Tom Harkin

Mr. HARKIN

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

Mr. HARKIN. Mr. President, I have a couple of amendments. I send the first one to the desk and ask for its immediate consideration. I send this amendment to the desk on behalf of myself and Senator Coats of Indiana.

Mr. HARKIN

Mr. HARKIN. Mr. President, I understand we have a minute on each side to explain the amendment?

Mr. HARKIN

Mr. HARKIN. Some colleagues have said the contractors are going to sue the Government for breach of contract. I do not know what they are talking about. If a company has a contract with the DOD that specifies that payment must be made from fiscal year 1997 funds, it will be paid under my amendment. If there is no such clause in the contracts, then they will not be paid from 1997 funds. There is no breach of contract here. What my amendment is, is simply a 1-year moratorium on payments we are not obligated to pay in 1997. I know there was an amendment adopted earlier today of Mr. Bradley. It called for a study. That amendment makes the best case for my amendment. It is a clear recognition we do not know how to assure that any payments for merger claims are purely waste. What my amendment does is it says we are going to have a moratorium for 1 year. If you had in your contract you would be paid out of fiscal year 1997 funds, you will be paid. If there is no such existing agreement, then there is a 1-year moratorium until we can get the study done that I call for. I might add, that is a study done by GAO in concert with OMB and the inspector general, not some internal study done by the Department of Defense. So we can get the study back early next year, we can take a look at it and we can address this a year from now. But mind you, if we do not put in a 1-year moratorium, you mark my words, they are going to rush in and they are going to sign these things in the next few months and they are going to lock it in. Then the arguments will be true that if we attempt to stop it, they will sue for breach of contract. Now is the time to put the 1-year moratorium on. Now is the time to stop this nonsense. I know, I remember when the $600 toilet seats and $500 hammers came up, people scoffed. The people of this country understood it. The taxpayers of this country understand this, too. They understand it is not right for them to pay compensation for executives, board members getting $200,000-and-some a year bonuses when they merge, and the workers being fired and not getting any retraining or compensation whatsoever. This money will not help the workers one bit. It is egregious. I cannot think of anything in my 22 years here in the Congress that I have seen to be this egregious. All I can say is those in the defense industry--and not all of them --but those who have propounded this, those who came to Secretary Perry and Under Secretary Deutch and got this changed, all I can say is: Don't you have any shame at all? None whatsoever? It is time to end this practice. I reserve the remainder of my time.

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

Mr. HARKIN. Any time. Will the majority leader yield on the unanimous-consent request?

Mr. HARKIN. Again, maybe my ears did not pick it up. Any time we have debate in the evening and we stack votes in the morning, this Senator feels that it is appropriate to give at least a couple of minutes in the morning before the votes.

Mr. HARKIN. Mr. President, I send an amendment to the desk.

