Orrin Hatch

Mr. HATCH

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

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

Mr. HATCH. Mr. President, my amendment delinks judges' salaries from our salary problem, because it is unbelievable how terrible it is in many parts of this country that judges do not have an annual COLA. That is what this will grant them. Mr. President, I am offering an amendment to establish a procedure for future cost-of-living increases in judicial compensation. This legislation is a portion of a legislative proposal prepared by the Administrative Office of the U.S. Courts, and which I introduced by request as S. 394 earlier this Congress. Under current law, salaries for Federal judges are currently linked to congressional and Executive Schedule salaries, so that Federal judges cannot receive cost-of-living adjustments [COLA's] unless Members of Congress and employees on the Executive Schedule receive the same COLA. As a consequence, Federal judges have not received a cost- of-living salary adjustment since January 1994. This amendment would amend section 461 of title 28 to end the current linkage between the judicial, congressional and Executive Schedule compensation. Instead, judicial salaries would be adjusted automatically on an annual basis, in the same percentage amount as the rate of pay of Federal employees under the General Schedule. In addition, the amendment would repeal section 140 of Public Law No. 97-92, thereby removing the current requirement that Congress affirmatively vote for cost-of-living increases for Federal judges. Not included in my amendment is language, originally proposed by the Administrative Office and introduced as part of S. 394 earlier this Congress, which would give a one-time salary increase to Federal judges. I do believe this separate, one-time salary increase warrants serious consideration by this body, although not necessarily as part of the second degree amendment I am presently offering. If we are to attract and retain the most capable lawyers to serve as Federal judges, it is vitally important that we ensure that those responsible for the effective functioning of the judicial branch receive fair compensation, including reasonable adjustments which allow judicial salaries to keep pace with increases in the cost of living. As Chief Justice Rehnquist stated in his ``1996 Year-End Report on the Federal Judiciary,'' ``We must insure that judges, who make a lifetime commitment to public service are able to plan their financial futures based on reasonable expectations.'' This amendment, which I am offering at the request of the Judicial Conference, proposes changes viewed by the Judicial Conference as advancing this objective--an objective with which I believe most Senators would agree. Mr. President, I urge adoption of the amendment.

Mr. HATCH

Mr. HATCH. Madam President, I would like to comment just briefly here on the nomination of Mr. Joel Klein, who has been nominated for the position of Assistant Attorney General of the Antitrust Division of the Department of Justice. Last Friday, I spoke on this floor in support of Mr. Klein and urged my colleagues to support his nomination. I certainly continue wholeheartedly to support Mr. Joel Klein. And I continue to urge my colleagues to join me. I will not repeat today all that I had to say last week on Mr. Klein's behalf, but I would like to reiterate that support and have my statement from last Friday printed in the Record. I ask unanimous consent to have that statement printed in the Record.

Mr. HATCH. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. HATCH. I ask unanimous consent that the call of the quorum be rescinded.

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

Mr. HATCH. I am very pleased that cloture was invoked last week with such overwhelming support. I must say, however, that I was quite surprised, and disappointed even, to find us in the position of voting on cloture for someone as good as Joel Klein. Even I, as chairman or ranking member of the Judiciary Committee, have not filibustered a single Clinton administration nominee for the Justice Department or the Federal courts. I am not saying I will not in the future, but I will say that I have not up until now. Indeed, the last filibuster of a Justice Department nominee was over the nomination of Walter Dellinger to head the Department's Office of Legal Counsel back in October of 1993. Of all the nominees I have seen in recent years, I must say that Joel Klein certainly ranks among the very best of them. Of course, I know my good colleague from South Carolina would not take this step lightly and without what is, in his view, adequate justification, but in fairness I think we must now move quickly to confirm this nominee who has been awaiting confirmation since May 5 of this year. As I explained last Friday, I believe it is critical for the Department of Justice, and the business community generally, to have a permanent, confirmed antitrust chief. Until we do, any antitrust matter before the Department of Justice will invite political maneuvering and gamesmanship by the affected parties, and any ultimate decision by the Department, no matter how justified on the merits, will unfairly be subject to criticism. Mr. Klein has, to his credit, not permitted the likelihood of such criticism to deter him from leading the Department to bring closure on critical matters pending before the Antitrust Division. I believe it is most unfortunate that, because of this body's, the U.S. Senate's, delay, Mr. Klein has been unfairly criticized for such decisions. This does a disservice to the Department as well as to those who come before it. By urging that we move to confirm Mr. Klein, and in expressing my support for this fine nominee, I intend in no way to diminish the important issues raised by my colleague from South Carolina, and others, regarding competition and antitrust policy in the telecommunications field. Quite the contrary, it is my belief that telecommunications competition and antitrust policy is one of the most important, yet somewhat unsettled, policy areas affecting our emerging and transforming economy. In fact, I announce today that I plan to work in coordination with Senator DeWine, who chairs the Judiciary Committee's Antitrust Subcommittee, to explore the looming policy decisions in this area and the role of the Department of Justice in the telecommunications arena. In my view, there are few competitive issues which are more worthy of examination than this one. Notwithstanding the tremendous import of the issues raised by some of my colleagues, I believe it is neither fair nor wise to hold this nominee and the Antitrust Division hostage because of concerns about his potential positions in this very turbulent area of the law. In my view, sound public policy is best served by bringing this nominee up for a vote, permitting the Justice Department to proceed with a confirmed Chief of the Antitrust Division, and for us in Congress to move forward and work with the Department and other involved agencies in the formulation and implementation of telecommunications policies. So, I urge my colleagues on both sides of the aisle to vote to confirm Joel Klein as Assistant Attorney General for the Antitrust Division. I have known Mr. Klein for quite a while, and I have to say I know him well. I also know his abilities well. I can also say, as someone who has had a little experience in the law, that Mr. Klein will stack up with anybody. He is a fine nominee. I commend the President for having made this choice, for having had the foresight to put somebody like this into the Justice Department. I commend Mr. Klein for the work that he has done up to date, for his fearless work and not waiting until he is confirmed to act as the acting person in that Department and for the work he did prior to this nomination in that Department. I commend him for a lifetime of service to this country and to his family and to the law firms that he has worked with. There is no question he has the academic and other credentials that far exceed the academic and other credentials of many others who served with distinction, who served in the Government of the United States, and particularly in the Justice Department. So I am very happy to support his nomination. I hope that today everybody will support his nomination. I think it is the right thing to do. Again, I say, my colleague from South Carolina is sincere and dedicated in his effort, but I hope he will see fit to support this nomination as well, on the basis that he has made his case, he has made his arguments, he has stood up for what he believes his principles are, and now it is time to support the President's nominee for this particular, important position in the Antitrust Division.

