Orrin Hatch

Mr. HATCH

Mr. HATCH. Mr. President, I hoped to come to the floor today to deliver a statement commending the Attorney General for her courageous decision to do the right thing and request the appointment of an independent counsel to investigate the fundraising violations in connection with the 1996 Presidential election. Regrettably, I am here today for a much different reason, to express disappointment and frustration with her refusal to even initiate an independent counsel's appointment. I appreciate the fact that the Attorney General is under enormous pressure from the White House, the Congress, the media, and the public, and that she is in a very unenviable position. I have respect and admiration for the Attorney General, but her refusal to do what the law permits and indeed requires her to do, frankly, does not engender respect or admiration in this instance. The Clinton administration and the Department of Justice is trying to cast her decision as a legal decision when, in fact, it is a decision within her power, and in my opinion, one which she is ethically obliged to make. As chairman of the Senate Judiciary Committee, which, pursuant to its statutory responsibilities requested 33 days ago that the Attorney General apply for the appointment of an independent counsel, I am compelled to respond to what can only be characterized as her inadequate response. In all candor, the substance of the Attorney General's report is vague, ambiguous at best, and at times, legally disingenuous. Especially in light of the fact that the committee requested she evaluate and report on ``all of the information before her,'' not just a few isolated allegations, the Attorney General's report also is incomplete, and in a rather selective way at that. A judge in a court of law would recognize the Attorney General's report as a defense brief, too clever by a half, carefully and zealously crafted to serve a client's interest. But the Attorney General's client here is not the President of the United States or her political party, it is the public. And the public's confidence that this investigation will be fair, as thorough, and as tough as any other, altogether untainted by political considerations, has not been fulfilled. I am afraid this client, the public, has been disserved. Given the evasiveness of the Attorney General's report, together with the delay in its transmission and the fact that as the Attorney General herself admits, ``much has been discovered,'' since the committee sent its letter, I have little choice but to conclude that much to my disappointment, the Attorney General did not receive our request with a mind fully open to doing what is plainly in our Nation's best interests. Before responding to the Attorney General's report in more detail, I feel I should briefly review what the independent statute provides for. An independent counsel can be triggered in one of two ways: Where there is sufficient information to investigate whether any person ``covered'' by the statute may have violated Federal law; or where an investigation of someone else who may have violated the law may result in a political or other conflict of interest. It is that simple. Let me talk, No. 1, about the mandatory trigger of that legislation. With respect to the first, the mandatory trigger where ``covered individuals'' are at issue, the Attorney General's report does little but make reference to legal ``factors that must be considered,'' and then repeatedly draws the summary conclusion that she does not have specific and credible evidence that a covered individual may have violated the law. Despite the White House's characterization of the Attorney General's decision as simply ``applying the law to the facts,'' there is virtually no application of the pertinent law to the pertinent facts actually before the public, let alone the facts before the Attorney General. While the statute requires the Attorney General to set forth the reasons for her decisions with respect to each matter before her, in my view she has utterly failed to do so here. To illustrate just a few examples of the inadequacy of the Attorney General's response, let me point out that she fails to specifically explain why an independent counsel is not warranted to further investigate the abundant evidence that covered individuals made extensive and deliberate use of Federal property and resources for campaign purposes including, for example, the Lincoln bedroom, and other areas of the White House, Air Force One, and a computer database costing the taxpayers $1.7 million. An authority higher than me and more independent than the Attorney General needs to determine the scope of the various laws implicated by this conduct and whether any of the laws were violated. The Attorney General's somewhat evasive approach to this entire matter is aptly illustrated by her argument that the use of the Government telephone does not constitute conversion of Government property. I am sure it does not. But as the Attorney General knows all too well, that is beside the point. The allegations of misuse of Government property are not based on phone calls. Mr. President, the Attorneys General's evasive approach to this entire matter is aptly illustrated by her argument that the use of the Government telephone does not constitute conversion of Government property. I am sure it does not. But, as the Attorney General knows all too well, that is beside the point: The allegations of misuse of Government property are not based on phone calls, but on the diversion of resources, such as the White House, Air Force One, and the White House database for campaign purposes, while phone solicitations were not alleged to have violated the conversion laws, but rather the prohibition on solicitations from Federal property. The conclusion I cannot help but draw here is that, however involved the Attorney General's career staff was in preparing this letter, in the end, it was her political advisers who had the last word. In short, the Attorneys General's carefully finessed and, in some cases, deliberately irrelevant legal arguments, combined with her summary conclusions that there is no specific, credible evidence that a covered individual may have violated the law, hardly persuades one that an independent counsel is not mandated under the statute or, for that matter that the question has been given a genuinely thorough and candid evaluation. Perhaps more fundamental, though, is the Attorney General's altogether inadequate explanation as to why she will not request an independent counsel pursuant to the second statutory trigger --to avoid a conflict of interest. Here the test is quite simple: If the Attorney General is presented with a conflict of interest in investigating whether any individuals may have violated the law, she has the discretion to proceed with the appointment of an independent counsel. Try as the White House and the Attorney General might to cast this as a narrow and technical legal question, it is anything but that; it is an ethical one requiring sensitive judgment as to what is necessary to ensure the public's confidence that an investigation can be supervised by the Attorney General and completed in a thorough and impartial manner. In the past, the Attorney General has had a rather broad view of what is necessary to protect the public's confidence that an investigation is not compromised by any perception of a conflict of interest. In her Whitewater independent counsel request, for example, Attorney General Reno concluded that an independent counsel was required because her investigation would involve an investigation of James McDougal and ``other individuals associated with the President and Mrs. Clinton'' would amount to a conflict of interest. It was that simple. In her referral of the Nussbaum perjury allegation to the independent counsel, the Attorney General concluded that a conflict of interest existed because the investigation ``will involve an inquiry into statements allegedly made by a former senior member of the White House staff.'' It was that simple. And, testifying before Congress in 1993, Ms. Reno stated that the Iran-Contra investigation ``could not have been conducted under the supervision of the Attorney General and concluded with any public confidence in its thoroughness or impartiality.'' It was that simple. Indeed, the Attorney General's testimony at that time thoroughly explained her rather strong view that even the slightest appearance of a conflict of interest should at all costs be avoided by the appointment of an independent counsel. It was that simple. She testified: There is an inherent conflict of interest whenever senior Executive Branch officials are to be investigated by the Department of Justice and its appointed head, the Attorney General. The Attorney General serves at the pleasure of the President. Recognition of this conflict does not belittle or demean the impressive professionalism of the Department's career prosecutors, nor does it question the integrity of the Attorney General and his or her political appointees. Instead, it recognizes the importance of public confidence in our system of justice, and the destructive effect in a free democracy of public cynicism. Attorney General Reno further testified: It is absolutely essential for the public to have confidence in the system, and you cannot do that when there is a conflict or an appearance of conflict in the person who is, in effect, the chief prosecutor. . .. The Independent Counsel Act was designed to avoid even the appearance of impropriety in the consideration of allegations of misconduct by high-level Executive Branch officials and to prevent. . . the actual or perceived conflicts of interest. The Act thus served as a vehicle to further the public's perception of fairness and thoroughness in such matters and to avert even the most subtle influences that may appear in an investigation of highly placed Executive officials. Now, in her report to the Judiciary Committee, however, the Attorney General adopts a far narrower view of when an independent counsel is called for. Suddenly, the conflict of interest provision has become a complicated legal threshold which ``should be invoked only in certain narrow circumstances.'' That is on page 3 of the letter to me. Directly contradicting her own public statements that it is impossible for the public to have confidence in an investigation where there is a ``conflict or an appearance of conflict in the person who is, in effect, the chief prosecutor,'' now the Attorney General claims that her discretion is limited only to situations where there is an actual conflict of interest. Quite frankly, the Attorney General's efforts to distance herself from her 1993 testimony require her to render a rather creative reading of her own testimony. Allow me to suggest that, to the extent an independent counsel was called for to ensure public confidence in an investigation of Mr. North, Mr. Nussbaum or Mr. McDougal and his associates, one certainly is called for here. If the Attorney General has adopted a new standard for evaluating when an independent counsel is necessary to ensure the public's confidence in an investigation, she should state as much and explain the basis for her new position. Although the Attorney General does not say as much in her letter, one can only surmise that her position is that First, there is no conflict of interest in continuing to investigate any of the individuals already under investigation, that is, Huang, Riady, Trie, Kanchanalak, John H.K. Lee, the Wiriadinatas, Charles DeQueljoe, Mark Middleton and Webster Hubbell, and second, that there is no basis for investigating whether other high-ranking officials may have violated the law. Since General Reno fails to explain her reasoning, let's step back for a moment and review some of the facts here to determine whether either of these apparent positions can really be defended. Take Mr. John Huang, the former Lippo executive whom the Riady's are widely reported to have bragged was placed in the Clinton Administration in exchange for generous donations by the Riady family, whose ties to the Clintons date back to Little Rock in the 1980's. See, for example, the New York Times, October 7, 1996. Recall that the Lippo Group, Huang's former employer, is connected to a far-reaching network of seriously questionable activities, directly implicating not just the Riadys and Huang, but the other individuals that figure in this troubling scandal, including Charlie Trie, Pauline Kanchanalak, Soraya Wiriadinata, C.J. Giroir, Mark Middleton, Mark Grobmeyer, Wang Jun, Charles DeQueljoe, and even Webster Hubbell. Since the Department is already investigating Huang, there plainly are sufficient grounds to investigate whether he may have violated federal law. In declining to invoke the discretionary conflict of interest trigger, the Attorney General's position, therefore, must be that there is no potential conflict of interest in her investigating Huang. Let's take a look at some of this. This is the ``Lippo Group, an Overview.'' John Huang was a former Lippo executive in the United States. He had a $780,000 severance package before he went to work for the Government. By the way, before he went to work for the Government, for 5 months he had a security clearance given him by this administration. There is a question whether that was legal; a former Commerce official, multiple contacts with Lippo during that time; former DNC vice chairman; raised more than $3.4 million; $1.6 million is to be returned; and, he visited the White House more than 75 times. C.J. Giroir, a Lippo Joint Venture person, and a former Rose Law Firm attorney, met with James Riady, President Clinton, and Lindsey on Huang on his move to the DNC. He donated $25,000 to the DNC. Mark Middleton, former White House aide from Little Rock, met with James Riady and President Clinton; has Far East business interests; unlimited access to the White House after his departure. Charlie Trie, Little Rock restaurateur, had a $60,000 loan from Lippo; former Lippo executive; arranged with a former Lippo executive Antonio Pan, a Hong Kong dinner for Ron Brown; attempted to give more than $600,000 to the Clinton's legal expense trust; visited the White House at least 27 times. I can go through all of these other people. Mr. President, I ask unanimous consent that the description of each of them be printed in the Record at this point.

