Orrin Hatch

Mr. HATCH

Mr. HATCH. Mr. President, I ask unanimous consent that Brian Day, one of my law clerks, have floor privileges during the pendency of the property rights debate.

Mr. HATCH. Mr. President, I yield 2 minutes to the Senator from Alabama.

Mr. HATCH

Mr. HATCH. Will the Senator yield so I can put us in morning business?

Mr. HATCH

Mr. HATCH. I thank my colleague.

Mr. HATCH. Mr. President, I ask unanimous consent that there now be a period for the transaction of routine morning business with Senators permitted to speak for up to 10 minutes each.

Mr. HATCH

Mr. HATCH. Mr. President, I thank my colleague for allowing me to make my remarks ahead of his. It is very accommodative and I appreciate it. Mr. President, today we will cast one of the most important votes of the 105th Congress. Today, we vote to enhance the power of the individual taxpayer and to reduce the opportunity for abuse by an arm of the federal government. We will vote on the conference report to H.R. 2676, the Internal Revenue Service Restructuring and Reform Act of 1998. This legislation is a tremendous leap forward in enhancing the credibility and effectiveness of the IRS. But Mr. President, this bill is about more than just changing the way one federal agency works. This bill is about reflecting American values and priorities; it is about remembering who the federal government is here to serve and what it is here to do. Of all the powers bestowed upon a government, the power of taxation is the one most open to abuse. As the agency responsible for implementing and enforcing the tax laws that we here in Congress pass, no other agency touches the lives of American citizens more completely than the IRS. I believe that Americans understand and appreciate that they have to pay taxes. Without their tax dollars, there would be no national defense; no Social Security, Medicare, or Medicaid; no environmental protections; no assistance for education or job training; no national parks, food inspection, or funds for highways and bridges. But, everywhere I go in Utah, I hear from my constituents about their frustrations. My office receives numerous letters each month detailing taxpayer interactions with the IRS. It seems that everyone has had, or knows someone who has had, a bad experience with the IRS. This adds to the impression of the IRS as an unfeeling, impersonal machine that will run roughshod over anyone in its way. I, myself, have seen abuses at the hands of the IRS. One of the reasons I ran for the U.S. Senate over twenty years ago was because of the abuses I saw. As an attorney, I had occasion to represent taxpayers against the IRS. The treatment these taxpayers received appalled me-- and that was twenty years ago. The stories have not changed all that much over the years; in fact, they seem to be occurring more and more frequently. The stories range from small annoyances such as unanswered phones or long periods of time spent on hold to shocking abuses such as unwarranted seizures of assets or criminal investigations being based on false information for the purpose of personal revenge. It is small wonder that the taxpayers are scared and frustrated. These stories illustrate a disturbing trend. They are dramatic reminders of the failure of Congress to exercise adequate oversight over a powerful federal agency. I have been here long enough to know that we are never going to be able to achieve a system where people do not get frustrated about paying their taxes--both the process of paying taxes and the amounts. Let's face it: paying taxes is not something we will ever enjoy doing. We must, however, achieve a system of collection that is efficient, fair, and, above all, honest. While not perfect, the conference report before us today moves us a long way toward a better system. During our oversight hearings and through letters to my office, I have heard several horror stories from taxpayers, innocent spouses, IRS employees, and those who have been the subjects of criminal raids and investigations. While these are the minority of the cases dealt with by the IRS, they still illustrate the nature of the abuses occurring. We are not talking about appropriate enforcement of the law. We are talking about heavy-handed abuses of enforcement powers. At best, such tactics are counterproductive; at worst, it is reprehensible behavior by big government. It must stop. The conference report before us is a comprehensive approach to reforming the IRS. No one provision can stand alone as the silver bullet that brought down the bear. Taken as a whole, however, this legislation provides a strong foundation for a new IRS by changing the way the IRS operates and interacts with individual taxpayers. The bill before us today gives the IRS Commissioner great flexibility to carry out a fundamental reorganization of the agency. But, it also places the IRS under an independent, mostly private sector board to oversee the big picture of operations at the agency. Through this board, the American taxpayer will now have a focused advocate examining the operations of the IRS and input into the way the agency runs. These are two very important elements to creating a new culture at the IRS: responsible leadership and accountability. I commend the new Commissioner for the steps he has taken so far to rectify these problems at the IRS, and I encourage him to keep going. And, I hope he will not feel constrained by ``business as usual'' attitudes among those who have an interest in maintaining the current methods. I hope the new Commissioner will shake the dead wood out of the trees. But, Mr. Rossotti needs to know that Congress will hold him and the agency accountable. And, our expectations--and the expectations of the American people--are not hard to fathom. We do not expect tax delinquents or cheats to go undetected or unpenalized. But, we do expect the IRS to enforce our tax laws appropriately. We expect the IRS to assist taxpayers to understand and comply with complicated laws and regulations. We expect taxpayers to be treated courteously. We expect taxpayers' questions to be answered promptly and their returns processes efficiently. And, we expect any penalties to fit the crime. Today, we will vote on a bill that takes a leap forward in eradicating a culture that has allowed corruption and abuse to occur over and over again and to taint the efforts of honorable IRS employees. There has been a lot of talk about changing the IRS into a service-oriented agency, and the bill before us goes a long way towards doing just that. We cannot stop there, however. While customer service is an important part of the equation, we must go further and address taxpayer rights. The conference report removes taxpayers from the reach of IRS excesses by instituting over 70 new rights and protections. The way the taxpayer deals with the IRS, individual IRS employees, and the courts will be changed. The conference report shifts the burden of proof in selected situations off of the taxpayer and onto the IRS. It also ensures that compromise is more accessible to taxpayers by making offers-in- compromise and installment agreements easier to achieve and the terms of these agreements more flexible. The conference report also contains some much-needed assistance for innocent spouses. The understatement thresholds are lowered and it is now easier for taxpayers to receive innocent spouse protections. In addition, limited proportional liability will now be available to a spouse who is legally separated and living apart for at least one year from the person with whom a taxpayer originally filed a joint return. Interest and penalty accrual will be suspended after a year in some cases when the IRS fails to notify a taxpayer of a liability for additional taxes within 18 months of filing a tax return. This period will be shortened to within one year of filing the tax return after the year 2004. The conference report also makes significant changes to the Taxpayer Advocate's Office to ensure that it will be an empowered and independent voice for the taxpayers. A long list of procedural due process safeguards are also provided in reaction to IRS collection abuses. These include a 30-day period to appeal before liens and levies are put into place, early referral to a strengthened and more independent appeals division, and implementation of fair debt collection practices. The conference report increases congressional accountability for the performance of the IRS through provisions such as streamlined congressional oversight and an independent voice for the IRS in the tax-writing process. This legislation also contains legislative incentives for tax law simplification by requiring a tax complexity analysis for new legislation. In this vein, the conference report goes one step further and simplifies one of the most embarrassingly complex computations for today's taxpayers by retroactively reducing the holding period to qualify for the preferential capital gains tax rate from 18 months to 12 months. This provision not only simplifies the process, it also reduces capital gains taxes and encourages further investment. The legislation before us today will fundamentally change how the IRS works. It is a necessary and bold set of initiatives. But, we cannot just declare victory and bask in the glow of a job well done. We must remember how we got to this point in the first place. The IRS was not born evil, and it is not an inherently bad organization. Rather, it has suffered from decades of neglect and inadequate oversight. Once we have set the agency on the road to recovery and given it the tools it needs to move forward, we must continue to guide it and ensure that the agency continues down the right road. Passage of this bill does not mean we can pat ourselves on the back and tell ourselves what a great job we did. We must continue to exercise our oversight responsibility. We must have continued hearings, reviews, and cooperation. We must remain vigilant in our search for areas where further reform is needed and ways to simplify the tax code. Left alone, any entity with power and authority will lose its way. Without continued oversight and cooperation, we will soon see this debate repeated on the Senate floor. This legislation can be summed up in one word--accountability. For too long, the IRS and its employees have operated in an environment with little or no accountability. This bill changes all that. The legislation before us makes individual IRS employees accountable for their actions. It makes management more accountable for the treatment given taxpayers and other employees. Finally, it makes the agency as a whole more accountable to the Congress and the American taxpayer. This debate has focused largely on the negative--and there is plenty of negative to focus on. But, we must also put these abuses and misdeeds in perspective. I believe that they are the exception and not the rule. Just as a vast majority of the taxpayers are honestly trying to comply with the tax code, the vast majority of IRS employees are honest and hard working individuals doing their best in a very difficult and unpopular job. Yes, abuses do occur, and we must reform the system to prevent improper activities. At the same time, we must make sure that we acknowledge those employees who are doing their jobs with competence and integrity. I have to look only as far as my own state of Utah to find numerous examples of this type of employee. I'd like to take a moment to recognize the exemplary work of several IRS employees in the Ogden, Utah, office of the IRS. I daresay that my colleagues could find IRS personnel in their states who share this dedication to service. Milt Flinders has worked with the IRS for 26 years, 13 of them as a manager. He currently has 20 IRS employees working under his supervision. Mr. Flinders has great management skills, and has a well- known reputation for being fair both to IRS employees and to the taxpayers with whom he comes in contact. Avon Wales has worked with the IRS for 20 years. She currently works as an office collection representative/revenue officer aide. Ms. Wales is a very conscientious employee who makes sure she knows the relevant rules and procedures regarding each case she works on. She treats taxpayers with kindness and patience, often putting in hours at a time with an individual taxpayer who is confused about the rules or needs additional assistance. Susan Vail, a revenue officer, has worked with the IRS for 31 years. She makes sure she stays current with the complex laws and procedures surrounding the collection of taxes--no easy task there. She is fair and evenhanded in her dealings with taxpayers. She gets positive marks from her supervisors and other IRS employees, but, perhaps most importantly from taxpayers themselves who have worked with her. These three, and other employees like them, are the reason that most taxpayers today, even if frustrated by the forms and irritated with the amount of their tax bill, continue to comply with our voluntary tax collection system. Thank goodness for these employees. Is this conference report perfect? No. There are some things I would like to see changed. For example, I have some serious concerns about the creation of an accountant-client privilege in this context. I am concerned that we are using the Internal Revenue Code to effectively amend the Federal Rules of Evidence. We have a clear procedure for amending these rules already set out. Changing these rules is no simple matter. It should only be done through careful, deliberate evaluation of the change and the effect it will have on the judicial system. It should only be done with input from the Judicial Conference of the United States and others. Despite these misgivings, I want to reiterate the importance of the bill before us today. The IRS touches more taxpayers in more aspects of their lives than probably any other agency. The American taxpayers have every right to expect a higher level of professionalism, customer service, and fair treatment from an agency charged with enforcing the law in an area as important and pervasive as is the area of taxation. The conference report before us stays true to the ultimate goal of the IRS reform legislation--it protects both the honest taxpayer trying to comply with our complex tax laws and those honest employees struggling to enforce an almost incomprehensible set of tax laws with integrity. This conference report takes on and accomplishes the difficult task of striking the right balance between granting taxpayers the experience of paying taxes without abusive treatment while providing the tools necessary to fund the Government. There is no question that we have come a long way, with this bill, to resolve many of the conflicts and problems that do exist between taxpayers and those who serve the taxpayers at the IRS. This bill makes gigantic steps forward, to try to make the system more fair. I think we on the Finance Committee and those on the Ways and Means Committee in the House have certainly all worked very hard to get this done. In particular, I commend Senators Roth and Moynihan, Representatives Archer and Rangel, and my colleagues on the IRS Conference Committee for the hard work they put into crafting the conference report before us today. I was proud to add my name to the conference report as a conferee. I wholeheartedly support its passage and urge my colleagues to do the same. This is the right thing to do. Once we have this done, then, it seems to me, Democrats and Republicans have to get together to see if we can simplify our tax system in whatever way is best in the interests of the taxpayers of America. This is only step one, but it is an important step. It is a step that will make a lot of difference in people's lives. It is a step that will make this system much more fair than it has been in the past. But it is only the first step. If we can get together and come up with a way of simplifying the Tax Code so everybody can fill out their own tax forms, for the most part, and also make it more fair to everybody in America, then I think in the end we will have done things that no other group of people in the history of our country would have done. I know we have colleagues here on both committees, the Finance Committee and the Ways and Means Committee, who have the capacity to do this, both on the Democrat side and on the Republican side. I call on all our colleagues to do that, whether it be by a flat tax, a value- added tax, a sales tax, or any other of a number of approaches. We have to look into this and get this code so it is not the monstrosity that we all know it to be today. Having said this, I thank again my dear colleague from Florida for his kindness and also my colleague from Montana. I appreciate their deferring to me so I could make these few remarks. I really appreciate it. Thanks very much. I yield the floor.

