Tom Harkin

Mr. HARKIN

Mr. HARKIN. Mr. President, I am fortunate the remarks I am about to make follow the remarks of my colleagues from Iowa and New Jersey in talking about nursing homes because I want to take a few minutes to talk about another aspect of how the elderly are getting ripped off in this country and what has happened with HCFA, the Health Care Financing Administration, and what they have been trying to do to stop this. What the Senate is doing and what the House has done recently is going to turn the clock back on our attempts to cut out waste, fraud, and abuse in Medicare. I have been working for over a decade to identify and eliminate waste, fraud, and abuse in the Medicare system. It is a big problem. The Office of Inspector General estimates that last year, Medicare lost nearly $13 billion--that is with a B, billion dollars--to waste, fraud, and abuse in Medicare. A few years ago, it was over $23 billion a year. So we have made some progress. It is still a huge annual waste of our tax dollars. I call it the Medicare waste tax, and we need to cut the Medicare waste tax. Since 1989, I have held hearing after hearing, released report after report documenting unnecessary losses to the Medicare program. I commissioned the Office of Inspector General and the General Accounting Office to research and review these unnecessary payments and to make recommendations. On July 28 of this year, I introduced S. 1451, the Medicare Waste Tax Reduction Act of 1999 which incorporates many of these GAO and IG recommendations. If enacted, it would save Medicare and our taxpayers billions of dollars every year. Medicare fraud is what we hear the most about, some egregious cases where a scam artist has found yet another way to skim millions from the Medicare trust fund. Those are the cases that make the headlines. But my years of investigation and review of this problem indicate that by far the greatest losses to Medicare are not in fraud, but they are due simply to waste and abusive practices. These losses are often directly due to or are encouraged by wasteful Medicare payment policies and practices and a laxity in oversight, as well as weaknesses in the Medicare law that restrict the program's ability to get the best deal possible when purchasing goods and services. To examine this further, in 1996, my staff and I undertook a study of Medicare payments for medical supplies. This followed a study by the GAO that I had requested earlier on the same topic. We compared Medicare's payment rates for 18 commonly used medical supply and equipment items with what the Veterans' Administration paid. Then we compared it to the wholesale rate and the retail rate. What we found was startling. This is a chart that depicts what we found. For example, an irrigation syringe--a small syringe like this little one right here, these little plastic syringes--we found that Medicare is paying $2.93 for each one. The Veterans' Administration is paying $1.89. The wholesale price was $1.10. The retail price was $1.95. One can walk into a drugstore and buy one for $1.95. Medicare was paying $2.93 for each one. The potential savings from that alone, if we base it on the wholesale price, is $4.4 million every year just on little plastic syringes. We had a walker. The Medicare purchase price was 75 bucks. The VA price was $25 for the walker. The wholesale price was $39, and the potential savings was about $17 million a year. Again, this is not an elaborate device. This is just a simple aluminum holding walker. Medicare was paying $75 each. The wholesale price was $39. This is a commode chair. This is even more egregious. The commode chair was being paid for by Medicare at the rate of $99.35 each. The VA was paying $24.12 each. The potential savings was $30.6 million a year. This is a commode chair; we have all seen them. A lot of people use them in hospitals and nursing homes. Potential savings: If Medicare just paid the VA price, not the wholesale price, just what the Veterans' Administration is buying them for, there would be a savings of $30 million a year just for the commode chair. Those are some of the items we found were being grossly overpaid for by the Medicare system. So, armed with this information, we began to work to cut this waste. First, I pushed an idea I have advocated for over a decade: Competitive bidding. Competitive bidding, that is how the Veterans' Administration gets the rates it does--good old-fashioned American free enterprise; put them out there for competitive bids. While Medicare pays bloated prices based on historical charges, the VA, which has much less purchasing power than Medicare, puts out bids that provide for both quality and cost control. So I wanted to get through competitive bidding. But all we could get through the Congress was a demonstration on competitive bidding. I do want to point out one of the items on which we were successful in reducing the price on this idea of competitive bidding. One of the demonstration programs we did was oxygen. We found that for oxygen, Medicare was paying more than 50 percent more than the Veterans' Administration. So we had a debate here about reducing the Medicare rate for oxygen. We had a compromise. We cut the rate by 30 percent. That was in the Balanced Budget Act of 1997. We said we were going to reduce the oxygen payments by 30 percent and put it out for competitive bids. We just got the first bids in on the competitive bidding demonstration for oxygen. Guess what. The