Mr. HATCH. Mr. President, let's just take a look at the specific, credible evidence that has surfaced to date. Huang, who received a severance package from Lippo of $788,750 is reported to have: Received a top secret security clearance that could have allowed him to review classified intelligence documents, for 5 months while still employed by the Lippo Group, and before he joined the Commerce Department, all after a lax security check that was limited to his activities in the United States; Made at least 78 visits to the White House during his 18 months at the Commerce Department; Received 37 intelligence briefings on issues relating to China, Vietnam, and other matters of potential interest to Lippo; Made more than 70 calls to a Lippo-controlled bank; and received at least 70 calls; 39 classified, top-secret briefings; 30 phone conversations with Mark Middleton; 9 phone calls from Webster Hubbell; received at least 9 calls from the Chinese Embassy officials. He had at least three meetings with Chinese Government officials. He had a 1-year top secret clearance after leaving Commerce after he joined the Democratic National Committee. You wonder why national security interests were compromised and why information was given to the DNC. Like I say, he had 30-plus phone conversations with Mark Middleton or his associates. All of them had interests--at least I understand had interests--in the Far East. He had his transfer to the DNC orchestrated at a curious September 13, 1995, Oval Office meeting attended by the President, Bruce Lindsey, James Riady, and Lippo joint venture partner and former Rose law partner, Joseph Giroir; Raised over $3.4 million while at the DNC--money used to reelect the President--retaining his top secret security clearance even though he was no longer working for the U.S. Government; and had $1.6 million of that $3.4 million used to reelect the President returned because of its suspicious sources. As we now know, John Huang has taken the fifth amendment, or has asserted the fifth amendment, while the Riadys have not only taken the fifth but they fled the country. Doesn't an investigation of Huang, so close to those who are covered by the statute, and the Riadys, so close to those who are covered by the statute who, like the McDougals, are political supporters and ``individuals associated with the President,''--to use the Attorney General's language of the past-- doesn't that raise a conflict of interest? It isn't just John Huang. Here are some examples of illegal funds raised by Huang: The Wiriadinatas, $450,000. They have returned to Indonesia. All funds are supposed to have been returned by the DNC. I am not sure that is true. Pauline Kanchanalak gave $253,000. She left the country. She is now in Thailand. Allegedly all of that $250,000 has been returned by the DNC. I am not so sure. Mr. Gandhi gave $250,000; testified he had no assets. How could he give $250,000? All of those funds are supposed to have been returned by the DNC. I am not so sure about that either. John H.K. Lee. He gave $250,000. He has disappeared. And those funds were supposed to be returned by the DNC. I am not so sure they have done it. Then Hsi Lai Buddhist Temple, $166,750 raised there. The temple residents, many of whom gave part of this money, were people who had taken a vow of poverty and had no money to give. Is there no illegality there; nothing to raise a possibility that something may be wrong here which is what the statute basically says? Supposedly $74,000 of that was returned by the DNC. You mean these things aren't wrong and illegal? You mean there is no conflict of interest here at all? If all you do is look at Huang, you have to say there is something wrong here. Then there is Mr. Charles Trie. Trie is a former Little Rock restaurateur, and reportedly a longtime friend of President Clinton who now runs an international trading company in Little Rock, AR. Mr. Trie has also asserted the fifth amendment and has even fled the country, along with these others. He is a business partner with Ng Lap Seng, a Chinese Government official. He received a $60,000 loan from the Lippo Group. He raised $645,000 in questionable funds which have been returned by the DNC. He raised $639,000 for the Clinton ``Legal Defense Fund,'' which was returned because the source of the money could not be identified; or the sources of the moneys could not be identified. He was during this period receiving wire transfers of very large sums from the Bank of China, owned by the Chinese Government. He visited the White House 37 times. He escorted Mr. Wang Jun, a Chinese arms merchant, to a White House coffee last year, which, when revealed, was described by the President as ``inappropriate.'' He wrote the President in March 1996 to question his decision to deploy aircraft carriers to the Taiwan straits when the Chinese test- fired missiles in Taiwan's direction, receiving a personal letter back from the President assuring Trie that the United States only wanted peace in the region; arranged a Hong Kong dinner for former Commerce Secretary Ron Brown; and, finally, was formally appointed to a Presidential Commission on Asian Trade in April 1996. To the extent there was a conflict of interest preventing public confidence in the Justice Department's investigation of Oliver North or James McDougal, certainly the same conflict exists with respect to an investigation of Huang, the Riadys, and Trie, not to mention the handful of other individuals who have taken or will assert the fifth amendment, fled the country, or done both, including Pauline Kanchanalak, Arief and Soraya Wiriadanata, John H.K. Lee, and Charles DeQueljoe. Frankly, there is even more of a conflict here. Moreover, it has become clear that there is specific, credible information providing sufficient grounds to investigate whether various high-ranking members of the administration may have known of, or conspired in, any of these apparent fundraising violations. Indeed, we now know from the Ickes files that the decision to transfer Huang from the Commerce Department to his fundraising role in the DNC was made at the September 13, 1995, Oval Office meeting which included not just Huang, James Riady, and Lippo Joint Venture Partner and former Rose Law Partner Joseph Giroir, but Bruce Lindsey--who seems to pop up in all of these instances--and President Clinton himself, and that a participant at this Oval Office meeting reportedly recommended that the President ``reassign Huang from his Government job to a political fund-raising job, where he could extract contributions for favors done and favors yet to come.'' The New York Times, March 5, 1997. Mr. Ickes' notes expressly indicate that Huang had specifically targeted ``overseas Chinese.'' And it has been reported how this decision to transfer Huang to the DNC, made at that September 13, 1995, Oval Office meeting, was directly linked to a plan, agreed to just days earlier by the President, Dick Morris, Harold Ickes, and others, to raise funds to wage a preemptive television ad campaign. See New York Times, April 14, 1997. In short, isn't there sufficient information at least to investigate whether any of these top-level White House advisers were aware of or involved in Huang's and the Riady's far-reaching scheme to launder foreign funds into Democratic campaign coffers? Does the Attorney General expect the public to have confidence that she can thoroughly and dispassionately investigate individuals among the President's closest advisers without any conflict? Similarly, there is now a wealth of information documenting the extensive involvement from the President down through Mr. Ickes and other White House advisers in the plans, discussed earlier, to use the Lincoln bedroom, the White House, Air Force One, and the White House's computer database to further campaign purposes, and that campaign contributions were received at the White House. The Attorney General claims she is ``actively investigating'' whether laws were violated. Doesn't this investigation of these high-level White House advisers, even if not covered individuals, present a conflict at least as great as the conflict that apparently existed with regard to the investigations of Mr. North and Mr. McDougal? How can one say that there is no conflict when the FBI and White House are publicly squabbling over whether the White House should receive information about the investigation, and the Attorney General is smack in the middle of this squabble; when the White House falsely accuses the FBI of telling the National Security Council staff not to pass on information regarding Chinese attempts to illegally influence United States policymakers? Indeed, the very fact that the FBI, an agency within the Justice Department, refused to produce this information to the White House on the eve of Secretary Albright's visit to China clearly suggests that the investigation has already reached high up into the White House. It is curious, to say the least, that the Department of Justice leaked its decision to the press over the weekend, but it did not actually notify the Judiciary Committee of its decision until 6:30 last night, 2 days after this letter was due. Furthermore, the Acting Deputy Attorney General's assertion that the fact that both Judiciary Committees have made a formal request would emphatically not have any impact on their decision suggests to me that the Justice Department is in a defense mode. In short, I think there is little doubt there is at the very least a potential conflict of interest in having the Justice Department investigate these matters. The administration should not be investigating itself, it is just as simple as that, as long as we have an independent counsel statute. Simply claiming to defer to career Justice Department officials will not do. Would the public accept a Member of Congress not recusing himself or herself from a particular matter on which he or she had a major conflict of interest because staff recommended they not recuse themselves? Would the public accept a judge's refusal to recuse himself or herself in the face of a conflict because a clerk advised against it? The fact is that the DNC, the Democratic National Committee, has simply, on the basis of its own audit, already identified over $3 million in improper contributions, violations of law, if you will. A significant portion of this illicit money has not even been returned yet, only confirming that this $3 million has already been spent, spent to reelect President Clinton. We have people calling for campaign finance reform on this floor. Why don't we enforce the campaign finance laws that are already on the books. That is what this is all about, in part, I have to tell you. Three million dollars in illegal funds, illicit funds spent to reelect the President, already spent. I wonder how Candidate Dole feels about that. The need for an independent counsel is not merely a matter of applying the law to the facts. The chorus we are now hearing from the President's press secretary and the Democratic apologists would seem to indicate that that is so when in fact it is not. In my opinion, Attorney General Reno was presented with an ethical question, a question ultimately of whether the public can have confidence in this investigation, whether the public can have confidence in this Justice Department, and whether the public can have confidence in the Clinton administration itself. Make no mistake about it. Attorney General Reno's decision yesterday was a significant political event, one which, much to my regret, will subject her to serious and I think justified criticism. This is not a happy day for the Department of Justice or for the public confidence in our system of justice. By continuing to permit what certainly appears to be a very serious conflict of interest, the Attorney General regrettably has, to use her own words, brought upon the Nation ``the destructive effect in a free democracy of public cynicism.'' I yield the floor. I thank the Chair. Mr. DURBIN addressed the Chair.

Mr. HATCH. Will the Senator yield?

Mr. HATCH. I appreciate my colleague yielding. Let us just make it clear to my colleague that this chairman of the Judiciary Committee and Chairman Hyde over in the House, when many people were calling for us to send her a letter, delayed and delayed, giving the Attorney General a lot of time, nor have we been calling improperly for her to act in any way other than properly. But it will be interesting for people to know that we had scheduled our oversight hearing for May 20 for the Attorney General to come in and to be examined by the Judiciary Committee. I think for the information of everybody who is here, she has agreed to come earlier than that, within the next 3 weeks, probably in the first week of May, and at that time she will have to justify this decision. I think it is also safe to point out that I have been a very strong supporter of the Attorney General and still care for her a great deal. I do not like to see her subjected to this, but this is, to my knowledge, the first time that the letters from thoughtful chairmen and all the Republicans on both sides of the Judiciary Committee have been rejected and I think under much more stringent circumstances than independent counsel she has granted in the past. So I personally hope she can assert why she has not decided to at least conduct a preliminary investigation which would have triggered another 90 days to do this. I suggested to her and to the Justice Department that she do that. I also do not accept the--I am sorry; I will not take much longer. I do not accept her assertion that she is relying on professional staff members. Now, I have a lot of confidence in the professional staff members down there, but this involves a lot more than that and, frankly, involves just how this statute is going to be applied. When the time comes to reconsider this statute, I will be very interested in working with the distinguished Senator from Illinois and others to make sure that, if we are going to have a statute like this, let us have it so it works, and, frankly, I have qualms about having it at all. But since we do have it and since it does have these two main methods of triggering the call for an independent counsel and the appointment of an independent counsel, I have to say I am sadly disappointed that she has not chosen to do that under these circumstances. But I do understand my colleague at this hour rising to defend Attorney General Reno. I am not attacking her personally. I am just attacking what has been done here, and I think it should have been done before.

Mr. HATCH. Will the Senator yield for just 90 seconds?

Mr. HATCH

Mr. HATCH. Mr. President, there will be a hearing held by the Subcommittee on Immigration, Senate Committee on the Judiciary, on Tuesday, April 15, 1997, at 10:30 a.m., in room 226, Senate Dirksen Building, on immigrant entrepreneurs, job creation, and the American dream.

Mr. HATCH

Mr. HATCH. Mr. President, I have introduced legislation to make a technical correction to the provision of the Antiterrorism and Effective Death Penalty Act of 1996, which provided a limited exception to the Foreign Sovereign Immunity Act, allowing U.S. courts to hear claims by American victims of foreign terrorism against the lawless governments that sponsored the terrorist act. I am pleased to be joined by Senator Mack, Senator Kennedy, Senator D'Amato, and Senator Moynihan in introducing this bill. Nearly a year ago, when we passed the landmark Antiterrorism and Effective Death Penalty Act, Congress took the important step of ensuring that Americans who are harmed by foreign governments committing or directing terrorists acts can sue those governments in American courts. Congress did this by amending the Foreign Sovereign Immunity Act, which generally bars claims against foreign governments, to provide that the FSIA does not preempt claims for personal injury or death by the victims and survivors of terrorist acts committed by certified terrorist states. Thus, lawless nations no longer are able to hide their terrorist acts behind the rules of international law that they otherwise flaunt. It has come to our attention, however, that a particular phrase in this law puts at risk, for a small class of intended claimants, the right to be heard in court. As enacted, the law provides that a claim must be dismissed if ``the claimant or the victim was not a national of the United States'' when the terrorist act occurred. There is substantial concern that this phrase may be interpreted by the courts to require that both the victim and the claimant be U.S. nationals. As a result, several American claimants against Libya for the bombing of Pan Am Flight 103 could be barred from bringing an action because their spouses, who were killed in the attack, were British subjects. Notably, the amendment to the Foreign Sovereign Immunity Act was not intended by Congress to preclude its application in such circumstances. Rather, all that was intended was that either the victim or the claimant be U.S. a national in order for foreign sovereign immunity not to apply, permitting a claim to go forward. The legislation we are introducing today corrects this ambiguity, by amending the law to apply foreign sovereign immunity, and thus bar the claim if ``neither the claimant nor the victim was a national of the United States.'' It is only right that we should do this. Companion legislation, H.R. 1225, has been introduced in the other body by Representatives Hyde and Conyers, the distinguished chairman and ranking member of the House Judiciary Committee. It is my hope that my colleagues will join us in a bipartisan effort to pass this legislation quickly. Madam President, I ask unanimous consent that the text of the bill be printed in the Record following my remarks.

Mr. HATCH

Mr. HATCH. Mr. President, there will be a hearing held by the Subcommittee on Immigration, Senate Committee on the Judiciary, on Tuesday, April 15, 1997, at 10:30 a.m., in room 226, Senate Dirksen Building, on ``Immigrant Entrepreneurs, Job Creation, and the American Dream.'' committee on agriculture, nutrition, and forestry

Mr. HATCH

Mr. HATCH. I thank the Chair. (The remarks of Mr. Hatch, Mr. Kennedy, Mr. Dodd and Mr. Kerry pertaining to the introduction of S. 525 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. HATCH

Mr. HATCH. Will my friend yield me 30 seconds?

Mr. HATCH. I want to compliment my friend for the remaining 30 seconds. I wish I could spend more time. Development of these bills has not been an easy thing for him to do, or for me. But I am convinced we have drafted a program that will work. I have to suggest that if Senator Kennedy and Senator Hatch--who have such widespread differences of philosophy--can unite to propose a program like this, then anybody can get together. Despite our philosophical differences, which are wide, we both have a great deal of friendship and caring for each other. We are working as hard as we can to do what is right here. I want to thank my colleague for his great work in this effort. I yield the floor.

