Tom Harkin

Mr. HARKIN

Mr. HARKIN. Mr. President, genetic discrimination is a terribly important issue and one that I have been following for quite some time now. I am pleased to be here today with Senator Daschle, Senator Dodd, and Senator Kenendy to introduce the ``Genetic Non-discrimination in Health Insurance and Employment Act of 1999.'' The advances we have made recently in the study of the human gene are mind-boggling. The identification of a number of disease-related genes is providing scientists with important new tools for understanding the underlying mechanisms for many illnesses. Genomic technologies have the potential to lead to better diagnosis and treatment, and ultimately to the prevention and cure of many diseases and disabilities. Yet discrimination in health insurance and employment, and the fear of potential discrimination, threaten our ability to conduct the very research we need to understand, treat, and prevent genetic disease. Moreover, discrimination--and the fear of discrimination--threaten our ability to use new genetic technologies to improve human health. Let me give you just a few examples: In the early 1970's some insurance companies denied coverage and some employers denied jobs to African-Americans who were identified as carriers for sicklecell anemia, even though they were healthy and would never develop the disease. More recently, in a survey of people in families with genetic disorders, 22% indicated that they, or a member of their family, had been refused health insurance on the basis of their genetic information. And a number of researchers have been unable to get individuals to participate in cancer genetics research. Fear of discrimination is cited as the reason why. But this is more than just about numbers and anonymous individuals, it's about real people--including my own family. As many of you know, both my sisters died from breast cancer. And other members of my family might be at risk. Should I counsel them to get tested for the BRCA1 and BRCA2 mutations? Should I counsel them to disclose our family history to their health care providers? Right now, I'm torn. I know that if my family is to have access to the best available interventions and preventive care, they should get tested, and they should disclose our family's medical history to their physicians. But, conversely, if they are to get any health care at all, they must have access to health insurance. Without strong protections against discrimination, access to health insurance is currently in question. In 1995, I introduced an amendment during the markup of the Health Insurance Portability and Accountability Act. My amendment clarified that group health plans could not establish eligibility, continuation, enrollment, or contribution requirements based on genetic information. My amendment became part of the manager's package that went to the floor, and it ultimately became law. HIPAA is a good first step. We should be proud of that legislation. Yet if our goal is to ensure that individuals have access to health insurance coverage and to employment opportunities--regardless of their genetic makeup--we must pass comprehensive anti-discrimination protections. Our proposed legislation offers such protections. Let me describe them in brief: First, this legislation prohibits insurers and employers from discriminating on the basis of genetic information. It is essential to prohibit discrimination both at work and in health insurance coverage. If we only prohibit discrimination in the insurance context, employers who are worried about future increased medical costs will simply not hire individuals who have a genetic predisposition to a particular disease. Second, under our proposal, health insurance companies are prohibited from disclosing genetic information to other insurance companies, industry-wide data banks, and employers. If we really want to prevent discrimination, we should not let genetic information get into the wrong hands. Finally, if protections against genetic discrimination are to have teeth, we must include strong penalties and remedies to deter employers and insurers from discriminating in the first place. In closing, let me say that this legislation will ensure that every American will enjoy the latest advances in scientific research and health care delivery, without fear of retribution on the basis of their sensitive genetic information. All of us should be concerned about this issue, because all of us have genetic information that could be used against us. As we move into the new millennium, everyone should enjoy the benefits of 21st century technologies--and not be harmed by 21st century discrimination. I applaud the committment of my fellow co-sponsors on this important issue and look forward to working with the rest of my colleagues to pass federal legislation that will prohibit genetic discrimination in the workplace and in health insurance.

Mr. HARKIN

Mr. HARKIN. Mr. President, I am offering this amendment on behalf of myself, Senator Daschle, Senator Graham, Senator Bingaman, Senator Murray, and Senator Johnson. Our amendment is simple and I believe makes common sense. It would give a needed shot in the arm to our war against drugs by modestly increasing funding for the High Intensity Drug Trafficking Areas--so-called HIDTAs--under the Office of National Drug Control Policy. The bill before us freezes funding for this important and successful program. It provides no increases for the existing 31 HIDTAs across the Nation and it provides no funding for new HIDTAs. Our amendment would increase HIDTA funding by $17 million. It would provide $7 million to combat the rising scourge of methamphetamine abuse. It would provide $5 million to increase existing HIDTAs. And it would allot $5 million to allow the establishment and funding of new HIDTAs. I fully recognize the challenges faced by the distinguished chair and ranking member of this Subcommittee. They were dealt a bad check and they have done a commendable job within the allocation they were given. However, we believe that we have found a reasonable offset--one that will not undermine the effective functioning of the government. We would take $17 million--less then 2.5 percent from the General Services Administration account dedicated to the repair and alterations of federal government buildings. There is $624 million in this account and over $300 million of its goes for unspecified projects. I have no doubt that much of these funds are needed, but clearly $17 million could be absorbed or a short deferral of a project could be made in order to make room for a modest increase in our war on drugs. The need for this increase in the HIDTA program could not be clearer, particularly as it relates to combating methamphetamine abuse. There is a plague sweeping across our Nation, ruining an untold number of lives, and claiming countless numbers of our children. On our streets as well as well as our classrooms, drugs have become more abundant. But there is a new drug, one that is far more addictive and readily available than heroin, cocaine, or any other illegal narcotic. Methamphetamine is fast becoming the leading addictive drug in this nation. From quiet suburbs, to city streets, to the corn rows of Iowa, meth is destroying thousands of lives every year. A majority of those lives, unfortunately, are our children. Methamphetamine is commonly referred to as Iowa's drug of choice. This drug is reaching epidemic proportions as its sweeps from the west coast, ravages through the Midwest, and is now beginning to reach the east. The trail of destruction of human life as a result of methamphetamine addiction stretches across America from coast to coast. To illustrate the violence meth elicits in people, methamphetamine is cited as a contributing factor in 80 percent of domestic violence cases in Iowa and a leading factor in a majority of violent crimes. The $17 million we provide would be used for increased enforcement and prosecution of drug dealers, additional undercover agents, and to help pay for the tremendous cost of confiscation and clean up of clandestine meth labs. I believe that we have a window of opportunity as a nation to take a stand right now to defeat the meth scourge plaguing our nation. Our amendment will not solve all of these problems, but it will give law enforcement the support that they vitally need in their efforts to defeat this dangerous drug. While we debate this modest proposal, another family is being devastated, another community is fighting an uphill battle, and another child is getting hooked by this deadly drug. The time is now to make a stand to protect our communities and schools by passing this important amendment. I ask my colleagues to support this amendment.

Mr. HARKIN

Mr. HARKIN. Mr. President, I am pleased to cosponsor this amendment offered by the distinguished Senator from New Jersey. I compliment him on his foresight for bringing this amendment up. We will have a 5-year media campaign, with $1 billion targeted at youth so they don't get into drugs and start taking drugs. The drug czar himself, General McCaffrey, said that alcohol is the gateway drug. Mr. President, 42 percent of Iowa teens seeking substance abuse treatment in 1998 were being treated for alcohol addiction; three out of five teens have had an alcoholic drink in the last month. We have a 5-year, $1 billion ad campaign to tell teens don't take cocaine, don't take meth, don't smoke marijuana, and we are not going to say anything about beer and alcohol? These are the first drugs these kids take. That is what the Senator from New Jersey is saying. Let's require in this package of ads over 5 years that they also target drinking by kids. I understand that the amendment is supported by Mothers Against Drunk Driving, the National Association of State Alcohol and Drug Abuse Counselors, and the National Association of Alcohol, Drugs, and Disability. It is time we took teen drinking seriously. I heard that the National Beer Wholesalers Association is opposed to the amendment. If I am wrong, someone please correct me. It is this association that has always said they are against teen drinking. If they are against teen drinking, why would they be opposed to this amendment to put ads out showing teens what happens if they drink? Eight young people every day die in alcohol-related car crashes. It is time to stop this epidemic.

Mr. HARKIN

Mr. HARKIN. Mr. President, today I am pleased to be joined by Senator Hatch and Senator McConnell in introducing the Food Stamp Vitamin and Mineral Improvement Act of 1999. Mr. President, this bipartisan legislation is very simple and I believe makes just plain common sense. It would give those Americans using food stamps the ability to purchase vitamin and mineral supplements for themselves and their families. The change called for in this legislation has been supported by a broad coalition of groups and nutrition experts. For example, it is backed by the Alliance for Aging Research, the Spina Bifida Association of America, the National Osteoporosis Foundation and the National Nutritional Foods Association. Nutrition experts such as Dr. Paul Lachance, Chair of the Department of Food Science at Rutgers University, Dr. Jeffrey Blumberg of Tufts University, Dr. Charles Butterworth, Director of Human Nutrition at the University of Alabama Birmingham, and Dr. Dennis Heldman, Chair of the Department of Food Science and Human Nutrition at the University of Missouri have also called for making this common sense change to food policy. Mr. President, I believe this legislation would contribute substantially to improving the nutrition and health of a segment of our society that too often falls below recommended levels of nutrient consumption. Scientific evidence continues to mount showing that sound nutrition is essential for normal growth and cognitive development in children, and for improved health and the prevention of a variety of conditions and illnesses. Studies have also shown, unfortunately, that many Americans do not have dietary intakes sufficient to meet even the conservative Recommended Daily Allowances or RDA's for a number of essential nutrients. Insufficient dietary intakes are especially critical for children, pregnant women and the elderly. A recent study conducted by the Tufts University School of Nutrition, and based on government data, showed that millions of poor children in the United States have dietary intakes that are well below the government's Recommended Daily Allowance for a number of important nutrients. The study found that major differences exist in the intakes of poor versus non-poor children for 10 out of 16 nutrients (food energy, folate, iron, magnesium, thiamin, vitamin A, vitamin B6, vitamin C, vitamin E, and zinc). Moreover, the proportion of poor children with inadequate intakes of zinc is over 50 percent; for iron, over 40 percent; and for vitamin E, over 33 percent. For some nutrients, such as vitamin A and magnesium, the proportion of poor children with inadequate intakes is nearly six times as large as for non-poor children. Pregnant women also have high nutritional needs. Concerns about inadequate folate intake by pregnant women prompted the Public Health Service to issue a recommendation regarding consumption of folic acid by all women of childbearing age who are capable of becoming pregnant for the purpose of reducing the incidence of spina bifida or other neural tube defects. That is why this change has long been a priority of the Spina Bifida Association of America. Furthermore, the percent of pregnant and nursing women who get the RDA level of calcium has dropped from just 24 percent in 1986 to a mere 16 percent in 1994. That's 84 percent of women who aren't getting enough calcium--which we know is critical to preventing the debilitating effects of osteoporosis. And again, the evidence is that lower income women, many of whom are eligible for Food Stamps, are more likely to have inadequate intake of key nutrients. Women with income of 130 percent or less of the poverty level have higher rates of deficiencies in intake of Vitamins A, E, C, B-6 and B-12, as well as Iron, Thiamin, Riboflavin and Niacin than those with higher incomes. Obviously, the best way to obtain sufficient nutrient intake is through eating a variety of nutritious foods, but some groups-- particularly those at the greatest risk, including children, pregnant women and the elderly--may find it significantly difficult to obtain sufficient nutrient intake through foods alone. Accordingly, many people in our nation do rely on nutritional supplements to ensure that they and their families are consuming sufficient levels of key nutrients. This legislation would enable low-income people to have greater access to nutritional supplements to improve their nutrient intake. Currently, recipients of food stamps are not allowed to use those resources to purchase nutritional supplements. This restriction clearly serves as an impediment to adequate nutrition for low-income people who may need supplements to ensure they are consuming sufficient levels of nutrients. It defies common sense. This restriction also prevents food stamp recipients from exercising their own responsibility and choice to use food stamps for purchasing nutritional supplements that they determine are important to adequate nutrition for their children or themselves. It is a glaring inconsistency that food stamps may currently be used to purchase a variety of non-nutritious or minimally nutritious foods but not to purchase nutritional supplements. Incredibly, you can use Food Stamps to buy Twinkies, but not Vitamin C or a multivitamin. Opponents of this legislation will argue that food stamps are most effectively used to improve nutrition through purchasing food rather than nutritional supplements, and that if food stamps may be used for nutritional supplements, households will be less able to stretch their resources to purchase sufficient quantities of food. The available evidence indicates, however, that food stamp households actually make more careful and effective use of their resources in purchasing nutritious foods than consumers in general. Since food stamp households necessarily have a limited amount of money to spend on food--and generally already find it difficult to meet their food needs--they simply cannot afford to make unwise or unnecessary purchases of nutritional supplements using food stamps which would otherwise be used for food. In addition, a month's worth of daily multivitamin supplements can cost as little as one can of soda. So I believe the concerns that food stamps will be wasted or unwisely used for nutritional supplements is unfounded. Our proposal is also clearly consistent with the stated purpose of the Food Stamp program, that is to ``promote the general welfare and to safeguard the health of the nation's population by raising the nutrition among low-income households.'' So, Mr. President, I hope that my colleagues will join us in supporting this legislation designed to improve opportunities for low- income Americans to ensure adequate nutrition for their families and themselves. Simply put, if you think it doesn't make sense that Food Stamps can be used to buy twinkies and doughnuts but not Vitamin C or a daily multi-vitamin supplement, you should support this bipartisan legislation. Mr. President, I ask unanimous consent that a copy of the bill be printed in the Record.

