Chuck Grassley

Mr. GRASSLEY

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRASSLEY. Mr. President, I yield to the Senator from Texas, Mr. Gramm, 20 minutes on the Byrd amendment, from our side.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am today introducing a bill which would exclude the value of real property of a veteran, or a veteran's spouse or dependent, in determining how a veteran's eligibility for health care from the Department of Veterans Affair (VA) is classified. The bill would also simplify eligibility determinations by eliminating the annual self-reporting burden for veterans, and instead enable the Department to obtain income information directly from the Internal Revenue Service and the Social Security Administration. The problem asset-rich, cash-poor veterans experience in gaining eligibility for veterans pension and health care benefits was brought to my attention late last year by one of my constituents, Larry Sundall. Larry is one of Iowa's county veterans service officers. He serves veterans in Emmet County, in northwest Iowa. In the course of his work, he was finding that many of his farmer-veteran constituents where in desperate straits with no, or little, income, but still could not qualify for VA pension programs without selling their land. Because of the value of their land, these veterans would also be classified in Category 7 for purposes of health service eligibility in the event they sought health care from the VA. Category 7 veterans can receive health care services as long as the VA has sufficient funds. However, they are required to pay co-payments for any health care they receive through the VA because of the value of their land, even if they have no income and are in debt to boot. If the administration and Congress don't appropriate enough money, these Category 7 veterans will not be eligible for health care services from the VA. At Larry's urging, I decided to convene a meeting of interested parties in Des Moines last April to talk over this issue. Because many of his county veterans officials in Iowa, Minnesota, Nebraska, and South Dakota were encountering constituents with similar problems, we invited the associations of county veterans service officers from those states to send a representative to participate. We invited the State Veterans Affairs Officers from those states. VA staff from headquarters, regional offices, and VISNs also participated. The meeting was very useful and informative from my perspective, and I am grateful to all who participated. As it happens, the VA's Health Services Administration had already recognized the asset test as a problem for veterans and had formed a task force to look into the feasibility of eliminating the asset test. The Veterans Benefits Administration had also begun to discuss the issue. In any case, VA participants at the meeting agreed to convey the essentials of our discussion to principal officials at VA headquarters. The problem follows from a provision of Title 38 which holds that the Secretary may deny benefits to a veteran ``. . . when the corpus of the estate of the veteran . . . is such that under all the circumstances . . . it is reasonable that some part of the corpus of such estates be consumed for the veteran's maintenance''. In other words, if the income and estate of a veteran are large enough, they should be used before the veteran receives benefits from the VA. The law also states, however, that liquidations of assets should be required only when it can be done at ``no substantial sacrifice'' to the veteran. Regulations implementing this provision of law contain essentially the same language. The complications begin with a VA manual, 21-1, which lays out criteria to be used by VA staff in adjudicating eligibility for pension and health benefits. Under the criteria set out in M21-1, the net worth of a veteran must be adjudicated when the veteran's income and net worth is greater than $50,000. Ownership of $50,000 of farm land or other real property does not automatically and inevitably mean that adjudicators will declare a farmer veteran ineligible for these VA programs. In principle, the $50,000 is just a threshold which is to trigger adjudication of a veteran's claim for benefits, not to automatically disqualify a veteran for benefits. But there are two problems with the treatment of assets in the schema. First is the $50,000 level. It's obviously much too low, even as a trigger for adjudication. In Iowa currently, the average value of an acre of farm land is $1,781. So a farm holding valued at $50,000 would average about 28 acres, clearly two small to be viable. A 40 acre farm, at the current average value per acre, would be worth $71,240. A more viable 80 acre farm would be valued at $142,480. It seems to me, therefore, that the threshold triggering review of a farmer veteran's income and assets should be raised to $150,000. But, second, and more fundamentally, the law stipulates, as I noted earlier, that divestiture of an estate should not involve ``substantial sacrifice''. It is difficult for me to see that selling off the family farm, in many, if not most, cases, the sole source of livelihood for a farm family, would not involve substantial sacrifice. It thus seems inherently unrealistic to require a veteran to liquidate land holdings in order to become eligible for VA pension benefits or in order to pay co-payments for VA health care services. What the bill I am introducing today would do is eliminate completely the asset test as a factor is establishing eligibility for health care services. A veteran's income, however, would still be considered in eligibility determinations. The bill would also permit the Secretary to determine the attributable income of the veteran using income date from the year preceding the prior year in the event that the Secretary is unable to use prior year data. Finally, the bill would permit the Secretary to use information obtained from the Secretary of the Department of Health and Human Services and the Treasury for the purpose of determining the attributable income of a veteran. The VA estimates that this proposal should save the VA money, Mr. President. They estimate that more than $11 million would be saved in fiscal year 2001, growing to more than $13 million in fiscal year 2005. I ask that the full text of the bill be included in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am today introducing a bill which would exclude the value of real property of a veteran, or a veteran's spouse or dependent, in determining how a veteran's eligibility for health care from the Department of Veterans Affair (VA) is classified. The bill would also simplify eligibility determinations by eliminating the annual self-reporting burden for veterans, and instead enable the Department to obtain income information directly from the Internal Revenue Service and the Social Security Administration. The problem asset-rich, cash-poor veterans experience in gaining eligibility for veterans pension and health care benefits was brought to my attention late last year by one of my constituents, Larry Sundall. Larry is one of Iowa's county veterans service officers. He serves veterans in Emmet County, in northwest Iowa. In the course of his work, he was finding that many of his farmer-veteran constituents where in desperate straits with no, or little, income, but still could not qualify for VA pension programs without selling their land. Because of the value of their land, these veterans would also be classified in Category 7 for purposes of health service eligibility in the event they sought health care from the VA. Category 7 veterans can receive health care services as long as the VA has sufficient funds. However, they are required to pay co-payments for any health care they receive through the VA because of the value of their land, even if they have no income and are in debt to boot. If the administration and Congress don't appropriate enough money, these Category 7 veterans will not be eligible for health care services from the VA. At Larry's urging, I decided to convene a meeting of interested parties in Des Moines last April to talk over this issue. Because many of his county veterans officials in Iowa, Minnesota, Nebraska, and South Dakota were encountering constituents with similar problems, we invited the associations of county veterans service officers from those states to send a representative to participate. We invited the State Veterans Affairs Officers from those states. VA staff from headquarters, regional offices, and VISNs also participated. The meeting was very useful and informative from my perspective, and I am grateful to all who participated. As it happens, the VA's Health Services Administration had already recognized the asset test as a problem for veterans and had formed a task force to look into the feasibility of eliminating the asset test. The Veterans Benefits Administration had also begun to discuss the issue. In any case, VA participants at the meeting agreed to convey the essentials of our discussion to principal officials at VA headquarters. The problem follows from a provision of Title 38 which holds that the Secretary may deny benefits to a veteran ``. . . when the corpus of the estate of the veteran . . . is such that under all the circumstances . . . it is reasonable that some part of the corpus of such estates be consumed for the veteran's maintenance''. In other words, if the income and estate of a veteran are large enough, they should be used before the veteran receives benefits from the VA. The law also states, however, that liquidations of assets should be required only when it can be done at ``no substantial sacrifice'' to the veteran. Regulations implementing this provision of law contain essentially the same language. The complications begin with a VA manual, 21-1, which lays out criteria to be used by VA staff in adjudicating eligibility for pension and health benefits. Under the criteria set out in M21-1, the net worth of a veteran must be adjudicated when the veteran's income and net worth is greater than $50,000. Ownership of $50,000 of farm land or other real property does not automatically and inevitably mean that adjudicators will declare a farmer veteran ineligible for these VA programs. In principle, the $50,000 is just a threshold which is to trigger adjudication of a veteran's claim for benefits, not to automatically disqualify a veteran for benefits. But there are two problems with the treatment of assets in the schema. First is the $50,000 level. It's obviously much too low, even as a trigger for adjudication. In Iowa currently, the average value of an acre of farm land is $1,781. So a farm holding valued at $50,000 would average about 28 acres, clearly two small to be viable. A 40 acre farm, at the current average value per acre, would be worth $71,240. A more viable 80 acre farm would be valued at $142,480. It seems to me, therefore, that the threshold triggering review of a farmer veteran's income and assets should be raised to $150,000. But, second, and more