Judd Gregg

Mr. GREGG

Mr. GREGG. Will the Senator yield on that point?

Mr. GREGG. I object.

Mr. GREGG. I object.

Mr. GREGG. If I may engage the assistant leader from Nevada in a colloquy, I am interested in knowing whether the assistant leader would agree to a unanimous consent request that would bring back the ESEA bill as reported out of committee with five relevant amendments on both sides, with a vote on final passage. If the Senator is agreeable to that, I am willing to walk down the hallway and probably get it signed onto by the majority leader.

Mr. GREGG. Mr. President, did the unanimous consent request get approved and was the amendment laid aside?

Mr. GREGG. This abundance of generosity has carried me away. I yield my time back if the Senator wishes to yield his time back, even the additional time the Senator has yielded.

Mr. GREGG. I simply state the reason we do not have the authorization levels we should have on the ESEA is that we have not passed ESEA, and the reason we have not passed ESEA is that we have been unable to debate on this floor the issue of education. We have had debate on the issue of campaign finance, on the issue of guns, on the issue of prescription drugs, but not on the issue of education, which is too bad, because the bill out of committee was a good bill and, by the way, it did not demand the States do anything. It set up a set of options for the States which the States could then follow. They could choose to use portability, they could choose to use Straight A's or they could choose the present law. It gave the States total flexibility. The goal was to get the academic achievement of low-income kids up. That should be our goal as a Senate, and that was our goal when we reported out the bill. Mr. President, I reserve the remainder of my time.

Mr. GREGG

Mr. GREGG. Mr. President, the Senator from North Carolina is certainly one of the finer trial lawyers who has come to this body in a long time. I simply note, on at least two of his examples, they were inaccurate. First, if it was an emergency-room situation, there could be no denial because under our bill emergency rooms have to be covered; and second, in the instance he just described about the child, which was a compelling incident, unfortunately he failed to mention in our bill we require that the reviewer be a medical person who has expertise in the discipline and in the area where the person is claiming to have received injury. The point I do think has been made by the Senator from North Carolina, and has been made by a number of other Senators on the other side of the aisle, is that employers will be sued. Employers will be sued under the bill that is being brought forward by the Democratic membership. That is a serious problem. We put an offer out, an offer to the other side, which was fairly substantive. It may have been two pages, but the other side understood there was a lot of documentation behind it, and in fact there were actually months of negotiation relative to the appeal process behind that offer. In that offer, we said employers cannot be sued. Why? Because when you start suing employers, employers drop out. They start creating uninsured individuals. We have already heard from a number of major employers, and testimony has been given here today by Senators who represent States where major employers have informed them that they are going to drop insurance if they start being sued. We know small employers will do that in droves because they cannot afford the risk of putting their businesses through a lawsuit over medical insurance. So this is not about suing HMOs, I say to those on the other side of the aisle, this is about opening up lawsuits to everybody, not only against HMOs, which by the way we allow to occur in our bill which was admitted to by the sign that was put up--we allow HMOs to be sued--but, more important, it is about suing employers. Look at this chart. This chart is a reflection of the various elements of what is essentially the bill the Democratic Party has brought to the floor today. It is so convoluted and so complex that, literally, you would have to spend probably a month just figuring it out, just to figure out what it all means. That is one of the reasons this conference has taken so long, because we have been trying to sort through all the different complications. I point out, at almost every element in this chart, every one of these white lines, every one of these crossing lines, every one of these agencies that is being created, every one of these decision processes being placed upon the community, there is a lawsuit waiting to happen under the Democratic bill. This is the attorneys annuity act. The direction the trial bar is going to go is to go after the employers; they are the ones who will be at risk. As a result, you will drive many people into an uninsured status because employers will stop running their insurance programs in droves. I mean literally millions of people. Why would you want to do that? I hate to be cynical about this, but I honestly think, if you look at the process this administration has pursued over the last 8 years, they are trying to continually raise the cost of insurance, health insurance, in this country and make it less and less affordable, so more and more people become uninsured, so at some point they can make an argument--which they have already made-- that they have to nationalize the health care system in order to pick up all the people they have created as uninsured. It is the old orphan argument. You know, the person who killed his parents goes to court and claims he should receive clemency because he is an orphan. The fact is, what the Democratic proposal does, and what the result of the administration proposal has been consistently, is to create more and more uninsured and then claim: Oh, my goodness, look at all these uninsured. We have to nationalize the system so we can cover them all. In the context of this bill specifically, however, the game plan is to create a whole new activity for the bar association, suing employers left and right. There is a law firm up in New England which represents Car Talk. They are called Dewey, Cheatum and Howe. Today, they have about three people working for them, according to Click and Clack, the Tappet brothers, who work at Car Talk Plaza. But I will tell you something. If this bill passes, they are going to give up automobile insurance and they are going to go into suing companies, suing businesses, suing employers who happen to supply health insurance to their people. They are going to add probably 20 or 30 or 40 new attorneys. So Dewey, Cheatum and Howe is going to just keep on going and going and expanding, because they will have received an annuity under this bill--not an annuity to sue HMOs, because that is not really in contest anymore; we have already put that on the table. It will be an annuity to sue employers. As a result, not only will there be a heck of a lot of lawyers working at Dewey, Cheatum and Howe; there will be a lot more people in this country who don't have insurance, and then we will hear from this administration, from Vice President Gore: My goodness, look at all the uninsured--who were created by this bill we just passed--we will have to nationalize the system. And then we will end up with a system that really doesn't work. We put on the table some fairly substantive and very good proposals which have come from months of work. I hope the other side, rather than try to politically posture during this period, will take a hard look at them, in the area of scope, the area of access, the area of appeals, and in the area of lawsuits and liability, and that we can get back to the business of negotiating this conference rather than to the politics of this debate. Mr. President, I yield any time I have remaining back to the Republican leader.