Mr. HARKIN

Mr. HARKIN. Mr. President, today I am pleased to be joined by Senator Hatch and Senator McConnell in introducing the Food Stamp Vitamin and Mineral Improvement Act of 1999. Mr. President, this bipartisan legislation is very simple and I believe makes just plain common sense. It would give those Americans using food stamps the ability to purchase vitamin and mineral supplements for themselves and their families. The change called for in this legislation has been supported by a broad coalition of groups and nutrition experts. For example, it is backed by the Alliance for Aging Research, the Spina Bifida Association of America, the National Osteoporosis Foundation and the National Nutritional Foods Association. Nutrition experts such as Dr. Paul Lachance, Chair of the Department of Food Science at Rutgers University, Dr. Jeffrey Blumberg of Tufts University, Dr. Charles Butterworth, Director of Human Nutrition at the University of Alabama Birmingham, and Dr. Dennis Heldman, Chair of the Department of Food Science and Human Nutrition at the University of Missouri have also called for making this common sense change to food policy. Mr. President, I believe this legislation would contribute substantially to improving the nutrition and health of a segment of our society that too often falls below recommended levels of nutrient consumption. Scientific evidence continues to mount showing that sound nutrition is essential for normal growth and cognitive development in children, and for improved health and the prevention of a variety of conditions and illnesses. Studies have also shown, unfortunately, that many Americans do not have dietary intakes sufficient to meet even the conservative Recommended Daily Allowances or RDA's for a number of essential nutrients. Insufficient dietary intakes are especially critical for children, pregnant women and the elderly. A recent study conducted by the Tufts University School of Nutrition, and based on government data, showed that millions of poor children in the United States have dietary intakes that are well below the government's Recommended Daily Allowance for a number of important nutrients. The study found that major differences exist in the intakes of poor versus non-poor children for 10 out of 16 nutrients (food energy, folate, iron, magnesium, thiamin, vitamin A, vitamin B6, vitamin C, vitamin E, and zinc). Moreover, the proportion of poor children with inadequate intakes of zinc is over 50 percent; for iron, over 40 percent; and for vitamin E, over 33 percent. For some nutrients, such as vitamin A and magnesium, the proportion of poor children with inadequate intakes is nearly six times as large as for non-poor children. Pregnant women also have high nutritional needs. Concerns about inadequate folate intake by pregnant women prompted the Public Health Service to issue a recommendation regarding consumption of folic acid by all women of childbearing age who are capable of becoming pregnant for the purpose of reducing the incidence of spina bifida or other neural tube defects. That is why this change has long been a priority of the Spina Bifida Association of America. Furthermore, the percent of pregnant and nursing women who get the RDA level of calcium has dropped from just 24 percent in 1986 to a mere 16 percent in 1994. That's 84 percent of women who aren't getting enough calcium--which we know is critical to preventing the debilitating effects of osteoporosis. And again, the evidence is that lower income women, many of whom are eligible for Food Stamps, are more likely to have inadequate intake of key nutrients. Women with income of 130 percent or less of the poverty level have higher rates of deficiencies in intake of Vitamins A, E, C, B-6 and B-12, as well as Iron, Thiamin, Riboflavin and Niacin than those with higher incomes. Obviously, the best way to obtain sufficient nutrient intake is through eating a variety of nutritious foods, but some groups-- particularly those at the greatest risk, including children, pregnant women and the elderly--may find it significantly difficult to obtain sufficient nutrient intake through foods alone. Accordingly, many people in our nation do rely on nutritional supplements to ensure that they and their families are consuming sufficient levels of key nutrients. This legislation would enable low-income people to have greater access to nutritional supplements to improve their nutrient intake. Currently, recipients of food stamps are not allowed to use those resources to purchase nutritional supplements. This restriction clearly serves as an impediment to adequate nutrition for low-income people who may need supplements to ensure they are consuming sufficient levels of nutrients. It defies common sense. This restriction also prevents food stamp recipients from exercising their own responsibility and choice to use food stamps for purchasing nutritional supplements that they determine are important to adequate nutrition for their children or themselves. It is a glaring inconsistency that food stamps may currently be used to purchase a variety of non-nutritious or minimally nutritious foods but not to purchase nutritional supplements. Incredibly, you can use Food Stamps to buy Twinkies, but not Vitamin C or a multivitamin. Opponents of this legislation will argue that food stamps are most effectively used to improve nutrition through purchasing food rather than nutritional supplements, and that if food stamps may be used for nutritional supplements, households will be less able to stretch their resources to purchase sufficient quantities of food. The available evidence indicates, however, that food stamp households actually make more careful and effective use of their resources in purchasing nutritious foods than consumers in general. Since food stamp households necessarily have a limited amount of money to spend on food--and generally already find it difficult to meet their food needs--they simply cannot afford to make unwise or unnecessary purchases of nutritional supplements using food stamps which would otherwise be used for food. In addition, a month's worth of daily multivitamin supplements can cost as little as one can of soda. So I believe the concerns that food stamps will be wasted or unwisely used for nutritional supplements is unfounded. Our proposal is also clearly consistent with the stated purpose of the Food Stamp program, that is to ``promote the general welfare and to safeguard the health of the nation's population by raising the nutrition among low-income households.'' So, Mr. President, I hope that my colleagues will join us in supporting this legislation designed to improve opportunities for low- income Americans to ensure adequate nutrition for their families and themselves. Simply put, if you think it doesn't make sense that Food Stamps can be used to buy twinkies and doughnuts but not Vitamin C or a daily multi-vitamin supplement, you should support this bipartisan legislation. Mr. President, I ask unanimous consent that a copy of the bill be printed in the Record.

