Phil Gramm

Mr. GRAMM

Mr. GRAMM. Mr. President, my point is that while declining pupil- teacher ratio is a wonderful thing, and we would all like to have our own children given the maximum instruction in the most intense way, the plain truth is that in the last 36 years, we have had a dramatic decline in the ratio of pupils to teacher while results have declined. This gets me to what the real debate is on education. Obviously, the real debate is not money. The President requested $32 billion; the Senate bill provides $32 billion. The debate is about who is going to spend the money. Republicans have proposed something that sounds revolutionary in Washington, but in America it sounds eminently reasonable; and that is, except for that money which is targeted to things like special education, we want to give the bulk of the money directly to school systems so that local teachers, local administrators and local school boards can set priorities for using money, so that if in my hometown of College Station we think the answer is a lower pupil- teacher ratio, we can use the money for that purpose; if we think the answer is something else, we can use it for that purpose. Another thing we are hearing about is building schools. I know our dear colleague who is presiding said that a bad idea never dies, that you can't kill an idea with facts. And I understand this will not kill that idea. We will be talking about it for the next 10 years. But I want to point out something which shows, I think clearly, why the Federal Government should not be setting policy where we have Members of the Senate voting for education policy in schools we have never put our foot in, children we have never personally met, families where we do not know their situation. What I have here is the population of enrollment in K through 12. I do not want to draw on this chart which I got from somebody else, but I want you to look right here where we are in 1998. We have just come off a very rapid increase in students, but we are now in a period where the population of students in K through 12 is flattening out. Doesn't it strike you as interesting that we are talking about the Federal Government mandating that local communities spend more of our money and theirs on schools at the very time where it is clear that in the past 10 years our problem has been school construction, but as we look at the future it is obvious that the population of students is beginning to flatten out? That is typical of the Federal Government. That is what happens when you have people in Washington setting education policy for students in College Station--when only two Members of the Senate have ever been in a school in College Station, and they are the two Senators from Texas. What is the difference between what the President wants to do and what the Congress wants to do? The biggest difference is, the Congress wants to spend the same $32 billion but let local school boards, local parents, local teachers decide--do they want to build more schools, do they want to do something about the pupil-teacher ratio, do they want to buy computers. We want them to decide. Finally, let me put this chart up here and just remind anyone who is interested in this debate that this Congress has been very active on education matters, that, first of all, we have the $32 billion appropriation bill--the same amount the President asked for; it is just spent differently. More of it is spent locally and not in Washington. We happen to believe that is better. The President thinks it is not better. But rather than debating us on the issue--because I am sure someone at the White House has done a poll or focus group and they have discovered what we know, and that is, parents in College Station think they know a little bit more about their children's needs than we know in Washington--so rather than debate those, the President is now saying that we are shortchanging education. The truth is, we have provided every penny the President asked for, roughly $32 billion--both the request and appropriation--it is just that we are letting local school boards and local teachers spend it. The President would spend it here in Washington. But finally, before my time runs out again, I remind my colleagues that we have done quite a bit on education in this Congress. First of all, we passed a bill that provided education savings accounts which let parents set aside up to $2,000 a year which they could use for tutors, they could use to send their children to summer school enrichment programs, they could use for afterschool programs; and, yes, if they chose to send their children to parochial or private schools, they could do it. And what happened? Vetoed by the President. It did not represent the teachers union agenda and so the President vetoed it. We provided literacy funding. The President vetoed it. We had a merit pay system for teachers. Can you imagine paying good teachers better than we pay bad teachers? Can you imagine having a system where you would actually pay a teacher more if they did a better job of teaching? Well, we could imagine it, but the President and the teachers union could not imagine it, nor could they tolerate it, so the President vetoed it. We provided a school choice system for low-income families so that working families in cities like Washington could do what President Clinton did, and that is, they could choose to send their children to private schools if they chose to. But the President vetoed it. We provided tax relief for parents whose kids used a State prepaid tuition plan. This is one of the most exciting new developments around the country where if you want your child to go to Texas A&M--that is your dream--you have to do two things: One, you set up a program and you pay in advance and pay off the tuition, and, obviously, you get a big discount if you start when your child is 6 months old or before they are born; and the second thing they have to do is get in. But we had a system to make it easier for working parents who had the big dream to realize it. The President vetoed it. We had a system for tax relief for employer-provided education assistance. Employers all over the country are saying, ``Our kids do not have the skills we need.'' So we had a better idea in Congress. We said, OK, if you want to send your employees back to school, to junior college or technical school, or to the University of Missouri, or anywhere, you can do it on a tax-free basis because you are investing in the future of America. And guess what? The President vetoed it. And finally, our major initiative of this Congress--for the first time since I have been in Congress, we have been successful in doing something that I came to Congress to try to do, and that is, to get the Federal Government out of the business of dictating education policy to local school boards. We, for the first time ever, passed a provision that would allow local school boards to take the money and spend it as they believed to be in the interest of their children. Maybe people in Washington know better about what children should do and take; but it is interesting, when you ask them, ``Well, if you know so much about kids in the elementary school at College Hills in College Station in the first grade class, tell us their names,'' they don't know them. But they think they know an awful lot about what should be done. We believe that local people should set priorities. We passed a bill to do that. The President threatened to veto it. So my final message is, Mr. President, first of all, your administration did not even raise education until Friday. We have been negotiating for a week. This is a ruse to cover up an effort by this administration to bust its own budget and to spend Social Security money. That is what this is about. Secondly, the President proposed $32 billion for educational appropriations. We have provided $32 billion for education, but we have provided it so that local school districts make more decisions and Washington makes fewer. So if the President wants to debate, let's debate about the real issue. The real issue is not how much money is spent, it is who is doing the spending. I thank the Chair.

