Orrin Hatch

Mr. HATCH

Mr. HATCH. We would be happy to do it, if the Senator wants to.

Mr. HATCH. Madam President, today we begin one of the most important debates that has ever taken place in the U.S. Senate or in the Congress of the United States. The subject matter goes to the very heart of our Founding Fathers' hope for our constitutional system--a system that would protect individual freedom through the maxim of limited Government. In the latter half of this century, however, the intentions of the Framers of the Constitution have been betrayed by the Congress' inability to control its own spending habits. The size of this Federal leviathan has grown to such an extent that the very liberties of the American people are threatened. I just stood at a press conference with our Democratic cosponsors of this amendment, and there was a huge table filled with unbalanced budgets since 1969. History was made in the 104th Congress when 300 of our courageous colleagues in the House of Representatives, both Democrats and Republicans, approved a balanced budget amendment to the Constitution. Unfortunately, the same measure was defeated in this Chamber by one solitary single vote. This year we begin a new Congress following an intensive fall campaign in which people in every State across this Nation made unmistakably clear their insistence that we put our fiscal house in order. The eyes of the people, now more than two-thirds of whom favor a balanced budget amendment, now turn to us to follow through on our promises. I am pleased to be joined by 61 of my colleagues, including every Republican Senator in the U.S. Senate and 7 bold Democrats who have done exactly that in sponsoring Senate Joint Resolution 1, the balanced budget constitutional amendment. Madam President, as we begin the debate on Senate Joint Resolution 1 proposing an amendment to the U.S. Constitution to require balanced annual Federal budgets, I want to summarize why I feel this amendment should be added to the basic great law of this great Nation. Let me say that as a lifelong student of the Constitution and having served on the Judiciary Committee in this body during my tenure here of 20 years, I do not lightly suggest amending our founding document. Yet, all other avenues having failed us, I believe it appropriate to take recourse to our basic charter to rein in an abused power of the purse-- as has been done in similar situations in our history since the Magna Carta--in order that we might save future generations from the heavy burden of irresponsible Government borrowing. Madam President, let me just summarize the reasons I believe the proposed balanced budget amendment should be presented to the States for ratification. We have to have a two-thirds vote in both of the bodies and submit this amendment to the States, and we have to get three-quarters of them to ratify the amendment before it can be entered into the Constitution. It is a tough process. It ought to be a tough process. These are some of the reasons why I believe this amendment should be presented to the States for their ratification: No. 1, integrity and accountability. It will bring immediate credibility to our current budget process and negotiations, and it will restore a measure of integrity and accountability to our Government. No. 2, our children's future. Passing the balanced budget constitutional amendment is a vote for our children's economic freedom. No. 3, family financial security. Passing the balanced budget amendment will improve the economic health and stability of all American families. No. 4, economic strength. The stabilizing effect the balanced budget amendment will have on the economy is clear, and it will enable us to rein in the level of our country's foreign-held debt. No. 5, retirement security. If we pass this balanced budget constitutional amendment it will literally save Social Security. It will stabilize the economy which will benefit all current and future retirees. Without it, all of these programs will be placed in jeopardy. Now let me describe these reasons in more detail. On the issue of integrity and accountability, our national debt is rocketing out of control and the American people are paying a very heavy price for it. As you can see by this chart, the debt was relatively stable for many decades, up to about 1970, a little bit before 1970. In recent years the debt has increased at alarming rates under the watch of both political parties. The fact is, our deficits have been structural and they will not be eliminated in the long run without the discipline of a balanced budget constitutional amendment. They really shot up in the 1980's, right on through the 1990's, and still that arrow is going almost straight up, even today, even with the efforts and actions that have been taken. Since 1978, there have been no fewer than five major statutory schemes or regimes enacted which promised to deliver balanced budgets, and these include Gramm-Rudman-Hollings. But there has not been a single balanced budget since 1969, which was the only balanced budget since 1960. While I support the steps we have taken to pass the balanced budget plan, I question whether, without the weight of a constitutional requirement to balance the budget, we will achieve balance by the year 2002. Without a balanced budget amendment, every year Congress has to act, and we have seen the lack of will to do what's right around here. For this reason, I feel passage of the balanced budget amendment is critical. Let's just acknowledge what every American citizen knows. In recent decades, Washington has been biased to spending, without feeling any constraints by the amount of money it actually has on hand. Washington has lost the habit of prioritized spending options. Any ideas with political appeal get enacted regardless of cost. We borrow the money if we run short. That is what we have been doing for most of the last 60 years. Those listening could try this thinking on their own budgets at home. Buy any item that looks appealing next time you are at the mall. Just put it on the card. What happens to your budget? Something like this chart probably, but hopefully not quite so high. Washington, however, is not as constrained as the average American. Washington spends in this way, and when the bill comes, it signs the debt over to the American people. In addition to paying their own bills, the American people have to pay Washington's bills in the form of higher taxes, of course, and accumulated debt. They also pay them in the form of higher interest rates on their homes, their cars, or student loans. They pay in the form of lower job growth, lower wages, and they even pay in the form of decreased services from the Government because more of the budget is being spent on interest rather than on education, health care, job training, child care, the environment, et cetera. The point is that Americans are getting fed up with Washington because they feel the pinch put on them by Washington's spendthrift ways. They know they have to make hard choices about how they will spend their own money, but they feel that Washington does not feel constrained to make hard choices about spending priorities. It's not even Washington's own money that it's spending so freely; it is the American people's money. No wonder the American people are tired of it. Besides being dismayed by Washington's free spending habits, the American people also believe that Washington is not accountable for its decisionmaking. The balanced budget amendment responds to both of these concerns. On this chart is the actual text of the balanced budget amendment before the Senate at this time. This balanced budget amendment will require Washington to make tough choices about spending priorities within the constraint of the amount of money it has, or it requires Members of Congress to go on record for its borrowing and taxing decisions. There will be no more voice votes when it comes to raising taxes. There will be no more voice votes when it comes to raising the deficit. You are going to have to stand up and vote. This amendment will see to that. It also requires Congress to achieve some measure of increased consensus about spending priorities if it is going to finance that spending by borrowing. The concept is simple: Don't borrow, unless a significant number of Members are willing to go on record as saying this spending is such a priority that we must borrow to do it. That would go a long way toward letting Americans know that their Government is deliberating about its spending habits, making choices among competing options, and only spending beyond its means when it really needs to in order to achieve a goal so important that a supermajority of Members could agree. The balanced budget amendment will go a long way toward restoring the people's faith in the integrity of our budget process and in the accountability of Washington for its decisions. A vote for the balanced budget amendment is a vote for integrity and accountability in Washington. Now, our children's future. Our national debt now tops $5.3 trillion. That averages out to about $20,000 in debt for every man, woman, and child in America. That is what our fiscal insanity has brought us to. A child born in America today comes into this world $20,000 in debt--and that is going up. Do we have the right to spend our children's future for our own comfort today? Over time, the disproportionate burdens placed or imposed on today's children and their children by a continuing pattern of deficits could include some combination of the following: Increased taxes, reduced public welfare benefits, reduced pensions and Social Security benefits, reduced benefits or expenditures on infrastructure and other public investments, diminished capital formation, diminished job creation, diminished productivity enhancement and less real wage growth in the private economy, higher interest rates, higher inflation, increased indebtedness to and economic dependence on foreign creditors, and increased risk of default on the Federal debt. Madam President, I have said this in the past. This is ``fiscal child abuse'' and it must end. It is our children's future versus Washington's spending addiction. I hope the Senate of the United States will come down overwhelmingly on the side of our children's future by passing this amendment. A vote for the balanced budget amendment is a vote for our children's economic security. Now, what about family financial security? It is not just our children that we hurt with these outrageous deficits. We