suppliers bid to provide home oxygen for about 25 percent less than the 30-percent cut we put in. On top of the 30-percent cut, the bids came in at 25 percent less than that. They are still making money. And they will still be providing regular servicing of equipment, doing it for that much less. Let me get this straight. A lot of the oxygen suppliers said they could not do this because they would lose money. We did not listen. We went ahead and put through the 30-percent cut. Then we put it out for competitive bids. They then cut it 25 percent more than that. So look at it this way. If the home oxygen people were making 50 percent more off Medicare than they were making off the Veterans' Administration, and we cut it by 30 percent, put it out for competitive bids, and they came in 25 percent even lower than that, that means they are now 5 percent under the Veterans' Administration. They were making money off VA before, and now they are even less than what VA is on competitive bids. And you know darn well they are not going to bid that unless they are making money on it. They are not going to put a bid out there to lose money. That is just an indication of how much waste and abuse there is in the Medicare system and why competitive bidding ought not to be a demonstration project but it ought to be the norm, the standard for all of our purchases for Medicare. We got the demonstration program. However, as a part of the Balanced Budget Act of 1997, we did succeed in giving Medicare a modest version of another waste-fighting weapon I have been pushing for a long time. We provided HCFA, the Health Care Financing Administration, with enhanced ``inherent reasonableness'' authority to reduce Medicare payments when it is clear that current Medicare payment levels are ``grossly excessive.'' In other words, Medicare, HCFA, has an ``inherent reasonableness'' clause. We enhanced that to say they could reduce Medicare payments when they were clearly grossly excessive. I would have liked to have done much more--obviously, put it out for competitive bids--but it is a step in the right direction. Specifically, what this does is provide Medicare with the authority to reduce payments by up to 15 percent a year for items where Medicare believes there are gross overpayments. That was 2 years ago. After 2 years of prodding, HCFA has finally begun the process of using its new authority to make Medicare a more prudent purchaser. They published a notice of proposed rulemaking on August 13 of this year. This followed an extensive investigation reviewing retail prices, wholesale prices paid by payers other than Medicare, and, of course, the payment amounts made by the Veterans' Administration. HCFA and their intermediaries then came up with an initial list of 12 items of durable medical equipment and 1 prosthetic device for which Medicare currently pays a grossly excessive amount. HCFA recommended reducing these exorbitant rates, and they projected over a 5-year period, just making these modest adjustments, it would save Medicare and the taxpayers over $487 million--just in the next 5 years. This chart will begin to show some of these items. For example, the items here: Lancers, enteral nutrients, eyeglass frames, catheters, test strips, albuterol sulfate; the overpayments are: 36 percent, 16 percent, 21 percent, 24 percent, et cetera. This chart shows the 5-year savings we would get off them. Then this chart shows the overpayment for the folding walkers I just talked about, the commode chairs, and others, for another $120 million. It is a total 5- year savings of almost half a billion dollars just from these items alone. Let me make it clear, we are only talking about the right of HCFA to reduce grossly excessive payments. Excessive pricing is not determined by comparing prices paid by Medicare to wholesale prices. That is not how we determine excessive pricing. HCFA, in its proposed rule, takes the Veterans' Administration price--what the VA is paying for these same items--and then it adds 67 percent. Keep this in mind. I will get my commode chair back out here again. For an item such as this commode chair, what the HCFA has said is: We will see what VA is paying for it, not what the wholesale price is. What is the Veterans' Administration paying for it? Then we will add 67 percent over that. That is what we will now pay for that commode chair. Keep in mind, the companies making these commode chairs are not losing money in the VA system. They would not be selling them to the VA if they were losing money. So you know they are making money off the VA. Now HCFA says: OK, they were so grossly overpriced before, we are now going to cut it; we are only going to allow a 67-percent markup. Wouldn't you like to have that guarantee in everything you sell the Government? I see no reason we should pay more than the VA. Medicare is the largest purchaser of medical supplies and equipment in the Nation. Because of this purchasing power, it ought to be able to demand better prices than anyone else. Medicare should not pay any more than any other Federal program does, whether it is VA, CHAMPUS, the Federal Employees Health Benefits Program, or others. Now, guess what. Even with the 67-percent markup over the VA rate, Medicare is currently paying even more. It is hard to believe. Now, here are the folding walkers. The VA payment on those is $30.24. The proposed Medicare payment is $50.50. That is with a 67-percent markup. So if they are making money on