Mr. GREGG

Mr. GREGG. Mr. President, this letter obviously, in my opinion, is a very positive step in the redirection of American policy in Sierra Leone. I congratulate Ambassador Holbrooke for organizing the letter. Whereas the Article V and IX of the Lome Accord granted Foday Sankoh the Vice Presidency of Sierra Leone and an ``absolute and free pardon,'' Ambassador Holbrooke's plan makes it clear that Foday Sankoh can play no role in the politics or government of Sierra Leone and that ``he must be held accountable for his actions.'' This when as late as a month ago State Department officials were still being quoted as saying that Sankoh's ``voice was positive'' and that he ``has a chance to play a positive role.'' Now, we will recognize him for what he is, a war criminal, and treat him as such. Whereas Annex 1 and Articles V and VII of the Lome Accord left Foday Sankoh and the RUF in control of Sierra Leone's diamonds, Ambassador Holbrooke's plan rightly strips Sankoh of his chairmanship of the diamond control board and insists that ``allied'' forces ``have the capacity to disrupt RUF control of Sierra Leone's diamond producing areas, the main source of RUF income.'' Under Lome, peacekeepers did no more than oversee the looting of Sierra Leone. Now, international troops will fight alongside local forces to expel the RUF from the diamond fields. Whereas the Lome Accord was silent on root causes of violence in Sierra Leone and the region, Ambassador Holbrooke's plan seeks a ``political strategy for dealing appropriately with Liberia's President, Charles Taylor, and with the illicit diamond trade that fuels conflict and criminality in the region.'' The RUF is in large part Taylor's proxy. Under Lome, Taylor's success in seizing the riches of Sierra Leone could invite a similar attack on Guinea. Lome is dead. The U.S. will not turn a blind eye to the rape of a people and a land. We will demand that brutal thugs are held accountable for their atrocities, and regional trouble-makers. Why the change? I do not flatter myself that my ``hold'' did all of this, but it did give those of us who opposed the Lome Accord a chance to right a terrible wrong. And to his credit, Ambassador Holbrooke has crafted a forceful plan, and vetted it through the inter-agency process in record time. It is a plan that I believe Americans can and should support, and can be proud of. Therefore, I am releasing my hold on the $50,000,000 owed the U.N. for peacekeeping in Sierra Leone. I will also press ahead to ensure that my provision blocking the illicit sale of diamonds from Sierra Leone and other war-torn countries is included in the final version of the fiscal year 2001 military construction appropriations bill. Finally, I look forward to working with Ambassador Holbrooke and his staff to ensure that the strategy laid out in his letter is supported by Congress. I thank the Chair. I thank the Senator from Idaho for his courtesy.