are suffocating our own families. The impact of higher interest rates, higher taxes, lower wage and job growth, and higher mortgages are felt at kitchen tables all across America. The Concord Coalition has estimated that the interest payments on our mountainous debt amount to $5,360 a year for a family of four. Just to pay the interest against our national debt, it's $5,360 a year. Chairman Kasich of the House Budget Committee has pointed out that three of the causes of the ``middle class squeeze''--high taxes, counterproductive Government spending policies, and anemic wage growth--are at least partly caused by continued borrowing by the Federal Government. He points out that the baby boom generation pays taxes that are at least 50 percent higher than those paid by their grandparents. Real per hour wages inched up just one-third of 1 percent annually over the past 4 years, which is one-seventh the rate of growth in the period between 1960 and 1974, and productivity over the past 4 years grew at only one-fifth the rate of that same period. Economist Lester Thurow noted that the one-earner middle-class family is extinct and explains that almost one-third of all men between the ages of 25 and 34 make less each year than is required to keep the average family of four above the poverty level. These combined pressures tear at the very fabric of our Nation and our families. By contrast, implementing the balanced budget amendment will lower interest rates, making it easier for our families to pay their mortgages, their car loans, and their student loans. Economist at DRI- McGraw-Hill estimate that a balanced budget rule would result in a 2- percent drop in interest rates. Now, DRI-McGraw-Hill is one of the best econometric groups in the country. A balanced budget rule would mean annual savings of $1,230 on a middle-class family's home mortgage, $216 each year for an average student loan, and $180 each year on the average car loan. The good effects of our overall economic health will help family budgets in many other possible forms, such as a higher paycheck, more job opportunity or security, lower taxes in the future, and a greater ability to save and invest for the future. The Joint Economic Committee has estimated that the average American family would have an additional $1,500 a year if we implemented a balanced budget rule. A balanced budget amendment will make it easier for American families to afford a house, a car, or to send a child to college. This offers a real way to relieve the pressure on American families who are struggling to stay together and get ahead. A vote for the balanced budget amendment is a vote for the economic health and stability of American families. Now, economic stability. Economists from all over this country agree that the balanced budget amendment should pass. They agree that ``we have lost the moral sense of fiscal responsibility that served to make formal constitutional restraints unnecessary.'' Hundreds of economists support the balanced budget amendment as being good for the national economy by increasing both investor and business confidence, both foreign and domestic. Some economists are against us on the balanced budget amendment. As a general rule, they are academics who depend upon the Government in many ways for their moneys and in many respects love the spending practices of the Federal Government. Not all--some sincerely worry about the amendment. But there are also many, many who worry that if we do not pass the amendment we are really going to be in trouble, and economic stability will be threatened. If the Government would stop borrowing so much money, interest rates would come down and money would be available for businesses to invest in creating jobs and paying higher wages. The Director of the Congressional Budget Office, June E. O'Neill, has testified recently that ``balancing budget will induce favorable changes in the economy,'' and among those favorable changes she specifically pointed to ``interest rates, economic growth, and the share of GDP represented by corporate profits.'' All of this can put real money in the pockets of real people, including small business owners and employees. CBO Director O'Neill has also suggested that taking action now to balance the budget can assure greater budgetary stability in the future. Greater budget stability means greater tax stability. And that means that Americans, and their families, and the businesses they own, can plan for the future better, with less risk that shifting tax policy will wipe out their plans in unforeseen ways. At the very least, this will save Americans substantial amounts on tax attorneys. But long-term planning, with less risk from shifting tax policy, can pay dividends throughout the economy. Decreasing our dependence on debt to finance Government activities will also increase our national economic sovereignty. Interest payments on our debt are increasingly leaving the country. This chart, based on Treasury Department statistics, shows that from 1992 to 1995, the portion of our debt held by foreign interests has increased 28 percent. That is money that leaves the United States, thus weakening our national economy, and perhaps slowly jeopardizing our national independence. It has been said, ``It is tough to get tough with your banker.'' The less we borrow from foreigners, the less dependent we are on foreigners, and the more independent we will be as a nation. By returning honesty to budgeting, the balanced budget amendment will improve our economy and our economic independence. retirement security The balanced budget amendment is important to current and future retirees. This is a very important chart because this chart is based on the Social Security trustees' intermediate projections. As you can see here, while we run modest yearly surpluses until the year 2015--down here is the 2015, and the green shows the moderate surpluses above zero, we get to 2015. The long-term projections are mammoth annual deficits--the red line--mammoth annual deficits that start about the year 2015, if we are lucky. That is assuming a rosy economic picture over the next 19 years. The long-term projections are for mammoth annual deficits projected at current dollars at as much as $7 trillion for today's children when they retire. The word ``trust'' in the Social Security trust fund refers to the trust retirees repose in the Government to meet its future obligations. We will be hard pressed to meet our obligations if we do not get our debt under control now and force ourselves to avoid the growth of debt in the future. The balanced budget amendment will force and empower us to meet these future obligations. In addition, the economic benefits of the amendment will benefit current and future retirees who are increasingly relying on private financial investments for retirement security. There are 34 million households that have invested in the stock market in some form. As financial expert Jim Cramer notes, if you have a pension, it's likely that it's invested in stocks. If you have a 401K plan, it's probably invested in stocks. Worth magazine's Ken Kurson points out that in 1996, 34 percent of households headed by someone under 35 had some sort of mutual fund. Simply put, many Americans are relying less on Government and more on themselves and their own investments for their retirement security. The balanced budged amendment will strengthen the markets and the investments these Americans are relying on. No matter the source of retirement security, the balanced budget amendment will benefit current and future older Americans. Some have argued that we should take Social Security out of the purview of the balanced budget amendment. They argue that we should take the highest items in the Federal budget and the most important item in the Federal budget out of the budget because they think that might protect Social Security. Give me a break. That is not going to protect Social Security. It is going to jeopardize it, because what happens is that if we take it out now, even the President has admitted that you cannot balance the budget by the year 2002 if you do not keep Social Security in the total unified budget. So it is a gradual way that we get there, and if we get there, then Social Security will be much more stable. When we get to these years when it starts to drop off, we have to take care of it, and, frankly, we have to do it within reasonable constraints and do it right. The fact is that some argue that we should keep Social Security in the amendment until the year 2003 and then all of a sudden take it out when all of these deficits occur. The reason they want that is so they can keep spending. As far as everybody knows, if we take Social Security out of the purview of the balanced budget, we would be creating the biggest loophole in the history of this country and they could spend anything they want by simply labeling it Social Security. Madam President, this scares me to death. It is true. These are the trustees' estimates here. That is assuming a fairly rosy economic picture. If we hit a recession or depression during this period of time, it is going to be worse. And the deficits might actually start before then. But that is the best analysis that we can get at this time. Madam President, only the force of the Constitution can balance out the incentives for irresponsibility that dominate the Congress, and only the balanced budget amendment can save this country from being swallowed in debt. A vote for the balanced budget amendment is a vote for a stronger and a freer future for all Americans. When we began this debate, we had at least 68 Members of the Senate who committed and promised that they would vote for this amendment. We need 67. So we believe the votes should be here. We believe people are honorable and will honor their commitments when they ran for office and when they appeared before their families and friends and voting constituents within their respective States. They all knew at the time that this was the only amendment we could possibly pass. They all knew at the time that this is a bipartisan consensus amendment brought about by both Democrats and Republicans, and that we have worked for over 20 years on this amendment. They all knew at the time that this was the one time in history when we could really get this done. And I hope we do. I believe we will because I believe our fellow Senators will live up to the word that they gave to their constituents. Madam President, I yield the floor. Mr. LEAHY addressed the Chair.