Mr. HATCH

Mr. HATCH. Mr. President, I am pleased to introduce today the Patriotic and National Observances, Ceremonies, and Organizations Codification Act. This legislation will codify as title 36, United States Code, certain general and permanent laws related to various Federally chartered patriotic and national observances, ceremonies, and organizations. Without making substantive changes, this bill restates existing law to remove ambiguities and inconsistencies and repeals obsolete, unnecessary, and superseded provisions. Some of the important organizations whose charters will be codified with this legislation include, among other: The American Legion, The American Society of International Law, Army and Navy Union of the United States of America, Boy Scouts of America, Boys & Girls Clubs of America, Congressional Medal of Honor Society of the United States of America, Girl Scouts of the United States of America, Jewish War Veterans of the United States of America, Incorporated, Little League Baseball, Incorporated, National Academy of Sciences, National Fund for Medical Education, United States Olympic Committee, The American National Red Cross. The bill was drafted by the Office of the Law Revision Counsel under the Office's statutory mandate to prepare and submit periodically to the Committee on the Judiciary of the House of Representatives, one title at a time, a restatement and revision of the general and permanent laws of the United States for enactment into positive law (2 U.S.C. 285b).

Mr. HATCH

Mr. HATCH. Mr. President, I am pleased to introduce today the Patriotic and National Observances, Ceremonies, and Organizations Codification Act. This legislation will codify as title 36, United States Code, certain general and permanent laws related to various Federally chartered patriotic and national observances, ceremonies, and organizations. Without making substantive changes, this bill restates existing law to remove ambiguities and inconsistencies and repeals obsolete, unnecessary, and superseded provisions. Some of the important organizations whose charters will be codified with this legislation include, among other: The American Legion, The American Society of International Law, Army and Navy Union of the United States of America, Boy Scouts of America, Boys & Girls Clubs of America, Congressional Medal of Honor Society of the United States of America, Girl Scouts of the United States of America, Jewish War Veterans of the United States of America, Incorporated, Little League Baseball, Incorporated, National Academy of Sciences, National Fund for Medical Education, United States Olympic Committee, The American National Red Cross. The bill was drafted by the Office of the Law Revision Counsel under the Office's statutory mandate to prepare and submit periodically to the Committee on the Judiciary of the House of Representatives, one title at a time, a restatement and revision of the general and permanent laws of the United States for enactment into positive law (2 U.S.C. 285b).

Mr. HATCH

Mr. HATCH. Mr. President, I will say one thing. With the approval of these two judges, this Republican Congress will have confirmed, during the full tenure of President Clinton, 272 Federal judges, following the confirmation of these two judges. Mr. President, I ask unanimous consent that we have two separate back-to-back votes of 15 minutes each on the two nominations we're considering this morning.

Mr. HATCH. Mr. President, I ask for the yeas and nays on both of the nominations.