Mr. GREGG. Mr. President, I want to speak about the issue of what is happening in Africa, specifically in Sierra Leone. Recently, I have become involved in this issue because, as chairman of the Commerce, Justice, State, and the Judiciary Subcommittee, we have jurisdiction over the funds that flow to the U.N. for peacekeeping activity. In order to adequately do the job as chairman of that subcommittee, our job involves oversight of those funds, to make sure they are being used effectively. After all, they are American tax dollars; Congress has control of the purse strings; and we have a major role in how those dollars are spent. I recognize fully, as all Members of Congress do, that the key individual who sets foreign policy is our President. Even though we may disagree with our President, he does have that priority position. But there are, obviously, issues on which the Congress has a role in foreign policy--very significant issues. One of them happens to be the funding of peacekeeping activities and the role the United States should play in that. So I have had very serious concerns about our policies in Sierra Leone specifically--on a number of peacekeeping activities, but specifically our policies in Sierra Leone. This is because of a number of issues that have been raised there. Last year, the United States, regrettably, played a key role in imposing the Lome Accord on a brutalized Sierra Leone. The accord granted a total amnesty to the Revolutionary United Front, RUF, which is basically a gang of thugs that murders, rapes, and mutilates people. Just about everybody in their path has come under their severe act of violence. In fact, they actually empower their soldiers--and they are not really soldiers; many are very young boys--to cut off the arms of women and children in order to make a point. This is a very common practice with this alleged military group called RUF, this gang of thugs. They have been terrorizing the country of Sierra Leone. There is no question about that. Their leader, Foday Sankoh, and his lieutenants, as part of the Lome agreement, as part of the understanding of the Lome agreement--and this is why it was such a horrendous agreement--were given top spots in the ``transition'' government and guaranteed RUF control over the Sierra Leone diamond mines, which is basically the core of the element of how they generate their revenues. It is inexcusable that we were party to the Lome agreement and that we therefore empowered these war criminals to take office and to have control over basically the only significant economic resource of the country of Sierra Leone. So I was more than upset about this. I believed it was essentially a surrender in the face of criminal violence. As a result, I did put a hold --not technically a hold, but I actually refused to approve a transfer of peacekeeping funds for the Sierra Leone initiative. I began exploring alternatives to this, what I believed was an extraordinarily unjust accord. In response to my concerns, U.S. Ambassador to the U.N. Holbrooke and his staff took on the difficult task of crafting a better approach to this issue. Since my ``hold'' became news, I have been sharply criticized by some, including some in the U.N. and the State Department, and even-- not even, but not surprisingly, really--the Washington Post, which recently accused me of ``playing at foreign policy,'' implying that serious students of world affairs would not question U.S. support for the Lome Accord. I simply point out that I think a lot of serious students of foreign policy question the decision to support that accord. Meanwhile, in Sierra Leone itself, the RUF, as a result of Lome in large part, continued to terrorize civilians and even challenge the U.N. peacekeepers. By last month, the RUF was marching on Freetown in complete violation of the Lome Accord. In fact, of course, they have humiliated the U.N. mission in Sierra Leone, which was supposed to disarm them. It actually ended up being disarmed by them, and much of the military equipment that is being used there by the RUF is U.N. equipment taken from U.N. advisers. Thus, the mission of the U.N., as a result of being an outgrowth of the Lome Accords, which were so disgraceful, is in disarray. Today, all that stands between the RUF and total control of Sierra Leone is the British and Nigerian troops who have come in to try to stabilize the situation. And what of the U.S. policy? Following our most recent meeting 2 weeks ago, Ambassador Holbrooke has sent me a letter laying out a new strategy for a more just and lasting approach to peace in Sierra Leone that gives me some reason for hope. I would like to read from what his letter says because I think it is an important adjustment in American policy in Sierra Leone. I congratulate him for it. First, he notes in his opening paragraph that he has taken this issue and walked it through the administration and that he has support for his letter from Secretary Albright, National Security Adviser Berger, and the head of the OMB, Jack Lew. Reading paragraphs from his letter: You asked for a letter encapsulating our discussion on Sierra Leone and Congo. After close consultation with Secretary Albright, let me review where we stand on each issue: First, Sierra Leone. Let me posit five principles that we will use to govern our policy. First, the United States does not believe that Foday Sankoh should play any role whatsoever in the future political process in Sierra Leone, and we will continue to press this point. He must be held accountable for his actions. This is a significant change in policy, in my opinion, and it is a positive one. Second, we strongly support the British military presence in Sierra Leone, which has played a key role in restoring a measure of stability to Freetown. We are discussing with the British their continuing role, and on May 23 London announced an important training program for Sierra Leone army, something that they will undertake at their own expense outside the U.N. system. This, again, is positive news that the British will be a stabilizing force there, which will be armed and know how to defend itself. Third, the objective should be to ensure that regional and international forces in Sierra Leone, together with the armed forces of the government of Sierra Leone, have the capacity to disrupt RUF control of Sierra Leone's diamond producing areas, the main source of RUF income. Completely eliminating them as a military force is not likely to be possible as an acceptable cost, but sharply reducing their sources of financial support and restricting their capability to threaten the people or government of Sierra Leone is within reach of sufficient numbers of properly trained, equipped, and well-led troops and is vitally important. That is to paraphrase a much more robust mission directive and portfolio and is exactly what needs to be done. The most likely nations to carry the burden would be Nigeria and Ghana, with the backing of other ECOWAS states. Other nations who are already rushing troops to Sierra Leone include India, Jordan and Bangladesh. Most potential troop contributors from the region are likely to require better equipment and training if they are to contribute meaningfully. Pentagon and EUCOM assessment teams are studying the issue urgently. If our objectives are to be accomplished, the U.S. will need to be ready, with congressional support and funding, to provide our share of international effort to provide equipment and training to those who are willing to do the military job--including the government of Sierra Leone and other countries in the region. Any direct training of contributing country troops by U.S. military personnel would be done outside Sierra Leone and no U.S. combat troops would be deployed to Sierra Leone. We will have to work out the relationships between such an operation and the UN, recognizing that for many countries a UN role is preferable--but we must ensure that the mandate is robust. Fourth, since there is virtually no real government structure left in Sierra Leone, if the security situation can be stabilized a longer term international effort will be needed to help build viable institutions in Sierra Leone. It will take time, but in the long run, the rest of the effort will be unsuccessful if it is not accompanied by this component. However, this cannot start until the situation is stabilized, and there is no present funding request for this function. Fifth (this is a point I failed to mention in our meeting) we must develop a corresponding political strategy for dealing appropriately with Liberia's President, Charles Taylor, and with the illicit diamond trade that fuels conflict and criminality in the region. That is a reading of two of the major paragraphs in this letter. Mr. President, I ask unanimous consent the letter be printed in the Record.