Mr. HATCH. Madam President, I ask unanimous consent that Manus Cooney, Sharon Prost, Shawn Bentley, Paul Larkin, Larry Block, Steve Tepp, Troy Dow, and Paul Joklik be permitted privileges of the floor for the duration of the debate.

Mr. HATCH

Mr. HATCH. There is none. It is absolutely astounding. Here is a Federal district judge, trial court judge in the District of Columbia, who has absolutely no connection to the Fourth Circuit Court of Appeals, telling appellate judges that they must come before her and explain why this murderer's frivolous appeal was denied.

Mr. HATCH. I am happy to yield.

Mr. HATCH. I have been critical of the activism of many of President Clinton's judges, and let me tell you I have read many an activist decision in the last few years, but I have never ever seen, nor heard of, a district court judge requiring circuit court of appeals judges to justify their decision, let alone circuit court of appeals judges from an altogether different circuit. In fact, we have consulted with a number of Federal court scholars who have told the committee that to their knowledge such an action is unprecedented. I should hope so. In short, Judge Kessler's order can only be explained as a blatant abuse of judicial authority and disregard for the basic structure of our Federal courts, or perhaps at the very least a gross oversight. But in any event, it is confounding and it is dumbfounding. That Judge Kessler apparently believes she somehow has the power to review fourth circuit judges' opinions is, quite frankly, nothing short of appalling and represents the worst short of judicial hubris. Perhaps Judge Kessler does not appreciate the gravity of her actions or perhaps she is trying to make a statement. Either way, however, her order is very disturbing because it represents either a fundamental disregard for, or ignorance of, the most basic limits on judicial power. Mr. President, when Republicans point out the activism of Clinton nominees, we are accused of using selective criteria. But as Clinton judges issue more and more activist decisions, it is becoming clear that a great number of them are--by any criterion--activist judges. Now, I have asked that the show cause order be printed in the Record. I hope people will read that. It is an astounding document. I do not know how anybody, any judge sitting for the district court, could have issued that kind of order. Nevertheless, it is just evidence of some of the things we have been going through in this country.

Mr. HATCH. We intend to let the Justice Department know, but, more importantly, I think, I am serving notice around here that we are not going to continue to sit back and tolerate these activist judges. Nobody has been more fair to the Clinton judicial nominations than I have. But many of these nominees have come in here and said we are not going to be activist judges; we are not going to usurp the powers of the executive and legislative branches of Government; we are going to do what judges should do, and that is interpret the laws that are made by those who are elected. All of them mouth that kind of language, but when it comes right down to it, a significant number of them are, one on the bench, engaging in patently activist judging and usurping powers that they do not have. So I am just serving notice that we are on to the games these nominees are playing, and do not intend to let this game go on. We are going to do what it takes to weed out those nominees who pay lip service to judicial restraint, but then think they can do anything they want to once they don their robes. There are limitations to the judiciary. The judiciary can preserve itself and keep the high opinion of the American people by not acting as activists, by not usurping the powers of the other two separated branches of Government, and by living within the limits of the Third Branch. I do not care whether activism comes from the right or whether it comes from the left. It is wrong, and I have never seen a more flagrant case of something that is wrong than this case. That is why I wanted to bring it to the attention of the Senate and also serve notice that we are going to treat the judgeship nominees over the next 4 years with the utmost diligence and scrutiny. We appoint Federal judges for a lifetime, and accordingly expect them to live up to the high calling of the judiciary; to appreciate the inherent limits on judicial power, and not to substitute their own policy preferences for that which the law requires. I hope that this sends a message to everybody, and I am serious about it. As one who has taken a lot of abuse from both sides on judges-- including my own Republican colleagues--I am serving notice that we do not intend to allow this rising tide of judicial activism to continue. The integrity of our judiciary, and our very right to self-government is at stake. I thank my colleague. I yield the floor. Mr. D'AMATO addressed the Chair.

Mr. HATCH. Mr. President, I rise today to speak on a subject which I have frequently addressed in the past, one that is extremely important to me and I think to every Member of this body--in fact, to everybody in this country: judicial activism. We are witnessing today a rising tide of concern, shared not just by my Republican colleagues and myself, but indeed by an ever-growing segment of the public at large, about judicial activism and the prospect of filling the courts with more activists over the next 4 years. Today, when we talk about activists, we are talking about people who are substituting their own personal preferences for what the law really is--those who choose as unelected judges appointed for life to make laws from the bench and to usurp the powers of the legislative and executive branches of this Government. They are not elected to make the laws, but are appointed to interpret the laws. Today, I would like to point out an especially egregious abuse of judicial power about which I have just learned. Judge Gladys Kessler, a Clinton appointee to the District Court for the District of Columbia-- that is the U.S. district court for the District of Columbia--took the truly extraordinary step, and as far as I know, a step which is virtually unprecedented in our Federal judicial system, and actually issued an order to show cause to three sitting U.S. Fourth Circuit judges--Fourth Circuit Court of Appeals judges, judges that are above her in the Federal system: Judges Karen Williams, Frances Murnaghan, and senior Judge Butzner. Judge Kessler in effect is seeking to force those appellate judges to come before her, a U.S. district court judge, and justify a decision that they recently handed down. Judge Kessler's order was personally served on Judge Williams' law clerk just yesterday. Let me tell you about this shocking order, dated January 3, 1997, and issued in Civil Action No. 96-2875-GK. In 1972, one Restoney Robinson pled guilty in North Carolina State court to first-degree murder. He was sentenced to life in prison, and he has since been imprisoned in North Carolina--which is located within the Fourth Circuit Court of Appeals' jurisdiction. After losing all of his appeals in the State courts, this convicted murderer, Mr. Robinson, has apparently been peppering the Federal district court for the middle district of North Carolina with frivolous petitions and, appealing the denials of those petitions to the higher court, the Fourth Circuit Court of Appeals. I understand that Mr. Robinson has brought more than 80 such actions. This past October, a panel of fourth circuit judges, comprised of Judges Williams and Murnaghan and Senior Judge Butzner, denied Robinson's most recent frivolous appeal. In what can only be described as a truly bizarre, indeed lawless, action, Judge Kessler not only entertained the habeas corpus petition from Mr. Robinson, a petition over which she had absolutely no jurisdiction whatsoever, since Mr. Robinson is imprisoned in North Carolina, but had the gall to issue an order to those fourth circuit judges--requiring them within 30 days to come before her and explain to her, and to Mr. Robinson, the convicted murderer, why he should not be released from prison. Indeed, I am told that just yesterday the U.S. marshals in Orangeburg, SC, personally served this order on Judge Williams' law clerk. I have a copy of the order right here, and I ask unanimous consent that it be printed in the Record.

