Judd Gregg

Mr. GREGG

Mr. GREGG. To 26; 1 teacher to 26 students in 1960.

Mr. GREGG. I yield to the Senator from Georgia.

Mr. GREGG. Thank you, Madam President. I congratulate the Senator from Vermont for bringing this bill forward. We recognize it is an extraordinarily important piece of legislation because it sets Federal policy for education, especially in the primary area where the Federal Government has responsibility, which is low-income education. There are really two areas of elementary and secondary school education where the Federal Government is the dominant player. One, of course, is elementary school education--the low-income kids. The other is elementary school education for special needs children. This bill doesn't address the special needs issue. It is not the IDEA bill, which is a special needs bill. This bill focuses primarily on how we deal with low-income children. I think it is important to reflect a little bit as we begin this debate as to what the history of this piece of legislation is because that puts in context to a significant degree why it is we on our side believe there needs to be interest for other options to be made available to the States as they address the issue of educating and helping low-income children achieve and, thus, realize the American dream. This bill was put together 35 years ago. At that time, it was a 32- page bill with 5 specific programs. Today, this bill before us has 922 pages; it has 79 different programs. It is a huge piece of legislation which has expanded radically over the period of the last 35 years. It originally had, and still has, categorical program after categorical program which specifically told the local school districts and the States how to manage very narrow areas of education in a very prescribed way. There has been a philosophy built up over 35 years in this Congress-- essentially dominated by the Democratic Party when this bill evolved-- that essentially says: We in Washington know a heck of a lot better how to educate a low-income child than you folks back in the districts do where that child is going to school; We know better than the parents of that child; We know better than the teachers of that child; We know better than the principal; We know better than the school district; And we know better than the State. As a result, this bill exploded from a 32-page bill to a 1,000-page bill with program after program after program very narrowly, rifle-shot targeted with significant limitations on the funds being spent and significant directions for the local communities. What was the result? The result was that over that period we spent almost $130 billion in education directed at low-income children--$130 billion over 35 years. What did we get for that? Unfortunately, what we had was a bunch of kids who were left behind--children to whom we had made a commitment, and low-income children who weren't educated hardly at all as a result of all of these dollars being spent. We know for a fact today that two out of every three low-income fourth grade African American and Hispanic children can barely read. This chart shows that over 70 percent of the children in our high- poverty schools who are low-income do not meet the most basic levels in reading. We know 60 percent of those children do not meet the basic levels of mathematics. We know almost 70 percent of those children do not meet the basic levels in science. This is the product we have produced $130 billion and 35 years later: 79 programs and 1,000 pages of law. We know in our high-poverty schools, low-income kids in the fourth grade read at two grade levels less than their peers who are not low-income. We know in our urban schools almost half our children are not graduating from high school. We know the achievement gap between our moderate-income, our average- income kids and our low-income kids is not closing as it was supposed to after $130 billion but is potentially expanding and, at best remains the same. We have gotten nothing for these kids from all this money that has been spent. It is not just our low-income kids, the children addressed in this bill who are being affected by the quality of education, but our entire educational system has serious problems. Forty percent of our fourth graders can't read at a fourth grade level. Our 12th graders have seen either a decline in reading, math, and writing skills or, at best, a stagnation of reading, math, and writing skills. I am talking about all 12th graders--not just low-income 12th graders. Our 12th graders, compared with the rest of the world, which is where we are competing today, and what our prosperity is tied to, come in about last among industrialized nations. We are behind Hungary, Slovenia, Austria, Germany, Netherlands, and Sweden. We are just about last in levels of academic achievement in mathematics and last for our academic levels in science. We know there are 7,000 schools in this country today that are deemed failing schools. They are not defined as ``failing'' by the Federal Government. We have not set a standard to say a school is failing. They are defined as failing by the school systems at the State and local levels that rate their own levels. School systems rating their own schools have identified over 7,000 schools that do not meet the standards they have set. Some of the schools have had the failing designation for not just 1 or 2 years but for up to 6 or 10 years. We need to be very concerned about this. We are not the only ones, as legislatures, who are concerned. Our manufacturers and our people who are trying to hire folks so they can become prosperous, so they can have good jobs, and so we as a country can compete internationally, are concerned. United States manufacturers have found that 40 percent of all 17-year-olds do not have the math skills necessary to do the job for which they are hired; 60 percent do not have the reading skills necessary to do a manufacturing job. That is a staggering number. Over half the kids leaving our school systems come in to their work experience without the ability to do the job because they cannot read and they cannot do math. Madam President, 76 percent of our college professors and 63 percent of our employers believe that a high school diploma is no guarantee the typical student has learned the basics necessary to function in our society, and specifically, in college and the businesses into which they are being hired. We obviously have a very significant problem. I must stress this problem isn't a lack of money. As I said, we have spent $130 billion for title I kids over the last 35 years. We have also as a Federal Government dramatically increased our funding. This chart reflects how much we have increased funding for education generally in this country from 1950 to the year 1997--from about $10 billion to well over $300 billion in total expenditures from K-12. This chart shows how much we are spending on our increases on children per pupil during that period. From 1970 to 1999, we see the increase per pupil went from $1,000 to well over $7,000 in this country. The United States spends 6 percent of its national income on primary and secondary school education which is more than any other of those industrialized countries. Every one of these countries spends less of their gross national product for education than the United States, except Denmark and Canada. All the other countries spend less as a percentage of their national product on education. It is not a function of dollars being spent. It is a function of what we are getting for our dollars that we are spending that is the problem. Somebody else said it is a function of the teacher ratio; We simply have too many kids in the classrooms for the teachers to handle. There may be instances where that is the case. I think that is possibly true. But as a practical matter, when reviewing the statistics, it is hard to defend that position. In the 1960s, there were 26 pupils per teacher. Today there are 17 students per pupil in this country, on average. The President has said he wants to have 18 students to one teacher. That is the ratio he wants to reach. As a practical matter, 42 States in this country already have ratios which equal either 18 to 1 or better for the ratio of students to teachers. We know we have a problem, and it is very significant. Some States have taken this issue on and made significant success. I point to Texas as an example. They have reduced their achievement gap by almost a third between the low-income kids and the high-income kids, and they have not done it by reducing the level of the achievement of the higher or the moderate-income child, the non low-income child. They have done it by raising achievement levels of the low-income child. One might ask: How have they done it? Texas--and there are lots of other States initiating these programs, including Michigan, Arizona-- has done it by being creative, taking a different approach with their kids by demanding achievement in most instances. When we looked at this bill as it came to the committee for reauthorization, we looked at the statistics and said one thing we know is what we are doing is not working. There are a lot on the other side who are willing to defend the status quo. I am not. These numbers are staggering. We have had generation after generation of low-income children who have been given the raw deal in the way the Federal Government has addressed the issue of educating or trying to help educate them by assisting the local communities. Their achievement levels have not increased. They cannot do math, they cannot read, even though we have poured these huge amounts of dollars into trying to help them out. So we knew it was not working, the status quo. We knew those 79 programs that had come, originally, from 5 simply had not resolved the problem. I guess they made a lot of people feel good because there is hardly a Member, especially on the other side of the aisle, who has served here for any length of time who does not have one of these targeted programs that is called something--something to help somebody somewhere that has his or her name on it so they can put out their press releases and go back to their States and say: I put out the ``da-da-da'' program which helps ``da-da-da.'' But the problem is, that has not improved the education of the children at all, especially the low-income children. So we, on our side of the aisle, said let's try to think of a better way to do this. We came up with a basic thematic approach. We said that, first, the programs we put forward should be child centered. That might seem obvious and everybody might say, of course, they should be child centered; it is education. Unfortunately, title I, the way it was originally designed and the way it functioned up until 1994, was not a child-centered program. Title I was a school-centered program, an administrator-centered program. Basically, the money went to the schools. If you happened to be a low-income child, you may or may not have ever seen that money. If you happened to be a low-income child in a school system which had less than 35 percent of its kids being low- income kids, you were absolutely not going to see any of that money because none of that money could go to your school. So a lot of low- income children were simply written out of the system, and the money did not go to the children; it went to the schools. So we said let's have a child-centered approach where we are really looking at the children. Second, we said title I has not accomplished its purpose, it has not improved the education of low-income kids, so let's put the emphasis on achievement; We especially want to see low-income children have their math and reading skills increased; We do not want to see them put into some aggregation where there is a claim of increase because they are part of an average; We want a disaggregated approach, so different groups within the low-income community are looked at independently. Then we want those groups of kids to improve relative to everyone else. We don't want everyone else to be brought down; We want to see better math skills, better science skills, better reading skills for the low-income children so when they leave school, they can read and they can write and they can do math. So we decided we were going to have an achievement-oriented proposal. First, it was child centered; second, it was achievement oriented. Third, we came to the conclusion that maybe we do not know best here in Washington; maybe the local school districts do know what they are doing. I meet very few parents, teachers, and principals who really don't want good education. Almost everyone I ever meet who is a parent of a student or teacher or principal or superintendent really does want good education. That is why they have committed their lives to this exercise. So we said let's give the flexibility to local school districts so they can make the decision as to how to allocate the funds within their school districts and within their schools the way it will get the best results. In order to give that flexibility we also said, fourth, that we want accountability. We want the local school districts in the States to show us the kids are achieving at a higher level. They have to be accountable. So it has four steps: Child-centered, achievement, flexibility, and accountability. That is the theme on which we built this bill, or the ideas we put into this bill. There was another approach which we took, which is a tactical approach. We said we do not know all the answers, unlike some on the other side who appear to think they do know all the answers. We said we don't know all the answers, we don't know what the States need and what they want, so we are going to give the States an optional approach. We are not going to say you have to do this in order to get the money, or you have to do that in order to qualify for the program. We are going to set out a series of options. The way I describe it is it is similar to a cafeteria line. A State can go down that cafeteria line, or a local school district can go down that cafeteria line, and they can pick out the program which they think best suits their ability to produce the results for the low-income child, to enable that child to have a better school experience and to learn more. We do not say you have to take any specific program. We do not say in order to get a new teacher you have to take class-size dollars, and if you take class-size dollars, you can't do anything but get new teachers. We don't say that. We say you, the State, can go down this cafeteria line, and if you like this program--and I will talk about them in a second--if you like Straight A's or you like portability or you like public school choice, you can just take that program and try it out in the context of an accountability system where you have to prove that you achieve the results of improving the quality of education for the low-income child. But if you don't want any of those programs, if your educational community is so strong in your State and you believe you are doing such a good job that you want to stick with title I as it is presently structured out of all the different rules and regulations and all the categorical programs, you can do that, too. You can go right down through that cafeteria line, don't pick up anything, and get the same amount of money. If you take any one of these programs, you get the same amount of money. We are not going to affect anybody's ability to get the dollars the Federal Government is sending to them. They are all going to get the same amount of dollars, but we are going to give some States and communities an opportunity to have options. It has outraged the other side of the aisle for some reason, the idea we would give options. Maybe it is because we are not demanding people do this. The approach we often hear, regretfully, from the Washington educational establishment is you must tell people what to do. We are not going to do that. We are going to say you have options and when you choose an option, then we are going to say you have to produce the results, yes, but you will have flexibility within that option to produce those results. Let me talk briefly, because there is going to be a lot of debate about these items, about the four major options in this bill. There are also a lot of other good initiatives in this bill. The Senator from Maine put in a superb initiative in rural education that is going to help rural school districts be able to manage their Federal dollars more, but that is not controversial because it is such a good idea. Let me talk about the four items that basically set these themes in place. The first, of course, is Straight A's. There are two different types of Straight A programs in this bill. One is the Governors' proposal; the other is pure Straight A's and includes title I. Essentially, what it says is we are going to take a bunch of programs, 14, 15 programs, and instead of having the money go to the States in a categorical way, the States will get the dollars from those programs in a group, and then they will have very significant obligations to meet accountability standards for having improved the achievement of low-income students as a result of getting those dollars--something which does not now exist. We will give them flexibility, but we will expect results. And low- income kids will learn. This is a State's choice, by the way. The State does not have to take Straight A's. If the State doesn't think this will work for it, it does not have to take this track. If a State wants to take this approach, it can. But after taking this approach, it has to prove, after a reasonable amount of time, the kids are actually improving in their educational levels. The second approach is called portability. Here we have tried to engage the parents in the process of becoming involved in the education of the low-income child. I think if there is one thing we all recognize, it is that parent involvement is absolutely critical to good education. This is an attempt to get the parents into the process. This proposal, essentially, says that instead of sending the money to the schools--as I mentioned earlier, if the school does not have 35 percent low-income kids, they don't get any money--instead of sending the money to the schools, we give the money to the schools, but we give it to them in relationship to the children who are in the schools so the money follows the child. It does not flow to the schools. Then the parent has the right to go to that school system and say: I am not happy with what my child is learning in this school. I would like you to put my child into an afterschool program or a tutorial program--not a private school; the child still has to go to the public school--but I would like you to put him or her into some sort of private tutorial assistance, or it could be public tutorial assistance, that may cost more money. That is allowed today under present law, under title I, but it is not at the direction of the parents. The school systems make these decisions. So the parent has the right now to say: Take my title I money and allow my child to get some assisted learning at a Sylvan Learning Center or some sort of other outside assistance program. That is portability. The money goes with the child and the parents, although they never get the dollars, they do not physically have the dollars. This is not anything like a voucher, even though it is occasionally, by people who are really demagogic, being classified as such, but nobody with any integrity would ever call this a voucher because it is not--the dollars go to the school, and the school has control over the dollars. But the parent has the ability, if the parent decides to do so, to direct that these dollars be used to assist the child in additional educational support, something the school can now do but may not want to do, for whatever reason. That is portability. Again, the most common attack we get on this-- and it is legitimate--is: What happens? Under the present system, money comes together in the school system and the school gets to use it to benefit all the kids. It is not going to take control away from the school and their ability to benefit all the kids with these title I dollars. Yes, it is; it is going to benefit the low-income kids. That is exactly what it is going to do. Remember, for this program to go forward, the school district and the State have to have made the decision this is what they want to do. So if the State and the school system come to the conclusion the best way to educate their kids is to use portability as an option, then they can apply for it, but if the local school district, the teachers, the principals, and the administrators decide this is not going to work, they do not have to apply for it; it is an option. There are some States in this country that, obviously, are going to apply for it because they already use portability. Arizona uses portability for its State funds, and the city of Seattle uses portability for its State funds. It is not a new idea. I am sure it will be pursued by those places. It will be on the table and available to them if they want it. Another area is public school choice. As I mentioned, in this country today, 7,000 schools have failed or are failing. What we essentially say is: If your child is in a failing public school--which can do a fair amount of damage to a child, to be in that school for 2 years--but if that school continues to fail for 2 years--and remember, failure is defined by the States, not by us--then the parent has the right to move that child out of that public school. If that public school fails for 4 years, then the parents have a right to move that child out of the public school and the public school system must assist them in the transportation costs of moving their child out of that public school, as long as it is a reasonable number. There is a contingency on how much can be spent. Parents cannot move their children to a private school and get any support. This is a public-school-to-public-school choice. In other words, if a parent wants to move their child out of one failing public school, under this bill, they can move to another public school that they, as a parent, believe is doing better. Again, this is a process of getting parents involved. Equally, it is a process of putting pressure on the 7,000 failing schools. Another area is teacher empowerment. This has already been attacked at some length from the other side of the aisle. I heard a commentary on this. There is a philosophical difference which reflects precisely from where the two different parties are coming. The President, the Vice President, and his supporters, have said: If you want to get more money from the Federal Government, you must use this money to add new teachers to classrooms; you must do it. I do not know how Al Gore or President Clinton know that the town of Milan, NH, needs more teachers, but for some reason they think they do. I do not know how they know that.