Mr. GREGG

Mr. GREGG. Mr. President, I thank the Senator from Idaho for his courtesy. I ask unanimous consent that he be allowed to proceed after I have completed my statement.

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

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

Mr. GREGG. Reserving the right to object, what was the Senator's request?

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent that at 12 o'clock I be allowed to speak for 15 minutes in morning business.

Mr. GREGG

Mr. GREGG. Mr. President, I wanted to speak about Sierra Leone and especially about the attempts I have made to address this issue as chairman of the Appropriations Subcommittee on Commerce, Justice, State, and the Judiciary. The New York Times and a number of other daily papers have reported that I have limited the ability of the State Department to spend money on behalf of the United Nations, or send money to the U.N. for the purpose of peacekeeping in Sierra Leone, and that is correct. However, the numbers that the New York Times, at least, used were incorrect. I think the record needs to be corrected. I presume this story came from a momentum within the U.N. to try to put pressure on the Congress to spend money on U.N. initiatives. Obviously, the U.N. feels that by using our media sources in this country, they can influence the activity of the Congress, specifically of the Senate. However, I would have hoped that the New York Times reporter would have reviewed the actual facts and determined the facts before reporting them as facts. Obviously, this reporter got his information from somebody, I presume, at the U.N., or maybe the State Department, and did not bother to check the facts. It was represented in the story, for example, that the amount of money that was owed to the U.N. in the area of peacekeeping was somewhere in the vicinity of $1.7 billion. This number is inaccurate and the story was, therefore, inaccurate. Let me review the numbers specifically. In accounting for the amount of money that the U.N. is owed, there is a regular budget assessment of approximately $300 million. This is included in the $1.7 billion, which I presume they got from the U.N., or they could not have gotten to that number. However, that $300 million is not owed. We paid that money on a 9-month delay. We have always paid it on a 9-month delay because of the budgeting process of the Federal Government. So you can reduce that number by the $300 million figure because that money will be paid on October 1, as it always is. Second, the Times must have been counting as a U.N. assessment the peacekeeping moneys of $500 million. Well, the $500 million is the amount we have allocated for peacekeeping in our budgets for the benefit of the U.N. But that $500 million has not yet been called upon by the U.N. In fact, of that $500 million, we have received requests for approximately $300 million. We have not received requests for the full $500 million. We have received requests for about $300 million. We have paid--of that $300 million requested--approximately $55 million. The balance is in issue, but it is being worked out. So that number is inaccurate, and you can reduce that $1.7 billion by at least $200 million that we have not received a request for, and the $55 million we have paid and, in my opinion, by significant other numbers also. Third, the Times must have been counting the $926 million which is an arrearage payment. The arrearage issue was settled last year. It had been delayed for 3 years because of the Mexico City language, which did not need to be delayed. But the administration put such a hard line on obscure language dealing with Mexico City Planned Parenthood that they ended up tying up the arrears that we as the Senate were willing to pay. We appropriated that money every year, by the way. There was an agreement reached between ourselves and the State Department and the White House, known as the Helms-Biden agreement, which said we would pay that money. So that money is in the pipeline to be paid, subject to the U.N. meeting certain conditions. That is not in issue. So when you take all the numbers, there is no $1.7 billion at issue. Actually, it is closer to $100 million than $1.7 billion. So the exaggeration in the story was inaccurate. It reflects, I think, shoddy journalism. Secondly, the story implied that my position was basically an isolationist position and that I am opposing peacekeeping everywhere in the world. No, I am not. In fact, we have approved peacekeeping in my committee in a number of areas. We have approved peacekeeping in the Golan Heights for $4 million, Lebanon for $15 million, Cyprus for $3 million, Georgia for over $3 million, in Tajikistan for $2 million, and the Yugoslavia and Rwanda War Crime Tribunal for $22 million. The list goes on and on. So we have approved a significant amount of peacekeeping dollars for a variety of different missions that have been undertaken by the U.N. However, the problem I have is that in Sierra Leone, what we ended up doing was endorsing a policy that brought into power parties who had committed rape, murder, and atrocities against the people of Sierra Leone. And instead of having these people brought to justice under the War Crimes Tribunal, as they should have been, what we have done is endorsed these people in the Lome Accord and said they should be brought into the Government. That policy makes no sense. We are seeing a deterioration of that policy by what is happening to the peacekeepers in Sierra Leone today. Instead of taking weapons from the rebels who are basically killing people arbitrarily and, as part of the policy, hacking limbs off of people--instead of taking their weapons, the U.N. has given up more weapons than it has taken in Sierra Leone. Right now, we still have actually hundreds of U.N. peacekeepers who have been taken hostage over there. Why? Because the policy being pursued in Sierra Leone was misdirected from the start. We should not have been making peace. We should not have been bringing into the Government people who acted in such a barbaric way toward their own people. We should have been taking a harder line. We should have been sending in U.N. peacekeepers--in Sierra Leone honoraria we may not want to--people who had the capacity and the equipment to defend themselves, and had the portfolio and the directions so they could defend themselves and use force. Unfortunately, we didn't send those types of troops in there--or the U.N. didn't. America is complicit in this. American taxpayers have to ask themselves, why are we spending this money? Why would we want to spend money to support, encourage, and endorse people who are essentially criminals and moving those criminals into the Government of Sierra Leone and giving them the authority to act? Well, that was my reason for putting a hold, as we call it, on this. It was actually a denial of the funds for Sierra Leone. It appears, having said that, I guess, that suddenly people have awakened and are saying, hey, maybe that is right. In fact, as of yesterday, the State Department changed its position as to the rebel leader over there. Instead of him being a conciliatory, positive force for the basis on which they might base the peace accord over there, this person--or people--should be brought before an international tribunal when they have committed crimes against humanity, which this individual clearly has. Maybe there is a shift of attitude occurring within the State Department. I hope there is because that would move us down the road towards resolving this issue. But the representation that the committee I chair, and in which the ranking member, Senator Hollings, participates in very aggressively, has in some way opposed peacekeeping is inaccurate. The numbers used in the article are inaccurate. The fact is, we have raised legitimate concerns to protect the taxpayers of this country, which is our job. I believe we are doing it effectively. I yield the floor.