fundamentally, the law stipulates, as I noted earlier, that divestiture of an estate should not involve ``substantial sacrifice''. It is difficult for me to see that selling off the family farm, in many, if not most, cases, the sole source of livelihood for a farm family, would not involve substantial sacrifice. It thus seems inherently unrealistic to require a veteran to liquidate land holdings in order to become eligible for VA pension benefits or in order to pay co-payments for VA health care services. What the bill I am introducing today would do is eliminate completely the asset test as a factor is establishing eligibility for health care services. A veteran's income, however, would still be considered in eligibility determinations. The bill would also permit the Secretary to determine the attributable income of the veteran using income date from the year preceding the prior year in the event that the Secretary is unable to use prior year data. Finally, the bill would permit the Secretary to use information obtained from the Secretary of the Department of Health and Human Services and the Treasury for the purpose of determining the attributable income of a veteran. The VA estimates that this proposal should save the VA money, Mr. President. They estimate that more than $11 million would be saved in fiscal year 2001, growing to more than $13 million in fiscal year 2005. I ask that the full text of the bill be included in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I strongly urge my colleagues to support section 103 of the energy and water appropriations bill. This section would prohibit changes to management of the Missouri River which would unquestionably increase flood risk on the lower Missouri and Mississippi Rivers. If this section is dropped from the bill, landowners in Iowa along the Missouri River will face the threat of increased flooding. Farmers and other river barge users would face increased transportation costs in getting their grain and other goods to market. Both of these outcomes are unacceptable to a majority of Iowans. There is nothing new in this bill language. It has been placed in four previous appropriations bill by my distinguished colleague from Missouri, Senator Bond. Each of these bills has been signed into law by this President. The measure would prohibit the U.S. Army Corps of Engineers from implementing a U.S. Fish and Wildlife Service plan to increase releases of water from Missouri River dams in the spring. The Daschle amendment could result in significant flooding downstream given the heavy rains that are usually experienced in my, and other downstream states during that time. We must keep in mind that it takes 8 days for water to travel from Gavins Point to the mouth of the Missouri. Unanticipated downstream storms can make a ``controlled release'' a deadly flood inflicting a widespread physical and human cataclysm. There are many small communities along the Missouri River in Iowa. Why should they face an increased potential risk for flooding and its devastation? They shouldn't. Equally unacceptable is the low-flow summer release schedule proposed by the Clinton-Gore administration's Fish and Wildlife Service. A so- called split navigation season would be catastrophic to the transportation of Iowa grain to the marketplace. In effect, the Missouri River would be shut-down to barge traffic during a good portion of the summer. It would also have a disastrous effect on the transportation of steel to Iowa steel mills located along the Missouri, construction materials and farm inputs such as fertilizer. Opponents of section 103 will advance an argument that a spring flood is necessary for species protection under the Endangered Species Act, and that grain and other goods can be transported to market by railroad. I do not accept that argument. I believe that there is significant difference of opinion whether or not a spring flood will benefit pallid sturgeon, the interior least tern or the piping plover. In fact, the Corps has demonstrated that it can successfully create nesting habitat for the birds through mechanical means. Further, it is in dispute among biologists whether or not a flood can create the necessary habitat for the sturgeon. I would further point out that the Fish and Wildlife Service has yet to designate ``critical habitat'' for the pallid sturgeon as required by the Endangered Species Act. Loss of barge traffic would deliver the western part of America's great grain belt into the monopolistic hands of the railroads. Without question, grain transportation prices would drastically increase with disastrous results on farm income. Every farmer in Iowa knows that the balance in grain transportation is competition between barges and railroads. This competition keeps both means of transportation honest. This competition keeps transportation prices down and helps to give the Iowa farmer a better financial return on the sale of his grain. This competition helps to make the grain transportation system in America the most efficient and cost effective in the world. It is crucial in keeping American grain competitively priced in the world market. The Corps itself estimates that barge competition reduces rail rates along the Missouri by $75-200 million annually. Further, if a drought hits during the split navigation season, there would be even less water flowing along the Missouri. This would greatly inhibit navigation along the Mississippi River. We cannot let this happen. Less water flowing in the late summer would also affect hydroelectric rates. The decreased flows would mean less power generation and higher electric rates for Iowans who depend upon this power source. I agree with the National Corn Growers and their statement that, ``an intentional spring rise is an unwarranted, unscientific assault on farmers and citizens throughout the Missouri River Basin.'' I urge my colleagues to support section 103. Vote against the Daschle amendment.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, we started earlier today the initial discussion of what I call the China trade bill, the Senate by law ratifying the agreement that has been worked out by this administration and the Government of China to level the playing field for trade between the United States and China. In a simple form, the bill before us will give access for U.S. exporters--meaning manufacturing, services and agriculture--to China on the same basis that China has had access to our markets for the last 15 to 20 years. When you have an opportunity for our people to export to China, to sell to China, on the same basis that China has been able to do with the United States, it is a win-win situation. My Midwestern common sense tells me this is a good situation for America. So that debate has started today. We are on the question of the motion to proceed. I support this motion. I hope we get to a final vote on the bill, because I think it will pass by an overwhelming margin, not the very narrow margin that it passed in the House of Representatives. This will give us an enhanced opportunity to do business with 20 percent of the world's population. There are many reasons I support this bill, which is probably one of the most important matters to come before the Senate this session. But today, I would like to address just two reasons. The first is the issue of jobs, a very positive aspect to this legislation. The second is human rights, which some people view as a reason for being against this legislation. I suggest to you that even though the human rights situation in China is not good, trade gives us an opportunity to improve that human rights situation. In each case, I want to address concerns of real people in a commonsense way. Too often, when we talk about major policy changes, we do so in lofty terms, not connected to the people's concerns and their interests, and what is important to everyday working Americans. Today, I would like to talk about how real people will be affected by making it possible for the United States to take advantage of China's pending accession to the World Trade Organization. Lowering protectionist tariffs and tearing down trade barriers that discriminate against American products will create many thousands of new American jobs. A new era of free trade with China, under the WTO World Trade Organization disciplines, will help us continue to build the tremendous prosperity that we enjoy as a direct result--a very direct result--of the success of our postwar trading system; going back to 1947, as we have used the gradual freeing up of trade around the world to expand the world economic pie. Because of free trade, with a population that is now about double what it was back then, we now have more prosperity for more people. If we had not expanded the world economic pie, we would, in fact, have less for our increased world population. So think in terms of the economic enhancement of individuals and the political stability that comes from it. In my State of Iowa, we know our economic interdependence with the rest of the world is not a policy choice; it is a fact. Trade means jobs anywhere, but particularly in my State. In just 5 years, Iowa's merchandise export to China has soared 35 percent. In the Waterloo-Cedar Falls area--that is close to where I was born, and where I have lived my entire life--recent merchandise sales to China have surged 806 percent. Iowa's trade-related jobs mean that a young couple can afford their first home. They can afford tuition for school. They can afford to buy a car. They can afford to care for their families, the way working people want to care for their families. But unless we seize this moment, this opportunity will pass us by. When China enters the World Trade Organization, which it will do regardless of the outcome of this vote on the Senate floor--and if we do not remove all of our current conditions on trade with China, which this bill does--other countries will reap the rewards of a trade deal that we helped negotiate. American companies then would be forced to sit on the sidelines as companies from the European Union or Asia or Africa or elsewhere take our business and ultimately take our jobs because we have not assumed this opportunity of freer trade with China. If we pass up this opportunity, America will be at the end of the line of the 137 other WTO countries, that will be standing in front of us, trading with China. I want to give my colleagues two real-life examples from my State of Iowa. Tucker Manufacturing Company is a family-owned business in Cedar Rapids, Iowa, that has developed a unique window-washing system which it makes and sells around the world. Tucker has made a few small sample sales to China and has found a distributor that would like to make a large order. Tucker knows that in the past state-owned distribution companies in China have dictated commercial terms that have often harmed exporting companies like Tucker. They would like to see China become a World Trade Organization member so that distribution rights are no longer strictly controlled by the state, meaning the