Mr. HATCH. Mr. President, today, Senator Kennedy, I, and a number of others, are introducing the Hatch-Kennedy child health insurance and lower deficit bill, or the CHILD Act, S. 525. We will also introduce a companion measure, S. 526, which contains a tobacco excise tax increase to pay for the program established in the CHILD bill. The CHILD bill has been negotiated over a long period of time in intensive and sometimes heated negotiations. As anybody can understand, it is difficult to get the two sides together on matters like this. So we have worked very, very hard to try and bring both sides together. It is no secret that Senator Kennedy and I have worked together in the past. And, we have fought each other in the past. But today is a time of unity, for I believe we have written a bill that really makes sense, a bill that will work and that will help one of the most vulnerable segments of our society, children without health insurance. Of the 40 million people who are uninsured in this country, 10 million of them are children. Of those 10 million, about 3 million do qualify for Medicaid, but are not enrolled. While it has its problems, Medicaid is an excellent program overall, a program that does assist the poorest of the poor children and families. But those above the Medicaid eligibility poverty levels, comprise about 7 million children, most of whom are often called the near poor, or the working poor. Mr. President, as a recent study has made abundantly clear, about one out of three children in this country lacks health insurance. It is a pathetic situation. As my colleagues are aware, Senator Kennedy and Senator Kerry introduced a bill last year which addressed the child health insurance problem from a considerably different perspective than the bill we are finally going to introduce today. I think it is important to point out the differences for the edification of my colleagues. The bill we will file today is a bill that is a straight block grant to the States. The States have flexibility to determine their own eligibility standards with minimal Federal requirements. The proposal is not an entitlement program. It is a fully funded program. It is a 5-year authorization. The mechanism for funding the CHILD program authorization is an increase in the tobacco excise tax, amounting to 43 cents per package for cigarettes and proportionate increases on other tobacco products. Some have analogized this to a user fee on those who use tobacco products. We think this excise tax is justified. In 1955, a package of cigarettes cost about 23 cents. Of that amount, 8 cents consisted of a Federal excise tax on the cigarettes. Today, a package of cigarettes costs almost $2, at least $1.82 in most States, but we have only a 24-cent Federal excise tax on the utilization of those cigarettes. We think this provision is also justified from a public health perspective. Smoking is the largest preventable cause of premature death in the United States. Thirty percent of all cancer patients develop their diseases from smoking. Almost all lung cancer comes from smoking. And much of the cardiovascular disease that we have in our society comes from smoking-- including passive smoking as well. It should be no secret to my colleagues that it was a difficult decision for me to submit a bill which will increase taxes, but after considerable study I concluded in this case it is a just and a right thing to do. And if we increase the cigarette tax by 43 cents, we will still be below the percentage the excise tax was back in 1955 when a package of cigarettes cost 23 cents and the excise tax was 8 cents of that. It is important to note that two-thirds of the revenue raised from this bill over the next 5 years will be used for the new child health insurance. The States will be able to negotiate with private health insurance companies to provide coverage, and they will be able to utilize the community health centers which are giving low-cost but high-quality health care in America today. I am one of the strongest advocate for community health centers, and, I must say, they have done a superlative job of delivering health care in general in our society. In Utah, we have what is known as the Caring Foundation. For every dollar we raise in charity, Blue Cross/Blue Shield matches that dollar with $1, making $2 for child health insurance. I believe that can be duplicated across this country in the best interest of children and families. When someone inquires about why I am sponsoring the CHILD Act, my thoughts turn to scores of constituents who have brought their concerns about the cost and availability of health insurance to my attention. It is heart rending to me when I have uninsured families come into my office--many of whom are young and who have children. These families are frantic; they don't know where to turn when a child gets sick. Two young women from Provo in my home State came in to visit me recently. Both had six children. They both work part time. Their husbands work full time, but neither family makes more than $20,000 a year. They are hard-working people. They are the working people of our society who are the poorest of the poor not on Medicaid, who cannot afford health insurance and, frankly, who do not know where to turn. I think that it behooves us to solve this problem for them, and the best way to do it is with a straight block grant to the States. The grant approach has a lot of benefits. There should be minimal new bureaucracy, because the IRS already collects excise taxes on cigarettes. There should be minimal bureaucracy because HHS will distribute the funds based on a simple formula reflecting the number of uninsured in a State. We provide a safeguard so there is no incentive for businesses to drop the lower paid people off their health insurance. In this bill, if a company wishes to drop any employee from the company health plan, then they will have to drop all their employees, from the top executives on down. We are trying to help those who cannot help themselves, which I think is the most conservative thing we can do in this society. We are not trying to help those who can help themselves but refuse to. People who can help themselves ought to help themselves. What I am saying, Mr. President, is that it is time. It is time for this Congress to get down to business. Mr. President, it is time. It is time for us to get down to business. It is time for the Congress to focus on how to make a great country greater on how to set aside partisan differences and help the people we were elected to help. It is time to focus on what truly needs to be done in this country not on deadlock or gridlock or shutdown. It is time to wake up and realize that--in this great land of incredible riches and abundance--in the greatest country of the world-- there are still children being left behind. Who cannot be disturbed, even frightened, by the statistics? Drug use among our young people is dramatically on the rise. In its ninth annual survey of students in grades 6-12, the National Parents' Resource Institute for Drug Education [PRIDE] reported that annual use of most drugs was at the highest level since the survey began 10 years ago. Record use was reported for cigarettes, marijuana, cocaine, uppers, downers, inhalants, and hallucinogens. Serious questions have been raised about our children's ability to learn. Our children rank pitifully behind other countries in educational scores. One survey of international test scores for math and science, found Americans to rank dead last and South Koreans ranking the best. And, who could not be disturbed by this? A 1991 National Assessment of Education Progress survey, revealed that only 5 percent of high school seniors demonstrated enough understanding of geometry and algebra to be prepared for college-level math. Violence is rapidly becoming a way of life for today's children. Over the past decade, the rate of homicide committed by teenagers aged 14-17 has more than doubled, increasing 172 percent from 1985 to 1994. In fact, 35 percent of all violent crime is committed by offenders less than 20 years of age. And here's another astounding fact. Two years ago, a survey of 1,000 teachers showed that 11 percent had been assaulted in school. Teachers have been robbed, vandalized, slashed by razors, physically assaulted, shot, and set on fire in the schools. What kind of learning environment is that for our children? And, let's look at child health. How many Senators are aware that almost one out of three children have no health insurance? Ten million children have no health insurance at all. That is more children than the entire populations of Maine, Rhode Island, Alaska, Delaware, Georgia, Hawaii, Montana, Nebraska, South Dakota, and Vermont--10 States--combined. Did anyone know this? Over 500,000 American infants are uninsured, infants who need such critical services as immunizations to grow up healthy. Mr. President, these are astounding statistics. Terrifying predictors of our world as we head into the 21st century. And I, for one, am going to put my foot down. I will do everything I can to reverse this trend. I challenge each Senator in this body to work with me on what must be the top agenda item for the 105th Congress: Making this world a better place for our children. I will make this a top priority in the Judiciary Committee. We will look at such issues as the Federal Gang Violence Act, violence in the schools, and, importantly, a strong national antidrug abuse strategy. Already the committee has approved--only to suffer the most narrow of defeats on the floor--the Balanced Budget Act, passage of which is perhaps the most important legacy we can leave for our children, each of whom is born saddled with $20,000 in debt. And I hope other committees will be working as well. For no effort to improve this world for our children can be complete without measures to improve their ability to grow up healthy. That is why I have united with my good friend and sometimes adversary, Senator Kennedy, to draft the bill we are introducing today: the Child Health Insurance and Lower Deficit Act. We call it the CHILD bill. The CHILD bill will be accompanied by additional legislation we also introduce today which provides the funding offset for the CHILD Program through an increase in the tobacco excise tax. Introduction today of S. 525, and the companion bill to increase the tobacco excise tax, completes 3 months of intense negotiations between myself and Senator Kennedy. Our discussions were sometimes heated, sometimes acrimonious, but always well intentioned. They have resulted in a bill, the adoption of which I think will make this country a better place. And so, today, Senator Kennedy and I have found a solid center--we have compromised from the left and from the right. We are doing this to help the 10 million children in the United States who are without health insurance. We are doing it because it is the right thing to do. The child health insurance and services bill Senator Kennedy and I will introduce today is targeted to the near poor, primarily working families, who are not covered by existing Government programs. Two- thirds of the uninsured children come from low-income working families with annual incomes of $25,000 or less; 86 percent are from families where at least one parent is employed. I think any honest examination of this would show that these statistics are deplorable. Children are our most precious natural resource. If we had a vote on that today, it would pass 100 to 0. And if you agree on that, the next step is simple. I can't think of a more appropriate role for the Federal Government than helping the most vulnerable in our society. It has become a cliche, but children are our future. Already I have taken criticism for this bill and for uniting with a Democrat to sponsor the CHILD Act. It is true that Senator Kennedy and I represent the most divergent philosophies in the U.S. Congress. It is for that very reason we are proposing S. 525 today. United, we can provide the basis for a consensus position we hope all our colleagues will endorse. It is true that Senator Kennedy and I do not often agree on public policy. I can't even count the number of times I have stood on this floor to oppose--even filibuster--legislation he has sponsored. But with respect to health care--when it comes to helping people--we both have a strong commitment to doing the right thing regardless of politics. And this legislation is the right thing to do. Joining Senator Kennedy and me today in cosponsorship of the CHILD bill, S. 525, are 19 Senators, for a total of 21. Those Senators are: Snowe, Kerry, Jeffords, Dodd, Stevens, Rockefeller, Bennett, Daschle, Collins, Wellstone, Smith (OR), Bingaman, Campbell, Murray, Reed, Boxer, Lautenberg, Durbin, and Reid. Joining us in cosponsorship of the tobacco tax bill, S. 525, are Senators Bennett, Bingaman, Boxer, Dodd, Durbin, Jeffords, Kerry, Lautenberg, Murray, Reed, Reid, Rockefeller, Snowe, and Wellstone. What are the major features of the CHILD bill? Our proposal sets up a voluntary State grant program--I repeat, voluntary State grant program. The funds will be used by States to subsidize the cost, or part of the cost, of private health insurance for needy children. States will also be able to use Community and Migrant Health Centers to provide services directly to children. We hope our program will be a catalyst to improve health care for kids. It is a Federal/State/private partnership. Any State that wishes to participate must contribute to the program. States may require individuals or their employers to contribute as well. We have designed an approach which we believe is fiscally responsible. The bill authorizes program expenditures for each of 5 years, and it is fully financed with a 43-cent increase in tobacco excise taxes. Two-thirds of the revenues will be used for program services, and one-third for deficit reduction. In drafting S. 525, we have worked very hard to make certain that no large, new bureaucracy will be needed to implement the CHILD Program. The idea of a huge new Federal involvement in health care frightens most Americans, as was so amply evidenced by the resounding defeat of the Clinton health care bill in 1994. I was one of the loudest objectors to that legislation as a member of both the Finance and Labor Committees at the time it was considered. I want to assure my colleagues that we are not replicating that exercise here today. HHS will disburse the grant money according to existing Medicaid formulas and the number of uninsured children in the State. The Treasury Department already collects an excise tax. The States will set eligibility levels, which presumably they could do very easily based on their experiences with Medicaid and other State programs to help the poor and near poor. The States will use their current Medicaid benefits packages to negotiate contracts for insurance coverage. These are not complex calculations. They should be easily achievable. We also worked very hard to allay any concerns that we were establishing a new entitlement program. We are not. The bill does not establish any individual entitlement to benefits. It is a 5-year authorization which is fully funded. It is not like Medicare where we guarantee we will pay for the services of every eligible beneficiary. It is not like Medicaid where we pay an open- ended amount, which is appropriated annually. What we are really talking about doing with this bill is finding cost-effective ways to get quality health care services to children. Our bill recognizes and strengthens the important role that community, migrant and homeless centers play in caring for the Nation's uninsured children and their families. Community and rural health centers already exist. We are not creating them or remaking them in this bill. They are located in medically underserved communities where many uninsured children live. Over 940 health centers in every State serve one out of six low-income American children, over 4.5 million children. They are currently the family doctor for one out of seven uninsured children, totaling 1.3 million children. Last year, health center professionals delivered one of every 10 babies born in the United States, and one out of every five low income babies. They are experts in providing quality, comprehensive primary and preventive care to uninsured children--the very type of care we are trying to get to children with this bill. Our bill permits these children to continue to choose health centers as their primary care provider and to make the choice of a health center available to other uninsured children. In each area currently served by a health center, a direct service option will be available to children who are served by a health center. Families choosing the direct service option will get the same comprehensive Medicaid package of services as do those who opt for a children's policy. Under the direct service option, children will receive their primary and preventive care at the health center they select and will receive specialty and inpatient care through networks of providers certified by the State or through a wrap-around insurance policy. We believe that the direct service option will be as cost effective as an insurance policy and may even be less expensive. Several studies which compared the total annual cost of health care for Medicaid patients served by health centers--including primary and specialty care and inpatient care--to the total annual cost of care for Medicaid patients served by other types of providers--including health maintenance organizations and private physicians--found that health center care was the least expensive. The reason? Health centers prevent illness because of the primary and preventive care they provide. Based on these studies, the cost of all care--primary, specialty, and inpatient--under the direct service option is expected to be lower than the cost for a child cared for by another type of provider. As the chief sponsor of the balanced budget amendment, I could not support the creation of any new entitlement program. Indeed, I believe this proposal is fully consistent with the BBA. First, our bill is fully financed by the proposed tobacco products tax. Second, for every $2 of program cost the Hatch-Kennedy bill dedicates $1 to deficit reduction. When all is said and done, this bill would help to bring the budget in balance--which I believe will be nearly as essential to children in the long-run as necessary health care is in the short-run. Let me underscore that the net cost to the Federal Government of the CHILD Act is zero, because it is fully funded. In fact, the bill literally saves money, because it provides at least $10 billion in funds for deficit reduction over the next 5 years. We cap Federal expenditures at $20 billion over 5 years for services, with $10 billion for deficit reduction. Over the 5-year period, the ratio of services to deficit reduction will be 2 to 1. For services, we will provide the following amounts: 1998: $3 billion, 1999: $3 billion, 2000: $4 billion, 2001: $5 billion, 2002: $5 billion. For deficit reduction, we provide the following amounts: 1998: $3 billion, 1999: $3 billion, 2000: $2 billion, 2001: $1 billion, and 2002: $1 billion. Let me make perfectly clear that the size of this program is capped each year. In fact, if not enough revenue is generated, then the size of the program will be lowered accordingly. Let me take a moment to address other potential concerns about this bill. Many have asked why we need a new program. Indeed, we have the Medicaid Program, which helps the poorest of the poor. Even so, there are 10 million children without coverage. In fact, 3 million uninsured children are eligible for Medicaid, but are not enrolled. There is no program for the remaining 7 million children, most of whom come from near poor families. Those families are faced with two very unattractive options: a choice between dropping out of the labor force in order to get Medicaid eligibility, or keeping their jobs with no health care coverage at all. It might be logical to assume that Medicaid would provide the basis for a program to increase child health coverage. And we did examine that idea. But, Medicaid is an open-ended entitlement--and an expensive one at that. Both the States and the Federal Government are seriously concerned about the runaway costs of Medicaid. In contrast, our capped program is not an entitlement. It is a targeted approach which allows States considerable flexibility in design and administration. Others have suggested that we use a tax-based approach. I would be willing to consider a tax credit approach, if we could design one that really works. But I foresee two problems in developing such an approach. The first is that a tax credit could really amount to an open-ended entitlement, whereas the size of our program is capped each year. The second is that poor and near-poor families, who we are trying to help with this bill, simply cannot afford to buy insurance coverage during the year, and wait until the next April to get the money back. For the benefit of my colleagues, I want to respond to two other concerns. First, I must emphasize that S. 525 is not the Kerry-Kennedy bill from last year, S. 2186. It is a new proposal that Senator Kennedy and I wrote together. Senator Kennedy and I have both moved considerable distances to write this compromise legislation. This bill is not an open-ended, permanent entitlement; it is a capped 5-year program, run by the States and, as such, is very similar to a proposal former House Republican Leader Bob Michel authored in 1995. Second is the assertion that this bill is part of the Clinton agenda on health care. If helping the needy is crime, then I plead guilty. But I hope I have convinced those here today that there is a big difference between Clintoncare and the Hatch-Kennedy bill. Indeed, I am aware that some believe there is a hidden Clinton agenda to enact health care reform piece by piece, starting with kids care. I think that is a red herring. This argument suggests to me that we should never do anything worthwhile because of the possibility that it may evolve into something bad. I agree that we do not want the huge Clinton health care mandate proposed and debated during the 103d Congress. But, this bill is not that bill--it is not even a look-alike bill. I have tried to design a Reaganesque block grant tailored to meet a specific problem with a wide degree of flexibility for the States. Unlike the Clinton program, the CHILD Act is focused. It is fully financed; it does not establish a new Federal bureaucracy; and it does not create any new entitlements. There are no price controls and no regional alliances and no global budgets. Another difference is that we are trying to make this a bipartisan approach right from the beginning. We have the wisdom of that national debate 2 years ago and are far wiser for it. Let me next turn to the issue of the tobacco tax as a source of revenue for the Children's Health Insurance and Lower Deficit Act. There can be no doubt that smoking and tobacco use is a major public health problem. By any measure, it is also costly. Smoking is our Nation's No. 1 preventable health threat. There are about 48 million Americans who smoke. About 2 million Americans use other tobacco products like chewing tobacco. Consider these facts. Tobacco kills an estimated 419,000 Americans each year. An additional 2.5 million more people throughout the world die from smoking each year. Smoking accounts for about 1 in 5 deaths in the United States. Tobacco accounts for more deaths than homicide, car and airplane accidents, alcohol, heroin, crack, and AIDS--combined. In fact, cigarettes are also a major cause of fire fatalities in the United States. In 1990, cigarettes were responsible for about one-quarter of all deaths associated with residential fires; this represented over 1,000 deaths. Each day nearly 3,000 young Americans become regular smokers. Eventually, 1,000 will die early from tobacco-related diseases. Unfortunately, cigarette smoking is on the rise among the young: According to the Centers for Disease Control and Prevention [CDC], the number of high school students reporting that they smoked in the last month rose about one-third between 1991 and 1995, from 27.5 percent in 1991 to 34.8 percent in 1995. Among black high school age males the jump in smoking was even more alarming, doubling from 14 percent in 1991 to 28 in 1995. About 8 in 10 smokers begin to use tobacco before age 18 and about one-half of all smokers started at age 14 or earlier. In 1964, Surgeon General Luther Terry reported that smoking causes lung cancer in men. In 1988, the Surgeon General C. Everett Koop reported that smoking was an addictive behavior--the same as for heroin or cocaine. Each year, the estimated 1 million youngsters who become smokers add about $9 to $10 billion to the Nation's health care costs over their lifetimes. According to a 1994 CDC report, tobacco cost an estimated $50 billion in direct health care costs in 1993. Of this total, CDC estimated that $26.9 billion went for hospital expenditures, $15.5 billion for physician expenditures, $4.9 billion for nursing home expenditures, $1.8 billion for prescription drugs, and $900 million for home health care expenditures. The 1994 CDC report notes: ``The findings in this report indicate that cigarette smoking accounts for a substantial and preventable portion of all medical-care costs in the United States.'' According to CDC projections, in 1993 approximately 24 billion packages of cigarettes were sold in the United States and for each of these packages about $2.06 was spent on medical care attributable to smoking. Of this $2.06 per pack estimated societal medical care cost, CDC estimated that $0.89 was paid through public sources. The CDC study estimated that there was a twofold increase in estimated direct medical care costs attributable to smoking between 1987 and 1993. Extrapolating the 1987 survey data reported by CDC, it can be estimated that, in 1993, about $10 billion in Medicare costs and $5 billion in Medicaid costs were attributable to smoking. It has been estimated that smoking cost $4.75 billion to other Federal health care programs, $1.6 billion to other State health programs, and over $16.7 billion in higher premiums paid to private health insurance companies. In addition to the direct cost of about $50 billion annually, experts agree that a similar amount of costs are borne by society through lost productivity--that is, the foregone earnings of those dying prematurely. Researchers at the University of California at San Francisco, Drs. Wendy Max and Dorothy Rice, estimate that the 1993 mortality costs due to smoking were $47 billion. Overall, smoking costs society over $100 billion annually. This is simply too high a price to pay. It is estimated by the Joint Tax Committee that a 43 cent per pack increase in the cigarette tax, coupled with proportionate tax increases for other tobacco products, would yield about $6 billion in new revenues. Another point that I want to make today is that the tobacco tax simply has not kept up with inflation. As a matter of fact, the relative component of the price of cigarettes devoted toward taxes has slipped over the last three decades and, even with the increase we propose today, will actually be lower proportionately once this bill is enacted than it was in 1964 when Surgeon General Luther Terry reported that smoking causes cancer. In 1964, the average total price of a pack of cigarettes was about 30.5 cents per pack. Of this total, 8 cents went to pay the Federal tax and another 8.5 cents per pack were levied in State cigarette and sales tax. In sum, in 1964, about 50.5 percent of the cost of a pack of cigarettes went to taxes. Currently, the average price per pack of cigarettes is about $1.94. Of this total, 24 cents represents the Federal tax and an additional 31.7 cents per pack is levied by the States together with an additional 9.3 cents per pack in sales taxes. All in all, the share of the per pack price of cigarettes devoted to taxes has dropped to about 33.5 percent today from the 1964 level of 50.5 percent. If the CHILD Act were signed into law and the new 43 cents per pack tax were added, and if this new tax were passed on directly to the consumer to increase the per pack price to $2.37 per pack, the share of the total price devoted to taxes--45.6 percent--would still be lower than it was in 1964. Even when this new tax is factored in, the United States would still have a relatively modest tax component built into the price of cigarettes compared with other industrialized countries. For example, in Canada 64 percent of the price of cigarettes is devoted to taxes. In Great Britain, the comparable figure is 82 percent. As a conservative, I am generally opposed to tax increases. I firmly believe that the Federal Government should spend less, and the American people should keep more of the money that is earned in our economy. As a conservative, I believe in a balanced budget. That is why I spent the better part of February managing the floor debate for the balanced-budget amendment. That is why I worked hard to convince Senator Kennedy to earmark one-third of the revenues raised by the proposed increase in the cigarette tax for deficit reduction. Yet, the statistics about tobacco use and cost that I cited above, I believe, make the case that tobacco products are imposing external costs onto society that are not adequately reflected in the price of these inherently dangerous products. Simply stated, the producers and consumers of tobacco products are not paying the full costs of this product. When I balance the opportunity that we have in terms of helping to provide health insurance and services to children, coupled with a significant deficit reduction component, against my natural aversion to raising taxes, I come down in favor of this financing mechanism with this tobacco tax--or, as I call it, a user fee. I believe that both the public health and economics reasons are unique and compelling. I believe that when my colleagues in Congress have the opportunity to fully consider these issues that they will agree with the cosponsors of this legislation and support the CHILD Act. In closing, Mr. President, let me state my intention to work with all interested parties to improve this bill as it moves through the legislative process. Indeed, as I have stated, there are some provisions contained within this bill that I believe could be improved through a thorough public discussion. In particular, I would like to hear from the Governors about how this bill meets their needs with respect to the uninsured population. I am aware that they may have a few concerns about the bill, such as using the Medicaid benefits package as the model for the private insurance contracts. Senator Kennedy and I inserted that provision in the bill for two reasons. We knew that the Governors would be familiar with it and, most importantly, it would obviate the need at either the Federal or State levels to undertake the onerous task of creating a benefits package. Our Utah Governor, Mike Leavitt, has stated on more than one occasion that he believes the Medicaid benefit package is too ``rich;'' in other words, a more efficient package would be less costly and still provide needed care. I look forward to working with him and the leaders of other States to address this issue. Another issue of critical concern is the interrelationship of this program with the employer community. We were very careful to design a program that would complement existing employer efforts to insure their employees without a costly Federal mandate. On the other hand, though, we wanted to make sure that there was no incentive for employers to ``dump'' employees into the new program in order to relieve themselves of a benefit cost. That is why we inserted a provision that states that any employer who makes health insurance contributions for an employee cannot vary such contributions based on an individual's eligibility under the CHILD Act. The only way an employer could put a currently insured employee into the CHILD program would be to eliminate coverage for all employees in the company plan. We think this is highly unlikely to happen. Again, let me state that we were very sensitive to the concerns about a mandate on employers, and we look forward to a very careful examination of this issue as the legislation progresses. Let me also discuss for a moment the issue that Senator Lott has already mentioned, that of making certain that the 3 million children who are currently eligible for Medicaid, but not participating, become enrolled. While our bill does not address that issue, it is something we need to do. I hope to work with Senator Jeffords and Senator DeWine who have indicated in interest to me in working to make certain that those who are eligible for Medicaid can participate. But let me hasten to add that only 3 million out of the 10 million uninsured children are eligible for Medicaid. So, Senator Lott's idea-- which is a good one--would still leave 70 percent of the problem untouched. Mr. President, in closing I want to reiterate my commitment to working with Senator Kennedy and all 98 of my other colleagues to enact a bill this year which will improve child health insurance coverage in the United States. It is time, and I hope the majority of this body will agree.