Mr. HARKIN

Mr. HARKIN. Mr. President, older workers across America have been paying into pension plans throughout their working years, anticipating the secure retirement which is their due. And now, as more Americans than ever before in history approach retirement, we are seeing a disturbing trend by employers to cut their pension benefits. Many companies are changing to so-called ``cash balance'' plans which often saves them millions of dollars in pension costs each year by taking a substantial cut out of employee pensions. This practice allows employers to unfairly profit at the expense of retirees. Employees generally receive three types of benefits for working: direct wages, health benefits and pensions. Two of those are long-term benefits which usually grow in value as workers become older. Pensions are paid entirely after a worker leaves. Reducing an employee's pension years after it is earned should be no more legal than denying a worker wages after work has been done. In fact, our laws do prohibit employers from directly reducing an employee's pension accrued benefit. Unfortunately, however, these protections are being sidestepped and workers' pensions are being indirectly reduced through the creation of cash balance pension plans. Under traditional defined benefit plans, a worker's pension is based on their length of employment and their average pay during their last years of service. Their pension is based on a preset formula using those key factors rather than the amount in their pension account. Under the typical cash balance plan, a worker's pension is based on the sum placed in the employee's account. That sum is based on their wages or salary year to year. When a worker shifts from a traditional to a cash balance plan, the employer calculates the value of the benefits they have accrued under the old plan. The result for many older workers who have accrued significant sums in their pension that are higher than it would have been under the new cash balance plan. In that case, under many of these cash balance plans the employer simply stops contributing to the value of their pension till the value reaches the level provided for under the new plan. And this can go on for significant periods--five years and sometimes more. Pension experts call this ``wear away'' others call it a ``plateau.'' This is not right. It is not fair. In fact, I believe it is a type of age discrimination. After all, a new employee, usually younger, would effectively be receiving greater pay for the same work: money put into their pension plan. And, there are some who believe this practice violates the spirit and perhaps the letter of existing law in that regard. What does this mean to real people? Two Chase Manhattan banking executives hired an actuary to calculate their future pensions after Chase Manhattan's predecessor, Chemical Bank, converted to a cash balance plan. The actuary estimated their future pensions had fallen 45 percent. John Healy, one of the executives, says ``I would have had to work about ten more years before I broke even.'' Ispat Inland, Inc, an East Chicago steel company, converted to a cash balance plan January 1. Paul Schroeder, a 44-year-old engineer who has worked for Ispat for 19 years, calculated it could take him as long as 13 years to acquire additional benefits. Why are companies changing to these cash balance plans? They have lots of stated reasons: ease of administration, certainty in how much is needed to pay for the pension plan and that the plan is beneficial to those workers who move from company to company (with similar pension plans). But, the big reason is the companies save millions of dollars. They save it because the pensions provided for with almost all cash balance plans are, on average far less generous, and they immediately reduce their need to pay anything into a pension plan at all for a while, sometimes for years, because of this wear away or plateau feature. At one conference of consulting actuaries, Joseph M. Edmonds told companies: . . . it is easy to install a cash balance plan in place of a traditional defined benefit plan and cover up cutbacks in future benefit accruals. For example, you might change from a final average pay formula to a career average pay formula. The employee is very excited about this because he now has an annual account balance instead of an obscure future monthly benefit. The employee does not realize the implications of the loss of future benefits in the final pay plan. Another example of a reduction in future accruals could be in the elimination of early retirement subsidies. Because traditional pension plans become significantly more valuable in the last years before retirement, the switch to cash balance plans also can reduce older workers' incentive to stay until they reach their normal retirement age. I support Senator Moynihan's legislation that requires that individuals receive clear individualized notice of what a conversion to a cash balance plan would do to their specific pension. There is no question that shining the light on this dark practice can reduce the chance that it will occur. I certainly agree with his view that those notices should not be generalized where obfuscation is easier and employees will pay less attention to the result. I also believe that more must be done. For that reason, I am introducing the Older Workers Pension Protection Act of 1999 which prohibits the practice of ``wear away.'' It provides that a company cannot discriminate against longtime workers by not putting aside money into their pension account without any consideration for the long term payments made to the employee's pension for earlier work performed. Under my bill, there would be no wear away, no plateau in which a worker would be receiving no increases in pension benefits while working when other employees received benefits. The new payments would have to at least equal the payments made under the revised pension plan without any regard to how much a worker had accrued in pension benefits under the old plan. Some suggest that if such a requirement were put in place, companies could and would opt out of providing any pension at all. I do not believe that would happen. Companies with defined benefit plans do not have them because they are required to do so. They do it because of negotiated contracts or because the company has decided that it is an important part of the benefits for employees to acquire and maintain a productive workforce. Many suggest that the simple disclosure alone might prevent a reduction in payment benefits. Much is made about the gains of younger workers when companies switch to cash benefit plans. There is greater portability. But, none of the experts I've consulted believes that is a dominant motivation of the companies for proposing these changes in pension law. And, the changes I am proposing would not reduce the benefits for younger workers. I urge my colleagues to take a fresh look at the spirit of the current law that prevents a reduction in accrued pension benefits. I believe it is only fair to extend that law with its current spirit by simply requiring that any company which changes to a cash balance or similar pension plan treats all workers fairly and not penalize older employees whose hard work has earned them benefits under the earlier pension plan. Mr. President, Ellen Schultz at the Wall Street Journal has done an excellent series of articles on this issue. I ask unanimous consent that a copy of those articles appear in the Record at this point. I am also including the text of a piece of this same subject done by NPR. If my colleagues have not seen these articles I commend them to their attention. I believe that once you've read them, you'll agree with me that we must take action to protect the pensions of older workers. [From the Wall Street Journal, Dec. 4, 1998] Employers Win Big With a Pension Shift; Employees Often Lose (By Ellen E. Schultz and Elizabeth MacDonald) Largely out of sight, an ingenious change in the way big companies structure their pension plans is saving them millions of dollars, with barely a peep of resistance. Unless they happen to have a Jim Bruggeman on their staff. Sifting through his bills and junk mail one day last year, Mr. Bruggeman found the sort of notice most people look at but don't spend a lot of time on: His company was making some pension-plan changes. The company, Central & South West Corp., was replacing its traditional plan with a new variety it said was easier to understand and better for today's more-mobile work force. A brochure sent to workers stressed that ``the changes being made are good for both you and the company.'' Alone among Central & South West's 7,000 employees, Mr. Bruggeman, a 49-year-old engineer in the Dallas utility's Tulsa, Okla., office, set out to discover exactly how the new system, known as a cash-balance plan, worked. During a year- long quest to master the assumptions, formulas and calculations behind it, Mr. Bruggeman found himself at odds with his superiors, and labeled a troublemaker. In the end, though, he figured out something about the new pension system that few other employees have noticed: For many of them, it is far from a good deal. But it clearly was, as the brochure noted, good for the company. A peek at a CSW regulatory filing in March 1998, after the new plan took effect, shows that the company saved $20 million in pension costs last year alone. Other government filings revealed that whereas the year before, CSW had to set aside $30 million to fund its pension obligations, after it made the mid-1997 switch it didn't have to pay a dime to fund the pension plan. pension light The switch to cash-balance pension plans--details later--is the biggest development in the pension world in years, so big that some consultants call it revolutionary. Certainly, many call it lucrative; one says such a pension plan ought to be thought of as a profit center. Not since companies dipped into pension funds in the 1980s to finance leveraged buyouts, have corporate treasurers been so abuzz over a pension technique. But its little-noticed dark side--one that many companies don't make very clear to employees, to say the least--is that a lot of older workers will find their pensions cut, in some cases deeply. So far, only the most financially sophisticated employees have figured this out, because the formulas are so complex. Even the Labor Department and the Internal Revenue Service have trouble with them. So thousands of employees, while acutely aware of how the stock market affects their retirement next eggs, are oblivious to the effect of this change. (See related article on page C1.) One might get the impression, from the rise of 401(k) retirement plans funded jointly by employer and employee, that pensions are a dead species. In fact, nearly all large employers still have pension plans, because pulling the plug would be too costly; the company would have to pay out all accrued benefits at once. Meanwhile, companies face growing obligations as the millions of baby boomers move into their peak pension-earning years. Now, however, employers have discovered a substitute for terminating the pension plan; a restructuring that often makes it unnecessary ever to feed the plan again. pitfalls for employers But this financially appealing move has its risks. The IRS has never given its blessing to some of the maneuvers involved. If employers don't win a lobbying battle currently being waged for exemptions from certain pension rules, some of these plans could be in for a costly fix. In addition, the way employers are handling the transition could result in employee-relations backlashes as more and more older workers eventually figure out they are paying the price for the transformation of traditional pension plans. In those traditional plans, most of the benefits build up in an employee's later years. Typical formulas multiply years of service by the average salary in the final years, when pay usually is highest. As a result, as much as half of a person's pension is earned in the last five years on the job. With the new plans, everyone gets the same steady annual credit toward an eventual pension, adding to his or her pension-account ``cash balance.'' Employers contribute a percentage of an employee's pay, typically 4%. The balance earns an interest credit, usually around 5%. And it is portable when the employee leaves. For the young, 4% of pay each year is more than what they were accruing under the old plan. But for those nearing retirement, the amount is far less. So an older employee who is switched in to a cash-balance system can find his or her eventual pension reduced by 20% or 50% or, in rare cases, even more. This is one way companies save money with the switch. The other is a bit more complicated. Companies can also benefit from the way they invest the assets in the cash-balance accounts. If the employer promised to credit 5% interest to employees' account balances, it can keep whatever it earned above that amount. The company can use these earnings to finance other benefits, to pay for a work-force reduction, or--crucially--to cover future years' contributions. This is why the switch makes pension plans self-funding for many companies. Although employers can do this with regular pensions, the savings are grater and easier to measure in cash-balance plans. The savings often transform an underfunded pension plan into one that is fully funded. ``Cash-balance plans have a positive effect on a company's profitability,'' says Joseph Davi, a benefits consultant at Towers Perrin in Stamford, Conn. They ``could be considered a profit center.'' motive for the move Employers, however, are almost universally reticent about how they benefit. ``Cost savings were not the reason the company switched to a cash-balance plan,'' says Paul Douty, the compensation director at Mr. Bruggeman's employer, CSW. Sure, the move resulted in substantial cost savings, he says, but the company's goal was to become more competitive and adapt to changing times. Besides, he notes, the $20 million in pension-plan savings last year were partly offset by a $3 million rise in costs in the 401(k); the company let employees contribute more and increased its matching contributions. There is another reason some employers like cash-balances plans: By redistributing pension assets from older to younger workers, they turn pension rights--which many young employees ignore since their pension is so far in the future--into appealing benefits today. At the same time, older workers lose a financial incentive to stay on the job, since their later years no longer can balloon the pension. Some pension professionals think companies should be more candid. ``If what you want to do is get rid of older workers, don't mask it as an improvement to the pension plan,'' says Michael Pikelny, an employee-benefits specialist at Hartmarx Corp., an apparel maker in Chicago that decided not to install a cash-balance plan. under a microscope Most employees aren't equipped to question what employers tell them. But Mr. Bruggeman was. He had a background in finance, his hobby was actuarial science, he had taken graduate-level courses in statistics and probability, and he knew CSW's old pension plan inside and out. So when the company announce it was converting to a cash-balance plan last year, he began asking it for the documents and assumptions he needed to compare the old pension to the new one. With each new bit of data, he gained another insight. First, he figured out that future pension accruals had been reduced by at least 30% for most employees. CSW got rid of early-retirement and other subsidies and reduced the rates at which employees would accrue pensions in the future. Employees wouldn't necessarily conclude this from the brochures the human resources department handed out. Like most employers that switch to cash-balances plans, CSW assured employees that the overall level of retirement benefits would remain unchanged. But a close reading of the brochure revealed that this result depended on employees' putting more into their 401(k) plans, gradually making up for the reduction in pensions. At a question-and-answer session on the new plan before it was adopted, Mr. Bruggeman spoke up and told co-workers how their pensions were being reduced. The next day, he says, his supervisors in Tulsa came to his office and told him that CSW management in Dallas was concerned that his remarks would ``cause a class-action suit'' or ``uprising,'' and said he shouldn't talk to any other employees. He says the supervisor, Peter Kissman, informed him that if he continued to challenge the new pension plan, CSW officials would think he wasn't a team player, and his job could be in jeopardy. Asked about this, Mr. Kissman says: ``In my department I would not tolerate employee harassment. I believe the company feels the same way. Past that, I really can't speak to this issue. It's being investigated by the company.'' a few sweeteners Employers, aware that switching to cash-balance plans can slam older workers, often offer features to soften the blow. They may agree to contribute somewhat more than the standard 4% of pay for older employees, or they may provide a ``grandfather clause.'' CSW offered both options, saying employees 50 or older with 10 years of service could stay in the old plan if they wished. Mr. Bruggeman, a 25-year veteran, was just shy of 49. He calculated that people in his situation would see their pensions fall 50% under the new plan, depending on when they retired. Mr. Bruggeman told company officials that the plan wasn't fair to some long-term employees. Subsequently, he says, in his November 1997 performance evaluation, his supervisor's only criticism was that he ``spends too much time thinking about the pension plan.'' A CSW official says the company can't discuss personnel matters. What bothered Mr. Bruggeman even more was his discovery of one of the least-known features of cash-balance plans: Once enrolled in them, some employees don't earn any more toward their pension for several years. The reasons are convoluted, but in a nutshell: Most employees believe that opening balance in their new pension account equals the credits they've earned so far under the old plan. But in fact, the balance often is lower. When employers convert to a cash-balance plan, they calculate a present-day, lump-sum value for the benefit each employee has already earned. In Mr. Bruggeman's case, this was $352,000--something he discovered only after obtaining information from the company and making the calculations himself. Yet Mr. Bruggeman's opening account in the cash- balance plan was just $296,000, because the company figured it using different actuarial and other assumptions. This is generally legal, despite a federal law that bars companies from cutting already-earned pensions. If Mr. Bruggeman quit, he would get the full $352,000, so the law isn't violated. But if he stays, it will take several years of pay credits and interest before his balance gets back up to $352,000. ``Wearaway'' Mr. Douty says this happened to fewer than 2% of workers at CSW. But at some companies that switch to cash-balance plans, far more are affected. At AT&T Corp., which adopted a cash- balance plan this year, many older workers will have to work three to eight years before their balance catches up and they start building up their pension pot again. ``Wearaway,'' this is called. Only if an employee knows what figures to ask for can he or she make a precise comparison of old and new benefits. Indeed, the difficulty of making comparisons has sometimes been portrayed as an advantage of switching to cash-balance plans. A partner at the consulting firm that invented the plans in the 1980s told a client in a 1989 letter: ``One feature which might come in handy is that it is difficult for employees to compare prior pension benefit formulas to the account balance approach.'' Asked to comment, the author of that line, Robert S. Byrne of Kwasha Lipton (now a unit of PricewaterhouseCoopers), says, ``Dwelling on old vs. new benefits is probably not something that's a good way to go forward.'' At one company, employees did know how to make comparisons. When Deloitte & Touche started putting a cash-balance plan in place last year, some older actuaries rebelled. The firm eventually allowed all who had already been on the staff when the cash-balance plan was adopted to stick with the old benefit if they wished. Struggle at Chase At Chase Manhattan Corp., two executives in the private- banking division hired an actuary and calculated that their future pensions had fallen 45% as a result of a conversion to a cash-balance plan by Chase predecessor Chemical Bank. ``I would have had to work about 10 more years before I broke even and got a payout equal to my old pension,'' says one of the executives, John Healy, now 61. He and colleague Nathan Davi say that after seven years of their complaints, Chase agreed to give each a pension lump sum of about $487,000, which was roughly $72,000 more than what they would have received under the new cash-balance plan. Although a Chase official initially said the bank had ``never given any settlement to any employee over the bank's pension plans,'' when told about correspondence about the Healy-Davi case, Chase said that a review had determined that about 1,000 employees could be eligible for additional benefits. ``We amended the plan so that it would cover all similarly situated employees,'' a spokesman said. How many quiet arrangements have been reached is unknown. But employees are currently pressing class-action suits against Georgia-Pacific Corp. and Cummins Engine Co.'s Onan Corp. subsidiary, alleging that cash-balance plans illegally reduce pensions. (Both defendants are fighting the suits.) Judges have recently dismissed similar suits against Bell Atlantic Corp. and BankBoston N.A. Concern at the IRS Not aware of any of this ferment, Mr. Bruggeman in August 1998 filed his multiple-spreadsheet analysis of the CSW cash- balance plan with the IRS and the Labor Department, asking them for a review. Soon after, he says, a manager in CSW's benefits department called him in and ``wanted to know what it would take for me to drop all this.'' The answer wasn't to be ``grandfathered'' and exempted from the new plan. ``I told him all I want is for the company to . . . be fair to employees,'' he says, ``It's the principle of the thing.'' The manager couldn't be reached for comment, but a CSW official says the company takes complaints ``very seriously and they're thoroughly investigated. In every part of this type of investigation an employee is interviewed by a company representative, and in every initial interview the employee is asked for suggestions on what might be a preferred solution.'' Even without Mr. Bruggeman's input, the IRS has a lot of cash-balance data on its plate. The agency is swamped with paper-work from hundreds of new plans seeking its approval, and applications are piling up. The delay is due in part to concern at the IRS that such plans may violate various pension laws, according to a person familiar with the situation. Meanwhile, the consulting firms that create the plans for companies are lobbying for exemptions from certain pension rules. They say they aren't worried. That's because ``companies who now have these plans are sufficiently powerful, sufficiently big and have enough clout that they could get Congress to bend the law . . . to protect their plans,'' says Judith Mazo, a Washington-based senior vice president for consulting firm Segal Co. Regulators, meanwhile, are playing catch-up. Bottom line, Ms. Mazo says: ``The plans are too big to fail.''