country and Government of China, and so that any new transactions in China then are protected by the rule of law, which is what the World Trade Organization regime is all about--the rule of law, predictability in international trade, the resolving of disputes in international trade. A second example from Cedar Rapids, Iowa, is the Diamond V Mills Company, which I visited just last week. I had the opportunity to present it with the Commerce Department's E-Star Award for excellence in exports. They had already received the E award, now they have the E- Star award that indicates they have been highly successful in international trade on an ongoing basis. Diamond V Mills has exported its yeast culture feed ingredients to China since 1996, but they did it by operating through a local distributor. The company wants to sell directly to its end user but has not been able to do so--until this agreement goes through--due to China's current restrictions on a foreign company's rights to distribute its products in China. Under the WTO accession agreement, China has committed to opening its markets to the private distribution networks that Diamond V Mills of Cedar Rapids needs. If Diamond V Mills can get access to new distribution networks in China, it will generate more sales, earn more revenue, provide more jobs in Iowa, create more opportunity and more prosperity for everybody. These are only two examples of how Iowa's manufacturing sector will benefit through expanded trade with China. There are many more. We have Iowa's farmers and agricultural producers seeing tremendous benefits from this proposal as well because China's World Trade Organization accession agreement will dramatically lower agricultural tariffs and eliminate many nontariff trade barriers. As a result, our farmers will sell more soybeans and more soy oil to China than ever before. After the United States, China is the second largest consumer of corn and corn products in the world. As the distinguished Presiding Officer knows, my State is No. 1 in the production of corn in the United States, as his State is No. 1 in the production of wheat. China's WTO commitments will create a great export opportunity for Iowa's corn growers and for corn growers across the United States. Iowa State University professor Dermot Hayes recently told my international trade subcommittee that if China fully implements its WTO accession commitments we could see hog prices rise by as much as $5 per head. That is a larger benefit than any of the Government support programs we have heard about lately. Unlike some of the proposals I have heard, we would not have to impair our obligations under the WTO's subsidies agreement, or the WTO agriculture agreement, to do it. Second, I want to discuss the issue of human rights and political freedoms in China because this is a legitimate issue, even though I disagree with the argument that killing this bill is going to help human rights in China. I wish to make it clear I don't find fault with those who bring it up as part of this debate because I think wherever we can try to say to China that they are going down the wrong road on human rights, they are hurting their country, not us. Like all Americans, Iowans care deeply about the struggle for liberty. Many have family members who have given their lives in freedom's cause, or they know someone who has. It hurts us to hear horrible accounts of repression. We are rightly repelled. We don't understand why it happens, and we want it to change because we think freedom is an innate right for the Chinese as well as for Americans. But the fact is, we can never turn China into a model of constitutional democracy if we isolate them economically. However, we can help bring about fundamental reform in China's economy and political structure through enforceable WTO rules that do not discriminate and are consistent and are not arbitrary. In addition, I have a firm conviction that regardless of how necessary a political and rule of law environment is for trade to take place and political leaders such as the President of the United States and other people negotiating with the Chinese, none of those efforts, as important as they are, can compare to the opportunities for advancing political freedom and human rights that will come when millions of American businesspeople interact with millions of Chinese businesspeople on a day-to-day basis. That is going to do more to improve human rights than anything else. When it comes to making decisions, the WTO applies the democratic principle of consensus rule. All of these principles--democratic decisionmaking, nondiscrimination, nonarbitrary regulation--are also the obvious, essential ingredients of political freedom. The process of economic reform, guided by China's WTO commitments, will mean that China will become more open. They will eventually become more free. We know, perhaps better than any nation on Earth, that economic and political freedoms share deep roots. That economic and political rights go hand in hand is at the heart of America's constitutional heritage. Many in China know that economic and political reform are closely linked as well. That is why many of China's military hardliners oppose China's entry into the World Trade Organization. Perhaps it is this inevitable linking between economic reform and political freedom that has inspired the Dalai Lama, no stranger to China's religious repression, to say: I have always stressed that China should not be isolated. China must be brought into the mainstream of the world community. . . . To those who doubt that economic reform has occurred in China, or that it is significant, I ask them to consider how much has changed in the last half century. You will remember that in 1952, China's Communist government mounted a wide-ranging crusade to undermine private entrepreneurs, businesspeople were commonly condemned as ``counterrevolutionaries,'' and many were assessed large fines and forced out of business. In fact, by 1956, China required all private firms to be jointly owned and, in fact, run by the government. In practice, this meant that we had state control of all private enterprise in China. It wasn't until the early 1980s that private enterprise began to reemerge in China. More significantly, it wasn't until 1988 that the private economy even had a defined legal status in China. Today, 12 years later, China is a different country. Today, young Chinese engineers who studied and worked in California's Silicon Valley are going back to China, lured by entrepreneurial opportunities that didn't even exist a few years ago. The number of individuals employed by the private sector in China has soared by over 31 percent in the last 3 years. That is bad news for China's state-owned enterprises. That happens to also be bad news for China's People's Liberation Army, which depends on many state-run businesses for revenue and have opposed these reforms that are going on within China, including this agreement before the Senate. But this development is good news for the cause of freedom. As the number of individuals employed in the private sector rises, the state will have less and less direct control over how people think and how people react to political change. Massachusetts Institute of Technology professor Edward Steinfeld is one of our country's keenest scholars on what goes on in China. This is what he had to say about the meaning of China's World Trade Organization concessions on China's direction as a country: The concessions of 1999 represented a thorough reversal of course. Instead of reform serving to sustain the core, the core itself would be destroyed to save reform, along with the growth, prosperity, and stability reform has brought to China. In the new view, instead of using market forces to save state socialism, state socialism itself would have to be sacrificed to preserve the market economy. I agree with Professor Steinfeld. China's membership in the World Trade Organization will require it to reform a very large portion of its economy, and not only to comply with WTO rules, but to be able to compete internationally. With a ``yes'' vote on the motion to proceed and a ``yes'' vote on approving permanent normal trading status for China, we can help change the world. China constitutes one-fifth of the world's population. We can be on the right side of history. We ought to be on the right side of history. I urge a vote for this motion to proceed and a vote of yes on final passage. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise to note the introduction of the Medicare Geographic Fair Payment Act of 2000. I'm very pleased to join Senators Domenici, Wyden, and Kerrey in this effort. While we share the problem of low payment rates, Iowa and Nebraska are in a different situation than New Mexico and Oregon. Those two states are concerned about Medicare + Choice plans leaving, but for the most part we in Iowa are still waiting for plans to arrive. There are a number of things that have to fall into place for Medicare + Choice to become a reality in Iowa, but one of them is increasing payment rates. I want to make sure that if Congress provides any relief in Medicare + Choice this year, that low-cost areas are not forgotten. We need to make Medicare + Choice a truly national program. There are two simple Medicare + Choice payment provisions in the bill. It would raise the minimum payment floor for all counties from the current $415 to $475 in 2001. This would primarily benefit rural and small urban areas, including the vast majority of Iowa. Secondly, it would establish a new minimum payment floor of $525 for all counties in Metropolitan Statistical Areas (MSAs) with populations exceeding 250,000. In Iowa, this would mean a substantial incentive for plans to enter the Des Moines and Quad Cities areas. As I've said so often throughout the five-plus years that I've been working on this issue, people in low-cost states like Iowa pay the same payroll taxes as those in high-cost areas. So it's a matter of simple fairness and equity that all seniors have access to the choices in Medicare, wherever they live. The problem with Medicare + Choice has been that payment rates are based on fee-for-service payment rates in the same county; thus, cost-effective regions like ours are punished. This makes no sense. We took our first step toward breaking that unfortunate link in 1997, and I have high hopes that we will take another big step with this bill in 2000. We in low-cost regions have to keep the fight for equity going on two fronts: Medicare + Choice payment, and traditional Medicare payment. The latter is harder for Congress to change, because we have to identify inequities in the various Medicare payment policies and fix them one by one. I thank my colleagues for including in this bill my earlier bill on the hospital wage index, which is one of those flaws in fee-for-service Medicare that cries out to be fixed. I look forward to the Finance Committee's Medicare discussions this fall; this is the kind of legislation that merits serious consideration there.