VA, they are making a killing off of Medicare. Here is the commode chair. VA is paying $37.64; the Medicare payment is $62.85. What a deal. And this is a result of us saying they shouldn't pay grossly exaggerated prices. Evidently paying $62.85 for a commode chair for which the VA is paying $37 is not grossly exaggerated. I think it is. There are a lot of other things, folding walkers and everything else. Here is a folding walker that has a wheel on it. The VA is paying $45.94; the proposed Medicare payment, $75.88. Even with that, HCFA is moving ahead, barely, to save Medicare and taxpayers a lot of money. We need to do more, and we need to do more rapidly. If my colleagues think that is bad news, get ready for the really bad news. With almost no discussion, last week the House Ways and Means Committee added a little special interest provision to the Medicare Balanced Budget Refinement Act of 1999. This provision would indefinitely delay cutting this wasteful spending. It would deny Medicare and the taxpayers $\1/2\ billion of savings. It does this simply by stopping HCFA from moving ahead. It stops Medicare, its intermediaries and carriers from using this inherent reasonableness authority until the Secretary has published a new rule and those rules are finalized. Medicare says this would mean a delay of maybe 18, 22, 24 months, another a couple years. If their track record is any indicator, the delay would be a lot longer than that. I suppose a lot of people on that House Ways and Means Committee got a lot of phone calls from the people who make walkers and commodes and these syringes who said do something about this. It is in the House Ways and Means Committee bill. It would block just these modest attempts to safeguard Medicare. We would still allow them to make 67 percent more than what they are making from VA. That is not enough for them. So they got a little provision slipped in that House bill. Talk about special interest legislation and a rip-off of our elderly and a rip-off of our taxpayers. What did the Senate do? Well, they tried to do the same thing. The Senate counterpart to that bill, called the Medicare, Medicaid and SCHIP Adjustment Act of 1999, would prohibit use of this inherent reasonableness authority until 90 days after the Comptroller General of the United States releases a report of its proposed impact. That would delay this implementation probably for another year. So the House, if we took the best case scenario, probably would delay it for 2 to 3 years. The Senate bill would delay it for at least a year. I am sure a compromise will be made leaning towards the House side, when this bill goes to conference, by members of the Finance Committee. I want members of the Finance Committee to know we are watching. We want to know what they are going to do to start reducing these exorbitant prices people pay for medical equipment. It is not right to stop or further delay HCFA from implementing at least these modest savings. We gave HCFA the authority in 1997; 2 years later, they just started to act on this. You can see how long it takes them to do something. Just when they are getting ready to make these cuts, to put more reasonableness in the amounts of money we pay, the Congress says, no, stop; put on the brakes. We can't do this. The Congress is standing by--let me rephrase that. The Congress is not standing by. The Congress, under the bills in the Senate Finance Committee and the House Ways and Means Committee, is actively stopping the progress and the process by which we will save taxpayers billions of dollars, an added tax not only on our taxpayers but on our elderly. We can do something about it. We have shown we can do something about it. We have shown how much we can reduce costs in oxygen and these other items. But now there are elements in this Congress who say, no, we can't do that. Well, we are going to watch. We will see what the Ways and Means Committee and the Finance Committee do to stop this rip-off of our taxpayers. We have grappled with ways to reduce Medicare expenditures. We passed this limited provision 2 years ago, giving them the authority just so they wouldn't pay grossly exaggerated prices. HCFA said: OK, we are not going to pay grossly exaggerated prices; we will just pay 67 percent more than VA. That is grossly exaggerated. But even to that modest amount of reduction, the House Ways and Means Committee says no. We all remember the Pentagon and the $500 toilet seats the Pentagon was buying some years ago. It is great news for all of us that the Pentagon isn't buying them anymore. Unfortunately, Medicare is. Taxpayers don't deserve to be ripped off and to have all of their money go for this gross waste and abuse in the Medicare system. Again, I know it is the waning hours of the Congress. We are all going to be getting out of here, I guess next week, they tell us. There is going to be a balanced budget amendment fix. We are going to look to see whether or not the special interests have gotten their way once again to rip off the taxpayers of this country and the Medicare system. I may not have the opportunity to take the floor after that is done. We may be recessed or adjourned until next year. But we will be back, as will the taxpayers of this country and the elderly people and their families who have been getting ripped off for far too long. We will be back to make sure we get competitive bidding once and for all to save our taxpayers a lot of money. I yield the floor.