Mr. HARKIN. Mr. President, this is a very simple amendment. Let me try to explain it by beginning this way. If you remember the $600 toilet seats, and the $500 hammers in the Department of Defense, well, what is going on right now is going to make those look like a real bargain. What has happened since 1993, due to a policy change that was never debated on the Senate floor, never published in the Federal Register, is that taxpayers are now paying for mergers and acquisition costs of defense contractors. Yes. You heard me right. Any defense contractor that merges--acquires other companies--the taxpayers get to pick up the bill. I know it is hard to believe. But it is actually happening. The cost estimated so far of doing this just since 1993 is over $300 million. There is somewhere in the neighborhood of about $2 billion in costs pending that the taxpayers will have to pick up unless we do something about it and stop this nonsense--this egregious attack on the taxpayer dollars. In 1993 the DOD, at the request of defense contractors, changed its policy on reimbursing companies for corporate mergers without adequately notifying Congress. This change in the interpretation of the Federal acquisition rules is far reaching. Every department and agency of the Government is affected. Yet, the Senate has not had one hearing nor significant floor debate on this issue. Mr. President, this amendment simply seeks to assure that what proponents of this form of corporate welfare claim--that it will lead to rational downsizing of the defense industry and result in net savings to the taxpayer--is actually realized. As of now both of those claims do not seem to be supported by the facts. Let me read a couple of passages from a recent DOD inspector general report dated June 28, 1996, on page 9. ``Contractors''--meaning defense contractors--``are submitting cost proposals for activities called concentration, transition, economic planning, and other terms that do not immediately suggest restructuring and make the cost issues difficult for the Government to review, administer, and resolve.'' On page 10 of the same IG report, One contractor's restructuring proposal projected savings over 10 years. The contractor's projections are highly speculative since the volume of Government business is not guaranteed. The same contractor also proposed savings based on ``synergies in the work force'' [how about that one?] a term that is not defined in the existing procurement regulations, and is difficult at best to monetize and evaluate.'' Another contractor proposed keeping subcontract profits [listen to this one] in its prime contract price, although it now owned the subcontractor and would be receiving a profit on top of a profit. Another example: A contractor voluntarily deleted costs to win a competitive program and subsequently identified those costs as restructuring. And billed the taxpayers for it. On page 16, the same IG report, which just came out about 3 weeks ago: Amortization based on the projection of extended savings can almost make a marginal acquisition appear attractive by spreading costs over a long period, and comparing them to the projected savings to determine savings. In all cases, amortization periods were selected for arbitrary reasons, such as the length of time needed to achieve restructuring savings, or to meet available funding otherwise not supported by generally accepted accounting principles. There is more, but I will leave that for right now. As I said earlier, Mr. President, proponents also say the policy is going to save taxpayers' money. How many times have we heard that old song? The record is spotty at best. According to a GAO study of one business combination, ``The net cost reduction certified by DOD represents less than 15 percent of the savings projected to the DOD 2 years earlier when they sought support for the proposed partnership.'' Less than 15 percent of the projected savings were actually being achieved. That alone proves the need for my amendment. Clearly, projected savings are not being realized. Yet, there is absolutely no mechanism for DOD to recoup actual losses to the Government. As a result, the American taxpayer is being asked to pick up the tab. In addition, the current practice is to measure only cost to the Department of Defense when contractors merge and lay off thousands of hard-working Americans. The costs associated with Government-subsidized social services like worker retraining are not tallied. Neither are the costs associated with lost payroll tax revenue. My amendment would fix that by requiring the Comptroller to include all costs to the Government in his recommendations. Although I believe this practice must stop, maybe this is too much to do right now, but that is why I am offering this very modest amendment. What this amendment does is it merely puts a 1-year moratorium on these payments so the Comptroller General can give us the tools we need to take a close look at the policy and to ensure that taxpayers recoup any payments in excess of realized benefits. It will also allow us to have hearings on this far-reaching policy change. Mr. President, this amendment is very similar to one adopted in the House on June 13. On June 13--get this--the House of Representatives, by voice vote, adopted an amendment even more stringent than mine. It would be retroactive. It would go back even on the contracts that are held right now. When I first proposed my amendment on the defense authorization bill, some of the Members came to me and said, ``Oh, my gosh. This is going to open up the Government to all kind of lawsuits--breach of contract.'' Well, all right, I took that into account. This amendment that I offer is not like that amendment. This amendment is only prospective. It allows the Government to pay the costs for which it is currently obligated, but it prevents any further obligation. Let me be very clear about this, especially to the managers of the bill. This amendment allows the Government to pay costs for which it is currently obligated but prevents any further obligation. Let me just discuss this policy in more detail. Lawrence Korb, the Under Secretary of Defense under President Reagan, supports this amendment. According to an article by him in the summer 1996 issue of the Brookings Review, this wasteful practice was initiated by the Pentagon in July 1993. The Pentagon claims that this was not a change of policy but merely a clarification of existing policy. However, no one can come up with examples of such corporate welfare before the 1993 decision. And there are several examples of such requests being denied. So it was a policy change, a serious and costly one. If this was not a policy change and merely a clarification of existing policy, then you better look out, because we have got mergers and acquisitions going back to the late 1970's, and they are all going to be marching up here and saying, well, it was existing policy. I hope the managers of the bill and their staffs will think about this and respond to this. You cannot have it both ways. If this is a change in policy, then it was not published in the Federal Register. It did not follow the rules, Federal rules. There were no hearings held in the Senate. We never debated it. If, however, as the Pentagon claims, this was not a change in policy but only a clarification of existing policy, then the taxpayers of this country ought to have to pay for every merger and acquisition going all the way back, and so the ones that were denied in the past will now come back to haunt us because they will come back and say, by your own words, this was existing policy. That is why even the $2 billion we are looking at that is pending now is going to mushroom to $3 billion, $4 billion, $5 billion. Who knows when it will all end? Let me read a little bit from Mr. Korb's article. First of all, from his letter to me dated July 11. As I testified in July 1994 before the House Armed Services Committee, and as I have written in Foreign Affairs, the Brookings Review and the Baltimore Sun, I do not believe that such payments are necessary to promote the rational downsizing of defense industry. Moreover, by its policy of subsidizing defense mergers and acquisitions, the Clinton administration has already created mega-companies that will stifle competition and wield tremendous political power. The conditions that the amendment places on paying the subsidy will ensure that Federal money will not go towards mergers that would have occurred without the subsidy or before the policy change. In addition, your amendment-- Talking about my amendment-- Will guarantee that there will be real savings to the taxpayer and that these savings are documented. In the article that he had in the Brookings Review in the summer issue, Mr. Korb pointed out how this happened. He said: To date, the Pentagon has received 30 requests for reimbursement for restructuring. Lockheed Martin alone expects to receive at least $1 billion to complete its merger. How did it happen? In July 1993, John Deutch, then the undersecretary of defense for acquisition, responded to pressure on his boss, William Perry, from the chief executive officers of Martin Marietta, Lockheed, Loral and Hughes by deciding to allow defense companies to bill the Pentagon for the costs of mergers and acquisitions. According to Deutch . . . the move was not a policy change but a clarification of existing policy. Deutch is wrong . . . This is a major policy change. It is not necessary. And it will not save money. Mr. Korb goes on in his article. He says: Indeed, during the Bush administration, the Defense Contract Management Agency rejected a request by the Hughes Aircraft Corporation to be reimbursed for $112 million in costs resulting from its acquisition of General Dynamics' missile division. But on July 21, 1993, Deutch wrote a memorandum stating that restructuring costs are indeed allowable and thus reimbursable under Federal procurement law. Deutch's position that he was merely clarifying rather than making policy is not supported by anyone, even those who favor the change. The procurement experts in his own department disagreed vehemently. On June 17, 1993, the career professionals at DCMA told him that the history of the FAR argues against making the nonrecurring organization costs associated with restructuring costs allowable and noted that they had disallowed these costs in the past. The DCMA position was also supported by Don Yockey, the undersecretary of defense for acquisition in the Bush administration, the Aerospace Industries Association, the American Bar Association's Section on Public Contract Law, and the American Law Division of the Congressional Research Service. * * * In Luckey's opinion, Deutch's position is based on semantics, not legality. Mr. President, I ask unanimous consent the cover letter to this Senator and the article that appeared in the Brookings Review, summer 1996, be printed in the Record.