Mr. GRAMM

Mr. GRAMM. I move to lay that motion on the table. The motion to lay on the table was agreed to. The title was amended so as to read: An act to express United States foreign policy with respect to, and to strengthen United States advocacy on behalf of, individuals persecuted in foreign countries on account of religion; to authorize United States actions in response to violations of religious freedom in foreign countries; to establish an Ambassador at Large for International Religious Freedom within the Department of State, a Commission on International Religious Freedom, and a Special Adviser on International Religious Freedom within the National Security Council; and for other purposes. Several Senators addressed the Chair.

Mr. GRAMM

Mr. GRAMM. I object.

Mr. GRAMM

Mr. GRAMM. Would the Senator yield?

Mr. GRAMM. I like it.

Mr. GRAMM. At the risk of overdoing it, could I have 30 seconds?

Mr. GRAMM. It is interesting. I know what happens in these debates is we end up talking past each other. But the Senator's statement about ``let's leave CRA to deal with next year'' is precisely my position. The problem is, the bill has six new CRA provisions. So if we were leaving CRA to be dealt with next year, we would have no dispute; we could debate it next year. I yield the floor. Several Senators addressed the Chair.

Mr. GRAMM. Mr. President, I just simply want to say to my colleague, Senator Sarbanes, and to others who support this bill, that I am willing, and have continued to be willing, to sit down and try to work something out. It may be that nothing can be worked out, but I just want to reaffirm my willingness to sit down with Senator Sarbanes, or any other person, who is in a position to work anything out--certainly Senator Sarbanes is--and see if we could find some common ground. Maybe we cannot. But I just want to reaffirm my willingness to do it. I have sat down and discussed this with Senator Dodd. And I am willing to do it again. So it may be that there is no way we can accommodate the different views we have, but I wanted to reaffirm my willingness to make an effort again. Though it may or may not prove fruitless, I am willing to do it. And I would like to work something out because, save the so- called CRA provisions, I am for this bill.

Mr. GRAMM. I do not have the floor.

Mr. GRAMM

Mr. GRAMM. Mr. President, I didn't hear the request. Can I hear it again?