Mr. GREGG. Reserving the right to object, the 45 minutes applies to Senator Lieberman.

Mr. GREGG

Mr. GREGG. Mr. President, I rise to speak about the issue of how we are fighting drugs in this country--specifically, the President's initiative relative to the country of Colombia in relation to our own initiatives on the southern border of our country. I have the privilege to chair the committee that funds the INS, which includes the Border Patrol, DEA, the department of drug enforcement; and the judiciary. All three agencies, of course, of our Government have a significant role in the issue of drug enforcement and especially as it affects our southern border. The President has asked for $1.6 billion of new money--he has asked for it in an emergency format--to be sent to the country of Colombia, in order for Colombia to fight drugs and the production of drugs. That may well be a reasonable request. I have reservations on its substance, but I also have serious reservations as to its appropriateness in the context of the drug war that we as a Nation face. The reason is simple. When the President sent a budget up to address the agencies that are responsible in our Government to fight drugs, he did not fully fund their needs. He underfunded the needs of the Drug Enforcement Administration, DEA; he underfunded the needs of the INS and Border Patrol; he underfunded the needs of the judiciary, which enforces the law. I have made a little chart here that reflects a comparison. The unfunded capital--I am talking about capital needs, one-time items, which involve the construction or technology and needs of these different agencies, the INS, DEA, and the judiciary. The unfunded requests of these agencies represented about $1.8 billion--a little bit more than $1.8 billion. Compare that with the fact that the President is willing to fund almost $800 million--million, not billion--of capital needs for Colombia. Let's do a little review of this because I think it is important for people to understand what happened. Essentially, what the President is saying is that the capital needs of Colombia are more important than the needs of our own drug enforcement agencies here in the United States. For example, the President has requested 15 Huey helicopters for Colombia and 30 Blackhawk helicopters. They are the most advanced helicopters we have in our fleet. Thirty Blackhawk helicopters will cost approximately $388 million. Let me tell you, those 30 helicopters, along with the 15 Hueys, are going to go to Colombia. Let me tell you what the Drug Enforcement Administration and the Border Patrol have to fly on our borders in order to interdict drugs. They fly old Vietnam-era helicopters. They aren't safe. In fact, many of them have been grounded. The Army, in fact, grounded almost all of its Hueys. But that is what we are left with. DEA and INS have both requested aircraft in order to patrol the borders. Those requests were not funded by this administration. Yet the administration turns around and is willing to give 30 Blackhawk helicopters to Colombia. Who knows what will happen to those helicopters. Who knows how they will be used. But I can assure you that the first call, I believe, on new helicopters for the purposes of the drug war should have gone to the departments which fight the drug war in the United States and which need them. Another example: Night vision goggles. We are going to send $2 million to Colombia to buy night vision goggles. Yet here in the United States, the Border Patrol and DEA are short on those materials. In fact, the Border Patrol is woefully short on night vision goggles, on pocket scopes, on fiber-optic scopes, on hand-held searchlights--all of these items the Border Patrol asked for and were not funded in this budget by the President. Yet the President has been willing to find the money, or suggested that we should find the money, to send not only night vision goggles but ground-based radar systems, secure communications systems, signal intelligence gathering systems, computers, and installation of sensor sights for aircraft. All of these items they have suggested we send to Colombia. In addition, they have suggested that we actually construct facilities for Colombia to the tune of approximately $49 million-- physical buildings. Let me tell you, both the INS and the DEA need physical facilities. In fact, the Border Patrol is functioning out of extraordinarily crowded facilities. Many of the Border Patrol stations are grossly overcrowded. There is one site which is designed for 5 people with 125 people working out of it. There is another site where the Border Patrol is working out of an old Tastee Freeze building. I guess you can use an old Tastee Freeze building. It is sort of hard to handcuff a drug dealer to a Tastee Freeze machine. The fact is we do not have the facilities which we need in order to adequately enforce our laws relative to drug dealers coming across the borders and drugs coming across the borders. We don't have the facilities to detain those people. There is a detention need of approximately $406 million. In other words, we need $406 million of construction in order to meet the potential detention needs for people illegally coming across the border, many of them drug dealers. The judiciary has the same problem. There is a massive increase in the amount of caseload which the judiciary along the southern border has to handle. Five district courts on the southwest border now handle 26 percent of all the Federal criminal activity--26 percent of all the Federal criminal activity--and a great deal of that is drug related. To put that in perspective, the remainder of the criminal activity in this country is handled by 89 other district courts. Five are handling 26 percent and 89 handle the rest. You can see how overworked those five courts are. The border courts' basic caseload is four times that of the national average. Yet did the administration put money in to try to increase the capacity of those court systems to handle this wave of crime that is coming across the border, much of it drug-related? Absolutely not. There are no physical facilities in that area. I put up another chart which is a little more stark explanation of some specific accounts. For example, the aircraft needs along the southwest border, this is what was unfunded. This bar chart shows the unfunded needs for aircraft along our southwest border. This shows how much the administration is willing to spend for aircraft for Colombia. They are willing to spend three times what it would take in order to adequately monitor our own border with aircraft. They are willing to spend it in Colombia. I have to say that I really doubt that aircraft in Colombia is going to end up doing the job. I do not know how it is going to be used. But I strongly suspect it is not going to be used very effectively if we look at the history of what has happened with our efforts outside this country in the area of crime enforcement. I suspect what we will end up with is some company in America making a heck of a lot of money because somebody will buy 30 Blackhawk helicopters and ship them to Colombia. That will be the end of it. That will be the last we hear of them. But if the administration is willing to pay for the aircraft along the border, the use of those aircraft would be accountable to the American people. We would know whether those aircraft were being used correctly in law enforcement and drug enforcement. I can assure you that my experience with the Border Patrol and the DEA is they would be used correctly, and we would get a return for the dollars that are being spent. It is not only in the capital areas that this administration has acted, in my opinion, with gross irresponsibility in their obligations to fight the drug war here in the United States, by funding the Colombian request but not funding the American needs, but more importantly, in the area of personnel and initiatives, it is really unbelievable. This administration is willing to spend $1.6 billion in Colombia, but they spent absolutely nothing in their budget on the methamphetamine initiative of the Drug Enforcement Administration. Nothing. The methamphetamine initiatives of DEA have been some of the most successful initiatives they have undertaken. Talk to people in Colorado, Missouri, Minnesota, and all along the southwest border. They will tell you methamphetamine is the drug that is growing most rampantly. It is growing at the most dramatic rate. Its production is growing at the most dramatic rate. Two years ago, the Congress set up 10 initiatives in the area of methamphetamine. They have been successful. Yet this administration has zeroed out for all intents and purposes any new initiative in methamphetamine, even though the DEA specifically requested of OMB-- part of the administration--and said they needed 10 more initiatives in the area of methamphetamine. I think it was 10. But that was zeroed out by the White House while at the same time they are willing to spend $1.6 billion to buy planes for Colombia. It makes no sense. We know that 85 percent of the methamphetamine that is being sold in Minnesota is smuggled in from Mexico. We know that. We know, if we are going to stop that smuggling, that we are going to have to have a border enforcement capability that can identify it, track it, arrest it, and then prosecute it. But you can't do that if you are going to underfund the DEA, the INS, and the judiciary to such dramatic levels. But the White House has done exactly that. But who have they been willing to fund for initiatives in Colombia? That is not the only instance. The Border Patrol was supposed to receive an increase of 1,000 people a year for 3 years. That is what the Congress asked this administration to do. That is what we actually funded--1,000 people for 3 years. This administration has refused to fill those slots. The administration has basically refused to fulfill its obligation to fill those slots. So the Border Patrol goes undermanned and in many instances underpaid. As I have already pointed out, the facilities and equipment it has are woefully inadequate. The Border Patrol, obviously, does things other than just drug enforcement, but because the Mexican border is the primary vehicle and the Mexican cartels are the primary force behind the drug flow into the United States, the Border Patrol is constantly being drawn into the drug fight. Therefore, adequately funding the Border Patrol is critical to having an adequate drug enforcement policy in this country. My point is simple and obvious. Before we send $1.6 billion to Colombia, before we send this money down there so they can have more planes, goggles, and radar sensors, how about funding the American needs in the area of drug enforcement? How about funding our own law enforcement community and our Judiciary so we can act adequately, interdict and fight drugs in the United States. I believe this administration's priorities are skewed. I think this Congress has an obligation to take a hard look at the Colombian drug proposal when it comes here. In my opinion, we should reallocate significant amounts of those funds so we can appropriately fund and support DEA, INS, and the Judiciary. I yield back the remainder of my time.