Mr. GREGG

Mr. GREGG. I ask unanimous consent that my 5 minutes come off of the time of the Senator from Wyoming.

Mr. GREGG. I ask unanimous consent that I be allowed to speak for 5 minutes and that his time be extended to reflect the time that I will take.

Mr. GREGG. Mr. PRESIDENT, I ask unanimous consent that I be allowed to speak for 5 minutes without having that time come off of the time allocated to the Senator from Minnesota, who, I understand, has time reserved during this period of morning business.

Mr. GREGG

Mr. GREGG. Mr. President, are we now in morning business?

Mr. GREGG

Mr. GREGG. Mr. President, I want to thank Chairman Burns and the ranking member, Senator Murray, for their support of my amendment combating the illicit trade in diamonds. I also want to acknowledge the assistance of the staff of the Treasury-General Government Subcommittee and the U.S. Customs Service. As the op-ed in today's Washington Post, ``Diamonds Are For Killers,'' by Sebastian Mallaby, correctly points out, diamonds are fueling the violence in Sierra Leone. The Revolutionary United Front (RUF), responsible for so many horrors, is not fighting for a belief, a cause, or an idea. They are a criminal gang brutalizing the people of Sierra Leone simply to maintain their grip on diamond rich lands. Diamonds from Sierra Leone are unusually large and clear, much prized by a jewelry industry prepared to pay top dollar with no questions asked. The diamonds buy weapons and narcotics, RUF staples. The diamonds are transshipped through Liberia and the Ivory Coast, the leaders of each taking their cut of the profits. From Africa, the diamonds are transported to Amsterdam or London before, in many cases, being shipped here. My amendment is a simple one. It bans the use of funds for the processing of paperwork associated with the importation of diamonds from Sierra Leone, Liberia, the Ivory Coast, the Democratic Republic of the Congo, or Angola. I have chosen to include the Congo and Angola because so-called ``conflict diamonds'' have fueled the bloody civil wars in those countries as well. Having choked off the RUF's source of revenue, it is my hope that forces loyal to the legitimate government of Sierra Leone, fighting even now in the outskirts of Freetown, can begin to gain the upper hand on the battlefield. Ultimately, it will take more, far more, than cutting off the diamond trade to crush the RUF, but the road to victory has to begin somewhere. Let it begin here. Fellow Senators may not realize that my amendment is based on legislation championed by Representatives Hall and Wolf. Clearly, there is bipartisan, bicameral support for banning this bloody trade. Few would treasure a diamond torn at such terrible cost from the blood- soaked soil of Sierra Leone. I look forward to working with colleagues in both houses to bring the trade in ``conflict diamonds'' to an end. I ask unanimous consent that Mr. Mallaby's op-ed piece be printed in the Record.