Mr. HARKIN. Mr. President, I ask unanimous consent that Senator Simon's name be added as a cosponsor of the amendment.

Mr. HARKIN. So this practice is clearly an abuse of taxpayers' money. If these companies are compelled to merge for business reasons, why do they need a handout from the taxpayer? If the business deals are good, the mergers will happen anyway and the taxpayers will receive any savings without paying anything out. If the deals are bad, then we should not gamble taxpayer funds on them. You would think we would have learned from the savings and loan debacle. You would think we would have learned from the $600 toilet seats and $500 hammers, too. I just do not think it is right to make taxpayers absorb the business costs of an industry capable of paying its own merger expenses. Mr. Korb points out defense is still a profitable business. Over the past year, Lockheed Martin stock increased 48 percent in value, Northrop Grumman is up 50 percent, McDonnell Douglas, a whopping 80 percent. Anyway, right now we have a situation where we give an up-front payment, hopefully for some savings that come down the line. But we do not know whether those savings are going to accrue. One analysis we have shows that only about 15 percent of the savings actually accrued. Here is what other groups have to say on the subject. The Cato Institute: ``The costs associated with mergers should not be absorbed by federal taxpayers. This is an egregious example of unwarranted corporate welfare in our budget.'' Taxpayers for Common Sense: ``It is time for the Pentagon to drop this ridiculous `Money for nothing' policy.'' The Project on Government Oversight: ``The new policy is unneeded, establishes inappropriate government intervention in the economy, promotes layoffs of high-wage jobs, pays for excessive CEO salaries, and is likely to cost the government billions of dollars.'' Mr. President, I ask unanimous consent these letters from Taxpayers for Common Sense and the Project on Government Oversight be printed in the Record.

Mr. HARKIN. Mr. President, how much time do I have remaining?