Mr. HATCH. I would also like to point out that numerous past and present Government officials and attorneys have voiced strong support for Mr. Klein, including James Rill and John Shenefield, who headed the Antitrust Division during the Bush and Carter administrations respectively. I also ask unanimous consent that a letter to the New York Times editor from Messrs. Rill and Shenefield be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, I wish to rise and join my colleagues in supporting the Smith amendment to the fiscal year 1998 foreign operations bill that would cut assistance to the Government of the Russian Federation if it enacts the onerous bill passed by the Duma last month entitled ``On Freedom of Conscience and Religious Association.'' Mr. President, this bill passed by the Duma is about restricting freedom of conscience and prohibiting the freedom of conscience. It is a major step backward for democracy and human rights in Russia. It takes Russia away from the West and the institutions that protect an individual's freedom of religion. The bill passed by the Duma--promoted by an unholy alliance of Communists and Populists whose responsibility to the country appears to focus on restricting its citizens' ability to practice any faith they choose. The measures in the bill are deeply objectionable. A few points are worth mentioning: Religious groups must register with the government by 1998. In a blatant act of discrimination, the bill assigns different religions to different categories that will afford them different sets of rights. For a religion to be deemed a religious organization, it will have to demonstrate that they have officially existed in Russia for at least 15 years. This means that the religion would have had to register under Communist dictator Leonid Brezhnev, at a time when the Soviet Union was officially atheistic and officially repressive to the pursuit of faith. Religious groups not deemed in the official, first category of ``religious organizations'' would have greatly restricted rights. They would have no legal status. Members would have to be individually and officially registered. They groups could not rent public space for services, own property, conduct financial activity, invite foreigners to Russia, or set up church schools. To register as a ``religious organization,'' a religious group would have to (a) be sponsored by a Russian religious organization, (b) undergo a 15-year registration period, and (c) have ``authenticity'' determined by a commission of state experts, who would review a faith's doctrine for admissibility. This state bureaucracy could deny registration to faiths on a wide range of practices, such as advocating nonmedical forms of healing, monasticism, conscientious objection, and proselytizing to minors. Mr. President, the Duma bill on restricting religious rights is contrary to international conventions signed by Russia, including the Helsinki Treaty of 1989, which states: [Participating states] will take effective measures to prevent and eliminate discrimination against individuals of communities on grounds of religion or belief in the recognitions, exercise and enjoyment of human rights and fundamental freedoms in all fields of civil, political, economic, social and cultural life; and [participating states] will grant upon their request to communities of believers, practicing or prepared to practice their faith within the constitutional framework of the States, recognition of the status provided for them in their respective countries. But if the Russian Government wishes to ignore its treaty obligations--which, from our record of arms control agreements, we must recognize is not a unique development--it is still shocking that the Duma egregiously ignores the Russian Constitution, which states: The state guarantees the equality of rights and freedoms regardless of sex, race, nationality, language, origin, property and official position, place of residence, attitude to religion, convictions, membership in public associations, as well as other circumstances. Banned are all forms of limitations of human rights on social, racial, national, language or religious grounds. (Art. 19) It is indeed of great concern to me, Mr. President, that the Duma sees fit to legislate restrictions on individual rights at a time when Russian society is greatly suffering. Michael Specter of the New York Times recently wrote about the alarming downward spiral in the health of the Russian population. In that article, Specter notes that per capita alcohol consumption is the highest in the world; that Russia has a wider gap in life expectancy between men and women than in any other country; that of the nations of Asia, America, and Europe, Russia's mortality rate is ahead of only Afghanistan and Cambodia; and that the death rate among working Russians today is higher than a century ago. And the indicators are getting worse: the mortality rate for Russian men between 40 and 49 years of age increased by over 50 percent between 1990 and 1995. The reporter concluded: ``An astonishing drop in life expectancy for Russian men over the past decade, combined with one of the lowest birthrates on earth, has turned Russia into a demographic freak show.'' Mr. President, we can expect yelping from the supporters of this bill in the Duma. Delighted to frustrate President Yeltsin's every move, they will claim that international opprobrium against this bill is infringing on Russia's sovereignty. This is not a question of Russia's sovereignty, Mr. President. The calls and letters President Yeltsin has received from political and religious leaders around the world declare our concerns about the freedom of individual conscience in Russia, concerns their elected body should share, not patronize. U.S. assistance is not an entitlement. It is a demonstration of our support for the emergence of democracy in a land cursed by communism for most of this decade. If Russia turns back to the night of authoritarianism, we should not squander our resources, Mr. President. In the past 2 weeks, we have seen the announcement of the historic enlargement of NATO. The Russian Government opposed this, somewhat disingenuously, I believe, because its concerns where not reflecting the concerns of the Russian people, who are much more concerned with poverty, disease, and rampant crime and their Duma's incessant political posturing, than they are of an alliance that has no historic record of aggression. Among those in the West, there were several groups of thinkers who supported this move. Perhaps they could be referred to as idealists and realists. The idealists hold a sense of optimism that believes that the enlargement of NATO is an expansion of democratic societies, which, history has shown, have a lesser tendency to go to war with each other. Certainly the history of NATO is clearly that of a defensive collective organization committed solely to its own defense. The realists focused on an unpredictable future and a geopolitical vacuum. This temporal and spatial approach, traditional geopolitics, warns that we do not know the ultimate evolution of the Russian state. It argues that there is little historical experience of democracy in Russia. The idealists focus on the internal aspects of NATO and the expansion of democracies. To idealists, the solution to Russia's concerns about NATO would occur when Russia is seen to have fully demonstrated its evolution to rule by democratic institutions. Because would NATO need to defend against such a Russia? I would like to think of myself as an idealist, Mr. President. And I support the enlargement of NATO because I welcome Hungary, the Czech Republic, and Poland to the family of democratic nations. Their membership in NATO will work to preserve their democratic accomplishments. But the developments in Russia--in particular this bill against religious freedom by the Duma--cloud my optimism. If Russia turns away from democracy in favor of an ill-considered exercise in demagogic politics, the realists, who fear a future authoritarian Russia and seek to prepare for it, will have their views confirmed. Mr. President, I have long supported Boris Yeltsin. In fact, when he first came to the United States in the late 1980's, I was among the few who said, to the Republican administration at the time: ``You're focusing on the wrong guy, Gorbachev. This is the man to watch, and this is the man to back.'' Since then, I have strongly approved every time President Yeltsin stood bravely for democracy in Russia. When he stood on that tank in defense of Russia's nascent democracy, my prayers were with him. I expect that President Yeltsin will veto this bill. That will make this legislation that we will pass today merely a demonstration that this body will stand for religious freedom in Russia. I will stand and applaud him when he vetoes this bill. But if this bill becomes law in Russia, Mr. President. Our support for democracy in Russia has been dealt perhaps a fatal blow. We should not waste our funds promoting democratic development on a government that turns away from democracy. And if President Yeltsin signs the the bill against religious rights, Mr. President, I will pray for Russia.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today on behalf of Mr. Joel Klein, who has been nominated for the position of Assistant Attorney General of the Antitrust Division of the Department of Justice. Mr. Klein was reported out of the Judiciary Committee unanimously on May 5. As his record and testimony reflect, Joel Klein is a fine nominee for this position, and I am pleased that his nomination has finally been brought before the full Senate today. He has my strong support and, I believe, the strong support of every member of the Judiciary Committee. Now, I believe Mr. Klein is as fine a lawyer as any nominee who has come before this committee. He graduated magna cum laude from Harvard Law School before clerking for Chief Judge David Brazelon of the D.C. Circuit and then Supreme Court Justice Lewis Powell. Mr. Klein went on to practice public interest law and later formed his own law firm, in which he developed an outstanding reputation as an appellate lawyer arguing--and winning--many important cases before the U.S. Supreme Court. For the past 2 years, Mr. Klein has ably served as Principal Deputy in the Justice Department's Antitrust Division, and for the past several months he has been the Acting Assistant Attorney General for the Antitrust Division. It is clear, both from his speeches and his enforcement decisions, that Mr. Klein is well within the mainstream of antitrust law and doctrine and will be a stabilizing influence at the Antitrust Division of the Justice Department. While no one doubts his willingness to take vigorous enforcement actions when appropriate, it is a credit to Mr. Klein that the U.S. Chamber of Commerce and the National Association of Manufacturers and other business associations have written in strong support of his nomination to lead the Antitrust Division. They believe he will be good for American business. And I think they are right. At the same time, Mr. Klein has demonstrated a sense of direction and a vision for the Antitrust Division, which is important in a leader. He is committed to enforcing our Nation's antitrust laws in order to uphold our cherished free enterprise system and protect consumers from cartels and other anticompetitive conduct. So, I am certain that Mr. Klein will also be very good for consumers. Antitrust doctrine has had its ups and downs over the years--although we may not all agree on which times were which. At this point, however, I am hopeful that antitrust is entering a more mature and more stable period. Although antitrust analysis is fact-intensive and will always contain gray areas, I hope Mr. Klein will work to help make antitrust doctrine as clear and predictable as possible so that companies know what is permitted and what the Antitrust Division will challenge. This will help businesses compete vigorously without the worry and chilling effects that result from uncertainty. I suggest that the Division's goal should be to avoid burdens on lawful business activities while appropriately enforcing the law against those who clearly violate it. Finally, I would like to add that personally I have been very impressed with Mr. Klein. He strikes me as a person of strong integrity, as a highly competent and talented lawyer who is well-suited to lead the Antitrust Division. While I expect we may not always agree on every issue, I believe that Mr. Klein's skills and expertise and his personal integrity will be a service to the Department of Justice, to antitrust policymakers, and to the health of competition in our economy. I look forward to working with him in the coming years. In what appears to be a last-ditch effort to scuttle Mr. Klein's nomination, there are some who have now floated an allegation that the nominee's participation in a particular merger decision was somehow improper. Upon examination, let me say that it appears to me that these reports are wholly unfounded and provide no basis whatsoever for questioning Mr. Klein's conduct. I understand that, with respect to the matter at issue, Mr. Klein consulted with the proper ethics officials and was assured that his participation raised no conflict of interest or even the appearance thereof. Based on what we know, this judgment appears sound, and I am confident that the nominee has conducted himself appropriately. I hope that nobody in this body will use this extraneous, ill-founded notion as an eleventh hour basis for opposing Mr. Klein's nomination. I am confident, having worked with him over the years, knowing him personally as well as I do, having watched him in action, having seen him make decisions, and having seen him apply the law, that Mr. Klein is a man of high integrity, and I urge my colleagues to cast their votes in his favor. I might add that some will suggest that Mr. Klein is misapplying the Telecommunications Act and has taken questionable positions on particular mergers. I will refrain here from passing judgment on any particular decision and from engaging in a detailed debate on telecommunications antitrust policy. I fully recognize that there are some very, very important issues at stake here, especially in light of a number of ambiguities left in the wake of the telecommunications law. I also recognize that there have been some controversial mergers in this area, and yet other potentially landmark mergers which have not yet come to pass. In short, telecommunications competition and antitrust policy is one of the most important, yet somewhat unsettled, policy areas affecting our emerging, transforming economy. The looming policy decisions to be made in this area cannot be ignored. Indeed, I plan to have the Judiciary Committee and/or our Antitrust Subcommittee fully explore these issues. But I believe it is neither fair nor wise to hold a nominee hostage because of such concerns, especially one as competent and decent as Joel Klein. In my view, sound public policy is best served by bringing this nominee up for a vote, permitting the Justice Department to proceed with a confirmed chief of the Antitrust Division, and for us in Congress to move forward and work with the Department and other involved agencies in the formulation and implementation of telecommunications policies. I hope that all Senators, and especially those of the President's own party, will permit the administration's nominee to be voted on. Finally, let me just say this: I believe that the President deserves a great deal of credit for picking Joel Klein as one of his chief nominations for this year. There are times when I disagree with the President, but I have to say when he does a good job and when he does nominate good people, as he has in these areas in the past in some of the areas of law, in particular, and I cite with particularity some people at Justice, the Director of the FBI and so many other law enforcement aspects of our Government, then I will support the President. I will do what I can to show support for him and to encourage him to continue to pick the highest quality people for these positions. I am confident that Joel Klein is of the highest quality. I am confident that he is one of the finest lawyers in this country in this field and I feel absolutely confident that he will do one of the best jobs in history at the Antitrust Division. Anything less than that, I would be disappointed in. I believe he will. He is a fine man. I hope this body will support him. I hope when we have the cloture vote on Monday we will invoke cloture and have the debate, allow anybody to say what they want to, but then hopefully vote Mr. Klein up for this position so he can fully embrace this position and fulfill it and do what needs to be done. That is all I will say today. I know my colleagues on the other side may have some comments. I yield the floor.