Mr. HARKIN

Mr. HARKIN. Mr. President, older workers across America have been paying into pension plans throughout their working years, anticipating the secure retirement which is their due. And now, as more Americans than ever before in history approach retirement, we are seeing a disturbing trend by employers to cut their pension benefits. Many companies are changing to so-called ``cash balance'' plans which often saves them millions of dollars in pension costs each year by taking a substantial cut out of employee pensions. This practice allows employers to unfairly profit at the expense of retirees. Employees generally receive three types of benefits for working: direct wages, health benefits and pensions. Two of those are long-term benefits which usually grow in value as workers become older. Pensions are paid entirely after a worker leaves. Reducing an employee's pension years after it is earned should be no more legal than denying a worker wages after work has been done. In fact, our laws do prohibit employers from directly reducing an employee's pension accrued benefit. Unfortunately, however, these protections are being sidestepped and workers' pensions are being indirectly reduced through the creation of cash balance pension plans. Under traditional defined benefit plans, a worker's pension is based on their length of employment and their average pay during their last years of service. Their pension is based on a preset formula using those key factors rather than the amount in their pension account. Under the typical cash balance plan, a worker's pension is based on the sum placed in the employee's account. That sum is based on their wages or salary year to year. When a worker shifts from a traditional to a cash balance plan, the employer calculates the value of the benefits they have accrued under the old plan. The result for many older workers who have accrued significant sums in their pension that are higher than it would have been under the new cash balance plan. In that case, under many of these cash balance plans the employer simply stops contributing to the value of their pension till the value reaches the level provided for under the new plan. And this can go on for significant periods--five years and sometimes more. Pension experts call this ``wear away'' others call it a ``plateau.'' This is not right. It is not fair. In fact, I believe it is a type of age discrimination. After all, a new employee, usually younger, would effectively be receiving greater pay for the same work: money put into their pension plan. And, there are some who believe this practice violates the spirit and perhaps the letter of existing law in that regard. What does this mean to real people? Two Chase Manhattan banking executives hired an actuary to calculate their future pensions after Chase Manhattan's predecessor, Chemical Bank, converted to a cash balance plan. The actuary estimated their future pensions had fallen 45 percent. John Healy, one of the executives, says ``I would have had to work about ten more years before I broke even.'' Ispat Inland, Inc, an East Chicago steel company, converted to a cash balance plan January 1. Paul Schroeder, a 44-year-old engineer who has worked for Ispat for 19 years, calculated it could take him as long as 13 years to acquire additional benefits. Why are companies changing to these cash balance plans? They have lots of stated reasons: ease of administration, certainty in how much is needed to pay for the pension plan and that the plan is beneficial to those workers who move from company to company (with similar pension plans). But, the big reason is the companies save millions of dollars. They save it because the pensions provided for with almost all cash balance plans are, on average far less generous, and they immediately reduce their need to pay anything into a pension plan at all for a while, sometimes for years, because of this wear away or plateau feature. At one conference of consulting actuaries, Joseph M. Edmonds told companies: . . . it is easy to install a cash balance plan in place of a traditional defined benefit plan and cover up cutbacks in future benefit accruals. For example, you might change from a final average pay formula to a career average pay formula. The employee is very excited about this because he now has an annual account balance instead of an obscure future monthly benefit. The employee does not realize the implications of the loss of future benefits in the final pay plan. Another example of a reduction in future accruals could be in the elimination of early retirement subsidies. Because traditional pension plans become significantly more valuable in the last years before retirement, the switch to cash balance plans also can reduce older workers' incentive to stay until they reach their normal retirement age. I support Senator Moynihan's legislation that requires that individuals receive clear individualized notice of what a conversion to a cash balance plan would do to their specific pension. There is no question that shining the light on this dark practice can reduce the chance that it will occur. I certainly agree with his view that those notices should not be generalized where obfuscation is easier and employees will pay less attention to the result. I also believe that more must be done. For that reason, I am introducing the Older Workers Pension Protection Act of 1999 which prohibits the practice of ``wear away.'' It provides that a company cannot discriminate against longtime workers by not putting aside money into their pension account without any consideration for the long term payments made to the employee's pension for earlier work performed. Under my bill, there would be no wear away, no plateau in which a worker would be receiving no increases in pension benefits while working when other employees received benefits. The new payments would have to at least equal the payments made under the revised pension plan without any regard to how much a worker had accrued in pension benefits under the old plan. Some suggest that if such a requirement were put in place, companies could and would opt out of providing any pension at all. I do not believe that would happen. Companies with defined benefit plans do not have them because they are required to do so. They do it because of negotiated contracts or because the company has decided that it is an important part of the benefits for employees to acquire and maintain a productive workforce. Many suggest that the simple disclosure alone might prevent a reduction in payment benefits. Much is made about the gains of younger workers when companies switch to cash benefit plans. There is greater portability. But, none of the experts I've consulted believes that is a dominant motivation of the companies for proposing these changes in pension law. And, the changes I am proposing would not reduce the benefits for younger workers. I urge my colleagues to take a fresh look at the spirit of the current law that prevents a reduction in accrued pension benefits. I believe it is only fair to extend that law with its current spirit by simply requiring that any company which changes to a cash balance or similar pension plan treats all workers fairly and not penalize older employees whose hard work has earned them benefits under the earlier pension plan. Mr. President, Ellen Schultz at the Wall Street Journal has done an excellent series of articles on this issue. I ask unanimous consent that a copy of those articles appear in the Record at this point. I am also including the text of a piece of this same subject done by NPR. If my colleagues have not seen these articles I commend them to their attention. I believe that once you've read them, you'll agree with me that we must take action to protect the pensions of older workers. [From the Wall Street Journal, Dec. 4, 1998] Employers Win Big With a Pension Shift; Employees Often Lose (By Ellen E. Schultz and Elizabeth MacDonald) Largely out of sight, an ingenious change in the way big companies structure their pension plans is saving them millions of dollars, with barely a peep of resistance. Unless they happen to have a Jim Bruggeman on their staff. Sifting through his bills and junk mail one day last year, Mr. Bruggeman found the sort of notice most people look at but don't spend a lot of time on: His company was making some pension-plan changes. The company, Central & South West Corp., was replacing its traditional plan with a new variety it said was easier to understand and better for today's more-mobile work force. A brochure sent to workers stressed that ``the changes being made are good for both you and the company.'' Alone among Central & South West's 7,000 employees, Mr. Bruggeman, a 49-year-old engineer in the Dallas utility's Tulsa, Okla., office, set out to discover exactly how the new system, known as a cash-balance plan, worked. During a year- long quest to master the assumptions, formulas and calculations behind it, Mr. Bruggeman found himself at odds with his superiors, and labeled a troublemaker. In the end, though, he figured out something about the new pension system that few other employees have noticed: For many of them, it is far from a good deal. But it clearly was, as the brochure noted, good for the company. A peek at a CSW regulatory filing in March 1998, after the new plan took effect, shows that the company saved $20 million in pension costs last year alone. Other government filings revealed that whereas the year before, CSW had to set aside $30 million to fund its pension obligations, after it made the mid-1997 switch it didn't have to pay a dime to fund the pension plan. pension light The switch to cash-balance pension plans--details later--is the biggest development in the pension world in years, so big that some consultants call it revolutionary. Certainly, many call it lucrative; one says such a pension plan ought to be thought of as a profit center. Not since companies dipped into pension funds in the 1980s to finance leveraged buyouts, have corporate treasurers been so abuzz over a pension technique. But its little-noticed dark side--one that many companies don't make very clear to employees, to say the least--is that a lot of older workers will find their pensions cut, in some cases deeply. So far, only the most financially sophisticated employees have figured this out, because the formulas are so complex. Even the Labor Department and the Internal Revenue Service have trouble with them. So thousands of employees, while acutely aware of how the stock market affects their retirement next eggs, are oblivious to the effect of this change. (See related article on page C1.) One might get the impression, from the rise of 401(k) retirement plans funded jointly by employer and employee, that pensions are a dead species. In fact, nearly all large employers still have pension plans, because pulling the plug would be too costly; the company would have to pay out all accrued benefits at once. Meanwhile, companies face growing obligations as the millions of baby boomers move into their peak pension-earning years. Now, however, employers have discovered a substitute for terminating the pension plan; a restructuring that often makes it unnecessary ever to feed the plan again. pitfalls for employers But this financially appealing move has its risks. The IRS has never given its blessing to some of the maneuvers involved. If employers don't win a lobbying battle currently being waged for exemptions from certain pension rules, some of these plans could be in for a costly fix. In addition, the way employers are handling the transition could result in employee-relations backlashes as more and more older workers eventually figure out they are paying the price for the transformation of traditional pension plans. In those traditional plans, most of the benefits build up in an employee's later years. Typical formulas multiply years of service by the average salary in the final years, when pay usually is highest. As a result, as much as half of a person's pension is earned in the last five years on the job. With the new plans, everyone gets the same steady annual credit toward an eventual pension, adding to his or her pension-account ``cash balance.'' Employers contribute a percentage of an employee's pay, typically 4%. The balance earns an interest credit, usually around 5%. And it is portable when the employee leaves. For the young, 4% of pay each year is more than what they were accruing under the old plan. But for those nearing retirement, the amount is far less. So an older employee who is switched in to a cash-balance system can find his or her eventual pension reduced by 20% or 50% or, in rare cases, even more. This is one way companies save money with the switch. The other is a bit more complicated. Companies can also benefit from the way they invest the assets in the cash-balance accounts. If the employer promised to credit 5% interest to employees' account balances, it can keep whatever it earned above that amount. The company can use these earnings to finance other benefits, to pay for a work-force reduction, or--crucially--to cover future years' contributions. This is why the switch makes pension plans self-funding for many companies. Although employers can do this with regular pensions, the savings are grater and easier to measure in cash-balance plans. The savings often transform an underfunded pension plan into one that is fully funded. ``Cash-balance plans have a positive effect on a company's profitability,'' says Joseph Davi, a benefits consultant at Towers Perrin in Stamford, Conn. They ``could be considered a profit center.'' motive for the move Employers, however, are almost universally reticent about how they benefit. ``Cost savings were not the reason the company switched to a cash-balance plan,'' says Paul Douty, the compensation director at Mr. Bruggeman's employer, CSW. Sure, the move resulted in substantial cost savings, he says, but the company's goal was to become more competitive and adapt to changing times. Besides, he notes, the $20 million in pension-plan savings last year were partly offset by a $3 million rise in costs in the 401(k); the company let employees contribute more and increased its matching contributions. There is another reason some employers like cash-balances plans: By redistributing pension assets from older to younger workers, they turn pension rights--which many young employees ignore since their pension is so far in the future--into appealing benefits today. At the same time, older workers lose a financial incentive to stay on the job, since their later years no longer can balloon the pension. Some pension professionals think companies should be more candid. ``If what you want to do is get rid of older workers, don't mask it as an improvement to the pension plan,'' says Michael Pikelny, an employee-benefits specialist at Hartmarx Corp., an apparel maker in Chicago that decided not to install a cash-balance plan. under a microscope Most employees aren't equipped to question what employers tell them. But Mr. Bruggeman was. He had a background in finance, his hobby was actuarial science, he had taken graduate-level courses in statistics and probability, and he knew CSW's old pension plan inside and out. So when the company announce it was converting to a cash-balance plan last year, he began asking it for the documents and assumptions he needed to compare the old pension to the new one. With each new bit of data, he gained another insight. First, he figured out that future pension accruals had been reduced by at least 30% for most employees. CSW got rid of early-retirement and other subsidies and reduced the rates at which employees would accrue pensions in the future. Employees wouldn't necessarily conclude this from the brochures the human resources department handed out. Like most employers that switch to cash-balances plans, CSW assured employees that the overall level of retirement benefits would remain unchanged. But a close reading of the brochure revealed that this result depended on employees' putting more into their 401(k) plans, gradually making up for the reduction in pensions. At a question-and-answer session on the new plan before it was adopted, Mr. Bruggeman spoke up and told co-workers how their pensions were being reduced. The next day, he says, his supervisors in Tulsa came to his office and told him that CSW management in Dallas was concerned that his remarks would ``cause a class-action suit'' or ``uprising,'' and said he shouldn't talk to any other employees. He says the supervisor, Peter Kissman, informed him that if he continued to challenge the new pension plan, CSW officials would think he wasn't a team player, and his job could be in jeopardy. Asked about this, Mr. Kissman says: ``In my department I would not tolerate employee harassment. I believe the company feels the same way. Past that, I really can't speak to this issue. It's being investigated by the company.'' a few sweeteners Employers, aware that switching to cash-balance plans can slam older workers, often offer features to soften the blow. They may agree to contribute somewhat more than the standard 4% of pay for older employees, or they may provide a ``grandfather clause.'' CSW offered both options, saying employees 50 or older with 10 years of service could stay in the old plan if they wished. Mr. Bruggeman, a 25-year veteran, was just shy of 49. He calculated that people in his situation would see their pensions fall 50% under the new plan, depending on when they retired. Mr. Bruggeman told company officials that the plan wasn't fair to some long-term employees. Subsequently, he says, in his November 1997 performance evaluation, his supervisor's only criticism was that he ``spends too much time thinking about the pension plan.'' A CSW official says the company can't discuss personnel matters. What bothered Mr. Bruggeman even more was his discovery of one of the least-known features of cash-balance plans: Once enrolled in them, some employees don't earn any more toward their pension for several years. The reasons are convoluted, but in a nutshell: Most employees believe that opening balance in their new pension account equals the credits they've earned so far under the old plan. But in fact, the balance often is lower. When employers convert to a cash-balance plan, they calculate a present-day, lump-sum value for the benefit each employee has already earned. In Mr. Bruggeman's case, this was $352,000--something he discovered only after obtaining information from the company and making the calculations himself. Yet Mr. Bruggeman's opening account in the cash- balance plan was just $296,000, because the company figured it using different actuarial and other assumptions. This is generally legal, despite a federal law that bars companies from cutting already-earned pensions. If Mr. Bruggeman quit, he would get the full $352,000, so the law isn't violated. But if he stays, it will take several years of pay credits and interest before his balance gets back up to $352,000. ``Wearaway'' Mr. Douty says this happened to fewer than 2% of workers at CSW. But at some companies that switch to cash-balance plans, far more are affected. At AT&T Corp., which adopted a cash- balance plan this year, many older workers will have to work three to eight years before their balance catches up and they start building up their pension pot again. ``Wearaway,'' this is called. Only if an employee knows what figures to ask for can he or she make a precise comparison of old and new benefits. Indeed, the difficulty of making comparisons has sometimes been portrayed as an advantage of switching to cash-balance plans. A partner at the consulting firm that invented the plans in the 1980s told a client in a 1989 letter: ``One feature which might come in handy is that it is difficult for employees to compare prior pension benefit formulas to the account balance approach.'' Asked to comment, the author of that line, Robert S. Byrne of Kwasha Lipton (now a unit of PricewaterhouseCoopers), says, ``Dwelling on old vs. new benefits is probably not something that's a good way to go forward.'' At one company, employees did know how to make comparisons. When Deloitte & Touche started putting a cash-balance plan in place last year, some older actuaries rebelled. The firm eventually allowed all who had already been on the staff when the cash-balance plan was adopted to stick with the old benefit if they wished. Struggle at Chase At Chase Manhattan Corp., two executives in the private- banking division hired an actuary and calculated that their future pensions had fallen 45% as a result of a conversion to a cash-balance plan by Chase predecessor Chemical Bank. ``I would have had to work about 10 more years before I broke even and got a payout equal to my old pension,'' says one of the executives, John Healy, now 61. He and colleague Nathan Davi say that after seven years of their complaints, Chase agreed to give each a pension lump sum of about $487,000, which was roughly $72,000 more than what they would have received under the new cash-balance plan. Although a Chase official initially said the bank had ``never given any settlement to any employee over the bank's pension plans,'' when told about correspondence about the Healy-Davi case, Chase said that a review had determined that about 1,000 employees could be eligible for additional benefits. ``We amended the plan so that it would cover all similarly situated employees,'' a spokesman said. How many quiet arrangements have been reached is unknown. But employees are currently pressing class-action suits against Georgia-Pacific Corp. and Cummins Engine Co.'s Onan Corp. subsidiary, alleging that cash-balance plans illegally reduce pensions. (Both defendants are fighting the suits.) Judges have recently dismissed similar suits against Bell Atlantic Corp. and BankBoston N.A. Concern at the IRS Not aware of any of this ferment, Mr. Bruggeman in August 1998 filed his multiple-spreadsheet analysis of the CSW cash- balance plan with the IRS and the Labor Department, asking them for a review. Soon after, he says, a manager in CSW's benefits department called him in and ``wanted to know what it would take for me to drop all this.'' The answer wasn't to be ``grandfathered'' and exempted from the new plan. ``I told him all I want is for the company to . . . be fair to employees,'' he says, ``It's the principle of the thing.'' The manager couldn't be reached for comment, but a CSW official says the company takes complaints ``very seriously and they're thoroughly investigated. In every part of this type of investigation an employee is interviewed by a company representative, and in every initial interview the employee is asked for suggestions on what might be a preferred solution.'' Even without Mr. Bruggeman's input, the IRS has a lot of cash-balance data on its plate. The agency is swamped with paper-work from hundreds of new plans seeking its approval, and applications are piling up. The delay is due in part to concern at the IRS that such plans may violate various pension laws, according to a person familiar with the situation. Meanwhile, the consulting firms that create the plans for companies are lobbying for exemptions from certain pension rules. They say they aren't worried. That's because ``companies who now have these plans are sufficiently powerful, sufficiently big and have enough clout that they could get Congress to bend the law . . . to protect their plans,'' says Judith Mazo, a Washington-based senior vice president for consulting firm Segal Co. Regulators, meanwhile, are playing catch-up. Bottom line, Ms. Mazo says: ``The plans are too big to fail.''