Mr. HATCH

Mr. HATCH. Mr. President, today I am proud to support passage of the National Center for Missing and Exploited Children Authorization Act of 1998. This bill recognizes the outstanding record of achievements of this outstanding organization and will enable NCMEC to provide even greater protection of our Nation's children in the future. In addition, I am offering an amendment with the text of the Child Exploitation Sentencing Enhancements Act along with the sponsors of that legislation, S. 900, Senators Feingold and DeWine. Lastly, I urge the Senate to accept an amendment offered by Senator Leahy and myself to reauthorize the Runaway and Homeless Youth Act and for other purposes. The underlying bill, S. 2073, authorizes appropriations for the National Center for Missing and Exploited Children. As part of the Missing Children's Assistance Act, the Office of Juvenile Justice and Delinquency Prevention has selected and given grants to the Center for the last 14 years to operate a national resource center located in Arlington, Virginia and a national 24-hour toll-free telephone line. the Center provides invaluable assistance and training to law enforcement around the country in cases of missing and exploited children. the Center's record is quite impressive, and its efforts have led directly to a significant increase in the percentage of missing children who are recovered safely. In fiscal year 1998, the Center received an earmark of $6.9 million in the Departments of Commerce, Justice, and State Appropriations conference report. In addition, the Center's Jimmy Ryce Training Center received 1.185M in this report. This legislation directs OJJDP to make a grant to the Center and authorizes appropriations up to $10 million in fiscal years 1999 through 2003. The authorization would, of course, be subject to appropriations. This bill thus continues and formalizes NCMEC's long partnership with the Justice Department and OJJDP. NCMEC's exemplary record of performance and success, as demonstrated by the fact that NCMEC's recovery rate has climbed from 62%to 91%, justifies action by Congress to formally recognize it as the nation's official missing and exploited children's center, and to authorize a line-item appropriation. This bill will enable the Center to focus completely on its missions, without expending the annual effort to obtain authority and grants from OJJDP. It also will allow the Center to expand its longer term arrangements with domestic and foreign law enforcement entities. By providing an authorization, the bill also will allow for better congressional oversight of the Center. The record of the Center, described briefly below, demonstrates the appropriateness of this authorization. For fourteen years the Center has served as the national resource center and clearinghouse mandated by the Missing Children's Assistance Act. The Center has worked in partnership with the Department of Justice, the Federal Bureau of Investigation, the Department of Treasury, the State Department, and many other federal and state agencies in the effort to find missing children and prevent child victimization. The trust the federal government has placed in NCMEC, a private, non- profit corporation, is evidenced by its unique access to the FBI's National Crime Information Center, and the National Law Enforcement Telecommunications system (NLETS). NCMEC has utilized the latest in technology, such as operating the National Child Pornography Tipline, establishing its new Internet website, www.missingkids.com, which is linked with hundreds of other websites to provide real-time images of breaking cases of missing children, and, beginning this year, establishing a new CyberTipline on child exploitation. NCMEC has established a national and increasingly worldwide network linking NCMEC online with each of the missing children clearinghouses operated by the 50 states, the District of Columbia and Puerto Rico. In addition, NCMEC works constantly with international law enforcement authorities such as Scotland Yard in the United Kingdom, the Royal Canadian Mounted Police, INTERPOL headquarters in Lyon, France, and others. This network enables NCMEC to transmit images and information regarding missing children to law enforcement across America and around the world instantly. NCMEC also serves as the U.S. State Department's representative at child abduction cases under the Hague Convention. The record of NCMEC is demonstrated by the 1,203,974 calls received at its 24-hour toll-free hotline, 1(800)THE LOST, the 146,284 law enforcement, criminal/juvenile justice, and healthcare professionals trained, the 15,491,344 free publications distributed, and, most importantly, by its work on 59,481 cases of missing children, which has resulted in the recovery of 40,180 children. Each of these figures represents the activity of NCMEC through this spring. NCMEC is a shining example of the type of public-private partnership the Congress should encourage and recognize. I urge my colleagues to support this legislation, which would help improve the performance of the National Center for Missing and Exploited Children and thus the safety of our Nation's children. In addition, I offer an amendment to S. 2073, along with Senators Feingold and DeWine, which contains the text of S. 900, the Child Exploitation Sentencing Enhancement Act. It is of the utmost importance that our children be protected from predatory pedophiles who roam the streets and the Internet looking for innocent children to victimize. These offenders need to be sent a message that the punishment for their actions will be serve and predictable. Unfortunately, the anonymity provided by a computer linked to the Internet is being used by pedophiles more each day to lure children into harmful, dangerous and potentially deadly situations. Often, the perpetrator will entice the child by convincing the child that he also is a child, thus easing the child's fears and inhibitions. The Hatch- Feingold-Dewine amendment calls for the Sentencing Commission to enhance the sentencing guidelines for punishment of individuals who have used a computer to lure a child into sexual abuse or exploitation, or who has misrepresented himself for those purposes. In addition to increasing the maximum penalties for first time offenders found guilty of transporting or enticing others for illegal sexual purposes or for traveling for illegal sexual purposes, the amendment also ensures that the penalties for repeat offenders are tougher, as they should be. Those convicted for transporting or luring minors for illegal sexual purposes, of for traveling across state lines to abuse a minor, will face up to twice the maximum jail sentence if they have previously been convicted of a similar crime. Those who are convicted of crossing state lines to sexually abuse minors or who do so on federal property, having previously been convicted of a similar crime, will also see their potential prison sentences doubled. Finally, the amendment will authorize funds to ensure that child victims and witnesses to crimes involving sexual abuse and exploitation will have the services of professional, experienced guardians appointed to assist them in legal proceedings where necessary and appropriate. It is important that those who have been traumatized by sexual abuse not be victimized by the criminal justice system a second time. I urge my colleagues to join me in supporting this important amendment. Lastly, I have joined with Senator Leahy in offering an amendment to reauthorize the Runaway and Homeless Youth Act. According to the National Network for Youth, this Act provides ``critical assistance to youth in high-risk situations all over the country.'' The three programs, discussed in more detail below, benefit those children truly in need and at high risk of becoming addicted to drugs or involved in criminal behavior. For these reasons, I supported including this reauthorization as section 306 of S. 10, the Violent and Repeat Offender Act. The cornerstone of the Runaway and Homeless Youth Act is the Basic Center Program which provides grants for temporary shelter and counseling for children under age 18. My home state of Utah received over $378,000 in grants in FY 1998 under this program, and I have received requests from Utah organizations such as the Baker Youth Service Home to reauthorize this important program. Community-based organizations also may request grants under the two related programs, the Transitional Living and the Sexual Abuse Prevention/Street Outreach programs. The Transitional Living grants provide longer term housing to homeless teens aged 16 to 21, and aim to move these teens to self-sufficiency and to avoid long-term dependency on public assistance. The Sexual Abuse Prevention/Street Outreach Program targets homeless teens potentially involved in high risk behaviors. In addition, the amendment reauthorizes the Runaway and homeless Youth Act Rural Demonstration Projects which provide assistance to rural juvenile populations, such as in my state of Utah. Finally, the amendment makes several technical corrections to fix prior drafting errors in the Runaway and Homeless Youth Act. The combination of this bill and the amendments will strengthen our commitment to our youth, and I urge adoption of the amendments and the bill as amended.

Mr. HATCH

Mr. HATCH. I believe this is one of the more important policy issues of our day, one which will have far reaching ramifications for years to come, and that it would be remiss for lawmakers and law enforcers not to be paying close attention to these issues. So, when we return from the July recess, I plan to hold further hearings on competition in the digital age. In particular, I plan for the committee to examine market practices and developments in the so-called ``enterprise'' or back office software market, and more generally to examine practices and developments affecting access to, and transactions on the Internet. Specific hearing dates and witness lists will be released when finalized. While I will reserve comments regarding Microsoft's tactics in these markets until after we learn more about this issue next month, I do have a few comments regarding Microsoft's tactics in Washington over the last several months. In a nutshell, I would offer my view that Microsoft has, regrettably, seen fit to deploy a massive pr campaign grounded in spin control and misdirection, as opposed to engaging the American public, on the basis of the facts and the merits surrounding all of these issues. For starters, I find it rather surprising that any one company would, rather than seeking to prevail on the merits, instead have the hubris to try and use the appropriations process to ``go on the offensive'' and seek to restrain a federal law enforcement agency that has an obligation to enforce the laws, as was recently reported. I trust that my colleagues in this Chamber would have little difficulty in seeing this as anything but an effort to interfere with an ongoing law enforcement action. I can certainly appreciate my colleagues wanting to go to bat for their constituent, but I would find it surprising and disturbing were they or any other Senators swayed to permit this body to seriously consider such an effort to interfere with the appropriations system hope and cut out funds for the Justice Department division on antitrust. I hope that they don't continue in those efforts if those reports are true. More fundamentally, though, I am troubled that Microsoft has seen fit to engage in a game of hide the ball, as opposed to putting their best case forward on the facts and on the merits. This issue has nothing to do with the government trying to design software. It is about trying to preserve competition and innovation--the hallmark of a free market--in an area that is absolutely critical to the future of our economy and I guess you have to pay the world. It is critical to our economy, as well. It is about getting to the bottom of the true facts here so as to understand how best to accomplish this fundamental objective. Frankly, if the facts truly aren't so bad, I would expect Microsoft to be happy to explain them. One of the issues I have been concerned with since last fall, for example, happens to be the restrictive contracts Microsoft has imposed on various Internet firms seeking placement on the ubiquitous Windows desktop. Rather than admit that they have indeed imposed such terms, and explain to us why we should not find them objectionable, Microsoft has consistently sought to avoid the existence and implications of these contract terms. When pressed on the issue, Microsoft announced on the eve of our March hearing that it would no longer enforce these restrictive covenants or these restrictive contract provisions, instead of explaining why these provisions were legal. But, when the Justice Department filed its suit nearly three months later, we learn not only that these restrictive and exclusionary provisions existed, but that Microsoft in fact continues to enforce them with respect to the biggest Internet firms such as AOL and Compuserve, notwithstanding Microsoft's prior representations to the Committee that these very provisions had been removed from its contracts ``on a worldwide basis.'' These are just a few examples where Microsoft has been less than one hundred percent candid and forthright. There are others. Committee staff has prepared a brief report outlining some of the areas where I believe Microsoft could and should have been more forthright with the Committee. As the Committee continues its inquiry, I plan to give Microsoft a fair opportunity to be heard on these issues. But I think they should be heard on the record, rather than through carefully orchestrated, multi-million dollar pr campaigns that are more concerned with blurring the true facts than explaining them. So I hope that, when given the opportunity to be heard on the record, Microsoft chooses to be somewhat more candid with the American people than it has been so far. I ask unanimous consent that a report prepared by the majority staff of the Senate Judiciary Committee, dated June 26, 1998, be printed in the Record.