Mr. HATCH

Mr. HATCH. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. HATCH. Mr. President, what is the pending business?

Mr. HATCH. Thank you, Mr. President. Mr. President, I rise to speak again in opposition to the Levin amendment, and in support of the Gramm second degree amendment. The Levin amendment, if enacted, would cripple Federal Prison Industries, by essentially eliminating the only market for its products. FPI is not permitted to compete for sales in the private market. It may only sell to the Federal Government, and then only if it can meet price, quality, and delivery requirements. I do not believe that Senator Levin is suggesting that we change the law and allow FPI to compete for business in the general market place. Yet, if we effectively eliminate the Government market for FPI goods, and FPI cannot sell its products to the public, who will its customers be? Those advocating elimination of the FPI's Government procurement preference suggest that their goal is only a level playing field, and complain the FPI wages ensure unfair competition. Yet, they do not mention the tremendous costs and inefficiencies inherent in operating a manufacturing operation behind bars. FPI endures security and work force challenges few private plant managers can even imagine. FPI puts 100 percent of its revenues back into the private sector. Thousands of private sector jobs depend on supplying FPI with materials and services. My colleagues should ask themselves, if FPI is forced to close its factories, what will replace those private sector jobs? FPI is also an essential prison management and rehabilitation tool. Any corrections officer will tell you, the most dangerous inmate is the idle inmate. Idleness breeds frustration, and provides ample time to plan mischief--a volatile combination. Yet, despite the references to the costs imposed by FPI by my colleagues who support this amendment, I have heard no one suggest how the taxpayers will pay for the new prison programs and the additional prison guards that might be needed if FPI factories are forced to close. Either we want Federal inmates to work, or we do not. I believe that we do want inmates to work, and therefor I must oppose this amendment. I say to my colleagues, if you believe in maintaining good order and discipline in prisons, or if you believe in the rehabilitation of inmates when possible, you should be opposed to this amendment. The Gramm amendment provides a better approach, by requiring a study and report to Congress on FPI and FPI's market needs and impact. As Chairman of the Judiciary Committee, I have a strong interest in this issue. I would note that my colleagues who support the Levin amendment have not approached me about addressing this issue in the Committee. Congress should consider this issue carefully before effectively eliminating a prison program that has served the Nation well for 60 years. This is particularly the case, as my friend from Texas has pointed out, that Congress allows no other market for prison-made goods and services. If we are going to consider eliminating the government sales preference, I believe it appropriate for us to also consider permitting prison goods to be sold on the open market as well. However, even then they may not be competitive because of the differences of efficiency between those who are about a quarter as much productive as the private sector workers are. Prison security and prisoner rehabilitation are too important matters to risk hurried action based on emotion. I urge my colleagues to reject the Levin proposal and adopt the Gramm substitute amendment. Mr. President, this is an important issue. I hope our colleagues will pay attention to it. I would hate to see what would happen to our prisons if we didn't have this privilege of helping these people to do meaningful work and have the opportunity of selling their goods and services that will be from a quality and price standpoint and delivery standpoint competitive with the private sector. Mr. President, I reserve the remainder of our time. I understand the distinguished Senator from Texas will be here later. I would like him to have the remaining part of the time.

Mr. HATCH. This is a very serious amendment. What the Gramm amendment does is it provides for a study in the procurement program.

Mr. HATCH. The only hope we have to rehabilitate these prisoners is to get them to work. The only work they do is Federal Prison Industries work. Basically, they can only sell their products to a Federal procurement program, and they have to be products of quality and products of price and products of distribution that work. So if we take this away from them, we take away one of the most important aspects of rehabilitation of criminals. So I hope people will vote for the Gramm amendment and vote down the Levin amendment.

Mr. HATCH. Mr. President, I send a modification to the desk on behalf of Senator Gramm of Texas and myself.

Mr. HATCH. This is a modification of the amendment to the Levin amendment.