Mr. HATCH

Mr. HATCH. Mr. President, today, Senator Kennedy, I, and a number of others, are introducing the Hatch-Kennedy child health insurance and lower deficit bill, or the CHILD Act, S. 525. We will also introduce a companion measure, S. 526, which contains a tobacco excise tax increase to pay for the program established in the CHILD bill. The CHILD bill has been negotiated over a long period of time in intensive and sometimes heated negotiations. As anybody can understand, it is difficult to get the two sides together on matters like this. So we have worked very, very hard to try and bring both sides together. It is no secret that Senator Kennedy and I have worked together in the past. And, we have fought each other in the past. But today is a time of unity, for I believe we have written a bill that really makes sense, a bill that will work and that will help one of the most vulnerable segments of our society, children without health insurance. Of the 40 million people who are uninsured in this country, 10 million of them are children. Of those 10 million, about 3 million do qualify for Medicaid, but are not enrolled. While it has its problems, Medicaid is an excellent program overall, a program that does assist the poorest of the poor children and families. But those above the Medicaid eligibility poverty levels, comprise about 7 million children, most of whom are often called the near poor, or the working poor. Mr. President, as a recent study has made abundantly clear, about one out of three children in this country lacks health insurance. It is a pathetic situation. As my colleagues are aware, Senator Kennedy and Senator Kerry introduced a bill last year which addressed the child health insurance problem from a considerably different perspective than the bill we are finally going to introduce today. I think it is important to point out the differences for the edification of my colleagues. The bill we will file today is a bill that is a straight block grant to the States. The States have flexibility to determine their own eligibility standards with minimal Federal requirements. The proposal is not an entitlement program. It is a fully funded program. It is a 5-year authorization. The mechanism for funding the CHILD program authorization is an increase in the tobacco excise tax, amounting to 43 cents per package for cigarettes and proportionate increases on other tobacco products. Some have analogized this to a user fee on those who use tobacco products. We think this excise tax is justified. In 1955, a package of cigarettes cost about 23 cents. Of that amount, 8 cents consisted of a Federal excise tax on the cigarettes. Today, a package of cigarettes costs almost $2, at least $1.82 in most States, but we have only a 24-cent Federal excise tax on the utilization of those cigarettes. We think this provision is also justified from a public health perspective. Smoking is the largest preventable cause of premature death in the United States. Thirty percent of all cancer patients develop their diseases from smoking. Almost all lung cancer comes from smoking. And much of the cardiovascular disease that we have in our society comes from smoking-- including passive smoking as well. It should be no secret to my colleagues that it was a difficult decision for me to submit a bill which will increase taxes, but after considerable study I concluded in this case it is a just and a right thing to do. And if we increase the cigarette tax by 43 cents, we will still be below the percentage the excise tax was back in 1955 when a package of cigarettes cost 23 cents and the excise tax was 8 cents of that. It is important to note that two-thirds of the revenue raised from this bill over the next 5 years will be used for the new child health insurance. The States will be able to negotiate with private health insurance companies to provide coverage, and they will be able to utilize the community health centers which are giving low-cost but high-quality health care in America today. I am one of the strongest advocate for community health centers, and, I must say, they have done a superlative job of delivering health care in general in our society. In Utah, we have what is known as the Caring Foundation. For every dollar we raise in charity, Blue Cross/Blue Shield matches that dollar with $1, making $2 for child health insurance. I believe that can be duplicated across this country in the best interest of children and families. When someone inquires about why I am sponsoring the CHILD Act, my thoughts turn to scores of constituents who have brought their concerns about the cost and availability of health insurance to my attention. It is heart rending to me when I have uninsured families come into my office--many of whom are young and who have children. These families are frantic; they don't know where to turn when a child gets sick. Two young women from Provo in my home State came in to visit me recently. Both had six children. They both work part time. Their husbands work full time, but neither family makes more than $20,000 a year. They are hard-working people. They are the working people of our society who are the poorest of the poor not on Medicaid, who cannot afford health insurance and, frankly, who do not know where to turn. I think that it behooves us to solve this problem for them, and the best way to do it is with a straight block grant to the States. The grant approach has a lot of benefits. There should be minimal new bureaucracy, because the IRS already collects excise taxes on cigarettes. There should be minimal bureaucracy because HHS will distribute the funds based on a simple formula reflecting the number of uninsured in a State. We provide a safeguard so there is no incentive for businesses to drop the lower paid people off their health insurance. In this bill, if a company wishes to drop any employee from the company health plan, then they will have to drop all their employees, from the top executives on down. We are trying to help those who cannot help themselves, which I think is the most conservative thing we can do in this society. We are not trying to help those who can help themselves but refuse to. People who can help themselves ought to help themselves. What I am saying, Mr. President, is that it is time. It is time for this Congress to get down to business. Mr. President, it is time. It is time for us to get down to business. It is time for the Congress to focus on how to make a great country greater on how to set aside partisan differences and help the people we were elected to help. It is time to focus on what truly needs to be done in this country not on deadlock or gridlock or shutdown. It is time to wake up and realize that--in this great land of incredible riches and abundance--in the greatest country of the world-- there are still children being left behind. Who cannot be disturbed, even frightened, by the statistics? Drug use among our young people is dramatically on the rise. In its ninth annual survey of students in grades 6-12, the National Parents' Resource Institute for Drug Education [PRIDE] reported that annual use of most drugs was at the highest level since the survey began 10 years ago. Record use was reported for cigarettes, marijuana, cocaine, uppers, downers, inhalants, and hallucinogens. Serious questions have been raised about our children's ability to learn. Our children rank pitifully behind other countries in educational scores. One survey of international test scores for math and science, found Americans to rank dead last and South Koreans ranking the best. And, who could not be disturbed by this? A 1991 National Assessment of Education Progress survey, revealed that only 5 percent of high school seniors demonstrated enough understanding of geometry and algebra to be prepared for college-level math. Violence is rapidly becoming a way of life for today's children. Over the past decade, the rate of homicide committed by teenagers aged 14-17 has more than doubled, increasing 172 percent from 1985 to 1994. In fact, 35 percent of all violent crime is committed by offenders less than 20 years of age. And here's another astounding fact. Two years ago, a survey of 1,000 teachers showed that 11 percent had been assaulted in school. Teachers have been robbed, vandalized, slashed by razors, physically assaulted, shot, and set on fire in the schools. What kind of learning environment is that for our children? And, let's look at child health. How many Senators are aware that almost one out of three children have no health insurance? Ten million children have no health insurance at all. That is more children than the entire populations of Maine, Rhode Island, Alaska, Delaware, Georgia, Hawaii, Montana, Nebraska, South Dakota, and Vermont--10 States--combined. Did anyone know this? Over 500,000 American infants are uninsured, infants who need such critical services as immunizations to grow up healthy. Mr. President, these are astounding statistics. Terrifying predictors of our world as we head into the 21st century. And I, for one, am going to put my foot down. I will do everything I can to reverse this trend. I challenge each Senator in this body to work with me on what must be the top agenda item for the 105th Congress: Making this world a better place for our children. I will make this a top priority in the Judiciary Committee. We will look at such issues as the Federal Gang Violence Act, violence in the schools, and, importantly, a strong national antidrug abuse strategy. Already the committee has approved--only to suffer the most narrow of defeats on the floor--the Balanced Budget Act, passage of which is perhaps the most important legacy we can leave for our children, each of whom is born saddled with $20,000 in debt. And I hope other committees will be working as well. For no effort to improve this world for our children can be complete without measures to improve their ability to grow up healthy. That is why I have united with my good friend and sometimes adversary, Senator Kennedy, to draft the bill we are introducing today: the Child Health Insurance and Lower Deficit Act. We call it the CHILD bill. The CHILD bill will be accompanied by additional legislation we also introduce today which provides the funding offset for the CHILD Program through an increase in the tobacco excise tax. Introduction today of S. 525, and the companion bill to increase the tobacco excise tax, completes 3 months of intense negotiations between myself and Senator Kennedy. Our discussions were sometimes heated, sometimes acrimonious, but always well intentioned. They have resulted in a bill, the adoption of which I think will make this country a better place. And so, today, Senator Kennedy and I have found a solid center--we have compromised from the left and from the right. We are doing this to help the 10 million children in the United States who are without health insurance. We are doing it because it is the right thing to do. The child health insurance and services bill Senator Kennedy and I will introduce today is targeted to the near poor, primarily working families, who are not covered by existing Government programs. Two- thirds of the uninsured children come from low-income working families with annual incomes of $25,000 or less; 86 percent are from families where at least one parent is employed. I think any honest examination of this would show that these statistics are deplorable. Children are our most precious natural resource. If we had a vote on that today, it would pass 100 to 0. And if you agree on that, the next step is simple. I can't think of a more appropriate role for the Federal Government than helping the most vulnerable in our society. It has become a cliche, but children are our future. Already I have taken criticism for this bill and for uniting with a Democrat to sponsor the CHILD Act. It is true that Senator Kennedy and I represent the most divergent philosophies in the U.S. Congress. It is for that very reason we are proposing S. 525 today. United, we can provide the basis for a consensus position we hope all our colleagues will endorse. It is true that Senator Kennedy and I do not often agree on public policy. I can't even count the number of times I have stood on this floor to oppose--even filibuster--legislation he has sponsored. But with respect to health care--when it comes to helping people--we both have a strong commitment to doing the right thing regardless of politics. And this legislation is the right thing to do. Joining Senator Kennedy and me today in cosponsorship of the CHILD bill, S. 525, are 19 Senators, for a total of 21. Those Senators are: Snowe, Kerry, Jeffords, Dodd, Stevens, Rockefeller, Bennett, Daschle, Collins, Wellstone, Smith (OR), Bingaman, Campbell, Murray, Reed, Boxer, Lautenberg, Durbin, and Reid. Joining us in cosponsorship of the tobacco tax bill, S. 525, are Senators Bennett, Bingaman, Boxer, Dodd, Durbin, Jeffords, Kerry, Lautenberg, Murray, Reed, Reid, Rockefeller, Snowe, and Wellstone. What are the major features of the CHILD bill? Our proposal sets up a voluntary State grant program--I repeat, voluntary State grant program. The funds will be used by States to subsidize the cost, or part of the cost, of private health insurance for needy children. States will also be able to use Community and Migrant Health Centers to provide services directly to children. We hope our program will be a catalyst to improve health care for kids. It is a Federal/State/private partnership. Any State that wishes to participate must contribute to the program. States may require individuals or their employers to contribute as well. We have designed an approach which we believe is fiscally responsible. The bill authorizes program expenditures for each of 5 years, and it is fully financed with a 43-cent increase in tobacco excise taxes. Two-thirds of the revenues will be used for program services, and one-third for deficit reduction. In drafting S. 525, we have worked very hard to make certain that no large, new bureaucracy will be needed to implement the CHILD Program. The idea of a huge new Federal involvement in health care frightens most Americans, as was so amply evidenced by the resounding defeat of the Clinton health care bill in 1994. I was one of the loudest objectors to that legislation as a member of both the Finance and Labor Committees at the time it was considered. I want to assure my colleagues that we are not replicating that exercise here today. HHS will disburse the grant money according to existing Medicaid formulas and the number of uninsured children in the State. The Treasury Department already collects an excise tax. The States will set eligibility levels, which presumably they could do very easily based on their experiences with Medicaid and other State programs to help the poor and near poor. The States will use their current Medicaid benefits packages to negotiate contracts for insurance coverage. These are not complex calculations. They should be easily achievable. We also worked very hard to allay any concerns that we were establishing a new entitlement program. We are not. The bill does not establish any individual entitlement to benefits. It is a 5-year authorization which is fully funded. It is not like Medicare where we guarantee we will pay for the services of every eligible beneficiary. It is not like Medicaid where we pay an open- ended amount, which is appropriated annually. What we are really talking about doing with this bill is finding cost-effective ways to get quality health care services to children. Our bill recognizes and strengthens the important role that community, migrant and homeless centers play in caring for the Nation's uninsured children and their families. Community and rural health centers already exist. We are not creating them or remaking them in this bill. They are located in medically underserved communities where many uninsured children live. Over 940 health centers in every State serve one out of six low-income American children, over 4.5 million children. They are currently the family doctor for one out of seven uninsured children, totaling 1.3 million children. Last year, health center professionals delivered one of every 10 babies born in the United States, and one out of every five low income babies. They are experts in providing quality, comprehensive primary and preventive care to uninsured children--the very type of care we are trying to get to children with this bill. Our bill permits these children to continue to choose health centers as their primary care provider and to make the choice of a health center available to other uninsured children. In each area currently served by a health center, a direct service option will be available to children