Mr. HATCH. I do not know that they know about it, but they certainly are going to know about it after we finish here today, because it is unbelievable.

Mr. HATCH. Or from New York. If we can have judges, district court judges, trial court judges in the District of Columbia issue an order to appellate judges in the Fourth Circuit Court of Appeals, then the structure and rationality of our Federal judicial system would be thrown into disarray.

Mr. HATCH. No. If I understand it, the crime was in North Carolina.

Mr. HATCH

Mr. HATCH. Mr. President, I was pleased that the Senate Judiciary Committee reported out today, I think a little bit before 2 o'clock, the balanced budget constitutional amendment 13 to 5. I want to personally express my appreciation to everybody on that committee for the cooperation that we had and for the effective debate that we had in getting that amendment out today. This will enable us to bring it up next week, if the leader so chooses. And I believe he does wish to bring the balanced budget amendment up next Wednesday. We will have the report filed by Monday. It is being circulated this afternoon. The minority will have 3 days to complete their remarks, or their position on the report, and then hopefully we will be in this battle next Wednesday. And I hope that we can have as much cooperation during the battle on the floor as we did in committee. It is a tough issue, and there are people on all sides of it. We do have to fight it out the best we can here on the floor.

Mr. HATCH

Mr. HATCH. Mr. President I really enjoyed the remarks of my distinguished colleague from New Hampshire. He makes a lot of very telling and important points in the field of health care. I think he deserves to be listened to, as certainly the distinguished doctor sitting in the chair, the Presiding Officer. As everybody knows, he has great interest in health care matters. And I just want to say that I appreciate the work of both of these Senators, the Senator from New Hampshire and the Senator from Tennessee, in this area.

Mr. HATCH

Mr. HATCH. Mr. President I really enjoyed the remarks of my distinguished colleague from New Hampshire. He makes a lot of very telling and important points in the field of health care. I think he deserves to be listened to, as certainly the distinguished doctor sitting in the chair, the Presiding Officer. As everybody knows, he has great interest in health care matters. And I just want to say that I appreciate the work of both of these Senators, the Senator from New Hampshire and the Senator from Tennessee, in this area.

Mr. HATCH

Mr. HATCH. Mr. President, I join the millions of Americans whose holidays were made just a little brighter this year by the sight of the magnificent 70-foot Engleman Spruce from Utah's Manti-LaSalle National Forest. I speak not only of those fortunate enough to see the tree in Washington, but of others who saw this giant tree of the great American west pass through their cities and towns en route to Washington. Like the relay that brought the Olympic flame to Atlanta, the journey for Utah's centennial Christmas tree required no less in the way of planning and cooperation. Many individuals and organizations contributed to this project. In a true holiday spirit, Mack trucks, which has a subsidiary in Pleasant Grove, UT, generously transported this special tree, along with 40 smaller trees to be displayed at other sites in the Nation's Capital, the 2,000 miles to Washington. Stops along the way included Salt Lake City, UT; Cheyenne, WY; Spearfish, Rapid City, Pierre, and Sioux Falls, SD; LaCrosse, WI; South Bend, IN; Pittsburgh and Allentown, PA; and Hagerstown, MD. At each stop, people came out to see this great symbol of the season and to spread holiday cheer and good will. At its final destination, in Washington, on the west lawn of the U.S. Capitol, the tree was appropriately welcomed with holiday carols sung by the Salt Lake Symphonic Choir and the Congressional Chorus. Speaker Gingrich's two nieces threw the switch that illuminated this spectacular Christmas tree. The staff of the Architect of the Capitol should be commended for the wonderful job they did erecting the tree and decorating it with the ornaments made by Utah's children. Mr. President, Utah takes special pride in having provided the national holiday tree from its soil, particularly during the year commemorating our centennial anniversary as a State. And, we were proud that Utah's history was also a part of this holiday display. Under the tree was a miniature railroad to commemorate another great Utah event: the joining of the Nation's railway system with a golden spike at Promontory, UT, in 1869. Those who conceived and constructed these railroad cars did a fantastic job. Finally, Mr. President, I want to reiterate a special note of thanks to the organizations and companies that worked diligently to make the tree the great success that it became. They include the many local communities surrounding Orem, UT; Utah's U.S. Forest Service personnel; the Utah Automotive Club; and such corporate sponsors as Mack trucks, D.M. Bowman, Inc.; Poulan weedeater; and the Hale Brake and Wheel Co. Few efforts like this are successful without the support of the community, and these organizations among many others helped to make Utah's centennial tree to the District of Columbia project possible.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce legislation which will at last deal with one of the most unfair aspects of our civil justice system--the availability of multiple awards of punitive damages for the same wrongful act. I introduced identical legislation last Congress, in the form of S. 671, and I hope that we can move this bill in the 105th Congress. While there are countless abuses and excesses in our civil justice system, the fact that one defendant may face repeated punishment for the same conduct is one of the most egregious and unconscionable. This can happen in a variety of ways, but in any case is unjust and unfair. A defendant might, for example, be sued by a different plaintiff for essentially the same action, or might be sued by the same parties in a different state based on essentially the same conduct. The only effective means of addressing these problems is through a nationwide solution, which the legislation I introduce today would provide. Significantly, this legislation will not affect the compensatory damages that injured parties will be entitled to receive. Even in cases of multiple lawsuits based on the same conduct, under this legislation injured parties will be entitled to receive full compensatory damages when they are wrongfully harmed. My legislation deals only with punitive damages. Punitive damages are not intended to compensate injured plaintiffs or make them whole, but rather constitute punishment and an effort to deter future egregious misconduct. Punitive damages reform is not about shielding wrongdoers from liability, nor does such reform prevent victims of wrongdoing from being rightfully compensated for their damages. It is about ensuring that wrongdoers do not face excessive and unfair punishments. I certainly do not argue that a person or company that acts maliciously should not be subject to punitive damages. But it is neither just nor fair for a defendant to face the repeated imposition of punitive damages in several states for the same act or conduct, as our system currently permits. Exorbitant and out-of-control punitive damage awards also have the effect of punishing innocent people: employees, consumers, shareholders, and others who ultimately pay the price of these outrageous awards. This is not a hypothetical problem. Last Term, the Supreme Court considered a case, BMW v. Gore, in which a state court let stand a multimillion dollar punitive damage award against an automobile distributor who failed to inform a buyer that his new vehicle had been refinished to cure superficial paint damage. The defendant in that case could be exposed to thousands of claims based on the same conduct. The plaintiff, a purchaser of a $40,000 BMW automobile, learned nine months after his purchase that his vehicle might have been partially refinished. As a result of the discovery, he sued the automobile dealer, the North American distributor, and the manufacturer for fraud and breach of contract. He also sought an award for punitive damages. He won a ridiculously high award of punitive damages. At trial, the jury was allowed to assess damages for each of the partially refinished vehicles that had been sold throughout the United States over a period of ten years. As sought by the plaintiff's attorney, the jury returned a verdict of $4,000 in compensatory damages and $4,000,000 in punitive damages. On appeal to the state supreme court, the punitive damage award was reduced to $2 million, applicable to the North American distributor. On reviewing the BMW v. Gore case, the United States Supreme Court recognized that excessive punitive damages ``implicate the federal interest in preventing individual states from imposing undue burdens on interstate commerce.'' While that decision for the first time recognizes some outside limits on punitive damage awards, the Court's decision leaves ample room for legislative action. Legislative reforms are now--more than ever before--desperately needed to set up the appropriate boundaries. In the 5-4 decision, the Supreme Court held that the $2 million punitive damages award was grossly excessive and therefore violated the due process clause of the Fourteenth Amendment. The Court remanded the case, and the majority opinion set out three guideposts for assessing the excessiveness of a punitive damages award: the reprehensibility of the conduct being punished, the ratio between compensatory and punitive damages, and the difference between the punitive award and criminal or civil sanctions that could be imposed for comparable conduct. Unfortunately, even under the Supreme Court's decision, this same defendant can be sued again and again for punitive damages by every owner of a partially refinished vehicle. The company could still be sued for punitive damages for the same act in every other state in which it sold one of its vehicles. In fact, the very same plaintiffs' attorney who filed the BMW v. Gore case filed numerous similar lawsuits against BMW. Defendants and consumers are not the only ones hurt by excessive, multiple punitive damage awards. Ironically, other victims can be those the system is intended to benefit--the injured parties themselves. Funds that might otherwise be available to compensate later victims can be wiped out at any early stage by excessive punitive damage awards. The imposition of multiple punitive damage awards in different states for the same act is an issue that can be addressed only through federal legislation. If only one state limits such awards, other states still remain free to impose multiple punitive damages. The fact is that a federal response in this area is the only viable solution. This bill provides that response by generally prohibiting the award of multiple punitive damages. With one exception, the bill prevents courts from awarding punitive damages based on the same act or course of conduct for which punitive damages have already been awarded against the same defendant. Under the exception, an additional award of punitive damages may be permitted if the court determines that the claimant will offer new and substantial evidence of previously undiscovered, wrongful behavior on the part of the defendant. In those circumstances, the court must make specific findings of fact to support the award, must reduce the amount of punitive damages awarded by the amounts of prior punitive damages based on the same acts, and may not disclose to the jury the court's determination and action under the provisions. The provisions would not apply to any action brought under a federal or state statute that specifically mandates the amount of punitive damages to be awarded. This legislation is needed to correct a glaring injustice. I hope my colleagues will join me in supporting it, and I ask unanimous consent that the full text of the bill be printed in the Record.