Mr. GRASSLEY. Mr. President I rise today to introduce an extremely timely piece of legislation in light of the current energy crisis facing our nation. This legislation, entitled ``The Resource Efficient Appliance Incentive Act,'' will provide a valuable incentive to accelerate and expand the production and market penetration of ultra energy-efficient appliances. Senator Rockefeller is joining me in this bipartisan effort, along with Senators Jeffords and Lincoln. Earlier this year, the appliance industry, the Department of Energy, and the nation's leading energy-efficiency and environmental organizations came together and agreed upon significantly higher energy efficiency standards for clothes washers to accompany the new energy efficiency standards for refrigerators that go into effect in July 2001, as well as the new criteria for achieving the voluntary ``Energy Star'' designation. This agreement is significant considering the fact that clothes washers and dryers, together with refrigerators, account for approximately 15 percent of all household energy consumed in the United States. This legislation will provide a tax credit to assist in the development of super energy-efficient washing machines and refrigerators, and creates the incentives necessary to increase the production and sale of these appliances in the short term. Manufacturers would be eligible to claim a credit of either $50 or $100, depending on efficiency level, for each super energy-efficient washing machine produced between 2001 and 2006. Likewise, manufacturers would be eligible to claim a credit of $50 or $100, depending on efficiency level, for each super energy-efficient refrigerator produced between 2001 and 2006. It is estimated that this tax credit will increase the production and purchase of super energy-efficient washers by almost 200 percent, and the purchase of super energy-efficient refrigerators by over 285 percent. Equally important is the long-term environmental benefits of the expanded use of these appliances. Over the life of the appliances, over 200 trillion Btus of energy will be saved. This is the equivalent of taking 2.3 million cars off the road or closing 6 coal-fired power plants for a year. In addition, the clothes washers will reduce the amount of water necessary to wash clothes by 870 billion gallons, an amount equal to the needs of every household in the city the size of Phoenix, Arizona for two years. Most importantly, the benefits to consumers over the life of the washers and refrigerators from operational savings is estimated at nearly $1 billion. In my home state of Iowa, this legislation would result in the production of 1.5 million supper energy-efficient washers and refrigerators over the next six years, requiring over 100 new production jobs. I also expect Iowans to save $11 million in operational costs over the life span of the appliances, and 9 billion gallons of water--enough to supply drinking water for the entire state for 30 years. Lastly, I believe the total revenue loss of this credit compares extremely favorably to the estimated benefits of almost $1 billion to consumers over the life of the super energy-efficient clothes washers and refrigerators from operational savings.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise to note the introduction of the Medicare Geographic Fair Payment Act of 2000. I'm very pleased to join Senators Domenici, Wyden, and Kerrey in this effort. While we share the problem of low payment rates, Iowa and Nebraska are in a different situation than New Mexico and Oregon. Those two states are concerned about Medicare + Choice plans leaving, but for the most part we in Iowa are still waiting for plans to arrive. There are a number of things that have to fall into place for Medicare + Choice to become a reality in Iowa, but one of them is increasing payment rates. I want to make sure that if Congress provides any relief in Medicare + Choice this year, that low-cost areas are not forgotten. We need to make Medicare + Choice a truly national program. There are two simple Medicare + Choice payment provisions in the bill. It would raise the minimum payment floor for all counties from the current $415 to $475 in 2001. This would primarily benefit rural and small urban areas, including the vast majority of Iowa. Secondly, it would establish a new minimum payment floor of $525 for all counties in Metropolitan Statistical Areas (MSAs) with populations exceeding 250,000. In Iowa, this would mean a substantial incentive for plans to enter the Des Moines and Quad Cities areas. As I've said so often throughout the five-plus years that I've been working on this issue, people in low-cost states like Iowa pay the same payroll taxes as those in high-cost areas. So it's a matter of simple fairness and equity that all seniors have access to the choices in Medicare, wherever they live. The problem with Medicare + Choice has been that payment rates are based on fee-for-service payment rates in the same county; thus, cost-effective regions like ours are punished. This makes no sense. We took our first step toward breaking that unfortunate link in 1997, and I have high hopes that we will take another big step with this bill in 2000. We in low-cost regions have to keep the fight for equity going on two fronts: Medicare + Choice payment, and traditional Medicare payment. The latter is harder for Congress to change, because we have to identify inequities in the various Medicare payment policies and fix them one by one. I thank my colleagues for including in this bill my earlier bill on the hospital wage index, which is one of those flaws in fee-for-service Medicare that cries out to be fixed. I look forward to the Finance Committee's Medicare discussions this fall; this is the kind of legislation that merits serious consideration there.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President I rise today to introduce an extremely timely piece of legislation in light of the current energy crisis facing our nation. This legislation, entitled ``The Resource Efficient Appliance Incentive Act,'' will provide a valuable incentive to accelerate and expand the production and market penetration of ultra energy-efficient appliances. Senator Rockefeller is joining me in this bipartisan effort, along with Senators Jeffords and Lincoln. Earlier this year, the appliance industry, the Department of Energy, and the nation's leading energy-efficiency and environmental organizations came together and agreed upon significantly higher energy efficiency standards for clothes washers to accompany the new energy efficiency standards for refrigerators that go into effect in July 2001, as well as the new criteria for achieving the voluntary ``Energy Star'' designation. This agreement is significant considering the fact that clothes washers and dryers, together with refrigerators, account for approximately 15 percent of all household energy consumed in the United States. This legislation will provide a tax credit to assist in the development of super energy-efficient washing machines and refrigerators, and creates the incentives necessary to increase the production and sale of these appliances in the short term. Manufacturers would be eligible to claim a credit of either $50 or $100, depending on efficiency level, for each super energy-efficient washing machine produced between 2001 and 2006. Likewise, manufacturers would be eligible to claim a credit of $50 or $100, depending on efficiency level, for each super energy-efficient refrigerator produced between 2001 and 2006. It is estimated that this tax credit will increase the production and purchase of super energy-efficient washers by almost 200 percent, and the purchase of super energy-efficient refrigerators by over 285 percent. Equally important is the long-term environmental benefits of the expanded use of these appliances. Over the life of the appliances, over 200 trillion Btus of energy will be saved. This is the equivalent of taking 2.3 million cars off the road or closing 6 coal-fired power plants for a year. In addition, the clothes washers will reduce the amount of water necessary to wash clothes by 870 billion gallons, an amount equal to the needs of every household in the city the size of Phoenix, Arizona for two years. Most importantly, the benefits to consumers over the life of the washers and refrigerators from operational savings is estimated at nearly $1 billion. In my home state of Iowa, this legislation would result in the production of 1.5 million supper energy-efficient washers and refrigerators over the next six years, requiring over 100 new production jobs. I also expect Iowans to save $11 million in operational costs over the life span of the appliances, and 9 billion gallons of water--enough to supply drinking water for the entire state for 30 years. Lastly, I believe the total revenue loss of this credit compares extremely favorably to the estimated benefits of almost $1 billion to consumers over the life of the super energy-efficient clothes washers and refrigerators from operational savings.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am introducing a bill today entitled the ``Federal Courts Improvement Act of 2000.'' Every few years, the Judicial Conference, the governing body of the federal courts, contacts Congress regarding changes to the law the Judicial Conference believes are necessary to improve the functions of the courts. As chairman of the Judiciary Subcommittee with jurisdiction over the courts, I have the responsibility to review the operation of the federal court process and procedures. In the past, I have also been in the forefront of advocating that the federal judicial system be administered in the most efficient and cost-effective manner possible while maintaining a high level of quality in the administration of justice. The bill I am introducing, along with Senator Torricelli, the Ranking Member of my subcommittee, is a consensus bill that includes many of the recommendations made by the Judicial Conference. The Judicial Conference has noted a problem that continues to plague the Federal judicial system is the lack of up-to-date technologies that would reduce costs while at the same time improve the efficiency of its administration along with a wide range of judicial branch programs. The ``Federal Courts Improvement Act of 2000'' attempts to addresses this problem. In accordance with federal policy to defray the cost of providing services by assessing a fee for their use, sections of this bill provide the judiciary with the authority to set, collect, and retain fees to be used to acquire information technologies, such as electronic filing, video conferencing, and electronic evidence presentation devices. This section requires that the fees collected are to be deposited into the Judiciary Information Technology Fund and used for reinvestment in information technology. I feel that granting the judiciary the authority to collect and retain these fees will go a long way toward improving the efficiency of the judicial system while providing