Mr. HARKIN

Mr. HARKIN. Mr. President, today I am pleased to introduce the Twenty-First Century Research Laboratories Act of 1999. I am joined in this effort by Senators Frist, Kennedy, Chafee, Reed of Rhode Island, Mack, Mikulski, Murray, Cleland, Helms, Warner, Sarbanes, Schumer, Cochran, Durbin, Moynihan, Boxer, Roberts, and Reid of Nevada. I want to thank my colleagues for cosponsoring this legislation. First though, let me say how pleased I was that we were able to provide the biggest increase ever for medical research last year. The Conference Agreement of the Fiscal 1999 Labor, Health and Human Services, Education and Related Agencies Appropriations Subcommittee, provided a $2 billion, or 15 percent, increase for the National Institutes of Health. And this year, I and Senator Specter will continue our work to make sure that Congress stays on course to double funding for the NIH over the next five years, a target that was agreed to by the Senate, 98 to 0, in 1997. However, as Congress embarks on this important investment in improved health, we must strengthen the totality of the biomedical research enterprise. While it is critical to focus on high quality, cutting edge basic and clinical research, we must also consider the quality of the laboratories and buildings where that research is being conducted. In fact, Mr. President, the infrastructure of research institutions, including the need for new physical facilities, is central to our nation's leadership in medical research. Despite the significant scientific advances produced by Federally-funded research, most of that research is currently being done in medical facilities built in the 1950's and 1960's, a time when the Federal Government obligated from $30 million to $100 million a year for facility and equipment modernization. Since then, however, annual appropriations for modernization of our biomedical research infrastructure have dramatically declined, ranging from zero to $20 million annually over the past decade. As a result, many of our research facilities and laboratories are outdated and inadequate to meet the challenge of the next millennium. In order to realize major medical breakthroughs in Alzheimer's, diabetes, Parkinson's, cancer and other major illnesses, our Nation's top researchers must have top quality, state-of-the-art laboratories and equipment. Unfortunately, the status of our research infrastructure is woefully inadequate. A recent study by the National Science Foundation finds that academic institutions have deferred, due to lack of funds, nearly $11.4 billion in repair, renovation, and construction projects. Almost one quarter of all research space requires either major renovation or replacement and 70% of medical schools report having inadequate space in which to perform biomedical research. A separate study by the National Science Foundation documents the laboratory equipment needs of researchers and found that 67 percent of research institutions reported an increased need for laboratory instruments. At the same time, the report found that spending for such instruments at colleges and universities actually declined in the early 1990's. Several other prominent organizations have documented the need for increased funding for research infrastructure. A March 1998 report by the Association of American Medical Colleges stated that ``The government should reestablish and fund a National Institutes of Health construction authority. . . .'' A June 1998 report by the Federation of American Societies of Experimental Biology stated that ``Laboratories must be built and equipped for the science of the 21st century . . . Infrastructure investments should include renovation of existing space as well as new construction, where appropriate.'' As we work to double funding for medical research over the next five years, the already serious shortfall in the modernization of our Nation's aging research facilities and labs will continue to worsen unless we take specific action. Future increases in NIH must be matched with increased funding for repair, renovation and construction of research facilities, as well as the purchase of modern laboratory equipment. Mr. President, the bill we are introducing today expands Federal funding for facilities construction and state-of-the-art laboratory equipment through the NIH by increasing the authorization for this account within the National Center for Research Resources to $250 million in FY 2000 and $500 million in FY 2001. In addition, the bill authorizes a ``Shared Instrumentation Grant Program'' at NIH, to be administered by the Center. The program will provide grants for the purchase of shared-use, state-of-the-art laboratory equipment costing over $100,000. All grants awarded under these two programs will be peer-reviewed, as is the practice with all NIH grants and projects. We are entering a time of great promise in the field of biomedical research. We are on the verge of major breakthroughs which could end the ravages of cancer, heart disease, Parkinson's and the scores of illnesses and conditions which take the lives and health of millions of Americans. But to realize these breakthroughs, we must devote the necessary resources to our Nation's research enterprise. The Association of American Universities, the Association of American Medical Colleges and the Federation of American Societies of Experimental Biology have all expressed their support for this legislation. I hope the rest of my colleagues will soon sign on as cosponsors to this important effort to improve the research capacity of this country.