Mr. GRAMM. No objection.

Mr. GRAMM

Mr. GRAMM. That is more than generous and I can complete what I have to say. Madam President, I have tried to live up to the President's challenge in that State of the Union Address by putting Social Security first, by delaying until next year a tax cut so that we could rebuild the financial base of Social Security and have the money to do it with. However, I have to say I am very distressed in that while I am trying to carry out the President's policy on a bipartisan basis and not supporting something that I am very much for--a tax cut--the President now is trying to say to Congress I am going to veto your spending bills and shut down the Government unless you spend $20 billion more than you have written into your budget and $20 billion of additional spending that the President didn't even ask for in his budget back in February. Now we have people at the White House and at OMB who are saying there is nothing extraordinary about what the President is doing and that the amount of money he is spending is not coming out of the surplus. My point is, everything about what the President is doing is extraordinary. It is twice as much as the President, on average, has requested in the past. It is 20 times as much as the last President requested for emergencies in 1991; it is for programs that have nothing to do with conventional emergencies: Funding for Bosnia, when we have been there 3 years. Why doesn't the President put it in his budget? Funding for the census, which we have done every 10 years since 1789. Why doesn't the President put it in his budget? Funding for the computer problem for the year 2000, when we have known since 525, when the world went to measuring time from the birth of Christ, that we were going to have a year 2000. Clearly, every penny that the President spends, or forces the Congress to spend, is coming right out of the surplus and right out of Social Security. So I don't believe the President is living up to his word. I don't think he is putting Social Security first, and I don't think it is right. I thank our dear friend from Montana for allowing me to finish my statement. I yield the floor.