Mr. GREGG

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

Mr. GREGG

Mr. GREGG. Mr. President, I appreciate the courtesy of the Senator from Montana. I yield the floor.

Mr. GREGG. Mr. President, a person would have this asset called a personal account which they would have to invest in three, four, five, or six different funds set up under the auspices of the Social Security Administration. The asset would be owned by that person. If they were to die at 45 or 59 or even 66, their estate would receive the asset held in that account and it would go to their wife, husband, children, or to whomever they wanted it to go. Equally important, the rate of return on personal accounts would dramatically exceed what one gets under the Social Security system today. A person who is today beginning in the workplace, who is about 22 or 25 years old, is going to pay more, if they are an African American, into the trust funds than they will ever receive from the trust funds. In other words, they get zero rate of return. If one happens to be a typical, average American, their rate of return in the Social Security trust funds, if they are in their twenties today, is about 1.4 percent. If they are in their thirties, it might get up to 2 percent. If they are in their forties, it might reach 2.5 percent--might. It is a terrible rate of return under the Social Security system. People are paying all these taxes and getting virtually nothing in return. Under a personal account--remember, it is only a small percentage of one's Social Security tax which is going to be invested in this personal account--one will own the asset; plus, the average rate of return over any 20-year period, including the Depression, of investment in the stock market exceeds 5 percent. Since I am talking about a 20- year period, not a 4-month period or a 5-month period or a 1-year period or 3-year period, one can be pretty sure the rate of return on the personal account is going to be at least twice the rate of return on the taxes that person is paying into the Social Security fund generally. That is called prefunding liability. In other words, we are going to give a person the opportunity as a citizen, especially a younger citizen--people over 55 are not going to be affected by this at all--to actually own an asset and have that asset grow at a rate that is at least twice the rate of their investment in Social Security. Then when they retire, that asset will be physically there to benefit them in their retirement. The liability that is owed to that person by the Federal Government will have actually been prefunded. There are many ways we can talk about that, but it gets into some complexities I do not have time for now. Essentially, what it means is that the younger generation, instead of having to pay a huge tax increase to support retirement, is going to actually be creating assets which give them, when they retire, a rate of return which will be significantly or at least as good as what they would get under Social Security without having to pay all these new taxes. It is a way of keeping the system solvent and, at the same time, maintaining a benefit structure that is reasonable and, at the same time, not dramatically increasing taxes. What we have is a pretty simple debate, in real terms, between the Vice President and Governor Bush. The Vice President does not want to tell people the younger generation is going to get hit with a huge burden of new taxes under his plan, and he does not want to tell us how he is going to address the Social Security system and reform it in the outyears. Governor Bush, on the other hand, is willing to step forward and put some interesting and innovative ideas on the table to address one of the most critical issues that will face our country over the next 30 or 40 years.