who are served by a health center. Families choosing the direct service option will get the same comprehensive Medicaid package of services as do those who opt for a children's policy. Under the direct service option, children will receive their primary and preventive care at the health center they select and will receive specialty and inpatient care through networks of providers certified by the State or through a wrap-around insurance policy. We believe that the direct service option will be as cost effective as an insurance policy and may even be less expensive. Several studies which compared the total annual cost of health care for Medicaid patients served by health centers--including primary and specialty care and inpatient care--to the total annual cost of care for Medicaid patients served by other types of providers--including health maintenance organizations and private physicians--found that health center care was the least expensive. The reason? Health centers prevent illness because of the primary and preventive care they provide. Based on these studies, the cost of all care--primary, specialty, and inpatient--under the direct service option is expected to be lower than the cost for a child cared for by another type of provider. As the chief sponsor of the balanced budget amendment, I could not support the creation of any new entitlement program. Indeed, I believe this proposal is fully consistent with the BBA. First, our bill is fully financed by the proposed tobacco products tax. Second, for every $2 of program cost the Hatch-Kennedy bill dedicates $1 to deficit reduction. When all is said and done, this bill would help to bring the budget in balance--which I believe will be nearly as essential to children in the long-run as necessary health care is in the short-run. Let me underscore that the net cost to the Federal Government of the CHILD Act is zero, because it is fully funded. In fact, the bill literally saves money, because it provides at least $10 billion in funds for deficit reduction over the next 5 years. We cap Federal expenditures at $20 billion over 5 years for services, with $10 billion for deficit reduction. Over the 5-year period, the ratio of services to deficit reduction will be 2 to 1. For services, we will provide the following amounts: 1998: $3 billion, 1999: $3 billion, 2000: $4 billion, 2001: $5 billion, 2002: $5 billion. For deficit reduction, we provide the following amounts: 1998: $3 billion, 1999: $3 billion, 2000: $2 billion, 2001: $1 billion, and 2002: $1 billion. Let me make perfectly clear that the size of this program is capped each year. In fact, if not enough revenue is generated, then the size of the program will be lowered accordingly. Let me take a moment to address other potential concerns about this bill. Many have asked why we need a new program. Indeed, we have the Medicaid Program, which helps the poorest of the poor. Even so, there are 10 million children without coverage. In fact, 3 million uninsured children are eligible for Medicaid, but are not enrolled. There is no program for the remaining 7 million children, most of whom come from near poor families. Those families are faced with two very unattractive options: a choice between dropping out of the labor force in order to get Medicaid eligibility, or keeping their jobs with no health care coverage at all. It might be logical to assume that Medicaid would provide the basis for a program to increase child health coverage. And we did examine that idea. But, Medicaid is an open-ended entitlement--and an expensive one at that. Both the States and the Federal Government are seriously concerned about the runaway costs of Medicaid. In contrast, our capped program is not an entitlement. It is a targeted approach which allows States considerable flexibility in design and administration. Others have suggested that we use a tax-based approach. I would be willing to consider a tax credit approach, if we could design one that really works. But I foresee two problems in developing such an approach. The first is that a tax credit could really amount to an open-ended entitlement, whereas the size of our program is capped each year. The second is that poor and near-poor families, who we are trying to help with this bill, simply cannot afford to buy insurance coverage during the year, and wait until the next April to get the money back. For the benefit of my colleagues, I want to respond to two other concerns. First, I must emphasize that S. 525 is not the Kerry-Kennedy bill from last year, S. 2186. It is a new proposal that Senator Kennedy and I wrote together. Senator Kennedy and I have both moved considerable distances to write this compromise legislation. This bill is not an open-ended, permanent entitlement; it is a capped 5-year program, run by the States and, as such, is very similar to a proposal former House Republican Leader Bob Michel authored in 1995. Second is the assertion that this bill is part of the Clinton agenda on health care. If helping the needy is crime, then I plead guilty. But I hope I have convinced those here today that there is a big difference between Clintoncare and the Hatch-Kennedy bill. Indeed, I am aware that some believe there is a hidden Clinton agenda to enact health care reform piece by piece, starting with kids care. I think that is a red herring. This argument suggests to me that we should never do anything worthwhile because of the possibility that it may evolve into something bad. I agree that we do not want the huge Clinton health care mandate proposed and debated during the 103d Congress. But, this bill is not that bill--it is not even a look-alike bill. I have tried to design a Reaganesque block grant tailored to meet a specific problem with a wide degree of flexibility for the States. Unlike the Clinton program, the CHILD Act is focused. It is fully financed; it does not establish a new Federal bureaucracy; and it does not create any new entitlements. There are no price controls and no regional alliances and no global budgets. Another difference is that we are trying to make this a bipartisan approach right from the beginning. We have the wisdom of that national debate 2 years ago and are far wiser for it. Let me next turn to the issue of the tobacco tax as a source of revenue for the Children's Health Insurance and Lower Deficit Act. There can be no doubt that smoking and tobacco use is a major public health problem. By any measure, it is also costly. Smoking is our Nation's No. 1 preventable health threat. There are about 48 million Americans who smoke. About 2 million Americans use other tobacco products like chewing tobacco. Consider these facts. Tobacco kills an estimated 419,000 Americans each year. An additional 2.5 million more people throughout the world die from smoking each year. Smoking accounts for about 1 in 5 deaths in the United States. Tobacco accounts for more deaths than homicide, car and airplane accidents, alcohol, heroin, crack, and AIDS--combined. In fact, cigarettes are also a major cause of fire fatalities in the United States. In 1990, cigarettes were responsible for about one-quarter of all deaths associated with residential fires; this represented over 1,000 deaths. Each day nearly 3,000 young Americans become regular smokers. Eventually, 1,000 will die early from tobacco-related diseases. Unfortunately, cigarette smoking is on the rise among the young: According to the Centers for Disease Control and Prevention [CDC], the number of high school students reporting that they smoked in the last month rose about one-third between 1991 and 1995, from 27.5 percent in 1991 to 34.8 percent in 1995. Among black high school age males the jump in smoking was even more alarming, doubling from 14 percent in 1991 to 28 in 1995. About 8 in 10 smokers begin to use tobacco before age 18 and about one-half of all smokers started at age 14 or earlier. In 1964, Surgeon General Luther Terry reported that smoking causes lung cancer in men. In 1988, the Surgeon General C. Everett Koop reported that smoking was an addictive behavior--the same as for heroin or cocaine. Each year, the estimated 1 million youngsters who become smokers add about $9 to $10 billion to the Nation's health care costs over their lifetimes. According to a 1994 CDC report, tobacco cost an estimated $50 billion in direct health care costs in 1993. Of this total, CDC estimated that $26.9 billion went for hospital expenditures, $15.5 billion for physician expenditures, $4.9 billion for nursing home expenditures, $1.8 billion for prescription drugs, and $900 million for home health care expenditures. The 1994 CDC report notes: ``The findings in this report indicate that cigarette smoking accounts for a substantial and preventable portion of all medical-care costs in the United States.'' According to CDC projections, in 1993 approximately 24 billion packages of cigarettes were sold in the United States and for each of these packages about $2.06 was spent on medical care attributable to smoking. Of this $2.06 per pack estimated societal medical care cost, CDC estimated that $0.89 was paid through public sources. The CDC study estimated that there was a twofold increase in estimated direct medical care costs attributable to smoking between 1987 and 1993. Extrapolating the 1987 survey data reported by CDC, it can be estimated that, in 1993, about $10 billion in Medicare costs and $5 billion in Medicaid costs were attributable to smoking. It has been estimated that smoking cost $4.75 billion to other Federal health care programs, $1.6 billion to other State health programs, and over $16.7 billion in higher premiums paid to private health insurance companies. In addition to the direct cost of about $50 billion annually, experts agree that a similar amount of costs are borne by society through lost productivity--that is, the foregone earnings of those dying prematurely. Researchers at the University of California at San Francisco, Drs. Wendy Max and Dorothy Rice, estimate that the 1993 mortality costs due to smoking were $47 billion. Overall, smoking costs society over $100 billion annually. This is simply too high a price to pay. It is estimated by the Joint Tax Committee that a 43 cent per pack increase in the cigarette tax, coupled with proportionate tax increases for other tobacco products, would yield about $6 billion in new revenues. Another point that I want to make today is that the tobacco tax simply has not kept up with inflation. As a matter of fact, the relative component of the price of cigarettes devoted toward taxes has slipped over the last three decades and, even with the increase we propose today, will actually be lower proportionately once this bill is enacted than it was in 1964 when Surgeon General Luther Terry reported that smoking causes cancer. In 1964, the average total price of a pack of cigarettes was about 30.5 cents per pack. Of this total, 8 cents went to pay the Federal tax and another 8.5 cents per pack were levied in State cigarette and sales tax. In sum, in 1964, about 50.5 percent of the cost of a pack of cigarettes went to taxes. Currently, the average price per pack of cigarettes is about $1.94. Of this total, 24 cents represents the Federal tax and an additional 31.7 cents per pack is levied by the States together with an additional 9.3 cents per pack in sales taxes. All in all, the share of the per pack price of cigarettes devoted to taxes has dropped to about 33.5 percent today from the 1964 level of 50.5 percent. If the CHILD Act were signed into law and the new 43 cents per pack tax were added, and if this new tax were passed on directly to the consumer to increase the per pack price to $2.37 per pack, the share of the total price devoted to taxes--45.6 percent--would still be lower than it was in 1964. Even when this new tax is factored in, the United States would still have a relatively modest tax component built into the price of cigarettes compared with other industrialized countries. For example, in Canada 64 percent of the price of cigarettes is devoted to taxes. In Great Britain, the comparable figure is 82 percent. As a conservative, I am generally opposed to tax increases. I firmly believe that the Federal Government should spend less, and the American people should keep more of the money that is earned in our economy. As a conservative, I believe in a balanced budget. That is why I spent the better part of February managing the floor debate for the balanced-budget amendment. That is why I worked hard to convince Senator Kennedy to earmark one-third of the revenues raised by the proposed increase in the cigarette tax for deficit reduction. Yet, the statistics about tobacco use and cost that I cited above, I believe, make the case that tobacco products are imposing external costs onto society that are not adequately reflected in the price of these inherently dangerous products. Simply stated, the producers and consumers of tobacco products are not paying the full costs of this product. When I balance the opportunity that we have in terms of helping to provide health insurance and services to children, coupled with a significant deficit reduction component, against my natural aversion to raising taxes, I come down in favor of this financing mechanism with this tobacco tax--or, as I call it, a user fee. I believe that both the public health and economics reasons are unique and compelling. I believe that when my colleagues in Congress have the opportunity to fully consider these issues that they will agree with the cosponsors of this legislation and support the CHILD Act. In closing, Mr. President, let me state my intention to work with all interested parties to improve this bill as it moves through the legislative process. Indeed, as I have stated, there are some provisions contained within this bill that I believe could be improved through a thorough public discussion. In particular, I would like to hear from the Governors about how this bill meets their needs with respect to the uninsured population. I am aware that they may have a few concerns about the bill, such as using the Medicaid benefits package as the model for the private insurance contracts. Senator Kennedy and I inserted that provision in the bill for two reasons. We knew that the Governors would be familiar with it and, most importantly, it would obviate the need at either the Federal or State levels to undertake the onerous task of creating a benefits package. Our Utah Governor, Mike Leavitt, has stated on more than one occasion that he believes the Medicaid benefit package is too ``rich;'' in other words, a more efficient package would be less costly and still provide needed care. I look forward to working with him and the leaders of other States to address this issue. Another issue of critical concern is the interrelationship of this program with the employer community. We were very careful to design a program that would complement existing employer efforts to insure their employees without a costly Federal mandate. On the other hand, though, we wanted to make sure that there was no incentive for employers to ``dump'' employees into the new program in order to relieve themselves of a benefit cost. That is why we inserted a provision that states that any employer who makes health insurance contributions for an employee cannot vary such contributions based on an individual's eligibility under the CHILD Act. The only way an employer could put a currently insured employee into the CHILD program would be to eliminate coverage for all employees in the company plan. We think this is highly unlikely to happen. Again, let me state that we were very sensitive to the concerns about a mandate on employers, and we look forward to a very careful examination of this issue as the legislation progresses. Let me also discuss for a moment the issue that Senator Lott has already mentioned, that of making certain that the 3 million children who are currently eligible for Medicaid, but not participating, become enrolled. While our bill does not address that issue, it is something we need to do. I hope to work with Senator Jeffords and Senator DeWine who have indicated in interest to me in working to make certain that those who are eligible for Medicaid can participate. But let me hasten to add that only 3 million out of the 10 million uninsured children are eligible for Medicaid. So, Senator Lott's idea-- which is a good one--would still leave 70 percent of the problem untouched. Mr. President, in closing I want to reiterate my commitment to working with Senator Kennedy and all 98 of my other colleagues to enact a bill this year which will improve child health insurance coverage in the United States. It is time, and I hope the majority of this body will agree.