Mr. HATCH. I suggest people who are interested in this issue not only listen to what I have to say here today but that they read this. I think they will find that this is a group that basically disassembles on many issues. Frankly, I don't think they need to disassemble. All they have to do is come in and tell their case forthright and in a fair and reasonable manner and do it on the merits. If you read this, I think you will realize this is a much more serious set of problems than some in the media make it, especially some of those who seem to think there should never be an enforcement of the antitrust laws. You don't get people from the left to the right, or right to the left--from Bork to you-name-it on the left--saying that there are things that are wrong here, that there is an exploitation of the monopoly power of 90 percent of the operating system and the desktop operating systems throughout the world to crush competition and to do a number of other things that basically are violative of our laws, without their being some heat to some of the arguments that they are making. I have to say, our committee hearings have shown that there are some things that are wrong here. It is a matter of getting people in the software industry to have the guts to come forward and tell their stories. For instance, the OEM, the original equipment manufacturers, are terrified because they depend totally on Microsoft's underlying operating system to run their machines. All Microsoft has to do is to delay the delivery of that underlying operating system or anything else they do to the OEMs by 1 week and they could be multimillions of dollars in the hole as others get an unfair advantage. We have had people come in and tell us, who are afraid to testify for fear they would lose their business, that they have been warned they better not cooperate with the committee or they better not tell the story. This happens in a wide variety of things according to people who have come to us. Now I think they have to have the guts to get in front of the committee and tell their stories and let the chips fall where they may. If they are true, if what they have been alleging to us and to the Justice Department is true, then we ought to find out about it and Microsoft ought to have some answers for it. I yield the floor.

Mr. HATCH. Mr. President, I rise this morning to speak for just a few moments on the Senate Judiciary Committee's progress with respect to our Microsoft inquiry and, more specifically, to share my perspectives on how Microsoft has conducted itself before the committee; to discuss some important developments from this past week; and to discuss the committee's upcoming plans with respect to the Microsoft issue. This week has been a significant one. Just yesterday, Windows 98 was rolled out to consumers. I might note that, contrary to Microsoft's emphatic protests last month that a federal lawsuit would have catastrophic consequences for the PC industry, the Justice Department did file suit, and, lo and behold, the sky has not fallen on either Microsoft or the computer industry. Meanwhile, the Department of Justice encountered a set back in its original consent decree case. And, something which got less attention in the midst of these other developments, the Software Publisher's Association, the 1,200 member software industry association of which Microsoft is a member, released a report describing how, if allowed to proceed with its tried and true market practices, Microsoft will extend its current desktop monopoly to control the market for network servers--a technology which provides the foundation for the Internet and corporate intranets. So this is important. Microsoft is attempting to extend its current monopoly of 90 percent of the underlying operating system to control all the market for network services, both the Internet and corporate intranets. So, for those who have looked seriously at the Microsoft issue, I believe it is clear that the issue is about much more than just the browser. In fact, I have never thought that the browser issue was the most important issue at all, although it is important if you look at all of the ramifications of the browser problems. It is about whether one company will be able to exploit its current monopoly in order to control access to, and commerce on, the Internet; whether one company will control the increasingly networked world in which we are coming to conduct our businesses and in which we are coming to lead our lives. Indeed, the reach of Microsoft's monopoly power is on the verge of extending well beyond markets which we have traditionally thought of as software or technology markets, and the effects of this expansion will be felt not just by the software companies who have traditionally competed with Microsoft, but by a broad swath of U.S. consumers. As The New York Times yesterday observed, Right now Microsoft is expanding into myriad Internet businesses, including news, entertainment information, banking, financial transactions, travel bookings and other services. Since consumers have no choice but to buy the Windows operating system when they buy personal computers, Microsoft is in a position to give such a big advantage to its own software that any other software maker would not be able to compete. I agree with the Times's conclusion. They went on to say: ``It is not healthy for the courts to grant Microsoft a permanent chokehold over the entire expanding world of the Internet.'' I ask unanimous consent that this New York Times editorial be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, I salute one of the greatest Senators this body has ever seen. Strom Thurmond is one of the greatest men I have ever known. A fine attorney, judge, local and State leader, war veteran, patriot, hero and long-term Senator. Strom is a great father and family man. He is a fine human being who always stands up for the right with all his might. He has been a fine example to all of us who serve with him and to the public at large. I've had the privilege of serving on the Judiciary Committee with him over the past 22 years. He has always worked hard, fought for his beliefs, and has set an example for all of us. I truly love Strom Thurmond and will do my best to live up to his great example.

