either the bottom or near the bottom in both math and science. Today, American students on international tests rank last in physics; they rank next to last in mathematics. When you look at those scores you say, ``Well, if we just had more money, we could change that.'' But I remind my colleagues, we have increased spending during the period where these scores have plummeted from $68.5 billion to $564.2 billion. One of our problems is we spend the money so inefficiently. Listen to these numbers: For every dollar we spend on education in Washington, DC, 15 cents never gets out of Washington; 15 cents stays here in our massive Federal bureaucracy; 48 cents ends up going to bureaucrats between here and the classroom; and 37 cents out of every dollar we spend in the name of education in Washington, DC, actually gets to the classroom for actual instruction, providing facilities, or providing that teacher in that classroom. No wonder that we rank last in physics and next to last in mathematics when our current program, which Senator Kennedy helped build and which he loves, gets 37 cents out of every dollar we spend in Washington into the classroom. We are hearing today that what we really need to do is we need to do something about class size. First of all, I think it is obvious to anybody that you would rather your child be in a small class than a big class. But if you can see this chart, what has happened since 1960 is that class sizes have gone down dramatically. The pupil-teacher ratio for public K through 12 education was 25.8 to 1 in 1960 when SAT scores were close to their maximum they ever achieved. In 1996, there was 17.1 to 1 or, in other words, a 51-percent decrease compared to today s level. I think lowering the class size is a wonderful thing, but I simply point out that contrary to all the rhetoric about how perfect the world would be if it were lowered, we have lowered it by 51 percent in the last 36 years, and the net result has been a dramatic decline. Is the Senator telling me that my 25 minutes is up?

Mr. GRAMM. I was told by the Chair there was 5 additional minutes. I don't know if the world comes to an end--

Mr. GRAMM. I didn't request any time. I don't know where the 5 minutes came from.

Mr. GRAMM. Excuse me, I didn't hear, Mr. President.

Mr. GRAMM. Mr. President, I wanted, today, to come over and talk about education. I have come back to town to help in some of these negotiations to try to complete the session, but upon hearing Senator Kennedy this morning, I felt compelled to come over and speak. I have several ideas I want to talk about. I would like to first talk about why we are talking about education. Here we are, 2 days before the session ends. In fact, as of last Friday, in the budget negotiations, no one at the White House had brought up education at all. Why suddenly do we have the focus on education? I would like to explain why this focus has come about and what I think it is trying to hide. I would like to talk about Senator Kennedy's education proposals. I would like to talk about the budget debate we have before us. I would like to talk about the failure of our current system. And then I would like to talk about how we ought to change it. That is an awful lot of subjects, but having listened to Senator Kennedy, I feel compelled to speak a little on this subject. I would say this is a subject I know something about. I taught for 12 years at Texas A&M prior to coming to Congress. In fact, I often say that I taught economics for 12 years at Texas A&M and I have been teaching it in Washington, now, for 20 years. You will not be surprised to hear me say my students at Texas A&M were a lot smarter than the students I have now. And, also, they were a lot more interested in learning. I say that partially in jest. So when I talk about education, it is something I know something about, because I have had the great experience of people calling me ``Teacher.'' I don't know of any title--maybe ``Rabbi,'' maybe ``Preacher,'' maybe ``Mr. President''--but there are not many titles that are more important than being called ``Teacher.'' First of all, I want to remind everybody, we were busy negotiating on the budget all last week and up through Friday nobody raised the education issue. And why should they? The President, in his fiscal year 1999 education appropriation, requested $32 billion. In the spending bill that we currently have pending in the Senate, we provide $32 billion. So it was not surprising that after a week's negotiation in trying to come together on this budget, there had been relatively little discussion about education, because the President had proposed $32 billion of spending, we had provided $32 billion, and while I am going to talk a little bit about the differences of how we provide it, the basic point was, this was not a budget issue. But over the weekend, in his radio show, and then as his representatives appeared on television on Sunday, suddenly the administration has opened a massive new education front. They are saying this Congress has not done enough for education, they are unhappy about what the Congress has done in education, and they want more. Why is this happening? Sadly, I am here to tell you that it is a smokescreen to cover up a robbery. There is a robbery underway on Capitol Hill right now. The working men and women of America are in danger of having $25 billion stolen from them this year and in the last week of Congress. I have to say, in a city which is marked by cynicism, it is one of the most cynical acts that I have ever observed. I want to be especially critical of the President of the United States on this issue, something I have not made a habit of doing. The President, in his State of the Union Address--the Presiding Officer was there, and I am sure if the American people remember anything any political figure has said about anything other than scandal this year, they will remember that the President, in his State of the Union Address--I ask unanimous consent for 25 additional minutes.

Mr. GRAMM

Mr. GRAMM. Mr. President, I am sorry our colleague from Kentucky has left the floor. I would like to add my voice to those who thanked him for his service. In an era where there are so many cellophane politicians, when there are so many people in public life who talk like newscasters but you can never quite tell what they are talking about when they get through speaking, I think Wendell Ford has been a welcome relief from that. He is a politician who has texture. When he speaks you may think he is wrong--which I often do--but you never question the fact that he is sincere, and when he speaks you know what he is talking about. I find the longer I serve in this great Senate, the more respect I have for people who stand for something and who speak up for it and who say what they think.

Mr. GRAMM

Mr. GRAMM. Mr. President, I wanted to give our colleague who has to preside an opportunity to speak first. I thank him for arranging for me to be recognized.