Mr. HATCH. Will my friend yield me 30 seconds?

Mr. HATCH. I want to compliment my friend for the remaining 30 seconds. I wish I could spend more time. Development of these bills has not been an easy thing for him to do, or for me. But I am convinced we have drafted a program that will work. I have to suggest that if Senator Kennedy and Senator Hatch--who have such widespread differences of philosophy--can unite to propose a program like this, then anybody can get together. Despite our philosophical differences, which are wide, we both have a great deal of friendship and caring for each other. We are working as hard as we can to do what is right here. I want to thank my colleague for his great work in this effort. I yield the floor.

Mr. HATCH

Mr. HATCH. Mr. President, intellectual property is vitally important to sustaining the high level of creativity that America enjoys, which not only adds to the fund of human knowledge and the progress of science and technology, but also results in the more tangible benefits of a strong economy and a favorable balance of trade. For example, 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. Mr. President, this is impressive to say the least. And these figures don't begin to take into account the contributions of other intellectual property sectors, including trade in patented technologies and the economic value of famous marks. Clearly intellectual property has become one of our Nation's most valuable resources. As you know, the Judiciary Committee, is charged with monitoring the effectiveness of our intellectual property laws and with proposing to the Senate changes that are called for to meet new challenges. Because of the digital age and the global economy, we've had our hands full. Let me just go through a few highlights. In the 104th Congress, we passed the Digital Performance Right in Sound Recordings Act, which, as its name signifies, adjusts the existing performance right in the Copyright Act to the demands of the new digital media. I also introduced, with Senator Leahy, the National Information Infrastructure (NII) Copyright Protection Act of 1995 to begin to lay down the rules of the road for the information highway. The Committee held two hearings on this bill, but not enough time was left in the 104th to complete our deliberations. In response to the challenges of the global economy, I introduced the Copyright Term Extension Act of 1995, along with Senator Thompson and Senator Feinstein, to give U.S. copyright owners parity of term in the European Union. The EU has issued a directive to increase the minimum basic copyright term from life-plus-50 years to life-plus-70. If we do not follow suit, U.S. works in potentially all EU countries will receive 20 years less protection than the works of the nationals of the host country. The Copyright Term Extension Act was approved by the Judiciary Committee. I am confident that the bill would have been approved by the Senate as well with little or no opposition, but unfortunately this important legislation was held hostage by advocates of music licensing reform--a totally unrelated issue. In patents, too, we were very active. The Biotechnology Process Patents Act was passed. Also, I introduced the Omnibus Patent Act of 1996, which remade the Patent and Trademark Office into a government corporation. The corporate form would allow the Patent and Trademark Office to escape the micromanagement that it currently endures from the Commerce Department, although my bill preserved a policy link with the Department. The bill also made several very important substantive changes to the Patent Act. After some tough negotiations, the Clinton administration ended up supporting the final version of the bill. The Judiciary Committee had a hearing on the bill, but Committee action was held hostage to yet another, totally unrelated issue--judicial nominations. In addition to improving the efficiency of the patent and trademark systems, I have worked tirelessly for a number of years to rectify the injustice of making American inventors bear a heavier burden in deficit reduction than the ordinary citizen through the withholding of patent surcharge funds. Again last year I led an ultimately unsuccessful effort to ease this tax on American ingenuity. Now no one has demonstrated more zeal for a balanced budget than I have. As you know, Mr. President, I was on the Senate floor for 3 weeks trying to get this body to discipline itself through the Balanced Budget Amendment. But I do not believe that inventors ought to pay a surcharge on their patent applications only to see that surcharge used for the general revenue rather than to improve the service they receive from the PTO. The PTO, after all, is a self-sustaining agency, not receiving a penny from taxpayer dollars. What they charge, they ought to keep. I am currently looking at a legislative solution to this problem. I have also been looking into the special patent restoration rules that apply to pharmaceutical products. In 1984, Congress enacted the Drug Price Competition and Patent Term Restoration Act. Essentially, this law--commonly known as, I am proud to say, the Hatch-Waxman Act-- allowed generic drug manufacturers to rely on the costly safety and efficacy data of pioneer drug manufacturers and provided for partial patent restoration for pioneer products to offset a portion of the patent term lost due to FDA regulatory review. I know that many are interested in revisiting particular provisions of the Hatch-Waxman Act now that we have had a decade-plus experience under the new system. In my view, to be successful, any Hatch-Waxman reform must be balanced in a manner that the American public, generic drug firms, and the R&D manufacturers are all able to realize benefits. Toward this end, my staff and I have been meeting with representatives of both segments of the pharmaceutical industry to identify areas of concern. It is my hope that these discussions will result in proposals to create new incentives in our intellectual property protection system and efficiency in our regulatory processes that will increase the long- term strength of both segments of the industry. Our bottom line goal is clear: We want a climate that produces both innovative new medicines and lower-cost generic copies of off-patent products. I do not guarantee success in this endeavor, I can only commit that I will listen to all parties involved and see if we can work together to forge a compromise on Hatch-Waxman reform. I would like to do it if we can, but I will not support any approach that is not balanced. Let me just add that my willingness to work with all parties should not be construed as giving a veto to any particular party. Ultimately, the test I use will be: Will the American public be better off if a particular legislative proposal is adopted? If, and only if, this test can be met, will I ask others in this body to join me in moving legislation. Mr. President, let me now turn to trademark legislation, an area in which we have had a lot of success. Both the Federal Trademark Dilution Act and the Anticounterfeiting Consumer Protection Act became law in the 104th Congress. The Federal Trademark Dilution Act was significant in that it established the first-ever Federal anti-dilution statute to provide nationwide protection against the whittling away of famous marks. The Anticounterfeiting Consumer Protection Act brought our Nation's anticounterfeiting laws up to speed with the quickly evolving counterfeiting trade by providing stiffer civil and criminal penalties and increasing the tools available to law enforcement to give them the upper hand in this fight. As you can see though, Mr. President, we have a lot of unfinished business, so today I'm introducing two bills from the last Congress, the Omnibus Patent Act, and the Copyright Term Extension Act. In addition, I'm introducing the Copyright Clarification Act, which is a series of truly technical amendments to the Copyright Act. I am pleased that Senator Leahy, the distinguished ranking member of the Judiciary Committee, Senator D'Amato, the distinguished junior Senator from New York, Senator Abraham, the distinguished junior Senator from Michigan, and Senator Feinstein, the distinguished senior Senator from California, are joining me as cosponsors of the Copyright Term Extension Act of 1997. Of course, Mr. President, these three bills do not comprise my entire intellectual property agenda. For example, at my request, the Copyright Office is taking a look at sui generis protection of databases and at amendments to the Satellite Home Viewer Act. The Copyright Office may very well have recommendations for legislation in this area, and I may introduce such legislation before the end of this session. However, because the three bills I am introducing today have widespread support and have been thoroughly discussed in the last Congress, it is appropriate that they be the first to be considered--old business before new business. The Omnibus Patent Act of 1997 Mr. President, the Omnibus Patent Act of 1997 is identical to the latest version of a bill I introduced last Congress, S. 1961, except for a few technical changes. Last Congress, S. 1961 gained bipartisan support in the Senate, its counterpart, H.R. 3460 gained bipartisan support in the House, and the Clinton administration also supported this bill. Further, a large, broad coalition of representatives of the patent industry were strongly supportive of the bill. Additionally, the National Treasury Employees Union and the AFL-CIO both supported the provisions that affect their membership. I am fully confident that this far-reaching, bipartisan support will continue this Congress. I have no doubt that had a vote been taken on S. 1961, it would have passed the Senate by an overwhelming vote. Unfortunately, we did not take up S. 1961 until later in the 104th Congress, and time ran out before we were able to reach a vote on this important measure. In order to be certain that such a problem is not repeated, I am beginning this process early in the 105th Congress. The House is already acting to move through this important and needed measure without delay. The House counterpart to my bill, H.R. 400, was introduced by Congressman Coble, the chairman of the House Judiciary Subcommittee on Courts and Intellectual Property. Chairman Coble has held a hearing on H.R. 400, and the bill was subsequently favorably reported by the subcommittee and the full House Judiciary Committee. I look forward to the consideration of H.R. 400 by the full House of Representatives. During the last Congress this bill was the subject of multiple hearings in both Houses of Congress. But, this is a new Congress, so I would like to review, once again, the purposes and goals of the Omnibus Patent Act of 1997. The purposes of this bill are: (1) to provide for more efficient administration of the patent and trademark systems; (2) to discourage ``gaming'' the patent system while ensuring against loss of patent term and theft of American inventiveness; (3) to protect the rights of prior users of inventions which are later patented by another; (4) to increase the reliability of patents by allowing third parties more meaningful participation in the reexamination process; (5) to make certain that American provisional applications are given the same weight as other countries' provisional applications in other countries' courts; (6) to close a loophole in the plant patent provisions of the Patent Act; and (7) to allow for the filing of patent and trademark documents by electronic medium. The United States Patent and Trademark Office The United States leads the world in innovation. That leadership is a direct result of our long-standing commitment to strong patent protection. The strong protection of patents and trademarks are of vital importance not only to continued progress in science, but also to the economy. A vast array of industries depend on patents. From the chemical, electrical, biotechnological, and manufacturing industries to computer software and hardware. And trademark is important to all businesses, period. I believe that we must not only keep our intellectual property laws current and strong, but we must do everything we can to make sure that the offices responsible for the administration of those laws are properly equipped and able to do their job as efficiently as possible. Thus, the first provision of this bill makes the Patent and Trademark Office a government corporation, called the U.S. Patent and Trademark Organization. Basically, the effect of this provision is to separate the administration of the patent and trademark systems from micromanagement by the Department of Commerce, while maintaining a policy link to that Department. The current PTO has been hampered by burdensome red tape regarding personnel matters, and the office has also been held back from reaching its full potential by the repeated siphoning off of its user fees for other, unrelated expenditures. The government corporation proposal was the subject of much discussion last Congress. The Administration, various union representatives, representatives of the users of the Patent and Trademark Office, and, of course, the officers of the PTO itself were all involved in helping me to craft this consensus legislation. I am confident that the product of these negotiations will enhance the efficiency of the USPTO while protecting the interests of the Commerce Department and the employees of the USPTO. The structure of the USPTO under my bill vests primary responsibility for patent and trademark policy in the head of the USPTO, the Director, and primary responsibility for administration of the patent and trademark systems in the respective Commissioners of Patents and Trademarks. The corporate form of the USPTO inoculates the Patent and Trademark Offices as much as possible from the bureaucratic sclerosis that infects many federal agencies. Further, by subdividing the organization into separate patent and trademark offices, the bill will help raise the prominence of trademarks, an important part of intellectual property but long seen as the poor step-child of the more prominent patent field. The parties interested in patents and trademarks support having close access to the President by having the chief intellectual policy advisor directly linked to a cabinet officer. The Secretary of Commerce is a logical choice. As a result, while this bill would make the day-to-day functioning of the USPTO independent of the Commerce Department, the policy portion of the new organization will still be under the policy direction of the Secretary of Commerce. Further, as a government corporation, as opposed to a private corporation, the USPTO will remain subject to congressional oversight. Mr. President, although the creation of the USPTO may be the most dramatic part of this bill, it also contains several important changes to substantive patent law that will, taken as a whole, dramatically improve our patent system. With the adoption of the GATT provisions in 1994, the United States changed the manner in which it calculated the duration of patent terms. Under the old rule, patents lasted for seventeen years after the grant of the patent. The new rule under the legislation implementing GATT is that these patents last for twenty years from the time the patent application is filed. In addition to harmonizing American patent terms with those of our major trading partners, this change solved the problem of ``submarine patents''. A submarine patent is not a military secret. Rather, it is a colloquial way to describe a legal but unscrupulous strategy to game the system and unfairly extend a patent term. Submarine patenting is when an applicant purposefully delays the final granting of his patent by filing a series of amendments and delaying motions. Since, under the old system, the term did not start until the patent was granted, no patent term was lost. And since patent applications are secret in the United States until a patent is actually granted, no one knows that the patent application is pending. Thus, competitors continued to spend precious research and development dollars on technology that has already been developed. When a competitor finally did develop the same technology, the submarine applicant sprang his trap. He would cease delaying his application and it would finally be approved. Then, he sued his competitor for infringing on his patent. Thus, he maximized his own patent term while tricking his competitors into wasting their money. Mr. President, submarine patents are terribly inefficient. Because of them, the availability of new technology is delayed and instead of moving to new and better research, companies are fooled into throwing away time and money on technology that already exists. By adopting GATT, and changing the manner in which we calculate the patent term to twenty years from filing, we eliminated the submarine problem. Under the current rule, if an applicant delays his own application, it simply shortens the time he will have after the actual granting of the patent. Thus, we have eliminated this unscrupulous, inefficient practice by removing its benefits. Unfortunately, the change in term calculation potentially creates a new problem. Under the current law, if the Patent Office takes a long time to approve a patent, the delay comes out of the patent term, thus punishing the patent holder for the PTO's delay. This is not right. The question we face now, Mr. President, is how to fix this new problem. Some have suggested combining the old seventeen years from granting system with the new twenty years from filing and giving the patent holder whichever is longer. But that approach leads to uncertainty in the length of a patent term and even worse, resurrects the submarine patent problem by giving benefits to an applicant who purposefully delays his own application. I believe that Titles II and III of the Omnibus