Mr. HATCH

Mr. HATCH. Mr. President, today with my friend and colleague Senator Baucus I introduce the International Tax Simplification for American Competitiveness Act of 1998. This bill will provide much- needed tax relief from complex and inconsistent tax laws that burden our American-owned companies which are attempting to compete in the world marketplace. Our foreign tax code is in desperate need of reform and simplification. The rules in this arena are way too complex and, often, their results are perverse. Mr. President, the economy of this country has entered into an environment like no other in our history. The American economy has experienced significant growth and prosperity. That success, however, is becoming more and more intertwined with the success of our businesses in the global marketplace. As the economic boundaries from country to country merge closer together, as technology blurs traditional geographical boundaries, and as competition continues to increase from previously lesser-developed nations, it is imperative that American-owned businesses be able to compete effectively. It seems to me that any rule, regulation, requirement, or tax that we can alleviate to enhance competitiveness will insure to the benefit of American companies, their employees, and shareholders. There are many barriers that the U.S. economy must overcome in order to remain competitive that Congress cannot hurdle by itself. All around the world, we have international trade negotiators working hard to remove the barriers to foreign markets that discourage and hamper U.S. trade. This is very important to the future economic growth of the U.S. economy. However, this effort has largely ignored the largest source of artificial and unnecessary trade barriers experienced by U.S. companies operating abroad--the complexities and inconsistencies contained in our own tax code. We cannot continue the status quo--we must work to remove the barriers in our own back yard as diligently as we attack those imposed by other countries. The failure to do so will even jeopardize our own domestic economy as American companies are lured to other countries with simple, more favorable tax treatment. The business world is changing at an increasingly rapid pace. Tax laws have failed to keep pace with the rapid changes in the world technology and economy. We enacted some foreign tax simplification in last year's Taxpayer Relief Act, but these changes are not enough. Too many of the international provisions in the Internal Revenue Code have not been substantially debated and revised in over a decade. Since that time, existing international markets have changed significantly and we have seen new markets created. The U.S. tax code needs to adapt to the changing times as well. The continued use of a confusing and archaic tax code only results in a mismatch with commercial reality. If we close American companies out of the international arena due to complex and burdensome tax rules on exports and foreign production, then we are denying them the ability to compete and dooming the, and ourselves, to anemic economic growth and all its adverse subsidiary effects. The bill we are introducing today is not a comprehensive solution, neither is it a set of bold new initiatives. Instead, this bill contains a set of important intermediate steps which will take us a long way toward simplifying the rules and making some sense of the international tax regime. The bill contains provisions to simplify and update the tax treatment of controlled foreign corporations, fix some of the rules relating to the foreign tax credit, and make other changes to international tax law. Some of these changes are in areas that are in dire need of repair, and others are changes that take into consideration the changes we have seen in international business practices and environments during the last decade. The provisions in this bill are necessary to facilitate the American economy's ability to remain the driving economic force in the world of the future. One example of the need for updating our laws to more adequately represent rapid changes that have occurred in the last few years is the financial service industry. This industry has seen technological and global changes that have changed the very nature of the way these corporations do business both here and abroad. This bill contains several provisions to help adapt the foreign tax regime to keep up with these changes. In particular, I want to highlight the provision regarding a Subpart F Exception for active financial services income. This provision is based in large part on the one-year rule embodied in H.R. 2513, the House-passed bill that resulted from lengthy negotiations between the Treasury Department and the financial services industry. The bill's provisions are not intended to replace H.R. 2513. Rather, this bill goes further and provides additional options to facilitate discussion regarding the parameters of a permanent rule that would effectively level the playing field with respect to our foreign competition. This discussion is even more important in view of the Supreme Court's ruling on the line-item veto this morning. The bill also allows deferral for cross-border income received by controlled foreign corporations engaged in the active conduct of a banking, financing, or similar business under narrowly defined circumstances. This provision is designed to preclude opportunities for excessive ``mobility'' of income. The first safeguard is the requirement that income eligible for deferral must be derived from a transaction with a ``customer.'' The definition of a customer would not permit a related-party transaction to qualify if one of the principal purposes for such transaction was to satisfy the underlying provision. Second, the requirement that employees meet a ``material participation'' test will reinforce the active nature of the covered activities. Thus, corporations holding passive investments would be precluded from relying on the rule. There are many areas of the international tax regime not covered by this bill. This legislation represents a pragmatic collection of proposals, not an exhaustive one. One area I think needs to be explored is the foreign tax rules as they apply to foreign corporations with U.S. operations and subsidiaries. These companies are helping the U.S. economy grow. They buy and sell U.S. products, and they employ U.S. workers. We need to examine the international tax law and any barriers it creates for these companies. We must ensure that the U.S. tax law is written and enforced fairly for all companies operating in the U.S. I hope that we can include provisions in this area in future versions of this legislation. This bill is not the end of the international tax debate. if we were to pass every provision it contains, we would still not have a simple tax code. We would need to make more reforms yet. We cannot limit this debate to only the intermediate changes such as those in this bill. We must not lose sight of the long term. I intend to continue this debate with an eye to the future and propel the discussion to broader, more sweeping areas in need of reform such as interest allocation, the international tax treatment of partnerships, issues raised by the European Union, and a broader debate of Subpart F itself. I believe that we must address these concerns in the next few years if we are to put U.S. corporations and the U.S. economy in a position to maintain economic position in the global economy of tomorrow. This bill is important to the future of every American citizen. Without these changes, American businesses will see their ability to compete diminished, and the U.S. will have an uphill battle to remain the preeminent economic force in a changing world. This credible package of international tax reforms will help to keep our businesses and our economy competitive and a driving force in the world economic picture. I urge my colleagues to support this legislation.

Mr. HATCH. Mr. President, today with my colleague, Senator Conrad, I introduce the Biomass and Coal Facilities Extension Act. This legislation would extend the ``placed in service'' date under section 29 for facilities that produce alternative fuels by 8 months. Section 29 was originally created to encourage the development of alternative fuels to reduce our dependence on imports and to reduce the environmental impacts of certain fuels. With the enormous reserves of low rank coals and lignite in the United States and around the world, and with the potential for use of biomass and other alternatives, it is particularly important to the American economy and the world's environment that new, more environmentally friendly fuels are brought to market here and in developing nations. Bringing new technologies to market is financially risky. In particular, finding investors to take a new technology from a laboratory table to the market is difficult because working the bugs out of a first-of-a-kind, full-sized plant is a costly undertaking. Incentives to bring new, clean energy technologies to the market in the U.S. are a worthwhile use of the code. The 1996 Small Business Protection Act provided sufficient incentives to make the development of alternative fuels a viable pursuit. In particular, it extended the section 29 ``placed in service'' date for facilities designed to produce energy from biomass or processed coals to July 1, 1998, provided that those facilities were constructed pursuant to a binding contract entered into before January 1, 1997. However, the Administration's budget proposal, released in February 1997, effectively nullified the extension granted by Congress in the 1996 Small Business Protection Act. The Administration proposed that the placed in service date be moved up one year, to July 1, 1997, which, for many of these projects, was an impossible deadline to meet. Without the assurance of the section 29 tax credit, financing for these projects dried up, stranding taxpayers in contracts, some of which contained significant liquidated damages clauses, already entered into in reliance on the Small Business Protection Act of 1996. As a result of the Administration's proposal, taxpayers essentially lost 8 months of the extension given them in 1996. Mr. President, the bill before us would give these lost months back to companies with contracts signed by January 1, 1997. This bill does not extend the contract deadline, allow more projects to be initiated, or change the 2008 deadline for receiving the section 29 tax credit. This bill simply restores the time taxpayers lost in their efforts to develop environmentally friendly fuels under section 29. Bringing new alternative fuel technologies to the market is an important part of our commitment to a cleaner environment and a secure economy. We reflected that commitment in our efforts to mitigate some of the financial risk involved in developing this much needed technology in the Small Business Protection Act of 1996. This bill maintains that commitment. I urge my colleagues to support this legislation.

Mr. HATCH

Mr. HATCH. I thank my colleagues. Mr. President, it is my understanding that the Senator from Utah has 20 minutes and the Senator from California has 20 minutes.

Mr. HATCH. We will be happy to do so.

Mr. HATCH

Mr. HATCH. I suggest the absence of a quorum.

Mr. HATCH. I am happy to yield the last couple minutes of my time to the distinguished Senator from California, if she would like. Mr. President, let me just bring one other point to the Senate's attention. Press articles in the past few days make it abundantly clear the need to enact a national settlement. Yesterday, the Washington Post had a front page article: ``Tobacco Pays for Crusade Against Itself.'' Think about that for a minute. This article highlights what it calls an ``all-fronts attack'' on tobacco, a massive counteradvertising campaign paid for by the industry itself. Those potent tools would be used by all 50 States if we enacted a national settlement. The article highlights the strong counter- advertising message that is being delivered in Florida because of the settlement. Then today, the Post ran another article that was entitled: ``Appeals Court Voids Award in Tobacco Suit.'' This article describes the Florida court of appeals action to overturn a $750,000 judgment against the Brown and Williamson tobacco corporation for a smoker who lost part of his lung to cancer. Experts agree that the ruling, which overturned a judgement termed by the AMA as a ``milestone,'' has important national implications. This jury award was just the second jury award against a tobacco company in all of our history in this country. Now, you can go back to the 1960s, when I became a young lawyer in Pittsburgh, PA. The first antitobacco cigarette cancer case in the history of the world was brought to the Federal district court by none other than Jimmy McArdle, one of the greatest plaintiffs' attorneys who ever lived, the lead partner in the law firm McArdle, Harrington, Feeney, and McLaughlin. That was a big battle. This case was publicized all over the country. It was the first loss of literally hundreds of cases. The ruling in the Florida case was just the second awarded against tobacco companies, and its reversal once again demonstrates how hard it is to successfully sue the tobacco industry. This ruling affirms the vitality of the common law doctrine of assumption of risk which bars recovery if the plaintiff knew the risk of his action. Because of the assumption of risk doctrine, the tobacco companies win almost all their cases. A national settlement bill, such as Hatch-Feinstein, would assure an orderly and rational payout of funds by earmarking annual payments. It would avoid the so-called ``race to the courthouse'' that has so many of us concerned. These two Washington Post articles point out the need for a ``global'' approach in the words of the Attorneys General. I would happily yield the remainder of my time to my friend from California.

