Judd Gregg

Mr. GREGG

Mr. GREGG. Will the Senator yield me another 30 seconds?

Mr. GREGG. Will the Senator yield?

Mr. GREGG. We have no time.

Mr. GREGG. I appreciate that.

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent that I be allowed to speak for 10 minutes as if in morning business.

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

Mr. GREGG

Mr. GREGG. Mr. President, I want to comment on the President's proposal relating to Medicare, and specifically relevant to the drug benefit which has been put forward by the President today and by his staff. I think the American people have to look at this in the context of the history of this administration's efforts in the area of health care. We know that when this administration came into office, Mrs. Clinton was assigned the task of developing a health care proposal. She came up with what has become known as ``Hillary Care,'' which was essentially a nationalization of the health care system. It was intricate bureaucracy that basically was so interwoven and so complex that it was totally impossible to recognize. It needs to be noted in evaluating the drug component on this recent proposal on Medicare, the proposal of the Clinton administration on general health care issues as it came forward under Mrs. Clinton's plan, known as ``Hillary Care,'' was a dramatic invasion of the health care delivery system in this country by the Federal Government. It was essentially a nationalization of the system with huge complexities and huge intricacies. That was followed by a number of other initiatives which were lesser but equally aggressive in their attempts to move to the Federal level control over functions of health care in this country. Then on the issue of Medicare, a commission was set up. The commission was to be balanced. In fact, the President had a large number of appointments to it, and the Senate and House had a large number of appointments to it. It was chaired by a Democratic Member of the Senate, Senator Breaux. That commission was to resolve this matter. It was to come forward with a proposal to address the long-term solvency of Medicare and, within that, the drug benefit for senior citizens. The commission did great work, yeoman's work. They came up with a proposal. More than a majority, a significant majority, of the commission supported the proposal which had in it a drug component, and the President walked away from the proposal, even though the proposal had been supported by a majority of the commission which he was instrumental in setting up and to which he appointed the chairman, who was Senator Breaux from this body. The question of his most recent proposal on Medicare, I believe, has to be looked at in that context, and therefore it becomes a question of whether or not the proposal put forward by the President, most recently today, is a serious proposal or is it a political proposal. If it is a serious proposal, why is it not in step with the Breaux commission, and if it is a political proposal, what is its purpose? Let's look at it quickly. Nobody has had a great deal of time to analyze it, but if you look at it quickly, it appears to be a proposal that is turning on its head the basic purposes of a drug benefit. The Breaux commission suggested that the purpose of a drug benefit should be to make sure the beneficiary, the person paying the drug costs, was not wiped out by the cost of the drugs. That is a reasonable position. Essentially, the Breaux commission concluded that we should have some way of saying to a senior citizen who ends up with a huge amount of drug costs that if you are hit with a catastrophic drug cost, there is going to be some protection for you and some coverage for you. This proposal from the President does the opposite. Instead of covering a catastrophic drug event where a senior citizen has to buy a lot of drugs to maintain their health over a period of a year and, thus, runs up huge bills which basically deplete their assets, this proposal has first-dollar coverage. The first-dollar coverage stops when it gets to $2,000, I believe, of drug expenditures, which means that if a senior citizen has a large number of drug expenditures, essentially the senior citizen is still going to be wiped out by those costs. It makes much more sense to approach it the way the Breaux commission approaches it and the way most people have looked at the issue, which is, you say to a senior citizen or anyone else: Listen, you have to be responsible for the cost up to a certain level, and when you get to that level which would threaten your economic solvency, at that point the Federal Government will come in and assist you in paying the drug costs, which would be catastrophic coverage and makes much more sense than the proposal which has first-dollar coverage, if you are putting forward a plan which has as its purpose the actual correction of the present problems occurring in the health care community relative to drug costs. The proposal the President puts forward makes no sense substantively on the issue of paying for drug costs, because it does not benefit anybody if they have a catastrophic amount of drug costs. It may make sense, however, politically because it says to a senior citizen, we are going to cover you for first-dollar coverage of your drug costs, which means you can say to all seniors, you no longer have a drug cost for up to $2,000, which means a lot of seniors will be covered, but of course those seniors who are most at risk, who have lots of drug expenditures, who exceed $2,000 in drug expenditures, are thrown out like the baby with the bathwater, but at least politically you pick up the vast majority of seniors who have lower drug costs. One has to look at that benefit and say that is a more politically driven benefit structure than a benefit structure directed at the problem, which is the huge amount of drug costs on senior citizens and the fact it can wipe out their assets. One has to look at another issue, which is, we all know a drug benefit is very expensive for the Federal Government, and therefore for the taxpayers, and when we are talking about taxpayers, we are talking about younger taxpayers who are paying to support the senior citizens. We have a transfer of income from younger working Americans into senior citizens' accounts, and one would expect, therefore, in looking at that, we would be saying: Seniors who are doing well--and a large number of seniors in our society are, fortunately, because we have been able to create an atmosphere where many seniors have a fair amount of income, and, as a matter of fact, as a matter disposable income, people over age 65 have more disposable income than in their working years when they were in their twenties and thirties. For the most part, you could say those people are doing really well. For example, say, Bill Gates' parents, who probably have a fair amount of stock in Microsoft, may be retired. I do not know if his parents are retired or not. I am using that as an example. Someone who is extremely wealthy who is retired, one would not expect their drug benefits to suddenly be subsidized by somebody who is working in