Mr. HATCH. Mr. President, I rise today to introduce the Federal Gang Violence Act. I am pleased to be joined in this important effort by Senator Feinstein, as well as by Senators D'Amato, Harkin, and Reid. Gang violence in many of our communities is reaching frightening levels. Last year, my hometown of Salt Lake City was shocked by a particularly awful example. Asipeli Mohi, a 17-year-old Utahn, was tried and convicted of the gang-related beating and shooting death of another teenager, Aaron Chapman. Why was Aaron Chapman murdered? He was wearing red, apparently the color of a rival gang. Ironically, Mr. Chapman was on his way home from attending an anti-gang benefit concert when he was killed. Before committing this murder, the killer had racked up a record of five felonies and fifteen misdemeanors in juvenile court. Sadly, this example of senseless gang violence is not an isolated incident in my State or elsewhere. It is a scene replayed with disturbing frequency. Gang violence is now common even in places where this would have been unthinkable several years ago. Indeed, many people find it hard to believe that Salt Lake City or Ogden could have such a problem--gangs, they think, are a problem in cities like New York, Chicago, and Los Angeles, but not in our smaller cities. However, reality is much grimmer. Since 1992, gang activity in Salt Lake City has increased tremendously. For instance, the number of identified gangs has increased fifty-five percent, from 185 to 288, and the number of gang members has increased 146 percent, from 1,438 to 3,545. The number of gang-related crimes has increased a staggering 196 percent, from 1,741 in 1992 to 5,158 in the first eleven months of 1996. In 1995, there were 174 gang-related drive-by shootings, and in the first eleven months of 1996, this dismaying statistic increased to 207. Our problem is severe. Moreover, there is a significant role the federal government can play in fighting this battle. I am not one to advocate the unbridled extension of federal jurisdiction. Indeed, I often think that we have federalized too many crimes. However, in the case of criminal street gangs, which increasingly are moving interstate to commit crimes, there is a very proper role for the federal government to play. This bill will strengthen the coordinated, cooperative response of federal, state, and local law enforcement to criminal street gangs by providing more flexibility to the federal partners in this effort. It provides the federal prosecutorial tools needed to combat gang violence. Violent crimes committed by youth continue to be the fastest growing type of crime. Indeed, even as the general crime rate has leveled off, or even declined slightly over the last couple of years, violent youth crime, much of it committed by gangs, has increased. As my colleagues know, the sophistication and the interstate nature of these gangs has increased as well. This bill puts teeth into the federal gang statute, by adding tough penalties based on the existing Continuing Criminal Enterprise statute in title 21 [21 U.S.C. 848]. Federal prosecutors will be able to charge gang leaders or members under this section if they engage in two or more criminal gang offenses. These offenses include violent crimes, serious drug crimes, drug money laundering, extortion, and obstruction of justice--all offenses commonly committed by gangs. Our bill adds a one to ten year sentence for the recruitment of persons into a gang. Importantly, there are even tougher penalties for recruiting a minor into a gang, including a four year mandatory minimum sentence. The bill adds the use of a minor in a crime to the list of offenses for which a person can be prosecuted under the federal racketeering laws, known as RICO. It enhances the penalties for transferring a handgun to a minor, knowing that it will be used in a crime of violence, and adds a new federal sentencing enhancement for the use of body armor in the commission of a federal crime. Finally, the legislation we introduce today adds serious juvenile drug offenses to the list of predicates under the federal Armed Career Criminal Act, and authorizes $20 million over five years to hire federal prosecutors to crack down on criminal gangs. Mr. President, these are common sense, needed provisions. They're tough. We need to get tough with gangs who recruit kids with the lure of easy money and glamour. This legislation is not a panacea for our youth violence crisis. But it is a large and critical step in addressing this issue. I look forward to working with my colleagues on this bill, and urge their support.

Mr. HATCH. I thank my colleague from Idaho for his excellent remarks and for his ardent fight for this amendment through the years. Mr. President, there are 13 Democrats who have promised to vote for this amendment. If we add all 55 Republicans and the 13 heroic Democrats who have agreed to vote for this amendment, that will give us 68 votes, 1 more than we need. We know the President is going to put on a full-court press. We also know that the minority leader and others will do the same. It is important that these people live up to the commitments they made to the constituents at home, and we are counting on them to do it. I believe they will. Thus far, only seven have cosponsored, but I believe the others will be on board when the debate comes to the floor. I hope, with all my heart, they realize how important this is. I hope they also realize how very deeply I feel about their courageous stand on this issue.