Mr. GRAMM. Madam President, I have come over today to respond to the Office of Management and Budget and to the White House in relation to comments they made about our weekly radio address, which we made in response to the President's radio address and which I had the privilege to make on behalf of the Republican majority in the Senate. What I thought I would do is simply take a little bit of time and review what I said in the radio address because it is relevant, obviously, to the response by OMB and the White House. I would like then to respond to the comments they made. And I will try to do it as quickly as possible. Madam President, in the Saturday radio address I tried to make several simple points, the first point being that we all can remember vividly, when the President gave his State of the Union Address, in probably the most dramatic statement made by any political figure in 1998, the President proclaimed: ``Save Social Security first.'' He then set out a prescription for Congress, and the prescription basically boiled down to: ``Don't increase spending; don't cut taxes; take every penny of the surplus and save it for Social Security.'' The President kept delivering exactly the same message over and over and over again through February, into June; and then all of a sudden, during the summer and into the fall, the President's message started to change. And the President's message started to change because he started leaving out the part of the policy prescription that had to do with not spending the surplus. What the President is now saying is that Republicans are wrong in trying to cut taxes, eliminating the marriage penalty, providing some tax relief to farmers and small business and to senior citizens--that Republicans are wrong in doing that in the House because it takes $6.6 billion away from the surplus. And then the President last week said if you take a little of the surplus here and a little of it there on tax cuts, then you don't have the money to put Social Security first. The problem is that at the very moment that the President is saying to the Republicans in the House not to use $6.6 billion to fund a tax cut, the President is proposing to Congress, in the strongest possible terms, that we spend up to three times that amount--roughly $20 billion this year--on a series of programs, most of which have nothing whatsoever to do with emergency spending by any definition that we have ever used for emergency spending. So the point I made, in very simple terms, was the President is not living up to his word. He is not putting Social Security first. The President is pretty clear about not wanting Republicans in the House to cut taxes and to use $6.6 billion of the surplus for that purpose. But the President is now actually threatening to veto bills and to shut down the Government unless we spend up to $20 billion of additional money this year, every penny of which would come out of the same surplus that the President is saying to the Republicans in the House, ``Don't dare touch that surplus, don't take $6.6 billion to cut taxes.'' The White House decided, over the weekend, that they wanted to respond to what I had to say. And I want to respond to a lady, Linda Ricci, who is the spokeswoman for the Office of Management and Budget. She made two statements that I want to respond to. Let me read you from the Reuters wire service story: Linda Ricci, spokeswoman for the administration's Office of Management and Budget, noted the actual additional spending request is roughly $14 billion, and said such emergency packages have become a normal part of the budget process. She further says: There is nothing extraordinary about emergency spending and there's nothing extraordinary about the amount of emergency spending we are requesting in this year's budget. Madam President, I take great exception to these statements because they are not true. I mean, other than the fact that they are not true, I do not have much objection to them. But one of the standards that we normally set in debate is a standard that we cannot have much of a meaningful dialogue if we are not sticking with the facts. One of the things that is often said in these kinds of debates is that you have a right to your own opinion, you just do not have a right to your own facts. Let me remind the Senate, and anybody who is listening, of the following facts: No. 1, we have already passed a $6 billion emergency spending bill earlier this year. If you add up all the requests the President has made for additional emergency spending, it is $14 billion. And when you add the two, that is a $20 billion emergency spending increase that was requested in calendar year 1998. The OMB says, ``There's nothing extraordinary about the amount of emergency spending we are requesting in this year's budget.'' Let me tell you what is extraordinary about it. Everything -- everything--is extraordinary about it. First of all, the level of emergency spending is far beyond any level of emergency spending ever proposed by any President under the budget agreement that was reached in 1990 that started this current loophole of emergency spending. I remind my colleagues, and anybody who is interested, that the first year that this ability to designate something as ``emergency'' and exempted from the budget--the first year it was in effect, in 1991, President Bush signed into law $.9 billion worth of emergency spending. President Clinton this year has asked for $20 billion of emergency spending. In fact, if you take the 3 years that President Bush was in office while we have had this emergency spending designation, in those 3 years President Bush averaged $4.6 billion of emergency spending, virtually all of it for things like hurricanes, floods, natural disasters, or what we normally refer to as acts of God. In the years, since President Clinton came into office, if this year's request is granted, President Clinton will have requested $9.9 billion worth of emergency spending a year. And, as I said, this year's total is roughly twice what the President has requested, on average. And that is what Bill Clinton has requested since he has been President. So to say there is nothing extraordinary about the request I think is simply not true. But there are two other things that are extraordinary. First of all, we have never had emergency requests for money to be spent in years where we have not even appropriated the money yet. And, finally, what we have in the President's proposal is a designation of emergency spending for ongoing programs of the Federal Government. I could talk a long time about this, but let me give you three examples. The President tells us that he needs $3.25 billion because he has