a restaurant, a gas station, or on a computer assembly line in Nashua, NH. Yet what the President has put forward is a plan that does just that. He put forward a plan where working Americans, Americans who are just trying to make ends meet, where both parents are having to work in order to take care of household expenditures, who are under tremendous financial pressure, are going to have to subsidize the drug benefit of all senior citizens, no matter what their income level. A high-income senior citizen, somebody who happens to be a member of a famous family that has made millions of dollars, or somebody who is not even a member of a famous family but happens to have a tremendous amount of wealth--Charlton Heston, for example, I suspect he has been successful--that person's drug benefit under Medicare will suddenly become a subsidized event paid for by a working American. Does that make sense? No; that is upside down. Obviously, if you are going to have a drug benefit for senior citizens, it should really apply to those seniors who need the benefit and who cannot afford it. That happened to be the proposal that came out of the Breaux commission. They suggested people up to 135 percent, I believe, of poverty be allowed to get the drug benefit and have it subsidized and people over 135 percent would not have that event occur. Therefore, people with higher incomes would not end up being subsidized by working Americans who maybe cannot afford to subsidize the drug benefit of senior citizens because they have to take care of their own household expenditures. Yet this proposal from the administration has not taken the tack of the Breaux commission which says: Let's take care of those seniors who need the assistance, but let the seniors who can afford to pay for their own drugs pay for them. They turned it upside down: Let's take care of all seniors at the expense of working Americans, maybe even Americans who have trouble making ends meet. That leads one to the question: Why are they doing this? Is this the substantively right thing to do? Is it the politically correct thing to do? Yes, it is, because we all know when it comes to senior citizen accounts, there is tremendous reticence within the senior citizen activist community in this country to have any sort of means testing, which is what this amounts to, or affluence testing, which is where it would lead to. Yet they allow Americans to subsidize extremely wealthy Americans, not only for the drug benefit as proposed by the President but, unfortunately, as the President did in part B premiums, they are willing to allow that truly inappropriate action to occur for the political benefit of it. Once again, what we are seeing is a political initiative. Then if you look at the proposal in its outline form, you can see it is going to create an intricate, complex, bureaucratic structure to determine what benefit is covered and is available to be picked up by the Federal Government under the drug benefit cost. There is going to have to be some sort of extremely complex structure. They turned it over to HCFA, which is an agency that has the capacity to develop a complex structure, but there will need to be some sort of national structure set up in order to account for what is and is not covered under the system the President has set up in his proposal. One gets the feeling we are looking again at the use of the Federal bureaucracy as the agency to manage the day-to-day activities of health care. We know from experience that does not work too well. This proposal the President has put forward is, on its face, upside down on core basic issues of better health care, whether it happens to be the premium, whether it happens to be the means testing, or whether it happens to be the bureaucracy. I think the thing that I find most dangerous about this proposal, and the thing I am most concerned about, is the effect on lifestyle of American seniors because it puts us on an extraordinarily slippery slope, in its present structure, which will most likely lead to a diminution of the effort of the American entrepreneurial culture to produce better drugs for seniors. A great number of American citizens today benefit dramatically from the fact that we have the most vibrant, innovative drug research and development industry in the world. We have an industry which is second to none in producing products that make people's lives better. But it is an extremely expensive undertaking. It takes 12 years and hundreds of millions of dollars to bring a drug to the market. The only way that these entrepreneurs can undertake that initiative is if they are able to go out in the marketplace and get the capital necessary to take that type of risk to produce those drugs. When you start having the Federal bureaucracy manage who can and who cannot buy a drug and what drug has to be bought and what drug cannot be bought, as will inevitably be, I suspect, the outcome of this initiative, as it moves into its second- and third-generation event-- and was the intention, by the way, of the Hillary health care plan, so we know that we can suspect that is in the back of somebody's mind around here--then your ultimate outcome will be to have a chilling effect, a dramatic dampening effect on the innovative minds of America, on the scientists of America who are producing the new drugs which make people's lives better because those scientists and those innovators are not going to be able to get funds through the capital markets to underwrite their undertakings. Why? Because if you are a capital investor, as Mr. Greenspan has so often told us, the capital markets are the most efficient markets in the world. Money flows for capital where it gets the return that makes the most sense for those dollars. People are not going to invest in drug research and development if they are not going to get adequate return. They are not going to get adequate return on it if you have a Federal bureaucracy taking over the control of the pricing mechanisms or the appropriate drugs to be purchased--both of which are potential outcomes of any plan put forward by this administration because that, as we have already seen, is a goal that is in the back of the mind of this administration. So although it is not a stated risk, it is, in my opinion, a clear undercurrent of risk as we step into this area of drug benefit for senior citizens. The ultimate conclusion of this, of course, is that I think the President's proposal is political, not substantive. If the President wanted to substantively pursue a drug proposal, a drug benefit for senior citizens that would work, that had been well vetted and well thought out intelligently, he would have adopted the proposal of his own commission, the Breaux Commission. That was rejected in order to take the path of the political initiative. I think we should be very suspicious before we step on to that path as a Congress. Mr. President, I appreciate the courtesy of the Chair and yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent that the period for morning business be extended until 3 p.m. and that the time be equally divided between the minority and majority.