Mr. HATCH. Mr. President, I am introducing today, along with Senators Leahy, Thurmond, and Moynihan, the Curt Flood Act of 1997, clarifying the applicability of antitrust law to major league baseball. This legislation, which is basically the same bill that was approved by the Judiciary Committee last Congress, marks what I hope will be the final chapter in a long and, at times, frustrating effort to correct a mistaken decision by the Supreme Court. As was true before, the bill simply makes clear that major league baseball, like all other professional sports, is subject to our Nation's antitrust laws, except with regard to team relocation, the minor leagues, and sports broadcasting. It overturns the Court's mistaken premise that baseball is not a business involved in interstate commerce, and it eliminates the unjustifiable legal precedent that individuals who play professional baseball should be treated differently from those who participate in other professional sports. In 1922, in Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs, 259 U.S. 200 (1922), the Supreme Court ruled that professional baseball was immune from the reach of the Federal antitrust laws because baseball was not a business in interstate commerce. Obviously, the Court at that time could not have imagined the modern game or a 1993 World Series where Canada's Toronto Blue Jays defeated the Philadelphia Phillies in games that were televised literally around the world. Fifty years after the Supreme Court's decision in Federal Baseball Club, the Court rendered its decision in Flood v. Kuhn, which repudiated the legal basis of its prior decision as an ``anomaly'' and ``aberration confined to baseball'' but, because of its reluctance to overturn long-standing decisions, left the job of remedying its mistake to Congress. Unfortunately, Congress has been reluctant to follow the Court's instruction. In the past, it has been argued that this issue was not ripe, that it should not be considered too close to a labor dispute or, as was the case most recently, that it should not be discussed during a labor dispute. Fortunately, that now infamous dispute, which has done so much to tarnish the game, is resolved. The time has come to pass this legislation. Moreover, for the first time, the primary impediment to passage has been eliminated. In the new collective bargaining agreement the owners have pledged to work with the players to pass legislation that makes clear that professional baseball is subject to the antitrust laws with regard to labor relations. It is our hope that this year, Congress will finally rectify the Court's mistake and make clear once and for all that baseball no longer has any claim to antitrust immunity. It has been 25 years since Curt Flood jeopardized his career by unsuccessfully challenging baseball's reserve clause, a suit which resulted in the unfortunate decision mentioned above. Yesterday, Curt Flood tragically died of throat cancer at the age of 59. The hearts of baseball fans all over the country go out to Mr. Flood's family. I join these fans in expressing my deepest regrets to the Flood family, and let me suggest today that the time has come to finish what Curt Flood so courageously began. Let me emphasize that our bill does not impose a big government solution to baseball's problems. On the contrary, it would get government out of the way by eliminating a serious government-made obstacle to resolution of the labor difficulties in baseball. Baseball's antitrust immunity has distorted labor relations in major league baseball and has sheltered baseball from the market forces that have allowed the other professional sports, such as football and basketball, to thrive. I should note that comparable legislation has been introduced in the other body by Mr. Conyers of Michigan, the ranking member of the House Judiciary Committee, whose bill bears Mr. Flood's number. Mr. President, I ask unanimous consent that the full text of our bill be printed in the Record.