Mr. GREGG. Mr. President, today Gov. George W. Bush set forth some ideas addressing the issue of Social Security. It is my understanding that the Vice President is also going to discuss this issue today, although he has, before today, made a number of comments in this area. I have spent a considerable amount of my time over the last 7 years I have served in the Senate working on the issue of Social Security, working on it in a bipartisan manner, trying to develop a coalition in this Senate to move toward resolution of what I consider to be one of the most significant public policy matters we have confronting us. Let me define the problem so we understand what we are working with and what the concerns are. Today, the Social Security system is running a very aggressive surplus. In other words, it is taking in more money than it is paying out. The Social Security system is on a dollar in/ dollar out basis. In other words, there is no asset value that is placed somewhere. There are not a set of dollars saved to pay your Social Security benefit. The dollar raised today pays the benefit that is incurred today. The younger worker who is paying Social Security taxes today is paying for the older worker who is retired today. We have the baby boom generation working today at its maximum earning capacity, and because we have a larger younger generation than the generation that is retired, we are now running a surplus. In other words, more money is being taken in to pay for the benefits than is being spent on the benefits. That extra money is being borrowed by the Federal Government. It is being used basically to operate the day-to- day activities of the Federal Government. In exchange for that, a note is given back to the Social Security trust fund. Alternatively, the money is being used to buy down the debt of the Federal Government--the public debt in many instances--and that money is then basically returned to the marketplace in the form of proceeds going into the capital markets because we no longer have the Federal Government borrowing those moneys from the capital markets but, rather, the money is no longer needed by the Federal Government and, therefore, the capital markets are free to create more activity for a stronger capital market. The problem is, the baby boom generation today is generating the huge surplus in Social Security funds and is going to start retiring in the year 2008. When that generation starts to retire, the demographics of the situation change radically. The Social Security system was always perceived as a pyramid. It was always believed there would be a larger working generation than the retired generation. The retired generation at the top of the pyramid would be smaller and the working generation at the bottom of the pyramid would be larger. Because the postwar baby boom generation is so large, it is that unique generation that has changed this country in every decade and forced the country to build all sorts of elementary schools in the 1950s and created the disruption to a large degree in the 1960s. It has gone through the pipeline and has changed the system in every generational phase. When that generation retires, we go from a pyramid to almost a rectangle. Instead of having 3.5 people working for every one person retired by the year 2015, we only have two people working for every one person retired. The system comes under a huge strain. The benefits don't change--or there is no plan to change them--and therefore all the folks who are retired have to be supported by a younger generation, which is a smaller generation, but they have to support them again with the tax dollars earned by that generation. As we look into the future--and we don't have to look very far; it begins in 2008--we see as we head into the second decade of this new century, the next generation, our children and their children are going to be subjected to a huge cost, a huge tax increase, in order to support the retirement of the baby boom generation. This escalates rather dramatically through the year 2045. There are Members who think something should be done, that we should not pass this huge burden on to the next generation; that we, as a baby boom generation, have an obligation to get ourselves and our Nation ready for the retirement of our generation. As I said, we worked across the aisle for the last few years to try to develop policies to address this problem. Dramatic progress has been made. There are at least four or five major initiatives in this Senate today which legitimately address the issue of making the Social Security system solvent for 100 years. One of them happens to be one which I worked on with Senator Breaux, Senator Kerrey, Senator Thompson, Senator Thomas, Senator Grassley, and Senator Robb. It is bipartisan and crosses philosophical spectrums. Our proposal, as scored by the Congressional Budget Office and by the Social Security actuaries, makes the system solvent for the next 100 years. It does it without any tax increase of any significance. In order to accomplish this type of a change, we have to have comprehensive reform. We cannot do it piecemeal; we have to do the whole system. We can't just simply pick out one point in the system and try to change that and expect to address the system so it becomes solvent, so we do not put a huge burden onto our children's backs in new taxes, or additional tax increases. We have tried to draw into this debate, to get this process moving, the White House and the President, but we have had singularly little luck in doing that. Regrettably, although this administration has occasionally talked about Social Security reform, and the President in his State of the Union even said this would be one of his primary goals in his waning years in office, it has done virtually nothing and, in fact, has put out proposals that would dramatically cause the situation to deteriorate, especially for the younger generation, in the form of major tax increases. Today, Governor Bush has put forth a proposal. Regrettably, the response by Vice President Gore, up until today--and I suspect he will not change his tune today--and the response of the White House, has been to essentially take the old time school approach of attacking it in the most demagogic terms, saying the proposal is going to end Social Security; it is going to put at risk recipients who are presently benefiting from Social Security, and that it is a proposal which undermines this critical national program of Social Security. The Vice President has used terms such as ``risky'' to describe it. He has used terms such as ``inappropriate.'' He has used terms-- ``smug,'' I think is one term, and other terms which try to demonize the proposal in a way that is not constructive. So let's look at the proposal because I think it is important to think about this. What Governor Bush has suggested is this. First, we recognize anybody who is on the Social Security system today, or about to go on the Social Security system soon, should have their benefits locked in place and the structure of the system maintained exactly as they receive it; there should not be any change at all for those folks. So any senior citizen today or anybody who is about to go on the system, anybody 55 years or older, I believe, has no concern here. Essentially the proposal says you will be held harmless. Nothing is going to impact your way of life as it relates to Social Security. Yet it is very obvious the Vice President is trying to scare senior citizens and