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent that the time assigned to the Senator from Arkansas, Mr. Hutchinson, be given to me at this time.

Mr. GREGG

Mr. GREGG. Mr. President, I rise today with Senator Kohl to introduce the New Economy Tax Simplification Act or NETSA. Electronic commerce is reshaping our society. In many ways, the strong economic conditions we currently enjoy are a result of the convenience, lower costs, and global connections provided by the internet. The question for us as a nation is how to manage this new enterprise so that it continues to benefit our nation's economy, particularly in regard to the taxation of e-commerce. So far, the government's hands-off approach is working. Our nation's unemployment and inflation rates are at record lows and higher paying jobs are being created at a tremendous rate. Many financial experts attribute the record low inflation rates to the Internet. A University of Texas study found that the Internet economy grew an astounding 68% rate in the past 12 months. Another sign of the good times is the surplus revenue flowing into federal and state treasuries all over the nation. The federal government's budget is balanced for the first time in a generation and the 50 states ended 1998 with a collective surplus of $11 billion. States are seeing revenue increases of more than 5 percent a year through the 1990's. This hardly seems like a compelling rationale for levying taxes on the Internet. Yet a heated debate is raging between those who want to keep the internet free of taxes and state and local governments who seek to impose widespread taxes on internet sales. The Advisory Commission on Electronic Commerce (ACEC), set up by Congress last year to develop recommendations on Internet taxes, recently concluded its final meeting but failed to reach the required supermajority to make any formal recommendations. Notably, it did agree by a simple majority vote to extend the current moratorium on Internet taxes for five years. The Commission is set to deliver it's report to Congress tomorrow. It will recommend that we extend the internet tax moratorium for another five years and I fully support this. The Commission will also ask Congress to establish nexus safeguards--to make clear when a State or municipality has the power to levy taxes. Our legislation establishes these important nexus safeguards. Currently, online sales are governed by the very same tax rules that govern mail order sales. The existing rules of the road are based upon two prior Supreme Court decisions--National Bellas Hess case in 1967, and the Quill case in 1992. Both decisions established the power of state tax authority to be limited by nexus--or the scope of a company's connection to the taxing state. Local sales taxes are incredibly complex. There are 7,600 different tax jurisdictions across the country--within these systems about 600- 700 rate changes occur per year. There are 46 different sets of rules (45 states and the District of Columbia have state sales tax). If forced to comply with these rules, companies would be filing 425 tax returns each month or 5,100 a year. The Gregg/Kohl bill, the New Economy Tax Simplification Act (NETSA), codifies these mail order tax rules as outlined in the Quill decision, updating this decision for the 21st century. Sales/use tax nexus rules are court-based, and income tax nexus rules are based upon a 1950s federal statute that applies only to tangible goods. The Gregg/Kohl plan would codify nexus standards across the board. This legislation would update and strengthen the nexus standards for the 21st Century economy--ensuring that intangible sales, web pages and servers do not cause nexus. It maintains current constitutional principles and keeps state powers within their jurisdictions, and does not try to pre-empt a state's tax authority within its own borders. I ask unanimous consent that the full text of the bill be printed in the Record.

Mr. GREGG

Mr. GREGG. Mr. President, I rise today with Senator Kohl to introduce the New Economy Tax Simplification Act or NETSA. Electronic commerce is reshaping our society. In many ways, the strong economic conditions we currently enjoy are a result of the convenience, lower costs, and global connections provided by the internet. The question for us as a nation is how to manage this new enterprise so that it continues to benefit our nation's economy, particularly in regard to the taxation of e-commerce. So far, the government's hands-off approach is working. Our nation's unemployment and inflation rates are at record lows and higher paying jobs are being created at a tremendous rate. Many financial experts attribute the record low inflation rates to the Internet. A University of Texas study found that the Internet economy grew an astounding 68% rate in the past 12 months. Another sign of the good times is the surplus revenue flowing into federal and state treasuries all over the nation. The federal government's budget is balanced for the first time in a generation and the 50 states ended 1998 with a collective surplus of $11 billion. States are seeing revenue increases of more than 5 percent a year through the 1990's. This hardly seems like a compelling rationale for levying taxes on the Internet. Yet a heated debate is raging between those who want to keep the internet free of taxes and state and local governments who seek to impose widespread taxes on internet sales. The Advisory Commission on Electronic Commerce (ACEC), set up by Congress last year to develop recommendations on Internet taxes, recently concluded its final meeting but failed to reach the required supermajority to make any formal recommendations. Notably, it did agree by a simple majority vote to extend the current moratorium on Internet taxes for five years. The Commission is set to deliver it's report to Congress tomorrow. It will recommend that we extend the internet tax moratorium for another five years and I fully support this. The Commission will also ask Congress to establish nexus safeguards--to make clear when a State or municipality has the power to levy taxes. Our legislation establishes these important nexus safeguards. Currently, online sales are governed by the very same tax rules that govern mail order sales. The existing rules of the road are based upon two prior Supreme Court decisions--National Bellas Hess case in 1967, and the Quill case in 1992. Both decisions established the power of state tax authority to be limited by nexus--or the scope of a company's connection to the taxing state. Local sales taxes are incredibly complex. There are 7,600 different tax jurisdictions across the country--within these systems about 600- 700 rate changes occur per year. There are 46 different sets of rules (45 states and the District of Columbia have state sales tax). If forced to comply with these rules, companies would be filing 425 tax returns each month or 5,100 a year. The Gregg/Kohl bill, the New Economy Tax Simplification Act (NETSA), codifies these mail order tax rules as outlined in the Quill decision, updating this decision for the 21st century. Sales/use tax nexus rules are court-based, and income tax nexus rules are based upon a 1950s federal statute that applies only to tangible goods. The Gregg/Kohl plan would codify nexus standards across the board. This legislation would update and strengthen the nexus standards for the 21st Century economy--ensuring that intangible sales, web pages and servers do not cause nexus. It maintains current constitutional principles and keeps state powers within their jurisdictions, and does not try to pre-empt a state's tax authority within its own borders. I ask unanimous consent that the full text of the bill be printed in the Record.