Mr. HARKIN

Mr. HARKIN. Mr. President, today I am pleased to introduce the Twenty-First Century Research Laboratories Act of 1999. I am joined in this effort by Senators Frist, Kennedy, Chafee, Reed of Rhode Island, Mack, Mikulski, Murray, Cleland, Helms, Warner, Sarbanes, Schumer, Cochran, Durbin, Moynihan, Boxer, Roberts, and Reid of Nevada. I want to thank my colleagues for cosponsoring this legislation. First though, let me say how pleased I was that we were able to provide the biggest increase ever for medical research last year. The Conference Agreement of the Fiscal 1999 Labor, Health and Human Services, Education and Related Agencies Appropriations Subcommittee, provided a $2 billion, or 15 percent, increase for the National Institutes of Health. And this year, I and Senator Specter will continue our work to make sure that Congress stays on course to double funding for the NIH over the next five years, a target that was agreed to by the Senate, 98 to 0, in 1997. However, as Congress embarks on this important investment in improved health, we must strengthen the totality of the biomedical research enterprise. While it is critical to focus on high quality, cutting edge basic and clinical research, we must also consider the quality of the laboratories and buildings where that research is being conducted. In fact, Mr. President, the infrastructure of research institutions, including the need for new physical facilities, is central to our nation's leadership in medical research. Despite the significant scientific advances produced by Federally-funded research, most of that research is currently being done in medical facilities built in the 1950's and 1960's, a time when the Federal Government obligated from $30 million to $100 million a year for facility and equipment modernization. Since then, however, annual appropriations for modernization of our biomedical research infrastructure have dramatically declined, ranging from zero to $20 million annually over the past decade. As a result, many of our research facilities and laboratories are outdated and inadequate to meet the challenge of the next millennium. In order to realize major medical breakthroughs in Alzheimer's, diabetes, Parkinson's, cancer and other major illnesses, our Nation's top researchers must have top quality, state-of-the-art laboratories and equipment. Unfortunately, the status of our research infrastructure is woefully inadequate. A recent study by the National Science Foundation finds that academic institutions have deferred, due to lack of funds, nearly $11.4 billion in repair, renovation, and construction projects. Almost one quarter of all research space requires either major renovation or replacement and 70% of medical schools report having inadequate space in which to perform biomedical research. A separate study by the National Science Foundation documents the laboratory equipment needs of researchers and found that 67 percent of research institutions reported an increased need for laboratory instruments. At the same time, the report found that spending for such instruments at colleges and universities actually declined in the early 1990's. Several other prominent organizations have documented the need for increased funding for research infrastructure. A March 1998 report by the Association of American Medical Colleges stated that ``The government should reestablish and fund a National Institutes of Health construction authority. . . .'' A June 1998 report by the Federation of American Societies of Experimental Biology stated that ``Laboratories must be built and equipped for the science of the 21st century . . . Infrastructure investments should include renovation of existing space as well as new construction, where appropriate.'' As we work to double funding for medical research over the next five years, the already serious shortfall in the modernization of our Nation's aging research facilities and labs will continue to worsen unless we take specific action. Future increases in NIH must be matched with increased funding for repair, renovation and construction of research facilities, as well as the purchase of modern laboratory equipment. Mr. President, the bill we are introducing today expands Federal funding for facilities construction and state-of-the-art laboratory equipment through the NIH by increasing the authorization for this account within the National Center for Research Resources to $250 million in FY 2000 and $500 million in FY 2001. In addition, the bill authorizes a ``Shared Instrumentation Grant Program'' at NIH, to be administered by the Center. The program will provide grants for the purchase of shared-use, state-of-the-art laboratory equipment costing over $100,000. All grants awarded under these two programs will be peer-reviewed, as is the practice with all NIH grants and projects. We are entering a time of great promise in the field of biomedical research. We are on the verge of major breakthroughs which could end the ravages of cancer, heart disease, Parkinson's and the scores of illnesses and conditions which take the lives and health of millions of Americans. But to realize these breakthroughs, we must devote the necessary resources to our Nation's research enterprise. The Association of American Universities, the Association of American Medical Colleges and the Federation of American Societies of Experimental Biology have all expressed their support for this legislation. I hope the rest of my colleagues will soon sign on as cosponsors to this important effort to improve the research capacity of this country.

Mr. HARKIN

Mr. HARKIN. Are we going to come back to this bill right after that vote?

Mr. HARKIN. That makes sense.

Mr. HARKIN. Mr. President, I did not know that was the situation before us. As I understand, at 11:35 a.m., under a previous unanimous consent, there will be 40 minutes of debate equally divided.

Mr. HARKIN. I will be glad to yield.

Mr. HARKIN. If my colleagues are not going to speak on the steel bill, then I will add the time to continue my remarks.

Mr. HARKIN. Mr. President, I thank the chairman and ranking member, the managers of the bill, for including the amendment I had offered in the managers' packet. I thank Senators Wellstone, Kohl, Lautenberg, Kennedy, Dodd, Torricelli, Wyden, and Feingold for cosponsoring this sense-of-the-Senate resolution regarding the recent adoption in Geneva by the International Labor Organization of the Convention on the Worst Forms of Child Labor. June 17, 1999 marked a historic event in the battle to end the scourge of abusive and exploitative child labor. By a unanimous vote, the International Labor Organization's member states approved a new Convention on the Worst Forms of Child Labor. For the first time in history, 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 Muslim, from Buddhists 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.'' Gone is the argument that abusive and exploitative child labor is an acceptable practice because of a country's economic circumstance. 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. The United States and the international community as a whole unanimously for the first time laid those arguments to rest and laid the groundwork to begin the process of ending the scourge of abusive and exploitative child labor. Mr. President, for the better part of a decade, I have been in my own capacity working to do what I can to end abusive and exploitative child labor around the globe, including in the United States. The ILO estimates that there are about 250 million children worldwide, many as young as 6 or 7, who are working, economically active. These are not just part-time jobs. Many of them work in dangerous environments which are detrimental to their emotional, physical, and moral well-being. Just last year, I traveled to Pakistan, India, Nepal, and Bangladesh where I witnessed the travesty of abusive and exploitative child labor firsthand. This chart is a picture I took myself. This is in a small plant, a factory, to use the term loosely, hidden away on the outskirts of Katmandu. I was there on a Sunday, and Sunday evening I was accompanied by a young man who is a former child laborer. He took me to this place on the outskirts of the city where, because of friends working there who said the owner was gone and he knew the guard at the gate, we got in surreptitiously. In fact, the sign on the outside of the gate said no one under the age of 14 was permitted to work there. It was a big sign in both English and in Nepalese. Once we got in, we saw kids as young as 6 and 7. This is just one of the many pictures I took depicting these kids working full time, and this was in the evening. This was probably about 7 or 8 o'clock in the evening on a Sunday. In India, I met children who were liberated from hand-knotted carpet factories where they were chained--chained, Mr. President--to looms and forced to work as many as 12 hours a day, 7 days a week. These children were nothing more than slaves. They earned no money. They received no education. They had no hope for a future until they were freed by the South Asian Coalition Against Child Servitude, headed by Kailash Satyarthi. I can tell you that I myself have only glimpsed into the dark world of exploitative child labor.

Mr. HARKIN. I need probably 10, 15 minutes. I do not know if my colleagues are here to speak under the previous order. I will have to come back.

Mr. HARKIN. As I understand, there will be 40 minutes of debate and then we will have a vote?

Mr. HARKIN

Mr. HARKIN. Mr. President, as my good friend from Delaware is aware, last week the International Labor Organization (ILO) unanimously adopted a new Convention on the Worst Forms of Child Labor. This Convention calls on ILO Member States to take immediate and effective actions to prohibit and eliminate the worst forms of child labor. The Convention also 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 of 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, safety, or morals of children. It also defines a child as any person under the age of 18. I was privileged to travel with the President to the ILO where he addressed the delegates on child labor and affirmed the United States Government support of this important Convention. Would the Senator from Delaware agree that this important and historic Convention should be considered as a high priority item and considered in a timely fashion after submission to the Senate by the President?

Mr. HARKIN. Mr. President, I was talking this morning about a very significant event that transpired last week in Geneva on June 17. It was a historic event in the battle to end the scourge of abusive and exploitative child labor. By a unanimous vote, the International Labor Organization's member states, including the United States, approved a new convention banning the worst forms of child labor. For the first time in history, 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 Muslim, from Buddhists 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.'' 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. The United States and the international community as a whole unanimously for the first time laid those arguments to rest and laid the groundwork to begin the process of ending the scourge of abusive and exploitative child labor. Mr. President, for the better part of a decade, I have been in my own capacity working to do what I can to end abusive and exploitative child labor around the globe, including in the United States. The ILO estimates that there are about 250 million children worldwide, many as young as 6 or 7, who are working. These are not just part-time jobs. Many of them work in dangerous environments which are detrimental to their emotional, physical, and moral well-being. Last year, I traveled with my staff to Katmandu, Nepal, and also to Pakistan, India, and Bangladesh. We were able to witness firsthand the abuse of child labor. This chart shows a plant we went to in Katmandu. It was on a Sunday. I was taken there by a young man who had previously been a child laborer. On the outside of the gate there was this sign in both Nepalese and English: Child labour under the age of 14 is strictly prohibited. I actually took this picture. Because we had information that the owner was gone and this young man I was with knew the guard at the gate, we were let in. When we were let in, I started taking pictures. This is one of many pictures I have of some of the young children working in that plant. We determined their ages to be somewhere in the neighborhood of 7 or 8 years. This was about 7 or 8 o'clock on a Sunday night. These kids were working in very dusty, dirty conditions, and this shows them as virtual slaves, unable to leave, unable to do anything but work at the rug plant. This gives a little idea of the child labor I was able to glimpse on my trip. Had they known we were coming to that plant, they would have taken the children out the back door and we would not have seen any children there. They would have said: See, we don't have any child labor. That is why it took a surreptitious action on my part to get in and take the pictures, so that I could get proof of the child labor and the deplorable conditions which occur not just in Nepal, but all over the world. In India, I met children who were liberated from hand-knotted carpet factories where they were chained--chained, Mr. President--to looms and forced to work as many as 12 hours a day, 7 days a week. These children were nothing more than slaves. They earned no money. They received no education. They had no hope for a future until they were freed by the South Asian Coalition Against Child Servitude, headed by Kailash Satyarthi. I have a chart prepared with ILO data. We see Latin America and the Caribbean have about 17 million children working; Africa, 80 million; Asia, 153 million; and about half a million in Oceania. That comes down to a total of about 250 million children worldwide. Again, I want to be clear that we are not just talking about kids working after school, working part-time. That is not it at all. The convention that the ILO adopted deals with children who are chained to looms, handle dangerous chemicals, ingest metal dust, are forced to sell illegal drugs, forced into prostitution, forced into armed conflict, some of whom who work in glass factories where furnace temperatures exceed 1,500 degrees. These children are forced to work with no protective equipment. They work only for the economic gains of others. This is in sharp contrast to any kind of a part-time job for some spending money for the latest CD. In this picture, taken in the Sialkot region of Pakistan, 8-year-old Mohammad Ashraf Irfan is making surgical equipment. He is 8 years old working around hot metal and sharp instruments. He has no protective clothing on at all, not even for his eyes. This is his lot in life at the ripe old age of 8. This is what the convention, adopted in Geneva last week, will start preventing. Mr. President, as you and many of my colleagues know, President Clinton traveled to Geneva, Switzerland, last week to address the International Labor Organization's conference. He is the first President in U.S. history to address the ILO in its 80-year history. Imagine that. I was privileged to be asked to accompany the President for this historic event. In his address to the ILO, President Clinton spoke eloquently of the crying need to protect all children from abusive and exploitative labor. The President said, in part: There are some things we cannot and will not tolerate. We will not tolerate children being used in pornography and prostitution. We will not tolerate children in slavery or bondage. We will not tolerate children being forcibly recruited to serve in armed conflicts. We will not tolerate young children risking their health and breaking their bodies in hazardous and dangerous working conditions for hours unconscionably long--regardless of country, regardless of circumstance. I cannot agree more. I was very proud of President Clinton--proud that he was the first U.S. President in history to address the ILO, proud that he focused his remarks on the issue of child labor and on his support for this convention. I will briefly describe the new Convention on the Worst Forms of Child Labor. I ask unanimous consent that a copy of the convention be printed in the Record following my remarks.