Mr. HARKIN. I would like to address some issues that may be bothering some of my colleagues. I know some representatives of defense contractors have visited with my colleagues. They have told them my amendment will hurt workers because the companies are relying on the taxpayer money to help them. This is completely and totally untrue. According to the rules of this subsidy, DOD cannot reimburse companies for helping fired workers unless the companies were already obligated to do that. Understand, under the subsidy rules, Government money cannot go to a company to help fired workers unless the companies were already obligated to do that under existing contracts with the workers. In other words, the taxpayers' subsidies will never reach the laid-off workers. Mr. President, if you do not believe me, let me read a letter from James Carroll, directing business representative of the International Association of Machinists, Lodge 709, Marietta, GA. He says: I am the Directing Business Representative and President of . . . Local Lodge 709, based in Marietta, Georgia. Our Local represents workers at Lockheed Martin's assembly plant. Over the past five years, many thousands of our members have been laid off because of these cutbacks in defense and cost cutting measures by Lockheed Martin. Contrary to the facts of an increasing stock value and skyrocketing executive compensation, our members did not receive any compensation or retraining assistance from the Lockheed Martin Corporation. Mr. President, I want to make it very clear that, under the present subsidy arrangement, these workers will not get any Government money regardless of what representatives of the defense industry may have told my colleagues. ``Our Members did not receive any compensation from Lockheed Martin Corporation.'' If they did not under the company's agreement, they will not get any from the Government. They will only get the money from the Government if the company already helped them. Mr. President, I ask unanimous consent the letter from James Carroll of the International Association of Machinists be printed in the Record.

Mr. HARKIN. Mr. President, I listened to my two good friends--and they are just that--responding to my remarks. I am wondering if they are talking about my amendment. My friend from Hawaii says that this amendment would not allow them to restructure and reorganize. There is nothing in my amendment that says that, not one thing in my amendment, I say to my friend from Hawaii. My amendment simply says, No. 1, we get a report by next spring, the inspector general and OMB and GAO to submit a report to set out just what is happening here and what kind of savings. It says then that no funds appropriated in this bill can be used this year. This is this year's bill, fiscal year 1997. No funds in this bill can be used to pay for a merger acquisition unless it has already been contracted to do so. So if there is an existing contract right now, that specifies that we are to pay merger and acquisition costs out of this bill. That is OK. What we say in this amendment is that we are going to put a 1-year moratorium on signing any new ones, just signing any new ones. As I said, Mr. President, mark my word, if we do not adopt this amendment, in the next few months you will have a rush by these companies to sign them, lock themselves in, and then they will raise the specter of, uh- oh, it is a breach of a Government contract if you do not ante up and pay it. That is why we need the 1-year moratorium. That is all it is. I say to my friend from Alaska, my amendment does not say that we cannot pay all of these attendant costs that he mentioned. He mentioned housing costs. He mentioned all these kinds of things, severance pay, retraining, relocation. He said my amendment would not allow for that. My amendment does not mention that. My amendment says a 1-year moratorium. That is all, a 1- year moratorium. But if they have gotten contracts that say they should be paid this year, they will be paid. Further, I again reply to my friend from Alaska with the letter from the head of the Machinists Union at Martin Marietta, who said that over the last 5 years members have been laid off because of cutbacks. ``* * * our members did not receive any compensation or retraining assistance from the Lockheed Martin Corporation.'' The way the subsidy is now structured, I say to my friends, under the Department of Defense, they still will not get anything. They will only get it if, in fact, there was an agreement by those companies to provide it in the first place. So, again, I hope that they would look at my amendment and read it for what it is. Let me just say one other thing. We talked about two other things. The industrial base--we have heard about, well, we are going to erode the industrial base. I say to my friend from Alaska, profits are at an all-time high in the defense industry. I do not think we have to worry about eroding the industrial base of this country. Again, I refer to the article by Lawrence Korb that appeared in the Brookings review where he pointed out that they are making record profits, that Grumman shareholders got a bonanza of $22 a share, a bonus of 40 percent when they merged. Since 1991, General Dynamics' stock increased 550 percent, and the company has stashed away $1 billion. We are not eroding the industrial base of this country. If it is good business practice, they are going to merge. That brings me to my final point, I say to my two good friends. We asked representatives of the defense industry, I say to my friend from Hawaii, we asked them--you know, these industries do not just deal with the Government. They have private industries that they deal with and that they contract with. We asked them, in any of your contracts with the private sector, do you have a clause like this in your contract that they will help pay? Not a one. Not a one. Just for the Government. So I say to my friends, this is not an overburdensome amendment. I know the first amendment I offered--maybe the managers of the bill think this is the first amendment I offered back under the authorization bill. It is not. I recognized that there might be a problem with breach of contract. That is why we put a clause in there that said if they have an existing contract, that they are to be paid those out of this bill--we are only talking about fiscal year 1997-- they must be paid. I am only talking about those who did not have that kind of an agreement. Then there is a 1-year moratorium. We get the report back. We find out what we are talking about. That gives us some time. I say to my friends from Alaska and Hawaii, please do not put us in a position where, over the next several months, companies will come in, lock in their contracts, and there is not a darn thing we will be able to do about it because then it will be a breach of a Government contract. Let us stop it right now, put a moratorium for 1 year, get the report, and then figure out what we want to do. Let us figure out--maybe the defense authorizing committee or the Appropriations Committee might want to spell out in more detail what it is that will be reimbursable, what is the period of time that we will take into account, and should we have a recoupment clause. Mr. President, what if they project all these savings, the taxpayers rush in, give them hundreds of millions of dollars for mergers and acquisitions, and then the savings are not realized? What do we do? Nothing. Perhaps we need a policy of recoupment that if, in fact, those savings are not realized over, say, 5 years, that we should have a policy of recoupment so that we can recoup back to the taxpayers the money that was spent out if, indeed, the savings do not accrue. So I think it is a logical and a reasonable amendment with just a 1- year moratorium. I think the facts are on our side. I think the people are on our side on this issue, too. This does not go as far as the House bill. The House bill was retroactive, and there may be some--