substantial savings for litigants and attorneys. This bill addresses two areas in which I have taken a personal interest, over the years: reducing unnecessary expenses and improving the efficiency of the judicial system. This bill would help achieve both. Traditionally, the safeguards applicable to criminal defendants charged with more serious crimes have not been applicable to petty offense cases because the burdens were deemed undesirable and impractical in dealing with such minor offenses. Currently, U.S. Magistrate Judges may preside over petty offense cases charging a motor vehicle offense and infractions, without the consent of the defendant. This bill removes the consent requirement in all other petty cases--a position repeatedly supported by the Judicial Conference of the United States. Additionally, this bill authorizes magistrate judges to try misdemeanor cases involving juveniles currently tried in district court. Removing the consent requirement from these petty offense cases and authorizing magistrate judges to preside over all juvenile misdemeanors would free-up valuable district court resources that could be used to deal with more serious crimes and offenders while reducing the time and expense necessary in dealing with these offenses. Another section of the bill also contains provisions that would free up district court resources and allow federal judges more time to deal with their civil and criminal dockets. These provisions raise the maximum compensation level paid to federal or community defenders representing defendants appearing before United States magistrates or the district courts before they must seek a waiver for payment in excess of the prescribed maximum. Payment in excess of the maximum currently requires the approval of both the judge who presided over the case and the chief judge of the circuit. This procedure in turn increases the amount of time judges must devote to non-judicial matters. The last increase was instituted fourteen years ago. During this time, the effects of inflation have significantly eroded the compensation paid to federal and community defenders. The Judicial Conference has expressed to me their concern over a growing trend of ``Criminal Justice Act'' (CJA) panel attorneys being subject to unfounded suits by the defendants they previously represented and the financial damage these attorneys have to deal with when they must pay to defend themselves in these actions. These unfair costs have the potential of having a chilling effect on the willingness of attorneys to participate as panel attorneys and will only make it more difficult to obtain adequate representation for defendants. Currently, the CJA authorizes the Director of the Administrative Office of the United States Courts to provide representation and indemnify federal and community defender organizations for malpractice claims that arise as a result of furnishing representational services. Panel attorneys are the only component of the appointed counsel program who are not permitted to receive CJA-funded coverage for any costs associated with defending against a malpractice claim by a CJA client. Our bill rectifies this oversight in the CJA, and provides CJA panel attorneys the same protection as other federal defenders. Provisions in our bill authorize the judge who presides over a case, at his discretion, to reimburse panel attorneys for out-of-pocket expenses for civil claims arising for their CJA services. The judge would exercise his discretion limiting the amount of reimbursement available for a panel attorney as he views appropriate under the circumstances, as has been the practice with respect to malpractice claims against other federal defenders. In addition, the ``Federal Courts Improvement Act of 2000'' also contains provisions designed to assist handicapped employees working for the federal judiciary. These provisions bring the federal judicial system in-line with the Executive Branch and other governmental bodies. The bill also contains a number of other provisions that we believe are necessary to improve the Federal Courts' administration, judicial process and matters relating to public defenders, as well as other items that enhance the operation of the Federal judiciary. I urge my colleagues to join us and support these improvements to our Federal Court system.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am introducing a bill today entitled the ``Federal Courts Improvement Act of 2000.'' Every few years, the Judicial Conference, the governing body of the federal courts, contacts Congress regarding changes to the law the Judicial Conference believes are necessary to improve the functions of the courts. As chairman of the Judiciary Subcommittee with jurisdiction over the courts, I have the responsibility to review the operation of the federal court process and procedures. In the past, I have also been in the forefront of advocating that the federal judicial system be administered in the most efficient and cost-effective manner possible while maintaining a high level of quality in the administration of justice. The bill I am introducing, along with Senator Torricelli, the Ranking Member of my subcommittee, is a consensus bill that includes many of the recommendations made by the Judicial Conference. The Judicial Conference has noted a problem that continues to plague the Federal judicial system is the lack of up-to-date technologies that would reduce costs while at the same time improve the efficiency of its administration along with a wide range of judicial branch programs. The ``Federal Courts Improvement Act of 2000'' attempts to addresses this problem. In accordance with federal policy to defray the cost of providing services by assessing a fee for their use, sections of this bill provide the judiciary with the authority to set, collect, and retain fees to be used to acquire information technologies, such as electronic filing, video conferencing, and electronic evidence presentation devices. This section requires that the fees collected are to be deposited into the Judiciary Information Technology Fund and used for reinvestment in information technology. I feel that granting the judiciary the authority to collect and retain these fees will go a long way toward improving the efficiency of the judicial system while providing substantial savings for litigants and attorneys. This bill addresses two areas in which I have taken a personal interest, over the years: reducing unnecessary expenses and improving the efficiency of the judicial system. This bill would help achieve both. Traditionally, the safeguards applicable to criminal defendants charged with more serious crimes have not been applicable to petty offense cases because the burdens were deemed undesirable and impractical in dealing with such minor offenses. Currently, U.S. Magistrate Judges may preside over petty offense cases charging a motor vehicle offense and infractions, without the consent of the defendant. This bill removes the consent requirement in all other petty cases--a position repeatedly supported by the Judicial Conference of the United States. Additionally, this bill authorizes magistrate judges to try misdemeanor cases involving juveniles currently tried in district court. Removing the consent requirement from these petty offense cases and authorizing magistrate judges to preside over all juvenile misdemeanors would free-up valuable district court resources that could be used to deal with more serious crimes and offenders while reducing the time and expense necessary in dealing with these offenses. Another section of the bill also contains provisions that would free up district court resources and allow federal judges more time to deal with their civil and criminal dockets. These provisions raise the maximum compensation level paid to federal or community defenders representing defendants appearing before United States magistrates or the district courts before they must seek a waiver for payment in excess of the prescribed maximum. Payment in excess of the maximum currently requires the approval of both the judge who presided over the case and the chief judge of the circuit. This procedure in turn increases the amount of time judges must devote to non-judicial matters. The last increase was instituted fourteen years ago. During this time, the effects of inflation have significantly eroded the compensation paid to federal and community defenders. The Judicial Conference has expressed to me their concern over a growing trend of ``Criminal Justice Act'' (CJA) panel attorneys being subject to unfounded suits by the defendants they previously represented and the financial damage these attorneys have to deal with when they must pay to defend themselves in these actions. These unfair costs have the potential of having a chilling effect on the willingness of attorneys to participate as panel attorneys and will only make it more difficult to obtain adequate representation for defendants. Currently, the CJA authorizes the Director of the Administrative Office of the United States Courts to provide representation and indemnify federal and community defender organizations for malpractice claims that arise as a result of furnishing representational services. Panel attorneys are the only component of the appointed counsel program who are not permitted to receive CJA-funded coverage for any costs associated with defending against a malpractice claim by a CJA client. Our bill rectifies this oversight in the CJA, and provides CJA panel attorneys the same protection as other federal defenders. Provisions in our bill authorize the judge who presides over a case, at his discretion, to reimburse panel attorneys for out-of-pocket expenses for civil claims arising for their CJA services. The judge would exercise his discretion limiting the amount of reimbursement available for a panel attorney as he views appropriate under the circumstances, as has been the practice with respect to malpractice claims against other federal defenders. In addition, the ``Federal Courts Improvement Act of 2000'' also contains provisions designed to assist handicapped employees working for the federal judiciary. These provisions bring the federal judicial system in-line with the Executive Branch and other governmental bodies. The bill also contains a number of other provisions that we believe are necessary to improve the Federal Courts' administration, judicial process and matters relating to public defenders, as well as other items that enhance the operation of the Federal judiciary. I urge my colleagues to join us and support these improvements to our Federal Court system.

Mr. GRASSLEY

Mr. GRASSLEY. As a reminder to all Members, on this date 2 years ago, Officer Chestnut and Detective Gibson were killed in the line of duty while defending the Capitol against an intruder armed with a gun. In honor of this anniversary, I now ask unanimous consent that at 3:40 p.m. today, there be a moment of silence to honor these two officers.

Mr. GRASSLEY. I thank my colleagues for their attention.