is saying the proposals coming from Governor Bush will in some way affect their benefit structure when Governor Bush is saying specifically it will not. Second, Governor Bush suggested we set up a bipartisan commission to take a look at this, a proposal that has been put forth by Senator Moynihan and Senator Kerrey and Senator McCain, I think. It is not a bad idea because this needs to be done in a bipartisan way, and we have worked very hard on the bipartisan process in this Senate, so that makes sense. Third, the Governor suggested we take a look at what is known as personal savings accounts. This is an idea whose time has come, in my opinion. Why? First, let's talk about what personal savings accounts are in the context of Social Security reform. There are three ways you can address Social Security and make it solvent, only three ways. One, you can raise taxes. That is the Clinton-Gore proposal. In fact, under the Gore-Clinton proposal, there will have to be a tax increase each year going forward on working Americans in order to support retired Americans. That goes up and goes up, I think, until it is $1 trillion around 2035. That is their proposal: Raise taxes on Americans in the outyears. Just do not tell Americans that is what is going to happen to them. The way they do not tell you is they say we are going to use the interest on the Social Security to pay down the debt, which is occurring today because we are returning a surplus; we are going to use that interest to extend the life of the trust fund. That is a paper game, the bottom line of which is a tax increase that hits $1 trillion by the year 2035. Why is that? Just to make an aside for the moment, so people understand what the Vice President is proposing: There are no assets in the Social Security trust fund other than Government bonds. What do Government bonds do? Government bonds are a claim on the taxpayers of America to be paid. It is an IOU from the taxpayers to the trust fund. It says we, the taxpayers of America, owe you this money. When you need this money, when that baby boom generation retires, then we, the taxpayers, of America will pay it. Who is ``we''? We are the younger generation. The ``we'' in that sentence is my children and their children, your children and grandchildren who will be working then. They will get stuck with the IOUs that Vice President Gore wants to stick them with, with his little gamesmanship of transferring interest, which is purely a paper transaction, creating absolutely no assets in the trust fund. All it does is create an IOU which has to be paid by the younger generation. These kids sitting right here as pages are going to pay that IOU. It means their taxes on Social Security will not be 12 percent of their payroll; it will be somewhere in the vicinity of 18 percent of their payroll. As I said, it will amount to about a $1 trillion tax increase on working Americans by the year 2035. That is the Vice President's proposal: Raise taxes but do not tell anybody it is coming. Use this little euphemism: We are going to transfer the savings on interest over to the trust fund, which means we are going to create a massive tax burden on the next generation in the outyears in order to pay for the benefits of this generation of which I am part, the baby boom generation. But do not tell anybody about that. Just use the term, ``We are going to transfer the savings from interest.'' ``We are going to transfer the savings from interest on Social Security'' sounds good--do that by paying down the Social Security funds, and that savings means we will extend the life of the trust fund. That means nothing. It simply means we are going to end up increasing taxes and having more IOUs our younger generation has to pay. So that is the first way you can do it; you can raise taxes--the Vice President's proposal. The second way you can address the issue is to reduce benefits. There is not much incentive for reducing benefits in our society. People do not like that idea in a democracy. In fact, the Vice President not only is not going to reduce benefits; he is already suggesting we increase benefits. The only specific proposals he has made on Social Security is we raise benefits in two different accounts. It happens to be both those proposals to raise benefits make some sense, but they have to be done in the context of the entire structure. There has to be some tradeoff. If you are going to raise those benefits, there has to be some adjustment in the other benefit side or else you significantly increase the liability to the trust fund, which means once again you raise the taxes on the next generation to pay for those benefits, that younger generation. So he has raised benefits. That is not the way to solve it. The third way he can address it--remember, you can address it by raising taxes on the younger generation that is earning the benefits for the older generation that is receiving the benefits, or the third way is you can prefund the liability. That is what personal savings accounts do, prefund the liability. By prefunding the liability, we mean you actually create an asset which is owned, actually physically owned by the person who is going to retire, which is not a debt instrument of the Federal Government. It is not an IOU that has to be paid for out of taxes, necessarily. It can be stocks or bonds--some of the bonds could be U.S. Government bonds--but it would be an asset owned by the individual. What does that do? Today, if you are in the Social Security system and you happen to die, unfortunately, before you reach retirement age--say you die and you are 59 years old and you do not have a spouse or any children. Everything you paid into the Social Security system is lost. You paid in for years and years and years and your estate does not get anything from it. It is gone; it just dissipates into the system. Somebody else benefits from all those taxes you paid. You have no asset value. Even if you have a spouse and you die before you retire at 62 or 65, or even if you die soon after that, the benefits that spouse gets as a result of your death, as a result of your Social Security payment, is really minimal--very, very small--compared to the amount of taxes you actually paid in to Social Security. So there is nothing physically there that you own. You have an obligation from the Federal Government to support you at a certain level after you retire, but you have no asset value. What a personal account does is it allows you to take a small portion of the taxes you are paying in to Social Security--and it is a very small portion. Under the plan that we have, it is 2 percent. Of the 12.4 percent of taxes you presently pay in Social Security, you would get to put 2 percent of those taxes into some sort of savings vehicle which you would own. You would physically own it. It might be stocks; it might be bonds, but you would physically own it. It could not be placed in those vehicles and then be speculated with; it would follow the course of what we call the thrift savings vehicle. That vehicle would require the Social Security trustees to basically set up the investment vehicles in which you could invest. One would be limited in how one could invest that money. They could not speculate with it. They would have to put it into basically large mutual funds which would be approved by and would be under the fiduciary control of the Social Security trustees. Mr. President, I note it is 3 o'clock. I ask unanimous consent to proceed for another 4 minutes.