Mr. GREGG

Mr. GREGG. I would think the Democratic membership would be happy about that and would accept our representation that we made a mistake and that we are happy to acknowledge it, and we are going to own up to that mistake and join with them and say they were right the first time we voted on this and we will be with them this time.

Mr. GREGG. If the Senator will yield for a question, I noticed that the Democratic leader held up a list of the vote and pointed out that 54 Republicans voted to overrule rule XVI, and that three Democratic Members, I guess, voted with us. Then that would mean that the balance of the Democratic membership--well into the 40s--voted for maintaining rule XVI. As I understand that argument, we are basically saying those guys were right.

Mr. GREGG. Mr. President, I also find it amusing that the Senator from Delaware would resist so aggressively our desire to join with him on his original vote when he appears to have been right, and we are saying: Gee, you were.

Mr. GREGG

Mr. GREGG. Mr. President, I think it is appropriate to respond to some of the commentary from the other side about the Patients' Bill of Rights--the Republican plan versus the Kennedy bill, the proposal that the other side has put forth. The American public should know and recognize that a majority in this Congress is for moving on an effective proposal and for addressing the needs of the American citizens relative to dealing with HMOs, and that is the Republican Patients' Bill of Rights. It is a very good package of ideas put together after a long and serious amount of consideration. It came out of the committee of jurisdiction with a majority vote, is now on the floor, and has received a majority vote in the Senate. It would significantly improve the situation of patients as they deal with doctors and HMOs across this country. I think, however, that it also ought to be noted on the other side of the coin that what Senator Kennedy's proposal does is to continue the Clinton health care plan that we saw about 5 years ago--I guess it was 5 years ago now--``Hillary-Care,'' as it came to be known. This is sort of the daughter of ``Hillary-Care'' or son of ``Hillary-Care,'' as put forth by the Senator from Massachusetts. Essentially, if you are going to be honest about the practical effect of the proposal of the Senator from Massachusetts, it is to increase the premiums for private health insurance in this country by at least 4 percent potentially; other estimates have been as high as 6 percent. When you start raising the premiums for health insurance--especially on self-insured individuals--the impact of that is that people drop out of the health care insurance system. Why is that? Because they can't afford it. If you are a small business of five or six employees, if you are running a restaurant, or if you are running an auto shop or a small software company, and your costs go up 4 percent on your health care premium, that can amount to a significant cost increase, and in many instances that is going to be the difference between making it and not making it in some of these small companies. So you have a situation where people drop the insurance. The Congressional Budget Office has estimated that the practical effect of the Kennedy health care plan will be that well over 1 million people will drop their health insurance. Why is this important? Why does this tie into ``Hillary-Care''? Because, if you will recall, back in the days when we were debating the issues of ``Hillary-Care,'' the basic proposal was to create a nationalized system where the Federal Government would come in and take over all insurance carriers in this country, for all intents and purposes, with the logic behind that being that there were too many uninsured people in the health market to date, too many Americans simply did not have health care insurance, and therefore we needed to have ``Hillary-Care.'' Nationalization of the health care industry was proposed at that time, and the Kennedy bill was introduced by Senator Kennedy on behalf the First Lady, and the proposal was, let's nationalize the system so all the uninsured in this country will have a system of insurance. Of course, it failed miserably, because it was incredibly complex, it was incredibly bureaucratic, and it was extraordinarily expensive for the American taxpayer. The cost increase and the tax burden for the American taxpayer would have far exceeded any savings in premium that would have occurred, and the cost in bureaucracy and the loss of effectiveness in the administration of health care in this country would have had a major impact on the quality of health care. So out of common sense, good sense, and good politics, the program was rejected out of hand, and in fact it never came to a vote in the Senate because, quite honestly, a majority on the other side of the aisle was embarrassed by the proposal and they decided to walk away from it. What we have here is essentially is an extension of that, because what we have is a back-door proposal to health care. Unhappy with the fact that they were unable to nationalize the health care system, in order to cover those folks who do not have enough health insurance, they have now decided, by bits and pieces, through small slices--this one is a very