Mr. HARKIN

Mr. HARKIN. Mr. President, I oppose this conference report. There are a number of important and positive elements in the measure that provide for improvements in the regulation of financial institutions that will better enable us to assure for the soundness of our financial institutions. More could have been done in that area. But, there are clear improvements. There are provisions which help small banks and small insurance companies acquire additional resources that are important to their ability to compete, to help their customers and useful to economy in their local areas. And, in a world marketplace, American institutions should have the resources needed to compete in that marketplace. Unfortunately, these positive steps are outweighed by the negative impact the bill will have on the privacy rights of Americans. Under this legislation, banks, insurance firms, and credit card agencies that are owned by the same mega-corporation can share a consumer's personal information. What kind of stock do you own? What information can be acquired from your credit card statements? When do your CD's mature? And, I fear, that information about a customer's health might also become available to those in a company who might decide if a customer is to get a loan or not get a loan. Do we want any possibility that a loan officer might have access to information about the medical condition and other private medical matters of a loan applicant without the customer's permission? I believe that this bill should have clearly provided solid protections in these areas. Unfortunately, these are the kinds of things that could happen if this measure becomes law. The measure does not even allow a customer to say No, I do not want any information picked up from my bank account or from records with the insurance company which is a part of a larger financial institution to be shared by any other part of a financial institution. If a customer wants information shared because that customer believes that he or she would be helped by one stop shopping for financial activities, fine. Let that customer waive rights to privacy by signing an appropriate form. But, the basic right to block information collected by a company from being shared by other parts of a company is not in this bill. There is an ability to say that you do not want the financial entity to simply sell the information. But, I understand that under this bill, your financial institution can share information they have acquired from your various accounts with other companies that they have entered into certain types of marketing agreements. Computers have great advantages. They increase the efficiency of our economy. But, they can store huge amounts of information about a person's private habits and circumstances. In this age where we have an explosion in the amount of information that is collected about people, I believe it is essential that we erect strong barriers that prevent the passage of personal information without a person's permission. I am also concerned about the weakness in the bill concerning the Community Reinvestment Act. We need to keep the burdens of paperwork down, particularly for small banks. But, we also need to provide for effective teeth in the requirement that banks provide proper financial assistance to all parts of their service area. And, this bill falls short in that area.

Mr. HARKIN

Mr. HARKIN. I ask unanimous consent the pending amendment be temporarily set aside, and I ask that my amendment No. 2495 be called up.

Mr. HARKIN. No. I don't have any problem with that, no.

Mr. HARKIN. Mr. President, I thought I had just agreed to have the amendment voted on. Mr. REID addressed the Chair.

Mr. HARKIN. I will yield for a question to my colleague from Nevada. We are trying to work out an arrangement.

Mr. HARKIN. Mr. President, let me see if I can revise my unanimous consent. I ask unanimous consent after the Landrieu amendment is disposed of, in whatever form that disposal may take, that I be recognized to call up my amendment, amendment No. 2495, and to have the yeas and nays on that amendment.

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

Mr. HARKIN. I ask for the yeas and nays on my amendment.

Mr. HARKIN. Mr. President, I believe my amendment is next in order?

Mr. HARKIN. Mr. President, under the understanding, I am going to take just a couple of minutes. Even though there was no time agreement, there was an understanding. I know people want to vote on this.

Mr. HARKIN. For how long? Is it 2 minutes?

Mr. HARKIN. Mr. President, this amendment is cosponsored by my colleague from North Carolina, the chairman of the Foreign Relations Committee, Senator Helms, and also by my friend from Minnesota, Mr. Wellstone. As you can see, this has broad philosophical support. I also at this moment inform my colleagues and thank Senator Helms for reporting out just this morning, from the Foreign Relations Committee, the Convention 182 on the Elimination of the Worst Forms of Child Labor. That is record time. It was just adopted in June of this year. Then it had to go through some legal reviews and the President submitted to the Senate on August 5, 1999. So I want the chairman to know how much we appreciate the expeditious handling of that and the fact it is reported out. I am hopeful we can get a vote on it before we go out toward the end of this year. The reason I had the clerk read the entire amendment is because it is not very long and not very convoluted. All it says, basically, is no country will get the benefits of this bill unless they adopt and enforce the provisions of this Convention 182 that was just adopted in June. I might point out that there are 160 signators to this Convention. It is the first time in history the entire three representatives of the ILO Tripartite group, which are representatives from government, business, and labor agreed on the final form of a convention out of ILO. So it has broad support. This talk about the worst forms of child labor, child prostitution, child trafficking in drugs, child trafficking itself, hazardous work, any forms of bondage or slavery--all of those are listed under 182. All this amendment says is the benefits of this bill cannot go to any country that does not adopt and enforce the provisions of 182. I hope we can get a vote on the convention itself before we go out this fall. I believe it will say to all these countries in Africa: We are willing to trade with you, we are willing to help, but if you are going to have child prostitution, if you are going to traffic in kids, going to use kids in the drug trade, if you are going to chain them to looms, and you are not going to let them go to school, you are not going to permit them to have their own childhood--you are not going to get the benefits of this trade bill. I think it is the least we can do, to try to help take one more step forward in eliminating child labor throughout the world.

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

Mr. HARKIN. Please do.

Mr. HARKIN. I will abruptly finish my remarks.