Mr. HARKIN. Mr. President, I ask unanimous consent for 2 minutes.

Mr. HARKIN. I think there may be some problems with that House bill in terms of breach of contract, so that is why we took it out of here. I hope the managers will take another look at this amendment and how it is written and hopefully be able to support and include it in this bill, because I think it will go a long way towards, again, letting companies restructure, if in the marketplace--if in the marketplace-- that is the best thing for them to do. Let it happen. But the Government should not be an active player in it one way or the other. That is all this amendment seeks to do. Mr. President, I ask unanimous consent that a document by the Congressional Research Service, the Library of Congress, be printed in the Record.

Mr. HARKIN. Mr. President, I yield my time, and I thank the managers.

Mr. HARKIN. Mr. President, I ask unanimous consent that Kevin Ayelsworth, a congressional fellow on my staff, be permitted floor privileges during debate on the DOD appropriations bill.

Mr. HARKIN

Mr. HARKIN. Mr. President, I commend my colleagues, Senators Nunn, Lugar, and Domenici, for developing this amendment which is a good first step in addressing the principal security threat facing the citizens of the United States today. I am pleased to join them in sponsoring this important antiterrorism proposal. I have always been in favor of the wise use of taxpayers' funds and this amendment meets that test. We have to be prepared to combat terrorism. Currently we have precious few means to deal with the threat of a terrorist attack of any kind, let alone nuclear, chemical, or biological terrorism. This amendment focuses on that vacuum. Events from Oklahoma City to Tokyo show that there is a major security risk in the ordinary--a rental truck or a subway. Training local emergency officials to recognize the signs of weapons of mass destruction in these mundane circumstances will help prevent these insidious attacks in the first place. Further training will allow local officials to ameliorate the impact should such a tragedy occur. Mr. President, this is the right amendment at the right time for the people of Iowa and the United States. If my colleagues care about protecting Americans on American soil, I urge them to support this amendment. Mr. STEVENS addressed the Chair.