Mr. HATCH. Mr. President, I am pleased to be joined by Senators Lieberman, Grassley, and Breaux in introducing the Capital Formation Act of 1997. Mr. President, reducing the high rate on capital gains has long been a priority of mine. During the last Congress, I joined my good friend, the chairman of the House Ways and Means Committee, Bill Archer, in sponsoring the Archer-Hatch capital gains bill. Then later in the session Senator Lieberman and I offered a bipartisan capital gains tax reduction bill. The Hatch/Lieberman bill, S. 959, contained the same 50 percent deduction for capital gains as well as an enhanced incentive for investments in newly issued stock of small corporations. This measure was supported by 45 senators, and we were pleased that its provisions were included in the Balanced Budget Act of 1995. The bill we are introducing today is substantially the same. Our bill combines two important elements of capital gains relief with a broad based tax cut and a targeted incentive to give an extra push for newly formed or expanding small businesses. Like the capital gains measure that passed the House and Senate during the last Congress, our bill would allow individual taxpayers to deduct 50 percent of any net capital gain. This means that the top capital gains tax rate for individuals would be 19.8 percent. Also, it grants a 25-percent maximum capital gains tax rate for corporations. Our bill also includes an important provision that would allow homeowners who sell their personal residences at a loss to take a capital gains deduction. A provision that is not in our bill is a provision for indexing assets. Many of our Senate colleagues have expressed concern that indexing capital assets would result in undue complexity and possibly lead to a resurgence of tax shelters. While I continue to support the concept of indexing capital assets to prevent the taxation of inflationary gains, I believe even more strongly that capital gains tax relief is essential for our long-term economic growth. Therefore, in an effort to streamline this bill and expedite its passage, we have omitted the indexing provisions. I hope that some form of indexing can be developed that will achieve the goals of indexing without adding undue complexity or the potential for abuse. In addition to the broad-based provisions listed above, our bill also includes some extra capital gains incentives targeted to individuals and corporations who are willing to invest in small businesses. We see this add-on as an inducement for investors to provide the capital needed to help small businesses get established and to expand. Mr. President, this additional targeted incentive works as follows: If an investor buys newly issued stock of a qualified small business, which is defined as one with up to $100 million in assets, and holds that stock for three or more years, he or she can deduct 75 percent of the gain on the sale of that stock, rather than just the 50 percent deduction provided for other capital gains. In addition, any time after the end of the 3 year period, if the investor decides to sell the stock of one qualified small business and invest in another qualified small business, he or she can completely defer the gain on the sale of the first stock and not pay taxes on the gain until the second stock is sold. In essence, the investor is allowed to roll over the gain into the new stock until he or she sells the stock and cashes out the assets. We think that this additional incentive will make a tremendous amount of capital available for new and expanding small businesses in this country. In particular, these special incentives should really make a difference in the electronics, biotechnology, and other high tech industries that are so important to our economy and to our future. The software and medical device industries in Utah are perfect examples of how these industries have transformed our economy. While these provisions are not limited to high tech companies by any means, these are the types of businesses that are most likely to use them because it is so hard to attract capital for these higher risk ventures. In addition, many start-up companies have large research and development needs. With the uncertainty of the R&E tax credit, this bill will give investors an incentive to fund high risk research companies that may be a Novell or Thiokol of tomorrow. Mr. President, our economy is becoming more connected to the global marketplace every day. And, it is vital for us to realize that capital flows across national boundaries very rapidly. Therefore, we need to be concerned with how our trading partners tax capital and investment income. Unfortunately, the U.S. has the highest tax rate on individual capital gains of all of the G-7 nations, except the U.K. And, even in the U.K., individuals can take advantage of indexing to alleviate capital gains caused solely by inflation. For example, Germany totally exempts long-term capital gains on securities. In Japan, investors pay the lesser of 1 percent of the sales price or 20 percent of the net gain. I think it is no coincidence, Mr. President, that Germany's saving rate is twice ours, and Japan's is three times as high as ours. In order to stay competitive in the world, it is vital that our tax laws provide the proper incentive to attract the capital we need here in the U.S. We are aware that some of the opponents of capital gains tax reductions have asserted that such changes would inordinately benefit the wealthy, leaving little or no tax relief for the lower and middle income classes. Nothing could be further from the truth. In fact, capital gains taxation affects every homeowner, every employee who participates in a stock purchase plan, or every senior citizen who relies on income from mutual funds for their basic needs during retirement. A capital gains tax cut is for everybody. It is interesting to note how the current treatment of capital gains only gives preferential treatment to those taxpayers whose incomes lie in the highest tax brackets. Under the Capital Formation Act of 1997, the benefits will tilt decidedly toward the middle-income taxpayer. A married couple with $30,000 in taxable income who sells a capital asset would, under our bill, pay only a 7.5-percent tax on the capital gain. Further, this bill would slash the taxes retired seniors pay when they sell the assets they have accumulated for income during retirement. I also believe there is a misperception about the term ``capital asset.'' We tend to think of capital assets as something only wealthy persons have. In fact, a capital asset is a savings account--which we should all have--a piece of land, a savings bond, some stock your grandmother gave you, a mutual fund share, your house, your farm, your 1964 Mustang convertible, or any number of things that have monetary worth. It is misleading to imply that only ``the wealthy'' would benefit from this bill. I want to elaborate on this point, Mr. President. Current law already provides a sizeable differential between ordinary income tax rates and capital gains tax rates for upper income taxpayers. The wealthiest among us pay up to 39.6 percent on ordinary income but only 28 percent on capital gains. We certainly believe that income tax rates are too high. And, for middle-income taxpayers in the 28 percent income tax bracket, there is no difference between their capital gains rate and their ordinary income rate. Thus, current law provides no tax incentive for middle income taxpayers to invest assets that may have capital gains. Our bill would correct this problem and give the largest percentage rate reduction to the lowest income taxpayers. For example, the rate for high income earners would change from 28 percent to 19.8 percent--a 8.2 percentage point reduction. Whereas, a middle income taxpayer--who is getting no benefit under current law--would be taxed at 14 percent--a 14 percentage point reduction. Frankly, Mr. President, the introduction of a bipartisan capital gains bill couldn't come at a better time than now. Congress is in the midst of formulating a plan to balance the federal budget. The elements of this plan will have consequences far beyond this year or even beyond 2002 when we hope to achieve our balanced budget goal. Crucial to the achievement of a balanced budget is the underlying growth and strength of our economy. Small changes in the behavior of the economy can make or break our ability to put our fiscal house in order. Thus, especially now, we can ill afford to have our economy slow down and create an increased fear of future job insecurity. Both Republicans and Democrats alike can agree that the creation of new and secure jobs is imperative for a vibrant and growing economy. This is where a reduction of the capital gains rate can be so important. By stimulating the economy and spurring job creation, a cut in the capital gains rate can stave off the downturn that may be on its way. Many Americans have expressed concern about the wisdom of a tax reduction while we are trying to balance the budget. However, Mr. President, we see this bill as a change that will help us balance the budget. The evidence clearly shows that a cut in the capital gains tax rate will increase, not decrease, revenue to the Treasury. During the period from 1978 to 1985, the tax rate on capital gains was cut from almost 50 percent to 20 percent. Over this same period, however, tax receipts increased from $9.1 billion to $26.5 billion. The opposite occurred after the 1986 Tax Reform Act raised the capital gains tax rate. The higher rate resulted in less revenue. Mr. President, the capital gains tax is really a tax on realizing the American dream. For those Americans who have planted seeds in small or large companies, family farms, or other investments, and who have been fortunate enough and worked hard enough to see them grow, the capital gains tax is a tax on success. It is an additional tax on the reward for taking risks. The American dream is not dead; it's just that we have been taxing it away. I urge my colleagues on both sides of the aisle to take a close look at this bill. We believe it offers a solid plan to help us achieve our goal of a brighter future for our children and grandchildren. When it comes down to it, jobs, economic growth, and entrepreneurship are not partisan issues. They are American issues. I ask unanimous consent that the text and a summary of the bill be printed in the Record.