Mr. HATCH. Mr. President, I rise to announce that--contrary to press reports that tobacco legislation is dead--in fact, a strong, bipartisan effort to enact meaningful tobacco legislation is very much alive and well in the Senate today. Last week's action by the Senate on the Commerce Committee tobacco bill should not be viewed as a failure by this Senate to pass tough tobacco legislation. Nor should it be viewed as a victory by tobacco companies and tobacco lobbyists to kill tobacco legislation and deny the public health benefits from a strong bill. To be fair, there were many criticisms of the Commerce bill. It suffered from a myriad of legal problems, including several unconstitutional provisions. Its costs were very high, perhaps as high as $800 billion. It could have provided enhanced opportunities for black market sales, with accompanying crime and violence. And, a bad bill was made worse on the floor with adoption of several, additional competing spending priorities which--however well- intentioned--diverted from the primary focus of the bill [e.g. child care, illegal drug abuse, tax cuts.] In my opinion, the four weeks that the Senate spent on the tobacco bill were a critical and useful exercise in educating ourselves--and the American public--on the numerous complexities of the tobacco issue. By and large, we now have a better understanding of this issue and what Congress should do to develop a good bill. Accordingly, Senator Feinstein, Senator Breaux and I have come to the floor today to announce our bipartisan effort to work toward a strong tobacco bill that, we believe, will be acceptable to the vast majority of our colleagues. There are eight cosponsors on our side and three cosponsors thus far on the Democrat side. And it is bipartisan. We must not lose sight of the fact that we have a very real opportunity, a compelling opportunity to act on tobacco this year. We believe the best framework for legislation clearly remains in the provisions of the June 20, 1997 global tobacco settlement that was agreed to by 40 State Attorneys General and the tobacco industry. This document should serve as the blueprint on which the Senate should act. It should be clean of extraneous provisions and programs and targeted to the overwhelming need to educate our nation's youth on the hazards of tobacco use. I call upon my colleagues--both Republicans and Democrats--to join us in this bipartisan effort to protect the lives of American youth. I call upon the President to work with us in a bipartisan effort to forge meaningful tobacco legislation. Without your active participation and support, Mr. President, there can be no tobacco bill. Together we can make a positive and defining difference. Senator Feinstein, Senator Breaux and I are prepared to move forward with tobacco legislation that is constitutionally sound and that will protect millions of Americans, both young and old, from the enticement of the deadly tobacco habit. We simply cannot lose this opportunity. We do not intend to remain on the sidelines while this issue languishes and political rhetoric is thrown back and forth. Some of my colleagues have stated they intend to offer the Commerce Committee tobacco bill as an amendment to all appropriate legislation on the floor of the Senate. Let me say to my friends that I share your concern that the Senate should pass legislation this year. I ask that you join us in our bipartisan effort to enact a settlement-based bill. Together we can realize enactment of tobacco legislation that has seemed so illusive over the past several weeks. I would like to outline this legislation so that my colleagues will understand the basics of the bill that we will file in the future. Number one, the key to an effective program, according to public health experts, is that it must be comprehensive. The Hatch-Feinstein bill accomplishes this goal with major provisions that build upon the June 20, 1997, agreement and the plaintiffs' attorneys' settlement proposal. Ours would require $428.5 billion in payments over 25 years. That is $60 billion more than the June 20, 1997 proposal. Our bill will focus on antitobacco activities, including prevention and research efforts, and give full FDA authority over tobacco products. This is important because no comprehensive, antitobacco bill can be passed without the voluntary cooperation of the tobacco companies. When the proposed settlement was announced last June, with a record $368.5 billion in industry payments, we were all astounded that the tobacco companies would agree to pay that whopping amount of money. That record amount, that ``ceiling'' as it were, was astounding. Now there are those who talk like that is nothing. Our bill will add another $60 billion to that $368.5 billion in required industry payments over 25 years. I am hopeful our bill will bring the tobacco companies back. Yes, they will be kicking and screaming. They will be angry. They will be upset. But, I predict they will come back. There has been considerable debate in this body about the adequacy of the industry payments. I wish we could require $1 trillion in payments. The plain fact is that we have to be reasonable. If we want a comprehensive and constitutional bill, then we will have to insert provisions to bring the industry back to the discussion. Only with their participation can we have a truly constitutional, comprehensive bill. Of the $428 billion in industry payments, $100 billion will be devoted to biomedical and behavioral research. These significant new revenues are devoted to efforts to prevent, treat, and cure tobacco-related and other illnesses. We have included funds for behavioral research as well, so that we can determine the causes for youth tobacco use and determine how best to address them. Let me emphasize, we provide $100 billion over 25 years, or $4 billion a year, for biomedical and behavioral research, with no possibility the funds will be diverted for other, non-tobacco-related purposes. That is something that will benefit the public health of this country significantly. We also provide $92 billion for important public health programs to combat youth tobacco use, including counteradvertising, smoking cessation, and public education. Again, this is all for tobacco-related public health programs. We also include $18.7 billion for tobacco farm families, by melding the Lugar bill and the best of the LEAF Act, Senator Ford's bill, other than continuing the subsidies. Public health authorities insist that increasing tobacco prices is an important weapon in our anti-youth-tobacco-use arsenal. Law enforcement is equally adamant that price increases will lead to greater opportunities for black market sales. Our bill will substantially enhance law enforcement resources at all levels--Federal, state and local--and will also provide new criminal penalties for trafficking in contraband. The Hatch-Feinstein-Breaux bill will provide $9.4 billion for law enforcement efforts, which will be essential in the eyes of law enforcement. Turning to another provision, our bill includes $5 billion for tobacco-related programs for Native Americans, who are particularly hard hit by some of the problems that come from tobacco. We provide $200 million a year for these Native American programs. Let me add that we also give FDA strong and new authority over tobacco products, authority that is in question in light of current litigation over this issue. We also include strong look-back assessments, which, without the tobacco companies on board, will not be constitutional. In addition, when I say we give FDA strong new authority, we mean it. We not only give them the authority, we give them the authority to ban tobacco products, with the consent of Congress, right from day one. And we require them to issue strong performance standards that industry must meet so that we can be assured that any tobacco products sold in the future, meet government-mandated standards with respect to their critical components, such as tar and nicotine and all other additives. So that is important. That is quite a bit different from what was included in the Commerce bill, where the performance standards were permissive, not mandatory. We keep the industry's feet to the fire by including a strong look-back provision which will provide the industry with the incentives to be good actors, but which will provide stringent penalties if they are not. We provide $204 billion to the States to settle their suits and provide reimbursement for their Medicaid costs. We waive Federal recoupment of these funds under Medicaid law. The challenge for Congress is to design a program which works and which will withstand legal challenge. The problem with the Commerce bill, had it passed, is that it would have been litigated for probably 10 years, because it was unconstitutional. Senator Feinstein, the other cosponsors, and I, have worked very hard to avoid constitutional and other legal pitfalls which handicapped the Commerce bill. So, to sum up, our bill contains constitutionally permissible advertising and marketing provisions, advertising restraints well- beyond those contained in the FDA rule. We have strong look-back assessments--up to $5 billion in penalties in 2004 and up to $10 billion by the year 2009 if the industry does not meet the reductions in youth-smoking that we set in the bill. And our bill mandates establishment of a documents depository in a central location, Washington, DC, where all of the tobacco companies will deposit critical industry documents. This will be done by volition, since the companies will have agreed to the protocol contained in the bill. This should make it easier for individual claimants to sue and to recover. And that is no small thing. Now, under Hatch-Feinstein, the manufacturers, State governments, the Castano litigants, and the Federal Government voluntarily execute a binding and enforceable contractual agreement, so that tobacco companies will have agreed, voluntarily to meet the requirements of the bill. Similarly, with the industry voluntarily consenting to the agreement, this obviates any constitutional problems with the look-back provision. We have included several limited liability provisions, which is the one prerequisite to the industry voluntarily agreeing to a bill; this will give the industry greater predictability in their financial exposure due to lawsuits, and which in turn will provide the Federal Government with a more predictable revenue stream to operate its new antitobacco program. Now, with respect to the limited liability provisions, we settle all Federal, State and local suits, including class actions, in line with the settlement nature of the legislation. That is what the attorneys general did. Shutting off the State litigation allows us to provide the States, counties and cities with guaranteed payments of up to $204 billion, without the need for costly and time-consuming litigation and without Federal Medicaid recovery. Specifically, we provide $204 billion to the States. Forty percent of the State funds are untied; 60 percent of the State funds are targeted for 14 specific programs. We fully preserve all individuals' rights to pursue their injury claims, and all individual suits will be preserved and allowed to proceed except for those making claim for treatment only of addiction or dependency. We settle all past punitive damages in exchange for an unprecedented $100 billion which will be used for biomedical and behavioral research. Future judgments against the industry, with the exception of claims for addiction and dependence, will be subject to punitive damages, but they will also be subject to a cap on total awards during any given year. May I ask, Mr. President, how much of my time is remaining?