Mr. GREGG

Mr. GREGG. Mr. President, I am pleased to be an original cosponsor of this legislation, and I thank Senator Santorum for his leadership in drafting it. My colleagues in the Senate may recall that last week, I prepared an amendment to the earnings limit legislation that would have achieved many of the same objectives that are outlined by the Senator from Pennsylvania with respect to this bill. I believe that we have begun a process, an important dialogue involving many interested parties in both the executive and legislative branches, and that the result of this process will ultimately be improved information for the public and for Congress regarding the state of the Social Security program, and the benefits that it can finance. I am pleased by the number of important individuals who have expressed interest in this effort. I am especially gratified by the interest of Senator Roth and of Congressman Archer, the two members of Congress with principal jurisdiction over the Social Security program. They have each indicated that they are willing to explore these informational issues via various means, and to lend their considerable influence to the effort. I am further pleased that various individuals within the administration have sought to work with us on our concerns, and to lay a groundwork for improved reporting to the public regarding the Social Security program. In that context, I would stress that we are not at the end of this process, and that we do not have universal agreement on the best way to proceed. I do not believe that either Senator Santorum or I would say that the language in either this bill, or the one that I offered last week, is perfect, and cannot be improved upon. Senator Santorum's draft, like my original draft, would seek to include additional information in the annual Trustees' Reports. I do not know whether the Trustees' reports are necessarily the optimal place to report such information, and to the extent that individuals within the administration may have views as to how and where this information is best presented, I know that Senator Santorum and I would both be flexible as to how this is done. The important thing is that this information is routinely presented to Congress and to the public in a clear, understandable, helpful way, and the best time and format for this is certainly a matter where reasonable people can disagree. I do, however, want to review the elements of Senator Santorum's legislation, and to express why I believe that they are so important. First, it would add important new information to the Personal Earnings and Benefit Statements that individuals are now receiving from the Social Security Administration. Those statements currently tell individuals how much they are promised in terms of benefits, and about their earnings history. Taken literally, however, they could provide a misleading picture as to what current law can actually finance. It is a misnomer to say that ``current law'' would provide a certain amount of benefits, when legally, the Social Security Administration does not have the authority to send out checks without financing. What ``current law'' would literally mandate, according to GAO, according to CRS, and according to everyone else who has studied this closely, is that benefits would be effectively cut sharply beginning in 2037 because benefit checks would have to wait until the available funds came in to finance them. Mr. President, it is unlikely that Congress would permit such a sharp and sudden set of benefit cuts to occur. Of course, neither we nor a future Congress would permit that. But it is also untrue to tell Americans that ``current law'' would provide them with all promised benefits. That is manifestly untrue by any definition. It is neither a true statement of current law, nor it is a true statement of how tax levels and benefit levels would look after necessary adjustments are made to the program to bring it into balance. Social Security beneficiaries certainly have a right to be told the truth about their benefits--the date through which they can currently be funded, the extent to which benefits could be provided under current estimates, as well as the additional revenues that must be collected through tax dollars, when the program first begins to experience cash flow deficits. Currently, there is a great misperception regarding Social Security financing that too many individuals are willing to tacitly encourage-- the idea that the existence of a positive Social Security Trust Fund balance enhances the ability of the federal government to pay Social Security benefits. It does not. The Social Security Trust Fund balance is actually a debt owed by the federal government, and it does not in any way finance benefits without requiring that the federal government turn to taxpayers to pay off that debt. Americans deserve to be told the truth about that, and Senator Santorum's language includes a statement that would explain the meaning of the Trust Fund, and the options before Congress when the program enters a phase of cash-flow deficits. Many of the paragraphs in the Santorum language, regarding increased clarity in the annual Trustees' report, are somewhat similar to language that I sought to pursue last week. Again, I would simply reiterate that reasonable people can disagree as to the proper venue for the reporting of this information. I personally am of the view that the annual Trustees' Reports should provide to Congress the relevant information that Congress, as the body that must budget for the Social Security program, needs to budget for it in the appropriate way. Congress has a right to insist, in my view, not on how these evaluations should be made, but that all relevant information be presented clearly to the Congress when they are made. However, the most important thing is that we reach an agreement among interested parties with common goals as to how best to do this. Currently, we receive 75-year actuarial estimates from the Trustees regarding the health of the Social Security Trust Fund. We only look at its impact on the overall federal budget over 10 years, through measurements by CBO and other bodies. We don't look out over the long term to judge the larger fiscal problems facing this long-term program and the unified federal budget. That is a problem. It tempts Congress and the Executive Branch to pursue ``solutions'' to Social Security's insolvency that improve the part of the picture that we see--the Trust Fund balance--heedless of the consequences for the part of the picture that we do not see--the impact on the unified federal budget. This is not an adequate method of approaching the problem of financing benefits over the long term. I believe that Congress should insist that portraits of the program's finances evaluate all scenarios on an absolutely level playing field, one that shows all costs borne by the system, and one that judges all possible solutions in terms of what they would actually cost and what they could actually pay. I commend Senator Santorum for his effort here, even as my mind is open on the best way to achieve this objective. Mr. President, I would simply close by saying that the Social Security program is too important to allow to operate in a fog of incomprehension and misunderstanding. There ought not to be resistance to efforts to bring additional ``sunshine'' upon the operations of the Social Security system as a whole. We currently operate, too often, in an atmosphere of selective information--one that measures only benefit promises, and current tax levels, without acknowledging the mismatch between the two, and what they mean for one another. A view that looks only at the Trust Fund balance, and not at the realities of the system's cost to future payers of both income and payroll taxes. This selective presentation of information encourages Congress to remain inactive, because it allows us to pretend that the consequences of current law are not actually worse than the choices that would be made in the course of reforming the program. We can do better than this, and we must, if we are to meet our responsibilities of stewardship for the Social Security program. I commend Senator Santorum for his effort.

Mr. GREGG

Mr. GREGG. Well, obviously it is not true. As the Senator knows, this is budget authority. Maybe the Senator skipped over that point or maybe he did not understand it. It is possible either way. But in either case, the Senator is wrong. Mr. President, I yield the floor.

Mr. GREGG. Mr. President, I will have to reserve my time. If the Senator wants to use his time to ask a question, I would be happy to yield.

Mr. GREGG. Sure.

Mr. GREGG. The second philosophical difference we have with the other side of the aisle is, again, highlighted by the discussion of the Senator from Massachusetts who said essentially there are a lot of States that do not know what they are doing in the area of education and we, the Federal Government, do know what we are doing; therefore, the programs from the Federal Government should be categorical so that States live up to their obligations to do what we in the Federal Government tell them they should do in education. It is essentially the attitude of ``we know best'' in Washington how to run the school districts across this country; that the people who run the school districts--the local school boards that are usually elected, the local legislatures that are always elected, and the Governors of States who are elected--that these individuals, for whom education is usually their No. 1 priority because it is their No. 1 spending issue, as compared with the Federal Government which has other priorities like national defense, Medicare and Social Security, these individuals who are almost all elected are not capable of doing their job. That is essentially the attitude taken on the other side of the aisle when they say we in the Federal Government know best how to run education and States do not know what they are doing in education; therefore, our programs must be categorical. They must tell the States exactly what they must do with dollars coming to them from Washington. It is a little bit of a disconnect, of course, because the dollars coming from Washington did not start in Washington. They started in the States. They came to Washington. Then we took 15 to 20 percent off the top and sent it back to the States. Maybe they got 80 percent back, but certainly not 100 percent. In any event, it is not our money in Washington. As a practical matter, we do not know more about running a school than the local school districts. I, for example, do not contend I know more about the Epping School District than the people in Epping or the people on the school board in Epping. When they look at their elementary school, they know whether they need another teacher or another classroom, whether they need computers or whether they happen to need a new baseball field or language course. I do not know that. It is not my purpose to tell them how to run their school district. So our philosophy of education on this side is a little different. They say it is a block grant; just send the money. No, that is not it at all. The Elementary and Secondary Education Act, which we passed in the HELP Committee a couple of weeks ago, will be before the Senate in a few weeks. That bill has a brandnew approach to education. The theme is not that we are going to send the money back in a great big huge block grant and the States can do whatever they want. It is not we are going to send it back with a targeted proposal and tell people what they must do with it. It is a different approach. The theme is, first, that funds should be spent for purposes of the child. The child is the center of our attention. Second, we will look for achievement on the part of the child to be sure they are actually learning. Third, there is flexibility. And fourth, there is accountability. We have reoriented these programs so that we send the money back, yes. For example, in our Teacher Empowerment Act, we send the money back in a rather large lump sum. We take the Eisenhower grants and the class size money and put it together. Then we say: You can use this money, local school districts. You do not have to hire a new teacher if you do not need a new teacher. You can use it to hire new teachers if you want to reduce class size. You can use it to improve the ability of your teachers to teach. You can use it to give teachers more support. You can even use it to pay teachers. They cannot keep the really good teachers in the classrooms because they are being hired by the private sector. This is especially true of our science and math teachers who are leaving because the opportunities are so lucrative outside education. You can pay teachers more to keep them by using bonus payments. You can use it for any of those things, but you have to produce results. We are not going to tell you how to produce results. We are not going to tell you that you must have 17 kids to every teacher. We are not going to tell you that you must have a computer in every classroom. We are not going to tell you that you must have a classroom that is 6 feet by 25 feet or 12 feet by 13 feet. We are not going to tell you how many books you must have in your library. No, we say: You can get the money and use it for these defined areas, and you have flexibility to use it in those areas, but you have to show us that the academic achievement of the low-income child--because that is where ESEA is basically aimed in the title I funds--is improving in relation to the other kids in the school. You have to have tests--not designed by the Federal Government; we are not out to design tests because that means we end up designing curriculum--tests that are designed by the local school districts and the States. Those tests have to ascertain annually whether or not the children in the low-income categories are improving academically. What a radical idea--we expect kids to learn. We are not going to tell schools how to teach. We are not going to tell schools the ratio of their classes. We are not going to tell schools the size of their classes. What we say is take this money and show us that kids are learning something and that they are improving in their academic achievement. That is a very radical idea. It is the idea we are pushing forward as an approach to education. It is not a block grant. It is not: Here is all the money and you can do whatever you want with it. It is: Here are the dollars, but we are not smart enough to tell you, the local school district, how to improve your children's education and what you need because we cannot look into every classroom and guide every classroom, even though they would like to do that on the other side of the aisle. On the other side of the aisle, they want to have a string running from every desk out to every classroom in America; 30,000 strings running off the desks, and pull a string here and there so every classroom in America has to fall into exactly what we outline in Congress. That is not the approach we suggest. The approach we suggest is, take the money and use it in a variety of different areas; have flexibility, but then show us, prove to us, that achievement is improving amongst those children who are targeted with the dollars. That is our approach to education. That is what is funded in this bill. Let me remind you, one more time, what the Bingaman amendment fails to mention: Our funding in this bill exceeds the President's funding in his budget. Therefore, our proposals in this bill make a lot of sense. They address the IDEA issue; they address special ed; they address the need to fund children in schools at a level that is appropriate and actually exceeds the President's level, and, more importantly than that, they expect the kids to achieve. As a result of achieving, we are going to get a much better return for the dollars we spend.