Mr. HATCH. Mr. President, for many years, Congress has recognized that private institutions can often provide better service in certain areas than the government. In this regard, membership organizations that serve various public needs are given tax-exempt treatment. However, some tax-exempt membership organizations are involved in political and lobbying activities. These activities may or may not meet with the approval of those who pay dues and certainly should not be subsidized by the taxpayers. Today, I am introducing legislation that is designed to rectify this problem. My bill is very simple. It requires tax-exempt membership organizations to disclose to their members these political activities and organizational resources spent on them. In addition, this bill will give the members of these tax-exempt organizations the opportunity to deduct the nonpolitical portion of their dues for income tax purposes without regard to the so-called ``two percent limitation.'' First, let me discuss the issue of full disclosure. Mr. President, in the Omnibus Budget Reconciliation Act of 1993, Congress disallowed a deduction for expenses relating to lobbying and political activities. Lobbying is no longer a legitimate deductible expense for American businesses. Since tax-exempt organizations generally do not pay any income tax, the law was amended to further disallow an individual taxpayer a tax deduction for the portion of annual dues paid to a tax-exempt organization that is attributable to any lobbying or political activities of the organization. To assist association members in knowing what portion is and what portion is not deductible when paying their dues, the law requires organizations to annually disclose to the IRS and to the individual members the amount of money spent on political activities by the organization. However, certain exceptions to the disclosure rules are provided in the tax code and an organization is not required to disclose such information if (1) political activities do not exceed $2,000 a year; (2) the organization elects to pay a proxy tax on the nondeductible portion in order to avoid providing disclosure; or (3) substantially all of the individual members do not deduct their annual dues payments on their tax returns as itemized deductions. In 1995, the IRS put forth an interpretation of this third exception and explained what they believe Congress meant by substantially all dues are not deductible. In Revenue Procedure 95-35, the IRS let all but three categories of tax-exempt organizations off the hook from the disclosure rules. The three that must comply are: section 501(c)(4) organizations that are not veterans organizations, 501(c)(5) agricultural and horticultural organizations, and 501(c)(6) organizations. Interestingly, Mr. President, the IRS choose to grant labor unions, which are also 501(c)(5) organizations, a complete exemption from the lobbying disclosure rules. Thus, unions do not have to inform their members how much of their dues are used for political purposes. I am sure that my colleagues see the obvious problems in this. It is simply not fair that the IRS would treat a labor union preferentially. Why are unions exempt and not, for example, farm cooperatives? Mr. President, it seems to me that the Clinton administration has twisted the law to favor their friends in union leadership at the expense of the right to know for the rank and file. Let me reiterate this point: the law says clearly that tax-exempt organizations must disclose their political and lobbying activities. It is only the IRS interpretation that enables unions to duck this disclosure requirement and still benefit from tax-exempt status. Second, I find it outrageous that union leadership are able to coerce dues from workers in many states as a condition of employment. But, it adds insult to injury that those dues can be used for political purposes without the knowledge, let alone permission, of the rank and file. The Supreme Court, in 1988, in Beck v. Communication Workers of America, declared that workers were entitled to know how much of their dues were being directed to political uses and to receive a refund for that portion of dues paid. This seems like a simple common sense solution to this violation of free speech rights. However, in one of his first acts upon taking office in 1993, President Clinton rescinded the executive order enforcing this decision of the Supreme Court. Mr. President, in the Beck case, for example, it was found that only 21 percent of the dues collected by the Communications Workers of America went for bargaining-related activities. This meant that Harry Beck, the former Maryland union shop steward who spent 13 years fighting his case in the courts, was entitled to get a substantial rebate of his dues, plus interest. Yet, this case is merely illustrative of a widespread injustice. Where is the fairness in requiring a worker to contribute to a political cause or a lobbying effort with which he or she does not agree? Forcing people to contribute portions of their earnings to political causes they oppose violates their First Amendment rights. In his Beck opinion, Justice William Brennen cited Thomas Jefferson's view that forcing people to finance opinions they disagree with was ``sinful and tyrannical.'' Mr. President, it is often a requirement or a condition of employment for workers to be members of a labor union. Yet, this requirement is often very costly. Union dues can run from about $300 to over $1,000 a year. Now, I am the first to acknowledge that unions play an important role in employee-employer relations. I will wager that I am one of the few members of this body who was ever a member of a union. And, that experience, perhaps, is the reason I believe so strongly that the rank and file have rights that must be protected. Citizens of a free country ought to be free to spend their own money on the political causes and candidates they wish to support. In 1992, union officials admit to having spent at least $92 million on political contributions and expenses. In-kind contributions could be 3 to 5 times that amount. In other words, organized labor may have actually spent from $300 million to $500 million on political activities in 1992. While some union members would approve of these expenditures, some definitely would not. But, I want to be absolutely clear that the bill I am introducing today does not affect any provision in the National Labor Relations Act, the ability of unions to establish closed or agency shops in any state where they are currently permitted, or the ability of unions to assess dues or collect fees. Those are debates for another day. Rather, this bill deals only with the obligation of labor unions, as tax exempt organizations, to disclose political and lobbying activities to their members. All union members deserve to know how their organizations spend their money. Moreover, because these are tax-exempt organizations, the taxpayers deserve to know what they are subsidizing. While union members are certainly capable of reading a headline like, ``Union leaders commit $35 million to Democrats,'' they may wish to have a more comprehensive disclosure of political and lobbying activity financed with their dues--and I cannot blame them one bit. Mr. President, polling data suggests that union members would prefer that their unions not engage in partisan political campaign activities at all. But, by an overwhelming 84 percent to 9 percent margin, according to a survey by Luntz and Associates, union members want to force their union leaders to explain what happens to their dues. They simply want to know where the money is spent and why. This seems utterly reasonable and fair to me. Furthermore, only 19 percent of union members know that they can request a refund if they do not agree with an ideological position and/ or political position of their particular union. When told that they have the right to a refund, 20 percent say they would ``definitely'' request their money back, and another 20 percent would be ``very likely'' to request a refund. Mr. President, let me turn to the issue of deductibility. Currently, an individual union member may deduct his union dues only if the amount exceed two percent of his or her adjusted gross income [AGI]. For all intents and purposes, this means that union dues and fees are not deductible at all for most workers, even if such dues and fees are required as a condition of employment. I believe that union dues and fees, especially to the extent that so many workers are forced to pay them, ought to be fully deductible for those who itemize deductions. Therefore, I am proposing this bill to remove the two percent threshold and to permit union members and fee payers to deduct that portion of their dues and fees that is not used for political or lobbying activities. This conforms union dues and fees with all other sorts of business expenses and contributions to tax- exempt organizations. Moreover, this deduction is a form of tax break that could put real money back in the pockets of American workers. Mr. President, to summarize, if my bill is enacted into law, tax- exempt organizations would be required--really required--to disclose to their members the amount of their political and lobbying activities. It goes further by allowing full deductibility of membership dues to the extent they are used for nonpolitical or lobbying activities. Mr President, this proposal is a step in the direction of campaign finance reform. One important objective of campaign finance reform should be to return political power to individual citizens and to diminish the influence of large organizational special interests. Well, Mr. President, knowledge has always been power. To return power to individual voters, they need to know where their dollars are going. If my bill is passed, workers will no longer be in the dark about their dues. At the same time they will be getting a tax break and possibly an increase in their take-home pay. I believe this is the fair and honest thing to do. I urge all my colleagues to support and cosponsor this bill.

Mr. HATCH. I am delighted to yield to my colleague and friend from Idaho who I think has played not only a singularly important role in the Senate, but long has played a very important role when he was in the House of Representatives, as well, and has been a great partner in fighting this battle. I yield to the distinguished Senator from Idaho.

Mr. HATCH

Mr. HATCH. Mr. President, I also want to note that I have filed three other bills today; in particular, the Curt Flood Act of 1997, which is the baseball antitrust bill that I believe now is coming to fruition, which is something that we have tried to do for a long time. We have named it after Curt Flood, who died a day or so ago, and who really deserves the recognition because of the fights that he led on this act in organized baseball. That is S. 53. We have also filed S. 54, which is the Federal Gang Violence Act of 1997, a bill by Senator Feinstein and myself. She has worked very hard with me and others on the Judiciary Committee, and we certainly want to mention her sterling work on that bill. Finally, the Civil Justice Fairness Act of 1997, which is already introduced. (The remarks of Mr. Hatch pertaining to the introduction of S. 53 and S. 54 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. HATCH

Mr. HATCH. Mr. President, this is a very important bill. We know juvenile crime is on the increase. Gang violence is on the increase. This bill would take care of both of those problems, and it does it in an intelligent, official, and decent way. I hope that our colleagues on the other side will look at it carefully. We will certainly work with them and with Senator Biden and others on the Judiciary Committee to try and make sure that we do the best we can. This is an excellent bill. It would make immediate inroads into the problems of juvenile violence and crime and gang violence. I hope all of our colleagues will get behind this and support it. Mr. President, this is a very important omnibus crime bill if we want to do something about crime in this society. In addition to what we have done in the past, this is an excellent Republican alternative to the violent crime that we have in the streets, the drugs permeating our society, and, of course, the many other difficulties that are literally making our society a less wonderful society to live in. Mr. President, I ask unanimous consent that the remainder of my remarks be printed in the Record at this point.

Mr. HATCH

Mr. HATCH. Mr. President, this is a very important bill. We know juvenile crime is on the increase. Gang violence is on the increase. This bill would take care of both of those problems, and it does it in an intelligent, official, and decent way. I hope that our colleagues on the other side will look at it carefully. We will certainly work with them and with Senator Biden and others on the Judiciary Committee to try and make sure that we do the best we can. This is an excellent bill. It would make immediate inroads into the problems of juvenile violence and crime and gang violence. I hope all of our colleagues will get behind this and support it. Mr. President, this is a very important omnibus crime bill if we want to do something about crime in this society. In addition to what we have done in the past, this is an excellent Republican alternative to the violent crime that we have in the streets, the drugs permeating our society, and, of course, the many other difficulties that are literally making our society a less wonderful society to live in. Mr. President, I ask unanimous consent that the remainder of my remarks be printed in the Record at this point.