Mr. HATCH. Let me just proceed a few minutes more before I turn to my colleagues, and then I will reserve the remainder of my time. The Hatch-Feinstein-Breaux bill contains many provisions that mirror those contained in the proposed settlement of June 20 of last year. We are trying to accomplish the art of the impossible. We want to enact this astounding settlement, this unprecedented agreement wherein the tobacco companies voluntarily concur in making large annual payments in exchange for unprecedented new advertising bans and future look-back penalties. If we cannot maintain the consensual nature of the original settlement, then we lose the ability to accomplish many of the key elements of any comprehensive anti-tobacco legislation. I want us togo home this year proud that we have enacted a good bill, not ashamed of our inaction or our action on a faulty bill. I thank my colleagues for being willing to support this bill. On the Republican side it is myself, the Senator from Oregon, Mr Smith, Senator Jeffords, Senator Gorton, Senator Bennett, Senator Hutchison, Senator Kempthorne, and Senator DeWine; on the other side, Senators Feinstein, Torricelli and Breaux. Let me reserve the remainder of my time.

Mr. HATCH

Mr. HATCH. Madam President, I thank my dear colleague for his kind remarks on the floor. I just want to again express my regard for him and for the service he has given to his country, not only being an effective and very important and powerful U.S. Senator, but also as a hero, in my eyes, having served our country in the war and having sacrificed greatly for our country. From my point of view, if he wants a judgeship nominee, he is going to be given the benefit of the doubt in every way. And I have to say, in the case of Susan Oki Mollway of Hawaii, I do support her for this position as a United States district court judge. I plan to vote for her nomination, as I did in committee. If confirmed--and I believe she will be confirmed--Ms. Mollway will be the 270th Clinton judicial nominee to be reported by the Judiciary Committee and confirmed by the Senate. In light of this record of accomplishment and in light of some recent remarks made on the floor of the Senate, I thought it would be appropriate for me to spend a few minutes reviewing our record in processing President Clinton's nominees. I have been working with White House Counsel Chuck Ruff to ensure that the nomination and confirmation process is a collaborative one between the White House and the Members of the Senate. I think it is fair to say that after a few bumpy months in which the process suffered due to inadequate consultation between the White House and some Senators, the process is now working rather smoothly. I think the progress is due to the White House's renewed commitment to good-faith consultation with Senators of both parties. I strongly believe that we must do our best to reduce the 73 current vacancies in the Federal courts. But, frankly, there are limits to what we can do given the administration's performance so far. The fact of the matter is that, of the 45 nominees currently pending, 15 of those were received during the last month alone. And it takes 3 to 6 months just to process Federal district and circuit court judges. These are very tough positions. These are positions that are lifetime appointments, and they deserve the scrutiny that we have always applied on the committee, whether the committee has been controlled by Democrats or Republicans. Of the 45 total judicial nominees that are pending, 10 are individuals simply renominated from last Congress. Last year, the administration renominated a total of 23 nominees from the 104th Congress. Thirteen of them have been confirmed, but some of the others have some problems. That is why they were held over. Of those 73 vacancies, 28 have not yet received a nominee, and it was only a few months ago when better than half of the total vacancies of around 81 or 82 did not have a nominee. Like I said, we have received 15 nominees within the last month. So, many of the vacancies come as a result not of the committee's slow pace but of the administration's inaction. Moreover, of the 115 judicial nominees sent forward to the committee this Congress, 82 of them have had hearings. Of the 82 nominees who have had hearings, 74 have been reported out of the committee. Of those 74 nominees reported out of the committee, 66 have been confirmed and 7 are pending on the Senate floor. One of those seven will be confirmed shortly, I hope, in the form of Susan Oki Mollway. Assuming most of these nominees the committee has processed are confirmed, I think you will see that our efforts compare quite favorably to prior Congresses in terms of the number of judges confirmed at this point in the second session of the Congress, especially if you look at the recent Democrat-controlled Congresses. For example, during the second session of the 102nd Congress, when President Bush was in office and the Democrats controlled the Senate and therefore the Judiciary Committee, guess how many nominees had been confirmed by July of 1992? Thirty. That is all. How many Clinton nominees this year will we have confirmed were we to stop confirming judges after today? Thirty-one. And we are not through with this session yet. As of July 1, 1990, the Democratic Senate had only confirmed 25 of the Bush nominees nominated that year. As of July 1, 1988, only 21 of Reagan nominees confirmed that year had been confirmed by the Democrat-controlled Senate. So the plain fact is that we are right on track, if not ahead of previous Congresses. Now, while I am concerned that some vacancies need to be filled, I think there has been considerable distortion of the overall situation. There is by no means an unprecedented level of vacancies. In fact, there are more sitting judges today than there were throughout virtually all of the Reagan and Bush administrations. As of today, we have 767 active Federal judges. In addition, there are also well over 400 senior judges who can, and often do, hear cases. Keep in mind that the Clinton administration is on record as having stated that 63 vacancies--a vacancy rate just over 7 percent--is considered virtual full employment of the Federal Judiciary. They were right; when we have around 60 vacancies, we have virtually full employment. It is natural that there will always be some vacancies in light of the turnaround time involved in receiving and reviewing nominees. That is as it should be. Seventy-three vacancies, however, is a vacancy rate of 9 percent. Now, how can a vacancy rate from 7 percent to 9 percent convert ``full employment'' into a ``crisis''? Moreover, compare today's 73 vacancies to the vacancies under a Democratic Senate during President Bush's Administration. In May 1991 there were 148 vacancies, and in May 1992 there were 117 vacancies. I find it interesting that at that time I don't recall a single news article or floor speech on judicial vacancies. So, in short, I think it is quite unfair and, frankly, inaccurate to report that the Republican Congress has created a vacancy crisis in our courts. While the debate about vacancy rates on our Federal courts is not unimportant, it remains more important that the Senate perform its advise and consent function thoroughly and responsibly. Federal judges serve for life and perform an important constitutional function, without direct political accountability to the people. Accordingly, the Senate should never move too quickly on nominations before it. I do not believe that we are moving too quickly on this nominee. This nominee is getting considered today, and I hope that she passes. Just this past year, we saw two examples of what can happen when we try to move nominations along perhaps too quickly. In one instance, a sitting Federal district judge nominated for a very important Federal appeals court was forced to withdraw the nomination after he had a hearing in the Judiciary Committee when it was discovered that he had lied about certain details of his background. In another instance, a nominee for a Federal district court was reported out of the Judiciary Committee before all the details of her record as a judge on a State trial court were known. As it happens, the district attorney in the nominee's city and the district attorneys' association in her home State have all recently come to publicly oppose the nomination, setting forth facts demonstrating a very serious antiprosecution bias in her judicial record. It is cases like these that underscore the importance of proceeding very deliberately with nominations for these most important life- tenured positions. Even so, you can be too deliberate; you can delay these too much. I think under my tenure as chairman of the committee we have not done that. I hope that our colleagues on the other side realize that. In closing, I feel I should respond to some unfortunate remarks made recently on the floor of the Senate. I am referring to a speech where one of my colleagues accused the Senate majority of ``stalling Hispanic women and minority nominees'' because of ``ethnic and gender biases.'' Day in and day out, the Judiciary Committee routinely has evaluated and reported on literally hundreds of Clinton judicial nominees without any regard whatever to the nominee's race, gender, religion, or ethnic origin. And the Senate has gone on to confirm those Clinton nominees-- 269 of them, up until today. Should Susan Oki Mollway be confirmed, the number will be 270 judges. Indeed, according to statistics compiled by the liberal judicial watchdog group, the Alliance for Justice, no fewer than 70 of these nominees were women, 42 were African Americans, 13 were Hispanics, and 4 were Asian Americans. These figures do not include the more than 235 Department of Justice and White House nominees--non-judicial nominees, if you will--approved by the Senate Judiciary Committee whom Republicans have confirmed for President Clinton. Anyone can cite individual isolated examples of unexpedited consideration but I flatly reject that these amount to what my colleague called a ``disturbing pattern'' of ``ethnic