Mr. GRASSLEY

Mr. GRASSLEY. For the leader, I would like to announce today's program. The Senate will be in a period of morning business until 2 p.m., with Senators Durbin and Thomas in control of the time. Following morning business, the Senate is expected to begin consideration of the Treasury-Postal appropriations bill with amendments in order to that bill. Those Senators who have amendments should work with the bill managers on a time to offer their amendments as soon as possible.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent to speak for 5 minutes as if in morning business, with the time to come from Senator Thomas' time.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to express my support for a provision included in the House-passed Department of Defense (DOD) Authorization bill which provides a permanent chiropractic benefit to all active military personnel. Iowans have a long history of support for the chiropractic profession. In fact, the nation's oldest institution of higher chiropractic learning--Palmer College--is located in Davenport, Iowa. I am pleased that both the House and Senate have included provisions in their respective DOD authorization bills which expand access to chiropractic services for members of the military. These provisions follow on the heels of a multi-year pilot program enacted in the National Defense Authorization Act for Fiscal Year 1995. The pilot program demonstrated that military personnel who received chiropractic care had higher levels of satisfaction with the care they received as compared to personnel who only received traditional medical care. Furthermore, the pilot project demonstrated that chiropractic care would reduce hospitalization, return injured patients to work more quickly, and would result in a net savings to the Department of Defense in excess of $25 million annually. The Defense Authorization Act passed by the House of Representatives begins the process of fully integrating chiropractic care into the military health care system on a direct access basis. The Senate-passed bill, however, limits chiropractic care through a medical gatekeeper. Direct access to chiropractic care would expedite the delivery of chiropractic care to those patients most in need of services and would free up existing health care providers to concentrate their time and efforts in other areas requiring attention. Therefore, I join the chiropractic profession in asking the conferees of the DOD Authorization legislation to accept the House-passed provision and provide direct access to chiropractic services to all active military personnel.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I would like to note that there are some things happening around here of late that make me wonder if we are in an episode of the X-Files. I am troubled with the mysterious appearance and disappearance of funds within the conference report for Military Construction. In the effort to develop an emergency spending package, the House included money for meth lab clean-up. It voted on money. The Senate-passed bill had money for meth lab clean-up. Both Houses of Congress recognized that there was a real emergency. Both bodies recognized the need to provide emergency money to DEA to help pay for the costs of cleaning up the toxic waste dumps caused by illegal meth production. I and other members of this body have been concerned for some time about this problem. We have written the President, the head of the Office of Management and Budget, the Attorney General, and the Majority Leader and members of the Committee on Appropriations. The Majority Whip of the Senate had an emergency meth spending item accepted as part of the bill passed by the Senate. But it seems we've had a case of alien abduction. All--all the meth money disappeared in conference and no one seems to know how or why. The House included money. The Senate included money. The conference to reconcile the differences, however, included no money. What this means is strange math in which one plus one equals zero. Mr. President, I have participated in various conferences with the other body, and I know they can be complicated affairs. Strong disagreements can exist over how to phrase a section, or how much funding this particular project should receive. But there have always been some guidelines governing a conference. First, you are working toward a compromise. This means, by definition, you are not going to get everything you want. However, it also means you will get something that will work. Second, in a conference, you aren't starting from scratch. Each body has reviewed, debated, and passed a version of legislation--a starting point, if you will, for compromise. These compromises, often difficult to arrive at, are worked out behind closed doors. Out of the watchful eye of the public. Legislating can be an ugly process, and often negotiations continue in a much more open and frank manner in private than under the media microscope. But compromise should not be the occasion for legislating afresh, for ignoring the expressed intent of majorities in both Houses. Looking through the Military Construction Appropriations bill this last week, I was distressed at some of the items I found that seem to have magically appeared. 6 C-130Js and a new Gulf Stream 5 for the Coast Guard, for example. So far as I know, the Coast Guard did not ask for a Gulf Stream, and we did not vote for one. But there it is. At the same time, it seems that needed funds to support the DEA's continued assistance to State and local law enforcement agencies to clean up methamphetamine labs have disappeared--and no one seems to know where it went. Heading into the conference, it was clear what the situation was. The House had provided $15 million in emergency funds for needed methamphetamine lab-cleanup. The Senate provided a total of $50 million for meth-related activities by the DEA--$10 million was added in Committee, and an additional $40 million was adopted on the floor for ``initiatives to combat methamphetamine production and trafficking.'' So you would think--I certainly thought--that the conferees would return with some funding--most likely between $15 and $50 million--for meth lab clean-up. But something happened in the conference. Someone waved a magic wand, and ``Poof!'' The money is gone. Where did it go? The conferees don't know. Why is it gone? The sponsors of the funds don't know. I don't know. Inquiries have left me feeling like Jimmy Stewart commenting on the evidence in his case in the 1959 movie classic, ``Anatomy of a Murder,'' where he notes evidence appears and disappears in a ghostly fashion. But what I do know is that I have to explain this to my constituents--to the law enforcement agencies in Iowa who are dependent upon these funds to support their clean up efforts of these mini environmental catastrophes. I am not alone. All of this funding hocus pocus I find to be very troubling. I hope we can solve the mystery and avoid its like in the future.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise to share in the memory of one of this body's most esteemed colleagues, Senator Paul Coverdell. His untimely death Tuesday was a shock to us all. My prayers and condolences go out to his family at their time of mourning. It so happens that Senator Coverdell was born in my home state of Iowa--in Des Moines. That made him an honorary constituent of mine. For that reason, he was always a special colleague to me. We in this body knew of his background in the Peace Corps just before he was elected to the Senate. He very quickly began to show his outstanding leadership skills. He built a respect among his colleagues because of his hard work and his dedication to those issues most dear to him--especially education and the war on drugs. Senator Coverdell did almost all of his work behind-the-scenes, work that the public never knew about. But we knew, because we worked with him. His interest was not the limelight. You rarely saw his name in the papers. Instead, it was rolling up his sleeves and working one-on-one with his colleagues in an effective way. No one among us had such energy, enthusiasm for public service, and organizing ability. I worked closest with him on international narcotics issues, as chairman of the Senate Caucus on International Narcotics Control. He was chairman of the Foreign Relations Subcommittee on Western Hemisphere, Peace Corps, Narcotics and Terrorism. We worked very closely together on narcotics matters. We would hold joint hearings on fighting drug cartels in Colombia and other countries. No one felt stronger about stopping the scourge of drugs in this country than he did. He cared deeply about the debilitating effect drugs have had on the future of our country and our youth. It was a real privilege to work with Paul Coverdell in the United States Senate. He was a statesman, a public servant in the true sense of the word. And he was a good friend, I join my colleagues in expressing how much we will miss his energy, enthusiasm and friendship. His presence will be greatly missed in the Senate. I wish all the best to his family, knowing of their profound grief at their loss.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to introduce the Civil Rights Tax Fairness Act of 2000. I am being joined by Senator Robb in this effort. Civil rights legislation has been in force throughout this country for nearly thirty years; its purpose being to provide real remedies to victims of discrimination. The Civil Rights Tax Fairness Act restores certain remedies for victims of discrimination by eliminating taxes on emotional distress awards. This tax was incorporated into the Small Business Job Protection Act of 1996, making the taxation of awards received in discrimination cases involving back wages or non-physical injuries ( including emotional distress) taxable. The result of the 1996 legislation was to discriminate against people involved in civil rights cases. People who received damage awards because of a bar-room brawl or slip-and-fall incident, often caused by simple negligence, get tax free awards. While, for similar types of psychological injuries caused by intentional discrimination the damages are taxed. The result of this taxation is that the attorneys and government make out better than the victims who had their rights violated. A second part of The Civil Rights Tax Fairness Act changes the current law, which requires people who receive back pay awards in discrimination cases to be bumped up into a higher tax bracket. When back pay awards are received by a person in a case the IRS considers it taxable income to be taxed in the year it is received, even though the award received covers many years of lost wages. Currently no averaging of back pay awards is allowed, but The Civil Rights Tax Fairness Act attempts to address this problem. The act provides for income averaging of back pay awards, making it possible for the award to be taxed over the number of years it was meant to compensate. The third area that The Civil Rights Fairness Act attempts to combat is the double taxation of attorneys' fees that takes place under current law. Presently individuals who receive awards end up having to include in that award their attorneys' fee. This fee can end up being larger than the actual award received by the plaintiff. The current tax implications in the law require the plaintiff to pay taxes on their award and on the attorneys fees received by their lawyer. One real life example recently brought to my attention involves an Iowa citizen named Don Lyons. Mr. Lyons, a man attempting to do the honorable