discovered since he submitted his budget in January that the year 2000 is coming. Apparently he was unaware of this in January when he submitted his budget, because he did not ask for the money to be used for year 2000 computer problems of the Government in January, but since then it is an emergency because he did not ask for it in January. I went back and looked, Madam President, at when we first started to keep time in Anno Domini, ``in the Year of Our Lord.'' And the first time we did was when the Julian calendar was amended so that the measurement of time started at the birth of Christ. And that was in the year 525. The point is, we have known for 1,470 years that the year 2000 was coming. Everyone in the world knew it was coming. In fact, we hardly hear a political speech that does not talk about the 21st century or the President rarely opens his mouth that he doesn't talk about the new millennium. Many people have actually planned where they are going to be on New Year's eve of next year. The only people on the planet who were surprised that the year 2000 is actually coming, are people in the Clinton administration. The reason they are surprised is they knew the year 2000 was coming, they knew we had these computer problems, but they didn't include this in their budget in January so they could try to hide the fact that they are busting their own budget, so that they could hide the fact that they are taking money away from Social Security to spend, at the same time that they are criticizing the House of Representatives for trying to have a modest tax cut. Now, a second example of nonemergency spending is Bosnia. I know the Presiding Officer is aware that we have troops in Bosnia because I have heard her demand that the administration establish a policy on numerous occasions. Her feelings and leadership on this are well-known. But we have an emergency in the President's mind because we don't have funding in his budget for Bosnia. I remind my colleagues the President sent troops to Bosnia 3 years ago. Then he extended the mission for our troops to Bosnia 2 years ago, and he extended it again last year. Finally, he said they would be there indefinitely. You might ask yourself a question: Given that we have had troops in Bosnia for 3 years, given that no one on the planet is surprised that there are troops in Bosnia, why does the President now ask for funding for troops in Bosnia as an emergency? Now, this lady, Linda Ricci, with the Office of Management and Budget says that there is nothing extraordinary about the President's emergency requests. I find it extraordinary, when we are in our fourth year of troops in Bosnia and the President has an emergency because he has discovered that we have troops in Bosnia, that we have no money in his budget to pay for troops in Bosnia. I find that extraordinary. The next item is my last. The Constitution, in article I, mandates that there be a census; that every 10 years we go out and count the number of people in the country and that we allocate representation in the House of Representatives based on the census. It has been in the Constitution for over 200 years. We have never had the change of a decade occur that we have not done a census. We have known from the first day that the Constitution was ratified in 1779 that we were going to do a census in the year 2000. Yet now we are considering declaring an emergency because we are going to have to do a census in the year 2000. Now, why is there an emergency? There is an emergency because the Administration did not include enough money in their budget to provide the funding for the buildup to the census year. In fact, they and Congress have systematically underfunded the census. Now, the Office of Management and Budget may not find it extraordinary that we have $20 billion worth of requested emergency spending by the President. But I find it extraordinary. They may not find it extraordinary that the President is asking for twice as much emergency spending this year as he has on average since he has been President, and on average since President Clinton has been in office. He has asked for twice as much as President Bush. In fact, his request in calendar year 1998 is over 20 times as big as President Bush's request for emergency spending in 1991, the first year that we had this emergency designation. I find it extraordinary. OMB may not, but the fact that they don't, it seems to me, simply shows that either they don't know what the history of the use of emergency spending is or they don't want to know. Now, the second response I wanted to give is a response to the brand- new White House spokesman. Joe Lockhart, in his first day on the job, White House spokesman Joe Lockhart rejected my comments saying that the emergency requests only total $14 billion and that it would not come out of the surplus. As I have already said, in calendar year 1998 the President has requested a total of $20 billion. The fact that he already has gotten $6 billion does not change the fact we are talking about $20 billion worth of new unbudgeted spending. I suggest that Joe Lockhart, in one day at the White House, has either shown that he is getting bad habits at the White House very quickly or he knows absolutely nothing about the budget. The only way these ``emergency spending programs''--like fixing the computers of the government, the census, funds for Bosnia--can be funded is taking every penny of it directly out of the surplus. When Mr. Lockhart, in his first day at the White House says that none of this money will come out of the surplus, it is obvious that Mr. Lockhart either doesn't know how the budget works, or he has gotten a very bad habit in only one day at the White House. I suggest that Mr. Lockhart set the record straight. Now, what is relevant here is the following: There were a few people--and I am one of them, so I am sensitive about it--who took the President at his word back in January. That word was ``save Social Security first.'' I would like to vote for a tax cut but I have said, given that we have problems in Social Security, given that we need next year to restructure Social Security and build the financial base of it, I have been willing to forego a tax cut so that we could set aside the whole $70 billion of the surplus to put Social Security first. I feel in this area that I have been trying to do what the President requested. Now I find that the President is not doing what the President requested, that while I have been trying to say no to spending and while I have been trying to say no to tax cuts, the President is saying no to tax cuts, but he is trying to force-feed Congress the largest increase in emergency spending in history.