and gender bias.'' I do not think it would be appropriate for me at this point to discuss why each of his examples fails to support his point. Suffice it for me to say here that members of the Judiciary Committee are well aware that many nominees lack the support of home-State Senators, have a record that raises serious questions of character and judicial temperament, or have some other background difficulty that necessitated further investigation. I do not believe it does the Senate well, nor do I believe it does the Committee well, to engage in this sort of ``wedge'' politics. I hope my colleagues will refrain from such unproductive attacks. They are not only unproductive, they are unfair and, in my opinion, somewhat vicious. To suggest that the Committee or this majority is motivated by improper bias of any kind is simply wrong, and the record shows it. In addition, I will not allow such accusations to force us to abdicate the Senate's responsibility to ensure that the Senate adequately and fully discharges its constitutional advise and consent function for nominees for life-tenured judicial office. Having said all of this, I would like to lend my support for Susan Oki Mollway and to the distinguished Senators from Hawaii, both of whom I admire very much. I have to say that the distinguished Senator from Hawaii, Senator Inouye, has known Susan Oki Mollway virtually all her life. He has known her father, who also, likewise, is a hero. I examined her record, and, yes, there are things that naturally raised the hackles of some on the committee, but I have to say that she is an extremely intelligent women with an extremely well balanced background. I have to say that I believe she ought to be supported here on the floor today, and I intend to do everything I can to support her. Susan Oki Mollway was nominated for district judge from the District of Hawaii on January 7 of last year. I personally apologize to my two colleagues for this having taken so long to get to the floor. She has a B.A. and an M.A. in English from the University of Hawaii. That alone is pretty impressive, but she received her J.D. cum laude from Harvard University in 1981. That is also pretty impressive. Currently, she is a partner with the Honolulu firm of Cades, Schutte, Fleming and Wright. She also currently serves as director to the Hawaii Justice Foundation and the Hawaii Women's Legal Foundation, both unpaid positions, organizations that focus on local issues and/or raise money for charitable organizations. In addition, she was the recipient of the Outstanding Woman Lawyer of the Year award in 1987. She is an exceptional person--in my opinion, one who should be able to fill this position in a way that will bring honor to the Federal courts. I hope that is true. I have no way of being absolutely sure, but I am relying on the recommendations of our two colleagues from Hawaii and the extensive background investigation the Committee performed on Susan Oki Mollway. I hope our colleagues in the Senate will support her. I believe she is worthy of support. I think my colleagues know that I take these nominations very seriously. We look at them very seriously. We do extensive background checks and investigations, as did our friends on the other side when they were in control of the committee. I try to be down the line, down the middle, and I try to make sure people are treated fairly. Naturally, I resent it when somebody indicates in any conversation that there may be some impropriety or improper bias involved with regard to some of the nominees who have been or are currently pending before the Senate and/or the Judiciary Committee. I am very concerned, as Judiciary Committee chairman, that we do our jobs well. I am very concerned that we do them in a way that is fair. I am very concerned that we get the best people we can on the Federal bench. After all, these are lifetime appointments. It is often said that Federal judges are the ``closest thing to God'' in this life because they have so much power, and once they are there, you really can't get rid of them. They are not really politically accountable or directly accountable to the American people because they don't have to stand for reelection, which I think is a very good thing because that keeps the Federal judicial system above politics, hopefully, or at least less involved in politics than any other branch of our Government. I think the judiciary has served our country well. I have seen great liberal judges and great conservative judges, and I have seen lousy liberal judges and lousy conservative judges on the Federal bench. Ideology isn't necessarily the determining factor as to whether a judge will serve in the best possible manner as a member of the Federal bench. So it is important that we find people of high caliber, high quality, high ethics, with good work habits, that are honest and decent, to fill these positions. I believe Susan Oki Mollway fits all of those categories. I yield the floor. Mr. INOUYE addressed the Chair.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to congratulate my home team, the Utah Jazz, on their remarkable season and thrilling playoff run. For the second straight year, the Jazz won the NBA's Western Conference in impressive fashion and lost a well-fought series to the Chicago Bulls by the slimmest of margins. As one of the team's most faithful fans, I share the heartache of the players and coaches, who came so close to reaching their goal only to fall one point short of a seventh game. However, I am confident that Jazz fans everywhere share my feelings of pride in the season that these gutsy, tenacious players gave us to enjoy. To those players who believe that professional sports have become just another business with big salaries and product licenses, I will simply say that the Utah Jazz personify everything that is good about the game of basketball. The Jazz believe in teamwork, pure fundamentals, courage, and determination. Basketball fans throughout the country have become enamored with the Jazz and their old-fashioned work ethic. Often facing younger and more athletic teams, the Jazz have relied on their trademark discipline and teamwork to overwhelm their opponents. However, it is not just the Jazz's triumphs on the basketball court that are spectacular--such as winning over 76 percent of this season's games and compiling an 11-3 mark through the Western Conference playoffs, punctuated by a 4-game sweep of the formidable Los Angeles Lakers. The examples they set for our youth off the court are just as noteworthy. Many of the players give of their time, talents and money to better our community. They have been unafraid to display to the world that you can be a superstar and a good citizen, friend, and father. Our team is made up of high caliber individuals. They have worked hard, believed in each other, and have displayed tremendous poise and dignity throughout a challenging season. Once again this year, Utahns were privileged to watch the timeless duo of John Stockton and Karl Marlone work their magic. By flawlessly executing there signature pick-and-roll time and time again, these two basketball legends led the Jazz to a 62-win season that classified as the best record in the NBA this season and included 2 wins and no losses in match-up with the Bulls. In fact, if you take into account every game in which the Jazz and the Bulls faced one another this year, each team won four. So, the way I see it, the Bulls win in Game 6 achieved a draw in the Jazz-Bulls rivalry for the entire '97-'98. I do want to congratulate the Chicago Bulls on another fine season and a tremendous victory in the Finals. My hat is off to Michael Jordan and the Bulls for a spectacular playoff performance. Michael Jordan's skills and superb performances will be applauded for many years to come. No one can dispute that this team is comprised of very talented players who have excited and entertained basketball fans around the world for most of this decade. Years from now, as I look back at this Jazz team, I will fondly remember this remarkable season and the joy they brought to all their fans. It has been my pleasure to attend many games at the Delta Center and to join in the cheering and excitement. It has been my honor to represent the state with the classiest team in the NBA. The Utah Jazz would not have been able to achieve such success without the contributions and talents of some very key people. I commend head coach Jerry Sloan and his staff for the gritty, hard-nosed approach that they have given to the team. Coach Sloan never gave excuses when things went awry and always expected his players to give their best efforts, every minute of every game. He has the complete respect of all of his players--the greatest accolade a coach can receive. Jazz Owner Larry Miller knew what it would mean for Utah to have its own NBA basketball team. He enabled the Jazz to stay in Salt Lake City. He has displayed great leadership and commitment to the team and the community throughout his many years of owning this team. Team President Frank Layden has always encouraged, motivated, and commanded respect from the players and the community. His enthusiasm creates community spirit and strengthens conviction in our team. And Scott Layden's savvy, and superb sense of what makes a champion has continued to propel the Jazz to greater heights. He has always conducted the business of the Jazz with professionalism, and is one of the most highly-respected front office people in the league. To the players, I offer my congratulations on an exceptional season. Each of these fine individuals--Karl, John, Jeff, Byron, Greg, Antoine, Shandon, Howard, Chris, Adam, Greg, and Jacque--contributed greatly to the success of this team. On behalf of Jazz fans everywhere, I thank you all for taking us on yet another memorable journey to the NBA Finals. Let's do it gain next year. Mr. President, I am proud of the Jazz and the unique spirit of unity that they have brought to the state of Utah. Win or lose, they act with professionalism and class both on and off the court. They are champions in every sense of the word.