Mr. HARKIN. The convention defines the worst forms as being all forms of slavery, debt bondage, forced or compulsory labor, the sale and trafficking of children, including forced or compulsory recruitment of children for use in armed conflict, child prostitution, children producing and trafficking in 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, or morals of children. It also defines a child as any person under the age of 18. Mr. President, this is what we are talking about. Look at this young girl in this photograph. We do not know her age, but from all accounts, people who know this area say she is probably less than 9 years old. She and her two friends have straps around their heads, and she is carrying what looks like seven big blocks or bricks on her back which are much to heavy for such a small child and are doing permanent damage to her spine and neck. She is barefoot and hunched over. As you can see, her friends of an equal age are carrying a similar load. These are the worst forms of child labor. That is what this convention is all about. The convention calls on the ILO member states to take immediate and effective actions to prohibit and eliminate the worst forms of child labor. I am looking at a chart, which is a photo of another young girl in India carrying construction material on her head. One can see her arms are straight, her face is dirty and sweaty, and she should be in school rather than having all this construction material, about 30 or 40 pounds piled on the top of her head. She is also doing permanent damage to her neck and spine. This is the sort of gross labor abuse the convention seeks to end. As I said, the convention defines a child for these purposes as any child under the age of 18. It calls on member states to implement action plans to move children from the workplace to the classroom. UNICEF reports that over 1 billion adults will be functionally illiterate on the eve of the new millennium because they worked as children and were denied an education. That is why I am especially pleased about the importance the convention placed on education as a principal means for reducing instances of abusive and exploitative child labor. I believe very strongly that these child laborers must go from exploitation to education. This chart shows a list of what the convention abolishes: Child slavery, child bondage, child prostitution, children in pornography, trafficking in children, forced recruitment of children for armed conflict, recruitment of children in the production or sale of narcotics, and hazardous work by children. But, let me come back to the forced recruitment of children for armed conflict for just a moment. We do not have forced recruitment in the United States for children. But I am aware our Armed Forces are able to recruit children who are 17 years of age. Quite frankly, we need a debate in this body about whether or not we ought to allow that to continue. I, for one, believe that the armed services ought to be held in abeyance from recruiting and signing up young people in the armed services until they at least reach the age of 18. But that is a debate for another time. As I stated earlier, I believe that children should go from exploitation to education. We visited a very important milestone in this effort in Dacca, Bangladesh, last year when we found almost 10,000 young children, mostly girls--about 90 percent--who had been working in the garment factories. After an historic agreement with the help of the ILO and the Bangladeshi Garment Manufacturers Export Association, these children were moved out of the garment factories and into about 353 schools established in Dacca for this sole purpose. We visited a couple of those schools, and I will just tell you, looking at these young girls, who maybe a year before could not read or write, now were standing up and reciting whole passages from books, being able to write, and you could see in their eyes they are not going to go back to exploitation. The people in Bangladesh, in the government and in industry, said it is probably one of the best things that has happened to them, because they are going to have a more highly educated workforce, a more productive workforce, and that means their whole standard of living is going to increase. The convention adopted last week also calls on all member nations to identify and reach out to children at special risk and to take into account the special situation of girls with regard to education. And I am also very pleased about that provision. There are many other important elements contained in the convention which I have not mentioned. I encourage all of my colleagues to read this document thoroughly. I would also mention another historic fact about this convention. For the first time in its history, the U.S. tripartite group to the ILO, which consists of representatives from government, business and labor, went to Geneva to negotiate on this important convention, and they unanimously agreed on the final version. So I commend Secretary of Labor Alexis Herman and the other members of the U.S. delegation, including Mr. John Sweeney, the president of the AFL-CIO, and Ed Potter, from the U.S. Council on International Business, for their leadership on this convention. With the adoption of the new Convention on the Worst Forms of Child Labor, the ILO has written an important new chapter in our effort to honor our values and protect our children. Today, in recognition of this effort, I offered a sense-of-the-Senate resolution regarding the International Labor Organization's new Convention on the Worst Forms of Child Labor which was accepted as part of the managers' package. This amendment calls upon the President to promptly submit to the Senate the new convention. It commends the ILO member states for their negotiating efforts and states that it should be the policy of the United States to work with all foreign nations and international organizations to promote an end to abusive and exploitative child labor. Again, it is my understanding that very shortly President Clinton will be transmitting this convention to the Senate for our consideration. I am hopeful that the Committee on Foreign Relations will take up the convention, have hearings on it, and report it out as soon as possible. Again, with the unanimous support of labor, government and business, I see no reason why the United States should not be one of the first countries to ratify this new convention. So I am hopeful that before this session of the Congress ends that the Senate will act on it and ratify the Convention on the Worst Forms of Child Labor. Once again, I thank Senators Wellstone, Kohl, Lautenberg, Kennedy, Dodd, Torricelli, Wyden, and Feingold for cosponsoring this important amendment. Exhibit 1 A. Proposed Convention concerning the prohibition and immediate action for the elimination of the worst forms of child labour The General Conference of the International Labour Organization. Having been convened at Geneva by the Governing Body of the International Labour Office, and having met in its 87th Session on 1 June 1999, and Considering the need to adopt new instruments for the prohibition and elimination of the worst forms of child labour, as the main priority for national and international action, including international cooperation and assistance, to complement the Convention and Recommendation concerning Minimum Age for Admission to Employment, 1973, which remain fundamental instruments on child labour, and Considering that the effective elimination of the worst forms of child labour requires immediate and comprehensive action, taking into account the importance of free basic education and the need to remove the children concerned from all such work and to provide for their rehabilitation and social integration while addressing the needs of their families, and Recalling the Resolution concerning the elimination of child labour adopted by the International Labour Conference at its 83rd Session, in 1996. Recognizing that child labour is to a great extent caused by poverty and that the long-term solution lies in sustained economic growth leading to social progress, in particular poverty alleviation and universal education, and Recalling the Convention on the Rights of the Child adopted by the United Nations General Assembly on 20 November 1989, and Recalling the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up, adopted by the International Labour Conference at its 86th Session in 1998, and Recalling that some of the worst forms of child labour are covered by other international instruments, in particular the Forced Labour Convention, 1930, and the United Nations Supplementary Convention on the Abolition of Slavery, the Slave Trade, and Institutions and Practices Similar to Slavery, 1956, and Having decided upon the adoption of certain proposals with regard to child labour, which is the fourth item on the agenda of the session, and Having determined that these proposals shall take the form of an international Convention; adopts this 17th day of June of the year one thousand nine hundred and ninety-nine the following Convention, which may be cited as the Worst Forms of Child Labour Convention, 1999. Article 1 Each Member which ratifies this Convention shall take immediate and effective measures to secure the prohibition and elimination of the worst forms of child labour, as a matter of urgency Article 2 For the purposes of this Convention, the term ``child'' shall apply to all persons under the age of 18. Article 3 For the purposes of this Convention, the expression ``the worst forms of child labour'' comprises: (a) all forms of slavery or practices similar to slavery, such as the same and trafficking of children, debt bondage and serfdom and forced or compulsory labour, including forced or compulsory recruitment of children for use in armed conflict; (b) the use, procuring or offering of a child for prostitution, for the production of pornography or for pornographic performances; (c) the use, procuring or offering of a child for illicit activities, in particular for the production and trafficking of drugs as defined in the relevant international treaties; (d) work which, by its nature or the circumstances in which it is carried out, is likely to harm the health, safety or morals of children. Article 4 1. The types of work referred to under Article 3(d) shall be determined by national laws or regulations or by the competent authority, after consultation with the organizations of employers and workers concerned, taking into consideration relevant international standards, in particular Paragraphs 3 and 4 of the Worst Forms of Child Labour Recommendation, 1999. 2. The competent authority, after consultation with the organizations of employers and workers concerned, shall identify where the types of work so determined exist. 3. The list of types of work determined under paragraph 1 of this Article shall be periodically examined and revised as necessary, in consultation with the organizations of employers and workers. Article 5 Each Member shall, after consultation with employers' and workers' organizations, establish or designate appropriate mechanisms to monitor the implementation of the provisions giving effect to this Convention. Article 6 1. Each Member shall design and implement programmes of action to eliminate as a priority the worst forms of child labour. 2. Such programmes of action shall be designed and implemented in consultation with relevant government institutions and employers' and workers' organizations, taking into consideration the views of other concerned groups as appropriate. Article 7 1. Each Member shall take all necessary measures to ensure the effective implementation and enforcement of the provisions giving effect to this Convention including the provision and application of penal sanctions or, as appropriate, other sanctions. 2. Each Member shall, taking into account the importance of education in eliminating child labour, take effective and time-bound measures to: (a) prevent the engagement of children in the worst forms of child labour; (b) provide the necessary and appropriate direct assistance for the removal of children from the worst forms of child labour, and for their rehabilitation and social integration; (c) ensure access to free basic education, and, wherever possible and appropriate, vocational training, for all children removed from the worst forms of child labour; (d) identify and reach out to children at special risk; and (e) take account of the special situation of girls. 3. Each Member shall designate the competent authority responsible for the implementation of the provisions giving effect to this Convention Article 8 Members shall take appropriate steps to assist one another in giving effect to the provisions of this Convention through enhanced international cooperation and/or assistance, including support for social and economic development, poverty eradication programs, and universal education. B. Proposed Convention concerning the prohibition and immediate action for the elimination of the worst forms of child labour The General Conference of the International Labour Organization, Having been convened at Geneva by the Governing Body of the International Labour Office, and having met in its 87th Session on 1 June 1999, and Having adopted the Worst Forms of Child Labour Convention, 1999, and Having decided upon the adoption of certain proposals with regard to child labour, which is the fourth item on the agenda of the session, and Having determined that these proposals shall take the form of a Recommendation supplementing the Worst Forms of Child Labour Convention, 1999; adopts this 17th day of June of the year one thousands nine hundred and ninety-nine the following Recommendation, which may be cited as the Worse Forms of Child Labour Recommendation, 1999. 1. The provisions of this Recommendation supplement those of the Worst Forms of Child Labour Convention, 1999 (hereafter referred to as ``the Convention''), and should be applied in conjunction with them. I. Programmes of action 2. The programmes of action referred to in Article 6 of the Convention should be designed and implemented, as a matter of urgency, in consultation with relevant government institutions and employers' and workers' organizations, taking into consideration the views of the children directly affected by the worst forms of child labour, their families and, as appropriate, other concerned groups committed to the aims of the Convention and this Recommendation. Such programs should aim at, inter alia: (a) identifying and denouncing the worst forms of child labour; (b) preventing the engagement of children in or removing them from the worst forms of child labour, protecting them from reprisals and providing for their rehabilitation and social integration through measures which address their educational, physical and psychological needs: (c) giving special attention to: (i) younger children; (ii) the girl child; (iii) the problem of hidden work situations, in which girls are at special risk; (iv) other groups of children with special vulnerabilities or needs; (d) identifying, reaching out to and working with communities where children are at special risk; (e) informing, sensitizing and mobilizing public opinion and concerned groups, including children and their families. II. Hazardous work 3. In determining the types of work referred to under Article 3(d) of the Convention, and in identifying where they exist, consideration should be given, inter alia to: (a) work which exposes children to physical, psychological or sexual abuse; (b) work underground, under water, at dangerous heights or in confined spaces; (c) work with dangerous machinery, equipment and tools, or which involves the manual handling or transport of heavy loads; (d) work in an unhealthy environment which may, for example, expose children to hazardous substances, agents or processes, or, to temperatures, noise levels, or vibrations damaging to their health; (e) work under particularly difficult conditions such as work for long hours or during the night or work where the child is unreasonably confined to the premises of the employer. 4. For the types of work referred to under Article 3(d) of the Convention and Paragraph 3 above, national laws or regulations, or the competent authority, may, after consultation with the workers' and employers' organizations concerned, authorize employment or work as from the age of 16, on condition that the health, safety and morals of the children concerned are fully protected, and the children have received adequate specific instruction or vocational training in the relevant branch of activity. III. Implementation 5. (1) Detailed information and statistical data on the nature and extent of child labour should be compiled and kept up to date to serve as a basis for determining priorities for national action for the abolition of child labour, in particular for the prohibition and elimination of its worst forms, as a matter of urgency. (2) As far as possible, such information and statistical data should include data disaggregated by sex, age group, occupation, branch of economic activity and status in employment, school attendance and geographical location. The importance of an effective system of birth registration, including the issuing of birth certificates, should be taken into account. (3) Relevant data concerning violations of national provisions for the prohibition and immediate elimination of the worst forms of child labour should be compiled and kept up to date. 6. The compilation and processing of the information and data referred to in Paragraph 5 above should be carried out with due regard for the right to privacy. 7. The information compiled under Paragraph 5 should be communicated to the International Labour Office on a regular basis. 8. Members should establish or designate appropriate national mechanisms to monitor the implementation of national provisions for the prohibition and elimination of the worst forms of child labour after consultation with employers' and workers' organizations. 9. Members should ensure that the competent authorities which have responsibilities for implementing national provisions for the prohibition and elimination of the worst forms of child labour cooperate with each other and coordinate their activities. 10. National laws or regulations or the competent authority should determine the persons to be held responsible in the event of non-compliance with national provisions for the prohibition and elimination of the worst forms of child labour. 11. Members should, in so far as it is compatible with national law, cooperate with international efforts aimed at the prohibition and elimination of the worst forms of child labour as a matter of urgency by: (a) gathering and exchanging information concerning criminal offences, including those involving international networks; (b) detecting and prosecuting those involved in the sale and trafficking of children, or in the use, procuring or offering of children for illicit activities, for prostitution, for the production of pornography or for pornographic performances; (c) registering perpetrators of such offences. 12. Members should provide that the following worst forms of child labour are criminal offences: (a) all forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage and serfdom and forced or compulsory labour, including forced or compulsory recruitment of children for use in armed conflict; (b) the use, procuring or offering of a child for prostitution, for the production of pornography or for pornographic performances; and (c) the use, procuring or offering of a child for illicit activities, in particular for the production and trafficking of drugs as defined in the relevant international treaties, or for activities which involve the unlawful carrying or use of firearms or other weapons. 13. Members should ensure that penalties including, where appropriate, criminal penalties are applied for violations of the national provisions for the prohibition and elimination of any type of work referred to in Article 3(d) of the Convention. 14. Members should also provide, as a matter of urgency, for other criminal, civil or administrative remedies, where appropriate, to ensure the effective enforcement of national provisions for the prohibition and immediate elimination of the worst forms of child labour, such as special supervision of enterprises which have used the worst forms of child labour, and, in cases of persistent violation, consideration of temporary or permanent revoking of permits to operate. 15. Other measures aimed at the prohibition and immediate elimination of the worst forms of child labour might include the following: (a) informing, sensitizing and mobilizing the general public, including national and local political leaders, parliamentarians and the judiciary. (b) involving and training employers' and workers' organizations and civic organizations; (c) providing appropriate training for government officials concerned, especially inspectors and law enforcement officials, and for other relevant professionals; (d) providing for the prosecution in their own country of the Member's nationals who commit offences under its national provisions for the prohibition and immediate elimination of the worst forms of child labour even when these offences are committed in another country; (e) simplifying legal and administrative procedures and ensuring that they are appropriate and prompt; (f) encouraging the development of policies by undertakings to promote the aims of the Convention; (g) monitoring and giving publicity to best practices on the elimination of child labour; (h) giving publicity to legal or other provisions on child labour in the different languages or dialects; (i) establishing special complaints procedures and making provisions to protect from discrimination and reprisals those who legitimately expose violations of the provisions of the Convention, as well as establishing help lines or points of contact and ombudspersons; (j) adopting appropriate measures to improve the educational infrastructure and the training of teachers to meet the needs of boys and girls; (k) as far as possible, taking into account in national programs of action the need for job creation and vocational training for the parents and adults in the families of the children working in the conditions covered by the Convention and the need for sensitizing parents on the problem of children working in such conditions. 16. Enhanced international cooperation and/or assistance among Members for the prohibition and effective elimination of the worst forms of child labour should complement national efforts and may, as appropriate, be developed and implemented in consultation with employers' and workers' organizations. Such international cooperation and/or assistance should include: (a) mobilizing resources for national or international programmes; (b) mutual legal assistance; (c) technical assistance including the exchange of information; (d) support for social and economic development, poverty eradication programmes and universal education.