large slice but through smaller slices of the pie-- to slowly uninsure Americans. So there is such a large pool of uninsured Americans that we will have to come back to a ``Hillary- Care'' system so there will be justification for nationalization of the health insurance industry, because there will be all these uninsured people out there who have been created and, because of a lack of insurance, we will have to create legislation. Because of all of these different actions taken--proposals such as we are seeing today on ``Kennedy-Care,'' which will create another 1 million-plus people who are uninsured--next year we will have another proposal which will create another group of uninsured and there will be another proposal to increase the cost of insurance. And they will add something else to private insurance costs--some new benefit, or initiative--that will have all sorts of trappings of nice political sounds so that they will need to raise the cost of insurance premiums. So more people will step off of insurance, and more and more people will end up being uninsured over a period of time, and we will end up with just more people becoming uninsured as we continue down the road of adopting these initiatives which are put forward by the Senator from Massachusetts. I will tell you, I think the basic game plan here is to create such a pool of uninsured people in this country that we have to turn the corner and come all the way back so that the Senator from Massachusetts and the First Lady can come to us again and say, now, we really need to nationalize the health care system because we have all of these uninsured people. I think there is a bit of a cynical game plan behind the Democratic proposal, the Kennedy plan. Maybe I am being too suspicious, but, as a practical matter, I think I am being accurate and I am observing what the factual events will be. The fact is that because of the premium costs that will increase, which are going to be driven by ``Kennedy-Care,'' as proposed by this bill, we will end up with more people uninsured, and the more people that become uninsured in this country, the greater the demand from the other side of the aisle will be for a nationalized system of health care. I will tell you, if a nationalized system of health care was a bad idea 5 years ago, it would be a bad idea today, and it will be an idea 5 years from now when we hear from the other side of the aisle how important it is because so many people had to drop off the health care system, because they increased the premiums on the health care system by passing their proposed Kennedy health care bill. I just wanted to make some of those comments in response to some of the comments from the other side. I think it is ironic that we are holding up agriculture appropriations over the issue of the Patients' Bill of Rights. I have never been a great fan of the way we fund agriculture in this country, as the Senator in the Chair knows. We have been discussing this issue for a number of years both in the House and in the Senate. I recognize that the farmers in this country are a critical part of our economy and that this agricultural appropriations bill is the reasonable, responsible way of addressing those farmers' needs. We have heard about the crisis in the farm community from the other side of the aisle ad nauseam now for 3 months, and suddenly we are about to pass the agriculture appropriations bill, and on the other side of the aisle Senators from farm States come forward and say, no, we can't do the agriculture appropriations bill. As someone who is not from a farm-community State--I have a few farmers, but they are not the dominant culture in New Hampshire. We wish they were. They are certainly wonderful, hard-working people. But as somebody who is not from a farm-culture State, I have to scratch my head and say, is the crisis real? If these folks on the other side of the aisle, who for months have been telling us about the severe crisis in farm country, come forward when we are about to do the agriculture appropriations bill and delay it for weeks and weeks, and potentially even months, I ask, is the crisis real in farm country? Should I, when we get another supplemental appropriations bill which has another few billion dollars for the farm crisis, take that seriously, or are we being ``gamed"? I think they put into serious jeopardy the reasonable arguments that have been put forward from our side of the aisle by the Senator from Kansas and the Senator from Montana, who understand the farm issue and who make good arguments on behalf of the farm issue. Those folks who are credible on the farm issue on our side of the aisle are having their credibility undercut by this type of action from the other side of the aisle, which really plays games with the farm crisis and really dilutes the arguments on the farm crisis when they are willing to delay the funding of the farm bill for what is clearly a political initiative undertaken for the purposes of trying to generate a higher polling rate than some poll taken in some political election. To me, there is a fair amount of cynicism in this Senate today, and most of it is being promoted by the actions brought forward by Members on the other side of the aisle. Mr. President, I suggest the absence of a quorum.