Mr. GREGG. There is no question about that. As we increase special education funding, the Senator from Pennsylvania is absolutely right, more of that funding will be flowing to schools in lower income districts and also in rural districts.

Mr. GREGG. Ironically, in Massachusetts, from where the Senator who was just speaking comes, 30 percent of their students are coded as special needs. If one looks at it across the country, most special- needs children, regrettably, do come from lower income school districts. They tend to have a higher percentage of kids in special needs.

Mr. GREGG. Yes.

Mr. GREGG. Mr. President, why do we believe that? We believe it, first, because it is an unfunded mandate, but more important, because in our school districts across this country, that special-needs child and his or her parents are being put in the impossible position of going into school meeting after school meeting and being told that resources are being used to pay for their child that should be used to pay for other children in the school district. As a result, the special-needs children and their parents are being put in an untenable position. They did nothing wrong. The people who did things wrong were the President and this administration for failing to fund special ed. We are saying let's give the special-needs children in this country a little relief, and let's fund special ed.

Mr. GREGG. Mr. President, I thank the Senator from New Mexico. I congratulate him on putting together this budget resolution, which was a very difficult task in the present climate. It is ironic; when we are running surpluses, it is almost more difficult to put together a budget than when we are running deficits. But through the adept and able leadership of the Senator from New Mexico, this budget has come forward. It is an excellent effort to address the issues which are critical to our country, especially the issue of protecting Social Security, as he does in this budget, so no Social Security funds are spent for anything other than Social Security, and the effort to protect some of the on-budget surplus so it will be available for debt reduction but also for reducing taxes for hard-working Americans who pay that extra money in that is no longer needed by the Government. The effort we are talking about today is in a number of categorical areas, but specifically today we are mentioning the area of education. I wanted to speak to the Bingaman amendment and some of the comments that were made, especially by the Senator from Massachusetts, first to their inaccuracy and second their inconsistency as to how we address quality education in this country. In fact, I can speak to the remarks of both Senators from Massachusetts who have spoken on this topic because I tend to disagree rather pointedly with both of them. Let me begin with Senator Bingaman's amendment. He held up a chart. It has been referred to by a number of Senators on the other side. The chart showed how much of an increase the Democratic leadership proposed in spending, and then they showed the Republican budget on the same account, same chart. They showed our budget being about $5 billion below what they were. What they failed to put up on the chart--which I found ironic and sort of misleading, relative to the way the debate was going--is the President's number. What did the President ask for in education? What the President asked for in education, if they had put it on the chart, would look something like this: The President asked for the greenish-blue line here. I am not sure what color you would call that--aqua, I guess. The aqua line here, that represents the President's request in education. Our request, what we put in the budget for education, is the red line. In each of the years of the budget, the Republican budget exceeds what the President of the United States asked for in education. This yellow insert here--which we had to jury-rig because we did not actually have the chart of the Senator from New Mexico--would be the Senate Democratic proposal. It is a dramatic increase over what the President requested and what we have put in our budget, which is an increase over what the President requested. So there is a bit of inconsistency for the Members of the other side of the aisle to come to the floor and savage the Republicans in this House, and the Republican budget, on the issue of education and not mention the fact we exceeded the President's request. Why didn't they savage the President's budget, too? Why didn't the Senator from California, Mrs. Boxer--she said we did not care about kids--say the President didn't care about kids? Maybe she just forgot. The President's budget was actually less--less than what we have put in our budget for education. I think what we have is a classic attempt at grandstanding, trying to throw more money at an issue and trying to address a problem, not by addressing it substantively but simply by saying: We outspent you on that issue, so you don't do as well as we do on education. Actually, we do very well on education. As I mentioned, we exceed the President's number in each year. It is not the dollars so much; it is the way we spend the dollars that I think is important to note. This is where I have disagreements with both Senators from Massachusetts who recently spoke on this matter, because there is a fundamental disagreement of philosophy on how we should address education. It is not a difference over money, really. As I said, our dollars exceed what the President requested for education. It is a difference of philosophy. Stated very simply, there are two philosophical differences. The first is that on the Republican side of the aisle, we think when the Federal Government says to the local school districts, you must spend a certain amount of money on education and we, the Federal Government, will help you by paying a percentage of the cost of that spending, when the Federal Government puts that type of mandate on local school districts, the Federal Government ought to live up to its obligation. It ought to pay the money it says it is going to pay. Before it starts new educational programs, it ought to pay for the ones it already requires from the States. What am I talking about here? Special education, IDEA. It has been alluded to by the other side of the aisle. It is almost a throwaway line there, at least from the Senator from Massachusetts, Mr. Kerry: Oh, sure, the Republicans will talk about IDEA, but we have done more about education; we don't have to worry about IDEA. IDEA is probably the most significant area you could find where the Federal Government has failed to fulfill its obligations to the school districts of this country. It is the largest unfunded mandate which the Federal Government puts on the States and the school districts, and which therefore causes the States and school districts to have to pay for the Federal share and, as a result, take local resources and reallocate them to pay the Federal obligation and, as a result, skew the local budgets. Local school districts, which would probably want to have better language courses, better computers, maybe more teachers, better trained teachers, smaller classes, can't do any of these things, in many instances, because they are having to take a large amount of their local dollars to pay for the Federal share of special education. On this side of the aisle, we have said that is wrong. We have said it is wrong now for 4 years. Every one of the President's budgets that has come up here over the last 4 years has had virtually no increase in special education funding, even though the Federal Government, when we arrived as a Republican Senate, was only paying 6 percent of the costs of special ed funding in this country when it originally said it was going to pay 40 percent of the costs. Even though the Federal Government was paying such a minimal part of the cost of special education, this administration has never sent us a budget that has significantly increased special education dollars. They have always taken the attitude, and it has been supported by the other side of the aisle: What the heck, let the local school districts pick up the Federal share. We are going to start a new categorical program that says to the local school districts you must, in order to get the Federal dollars, start this new program, too, rather than funding the special ed dollars which were originally owed. The practical effect of that, as I have said, is to skew the local budgets, and too many local school districts have been unable to do things they might have wanted to do because they have had to cover the Federal share of special education dollars. So what did we as a Republican Senate do? We changed that paradigm. In the last 4 years, we have more than doubled the funding for special education. We have gone from 6 percent up to almost 13 percent of the special ed dollars. In this budget, we increase it significantly again. It is our No. 1 priority. Yes, it is our No. 1 priority as a Congress, as a Republican Congress: Fund special education because that is our obligation. We said we would do that back in 1976, when Public Law 94- 142 was passed. So it is not a throwaway line for us. It is something we should do. Yes, that is where some of our dollars are flowing. When we exceed the President's budget in education spending, which we do, some of that excess spending in education goes into special ed, a significant amount more than what the President requested. He requested virtually none, no increase. So that is the first fundamental difference. We believe the special ed student deserves to get the funds, the funding support to which the Federal Government originally committed. (Mr. HAGEL assumed the chair.)