Mr. GRAMM. Let me finish this thought and I would be happy to yield.

Mr. GRAMM

Mr. GRAMM. Mr. President, let me begin by congratulating the chairman of our committee, Senator D'Amato. I have had an opportunity to serve both in the House and in the Senate. I have worked with many great legislators in that process. But I have to say that the job Senator D'Amato has done in putting this bill together, in bringing together people with very different starting points to a unity among the variety of interests that are concerned about this bill, represents one of the most outstanding and, I think, one of the most miraculous legislative achievements that I have seen in my service in the House and the Senate. I congratulate him. I congratulate Senator Sarbanes, the ranking member, for his work. Certainly our colleagues are right when they say that all the interests are for this bill, but I think it is fair to say that Senator Shelby and I are not here today to represent any particular interest or even the collection of all interests. We are here today representing what we believe is a fundamental principle. Where I come from, when interest comes up against principle, then interest loses. We have a fundamental issue before us. I believe that perhaps the greatest national scandal in America is not the scandal that is being covered every day at the White House. It is a scandal where a law is being used in such a way as to extract bribes and kickbacks and in such a way as to mandate the transfer of literally hundreds of millions of dollars and to misallocate billions and tens of billions of dollars of credit. I believe that this represents something that should be stopped. Perhaps some word of explanation should be given. If the people who are being extorted, if the people who are being blackmailed are not objecting, why are we objecting? My response to this is to point out that when the mob was engaged in the protection racket, the little merchant who was afraid generally did not object. But we don't generally accept that in America anymore because there have been police officers and there have been prosecutors who did object on their behalf. Senator Shelby and I are here to object on behalf of bankers and small community banks that, in many cases, are afraid to object on their behalf. I have related to the Senate on many occasions, and we are going to have an opportunity to debate this at length, the abuses under the Community Reinvestment Act, or CRA. I want to make a couple of points related to it. No. 1, the so-called Community Reinvestment Act and the provisions contained in it was voted on only once in the Congress. It was voted on in 1977 in the Senate Banking Committee on a motion to strip the provision from a proposed housing bill, and that motion failed on a tie vote, 7 to 7, in 1977, which means for half of the Members to vote to strip the provision when the Republicans were in the minority, there had to be a bipartisan vote. So far as I have been able to find, that is the only vote that ever occurred on this provision of law. The logic of this provision, which came from the former chairman of the Banking Committee, Senator Proxmire, was to require banks to make loans in areas where they operated. The concern expressed at the time was that banks weren't serving their communities, and, therefore, the Government took upon itself to impose on the banks the necessity of lending in their local community. I am not going to debate tonight the wisdom or lack of wisdom of that, but as I have pointed out on many occasions, what has happened is that CRA has taken on a meaning that has nothing to do with lending. It has now become common practice in CRA for professional protest groups to protest a bank's ``community service record'' and, in turn, use the leverage of those protests to extract bribes, kickbacks, set- asides in purchases and quotas in hiring and promotion, none of which has anything to do with CRA and the lending practices of banks in the communities they serve. All of this is made possible by the banking regulators in enforcing this law, who respond to the protests by holding up action which banks wish to undertake and often are under immense pressure to undertake once it has been announced. Professional groups here in Washington that you can hire will go to your community and protest against the bank, even dump garbage on the property, make all kinds of statements, claims and demands and, in turn, extract resources for themselves and for others. So strong is the growing resentment against this provision of the law, that when proponents of the provision sought to put it in the credit union bill, it was defeated on the floor of the Senate. When consideration on this bill began in the Senate Banking Committee, Senator Shelby and I, and others, offered an agreement which was--this is a very contentious issue, so let us call a truce on it an leave it alone for now. I want to repeal this provision of law. I want to end this scandal. I want to stop this extortion. Others want to expand it, expand this provision of law. Knowing that we would never be able to compromise on this issue within the very limited time that we had to enact this important financial services legislation, I sought to come up with a solution. And the solution was to treat it as slavery was treated by Abraham Lincoln in his campaign in 1860. That was, where the evil existed, leave it alone, but do not expand it into new areas. On that basis, if we had left CRA out of this bill, we could have moved together, we could be at this moment united for this bill, and this bill, in my opinion, would be on the way to becoming law. But that is not what has happened. There has been great confusion about what is actually contained in the bill. So I want to take a few minutes and go over what is in current law and what this bill actually does. In current law, there are really only two provisions related to CRA. First, bank regulators consider how a bank has been meeting the local credit needs only when a bank applies to open a new bank, a branch or engage in a merger. Second, bank regulators may deny applications for these activities based on the record of the bank in community lending. That is the current law. Based on this, all over the country banks that have exemplary records in community lending and that have received the highest ratings on CRA are routinely shaken down every time they want to open a branch, every time they want to start a new bank, every time they want to engage in a merger. They end up having to make cash payments, kickbacks, establish quotas in hiring, and many other things, because the regulator simply holds up approval of the action, even though the bank may have a perfect record on CRA. In fact, we discussed on the floor the record of Bank of America. It was brought up by proponents as an exemplary bank in CRA. I pointed out how professional protest groups had said they were going to shut down the bank in California when it sought to merge with NationsBank if it did not make more concessions to them. Those are the abuses under the current law. But look what is added by this bill. When you listen to proponents of the bill, it is as if there are no CRA provisions of any significance in it. In fact, we just heard that the so-called community groups, whoever they are, that they did not get--what?