Mr. GREGG

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

Mr. GREGG

Mr. GREGG. Will the Senator from New Jersey allow the Senator from Connecticut to go forward in conjunction with this resolution?

Mr. GREGG. Mr. President, I yield 10 minutes of my time to the Senator from Connecticut.

Mr. GREGG. The Senator from Maine.

Mr. GREGG. Mr. President, I further request that be amended to ask that Senator Collins have 10 minutes at the conclusion of the Senators who have just spoken.

Mr. GREGG

Mr. GREGG. Mr. President, Senator Lieberman and I today introduce a resolution which asks that June 20, Father's Day, be further designated as ``National Father's Return Day.'' The purpose of this resolution is to highlight the fact that fathers are needed in the family. I heard Governor George Bush speak this past weekend in New Hampshire, and one of the things that really resonated with me was that he said the most important job we have is not being a Governor or being a Senator or being head of an assembly line or working at a restaurant; the most important job we have is to be good moms and pops. That is absolutely true. Unfortunately, in our country today, one out of every three children is currently in a household without a father. That has a devastating impact on the manner in which these children perceive life and the manner in which these children are raised. We all know that in this time of difficult economic activity, where, unfortunately, it does take two parents working to raise a family in many households, there is great stress on the family to begin with and there is always the question of enough family time. There is always the question of having enough time to be with our children and have our children get from their parents the values and the ideas that are so critical. Coupled with the fact that so many children are being raised in households where there is no father, it is absolutely critical that we refocus ourselves on the importance of the father in the household and that we say to those fathers who maybe have left the household and are not spending the type of time they should with their children, who are not coming back as regularly as they should or not taking the extra initiatives, the extra time it takes to be with their children during periods when it is convenient for both the mother and the father: Think about this, think about what you are doing, and think about your obligations as a father. So this initiative which we put forward today, this resolution to designate June 20 as National Father's Return Day, has as its purpose to highlight this fact and to say to fathers throughout our Nation, think about your opportunity as a father, not only fathers outside the home but fathers who are still in the nuclear family, think about your responsibilities and make sure you are living up to that obligation, because as a Nation I think we must all understand we are never going to be able to be a nation of values, a nation of moral strength, a nation of purpose, unless we give our children, the next generation, a sense of purpose, a sense of values, and a sense of moral strength. The father plays a major role in accomplishing that. So this resolution, which I will not read in its entirety, although it is an excellent resolution, I must admit, has as its resolve clause: Be it Resolved, That the Senate-- (1) recognizes that the creation of a better United States requires the active involvement of fathers in the rearing and development of their children; (2) urges each father in the United States to accept his full share of responsibility for the lives of his children, to be actively involved in rearing his children, and to encourage the emotional, academic, moral, and spiritual development of his children; (3) urges the States to hold fathers who ignore their legal responsibilities accountable for their actions and to pursue more aggressive enforcement of child support obligations; (4) encourages each father to devote time, energy, and resources to his children, recognizing that children need not only material support, but also, more importantly, a secure, affectionate, family environment. (5) urges governments and institutions at every level to remove barriers to father involvement and enact public policies that encourage and support the efforts of fathers who do want to become more engaged in the lives of their children; (6) to demonstrate the commitment of the Senate to those critically important goals, designates June 20, 1999, as ``National Father's Return Day''; (7) calls on fathers around the country to use the day to reconnect and rededicate themselves to their children's lives, to spend National Father's Return Day with their children, and to express their love and support for them. Then it requests that the President issue a proclamation calling on the people of the United States to observe National Father's Return Day with appropriate ceremonies and activities. I certainly appreciate the chance to participate in this resolution, which was the idea and the initiative of the Senator from Connecticut, who has so many good ideas in the area of trying to improve family values in our Nation. So it is a pleasure for me to join with him on this resolution, to be a cosponsor of this resolution, and participate in offering it today. I reserve the remainder of my time.