Mr. HARKIN. Normally, I would say fine to accept it, but since the Foreign Relations Committee passed it out this morning and I believe we will have it before the Senate before the end of the year, I think it is important for the Senate to express itself on this issue on the forms of abusive and exploitative child labor. It is important we do that. We have taken so many steps and come so far, we ought to do that. I am hopeful my colleagues will support this. My amendment is cosponsored by Senator Helms, the chairman of the Foreign Relations Committee, and Mr. Wellstone from Minnesota. There is a pretty broad philosophical spectrum encompassed on this amendment. I ask unanimous consent the pending amendment be temporarily set aside, and I ask to call up my amendment No. 2495.

Mr. HARKIN. I am happy to yield to the Senator.

Mr. HARKIN. To set aside the amendment and call up my amendment.

Mr. HARKIN. Mr. President, in the discussion of this trade bill, we hear a lot of talk about the different things involved in trade and how we want to lift countries up; that the essence of this trade bill before us is to open up the avenues and the corridors of free trade so people living in Third World countries, in Africa specifically, can begin to enjoy some of the benefits of increased production, increased distribution of goods and services, and an increased standard of living. That is what the proponents of the trade bill are arguing. I am not here to argue against that. I believe free trade, if it is practiced as free trade, it can have genuine beneficial effects on all parties involved. There are anomalies, however, in the trade structure that keep the benefits of open and free trade from being genuinely and broadly distributed among people in Third World countries. There are a lot of these, but I believe the single most important feature, institution or practice of Third World countries that inhibits their economic growth, inhibits their social growth, even if they are allowed into a free trade structure, is the use and practice of abusive child labor. Child labor is the last vestige of slavery on the face of the Earth. It is widespread. It is condoned--if not openly, at least passively--by many of the major industrial nations of the world. I think it is time we get rid of this last vestige of slavery: child labor. I have an amendment that is very simple and straightforward. It builds on the international consensus that emerged from the ILO conference in Geneva this summer in which the delegates unanimously adopted a convention to eliminate the worst forms of child labor. The amendment simply states that in order to be eligible for the trade benefits in this bill, a country must meet and effectively enforce the standards regarding child labor, as established by the ILO convention 182 for the Elimination of the Worst Forms of Child Labor. It is just that simple. In other words, if a country wants the benefits of this trade bill, they must meet and effectively enforce the standards of the recently adopted ILO convention 182. This convention defines the worst forms of child labor as: all forms of slavery, debt bondage, forced or compulsory labor, or the sale and trafficking of children, including forced or compulsory recruitment of children for use in armed conflict; child prostitution, children producing and trafficking narcotic drugs; or any other work which by its nature or the circumstances in which it is carried out, is likely to harm the health, the safety, and the morals of children. These are the provisions of ILO convention 182. As I stated earlier, for the first time in history, this last June, the world spoke with one voice in opposition to abusive and exploitative child labor. Countries from across the political, economic, and religious spectrum--from Jewish to Moslem, from Buddhist to Christians--came together to proclaim unequivocally that ``abusive and exploitative child labor is a practice which will not be tolerated and must be abolished.'' So gone is the argument that abusive and exploitative child labor is an acceptable practice because of a country's economic circumstances. Gone is the argument that abusive and exploitative child labor is acceptable because of cultural traditions. And gone is the argument that abusive and exploitative child labor is a necessary evil on the road to economic development. When this convention was approved, the United States and the international community as a whole laid these arguments to rest and laid the groundwork to begin the process of ending the scourge of abusive and exploitative child labor. Additionally, for the first time in its history, the U.S. tripartite group to the ILO--consisting of representatives from government, business, and labor--unanimously agreed on the final version of the ILO convention 182. I believe strongly that the time has come to say to countries: If you want the trade benefits outlined in this bill, you must, at a minimum, enforce international standards on abusive and exploitative child labor. That is at a minimum. So let me be clear about what is meant by abusive and exploitative child labor. This is not about kids working on the family farm. It is not about kids who work after school. There is nothing wrong with that. I worked in my youth when I was in school. Probably most of us in the Chamber today worked when we were young and in school. There is nothing wrong with that, and that is not what we are talking about. The convention that the ILO adopted in June deals with children who are chained to looms, who handle dangerous chemicals, who ingest metal dust from working around machinery, children who are forced to sell illegal drugs, forced into prostitution, forced into armed conflict, forced to work in factories where furnace temperatures exceed 1,500 degrees. Let me refer to this chart again and repeat, for the sake of emphasis, what the convention does. It abolishes the harshest forms of child labor, including child slavery, child bondage, child prostitution, use of children in pornography, trafficking in children, the forced recruitment of children for armed conflict, the recruitment of children in the production or sale of narcotics, and hazardous work by children. Those are the abusive and exploitative forms of child labor that are covered. According to the ILO, in Latin America and the Caribbean there are an estimated 17 million children working. In Africa--and we are on the Africa trade bill--80 million children are working. In Asia, about 153 million children are working. There are about half a million in Oceania, in the islands of the southwest Pacific. This totals about 250 million children world wide that are working full time. They are forced to work with no protective equipment under hazardous and slave-like conditions. They endure long hours for little or no compensation. They simply work only for the economic gain of others. They are denied an education and denied the opportunity to grow and develop. I paint this in sharp contrast to afterschool jobs that kids have so they can have some more spending money to buy the latest CD. These kids are not buying CDs. They are not even in school. They are kept out of school and are forced to work. Again, I know firsthand