Mr. GREGG

Mr. GREGG. Mr. President, back in February of 1993, as we all remember so vividly, the World Trade Center in New York City was bombed. Over 1,000 people were wounded and 6 people were killed. Two years later, the Federal building in Oklahoma was bombed; 168 people died, including many children. These two very tragic events highlight the potential threat this country is subjected to and, in fact, has been subjected to in the area of terrorism. The threat of terrorism was further reinforced with the events in Africa where two of our embassies were bombed 3 years ago. The Commerce, State, Justice, Appropriations Subcommittee, which I chair, directed the Attorney General to develop a plan to address terrorism which would be a Governmentwide plan, an interagency counterterrorism plan. The Attorney General, in a very conscientious effort, put together a 5-year interagency counterterrorism and technology crime plan. It was an excellent proposal. This proposal was put together by the Attorney General 3 years ago. It basically became known as the bible--for lack of a better or more descriptive word--as to how we should proceed in the area of developing a Governmentwide strategy in order to address terrorism, something we hadn't done up until that point. It wasn't just to focus on Federal Government agencies but, rather, it went beyond that and talked about how we needed to integrate the private sector and State and local governments in our efforts to address terrorism. It had a large number of functions within it, a large number of areas that had to be addressed, as was obvious to those of us who took even a cursory look at the issue of terrorism. Unfortunately, we, as a culture, were not ready to address terrorist acts because we are an open culture. The essence of our culture is freedom, the ability of people to move freely among our society. It is very difficult for us to deal with people who are willing to kill indiscriminately simply to make their points of view known. It requires a lot of thought and effort for us as a nation to address a problem such as terrorism. That is why we asked for this 5-year plan to be developed. As part of this 5-year plan, one of the key things we believed we needed to address was the fact that there really wasn't anyplace where all of the issues of terrorism were being brought together. There were something like 43 different agencies addressing some element of the terrorist threat. This was not counting the issues of State and local government involvement and the issue of the private sector. For instance, how would the private sector address a terrorist threat to our power grid and our telecommunications systems. One of the first things deemed necessary to do was to develop a centralized place where people could go, whether they happened to be in the Federal Government, State and local government, or whether they happened to be in the private sector, a centralized place where people could go and find out how to approach the issue of preparing our Nation to be able to handle the terrorist threat. An office was designated to be created called the National Domestic Preparedness Office, or the NDPO. The NDPO was essentially to be a one-stop shopping center on the issue of how we address the threat of terrorism as a nation, a very important activity. It was to include participation by DOD, the Department of Defense, by FEMA, by HHS, Health and Human Services, by the Department of Energy, by the Environmental Protection Agency, by the Attorney General, and by the FBI. State and local authorities were to be included for participation in this office. It was to be a central agency which had all the players needed to be at the table--up and functioning and continually available as a resource to address the threat of terrorism. Unfortunately, this administration has treated the issue of terrorism as a stepchild. When there is a terrorist event, they react. In some instances, they react arbitrarily and ineffectively, as they did in reaction to the African situation where they essentially ended up targeting a facility in Sudan. It is still very much an issue, as to whether the facility was actually producing any chemical weapons. Also, they attacked a facility in Afghanistan. Rather than assisting our ability of tracking down the terrorist Bin Laden, it made it obvious to him that he could never again have a joint meeting of his terrorist forces. Thus, he scattered them to the wind and we have had much more trouble tracking them down. The response of this administration has been a PR response, to be quite honest, on the issue of terrorism at many levels. When it comes to actually substantively addressing the issue of terrorism, this administration's response from the top has been woeful. I will acknowledge, in fact I will cite and congratulate, that at the agency level there is an ongoing, aggressive, and very positive effort to address terrorism. But, for some reason, there is an unwillingness in the White House to genuinely focus on this issue in a way that produces results. One of the most glaring examples of that unwillingness to focus is the fact that the NDPO--the office which was supposed to be the one- stop shopping center for people who wanted to get ready to address a terrorist event--hasn't really been allowed to wither on the vine because they never even planted the seeds to get the vine growing. The office has not been funded. In fact, the travel funds which were supposed to be applied to it have been cut off. The office has been unable to get reprogramming through OMB, even though the Attorney General has requested on a number of occasions to get reprogramming through OMB to allow the office to function effectively. The FBI Director has not been able to get reprogramming through OMB that has allowed the office to function effectively. The State and local advisory groups which were supposed to be set up to bring the first responders--the local police, local fire, local health officials who have the knowledge and the expertise to do the job right and do it in a coordinated way with the Federal Government--in to advise the NDPO has not been energized in any effective way. We do not get the standardization on equipment we need. We are not getting the leadership from the top that we need in the area of making the States and local people as knowledgeable as we can. I will say this: At least in the other areas where we are trying to educate first responders, such as our initiatives across this country in education, we are making progress. But the central management agency has been ignored. We understand the reprogramming that the NDPO needs in order to fund its activities effectively for this year will not be adequately fulfilled. So this agency has been allowed to simply sit there and has not been energized. In fact, as I understand it, the person named director of the NDPO has recently, within the last week, asked to be transferred out of the job. I do not know why he asked for that, but I certainly can guess. I suspect it is because of the frustration of doing a job where he was not getting the support he needed from the White House and from this administration to do it effectively. Terrorism is not a political event. It should not be used for the purpose of initiating press conferences or trying to drive poll numbers. This is an extraordinarily serious issue. We as a nation need to have a Government that doesn't approach this issue in a manner which involves something less than a total commitment. Yet that is the way it is being approached by this administration and its failure to fund, organize, and energize the National Domestic Preparedness Office. This same problem was highlighted in a news story in the Wall Street Journal relative to another issue of terrorism. It was again requested by the subcommittee I Chair in this Congress that there be exercises-- much like our military undertakes--to determine our readiness to deal with a terrorist event. During the cold war days, if you were in the Strategic Air Command, every 6 months you knew, if you were on a Strategic Air Command air base, at some point during that 6 months you were going to have a full-scale alert, and you were going to have to act as if you were in a confrontation with the Soviet Union. That was the way we kept our forces current and that is how we found out the problems in our systems. It is the way it is still done in the military. You have what amounts to war games in order to determine whether or not you are ready to participate in a real, live event. Well, terrorism is war. It is war on our Nation, and we know there are people out there who intend to exercise their ability to wage war on America. They have already done it. We need to go through the exercises of determining whether or not the agencies that are going to be responsible to protect the American people are ready to respond in the case of a terrorist event. So we asked the administration, to pursue exercises to determine whether or not we are ready--mock exercises. These were to take place in three different communities across our country. Now, in a recent report in the Wall Street Journal, it was stated that some of the top agencies that are involved in this exercise are basically taking a laissez-fair attitude toward the exercise and are basically saying that they may participate but participate at a very low level of operations, or they are going to participate with very low level personnel--not that they won't be good personnel, but they won't be the personnel who have the final responsibility in the event of a real terrorist event or attack on our country. That would be unfortunate. The Attorney General, I understand, not directly but indirectly, believes she is getting commitments from the various agencies to fulfill their role of having senior personnel at DOD, DOE, HHS, EPA, FEMA, and State, and obviously the Attorney General and the FBI--senior personnel--involved in these exercises, so that we know when we have a problem, the people who can resolve them are physically there on site and can observe the problem and can participate in resolving and developing a response to the problem. Now, the Attorney General tells me, indirectly through my staff, that the news story may not have been completely accurate. But the news story quoted some sources and said certain agencies within the administration were not going to be seriously committed to this exercise. That, again, in my opinion, shows the laissez-fair attitude this administration has taken toward preparing this Nation to address a terrorist event. As I said earlier, terrorism is not a partisan issue, not a political issue; it is a serious threat to our country. It has to be addressed aggressively and professionally by the agencies that are responsible. The Congress can only do so much. We have funded aggressively antiterrorism efforts. We have set up structures, working with the agencies to try to make sure that we have a coordinated response. We have requested that the agencies involved participate in trying to make sure that they are as ready as possible for a horrific event. But all we can do is fund and request. If we don't get cooperation and enthusiasm and commitment from this administration, then we will not have success. So I have come to the floor today to highlight what I am very concerned about and what I think we should all be concerned about, which is whether or not there is a sincerity of effort occurring within this administration to get us ready to address a potential terrorism threat to the United States. Mr. President, I suggest the absence of a quorum.

Mr. GREGG

Mr. GREGG. I ask unanimous consent to speak as in morning business for 10 minutes.

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

Mr. GREGG

Mr. GREGG. If the Senator from New York will yield, I appreciate those comments. I know the efforts which have been made by the Senator from New York, trying to make the Social Security system solvent. I greatly admire them. I would say, this information would be in addition to the information that is already available. The Senator from New York makes the point, people are now told how much they should receive in benefits. What they are not told and what this information would tell them is, where are we going to get the money and what are the shortfalls in the Federal Government that will be created by paying those benefits, and isn't that what you should be worried about as a recipient: Where is the money going to come from?

Mr. GREGG. Mr. President, I appreciate the courtesy of the Senator from Delaware allowing me to proceed out of order. I very much appreciate that generosity on his part. I also appreciate his courtesy as we develop this piece of legislation and congratulate the Senator for bringing it to the floor. Repealing the earnings limitation is a very important step to assist people who have reached eligibility age for retirement to have a better lifestyle. It allows them to work harder, work longer, work at their option versus at the Government's option, and keep the proceeds of what they earn versus losing it because of this artificial reduction in their benefits, which is presently the law under the earnings limitation test. It is a very appropriate piece of legislation. It is one which I fully congratulate the chairman of the Finance Committee for authoring and bringing forward, and it is something which I have strongly supported for many years. In fact, yesterday I spoke at some length relative to a bill that has been introduced by myself and a number of other Members of the Senate, including members of the Finance Committee, Senator Kerrey, Senator Breaux, Senator Grassley, Senator Thompson, and Senator Robb, along with Senator Thomas. That piece of legislation is a comprehensive attempt to reform Social Security, to make it solvent for the next 100 years. As part of that comprehensive reform, we included the earnings limitation repeal, which is very appropriate legislation. However, I do think if it were being done in a perfect world it would be done in a comprehensive reform of the entire Social Security system because we well know Social Security is facing disastrous consequences beginning in the year 2008 when the baby boom generation retires, followed closely by the year 2014 when the system actually starts to run a cash deficit and is aggravated to the point of crisis by the period 2020 to 2040 when we actually run up an absolutely massive deficit which will have to be passed on to the younger generation through tax increases or through a cut to the benefits of the older generation, but it would be a deficit in the vicinity of $7 trillion under the present benefit structure. We need to address that. We need to address the whole issue of Social Security reform, in my opinion. That is why I have worked with Members of the Senate to draft this comprehensive bill. As I said, one element of the comprehensive bill is the repeal of the earnings limitation. That is a very appropriate step and one which should have been taken many years ago, that will be very beneficial for our Nation as our population and the demographics of our population ages so people, as they become older but are still living longer, will have the opportunity to participate in the workforce, be productive citizens without being penalized by the Government and having some of their benefits taken away under Social Security. As part of the earnings limitation repeal, I wanted to introduce an amendment to address some of the issues of transparency, of disclosure, of telling people in America in plain English what the Social Security system's present economic status is and what it is going to be in the future. The proposal I was going to offer was basically a mirror of the proposal which came out of the professional group which oversees reviewing the Social Security Administration, the Technical Panel on Assumptions and Methods of the Social Security Advisory Board, a board put together as an arm of the Social Security Administration to come up with ideas for how to improve the Social Security Administration. They came up in November of 1999 with a whole series of proposals as to information that should be made available to the American public. It was not complicated information, and in fact they stressed it should be put forward in plain English terms so Americans everywhere could understand the status of the Social Security system. But it was important information, such as: What will the program cost each year? We should know that as an American people. What is the projected cash-flow deficit in the program? That is another very important fact we should know in deciding how we are going to deal with Social Security. What are the benefits the system can actually fund? I cannot think of any information that would be more important than that. What is the impact of all of this on the overall Federal budget? That is another very important point of information. All this information should be made available to the American public. That is why the Technical Panel on Assumptions and Methods of the Social Security Advisory Board recommended this type of disclosure occur. So my amendment was going to make as part of the law a commitment we would make those disclosures to the American people through the auspices of the Social Security Administration. It is basic information, critical information for people making informed decisions. Regretfully, I tell the American people that we have a very big problem coming. Maybe there was some resistance because if that type of information were available, people would start scratching their heads, saying, ``Gee, we do have a big problem; maybe we should address it.'' That is the goal I have, obviously--to use this information to energize action and move this Congress, and especially the White House, down the road of substantively addressing the whole Social Security issue rather than this narrow question of the earnings limitation question. However, having stated the outline of the amendment and having gone into much more depth yesterday, I have been working with the chairman, and he has agreed, to try to work this type of language into some other process where it will not complicate his life on this bill but where it will still be language which will at some point become law and which will effectively address the issues raised by the Social Security Advisory Board so we can get full disclosure to the American people. I very much appreciate the chairman's commitment to work with me on this. As a result, I have decided not to offer this amendment. I believe the chairman has requested I yield to him the time which would have been available under my amendment.