Mr. GREGG

Mr. GREGG. Mr. President, today the Senate will be in a period of morning business until 11:20 a.m. Following morning business, the Senate will begin consideration of H.R. 1664, the steel, oil, and gas appropriations legislation, with amendments expected to be offered. Therefore, votes are anticipated throughout the day. Tomorrow, it is the intention of the leader to take up and complete action on the State Department authorization bill. Therefore, votes will take place during Friday's session of the Senate. I thank my colleagues for their attention.

Mr. GREGG

Mr. GREGG. Mr. President, I rise to clarify points regarding the Army Corps of Engineers maintenance dredging projects in the State of New Hampshire. Maintenance dredging of Little Harbor, in Portsmouth, remains a top priority for the State of New Hampshire and is important to regional and recreational commercial boating users who continue to operate with navigational safety hazards. Environmental mitigation matters associated with the federal project have been addressed by an interagency task force. Proposed dredging, dredged material disposal, and mitigation arrangements are currently being addressed by the Army Corps of Engineers in an Environmental Assessment. Piscataqua River shoaling remains a top priority for the State of New Hampshire. Shoaling has occurred in the major shipping lane at Portsmouth Harbor. Last year 6 million tons of cargo, mostly petroleum products, passed through the Piscataqua River. It is imperative for navigational and environmental safety that the shipping lane be cleared at the earliest possible opportunity. The Army Corps of Engineers is currently developing an Environmental Impact Study. Sagamore Creek is also a priority for the State of New Hampshire. Maintenance dredging of Sagamore Creek is important to the New Hampshire Commercial Fishing Industry as it functions as a transit channel and is the back channel to Little Harbor. Appropriated funds would allow the Army Corps of Engineers to conduct required hydrographic and material testing to initiative project. Sagamore Creek is being abandoned by the New Hampshire Commercial Fishing Fleet due to lack of clearance and navigational safety concerns. I respectfully ask the distinguished chairman to consider the importance of these projects as this bill develops and to help the Corps in addressing these pressing priorities which are so important in my state.

Mr. GREGG

Mr. GREGG. Mr. President, today, I join my esteemed colleagues Senator Collins and Conrad in introducing the Rural Education Initiative Act (REA). This Act represents a bipartisan approach to address the unique needs of 35% of school districts in the United States, specifically small, rural school districts. It does not authorize any new money. Rather, REA amends the Rural Education Demonstration Grants under Part J, of Title X, of the Elementary and Secondary Education Act (ESEA) and retains the current ESEA authorization of up to $125 million for rural education programs. Rural school districts are at a distinct disadvantage when it comes to both receiving and using federal education funds. They either don't receive enough federal funds to run the program for which the funds are allocated or don't receive federal funds for programs for which they have to fill out applications. Small rural school districts rarely apply for federal competitive grants because they lack the resources and expertise required to fill out complicated and time intensive applications for federal education grants, which means that rural school districts lose out on millions of federal education dollars each year. The Rural Education Initiative Act addresses both the problem of rural school districts' inability to generate enough money under federal formula grants to run a program and the problem of rural school districts' inability to compete for federal discretionary grants. With regard to federal education formula grants, REA permits rural school districts to merge funds from the President's 100,000 New Teachers program and several Elementary and Secondary Education Act programs, specifically Eisenhower Professional Development, Safe and Drug Free Schools, Innovative Education Program Strategies. Under REA, school districts can pool funds from these federal education programs and use the money for a variety of activities that the district believes will contribute to improved student achievement. With regard to federal discretionary grants for which rural grants have to compete, the bill stipulates that small rural school districts who decline to apply for federal discretionary grants are eligible to receive money under a rural education formula grant. As a result, school districts would no longer have to go through the application process to receive federal funds. School districts that had to forgo applying for discretionary grants simply because they did not have the resources to do so, would no longer be penalized. As with their other federal grant money, a school district would have broad flexibility on how to use funds provided under this new grant to improve student achievement and the quality of instruction. A local school district can combine their other formula grant money with this new direct grant to create a large flexible grant at the school district level to: hire a new teacher, purchase a computer, provide professional development, offer advanced placement or vocational education courses or just about any other activity that would contribute to increased student achievement and higher quality of instruction. In addition to the aforementioned changes, REA has a strong accountability piece. The bill stipulates that rural school districts may only continue to receive the rural education initiative grant and have enormous flexibility over other federal education dollars if in fact they can show a marked improvement in student achievement. In conclusion, this bill not only builds momentum for driving more federal dollars directly down to rural school districts but marks an important sea change in federal education policy in that it cedes unprecedented authority to school districts to use federal funds as they see fit, not as the federal government prescribes and it links increased flexibility and increased federal funds directly to student achievement.