what this is about. I have some charts here, some pictures. Last year, my legislative assistant, Rosemary Gutierrez, and I traveled to several countries in South Asia to investigate child labor. This happens to be a picture that was taken outside of a compound in Katmandu, Nepal. This was on a Sunday evening, shortly after dark, maybe about 7 or 7:30 in the evening. I had heard repeated stories about children who were working, making carpets, children as young as 5 to 7 years of age. But I also knew from others I had talked to that if you asked to visit one of these plants, by the time you got there, they had the kids out the back door. So nobody could ever see them. Well, it turned out that, through mutual acquaintances, we located a young man--I don't know how old he is now, maybe 21 or 22 years old-- who had been a former child laborer in one of these plants. He knew of a plant where he knew the guard at the gate on this Sunday evening in question. So what we did is, we got in an unmarked car and we drove to the outskirts of Katmandu and went up to this compound. Later, we found out we were mistaken and the owner was in fact there. So we went up to the gate, four or five of us, with this young Nepalese man. He got us in the gate. This was the picture I took outside the gate. There is a sign posted very prominently in Nepalese and in English. As you can see, it says, ``Child labour under the age of 14 is strictly prohibited.'' They have these signs all over. So I took a picture of it. We went to the gate of this compound. We walked down a fairly narrow alleyway. There were low-lying buildings on our left and right. We went down a few hundred yards and turned to our left to this carpet factory. We went into the carpet factory. Mind you, this is on a Sunday evening, and it is about 7:30. Here is what we found. I can tell you this is what we found because I took the picture. There were dozens and dozens of kids working in this building, with a lot of dust around; carpets put off a lot of dust when they make them. I took this picture of these two kids. I had the young man who spoke Nepalese there, and we were able to talk to them a little. As best I could figure out, he was about 7 and she was about 8. This was at 7:30 in the evening. You can't see because the flashbulb wasn't strong enough, but there are dozens of children sitting in rows up and down the aisles working. Here is a better picture, and I am in it. My staff assistant took this picture. These kids are 8, 9, 10, 11 years old, all the way back here, on both sides, up and down, working at 7:30 at night. These are kids who work probably 12 to 14 hours a day, 6 to 7 days a week. When they are not working, they are taken out of here to those low-lying buildings where they sleep and eat; that is where they live. They are not allowed to go out. They are not allowed to go out on the streets. They are not allowed to get an education, go to school. They go from their little Quonset hut, where they stay like stacks of cord wood. Then they are herded in here, work 12 to 14 hours a day, and they are herded back into the building. They are 7, 8, 9 years of age. I said: What happens when they get to be 12, 13, or 14? I didn't see any children there that old there. Well, sometimes the boys go into different kinds of work, and the girls are sold into prostitution. You don't have to take my word for that; you can talk with anybody in the U.N., the ILO, and talk about the trafficking of young girls from Nepal to India, some as far away as Saudi Arabia. I met with some young girls who had been sold into prostitution. There is an organization in Nepal of women trying to repatriate these young women, get them back to their country and their villages. Some were sent as far away as Saudi Arabia. Trafficking in prostitution-- that is what we are talking about in this amendment. We are not talking about kids working after school. We are talking about these kids. Should a country that permits this and condones this and doesn't take active steps to stop it--should they, I ask you, get the benefits of this trade bill? Here is another kid. I did not take this picture. This is not my picture. I admit that. But there is a young boy in the Sialkot region of Pakistan. He is 8 years old. His name is Mohammad Ashraf Irfan. You may not be able to see it from there, but he is making surgical equipment. These are scissors used in surgery that are shipped to this country. Think about that. Think about that the next time you go into the doctor's office. It is clean, it is sterile, you have a wound, and they are going to sew you up or they are going to make you well again. You see those little scissors come out, or the little knife, and the things they use. Think about Ashraf here who is 8 years old. Look at him. The next time you go into a doctor's office, think about Ashraf and think about hundreds of thousands like him sitting there day after day. He has no protective goggles, no protective equipment on his hands, and he is making surgical equipment to be used in the finest of doctor's offices and hospitals in Europe and America. That is what we are talking about in this amendment. I believe our goal must be to encourage and to persuade other countries to build on the prosperity that comes with trade and to lift their standards up. Exploited child labor in other countries not only penalize Ashraf to a lifetime of illiteracy, low wages, bad health, and not only does it condemn him to that, and hurt his life, but the fact they exploit him means that it unfairly puts workers in our country and other countries at a disadvantage. You can't compete with slavery. This is slavery. You can dress it up and call it what you want. But this is about the nearest thing you can get to slavery. Yet, unfortunately, the legislation before us does not address this issue. It simply relies on the criteria of the Generalized System of Preferences, or GSP, to extend countries trade benefits. Is that adequate to what we know is going on in the world? This criteria in GSP has been on the books since 1984--15 years. And child labor today is worse than it was 15 years ago. Let me explain that the USTR, our own Trade Representative office, in its implementation and enforcement of GSP, has, I believe, abused the language in the statute that calls for taking steps to afford respect for workers' rights, including child labor. They have interpreted that any gesture made by a country will satisfy the requirements of GSP. There is a list of five internationally recognized workers' rights provisions in GSP. Here they are: One, the right of association; two, the right to organize and bargain collectively; three, a prohibition on the use of any form of forced or compulsory labor; four, a minimum age for employment of children; five, acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health. If a country takes steps--we don't say how big a step--if a country takes one teeny, little bit of a step in any one of those areas, they are allowed GSP benefits. They may have the most abusive forms of child labor, but if they have taken steps --for example, to have the right of free association--there you go. They have satisfied the requirements. Quite frankly, these countries should