Mr. HATCH

Mr. HATCH. Mr. President, I want to take a few moments today to talk about this process. I have to say that having gone through the three BRAC processes we have had in the past, having traveled from city to city to make the cases that we made, having fought very hard to try and make sure the process was honest and decent, having lived through it, where the defense depot in Ogden was shut down--we felt, for very poor reasons. The only reason was that it was more interior, it seems to me, than the bases on the various coasts. But it seems to me that that was one of its great advantages. It would be much more difficult to attack if we got into difficulty. But we lived with that. We lived with the shutdown of the Tooele Army Base, which literally had the greatest heavy-duty vehicle repair facility in the world, just completed at a cost of almost $200 million to the taxpayers. And they shut down. Now they wish they had not because they now don't have the facilities or quite the same capability to take care of Army heavy-duty vehicles. It was a stupid thing to do. But that is what they did, in spite of the fact that Utahans have the chemical weapons destruction facility there. And we put up with all of the hazardous problems of storing chemical weapons in Utah and even transporting them around with various aspects in and out of Utah and with the chemical weapons demilling that we do there. Utahans have always been very patriotic. They have supported the military as much, if not more so, than any other State in the Union, and I think the attitude is still that way in spite of some of these glaring inequities that have occurred. We lived with those. We can accept them. I agree with the distinguished Senator from Arizona. We should shut down bases that do not deserve to compete, or really aren't competitive, or really are dealing with old, worn-out, less modernized facilities and also equipment, and work done on various less modernized pieces of equipment. But what we are getting very upset about lately is that we went all through this BRAC process, and we worked our tails off trying to make a case for the Hill Air Force Base and Ogden Air Logistics Command. We did. It came out No. 1 without question. It was the best Air Logistics Command in all of the Air Force--in all of the military. The work force was one of the best in the history of the country. And we won. So did Tinker Air Force Base. So did Warner Robins. Mr. President, they won because they were more competitive. These three bases won because they could do a better job. They won because they literally made sense as far as keeping our Air Force modernized and working well with the best equipment possible. Three work forces appeared to be the best, and certainly Hill was No. 1. Since that has happened, Hill has gone down to about a 54 or 55 percent utilization of capacity. I have to say this. With that low utilization of capacity, which should be up around 85 percent had the transition work been given to Hill, and which we hope will be given to Hill, if we could get it up over 70 percent of capacity, as high as 85 percent of capacity, Hill Air Force Base would be so competitive that nobody could compete with them in the world today. But at 54 or 55 percent, it means that the costs are much higher than literally they would be if we were utilizing the capacity in a fair and decent manner. I have to say that we have had many Air Force people tell us they don't want to ever see Hill hurt because it is the best Air Logistics Command in the armed services today. But their hands are somewhat tied by the administration that is playing politics with the BRAC process. The administration has indicated because there are two Presidential States involved that even though the full BRAC process said that McClellan Air Force Base in Sacramento had to be shut down and that Kelly Air Force Base in San Antonio had to be shut down, the administration has indicated they don't want them shut down. As a matter of fact, they are now talking about privatization in place. It is nice to talk about that if all things were equal--if literally good business principles were practiced; if literally there was not any stacking of the deck in either case; if literally the regulations that would be written would be fair. Maybe there could be an argument for that. But the only argument that should be made for privatization in place is after the consolidation of the three Air Logistic Commands that won the competition. Once they are consolidated, then I have no problem with trying to place some privatization and have private companies bid on some of the work. Keep in mind that one reason why we don't go straight to privatization is because during time of war, we want to be able, above all things, to be functional, and we don't want to have to worry about whether prices are going to be jacked up by private companies, or whether or not we have the capacity to take care of the needs of our fighting men and women overseas, or for any other number of reasons. Mr. President, the President's politicization of the BRAC95 process has become a common theme on this floor. I admire the willingness of so many of my colleagues on both sides of the aisle to explicitly state that privatization-in-place was not intended by BRAC, and that this deliberate evasion of the BRAC recommendations can only portend defeat for those seeking future BRAC rounds. utah does not deserve to lose three bracs in a row My State, Utah, does not deserve to lose in three successive BRAC rounds. We lost 5,000 jobs from the closure of two installations, the Tooele Army Depot in BRAC91 and the Defense Depot at Ogden in BRAC93. But Hill Air Force Base, and the Ogden Air Logistics Center, is a different case. Hill is the best of the best among maintenance depots, rated as a tier I installation. That means the highest military value. By contrast, Kelly and McClellan were rated tier III--meaning the lowest military value. To privatize at the worst depots is to demean the merits of the Air Force and BRAC decisions to preserve the best, and the best is the work force at Hill. I can make the case that BRAC91 was wrong. The Army put $250 million into the finest consolidated maintenance depot for wheeled combat vehicles in the world. A couple of years later, it shut it down and moved the work to the Red River Army Depot at Texarkana. Then what do you think happened? Red River was designated for closure! But it gets worse--DOD virtually abandoned Tooele until the Tooele County Commission, to its everlasting credit, aggressively beat the bushes for users, successfully bringing Detroit Diesel onto the former base. The point is that Utahns can and do turn bad situations into successes. We can deal with adversity, but we do not have to deal with the type of unfairness and outrageous discrimination that is being dealt to my State by the President. Let me remind my colleagues that Hill met the best of the BRAC95 parameters, which included military value and return on investment. Utah is a terrific investment for the Air Force and the Nation: DOD is mindful of Utah's value for the same reasons that domestic and foreign businesses flock to the State. And they certainly don't come because of our political clout alone--after all, we have only five electoral votes. Utah's attraction lies with its people, its business climate, its youthful and well-educated work force. The State has the highest educational level in the United States, according to the U.S. Bureau of Labor Statistics. Money Magazine and Business Week, among other sources, repeatedly cite it as the best place to do business, the best place to live, and the so-called Software Valley of the World. And its workforce is the youngest in the country and teeming with skilled college graduates who work. Ask any business in Utah about the Utah work ethic; in fact, ask the BRAC commissioners! Ask the Air Force! In a few words: Utahns are the real return on investment, and it is why the Air Force and BRAC have heavily endorsed the retention of Hill. Utah's military value is unmatched. The BRAC commissioners didn't miss a thing in assessing Hill's military value. It hosts the gateway to the Nation's largest exercise site, the Utah Test & Training Range, covering 2,675 square miles. This is the only range in the world on which every active Air Force aircraft can exercise--keep that point in mind. If Hill is not properly used, or if the President's privatization deception causes an underutilized Hill to suffer in a future BRAC round, I will tell you now that this range will not longer be available to DOD. It is just that simple. People in Utah are going to turn against them. Even though we have been the most patriotic State, or equal to any other patriotic State in the Union. I will not allow the citizens of my State to become a DOD trash can-- dumping bombs on our fragile terrain, using our remote regions for developing chemical defenses or demilitarizing dangerous chemical munitions, for example. We tolerate as day-to-day sacrifices certain activities that we see other States revolting against. We want Hill's military value appreciated and developed precisely the way that BRAC intended, and that means consolidating core workload at Hill. We want this work at the best depot. Like most other Americans, we do not want privatization of the workload at the site of the worst depot. We want the ICBM depot at Hill to flourish, the F-16 logistics management program, and the C-130 depot programs to be expanded as intended. We deserve--because we have earned--the F-22 and Joint Strike Fighter depot programs over the next decade. Hill does not work well at the current 50-percent capacity usage level, nor at the 66-percent level which it would have in the outyears if privatization in place occurs. We work best when we are at full capacity, and that is why BRAC directed a consolidation package that would put Hill at 86-percent utilization in the year 2001. It was done, to repeat myself, because Hill is the best of the best. hill reflects the utah ``can-do'' spirit Mr. President, Utah is a State populated initially by pioneers who lived and overcame adversity--even in the face of outrageous unfairness and persecution. Today, the Old Mormon Trail is alive with men and women of all ages, and of all faiths, who are re-re-creating that spirit as they trek toward Utah. We overcame the unfairness of Tooele Army Depot loss, as I mentioned. Despite our remote location, we are a literate, sophisticated State with 17 percent of the Utah adult speaking a foreign language, most fluently. Our small State with just over 1 million persons in the work force, has over 1,800 information technology and computer software companies. Our unemployment rate is 3.5 percent, while our job creation rate is twice that of the United States at 7.3 percent. And, we are the fifth fastest growing State. Mr. President, I could go on--but my point has been made, I believe. It is that, like many other Members of both the House and Senate, we demand fairness. When we appoint an independent commission, we expect its recommendations to be honored by a Chief Executive who is President of all the people, not just those with the greatest number of potential votes. privatization in place Mr. President, the Base Realignment Commission--BRAC--issue that affects us most deeply is the evasion of the BRAC recommendation to consolidate workload at a public depot or at a commercial private sector facility. This BRAC recommendation has been distorted by the Clinton administration to allow what has now become known as privatization in place. In the next few minutes, I will present eight reasons why privatization in place will not work. It is not economically feasible, and it is inherently unfair to the public depot competitor: First, it will worsen already deteriorated efficiency in the depot system; Second, GAO has identified current wasteful depot practices that beg reform, something that privatization in place can't provide; Third, past depot reforms have not succeeded; Fourth, the problem of excess capacity is not solved; Fifth, it will not produce promised cost savings; Sixth, the best depots are being sacrificed on a shaky political alter; Seventh, the case for privatization in place has yet to be made; and Eighth, the privatization-in-place competition lacks the elements of fairness expected in Government solicitations. privatization-in-place will compound identified depot inefficiencies Mr. President, the Depot Caucus is an informal group of Members of Congress with strong interests in averting the problems of depot waste and inefficiency. Our goal is to ensure the availability of high- readiness equipment to our Armed Forces. Depot operations are part of service logistics, which is probably the most difficult of all military specialties. Even some of history's top military strategists, Napoleon and von Clausewitz, to name two of the greatest, failed to insert military logistics into their battle plans and strategies. Yet, military logistics has long been one of the great strengths of our military services. It has also been an undeniable cause of our success on the battlefield. My point here is that we cannot afford the inefficiencies and waste that privatization in place will bring to an already cumbersome depot system in DOD. gao has found depot operations wasteful and inefficient GAO has identified $2.5 billion of losses over 4 years directly related to an Air Force depot system that is already encumbered with 40 percent excess capacity. In its May 1997 report on defense depot operations, the GAO said ``DOD consistently experienced losses [in depot operations] * * *, and has had to request additional funding to support their operations.'' Why do I raise this specific point? Because depot operations are expected to at least break even. That has always been one of the Air Force depot system's ever-elusive goals. But, instead, the system will sustain operating losses for fiscal year 1997, which the Air Force estimates at $1.7 billion. This exceeds even the GAO forecasted losses. Let me add that operating losses is an auditor's term of art. GAO's mandate is to audit organizational and operational procedures to evaluate efficiency and effectiveness, predictors of program quality. depot financial management reforms have helped only marginally This is not to say that DOD hasn't been working the problem; it's just not getting any better. Let me give you an example. In 1995, DOD streamlined the financial management of its depot operations by devolving control over depot financing from the office of the Secretary of Defense to the military services. This reform shifted accountability for the Defense Business Operating Fund [DBOF], placing it at the service level. I share GAO's demand for better accountability. But the problems plaguing DBOF just followed the so- called reforms. First, the Air Force, not unlike the Navy, advance billed its customers, which are the military units sending equipment to the depots and which pay for the services of the depots. The advance billing came to $2.9 billion, which was to ensure that sufficient cash balances were available to pay for the goods, services, and other stock items required by the depots to service the assets. Still, the Air Force will operate this year at the $1.7 billion deficit that I mentioned earlier. The second point regarding this reform is that there is simply too little demand for depot service. It's a classic supply-demand problem that every undergraduate encounters in textbooks. I suggest to my colleagues that if they owned a chain of auto repair facilities--let's say 5--and there was significant excess capacity, the logical thing would be to close two garages and consolidate the work in the remaining three. Unlike a lot of what the Air Force does, this is not rocket science. But, I can't place too much blame on the Air Force. They have four big problems, the last of which is beyond their control: First, they're faced with 40 percent overcapacity; Second, they have a resulting $1.7 billion deficit this year; Third, there are gross inefficiencies and distortions that always accrue to business planning when you have to advance bill your customers; and Fourth, they now have some members of their board of directors, including Congress, telling them to throw caution to the wind and sustain these inefficiencies anyway! Many Members of this body have run businesses. Is there anyone here who could keep afloat under these conditions? My last point on current inefficiencies is that these problems were not unknown before we compiled the Defense depot provisions in the bill before us