thing by helping out a co-worker with filing a sex discrimination complaint against their employer, was unjustly retaliated against. After prevailing in court and receiving a $15,000 remitted judgment, Mr. Lyons then had to deal with the present tax laws, which not only devoured his judgment, but required him to actually pay thousands of more dollars to the government in taxes. First, Mr. Lyons had to pay taxes on the $15,000 he received as punitive damages from his employer. After he pays his taxes he is left with $9,533. However, when Mr. Lyons takes into account the taxes that he has to pay on the combination of his settlement and attorneys' fees, he ends up owing $67,791 in taxes. When you subtract the $9,533 Mr. Lyons had left from the initial judgment he ends up still owing the government $58,236 in taxes. Mr. Lyons attorney, Ms. Victoria L. Herring, also has to pay taxes on the fee she received for taking Mr. Lyons case. Mr. Lyons ends up paying taxes on money that he never even received, making him a good example of why it is important to pass The Civil Rights Tax Fairness Act and end double taxation. Everyone should agree that this is a extreme example of unfair taxation. Mr. Lyons helped out a co-worker, was attacked by his employer, and received damages in a court of law. People count on the legal system to protect them and when their civil rights are violated the system needs to function properly. It is disheartening to learn that, in actuality, Mr. Lyons is going to be taken to the cleaners by the government tax system, and as a result, he ends up owing $58,236 to the government for the ``privilege'' of having won his retaliation case. It seems to me that there is something fundamentally wrong with the law when it hurts the people it is supposed to protect. This being said, it is time to change the mistakes made in the past by passing the Civil Rights Tax Fairness Act 2000. This bill will go a long way toward helping out victims of discrimination by eliminating taxes on emotional distress awards, ending lump-sum taxation, and ending double taxation. The changing of the law will have positive effects on citizens like Mr. Lyons, allowing similar victims to keep more of their awards. At the same time, it will be beneficial for business, since they will be able to settle discrimination claims for lower settlements. I ask unanimous consent to have printed in the record after my remarks the letter I received from Mr. Lyon's attorney, Victoria L. Herring. Ms. Herring does an outstanding job of quantifying and personalizing the importance of the Civil Rights Tax Fairness Act.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to introduce the Civil Rights Tax Fairness Act of 2000. I am being joined by Senator Robb in this effort. Civil rights legislation has been in force throughout this country for nearly thirty years; its purpose being to provide real remedies to victims of discrimination. The Civil Rights Tax Fairness Act restores certain remedies for victims of discrimination by eliminating taxes on emotional distress awards. This tax was incorporated into the Small Business Job Protection Act of 1996, making the taxation of awards received in discrimination cases involving back wages or non-physical injuries ( including emotional distress) taxable. The result of the 1996 legislation was to discriminate against people involved in civil rights cases. People who received damage awards because of a bar-room brawl or slip-and-fall incident, often caused by simple negligence, get tax free awards. While, for similar types of psychological injuries caused by intentional discrimination the damages are taxed. The result of this taxation is that the attorneys and government make out better than the victims who had their rights violated. A second part of The Civil Rights Tax Fairness Act changes the current law, which requires people who receive back pay awards in discrimination cases to be bumped up into a higher tax bracket. When back pay awards are received by a person in a case the IRS considers it taxable income to be taxed in the year it is received, even though the award received covers many years of lost wages. Currently no averaging of back pay awards is allowed, but The Civil Rights Tax Fairness Act attempts to address this problem. The act provides for income averaging of back pay awards, making it possible for the award to be taxed over the number of years it was meant to compensate. The third area that The Civil Rights Fairness Act attempts to combat is the double taxation of attorneys' fees that takes place under current law. Presently individuals who receive awards end up having to include in that award their attorneys' fee. This fee can end up being larger than the actual award received by the plaintiff. The current tax implications in the law require the plaintiff to pay taxes on their award and on the attorneys fees received by their lawyer. One real life example recently brought to my attention involves an Iowa citizen named Don Lyons. Mr. Lyons, a man attempting to do the honorable thing by helping out a co-worker with filing a sex discrimination complaint against their employer, was unjustly retaliated against. After prevailing in court and receiving a $15,000 remitted judgment, Mr. Lyons then had to deal with the present tax laws, which not only devoured his judgment, but required him to actually pay thousands of more dollars to the government in taxes. First, Mr. Lyons had to pay taxes on the $15,000 he received as punitive damages from his employer. After he pays his taxes he is left with $9,533. However, when Mr. Lyons takes into account the taxes that he has to pay on the combination of his settlement and attorneys' fees, he ends up owing $67,791 in taxes. When you subtract the $9,533 Mr. Lyons had left from the initial judgment he ends up still owing the government $58,236 in taxes. Mr. Lyons attorney, Ms. Victoria L. Herring, also has to pay taxes on the fee she received for taking Mr. Lyons case. Mr. Lyons ends up paying taxes on money that he never even received, making him a good example of why it is important to pass The Civil Rights Tax Fairness Act and end double taxation. Everyone should agree that this is a extreme example of unfair taxation. Mr. Lyons helped out a co-worker, was attacked by his employer, and received damages in a court of law. People count on the legal system to protect them and when their civil rights are violated the system needs to function properly. It is disheartening to learn that, in actuality, Mr. Lyons is going to be taken to the cleaners by the government tax system, and as a result, he ends up owing $58,236 to the government for the ``privilege'' of having won his retaliation case. It seems to me that there is something fundamentally wrong with the law when it hurts the people it is supposed to protect. This being said, it is time to change the mistakes made in the past by passing the Civil Rights Tax Fairness Act 2000. This bill will go a long way toward helping out victims of discrimination by eliminating taxes on emotional distress awards, ending lump-sum taxation, and ending double taxation. The changing of the law will have positive effects on citizens like Mr. Lyons, allowing similar victims to keep more of their awards. At the same time, it will be beneficial for business, since they will be able to settle discrimination claims for lower settlements. I ask unanimous consent to have printed in the record after my remarks the letter I received from Mr. Lyon's attorney, Victoria L. Herring. Ms. Herring does an outstanding job of quantifying and personalizing the importance of the Civil Rights Tax Fairness Act.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I want to make a few comments about the reconciliation bill before us containing marriage penalty tax relief. This is an issue about fairness, Mr. President for around thirty years our Tax Code has been penalizing people just becuase they happen to be married. This is a perfect example of how broken our Tax Code is. Just like the earnings limitation that discriminated against older Americans, this unfiar Tax needs to be dumped. It took a Republican-led Congress to repeal the Social Security earnings limit. And now, it's the same Republican-led Congress that's talking the lead in repealing the marriage penalty tax. We tried it a couple of months ago, but we were blocked by the Democratic side from passing the bill. Now, we're back under reconciliation instructions that prevent the other side from gridlocking the Senate. Of course, the minority side wants you to believe they're all for getting rid of the marriage penalty tax. Of course, they had control of the Congress for decades and never once tried to repeal it. What's worse, now they're using the old bait-and-switch routine. They say they're for this tax relief, but not until Social Security and Medicare are fixed. We all know neither the administration nor the Democratic side have comprehensive proposals to fix Social Security and Medicare, so this is just a delyaing tactic to kill the bill so, they say they're for marriage penalty relief--but only sometime in the unknown future. That's Washington D.C. double-talk. Delaying this tax relief really means no tax relief at all. Mr. President, we've heard other misleading arguments that under the majority bill, married couples would get a tax cut, but single mothers with kids would not get one. However, an important part of our bill repeals the alternative minimum tax for over then million people. Many of those helped will be single mothers. But, guess what's even more interesting? The Democrat alternative bill is the bill that doesn't help single mothers at all. In addition, it's important to note that the Democrat alternative discriminates against stay-at-home moms. That's right, the Democrat proposal only helps two earner couples. So, it not only doesn't helpt those single mothers the other side was crying crocodile tears over--it hurts those families where one partent decides to stay at home with the children. I hope all of you stay-at-home parents out there listening understand what the Democratic alternative will do to them. Mr. President, we're going to pass this tax relief measure anad send it to President Clinton. This begs the question--where is the Clinton-Gore administration on providing this tax reljief to working Americans? Well, a few weeks ago, the administration offered to accept mariiage penalty tax relief for a Medicare prescription drug benefit. This is the same tax relief bill the Clinton-Gore administration and Democrats have been attacking and deriding for months. Now, they're saying, forget all those bad things we said, we're ready to deal. This just shows the Clinton-Gore administration either doesn't have any principles, or they're willing to trade them to the highest bidder. Of course, for years this administration has been saying they would work with Congress to save social security and medicare. But, here we are near the end of this administration, and it has no comprehensive plan to save either program. They're reduced to trying to salvage a legacy by creating a hugely expensive entitlement program that could end up draining the hard-earned surplus. This is a surplus earned bythe American people, not the Government, who wants to spend it all. Interestingly, a recent polly said that 60 percent of Americans credit American workers and businesse for our successful economy. Only 39 percent credit the administration, who would like you to believe they did it all. I think the American people are finally figuring out the Clinton-Gore charade. We're going to see more and more of these con-games as sthe Year winds down, and this tired, worn-out administration desperately tries to reshape its disappointing place in history. Mr. President, the time for delay is over. The time for gridlock is over. Now is the time to pass this important tax relief measure, and I urge the members of this body to come together and do what's right, by passing this legislation.