--they did not get enough of what they wanted. I submit they never get enough of what they want nor will they ever get it until we redistribute wealth in America. Here are the provisions that are added: The first provision added, the third that would become a part of the law, is that officers and directors can be fined up to $1 million per day for CRA noncompliance--a totally new provision of law. The new fourth provision that is proposed: Banks can be fined up to $1 million a day for CRA noncompliance. The fifth provision: cease and desist authority for CRA noncompliance. Sixth provision: the Federal Reserve may place any restrictions on any banking activity for CRA noncompliance. Seventh provision: the Federal Reserve may place any restriction on any insurance activity for CRA noncompliance. Eighth provision: the Federal Reserve may place any restrictions on securities activities for CRA noncompliance. Ninth provision: the Federal Reserve may place any restriction on any other activity of the holding company for CRA noncompliance. Tenth provision: Any violation by any one bank in the holding company triggers the penalties that I have listed above against the entire company. The eleventh provision would place in law sanctions affecting insurance sales. The twelfth provision: CRA is applied to uninsured, wholesale financial institutions. If we have the abuse that we have under current law with two simple provisions that have no enforcement mechanism whatsoever against a bank, unless it is seeking to acquire a new bank, to merge, or to branch, can you imagine what will occur when the officers of a bank can be fined $1 million a day for noncompliance? Or can you imagine the perpetual shake down of a national, nationwide bank, with 1,000 branches, when the entire company receive those penalties if one branch is found to be or accused to be out of compliance? So this is a very, very big issue. Here is where we are. We have rules in the Senate. And those rules were designed to protect the rights of the minority. And basically, my position, and Senator Shelby's position, is that the expansion of CRA by these provisions will greatly increase the opportunity for extortion and kickbacks and the imposition of coercive agreements, such as those whereby companies in the past have agreed to give protest groups a percentage of their profits, have agreed to hire protesters as advisors on dealing with these provisions of law--things that turn your stomach and that in any other area would call for prosecutors and would send the police out to do something about it. We are now condoning it by law with very weak enforcement provisions. If we have a $1 million-a-day fine, we are going to have an explosion of these kinds of activities. I have talked to Federal Reserve Board Chairman Alan Greenspan and I have talked to the Secretary of the Treasury about this whole problem area. And I have proposed yet another compromise. The easiest thing to do would be to leave CRA out of the bill. But I have recognized that the President has said that he would not support leaving it out. We have colleagues who would not support leaving it out. So here is the compromise that Senator Shelby and I want to propose as an alternative, as another option: Expand CRA to the new financial service holding companies so that the laws that apply now to other banking entities will apply in the same way to the new banking entities. But also add two provisions of law to check abuses. First, we want a simple, well-defined antiextortion, antikickback provision that focuses CRA on lending and not on cash payments, or quotas, or set-asides, or giving protesters a percentage of your profits for a certain number of years. Second, if a bank is in compliance with CRA in its last examination, then that compliance should mean something. It should remain in force until the next regularly scheduled exam. Then we could end the double- jeopardy situation where the officers and directors are in a position where they can be extorted--even if they have a perfect CRA record--the moment they apply to open a new bank, to merge, or to open a new branch, even though they have an exemplary CRA record. If we could do these three changes--expand CRA to address the requests those who want to expand it, joined together with those two checks against abuse, one on bribery and extortion, and the other on eliminating double jeopardy--I believe we could have a bill. Let me make this clear. Obviously, many people are for this bill. All the interests are for this bill. But there is a strong principle at stake here, and I am not for this bill. Senator Shelby is not for this bill. We believe that using our rights under the rules of the Senate we can probably stop this bill. We will, if we can, stop this bill unless some accommodation is made on the effort to expand CRA. We will not let this bill go forward with these massive expansions in CRA power. We are in a position where one side is not willing to let the bill go forward with these massive expansions in CRA; the other side says they will kill the bill if these expansive provisions are taken out. So that is where we are. I want people to understand, if you are for this bill, don't waste your time calling Senator Shelby and me. We will not be moved. If you are for this bill, call those who are for expansion of CRA and ask them what is wrong with a simple expansion of CRA and a simple amendment dealing with bribery and extortion and a simple provision establishing that if a bank is in compliance, it is in compliance. I urge those that are for this bill to let their views be known on this issue. I understand some banks in this country are willing to go on paying these bribes and keep quiet about it because there are other provisions of the bill they want. This is a wrong that is bigger than dollars and cents, and it needs to be stopped. I remind my colleagues that the clock is running and will run out, and this bill will die unless an accommodation is made on this issue. If you care about this bill, if you really believe that this bill is important--and I believe it is important, but I don't buy into the logic that we are not going to pass the bill early in the next session if we don't pass it here this week, but some people believe we won't-- what I am saying is for those who want the bill now, there is one thing you have to do to get this bill. You will have to do something about the expansive CRA provisions. Finally, let me say even if you fix CRA, the clock is running out, and if you are going to fix it, you better do it fast. That, I think, is the essence of our message. I yield the floor.