today. You'll recall that during the BRAC process we used a sophisticated analytical modeling technique called COBRA [Cost of Base Realignment Activities]. The parameters and formulas applied by the COBRA model long ago uncovered the same problems. Academicians say that a model's strength is related to its ability to predict and explain. The accuracy with which BRAC uncovered, explained, and predicted the problems that we are discussing today suggests COBRA's efficacy. Perhaps some other agencies of government ought to try it. the problem of excess capacity Mr. President, the GAO testified before the Senate Defense Appropriations Subcommittee hearing last month. In his testimony before that panel, the Assistant Comptroller General made the following observation on excess capacity. DOD's 40 percent excess capacity, he said, ``is a significant contribution toward inefficiency and high cost of DOD's maintenance program and in generating significant losses in the depot maintenance activity group of the services' working capital funds.'' This was in further reference to the annual $1.7 billion annual Air Force depot system loss referred to earlier. Still more importantly, the GAO testimony continued--and I want to emphasize the following remarks: The Air Force's plans for implementing BRAC recommendations will do little to reduce excess capacity and will likely result in increased depot maintenance prices. Here, of course, the GAO witness was referring to Air Force proposals to implement privatization in place to avoid the BRAC recommendation for the consolidation of workload to depots or other commercial private activities. In the case of San Antonio and Sacramento, this expressly excludes privatization in place as an alternative to closure. Mr. President, as a customer of the depot system, you don't have real market choice if you cannot utilize alternatives to suppliers who lock you into higher prices. My point is that depots are forced to be inefficient, both as competitors as well as business operators, where we deny them the opportunity to rid themselves of excess capacity to bring down costs. The problem of waste gets worse. GAO found a $689 million loss from continued excess capacity related to the DOD privatization in place plan. If you multiply this amount over 6 years, which is the statutory period for the phase-out of BRAC closures, the loss to the taxpayers is a staggering $4.1 billion. Imagine what it would be if an 8-year contract, as proposed in the McClellan competition, were to be awarded! Again, I plead with my colleagues who have been in business to stop and think about this--could you keep your customers if you just kept raising prices, while requiring them to disperse badly needed operating funds to pay for services in advance? It may be great theater, but it's a lousy business practice. And it is even worse as public policy. We are gouging the taxpayers to subsidize such outrageous waste. We need to put a stop to it by preventing privatization in place. privatization in place does not produce cost savings Mr. President, GAO has also criticized the overly optimistic assumptions about cost savings that were anticipated from privatization in place where it had been authorized. I repeat: where authorized, to distinguish from the plain language of the BRAC recommendation regarding Sacramento and San Antonio, which stated ``consolidation . . . to commercial private sector activities,'' which in no way allows the inference of privatization in place. Privatization in place was not intended. This is a point clearly made by the ranking minority member of the Readiness Subcommittee and junior Senator from Virginia on this floor last Thursday evening. But, let me turn to a case study where privatization in place was directly recommended by BRAC. Let's look at the results. I refer to the BRAC 1993 decision regarding the Air Force Aerospace Guidance and Metrological Center located at Newark AFB, Ohio. GAO performed an audit of facility operations under privatization in place and found that the Air Force itself estimated costs to be $9 to $32 million higher than those before the operation went private. In fact, I was told by the Air Force over the weekend that there remain nearly 150 government employees at the site. Despite this history, the solicitation for privatization at McClellan is actually forecasting a 25 percent cost savings! Every sensible government accountant that I've spoken to claims this figure is at best vastly inflated. the president is sacrificing the best depots on a shaky political alter Politicization of the BRAC process is risky both economically and militarily. The consequences are already quite clear: Both the House an Senate will deny the President future BRAC rounds. Who among us can support continuation of a process that has become blatantly political? Who is willing to roll the dice with the livelihoods of workers in their States, let alone the lives of our servicemen and women? We are denying DOD critically needed modernization moneys that were to come from the BRAC savings. Worse, still, we are courting the serious deterioration of combat efficiency and safety if our armed services do not get technologies-- technologies which are already in the hands of our adversaries, some of them Third World countries. There is not the least likelihood that demand will rise to meet the sustained levels of excess capacity perpetuated by the President's actions. For example, modern weapon systems have reduced programmed depot maintenance. The F-16, for one, has no routine depot-maintenance requirements. And that aircraft is to be replaced by the Joint Strike Fighter, which has even a longer mean-time-between-failures requirement--MTBF means the average that a system can operate without major replacement or overhaul. The F-22, which will replace the F-15, also has no programmed depot maintenance. But the problems of excess capacity get worse. GAO has calculated that the 5 depots left in place will have 57 million direct work hours to perform 32 million direct work hours of labor, and, the requirement will fall by over 37 percent to 20 million direct work hours by 1999. This means that the depot system will have over 2\1/2\ times the amount of labor it needs. Mr. President, the President's politicization of BRAC is costing our defense structure the best of the best. The BRAC decision could not have been more clear. Hill AFB was a Tier I depot, meaning that it had the highest military value. San Antonio and Sacramento, by contrast, were Tier III--or installations which had the lowest military value. The ratings were made by the Air Force and used extensively in the BRAC rounds. Yet, the Air Force is now being brow-beaten by its political masters in the Clinton administration into renouncing its own objective rankings. At the same time, these Tier III installations are being extended the same rewards that were fairly won by the hard work of the Utah, Georgia, and Oklahoma bases. Mr. President, what does this say for merit? Or, will the Senate merely go on record with the message that lots of electoral votes carry the day? What statement are we making to motivate government employees to provide their best effort? How much political distortion and corruption of good performance are we willing to tolerate? Let me put a more positive face on some of these problems. Let's consider the value to the taxpayer of pursuing the BRAC recommendations, that is, keeping the best, while eliminating the poorer performers. According to GAO, the elimination of the San Antonio and Sacramento depots, as proposed by BRAC, would produce the following gains: Excess capacity, by 1999, would fall from 65 percent to 27 percent. On the other hand, if the bases are not closed, San Antonio will have 89 percent of its maximum capacity idled, while Sacramento will be at 90 percent; Average hourly rates would be reduced by $6 per hour; and That $182 million would be saved annually from these types of economies of scale and efficiencies. Regrettably, I have to say that the President's attitude toward the noncoastal Western States, and especially my own State of Utah, cannot escape our attention. It should be foremost in the thoughts of every Senator from this region. The President has repeatedly interfered with, tried to disrupt, and tried to knock off course the most economically vibrant regional economy in the Nation. Need another example? Among other punitive land use regulations, he has usurped without prior consultation 1.7 million acres of land in my State, arbitrarily removing them from economic development and other generally beneficial uses. I refer here to the grand Staircase- Escalante National Monument. It troubles me substantially that the President, even though he is in his second term, is simply not acting as the President of all the people and all the States. He is acting as the President for the large, electorally rich States. If this were not true, the decision to implement the BRAC recommendation would be a no-brainer. The privatization in place competition is inherently unfair Mr. President, I have done a thorough assessment of the proposal for privatization in place at McClellan. I find two major flaws that starkly stack the deck against the public depot and favor private bidders. First, the public depot bidders are forced to bear an unfair share of the costs of transitioning the Sacramento depot from active Air Force status. The DOD Cost of Competition Handbook stipulates that both public and private bidders must cite the transition costs in their bids. However, the private bidder doesn't include the costs of early retirement, separation, or relocation for workers at Sacramento who lose their jobs. But the public depot shows it as an accounting charge because it's paid by the taxpayer. This becomes a form of double accounting. In fact, BRAC intended, and Congress provided the moneys, to fund personnel transition costs regardless of who wins. Yet, the impression is left that this is a cost that will be integrated into the depot's cost to its customers. Second, the private bidders get substantial financial and performance advantages from the use of the excess capacity intended to be closed by BRAC. The local redevelopment authority can determine its own cost of leasing the facility to the private bidder. What an incentive. There is nothing to keep the leasing agreement from covering just about anything, such as depreciation writeoffs, improvements, and even equipment and facility maintenance. All of this allows the private bidder to be artificially low. Yet another inequity denies the public depot from beginning military construction related to the workload transfer until the contract is awarded. This means the work must be performed at the Sacramento location for an indeterminate period of time, adding to the public bidder's cost. And, of course, reducing the fairness of the competition. The McClellan bid consists of a 5-year contract with three 1-year options, for a possible total award of 8 years. The options are performance based. This means that the LRA is certain to expend moneys on facilities maintenance in order to allow the private contractor to achieve better productivity, and through that level of performance, ensure the option awards. The public depot, on the other hand, must invest in facilities modernization and reflect this investment in its cost. the case for privatization in place just can't be made Mr. President, on the basis of all available evidence, we should conclude that privatization in place cannot fairly or reasonably produce cost savings. More likely, it will contribute to waste and inefficiency. In support of this proposition, I want to make the following closing arguments: First, depots are already among the most critical or so-called high- risk areas of the Federal Government. High risk is a special designation used by GAO to alert Congress to areas that are highly vulnerable to waste, fraud, abuse, and mismanagement. Second, GAO has already forecast that, by the end of fiscal year 1999, San Antonio will have 89 percent of its maximum productive capacity as excess, while Sacramento's excess capacity will be at 90 percent. Both of these levels are more than twice the current 40 percent excess capacity that we are arguing about today. In other words, the problem is going to be doubly bad by the end of the next fiscal year if we don't solve it now by ending privatization in place. Again, these problems are caused in great part by diminished workload requirements related to force downsizing. Yet, as I said earlier, it is the savings generated by reducing infrastructure that are fueling our ability to modernize our equipment, something that almost every Member of this body knows is necessary. Third, GAO told the Appropriations Committee panel that: ``the Air Force has the most serious excess capacity problem.'' The combined losses could reach about $500 million if the Sacramento and San Antonio facilities are kept in the inventory. Let me remind my colleagues of the value of the BRAC findings that I mentioned earlier. I need to repeat this: in making its determinations regarding both these depots, BRAC leaned heavily on the Air Force's own designation of the Sacramento and San Antonio ALC's as so-called Tier III installations. This means, as most of us involved in the BRAC process will recall, that the installations had the lowest military value. I challenge anyone to argue that there is some redemptive value that could follow from the revival of installations that the Air Force itself realized should be closed. I might add, Mr. President, that Utah has been on the low end of the BRAC process in other areas. My State has lost two installations. I must admit that I fought hard to prevent those losses. I do not deny the trauma that the closure of such a large military facility causes States and communities. And, I admit that if the situation were reversed, I might be making the same weak arguments my colleagues from California and Texas are making today. I am well aware of what is at stake for my colleagues from Texas and California. But, this does not excuse the Clinton administration from its responsibilities either to the defense of our country, to the ensuring the safest possible equipment for our servicemen and women, or to the taxpayers who are footing the bills. The President needs to take the broad view. And, by rejecting the BRAC recommendations--and compromising the entire BRAC process for unsupportable political reasons--he clearly has not. We should not tolerate diversions from, or the politicization of, the BRAC recommendations. The very nature of downsizing means that there will be losers and survivors. We must make every effort to protect the integrity that the process itself demands. But, more importantly, one of our essential duties under the Constitution is to provide for the common defense. Congress and the President have the ultimate responsibility for the support of our Armed Forces. It is a duty we cannot delegate. I simply ask each of my colleagues these questions: Do we fulfill that duty when we knowingly allow diversions that produce gross inefficiencies in the operation of military services from the recommendations of an independent commission? And do we honor our obligations by denying funds produced by these recommendations for the provision of technologically superior equipment and training for our fighting men and women? We need to affirm our duties and obligations. Only then will we take a major step toward giving our citizens and our fighting men and women the type of defense the country expects. Mr. President, let me just say, in conclusion, that I want this process to work. It is very difficult for me to support a future BRAC process if this is going to be politicized the way we see it being politicized right now. After all, the pain, suffering, inconvenience, and difficulties in traveling around the country and meeting time after time with the military, with the various administrations, and so forth, to have to put up with what is going on right now is just unacceptable. Frankly, I can't support a future BRAC process if that is the best we can do with this one, which I thought was fair and which came out with very tough decisions. They weren't easy. I feel sorry for anybody who has lost anything. But we have lost plenty, too. All I can say is, if we lose this, then I am never going to get over it. I don't think the people of Utah are going to get over it, and I think, frankly, the country will be poorer for it, and I think our national security interests will be poorer for it. I yield the floor. Mr. THURMOND addressed the Chair.