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I yield myself 6 minutes. I want to reserve 4 minutes for other people who want to speak on my amendment. Mr. President, the amendment I'm offering on behalf of myself and others will assist millions of farmers across the Nation. In the midst of one of the worst farming crises we've seen, in addition to the estate tax repeal, it seems to me we ought to be doing everything we can to help farmers survive. The package of measures included in this tax relief amendment include the following: FARRM accounts. These farmer savings accounts would allow farmers to contribute up to 20 percent of their income in an account, and deduct it in the same year. FARRM accounts would be a very important ``risk management'' tool that will help farmers put away money when there's actual income, so that, in the really bad times, there will be a safety net. This measure has strong bipartisan support and was actually sent to the President last year as part of the Taxpayer Relief Act that the President vetoed. Reversing the unfair IRS decisions on self-employment tax for farmers. Farmers who participate in the Conservation Reserve Program are unnecessarily struggling during tax season because of a recent case pushed by the IRS. The latest 6th Circuit Court's ruling treats CRP as farm income subject to the additional self employment tax rate of 15 percent. Senator Brownback has taken the lead on fixing this problem. This unfair tax not only ignores the intent of Congress in creating the CRP, it discourages farmers from using environmentally pro-active measures. At a time when farmers are struggling to regain their footing economically and do the right thing environmentally, it's important that Congress support them by upholding its promise on CRP. In addition, this amendment includes an effort I've been leading to reverse an IRS attempt to apply the self-employment tax on farmer's cash rental income. A tax deduction for farmers to donate to food banks. Senator Lugar has led the effort to expand the current program where companies can donate to food banks, so that farmers can donate surplus food directly to needy food banks. This will be a win for the farmers and a big win for people who depend on food bank assistance. Income averaging for farmers who are caught in the alternative minimum tax. This was also part of last year's vetoed bill. When we passed income averaging for farmers a few years ago, we neglected to take into account the problem of running into the alternative minimum tax, which many farmers are facing now. Our amendment will fix this growing problem. Expansion of first-time farmer loans, or Aggie bonds. Our amendment expands opportunities for beginning farmers who are in need of low interest rate loans for capital purchases of farmland and equipment. Current law permits state authorities to issue tax exempt bonds and to loan the proceeds from the sale of the bonds to beginning farmers and ranchers to finance the cost of acquring land, buildings and equipment used in a farm or ranch operation. Unfortunately, Aggie bonds are subjected to a volume cap and must compete with big industrial projects for bond allocation. Aggie bonds share few similarities to industrial revenue bonds and should not be subjected to the volume cap established for IRBs. Insufficient allocation of funding due to the volume cap limits the effectiveness of this program. We can't stand by and allow the next generation of farmers to lose an opportunity to participate in farming because of competition with industry for reduced interest loan rates. Repeal of the installment method for certain small businesses. Our amendment would repeal a law that was passed at the end of last year that's had a very negative effect on the small business community. Repeal of this draconian installment sales method is one of small business's biggest priorities. Farmer co-op initiatives. Recently the IRS determined that some cooperatives should be exposed to a regular corporate tax due to the fact that they are using organic value-added practices rather than manufactured value-added practices. This is unfair, and needs to be fixed. In addition, we want to allow small cooperative producers of ethanol to be able to receive the same tax benefits as large companies. Our amendment addresses these problems. So, Mr. President, our amendment would do more for the American farmer regarding taxes than any measure in recent memory. I know others want to speak, so I would urge Members to strongly support this measure. It is an amendment that should have unanimous support. I yield to the Senator from Minnesota 1\1/5\ minutes.

Mr. GRASSLEY. Mr. President, with this amendment we are making very certain that farmers are a high priority with this bill and with this body. This amendment is a major package of tax benefits for farmers: No. 1, the farmers savings account; No. 2, fixing a number of misguided IRS decisions that are very detrimental to farming and not within the intent of Congress; No. 3, repealing the draconian installment sales provision which is a No. 1 provision that small business seeks; No. 4, to increase bonding for beginning farmers. I thank Senators Roth, Roberts, Brownback, Lugar, and Grams for their contributions. I urge its adoption.

Mr. GRASSLEY. Mr. President, I want to make a few comments regarding the need to repeal the estate tax. The United States has had an estate or death tax of some form since 1916. The current version of the death tax came into existence after the Tax Reform act of 1976. This change combined the estate and gift tax structures in one gift and estate tax system, which is essentially a wealth transfer tax. Of course, that's what many on the other side stand for--they want to transfer your money to the federal government so they can decide how your money will be spent. The Public Interest Institute at Iowa Wesleyan College has recently released a Policy Study entitled, ``A Declaration of Independence from Death Taxation: A Bipartisan Appeal.'' The director of the Institute is Dr. Don Racheter, who I know and respect very much. I'd like to thank Dr. Don Racheter for his help with providing this information. The study was written by Edward McCaffery of the University of Southern California Law School and Richard Wagner of George Mason University. I'd like to just mention three points made by the study. These three points show from both a liberal and conservative perspective that the death tax should be repealed. First, we've heard the other side argue that this repeal really only affects the wealthiest of taxpayers. So, once again, the other side has rolled out the old, tired class warfare argument. The fact is the death tax affects nearly everyone, not just the wealthy. In fact, a 1999 poll showed that 84 percent of the people surveyed believe the estate tax affects other groups of Americans besides the wealthy. Anyone who owns a family business knows that the estate tax creates major hurdles for small and large family-owned enterprises, which in turn negatively affects local communities. While only about 2 percent of inherited estates are large enough to actually fall under the death tax, millions of more people have to spend substantial amounts of time and money planning their way around it. All of society loses opportunities by these avoidance procedures. Such tactics are costly, inefficient, and they monopolize many professionals who could be spending their time on more productive endeavors. The study also shows the death tax damages the patterns of work, savings, and capital information by encouraging taxpayers to slow their work and savings, give money away whenever possible, and spend the rest so they can die broke. By encouraging people to avoid this tax, we are damaging the entire system. A second point the study makes is that the death tax does not provide the government with extra funds for social purposes, which our friends on the other side have been advocating. It only generates .01 to .0125% of the federal budget. More importantly, the amount of revenue collected from death tax filings has a negative impact on other forms of tax revenue and cash flow. This includes restricted savings and capital formation, hindered creation and growth of private family enterprises, lower amount of jobs, and a lower personal income. These effects lead to the loss of revenue from income taxes which is equal to or greater than that collected from the death tax. So, when you add up the cost of collecting for the death tax, we do not gain much, if anything for our efforts. I've heard these Treasury numbers of a $750 billion cost over 20 years or so from the other side. The Minority Leader mentioned the $750 billion number. Then, the senator from Minnesota, Senator Wellstone, upped it to $850 billion. Then, we heard Senator Boxer come up with a trillion dollar number. Among the three of them, they've already lost $250 billion! And, of course, this close to the election, the Treasury Department is acting like an arm of the Democratic Party throwing numbers out of thin air to justify their cause. These estimates are about as believable as a Treasury three dollar bill. It's important to remember that many estates will lose their stepped-up basis under this repeal bill. Then, once the assets are sold, there will be a sizable capital gains tax on the entire appreciated value of the estate. So, the government will still get a substantial amount of money from these estates over the long run, despite what the Treasury Department and the other side would have you believe. Third, finally, we hear the argument that if the estate tax didn't exist, taxpayers would give less to charity since they wouldn't have to avoid the tax. I hope no one took seriously the so-called estimates that the senator from California alluded to, citing some ambiguous Finance Committee estimates that charities would lose $250 billion if the estate tax is repealed. I assume these estimates were created by the other side. So, once again, we have the Democrats conjuring up their own facts to make their arguments. Beyond the cynicism of this charitable giving argument, the study argues that the tax exemption for charitable giving does not necessarily benefit private philanthropy. If encouraging charitable giving is going to be the goal of a tax, more specific income tax laws need to be made. The study makes the point that this charitable giving claim is based on the assumption that the tax works as a subsidy to charitable bequests. In reality, the cost of one dollar of giving, no matter the tax rate, is one dollar. The death tax is neutral towards charitable bequests as long as these bequests are exempt from tax. Keeping a complicated death tax to encourage charitable giving is not worth the economic and social costs to the government and the taxpayers. Mr. President, the estate tax does not accomplish any of the goals it's supposed to. It doesn't raise money overall, or promote well- being. It stands in the way of human progress and encourages wasteful and time-consuming financial planning. I hope we repeal this complicated and inefficient tax and I urge everyone to support this effort.