Mr. HARKIN

Mr. HARKIN. Mr. President, in February, Iowa was featured on the front page of the New York Times--but it wasn't the kind of publicity I want to see our State receive. The article highlighted a problem that is exploding around Iowa--the growing use of the drug methamphetamine, commonly known as meth or crank. There's no doubt that meth has invaded our State with a fury. The statistics tell the tragic story. More than 35 percent of new incarcerations in Iowa involve meth. Federal methamphetamine investigations have doubled and meth arrests have more than tripled over the past 2 years. The Division of Iowa Narcotics Enforcement has reported a nearly 400-percent increase in meth seizures in a 1-year period. And in our largest city of Des Moines, meth seizures increased more than 4,000 percent. The number of labs producing meth has also increased dramatically. And many of the traffickers are illegal aliens from Mexico, presenting additional problems and burdens on law enforcement. This is especially challenging because Iowa currently has no Immigration and Naturalization Service office. Meth is now termed Iowa's ``drug of choice.'' And unfortunately, its spread has left no part of our State untouched. In a word, meth is poison. It destroys lives, families, and communities. The experts describe methamphetamine as a synthetic central nervous system stimulant--the strongest and most intense of the amphetamine group. A leading Iowa doctor referred to meth as the most malignant, addictive drug known to mankind. Meth is a killer. It causes brain, heart, liver, and kidney damage. It breaks down the immune system and often leads to paranoid psychosis, violent behavior, and death. The narcotic is primarily used by young male adults. But experts have found that a growing number of women and teens are now turning to meth. A majority of Iowa law enforcement officials responding to a recent Governor's Alliance on Substance Abuse Survey ranked meth as the No. 1 problematic drug in their area. The legislation we are introducing today will help States like Iowa fight back. The Comprehensive Methamphetamine Enforcement Act of 1996 cracks down on the use and manufacture of methamphetamine by increasing the sentencing scheme to be comparable to crack cocaine. It also goes after the precursor chemicals and equipment used to manufacture methamphetamine as well as companies who intentionally sell chemicals for manufacture of meth. The bill also includes public health monitoring and a task force and advisory panel for public education. This legislation will complement another initiative I have been working on. I have spent a lot of time with local, State, and Federal law enforcement officials in Iowa who tell me that they simply don't have the resources necessary to adequately tackle this skyrocketing new challenge. That's why I am working hard to increase the arsenal in Iowa's fight against meth and to help our law enforcement on the frontlines. Several years ago, Congress created the High Intensity Drug Trafficking Area initiative to provide added resources to highly affected areas. The program has proven useful, but it has been limited to urban areas such as Miami and Philadelphia. I believe that it's time to apply this model to help Iowa and surrounding Midwestern States to combat the large methamphetamine trafficking networks, curtail sale and distribution of the narcotic and reduce related violence. This would open the door for the hiring of additional field investigators, chemists, prosecutors and other law enforcement personnel specifically targeted to the methamphetamine problem. I recently wrote to National Drug Control Policy Director, Gen. Barry McCaffrey, outlining just such a plan. Because of the urgent need I proposed a $7 million increase in resources to begin such an initiative. I will continue to work with Director McCaffrey and my colleagues on the appropriations committee to make this a reality. People in Iowa have worked hard to cultivate a good quality of life. They have worked hard to make their communities a place to raise a family, a safe place, a decent place, but drug dealers are planting the seeds of destruction and are wreaking havoc on small towns and rural communities all over America. We must win back our communities and we must fight back. It's a question of priorities and the determination to defend our homes from a threat that is right down the street, not halfway around the world.

Mr. HARKIN

Mr. HARKIN. Mr. President, in February, Iowa was featured on the front page of the New York Times--but it wasn't the kind of publicity I want to see our State receive. The article highlighted a problem that is exploding around Iowa--the growing use of the drug methamphetamine, commonly known as meth or crank. There's no doubt that meth has invaded our State with a fury. The statistics tell the tragic story. More than 35 percent of new incarcerations in Iowa involve meth. Federal methamphetamine investigations have doubled and meth arrests have more than tripled over the past 2 years. The Division of Iowa Narcotics Enforcement has reported a nearly 400-percent increase in meth seizures in a 1-year period. And in our largest city of Des Moines, meth seizures increased more than 4,000 percent. The number of labs producing meth has also increased dramatically. And many of the traffickers are illegal aliens from Mexico, presenting additional problems and burdens on law enforcement. This is especially challenging because Iowa currently has no Immigration and Naturalization Service office. Meth is now termed Iowa's ``drug of choice.'' And unfortunately, its spread has left no part of our State untouched. In a word, meth is poison. It destroys lives, families, and communities. The experts describe methamphetamine as a synthetic central nervous system stimulant--the strongest and most intense of the amphetamine group. A leading Iowa doctor referred to meth as the most malignant, addictive drug known to mankind. Meth is a killer. It causes brain, heart, liver, and kidney damage. It breaks down the immune system and often leads to paranoid psychosis, violent behavior, and death. The narcotic is primarily used by young male adults. But experts have found that a growing number of women and teens are now turning to meth. A majority of Iowa law enforcement officials responding to a recent Governor's Alliance on Substance Abuse Survey ranked meth as the No. 1 problematic drug in their area. The legislation we are introducing today will help States like Iowa fight back. The Comprehensive Methamphetamine Enforcement Act of 1996 cracks down on the use and manufacture of methamphetamine by increasing the sentencing scheme to be comparable to crack cocaine. It also goes after the precursor chemicals and equipment used to manufacture methamphetamine as well as companies who intentionally sell chemicals for manufacture of meth. The bill also includes public health monitoring and a task force and advisory panel for public education. This legislation will complement another initiative I have been working on. I have spent a lot of time with local, State, and Federal law enforcement officials in Iowa who tell me that they simply don't have the resources necessary to adequately tackle this skyrocketing new challenge. That's why I am working hard to increase the arsenal in Iowa's fight against meth and to help our law enforcement on the frontlines. Several years ago, Congress created the High Intensity Drug Trafficking Area initiative to provide added resources to highly affected areas. The program has proven useful, but it has been limited to urban areas such as Miami and Philadelphia. I believe that it's time to apply this model to help Iowa and surrounding Midwestern States to combat the large methamphetamine trafficking networks, curtail sale and distribution of the narcotic and reduce related violence. This would open the door for the hiring of additional field investigators, chemists, prosecutors and other law enforcement personnel specifically targeted to the methamphetamine problem. I recently wrote to National Drug Control Policy Director, Gen. Barry McCaffrey, outlining just such a plan. Because of the urgent need I proposed a $7 million increase in resources to begin such an initiative. I will continue to work with Director McCaffrey and my colleagues on the appropriations committee to make this a reality. People in Iowa have worked hard to cultivate a good quality of life. They have worked hard to make their communities a place to raise a family, a safe place, a decent place, but drug dealers are planting the seeds of destruction and are wreaking havoc on small towns and rural communities all over America. We must win back our communities and we must fight back. It's a question of priorities and the determination to defend our homes from a threat that is right down the street, not halfway around the world.