be taking steps in all five areas and enforcing the laws they have on the books. The fact is, there are laws in Nepal against the use of child labor in these looms. There are laws in Pakistan against what Ashraf Irfan is doing. They all have laws on the books. They are just not enforcing them. Many of these countries have been able to provide cosmetic and unenforceable actions. Then they are recognized as having taken steps, and they are off the hook. In fact, the principal sponsor of the GSP criteria, an individual I served with in the House of Representatives, Representative Don Pease, wanted to set a high standard to ensure that countries not only have laws on their books with regard to these rights and minimum age requirements but that they were also being enforced. When it got to conference, it was watered down. We have that today. If they meet just one of those criteria, that is all they have to do. Fifteen years later after GSP, we now have a universal standard adopted this June by the ILO in Geneva. The ILO convention 182 is a well-defined, internationally accepted standard that I believe should be the criteria in granting any country U.S. trade benefits. ILO convention 182 that will hold everyone to one real and enforceable standard that was unanimously agreed to in Geneva this past June. Again, as I have said before, I believe in free trade. I voted for the North American Free Trade Agreement. But I also believe in a level playing field. I also believe you should use trade to try to lift countries up--not lift countries up on the backs of children but to lift those countries up alongside of us. U.S. workers can't compete with slaves. U.S. workers can't compete with 8-year-old kids working 12 and 14 hours a day who are paid almost nothing. You can dress it up any way you want. You can use whatever fancy words and language you want. That is slavery. These kids don't have a choice. They are forced to work in unbearable conditions. They don't have a choice. They do not have any freedom and liberty. Is that not the definition of slavery? Children are exploited for the economic gain of others. The child loses, the family loses, this country loses, and we in the world lose, too. Every child lost to the workplace in this manner is a child who will not receive an education, learn a valuable skill, and help this country develop economically, or become a more active participant in the global market. When just one child is exploited in this manner, every one of us is diminished. Recently, I came across a startling statistic. According to the UNICEF report entitled ``The State of the World's Children 1999,'' nearly 1 billion people will enter the 21st century--the new millennium--1 billion people will enter unable to read a book, or unable to sign their name because they are illiterate. This is a formula for instability, violence, and conflict down the road. Nearly one-sixth of all humanity--think about it; three and a half times the population of the United States--next year won't even be able to read a book or sign their name. This is the reason: Because they were denied an education when they were young. They were forced to work in front of rug looms, or making surgical equipment, glassware, and metals in mines and places such as that. I believe it is shocking. I believe children making pennies a day spells disaster and conflict down the road. In cold, hard, economic terms, children making pennies a day will never buy a computer, they will never buy the software to run it, they will never purchase the latest music CD or a VCR to play American-made movies. By allowing abusive and exploitative child labor to continue, we not only doom the child to a future of poverty and destitution, we doom future markets for American goods and services. Why in our trade bill do we not just look one foot in front of our nose? We think about next year or the year after. Why not think about 10, 15, or 20 years from now, when 8-year-old Ashraf Irfan is in his twenties and thirties? What will he be buying? Will he buy a computer? Will he buy software and log on to the Internet? Will he buy clothes? No; he will be functionally illiterate. He will go to a store and watch television and see how the rest of the world lives and say, Why do I live like this? It is ripe for revolutions, wars, insurrections, and instability all over the world. Some say child labor shouldn't be dealt with in trade measures. I think this is wrongheaded thinking and closed minded. I believe we should be addressing child labor issues on trade measures. After all, we are ultimately talking about our trade policy. Not too long ago, agreements on intellectual property rights were not considered measures to be addressed by trade agreements. In the beginning, only tariffs and quotas were addressed by GATT because they were the most visible trade- distorting practices. As time went on and as we began to develop more and more intellectual property in this country, we said we ought to include intellectual property rights and services, too. Now they have become an integral part of our trade agreements. The trade bill two years ago had several pages on intellectual property rights and one small, ineffectual paragraph on child labor. Now the WTO will consider rules dealing with foreign direct investment. That is another new step. A part of our trade agreements will now involve foreign direct investment and competition policy. When I looked at the trade bill two years ago and saw all the pages dealing with intellectual property rights and I saw the little, ineffectual paragraph that actually turned the clock back on child labor, I thought to myself, if we can protect a song, can't we protect a kid? Think about it. We are going to protect someone's song so it can't be stolen, used, recorded, or sung by anybody else in the world-- we can protect that; but we can't protect this kid? Tell me that child labor is not an apt policy for trade policy and trade bills. I believe it is time we do this. We as a nation cannot ignore what is happening. In 1993, this Senate put itself on record in opposition to the exploitation of children for economic gain by passing a sense-of-the- Senate resolution that I submitted. That was in 1993. It was a sense- of-the-Senate resolution. Nonetheless, it passed. In 1994, I requested the Department of Labor to begin a series of reports on child labor. These reports now consist of five volumes representing the most comprehensive documentation ever assembled by the Government on this issue. Earlier this year, President Clinton issued an Executive order prohibiting the U.S. Government from procuring items made by forced or indentured child labor. We are making progress. Some may say we have not even ratified convention 182 ourselves, so how do we expect others to abide by that? The chairman of the committee, Senator Helms, had a hearing about 2 weeks ago on this. I thought it was a great hearing. I am pleased to report to my colleagues, just today the Senate Foreign Relations Committee reported out the new ILO convention. I am hopeful we will have it on the floor to get a unanimous vote and to ratify that before we leave this year. I have every reason to believe we will before we leave this year.