Mr. HARKIN

Mr. HARKIN. Mr. President, I will make a few comments about the importance of managed care reform and the importance of passing a strong Patients' Bill of Rights in this Congress. The bill that my colleagues on the other side of the aisle want us to consider, I believe, is fundamentally flawed. First, it fails to cover two-thirds of privately insured Americans. Secondly, it fails to prevent insurers from arbitrarily interfering with the decisions of a patient's treating physician. And, third, it is weak in giving consumers the right to sue their insurance companies for faulty decisions to withhold care. Today, I want to focus on a few issues that have critical importance to me: access to specialty care, network adequacy, and genetic discrimination. When we marked up the bill in the Health, Education, Labor and Pensions Committee, I offered an amendment to ensure that patients have access to the specialty care they need. I intend to offer it again if we are ever allowed a full and fair debate on this bill. This is a critical issue for people with disabilities, women with breast cancer, and others with chronic health conditions. But it is important for all Americans. The inability to access specialists is the number-one reason people give when they leave a health plan, and it is a top issue they want Congress to address. The Republican bill is deficient in this area. Aside from two minor provisions regarding access to OB/GYNs and pediatricians--access that almost all health plans already provide--there is nothing in the Republican bill that guarantees access to specialty care such as that provided by neurologists, pediatric oncologists, rehabilitation physicians, and others. We need to ensure that people can see specialists outside of their HMO's network at no additional cost if specialists in the plan's network cannot meet their needs. We need to allow a specialist to be the primary care coordinator for patients with disabilities or life- threatening or degenerative conditions. And we need to provide for standing referrals for people who need ongoing specialty care, which enables them to go straight to the specialist instead of jumping through hoops with primary care doctors or insurance companies. These provisions would not create onerous new burdens on plans. In fact, many plans already allow specialists to be primary care coordinators, and they let people have standing referrals. Most importantly, they address the tragic cases we have heard about that stem from delay or denial of access to specialists. Finally, helping people get timely access to specialty care is not just smart and compassionate policy; it will also help minimize the need for litigation that results from a failure to have access. Another amendment I have been working on ensures that each insurance plan has sufficient providers in its network to deliver the care that is promised. Again, this is an area where the Republican bill is, I think, very inadequate. There is no provision in the Republican bill to ensure network adequacy. This is a very important issue in my State of Iowa. My amendment ensures that every network plan has a sufficient number and mix of providers to deliver the covered services. It also requires plans to incorporate a primary care physician in their network who is within 30 minutes or 30 driving miles of a patient's home. If the plan cannot include patients within that distance, patients need to be allowed to go ``out-of-network'' to obtain the care they need. In other words, no one should have to drive more than 30 miles or 30 minutes to see a primary care physician. It is important to understand what is happening now. Many managed care companies now contract only with urban-based providers. Not only does this require patients to travel considerable distances to receive basic health care, but these urban-based networks also weaken the rural health infrastructure by shutting local doctors and local clinics out of the network. This is wrong and must be stopped. I have been working also on the genetic issues of this since the early 1990s when I introduced an amendment to the HIPAA that prohibited genetic discrimination by group health plans. As ranking member of the Labor-HHS appropriations subcommittee, I have also been and continue to be a strong supporter of the Human Genome Project. In the HELP Committee, the authorizing committee, I worked with Senators Dodd and Kennedy on a genetic discrimination amendment. I intend to continue working on this issue when and if we get a Patients' Bill of Rights on the floor. We have all discussed at length the importance of prohibiting discrimination on the basis of all predictive genetic information in all health insurance markets. I am pleased that the Republican bill recognized that we need to prohibit discrimination in the group and in the individual markets, and that we need to prohibit discrimination not only on the basis of genetic tests but on the basis of a person's family history. Still, the Republican bill failed to address several other equally critical issues in this area. The bottom line is that we must prohibit discrimination by insurers and employers. To prohibit discrimination in one context only invites discrimination in the other. For example, if we only prohibit discrimination in the insurance context, employers who are worried about future increased medical costs will simply not hire individuals who have a genetic predisposition to a particular disease. Similarly, we must prohibit health insurance companies from disclosing genetic discrimination to other insurance companies, to industry-wide data banks, and employers. If we really want to prevent discrimination, we should not let genetic information get into the wrong hands in the first place. Finally, if we really want a prohibition of genetic discrimination to have teeth, we have to have strong remedies and penalties. The $100-a- day fine against health insurers that my colleagues across the aisle have proposed will do little to prevent health insurers from discriminating, and it does nothing to compensate a victim of such discrimination. We must do better than this. Mr. President, let me say that we must not pass up this chance to make true and significant reforms to managed care programs. This is the issue that the American people have said they most want the Congress to address. And they are watching us carefully to see if we will enact real reform or a series of meaningless sound bites. If we take strong action that allows clear-cut access to specialty care, ensures network adequacy, and prohibits genetic discrimination, we will have gone a long way to providing real reform and providing for a meaningful Patients' Bill of Rights. I yield the floor. Mr. LEAHY addressed the Chair.

Mr. HARKIN

Mr. HARKIN. Mr. President, I ask unanimous consent Claire Bowman and Sarah Wilhelm, interns in my office, be granted the privilege of the floor.

Mr. HARKIN

Mr. HARKIN. In listening to the Senator's very eloquent remarks, the Senator from North Dakota really does understand the depth of the problems in agriculture. He has been one of our great leaders in fighting for family farms and our rural communities, in making statements and comments about the lack of free trade and the other economic conditions that are working against the farmer. What I really wanted to ask the Senator is, What role do the increasing sorts of conglomerates, vertical integration, the fact that we are getting fewer and fewer hog farms, for example, that we are experiencing in Iowa and other places, smaller and smaller numbers of meatpackers and slaughterers in this country--when you look at the increasing concentration, what, I might ask, is this doing, and what effect does this increasing concentration have in reducing the price that the farmer gets? In other words, we saw the cartoon about the person in the grocery store saying, ``It only pays pennies. Who gets the rest?'' I ask the Senator from North Dakota again, what is the effect on the farmer?--in other words, what the farmer is getting from the consumer's dollar, because in the past you had a lot of competitors out there competing against one another to take the raw product and get it to market. Now you have just a few. You have a very narrow funnel now. It has been my opinion and observation, based upon a lot of economic data, that this small funnel now they have to go to, the few meatpackers and processors, vertical integration, basically that is where the consumer dollars stops, and it is not getting back to the farmer. The Senator has been very eloquent on this issue of the increasing concentration and what that means for family farming; does the Senator share that feeling?

Mr. HARKIN. Will the Senator yield for a question?

Mr. HARKIN. Madam President, I ask unanimous consent that reading of the amendment be dispensed with.