Mr. HARKIN

Mr. HARKIN. Mr. President, I am pleased that we are taking action on, H.R. 1114, a common-sense bill that has broad bipartisan support. I especially want to thank my colleague, Senator Craig, from the State of Idaho for his hard work with me on this issue. Use of scrap paper balers and paper box compactors in the grocery industry has expanded since the 1970's due to the increase in recycling of cardboard boxes. The balers and compactors that are prevalent today have gone through significant safety design improvements over the last 20 years-design features that, for example, prevent compression action unless a gate over the loading area is shut. In other words, modern balers and compactors cannot be loaded while the machine is operating. Such safety features have, since 1982, been codified in design safety standards now recognized as the norm by the waste equipment industry as well as the insurance industry. Back in 1954, however, balers did not have such safety features. Because they could be loaded while they were being operated they presented a significant danger to individuals unfamiliar with the machines. In response to this concern, the Labor Department issued hazardous occupation order No. 12 (HO 12), prohibiting 16- and 17-year- olds from loading, operating, or unloading balers. Unfortunately, HO 12 has not been updated to account for the advances in baler and compactor safety. Modern balers cannot be operated when the loading gate is open and are shut off by a key lock held by the store manager or adult supervisor. They are safe, yet 16- and 17-year-olds are still prohibited from even placing cardboard boxes into balers. As a result, grocery stores all over the country have been fined when 16- and 17-year-old part-time and summer-time workers inadvertently toss cardboard into dormant balers. Millions of dollars in fines have been collected, resulting in a reluctance on the part of grocers to hire anyone under the age of 18. A survey of its members by the Food Marketing Institute showed that 60 percent of grocers reduce the employment opportunities for teenagers because of HO 12. Some simply no longer hire anyone under 18--a needless loss of teen employment. H.R. 1114 addresses this problem. H.R. 1114 allows 16- and 17-year-olds simply to load--not operate or unload--balers and compactors that meet the safety standards established by the American National Standards Institute. Other provisions dealing with proper notice to employees and safety signs on the equipment further protect the safety of minors. In order to track the safety impact of this bill, for 2 years employers would be obligated to report to the Secretary of Labor any injury or fatality of an employee under the age of 18 within 10 days of when the incident occurred. The maximum penalty for failure to file such a report would be $10,000 per violation. Under these reporting requirements, it is not the intention of Congress to have an employer subjected to a fine of any amount if there is an inadvertent error, such as a wrong street number in an address, or a misspelled name. Mr. President, I am especially pleased that the bill was negotiated with the United Food and Commercial Workers Union as well as the grocery industry, represented by the Food Marketing Institute and the National Grocers Association. These groups came together and were able to come up with a win-win scenario while still addressing each other's concerns. This bill passed the House on a voice vote with several members speaking in favor. We are continuing in this bipartisan spirit today. I urge the immediate adoption of H.R. 1114.