Patent Act of 1997 solve the administrative delay dilemma without recreating old problems. Early Publication Title II of the bill provides for the early publication of patent applications. It would require the Patent Office to publish pending applications eighteen months after the application was filed. An exception to this rule is made for applications filed only in the United States. Those applications will be published 18 months after filing or 3 months after the office issues its first response on the application, whichever is later. By publishing early, competitors are put on notice that someone has already beaten them to the invention, thus allowing them to stop spending money researching that same art. The claims that early publication will allow foreign competitors to steal American technology are simply not true. To start with, between 75 and 80 percent of patent applications filed in the United States are also filed abroad where 18 month publication is already the rule. Further, I have provided in my bill for delayed publication of applications only submitted in the United States to protect them from competitors. Additionally, once an application is published, Title II grants the applicant ``provisional rights,'' that is, legal protection for his invention. Thus, while it is true that someone could break the law and steal the invention, that is true under current law and will always be true, and it will subject them to liability for their illegal actions. Patent Term Restoration Title III deals directly with the administrative delay problem by restoring to the patent holder any part of the term that is lost due to undue administrative delay. To prevent any possible confusion over what undue delay means, the bill sets specific deadlines for the Patent Office to act. The office has fourteen months to issue a first office action and four months to respond to subsequent applicant filings. Any delay beyond those deadlines is considered undue delay and will be restored to the patent term. Thus, Title III solves the administrative delay problem in a clear, predictable, and objective manner. Prior Domestic Commercial Use Title IV deals with people who independently invent new art, and use it in commercial sale, but who never patent their invention. Specifically, this title provides rights to a person who has commercially sold an invention more than 1 year before another person files an application for a patent on the same subject matter. Anyone in this situation will be permitted to continue to sell his product without being required to pay a royalty to the patent holder. This basic fairness measure is aimed at protecting the innocent inventor who chooses to use trade secret protection instead of pursuing a patent and who has expended enough time and money to begin commercial sale of the invention. It also serves as an incentive for those who wish to seek a patent to seek it quickly, thus reducing the time during which others may acquire prior user rights. The incentives of this title will improve the efficiency of our patent system by protecting ongoing business concerns and encouraging swift prosecution of patent applications. Patent Reexamination Reform Title V provides for a greater role for third parties in patent re- examination proceedings. Nothing is more basic to an effective system of patent protection than a reliable examination process. Without the high level of faith that the PTO has earned, respect for existing patents would fall away and innovation would be discouraged for fear of a lack of protection for new inventions. In the information age, however, it is increasingly difficult for the PTO to keep track of all the prior art that exists. The examiners do the best job they can, but inevitably someone misses something and grants a patent that should not be granted. This is the problem that title V addresses. Title V amends the existing reexamination process to allow third- parties to raise a challenge to an existing patent and to participate in the reexamination process in a meaningful way. Thus, the expertise of the patent examiner is supplemented by the knowledge and resources of third-parties who may have information not known to the patent examiner. Through this joint effort, we maximize the flow of information, increase the reliability of patents, and thereby increase the strength of the American patent system. There are also safeguards to prevent this process from being abused by those who merely seek to harass a patent-holder. First, if a third- party requestor loses an appeal of his reexamination request, he may not subsequently raise any issue he could have raised during the examination proceeding in any forum. Second, a party that loses a civil action where that party failed to show the invalidity of the patent, the party may not subsequently seek a reexamination of such patent on any grounds that could have been raised in the civil action. Third, the burden of reexamination on the patent-holder is minimized by the fact that a reexamination is not like a court review, and that the patent holder need not submit any documentation in order to prevail. Provisional Applications for Patents Title VI is comprised of miscellaneous provisions. First, it fixes a matter of a rather technical nature. Some foreign courts have interpreted American provisional applications in a way that would not preserve their filing priority. This title amends section 115 of Title 35 of the U.S. Code to clarify that if a provisional application is converted into a non-provisional application within 12 months of filing, that it stands as a full patent application, with the date of filing of the provisional application as the date of priority. If no request is made within 12 months, the provisional application is considered abandoned. This clarification will make certain that American provisional applications are given the same weight as other countries' provisional applications in other countries' courts. Plant Patents Title VI also makes two corrections to the plant patent statute. First, the ban on tuber propagated plants is removed. This depression- era ban was included for fear of limiting the food supply. Obviously, this is no longer a concern. Second, the plant patent statute is amended to provide protection to parts of plants, as well as the whole plant. This closes a loophole that foreign growers have used to import the fruit or flowers of patented plants without paying a royalty because the entire plant was not being sold. Electronic Filing Lastly, this title also allows for the filing of patent and trademark documents by electronic medium. It is high time that the government office that is, by definition, always on the cutting edge of technology, be permitting to enter the age of computers. Mr. President, this bill is an important, and necessary measure that enjoys overwhelming support. I am confident that it will be enacted into law this Congress. The Copyright Term Extension Act of 1997 Mr. President, the purpose of the Copyright Term Extension Act of 1997 is to ensure adequate copyright protection for American works abroad by extending the U.S. term of copyright protection for an additional 20 years. It also includes a provision reversing the Ninth Circuit decision in La Cienega Music Co. v. ZZ Top that calls into question the copyrights of thousands of musical works first distributed on sound recordings. Except for the La Cienega provision, the substance of this bill is identical to S. 483, the Copyright Term Extension Act, which was passed by the Judiciary Committee on May 23, 1996, with overwhelming bipartisan support. This legislation also has the strong support of the Administration, as expressed by both the Commissioner of Patents and Trademarks, Bruce Lehman, and the Register of Copyrights, Marybeth Peters, in their testimony before the Judiciary Committee in the last Congress. Twenty years ago, Mr. President, Congress fundamentally altered the way in which the U.S. calculates its term of copyright protection by abandoning a fixed-year term of protection and adopting a basic term of protection based on the life of the author. In adopting the life-plus- 50 term, Congress cited three primary justifications for the change. 1) the need to conform the U.S. copyright term with the prevailing worldwide standard; 2) the insufficiency of the U.S. copyright term to provide a fair economic return for authors and their dependents; and, 3) the failure of the U.S. copyright term to keep pace with the substantially increased commercial life of copyrighted works resulting from the rapid growth in communications media. Developments over the past 20 years have led to a widespread reconsideration of the adequacy of the life-plus-50-year term based on these same reasons. Among the main developments is the effect of demographic trends, such as increasing longevity and the trend toward rearing children later in life, on the effectiveness of the life-plus- 50 term to provide adequate protection for American creators and their heirs. In addition, unprecedented growth in technology over the last 20 years, including the advent of digital media and the development of the National Information Infrastructure and the Internet, have dramatically enhanced the marketable lives of creative works. Most importantly, though, is the growing international movement toward the adoption the longer term of life-plus-70. Thirty-five years ago, the Permanent Committee of the Berne Union began to reexamine the sufficiency of the life-plus-50-year term. Since then, a growing consensus of the inadequacy of the life-plus-50 term to protect creators in an increasingly competitive global marketplace has led to actions by several nations to increase the duration of copyright. Of particular importance is the 1993 directive issued by the European Union, which requires its member countries to implement a term of protection equal to the life of the author plus 70 years by July 1, 1995. According to the Copyright Office, Belgium, Denmark, Finland, Germany, Greece, Ireland, Spain, and Sweden have all notified their laws to the European Commission and the Commission has found them to be in compliance with the EU Directive. Luxembourg, The Netherlands, Portugal, the United Kingdom, and Austria have each notified their implementing laws to the Commission and are awaiting certification. Other countries are currently in the process of bringing their laws into compliance. And, as the Register of Copyrights has stated, those countries that are seeking to join the European Union, including Poland, Hungary, Turkey, the Czech Republic, and Bulgaria, are likely to amend their copyright laws to conform with the life-plus-70 standard. The reason this is of such importance to the United States is that the EU Directive also mandates the application of what is referred to as the rule of the shorter term. This rule may also be applied by adherents to the Berne Convention and the Universal Copyright Convention. In short, this rule permits those countries with longer copyright terms to limit protection of foreign works to the shorter term of protection granted in the country of origin. Thus, in those countries that adopt the longer term of life-plus-70, American works will forfeit 20 years of available protection and be protected instead for only the duration of the life-plus-50 term afforded under U.S. law. Mr. President, I've already cited some statistics about the importance of copyright to our national economy. The fact is that America exports more copyrighted intellectual property than any country in the world, a huge percentage of it to nations of the European Union. In fact, intellectual property is our third largest export. And, according to 1994 estimates, copyright industries account for some 5.7 percent of the total gross domestic product. Furthermore, copyright industries are creating American jobs at twice the rate of other industries, with the number of U.S. workers employed by core copyright industries more than doubling between 1977 and 1994. Today, these industries contribute more to the economy and employ more workers than any single manufacturing sector, accounting for nearly 5 percent of the total U.S. workforce. In fact, in 1994, the core copyright industries employed more workers than the four leading noncopyright manufacturing sectors combined. Clearly, Mr. President, America stands to lose a significant part of its international trading advantage if our copyright laws do not keep pace with emerging international standards. Given the mandated application of the rule of the shorter term under the EU Directive, American works will fall into the public domain 20 years before those of our European trading partners, undercutting our international trading position and depriving copyright owners of two decades of income they might otherwise have. Similar consequences will follow in those nations outside the EU that choose to exercise the rule of the shorter term under the Berne Convention and the Universal Copyright Convention. Mr. President, adoption of the Copyright Term Extension Act will ensure fair compensation for the American creators whose efforts fuel the intellectual property sector of our economy by allowing American copyright owners to benefit to the fullest extent from foreign uses and will, at the same time, ensure that our trading partners do not get a free ride from their use of our intellectual property. And, as stated very simply by the Register of Copyrights in her testimony before the Judiciary Committee in the last Congress: ``[i]t does appear that at some point in the future the standard will be life plus 70. The question is at what point does the United States move to this term * * *. As a leading creator and exporter of copyrighted works, the United States should not wait until it is forced to increase the term, rather it should set an example for other countries.'' Mr. President, this bill is of crucial importance to our Nation's copyright owners and to our economy. It is also a balanced approach. It contains a provision, allowing the actual creators of copyrighted works in certain circumstances to bargain for the extra 20 years, except in the case of works made for hire. The libraries and archives, too, will be pleased to see that the bill provides them with additional latitude to reproduce and distribute material during the extension term, and it does not extend the copyright term for certain works that were unpublished at the time of the effective date of the 1976 act. This latter provision means that libraries and archives will be able to go forward with their plans to publish those unpublished works in 2003, the year after the current guaranteed term for unpublished works expires. La Cienega v. ZZ Top Mr. President, the Copyright Term Extension Act of 1997 also includes a provision to overturn the decision in La Cienega Music Co. v. ZZ Top, 53 F.3d 950 (9th Cir. 1995), cert denied, 116 S. Ct. 331 (1995). In general, La Cienega held that distributing a sound recording to the public--for example by sale--is a ``publication'' of the music recorded on it under the 1909 Copyright Act. Under the 1909 act, publication without copyright notice caused loss of copyright protection. Almost all music that was first published on recordings did not contain copyright notice, because publishers believed that it was not technically a publication. The Copyright Office also considered these musical compositions to be unpublished. The effect of La Cienega, however, is that virtually all music before 1978 that was first distributed to the public on recordings has no copyright protection--at least in the 9th Circuit. By contrast, the Second Circuit in Rosette v. Rainbo Record Manufacturing Corp., 546 F.2d 461 (2d Cir. 1975), aff'd per curiam, 546 F.2d 461 (2d Cir. 1976) has held the opposite--that public distribution of recordings was not a publication of the music contained on them. As I have noted, Rosette comports with the nearly universal understanding of the music and sound recording industries and of the Copyright Office. Since the Supreme Court has denied cert in La Cienega, whether one has copyright in thousands of musical compositions depends on whether the case is brought in the Second or Ninth Circuits. This situation is intolerable. Overturning the La Cienega decision will restore national uniformity on this important issue by confirming the wisdom of the custom and usage of the affected industries and of the Copyright Office for nearly 100 years. My bill, however, also contains a provision to ensure that Congress' affirmation of this view will not retroactively upset the disposition of previously adjudicated or pending cases. The Copyright Clarification Act of 1997 Finally, Mr. President, I am introducing the Copyright Clarification Act of 1997 to make a series of truly technical amendments to the Copyright Act. The need for these technical corrections was brought to my attention in the last Congress by the Register of Copyrights, Ms. Marybeth Peters. This bill was passed by the House of Representatives in similar form in the 104th Congress. Unfortunately time ran short on our efforts to enact the same bill in the Senate. The version I am introducing today is identical to H.R. 672, which passed the House under suspension of the rules just yesterday. I hope the Senate will follow suit and act expeditiously to make these important technical amendments. Conclusion Mr. President, each of the three bills I am introducing today is tremendously important. For the information of my colleagues I am submitting a brief summary of the Omnibus Patent Act of 1997, a section-by-section analysis of the Copyright Term Extension Act of 1997, and a summary of provisions of the Copyright Clarification Act of 1997. I ask unanimous consent that they be printed in the Record, along with the text of the Copyright Term Extension Act of 1997 and the text of the Copyright Clarification Act of 1997.