Mr. GREGG

Mr. GREGG. Mr. President, I want to speak today about the issue we are going to take up tomorrow, the Social Security earnings limitation, and the fact that we are going to pass a bill tomorrow which will eliminate a limitation on the ability of people once they retire to make money independent of Social Security benefits they receive and not have their Social Security benefits reduced. Under present-day law, unfortunately, a retired individual--or not even retired person, a person who has reached eligibility age for Social Security benefits--the age for eligibility retirement is really the wrong term to apply to that individual. That person is penalized if he goes out and gets a job because his benefits under Social Security are reduced if he makes a certain amount of money under that job. That is wrong. It is something I have tried to correct, and a number of Members of this Senate have tried to correct, for a number of years. I have a bill, cosponsored by Senators Kerrey, Breaux, Grassley, Thompson, Robb, and Thomas. It is a very bipartisan bill, obviously, and is strongly supported by many of the Members on the Finance Committee. That bill is, in substance, a reform bill for the entire Social Security system to allow us to have a Social Security system which is solvent for the next 100 years. It is a creative and imaginative piece of legislation, and it accomplishes that growth which is to create solvency in the Social Security system over the next 100 years and do it without raising taxes. One of the elements of that bill is the repeal of the earnings limitation. It has been something I have supported and I have backed up with legislative language, cosponsored by myself, as I mentioned, and also by other Members of the Senate. Over the years, we have worked in this area. It is a very appropriate area to go into. However, tomorrow when we take up the bill for repealing the earnings limitation, we are going to take it up as sort of an isolated event. We are not taking it up very much as an isolated event but as part of a Social Security reform package. I guess that is where I have my concern, because we know the Social Security system, although solvent today and running very large surpluses, is headed towards the disastrous crash. When the baby boom generation, the Bill Clinton generation, arrives at retirement, which starts in the year 2008 and accelerates aggressively so that by the year 2014 we actually are running a cash deficit within the Social Security system, we will have so many people retired in this country during the post-2008 period that we will have too many people retired for the younger generation to be able to support them effectively under the present structure of the Social Security system. It will cost the next earnings generation--that generation who are my children, the children of the Members of this Senate, and their children's children--over $7 trillion in general fund revenues. We are not talking about Social Security taxes; we are talking about general fund revenues over the period from 2014 to 2034. It will cost $7 trillion of general fund revenues to keep the Social Security system solvent. What does $7 trillion in general fund revenues mean? That means there will have to be tax increases of $7 trillion in order to pay for those benefits, or, alternatively, we will have to cut them. Some of us have said let's not force this crisis on the next generation, let's not turn to our children and say, Here is the problem; we are going to give it to you. Many of us have said let's look at the problem today and try to solve it, let's try to put in place systems that will allow us to build up a process which will protect our children from having to face the catastrophe of having to support our generation in retirement at levels which they could not possibly afford to support and which would put an undue burden on the next generation in the area of tax increases. We have put together substantive pieces of legislation. The one I mentioned, for example, the Gregg-Kerrey-Breaux-Grassley-Thompson- Thomas-Robb--Senator Roth is also on that--is one of the proposals. There is another bill in the House called Kolbe-Stenholm, an aggressive piece of legislation. Senator Moynihan has a piece of legislation. Senator Gramm from Texas has a piece of legislation. The chairman of the House Ways and Means Committee, Congressman Archer, and Congressman Shaw have proposals. Congressman Kasich and Congressman Smith have proposals. There are a lot of proposals out there. Many of them are very substantive and thoughtful. I would like to think ours is. Almost all of them will do a lot more than we are doing today trying to put in place and under control a system that will address the Social Security problem as it is facing us and as it is facing the next generation. I see the pages down here. These folks are going to end up paying a huge bill as a result of our inaction today in Congress. It is not fair and not right for us to put the next generation in this position. As we take up the earnings limitation repeal tomorrow, it is necessary and appropriate. It is something we should do. But we should be much more aggressive on this issue. We should be addressing the fundamental problems that are facing us in the Social Security system, the most fundamental of which is that it is an unfunded liability. Essentially, the Social Security system says we promise you, the baby boom generation, all of these benefits. But we don't do anything about getting the baby boom generation into a position where we can pay those Social Security benefits. Rather, we go on a pay-as-you-go basis. One dollar taken in today is paid out today, or spent on some other operation of government today. So when the baby boom generation retires, there are no dollars available for them to support their benefit structure. We ought to address that. The best way to address it is to do something which will be called prefunding liability. That is probably a technical term which is sort of lost in its translation. It basically means giving people savings, assets, and gives people something they can physically own and possess, so that when they retire, they will have assets they can use to pay for their retirement benefits under the Social Security system. In our proposal, this is called a personal savings account. Essentially, we reduce the payroll tax today. We say let's reduce the payroll tax today because it is running a surplus, take that money we save on payroll taxes and give it to all of the Social Security earners today, and allow those Social Security earners to save that money for themselves. So that by the time they retire, they will have a nest egg, a physical nest egg that is based in stocks, Treasury notes, and bonds, which will be available to them to spend on their retirement. It is called free-funding liability, so their actual assets are there when they retire. They actually physically own something they can use to benefit them in their retirement and to support the costs of their retirement structure in Social Security. That is the essence of what we propose in our bill--to prefund the liability through personal savings accounts. It is an idea for which the time appears to be coming. I notice Governor Bush is talking about this aggressively. Other people who are running for the Presidency are talking about this aggressively. Regrettably, this administration has not been willing to talk about this aggressively. This administration has walked away from the opportunity to fundamentally reform and improve Social Security so we can past on to our children a solvent system instead of passing on to them an insolvent system. I and a number of Members on the other side of the aisle have great frustrations. I know Senator Kerrey from Nebraska has on numerous occasions--and will tomorrow, I suspect, when he offers his amendment-- expressed the frustration he feels and many of us feel about the fact we are unable to get White House leadership on this critical issue of moving forward Social Security reform so the next generation isn't passed a sour lemon but is given an opportunity to have a lifestyle that is equal to ours, or hopefully significantly better, and isn't instead passed a huge bill from our generation that they have to pay off in order to support our generation's retirement. I believe this administration refuses to take any aggressive action in this area for political reasons because they want to keep the issue alive for the next election cycle. Clearly, there is bipartisan support in the Senate. As I mentioned, the Members of the Senate supporting the bill are Senator Kerrey, Senator Breaux, and Senator Grassley--a bipartisan group. Their philosophies are significantly different. We could build a coalition in this Senate to pass substantial Social Security reform which would make the system solvent for the next 100 years without raising taxes on the next generation. If we could get leadership and assistance from the White House, we could do that. Unfortunately, we have not gotten that. Instead, we are getting one little snippet of the Social Security issue, the earnings limitation test. It has been passed by the Senate, passed by the House, and the President says he will sign it if it is a clean bill. What is the effect of taking up one little part of the whole puzzle? This happens to be a part of the puzzle that ends up costing more money to the system. In other words, when we repeal the earnings limitation, we end up actually putting the system in a less financially sound position than it is today. It is an appropriate thing to do because the earnings limitation is bad public policy. We should not be saying to senior citizens: You shouldn't go out and work; or, if you do work, we will reduce your Social Security benefit. That is bad policy, especially bad policy when we have a potentially large soon-to-retire generation, the baby boom generation. When our generation retires, as a nation we are going to need to keep people working even though they may be retiring. We won't have enough workers in this country. That is going to be a demographic fact. The earnings limitation is bad policy. It has a negative impact on Social Security long-term solvency. It aggravates the problem for the next generation by repealing it as a freestanding event. It should, rather, be repealed in the context of an overall reform effort. By doing that, we can adjust for the fact that this may negatively impact the financial situation of the Social Security system, while other things could positively impact it, and we can weigh them off. But we are not going to do that. We are doing just Social Security limitations. If that is all we can do, that is what we should do. But we should be honest with the American people. We should tell them what the effect of it will be. More importantly, we should tell them the present status and the future status of the Social Security trust funds. We shouldn't continue this babble about how solvent the Social Security trust fund is. Although it is running a surplus today, it is as predictable as night follows day, as the sun rises in the east and sets in the west, it is an absolute known fact that beginning in the year 2008, as the large baby boom generation retires, we are going to see the system head toward massive insolvency if we don't have massive tax increases or major benefit cuts. We ought to tell the American people so they know it is coming and they can plan. If the Congress isn't going to plan, if the White House isn't going to plan, at least give the American people the information they need to plan. I hope to have this bill agreed to because I think it is reasonable. I am introducing a proposal which was essentially the proposal put forward in November 1999 by the Technical Panel On Assumptions and Methods of the Social Security Advisory Board. It is a professional group, an independent bipartisan group set up by the Social Security trustees for the purpose of reviewing what should be done with the Social Security system. This Technical Panel on Assumptions and Methods of the Social Security Advisory Board put out a series of recommendations regarding information that should be available in plain English--they stress ``in plain English''--to the American people. I have suggested we amend this effort by putting in place that recommendation, have the panel's recommendations become a requirement of law, and thus they will be disclosed to the American people. What will be disclosed? The following: What the program will cost each year; What is the projected cash-flow deficit in dollars, real and nominal; What are the benefits the system can actually fund as opposed to what we tell the public; What is the impact of all of the above on the Federal budget. These are not complicated. These can be simply stated. But they are very important facts for the American people to know. Some don't want the American people to have this information. They realize if people were actually informed about the significant financial crisis we are facing in the Social Security system beginning when the baby boom generation retires, people would get pretty upset. They would ask: Why hasn't Congress acted? Why isn't the White House displaying leadership? Some would rather not have this information on the table. It is ``vanilla'' information. It is information the American people have the right to know. It is information I am suggesting be made available. It is information the Social Security Advisory Board is suggesting be made available. It is not a partisan effort on my part; it is simply a desire to, hopefully, further the effort to inform the American people of the problems we face if we do not get on this issue of Social Security and begin to solve it. That is the amendment I will offer. That is the bill I am introducing today. I see the Senator from Iowa, the ranking Republican on the Finance Committee. He has been a leader on the issue of Social Security reform in this Congress. I greatly appreciate his support, cosponsorship, and initiation in drafting the bill which solves the overall problem. I thank him for his support. I thank the Chair for its indulgence, and I yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, I want to speak today about the issue we are going to take up tomorrow, the Social Security earnings limitation, and the fact that we are going to pass a bill tomorrow which will eliminate a limitation on the ability of people once they retire to make money independent of Social Security benefits they receive and not have their Social Security benefits reduced. Under present-day law, unfortunately, a retired individual--or not even retired person, a person who has reached eligibility age for Social Security benefits--the age for eligibility retirement is really the wrong term to apply to that individual. That person is penalized if he goes out and gets a job because his benefits under Social Security are reduced if he makes a certain amount of money under that job. That is wrong. It is something I have tried to correct, and a number of Members of this Senate have tried to correct, for a number of years. I have a bill, cosponsored by Senators Kerrey, Breaux, Grassley, Thompson, Robb, and Thomas. It is a very bipartisan bill, obviously, and is strongly supported by many of the Members on the Finance Committee. That bill is, in substance, a reform bill for the entire Social Security system to allow us to have a Social Security system which is solvent for the next 100 years. It is a creative and imaginative piece of legislation, and it accomplishes that growth which is to create solvency in the Social Security system over the next 100 years and do it without raising taxes. One of the elements of that bill is the repeal of the earnings limitation. It has been something I have supported and I have backed up with legislative language, cosponsored by myself, as I mentioned, and also by other Members of the Senate. Over the years, we have worked in this area. It is a very appropriate area to go into. However, tomorrow when we take up the bill for repealing the earnings limitation, we are going to take it up as sort of an isolated event. We are not taking it up very much as an isolated event but as part of a Social Security reform package. I guess that is where I have my concern, because we know the Social Security system, although solvent today and running very large surpluses, is headed towards the disastrous crash. When the baby boom generation, the Bill Clinton generation, arrives at retirement, which starts in the year 2008 and accelerates aggressively so that by the year 2014 we actually are running a cash deficit within the Social Security system, we will have so many people retired in this country during the post-2008 period that we will have too many people retired for the younger generation to be able to support them effectively under the present structure of the Social Security system. It will cost the next earnings generation--that generation who are my children, the children of the Members of this Senate, and their children's children--over $7 trillion in general fund revenues. We are not talking about Social Security taxes; we are talking about general fund revenues over the period from 2014 to 2034. It will cost $7 trillion of general fund revenues to keep the Social Security system solvent. What does $7 trillion in general fund revenues mean? That means there will have to be tax increases of $7 trillion in order to pay for those benefits, or, alternatively, we will have to cut them. Some of us have said let's not force this crisis on the next generation, let's not turn to our children and say, Here is the problem; we are going to give it to you. Many of us have said let's look at the problem today and try to solve it, let's try to put in place systems that will allow us to build up a process which will protect our children from having to face the catastrophe of having to support our generation in retirement at levels which they could not possibly afford to support and which would put an undue burden on the next generation in the area of tax increases. We have put together substantive pieces of legislation. The one I mentioned, for example, the Gregg-Kerrey-Breaux-Grassley-Thompson- Thomas-Robb--Senator Roth is also on that--is one of the proposals. There is another bill in the House called Kolbe-Stenholm, an aggressive piece of legislation. Senator Moynihan has a piece of legislation. Senator Gramm from Texas has a piece of legislation. The chairman of the House Ways and Means Committee, Congressman Archer, and Congressman Shaw have proposals. Congressman Kasich and Congressman Smith have proposals. There are a lot of proposals out there. Many of them are very substantive and thoughtful. I would like to think ours is. Almost all of them will do a lot more than we are doing today trying to put in place and under control a system that will address the Social Security problem as it is facing us and as it is facing the next generation. I see the pages down here. These folks are going to end up paying a huge bill as a result of our inaction today in Congress. It is not fair and not right for us to put the next generation in this position. As we take up the earnings limitation repeal tomorrow, it is necessary and appropriate. It is something we should do. But we should be much more aggressive on this issue. We should be addressing the fundamental problems that are facing us in the Social Security system, the most fundamental of which is that it is an unfunded liability. Essentially, the Social Security system says we promise you, the baby boom generation, all of these benefits. But we don't do anything about getting the baby boom generation into a position where we can pay those Social Security benefits. Rather, we go on a pay-as-you-go basis. One dollar taken in today is paid out today, or spent on some other operation of government today. So when the baby boom generation retires, there are no dollars available for them to support their benefit structure. We ought to address that. The best way to address it is to do something which will be called prefunding liability. That is probably a technical term which is sort of lost in its translation. It basically means giving people savings, assets, and gives people something they can physically own and possess, so that when they retire, they will have assets they can use to pay for their retirement benefits under the Social Security system. In our proposal, this is called a personal savings account. Essentially, we reduce the payroll tax today. We say let's reduce the payroll tax today because it is running a surplus, take that money we save on payroll taxes and give it to all of the Social Security earners today, and allow those Social Security earners to save that money for themselves. So that by the time they retire, they will have a nest egg, a physical nest egg that is based in stocks, Treasury notes, and bonds, which will be available to them to spend on their retirement. It is called free-funding liability, so their actual assets are there when they retire. They actually physically own something they can use to benefit them in their retirement and to support the costs of their retirement structure in Social Security. That is the essence of what we propose in our bill--to prefund the liability through personal savings accounts. It is an idea for which the time appears to be coming. I notice Governor Bush is talking about this aggressively. Other people who are running for the Presidency are talking about this aggressively. Regrettably, this administration has not been willing to talk about this aggressively. This administration has walked away from the opportunity to fundamentally reform and improve Social Security so we can past on to our children a solvent system instead of passing on to them an insolvent system. I and a number of Members on the other side of the aisle have great frustrations. I know Senator Kerrey from Nebraska has on numerous occasions--and will tomorrow, I suspect, when he offers his amendment-- expressed the frustration he feels and many of us feel about the fact we are unable to get White House leadership on this critical issue of moving forward Social Security reform so the next generation isn't passed a sour lemon but is given an opportunity to have a lifestyle that is equal to ours, or hopefully significantly better, and isn't instead passed a huge bill from our generation that they have to pay off in order to support our generation's retirement. I believe this administration refuses to take any aggressive action in this area for political reasons because they want to keep the issue alive for the next election cycle. Clearly, there is bipartisan support in the Senate. As I mentioned, the Members of the Senate supporting the bill are Senator Kerrey, Senator Breaux, and Senator Grassley--a bipartisan group. Their philosophies are significantly different. We could build a coalition in this Senate to pass substantial Social Security reform which would make the system solvent for the next 100 years without raising taxes on the next generation. If we could get leadership and assistance from the White House, we could do that. Unfortunately, we have not gotten that. Instead, we are getting one little snippet of the Social Security issue, the earnings limitation test. It has been passed by the Senate, passed by the House, and the President says he will sign it if it is a clean bill. What is the effect of taking up one little part of the whole puzzle? This happens to be a part of the puzzle that ends up costing more money to the system. In other words, when we repeal the earnings limitation, we end up actually putting the system in a less financially sound position than it is today. It is an appropriate thing to do because the earnings limitation is bad public policy. We should not be saying to senior citizens: You shouldn't go out and work; or, if you do work, we will reduce your Social Security benefit. That is bad policy, especially bad policy when we have a potentially large soon-to-retire generation, the baby boom generation. When our generation retires, as a nation we are going to need to keep people working even though they may be retiring. We won't have enough workers in this country. That is going to be a demographic fact. The earnings limitation is bad policy. It has a negative impact on Social Security long-term solvency. It aggravates the problem for the next generation by repealing it as a freestanding event. It should, rather, be repealed in the context of an overall reform effort. By doing that, we can adjust for the fact that this may negatively impact the financial situation of the Social Security system, while other things could positively impact it, and we can weigh them off. But we are not going to do that. We are doing just Social Security limitations. If that is all we can do, that is what we should do. But we should be honest with the American people. We should tell them what the effect of it will be. More importantly, we should tell them the present status and the future status of the Social Security trust funds. We shouldn't continue this babble about how solvent the Social Security trust fund is. Although it is running a surplus today, it is as predictable as night follows day, as the sun rises in the east and sets in the west, it is an absolute known fact that beginning in the year 2008, as the large baby boom generation retires, we are going to see the system head toward massive insolvency if we don't have massive tax increases or major benefit cuts. We ought to tell the American people so they know it is coming and they can plan. If the Congress isn't going to plan, if the White House isn't going to plan, at least give the American people the information they need to plan. I hope to have this bill agreed to because I think it is reasonable. I am introducing a proposal which was essentially the proposal put forward in November 1999 by the Technical Panel On Assumptions and Methods of the Social Security Advisory Board. It is a professional group, an independent bipartisan group set up by the Social Security trustees for the purpose of reviewing what should be done with the Social Security system. This Technical Panel on Assumptions and Methods of the Social Security Advisory Board put out a series of recommendations regarding information that should be available in plain English--they stress ``in plain English''--to the American people. I have suggested we amend this effort by putting in place that recommendation, have the panel's recommendations become a requirement of law, and thus they will be disclosed to the American people. What will be disclosed? The following: What the program will cost each year; What is the projected cash-flow deficit in dollars, real and nominal; What are the benefits the system can actually fund as opposed to what we tell the public; What is the impact of all of the above on the Federal budget. These are not complicated. These can be simply stated. But they are very important facts for the American people to know. Some don't want the American people to have this information. They realize if people were actually informed about the significant financial crisis we are facing in the Social Security system beginning when the baby boom generation retires, people would get pretty upset. They would ask: Why hasn't Congress acted? Why isn't the White House displaying leadership? Some would rather not have this information on the table. It is ``vanilla'' information. It is information the American people have the right to know. It is information I am suggesting be made available. It is information the Social Security Advisory Board is suggesting be made available. It is not a partisan effort on my part; it is simply a desire to, hopefully, further the effort to inform the American people of the problems we face if we do not get on this issue of Social Security and begin to solve it. That is the amendment I will offer. That is the bill I am introducing today. I see the Senator from Iowa, the ranking Republican on the Finance Committee. He has been a leader on the issue of Social Security reform in this Congress. I greatly appreciate his support, cosponsorship, and initiation in drafting the bill which solves the overall problem. I thank him for his support. I thank the Chair for its indulgence, and I yield the floor.