Mr. HATCH

Mr. HATCH. Mr. President, I feel constrained to oppose the Levin amendment provision that is filed on this bill before the Senate, as it is a matter that is properly within the jurisdiction of the Judiciary Committee which has not had an opportunity to consider it. More importantly, in my view, this amendment, while well intentioned, is unwise policy. This amendment would essentially abolish the Federal Government's purchasing preference for products supplied by Federal Prison Industries [FPI], also known by its trade name of UNICOR. FPI is the Federal corporation charged by Congress with the mission of training and employing Federal prison inmates. For more than 60 years, this correctional program has provided inmates with the opportunity to learn practical work habits and skills, and has enjoyed broad, bipartisan support in Congress and from each Republican and Democrat administration. FPI and its training programs at Federal prisons across the Nation have been credited with helping to lower recidivism and ensuring better job-related success for prisoners upon their release--a result that all of us applaud. This amendment, in its starkest terms, requires of us a choice-- either we want Federal inmates to work, or we do not. I believe that we do want inmates to work, and therefore I must oppose this amendment. I say to my colleagues, if you believe in maintaining good order and discipline in prisons, or if you believe in the rehabilitation of inmates when possible, you should be opposed to this amendment. Under current law, FPI may sell their products and services only to the Federal Government. The amendment we are debating would not alter this sales restriction. To ensure that FPI has adequate work to keep inmates occupied, Congress created a special FPI procurement preference, under which Federal agencies are required to make their purchases from FPI over other vendors as long as FPI can meet price, quality, and delivery requirements. This amendment would remove this procurement preference. Without the Federal Government's procurement preference, FPI probably could not exist. Again, FPI is not permitted to compete for sales in the private market. It may only sell to the Federal Government, and then only if it can meet price, quality, and delivery requirements. Nothing short of the viability of Federal Prison Industries is at issue here. Under full competition for Federal contracts, combined with market restrictions, FPI could not survive. My colleagues should remember that the primary mission of FPI is not profit, but rather, the safe and effective incarceration and rehabilitation of Federal prisoners. Needless to say, FPI operates under constraints on its efficiency no private sector manufacturer must operate under. For example, most private sector companies invest in the latest, most efficient technology and equipment to increase productivity and reduce labor costs. Because of its different mission, FPI frequently must make its manufacturing processes as labor-intensive as possible--in order to keep as many inmates as possible occupied. The Secure correctional environment FPI in which FPI operates requires additional inefficiencies. Tools must be carefully checked in and out before and after each shift, and at every break. Inmate workers frequently must be searched before returning to their cells. And FPI factories must shut down whenever inmate unrest or institutional disturbances occur. No private sector business operates under these competitive disadvantages. The average Federal inmate is 37 years old, has only an 8th grade education, and has never held a steady legal job. Some studies have estimated that the productivity of a worker with this profile is about one-quarter of that of the average worker in the private sector. My colleague's amendment has not been considered by the Judiciary Committee, which has jurisdiction over FPI and, more generally, National penitentiaries under rule XXV of the Standing Rules of the Senate. The Committee has not had the opportunity to consider the full impact of this proposal on FPI and prison work. All share the goal of ensuring that FPI does not adversely impact private business. Indeed, FPI can only enter new lines of business, or expand existing lines, until an exhaustive review has been undertaken to the impact on the private sector. Again, this is a restraint that most other businesses do not have imposed on them. FPI has made considerable efforts to minimize any adverse impact on the private sector. Over the past few years, it has transferred factory operations for multiple factory locations to new prisons, in order to create necessary inmate jobs without increasing FPI sales. FPI has also begun operations such as a mattress recycling factory, a laundry, a computer repair factory, and a mail bag repair factory, among others, to diversify its operations and minimize its impact on the private sector, while providing essential prison jobs. I agree with my colleagues who believe that we must address the issues raised by prison industries nationwide. As we continue, appropriately, to incarcerate more serious criminals in both Federal and State prisons, productive work must be found for them. At the same time, we must ensure that jobs are not taken from law-abiding workers. On jobs there is substantial evidence that FPI actually creates a substantial number of private sector jobs. In fiscal year 1996, some 14,000 vendors nationwide registered with FPI, and supplied over $276 million in sales to FPI. Every dollar FPI receives in revenue is recycled into the private sector. Out of each dollar, 56 cents go to the purchase of raw materials from the private sector; 19 cents go to salaries of FPI staff; 17 cents go to equipment, services, and overhead, all supplied by the private sector; 7 cents go to inmate pay, which in turn is passed along to pay victim restitution, child support, alimony, and fines. FPI inmates are required to apply 50 percent of their earnings to these costs. One cent goes to activating new FPI factories--again, with equipment purchased from the private sector. Private businesses in every State benefit from these sales. In short, FPI is a proven correctional program. It enhances the security of Federal prisons, helps ensure that Federal inmates work, and helps in their rehabilitation when possible. The amendment before us now would do immense harm to this highly successful program, and I urge my colleagues to oppose it. I think it is the right thing to do to oppose it. Mr. President, I yield the floor.