Mr. GRAMM

Mr. GRAMM. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Monday, October 5, 1998, at 2 p.m. to hold a hearing.

Mr. GRAMM

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

Mr. GRAMM

Mr. GRAMM. Will the Senator yield? Reserving the right to object.

Mr. GRAMM. Reserving the right to object.

Mr. GRAMM

Mr. GRAMM. I object.

Mr. GRAMM

Mr. GRAMM. I have no objection to proceeding to it, but I do object to proceeding to H.R. 10.

Mr. GRAMM. Reserving the right to object, the motion before the Senate is a motion to proceed to the Internet tax bill; is that correct?

Mr. GRAMM. Is the unanimous consent request of the majority leader to proceed to H.R. 10?

Mr. GRAMM. Will the Senator yield? Parliamentary inquiry, Mr. President.

Mr. GRAMM

Mr. GRAMM. Mr. President, I rise today 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 most recent projections by the Congressional Budget Office show a unified budget surplus of $63 billion, and an on-budget deficit of just $41 billion when the $104 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, which received 66 votes in the Senate on March 4, 1997, except that surplus revenues in Social Security are not counted in determining compliance. It is also identical to the Dorgan substitute and Reid perfecting amendments to S.J. Res. 1, which received 41 and 44 votes respectively, except that while Social Security surpluses are not counted, any deficit in Social Security must be offset by an equivalent on-budget surplus. This distinction is important because Social Security is projected to begin running cash- flow deficits in the year 2013. 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.