Mr. HARKIN. I thought my amendment was pending, under the unanimous consent agreement.

Mr. HARKIN. Yes; I have no problem.

Mr. HARKIN. I call up amendment 2495.

Mr. HARKIN

Mr. HARKIN. Mr. President, I ask my colleagues to join me in paying tribute to Dr. Percy G. Harris, a distinguished Iowan from Cedar Rapids who is retiring after forty years of practicing family medicine. His biography is truly a great American story. Dr. Harris was born into a poor family in Mississippi in 1927. He was orphaned as a teenager and moved to Waterloo, Iowa to live with his aunt. High school was a struggle for Percy Harris, but he finally received his diploma at the age of 19. After that, he was determined to make something of his life, and set his sights on becoming a doctor. He was admitted to medical school at Howard University in Washington, DC. He paid his way by working as an elevator operator and janitor. After he received his medical degree, Dr. Harris returned to Cedar Rapids, Iowa to open a family practice. His practice grew and flourished over four decades. His patients credit him with the old-fashioned virtue of patience and say he is always willing to spend extra time caring for them. He believes in giving back and is active in the community as a civil rights leader and as a volunteer athletic doctor for Jefferson High School. Percy Harris's life is a list of firsts. He was the first African- American to hold an internship at St. Luke's Hospital in Cedar Rapids. He served as Linn County, Iowa's first and only medical examiner. In 1977, Governor Robert Ray appointed him to the Iowa Board of Regents where he served two terms as the Board's first African-American member. Dr. Harris encountered adversity along the way, but he chose to view it as a challenge rather than an obstacle. In 1961, he and his wife, Lileah, decided to build a home for their growing family. They set their sights on a piece of property in one of Cedar Rapids' all white neighborhoods. The neighbors were up in arms, but Percy and Lileah Harris persisted and eventually purchased the property in a dispute that gained national attention. They built their family home on the property and raised 12 fine children, all of whom are now grown and successful in their own right. Mr. President, Dr. Harris is one in a long American tradition of medical practitioners who put patients before profits, who lead by example, and who dedicate themselves to the well-being of humankind, from their community to their nation. I congratulate him on his many achievements and wish him well in all future endeavors. I know wherever he chooses to put his many talents, he will leave his mark.

Mr. HARKIN

Mr. HARKIN. Mr. President, as I understand it, I have 5 minutes.