Mr. HATCH

Mr. HATCH. Mr. President, for some time now the Judiciary Committee has been working on issues dealing with copyright protection on the Internet and the copyright rights of performers and sound recordings. The Digital Performance Right in Sound Recordings Act that I introduced was passed in 1995, and my National Information Infrastructure Copyright Protection Act was the subject of two hearings in the last Congress. The NII Copyright Protection Act was superseded by the Clinton administration's effort to deal with many of the same issues in the context of two new treaties, the World Intellectual Property Organization [WIPO] Copyright Treaty and the WIPO Performances and Phonograms Treaty. These treaties were concluded successfully in Geneva in December 1996. Since then, I have been eagerly awaiting the administration's draft of implementation legislation. To date, I have not received such legislation, and the Foreign Relations Committee has not received the treaties. I know that the administration shares the respect that I have for copyright, and I commend Bruce Lehman, the Commissioner of Patents and Trademarks, for the splendid work that he did on negotiating the treaties, but I am concerned that 6 months have passed without draft legislation for the committee to work on. Both WIPO treaties were completed in record time, because there was a sense of urgency about the vulnerability of U.S. copyrighted works to massive infringement by means of Internet access and about insufficient international copyright protection for sound recordings. Where is this sense of urgency now? Nothing has changed. Our copyright industries are still threatened. In 1994, copyright-related industries contributed more than $385 billion to the American economy, or more than 5 percent of the total gross domestic product. This represents more than $50 billion in foreign sales, which exceeds every other leading industry sector except automotive and agriculture in contributions to a favorable trade balance. From 1977 to 1994, these same industries grew at a rate that was twice the rate of growth of the national economy, and the rate of job growth in these industries since 1987 has outpaced that of the overall economy by more than 100 percent. Yet these same industries lost an estimated $18 to $22 billion to foreign piracy in 1995. The film industry alone estimates that its losses due to counterfeiting were in excess of $2.3 billion for that year, even though full-length motion pictures are not yet available on the Internet. The recording industry estimates its annual piracy losses in excess of $1.2 billion, with seizures of bootleg CDS up some 1,300 percent in 1995. These figures promise to grow exponentially as technology provides for quicker, more perfect digital reproduction, which is exactly why timely ratification of the WIPO treaties is so important.. I urge the administration to complete its work and to send the treaties to the Senate. I would like to get the treaties ratified and implementation legislation passed during this session of Congress. That goal may already be unachievable because of administration delay. I hope not. I'll try my best.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to speak in strong support of the historic tax relief plan, the Revenue Reconciliation Act of 1997, that is before the Senate today. Change has finally come to Washington and the fruits of that change are beginning to be realized. Who would have thought that 3 years ago that the American people would be receiving a $85 billion tax cut today, especially after the huge $265 billion tax increase that President Clinton pushed through in 1993? It is a proud day for this body and for the American people to finally witness a Congress with the courage to enact a plan to restrain Federal spending and balance the budget. Also very important is the savings that will be passed on to the American people in the form of tax relief. One thing we easily forget is that tax revenues belong to the taxpayers. This historic bill will simply return the taxpayers' own money back to them. Mr. President, important to this debate is how this tax package is being received and the work that has gone into making this bill a good piece of legislation. This bill was reported out of the Finance Committee with overwhelming bipartisan support, and I hope that there is overwhelming bipartisan support for its final passage. I want to commend my colleague and chairman of the Senate Finance Committee for the balanced, bipartisan bill he spearheaded. Mr. President, working families in this country do not take the paying of taxes lightly. How could they? They pay payroll taxes, income taxes, property taxes, and other taxes. In addition to the amount of taxes taken out of every paycheck, families reconcile what income taxes they owe to Uncle Sam every April 15, and millions must send a check to the government for additional taxes. The American taxpayers understand and realize that their tax payments go to providing needed Government benefits and to support the freedoms we enjoy. However, enough is enough. It is time to cut the fat out of Government and lower the Federal tax burden. And, it is time to reduce the burden of budget deficits on taxpayers, mortgage holders, small businessmen, students, and all others having or needing loans. It is time to stop passing off the burden of current spending onto our children and grandchildren. Mr. President, this tax relief plan contains significant tax cuts in a variety of areas. I will not take the time to comment on every provision and change in the bill. However, I would like to comment on a few of the main areas of tax relief which I have long advocated. First, families with children will receive a $500 per child tax credit. Raising children in today's world becomes more expensive each year. This $500 credit will put more money in the hands of parents to help them better afford the high cost of raising children. It's real money back into the bank accounts of American families. Second, this bill would provide a number of proposals to ease the burden of paying for college. I hear again and again about the high cost of colleges and universities. And, I have some personal knowledge on this point, Mr. President. I not only put myself through both college and law school, I have also, as a father, put my six children through college. I know the sacrifices that are necessary. This tax bill would provide a tax credit for tuition expenses, a deduction for student loan interest, and an expansion of the current pre-paid tuition programs. And, important to elementary and secondary school teachers, the bill contains a provision to remove from the 2- percent itemized deduction limitation educational expenses related to furthering the skills of the teacher. Teachers have great influence over our children. Well trained teachers are critical to preparing our children for the challenges of the future. Third, this bill contains important tax cuts to stimulate economic growth and to further the creation of jobs. I have long been an advocate of reducing the tax on capital gains. During debate this week, we have heard a great deal of discussion about the rich versus the poor and who gets what out of this tax bill. Let me make it clear that everybody benefits when jobs are created through economic growth. A capital gains tax cut creates jobs and economic growth. Government investment is limited in what it can do to help people economically. Encouraging private sector investment will foster the most efficient and effective ways to better the economy. I firmly believe that the capital gains tax relief in this bill is the most important thing we can do for economic growth in this country. Expanding an existing business, starting a new venture, or bringing a new invention to market requires capital investment to make happen. Tax policy has a tremendous impact on the amount of capital investment. Under the current law, gains from capital investments are taxed twice, once when the income is earned and again when that income is distributed to the shareholders. Cutting the capital gains tax rate will encourage more investment which will translate into the creation of more jobs. This change is absolutely critical to maintaining a strong economy well into the future. I am also pleased to see relief from the death tax in this bill. Nowhere is the damage of onerous taxation more evident than our current estate tax. It is an inefficient tax that really should be abolished. Families should not have to face a tax bill that forces the involuntary sale of assets shortly after putting a loved one to rest. I hope that we can increase exemption from this onerous tax as quickly as possible. Mr. President, another critically important provision in this bill is the $8 billion in additional money for children's health insurance. This is important for the most vulnerable of our citizens--low-income children. The future of this country lies with our children. We cannot ignore the gap in our health care system that does not currently provide vision or auditory screening, or other preventive health care. The provisions adopted by the Finance Committee, and ratified by the full Senate by an overwhelming vote, are significant and will help address these yet unmet needs in a responsible manner. I applaud my colleagues for their support of this important program. Mr. President, there are a number of other tax relief provisions in this bill and also many other tax simplification provisions that are very important. I personally wish we could have done more in many of these areas. But, the fact that we are passing this legislation today, and the promise of the President that he will sign it into law, means that the bill has been a bipartisan effort. As such, it is a compromise and is not perfect from any one Senator's point of view. If you polled all 100 Senators, I am sure each of us would mention provisions we would like to have written differently. There were a number of amendments offered to this bill that I support and would have liked to vote for. However, when anyone participates in a negotiation and becomes a party to an agreement, he or she cannot willy-nilly support changes to that agreement just because you happened to like someone else's idea better. It stands to reason that you cannot persuade others to compromise if they cannot expect your adherence to whatever agreement is reached. I gave my word to Chairman Roth and to my colleagues on the Finance Committee to maintain the integrity of the compromise bill that we passed out of the Finance Committee on a strong bipartisan basis. I am also constrained from voting to further increase the cigarette tax even though it could be used to finance laudable objectives in childrens health or to increase the deduction for health insurance premiums paid by those who are self-employed. Of course, there are also some provisions in this bill that I am not enthusiastic about and would cheerfully drop were they not part of the agreement. But, taken as a whole, this tax package is a good mix of tax relief provisions that will go a long way to lower the average American families' tax burden. This is an historic piece of legislation, and I am proud to support its passage.