Mr. HARKIN

Mr. HARKIN. Today we get the opportunity to assure that 12 million American workers are provided with a much needed and much deserved raise. The value of the minimum wage is 50 cents less than it was when it was last increased and it's headed for a 40-year low. At last we have the chance to increase the minimum wage so that American families aren't working harder for less. Some say that working Americans don't deserve a raise. I say look at the facts. In my home State of Iowa our minimum wage is 40 cents above the national law. The increase has meant more money in the pockets of Iowa workers and more money spent in our local economy. Jobs are up, unemployment is down, and our economy is stronger. Look around the Nation. Two-thirds of minimum wage workers are adults. Nearly 60 percent are women. More than one-third are the sole breadwinners. Now think about this. Last year, the CEO's in America's top companies made an average of over $4.3 million--about $12,000 a day. Meanwhile someone working for minimum wage made $8,500 a year. That means that a top CEO made more in 1 day than a minimum wage worker earns in well over a year. That's not right and it's not good for America. The one thing spoiling this vote today is an amendment offered by the majority. They delayed this vote for as long as they could and they're still trying to stack the deck against working Americans. The Bond amendment is even more extreme than the Goodling amendment that was rejected as too extreme by House Republicans. Through a host of exemptions, denials, and delays, the Republican minimum wage proposal is designed to provide the minimum possible minimum wage increase to the minimum number of people. First, the Bond amendment delays the increase until January 1, 1997-- that means that for another 6 months, minimum wage workers will go without a raise, as they already have for more than 5 years. This works out to about $500 in pay that employees would receive over the next 6 months, money that could be spent on crucial family needs like health care, food, and housing. Next, they want to create a subminimum wage for all workers. Their proposal would allow employers to pay all new employees a subminimum wage of $4.25 an hour, for 6 months. That means that no matter how old you are and how much experience you have, if you start a new job, your value to your employer is equal to the most inexperienced employee. That's far worse than the opportunity wage passed by the House that affected young workers age 20 and under for 90 days. And last, the Bond amendment would exempt 10.5 million workers--two- thirds of all companies--from a minimum wage coverage by providing for an across-the-board exemption for small businesses with less than $500,000 annual sales. This is unnecessary. The economy has added more than 10 million jobs since the last minimum wage increase and small business has led the way. The Bond amendment is a blatant attempt to derail the opportunity to give America a raise. The National Retail Association admitted as much in one of their action alerts to members. Referring to the Bond amendment the alert advised members that, ``It is our last chance and best hope for stopping the minimum wage increase this year.'' The majority is trying to two-step with the working Americans. They say for every step forward, working Americans have to take two steps back. Well, we don't do that dance and I urge my colleagues to reject the Bond amendment. The bottom line: America deserves a raise. Profits and productivity are up. There is room to give workers a wage they deserve without harming economic growth. The rest of the economy shouldn't be doing better than the people who make it run. So I urge my colleagues to support a raise in the minimum wage. It is the right thing to do and it is overdue. Mr. President, I also want to make brief remarks on the tax provisions in the bill. I am a strong supporter of the pension improvements: increasing the ability of small businesses to establish pension plans with far less paperwork. Too many smaller businesses do not have pension plans. And, this legislation will help in that area. We need to do more to increase the availability of pensions and to secure further protections against inappropriate actions that reduce pension benefits. The higher expensing limits allowing more capital purchases to be deducted will be helpful to many small businesses. The extension and modifications in the targeted jobs tax credit, now called the work opportunity tax credit and the extension of the exclusion of employer paid higher education costs are an excellent step toward increasing the ability of Americans to improve their education and job skills. We need to help people get their first leg up the ladder of success and we need to improve the skills of workers. The measure also extends the R&D tax credit which I have long supported. I am also pleased that the Senate once again passed provisions to block billionaires from gaining tax advantages from renouncing their citizenship. This is long overdue reform. So, while I believe certain provisions can and should be improved in this bill, overall it is a victory for American workers and will provide needed help to small businesses. I hope conferees are named promptly and a strong bill is quickly sent to the President in a form he will sign. minimum wage and nursing homes

Mr. HARKIN. Mr. President, I wanted to lend my support to the colloquy between my colleagues Senators Hatch and Kennedy relative to nursing homes and the minimum wage. In their colloquy my colleagues note that nursing homes, many of which, particularly in rural areas like my State of Iowa, are funded primarily through the Medicare and Medicaid programs. Nursing homes provide vital services to our elderly and disabled citizens and they employ many minimum wage workers who provide direct care to these residents. Therefore, this minimum wage increase, which will help these valued workers and help increase their retention, will have an impact on nursing homes costs. And that should be reflected in Medicare and Medicaid payments. It is essential that state Medicaid payments be reasonable and adequate to enable well-run facilities to meet and exceed the quality standards set by law. I thank my colleagues for raising this important issue and I appreciate the opportunity to express my agreement with their statements.

Mr. HARKIN

Mr. HARKIN. We simply must make reforms here. So, I will pursue this on the DOD appropriations bill and try to put an end to this ill- advised waste of taxpayer money. I look forward to working together with Senator Nunn and other of my colleagues in reaching a successful conclusion to this issue. I appreciate his good faith efforts to try to resolve this and I believe the additional time may help us to that end.