Mr. GREGG

Mr. GREGG. Mr. President, today, I join my esteemed colleagues Senator Collins and Conrad in introducing the Rural Education Initiative Act (REA). This Act represents a bipartisan approach to address the unique needs of 35% of school districts in the United States, specifically small, rural school districts. It does not authorize any new money. Rather, REA amends the Rural Education Demonstration Grants under Part J, of Title X, of the Elementary and Secondary Education Act (ESEA) and retains the current ESEA authorization of up to $125 million for rural education programs. Rural school districts are at a distinct disadvantage when it comes to both receiving and using federal education funds. They either don't receive enough federal funds to run the program for which the funds are allocated or don't receive federal funds for programs for which they have to fill out applications. Small rural school districts rarely apply for federal competitive grants because they lack the resources and expertise required to fill out complicated and time intensive applications for federal education grants, which means that rural school districts lose out on millions of federal education dollars each year. The Rural Education Initiative Act addresses both the problem of rural school districts' inability to generate enough money under federal formula grants to run a program and the problem of rural school districts' inability to compete for federal discretionary grants. With regard to federal education formula grants, REA permits rural school districts to merge funds from the President's 100,000 New Teachers program and several Elementary and Secondary Education Act programs, specifically Eisenhower Professional Development, Safe and Drug Free Schools, Innovative Education Program Strategies. Under REA, school districts can pool funds from these federal education programs and use the money for a variety of activities that the district believes will contribute to improved student achievement. With regard to federal discretionary grants for which rural grants have to compete, the bill stipulates that small rural school districts who decline to apply for federal discretionary grants are eligible to receive money under a rural education formula grant. As a result, school districts would no longer have to go through the application process to receive federal funds. School districts that had to forgo applying for discretionary grants simply because they did not have the resources to do so, would no longer be penalized. As with their other federal grant money, a school district would have broad flexibility on how to use funds provided under this new grant to improve student achievement and the quality of instruction. A local school district can combine their other formula grant money with this new direct grant to create a large flexible grant at the school district level to: hire a new teacher, purchase a computer, provide professional development, offer advanced placement or vocational education courses or just about any other activity that would contribute to increased student achievement and higher quality of instruction. In addition to the aforementioned changes, REA has a strong accountability piece. The bill stipulates that rural school districts may only continue to receive the rural education initiative grant and have enormous flexibility over other federal education dollars if in fact they can show a marked improvement in student achievement. In conclusion, this bill not only builds momentum for driving more federal dollars directly down to rural school districts but marks an important sea change in federal education policy in that it cedes unprecedented authority to school districts to use federal funds as they see fit, not as the federal government prescribes and it links increased flexibility and increased federal funds directly to student achievement.

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent to modify the amendment.

Mr. GREGG. Mr. President, I ask for the yeas and nays.

Mr. GREGG. This amendment is really fairly simple. Essentially, it is an attempt to give the middle person, the small businessperson in this country who may, through no fault of their own, be subject to a Federal fine because they didn't comply with some Federal law as a result of the failure of their computer system, some protection from that fine. It says that this can only occur in instances where it is the first time it has happened. In other words, you can't have a bad actor trying to use this to try and get out from underneath the fines. It says that the small business may have a legitimate, provable effort that they tried to protect the computer problem and that they notified the Federal agency they had the computer problem. So there is ample protection to be sure that the system can't be gamed. The purpose of this amendment is simply to protect the small businessperson. This will be rated by the NFIB, I understand.