Mr. HATCH

Mr. HATCH. Mr. President, I rise to support Senator Kohl's amendment. This amendment would provide tax credits to encourage businesses and other institutions to provide child care for their employees. This proposal, which is similar to one that I included in my original child care bill several years ago, would provide a tax credit for businesses that build on- or near-site day care centers, jointly participate with other businesses in running child care centers, or contract with child care facilities. This amendment is important in order to meet the rapidly increasing demand for child care. I recognize the importance of finding safe places for our children while their parents are at work, preferably places where they can learn and have wholesome fun. We use the Tax Code to encourage a variety of private endeavors; we should not hesitate to use the tax code to encourage private businesses to become involved in providing child care for dependents of their employees. This tax credit would be equal to 50 percent of the qualified child care expenditures up to a maximum of $150,000, paid or incurred by the employer during the taxable year to acquire, construct, rehabilitate, expand, or operate a qualified child care facility. Parents of young children are joining the work force in record numbers, leading to more young children in the need of care as their parents go off to work. There are more single parents today than ever before. In has been reported that up to 62 percent of working mothers have children under 6 years old and 59 percent had children under 3 years of age. This amendment would give incentives for any company, small or large, to provide child care to its employees. Studies have shown that organizations that provide child care benefits to their employees attract and retain better qualified applicants and experience reductions in employee absenteeism. But, the argument goes that if the employer benefits from providing child care benefits, why should we subsidize the costs with a tax credit. That is not a bad question. But, I suggest that society has a stake in this as well. Not only will our workforce respond positively given the peace of mind that comes from knowing that your children are safe and thriving, but also, we must be concerned with the health and safety of our children. It is disturbing whenever we read about children left alone or children in inadequate or unsafe facilities. I believe that the small innovation of a tax credit to defray the costs of employer-sponsored child care will do wonders to address this increasing need of American families. Mr. President, child care is an investment for the future. It is good for business, good for our communities, and good for the Nation. There certainly is a need for quality child care. As a nation, we have made significant increases in the education of our older children, aged 5 to 25. We have increased Headstart. But, we need to do more. And, we need to create more options. This tax credit proposal made by Senator Kohl is the least intrusive and least expensive way I can think of to stimulate private sector investments in child care. It is now time to set the infrastructure in place for the most important years in the development of our children. There is an increasing struggle to balance work and family. How well we respond will determine the success of our future. I encourage my colleagues to support this important amendment, and I commend Senator Kohl for his work on it.

Mr. HATCH

Mr. HATCH. Mr. President, why do we need 8 billion on top of the 16 billion already appropriated? We learned earlier that the House Commerce block grant may be scored as reaching only 860,000 uninsured children. I understand that this is a complicated matter because some funds will be used for direct services and not to purchase insurance. But it just shows you that this whole area is not cheap. We heard from Bruce Vladeck it costs about $1,000 or so for a good, solid insurance policy. We also know that the Federal share of Medicaid this year averages about $860 per child. In the first year of the CHILD Program there will be an even 50/50 split between health care and deficit reduction so that $3 billion will be used for program costs. In year five, this program component will grow to $5 billion. Using these numbers as a guide, it seems reasonable to expect that, depending a great deal how states chose to implement this program that our bill will be able to cover about 3.5 million or so children in the early years of the program and about 5 million children in the fifth year. There are many variables such as which States chose to participate, what their State matching requirement is, what coinsurance and copayments they require, and so on. We must also take into account inflation which will erode the purchasing power of the yearly allocation. Another way to look at the problem is to see how many children the $16 billion in the budget agreement could cover. This $16 billion amounts to an average of $3.2 billion per year. If we used all of this money to buy Medicaid coverage at $860 per child, it would cover about 3.7 million children. This would still leave 1 million children under 125% of poverty with no health insurance. Twenty-four billion dollars is about $4.8 billion per year spread over 5 years. Depending on how States implement the program, cost-sharing requirements and so forth, I think that would cover between 5 and 6.5 million, perhaps 7 million children.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to oppose the amendment by my colleagues, Senator Bumpers and Senator Gregg. This amendment would repeal the percentage depletion allowance for mineral extraction. It would, however, only repeal this allowance for minerals extracted from any land obtained pursuant to the provisions of the mining law of 1872. This amendment is discriminatory and bad policy. Minerals are not free for the taking or inexpensive to mine just because they are on land obtained from the 1872 mining law. In truth, significant capital is invested during the development of a mine. Capital costs often reach close to $400 million to develop a major mine. In addition, there is a lot of time invested in the development of any mine, and it has increased even more in recent years. Just getting a permit for a new mine on Federal lands has increased from a 1-year time frame to 3 or 5 years over the last 4 years. The rationale for the depletion allowance provisions in the Tax Code are not just targeted to mineral extraction. They are the same for oil and natural gas, coal, and metals extraction as well. This allowance recognizes the unique nature of resource extraction. It is designed to provide a practical method of measuring the decreasing value of a deposit as the materials are extracted. It recognizes that the replacement cost of new mines are always higher in real terms. This allowance helps the mining industry to generate the capital needed to bring new mines into production. Mr. President, mines mean jobs. They are not just vacuums sucking our minerals out of the land at a low cost. They are economic entities that extract valuable resources for circulation in the economy and provide millions of jobs for American citizens. These are direct jobs. But, mining produces essential raw materials for manufacturing in other industies. Think about the untold number of jobs that are indirectly linked to mining. Moreover, jobs in the mining industry are not just minimum wage jobs, either, Mr. President. The Bureau of Labor Statistics tells us that the average mining wage is $45,270 per year. This is significantly higher than the average national wage of $27,845. This amendment would have a severe effect on the mining industry. It means thousands of lost jobs. These jobs are high-paying jobs that raise the standard of living of millions of workers. This amendment means a significant reduction in mining activities all over the Nation. This will have a corresponding effect on the tax base and economies of the areas dependent on a sound and viable mining industry. The effects of this amendment will not only be felt in Western States, where mining is abundant, but will be felt across the Nation. This amendment destroys more than just the economics of mining communities. It also harms the stewardship of our national mineral wealth. Companies will be encouraged to spend their scarce exploration and development funds in an atmosphere more favorable to them. The political and regulatory climates overseas already beckon to our mining companies. By making our tax climate so unfavorable for these mining companies, we are practically giving them the push they need to move overseas. Make no mistake about it, this amendment will have an effect on our national production. Imports will replace the loss of domestic production, moving high-paying jobs and economic activity to other countries. This is not the way to ensure a stable economy in the United States. Mr. President, let's put aside the fact that this is such bad tax policy. This amendment is an administrative nightmare. Most mining projects consist of land and rights obtained from a variety of sources. For example, a large open pit mining operation may include private property acquired through homestead laws, patented mining claims, unpatented claims, State lands, and 1872 mining law land. How is a company supposed to figure out where a mineral comes from? This amendment would require mining companies to find some way of tracing the ore extracted just from the mining rights obtained from the 1872 mining law. This would often mean that the depletion allowance would apply to a shovel of ore from one location, but not to a shovel of identical ore from 10 feet away. This is ridiculous. This amendment does not appear to be an attack on the percentage depletion allowance for mineral extraction. It is only targeted at a specific segment of this industry relating the 1872 mining law. I do not disagree that this mining law should be debated and reformed. I do not agree that it should be reformed using a piecemeal approach through the Tax Code. If we are going to reform the 1872 mining law, let us do it in a thoughtful, comprehensive manner. I urge my colleagues to join me in opposing this amendment.