Mr. HATCH

Mr. HATCH. Mr. President, along with my colleague, Senator Bennett, I am pleased to introduce the National Monument Fairness Act of 1997. This act will promote procedural fairness in the creation of national monuments on Federal and State lands under the Antiquities Act of 1906 and further congressional efforts in the area of environmental protection. Identical legislation is being introduced today in the House of Representatives by Congressman Jim Hansen with the support of Congressmen Merrill Cook and Christopher Cannon. As my colleagues know, on September 18, 1996, President Clinton invoked the Antiquities Act of 1906 to create the Grand Staircase/ Escalante Canyons National Monument. The 1.7 million acre monument, larger in size than the States of Rhode Island and Delaware combined, locks up more than 200,000 acres of State lands, along with vast energy reserves located beneath the surface. Like the attack on Pearl Harbor, this massive proclamation came completely without notice to the public. Although State officials and members of the Utah congressional delegation were told that the Administration would consult us prior to making any change in the status of these lands, the President's announcement came as a complete surprise. The biggest Presidential land set-aside in almost 20 years was a sneak attack. Without any notification, let alone consultation or negotiation, with our Governor or State officials in Utah, the President set aside this acreage as a national monument by the stroke of his pen. Let me emphasize this point. There was no consultation, no hearings, no town meetings, no TV or radio discussion shows, no nothing. No input from Federal managers who work in Utah and manage our public lands. As I Stated last September, in all my 20 years in the U.S. Senate, I have never seen a clearer example of the arrogance of Federal power than the proclamation creating this monument. It continues to be the mother of all land grabs. We in Utah continue to work with the hand President Clinton has dealt us. That is, we are attempting to recognize and understand the constraints placed upon the future use of the land and resources contained within the monument's boundaries. We are trying to identify the various adverse effects this action will have on the surrounding communities. Personally, while I would have preferred a monument designation considerably smaller in scope, I could have enthusiastically supported a monument designation for the area covered by the proclamation had I been consulted prior to last September and invited to work with the President on a designation that was tailored to address the many concerns we have heard over the years on this acreage. Two of these concerns involve the 200,000 acres of school trust lands captured within the monument boundary and the locking up of 16 billion tons of recoverable, low-sulfur, clean-burning coal. Remember, our wilderness bill considered last year proposed designation of approximately one-quarter of this land as wilderness. I wanted to protect most of it; the people of Utah wanted to protect most of it. But, we were not consulted; we were not asked; our opinion was not sought. Rather, in an effort to score political points with a powerful interest group 48 days before a national election, President Clinton unilaterally acted. In taking this action in this way, the President did it all backwards. Instead of knowing how the decision would be carried out-- and knowing the all ramifications of this implementation and the best ways to accommodate them--the President has designated the monument and now expects over the next 3 years to make the designation work. The formal designation ought to come after the discussion period. It is how we do things in this country. Unfortunately, however, the decision is now fait accompli, and we will deal with it as best we can. I hope the President will be there to help our people in rural Utah and our school system as the implementation of the designation order takes place. The legislation we are introducing today, the National Monument Fairness Act, is designed to correct the problems highlighted by the Clinton Antiquities Act proclamation in Utah. It will do this in two significant ways. First, the act makes a distinction between national monument proclamations greater in size than 5,000 acres, and those 5,000 acres and less. The President retains his almost unfettered authority under the Antiquities Act over monument designations 5,000 acres and less. Specifically, the Antiquities Act delegates to the President discretion to declare as a national monument that part of Federal land that contains historic landmarks, historic and prehistoric structures, and other objects of historic or scientific interest--but only as long as the declared area is confined to the ``smallest area compatible with proper care and management of the objects to be protected.'' The 5,000 acre limitation will give effect to this ``smallest area compatible'' clause, which both the courts and past Presidents have often ignored. For areas larger than 5,000 acres, the President must consult, through the Secretary of Interior, with the Governor of the State or States affected by the proposed proclamation. This consultation will prevent executive agencies from rolling over local concerns--local concerns that, under the dictates of modern land policy laws such as the Federal Land Policy and Management Act of 1976 [FLPMA] and the National Environmental Policy Act, certainly deserve to be aired. The National Monument Fairness Act also provides time constraints on the consultation requirement. From the date the Secretary of Interior submits the President's proposal to the appropriate State Governor, the Governor will have 90 days to respond with written comments. Ninety days after receiving the Governor's comments, the Secretary will then submit appropriate documentation, along with the Governor's written comments, to the Congress. If the Governor fails to comment on the proposal, the Secretary will submit it to the Congress after 180 days from the date of the President's proposal. These time constraints assure that the process will be fair. It will prevent State officials from unnecessarily delaying proposed proclamations, but will allow appropriate time for State and localities to voice their concerns through the Governor's comments on the President's actions. Consequently, the consultation requirement ensures that large monument designations will be made fairly, and in a manner that allows the participation, through their Governor, of the people most directly affected by the proclamation. Second, the National Monument Fairness Act allows all citizens of the United States to voice their concerns on large designations through Congress. The act provides that after the Secretary has presented the proposal, Congress must pass it into law and send it to the President for his signature before the proposal becomes final and effective. Thus, the Nation, through its elected representatives, will make the decision whether certain lands will become national monuments. This is the way our democracy ought to operate. Indeed, it furthers the intent of the Framers in the Constitution who anticipated that laws and actions affecting one or more individual States would be placed before the legislature and debated, with a State's representatives and senators able to defend the interests of their State. Mr. President, the purpose of our legislation is to ensure that a fair and thorough process is followed on any future large-scale monument designations under the authority granted in the Antiquities Act. Since Utah is home to many other areas of significant beauty and grandeur, I am concerned that this President or those within his administration, or a future President or administration, might consider using this authority in the same manner as last September. In other words, it will be ``deja vu all over again.'' We cannot afford to have the entire land area of our state subject to the whims of any President. Many have proposed plans, including myself, for these areas, that have been the subject of considerable public scrutiny and comment. The consensus building process must be allowed to continue without the threat that a Presidential pen will intervene to destroy any progress and goodwill that has been established or that may be underway among the citizens of our State. I am aware that Interior Secretary Babbitt stated publicly last month that ``there are no plans for any additional executive withdrawals'' during the remaining years of the Clinton administration. That is fine. However, as my colleagues know perfectly well, Secretary Babbitt told me and other members of our congressional delegation last December that there was no final decision to designate the Grand Staircase/Canyons of the Escalante Monument and that we, the congressional delegation, would be consulted prior to any designation. Since then, we have learned from press reports that many decisions leading to the monument announcement had already been made, if not finalized, prior to our meeting with the Secretary. But, regardless of whether the Clinton administration plans to designate any more monuments, I do not think it is unreasonable to look at the authorities contained in the Antiquities Act--particularly the authority that permits such sweeping and long-lasting changes for individual States and towns without State input and congressional approval. That is the issue. That is why we are introducing this legislation today. This matter of due process for State and local officials--as well as for small business people, ranchers, school systems, and many others affected by locking up lands--is an issue about which I believe all Senators and Congressmen need to be concerned. While Senators representing the so- called public lands States may need to pay particular attention, if the long arm of the Federal Government can do this to Utah without so much as a day's notice, it can do it to your State as well. It is time we incorporate some common sense protections for all States into the Antiquities Act. I continue to believe that last September's act was a Federal land grab, and I unwilling to stand by and let it happen again in my State or any other State without a fair and proper airing in the court of public opinion. Some may ask why this legislation focuses only on proposed areas over 5,000 acres. First, it is not our desire to completely withdraw the authority granted the President in the 1906 act. But, the original act is clear when it States that this authority should be limited to ``the smallest area'' possible. In my mind, this authority should be available for those areas that are small in nature that may require quick or emergency protection for which a monument designation is warranted. That is how I envision this authority being used. Second, there is already precedence in Federal law for 5,000 acres as the threshold amount for determining certain pending or future Federal action or consequence. For example, the Wilderness Act of 1964 defines wilderness as having ``at least 5,000 acres of land.'' Also, FLPMA authorizes the Secretary to withdraw 5,000 acres or more for up to 20 years ``on his own motion or upon request by a department or agency head.'' And, there is reference to ``roadless areas of 5,000 acres or more'' in that section of FLPMA that authorizes the 15-year Bureau of Land Management wilderness study process. I am sure that any detractors of this bill will State that had our bill been enacted in the past, some of the Nation's most gorgeous and long lasting monuments would never have been designated as a national monument. I would say two things to this point. First, our bill will not prevent the establishment of any monument consisting of 5,000 acres or more. The bill simply modifies the process by which proposed monuments of acreage above this amount can be designated. Second, and most importantly, I understand that there are 72 national monuments in the United States. Of that number, only one- third, or 24, have a total acreage figure greater than 5,000 acres. Enactment of our bill will not bring a halt to the ability of Congress--or even the President--to designate national monuments. In addition, I realize that some of our existing national parks, such as Arches and Canyonlands National Parks in Utah, were originally established as national monuments, only to be designated a park afterward. It is not fair to say that had our bill been in law prior to the designation of these monuments that parks like Arches and Canyonlands or the Grand Canyon National Park would never have been designated. Certainly, any monument proposal consisting of more than 5,000 acres that is proposed by the President where a consensus exists within Congress that such a designation is warranted would be favorably received and acted upon by Congress. And, at least home State senators and representatives have a voice. In many cases, it is likely that they would pursue a designation of these areas prior to the President exercising his authority under the Antiquities Act. But, let's not lose focus of the purposes of this bill. We simply want to ensure that a public process is undertaken prior to any large monument designation under the Antiquities Act. As I stated earlier, we conduct such a process whenever a similar proposal is introduced in Congress; why can't Congress insist that it be done when the President desires to achieve the same purpose? I mentioned that we are in the process of recognizing and understanding the constraints this proclamation will place on the economic and social aspects of the surrounding communities. When an area the size of the Grand Staircase-Escalante Canyons National Monument is withdrawn from public use and given a special designation, there are many ramifications that need to be addressed, the burden of which falls primarily on the shoulders of the local community. These include the following items: First, county land-use plans will have to be studied and amended to address necessary changes relating to the new monument. Second, consideration of the transportation improvements required to improve the existing inadequate transportation system to access the new monument for visitors to the area. Third, increased visitation to the area will place greater burden on services provided by local government, such as law enforcement, fire, emergency, search-and-rescue, and solid waste collection. Fourth, increased visitation to the area will place greater burden on the proper disposition of limited natural resources, such as water, both for culinary and irrigation purposes. These are just a few items that are currently being discussed and reviewed by local leaders in the area of the new national monument. These are not trivial matters; they are critical to continuing the livelihood of the cities and towns in the area. So, no one should think that creating a new monument of this size, as endearing a concept as that is, does not create significant matters that must be addressed. Of course, the other consequence the creation of this monument has created which continues to be of utmost concern to me is the final disposition of the State school trust lands captured within the monument's boundaries. The inability to access the natural resources contained on these lands will have a devastating impact on providing crucial funds to Utah's public school educational system. The Utah Congress of Parents and Teachers has indicated that ``the income from the mineral resources within the Monument could have made a significant difference in the funding of Utah schools now and for many generations to come.'' It remains to be seen the manner in which the President will fulfill the promises he made to the children of Utah last September when he created the new monument. Specifically, he said ``creating this national monument should not and will not come at the expense of Utah's children.'' He also added that it is his desire to ``both protect the natural heritage of Utah's children and ensure them a quality educational heritage.'' I am eager to work with him to fulfill these promises. I mention these items to simply paint a picture for my colleagues that there are many pieces to the monument puzzle that remain to be resolved. The President can come to town--or 75 miles to the south in another State--and designate a monument, but Utahns are left to pick up the pieces of his action to make sure that it works--and that it works properly. That is what I want, and I am sure that is what the President wants. Finally, Mr. President, I must point out that the adoption of this act will likely result in more stringent environmental protection of Federal lands. The most ironic fact of the administration's monument designation in Utah is that national monuments permit a greater level of activity than does a wilderness designation. Last year, the Utah delegation proposed that 2.1 million acres of land on and around the Grand Staircase/Escalante Canyons area be declared wilderness, under the language of the Wilderness Act of 1964. The wilderness designation is far more stringent than the administration's monument designation and prevents the construction of the roads and visitors centers envisioned under the monument designation. The Utah proposal of the 104th Congress included more area than BLM had officially recommended to Congress following its 13-year inventory of the lands in Southern Utah. This is yet another compelling reason why it is vital for local and State officials to be consulted prior to national monument declarations. Mr. President, the Antiquities Act is antiquated. It needs to be updated. It can be amended in a manner consistent with today's pressing land policy concerns without destroying the original intent behind the act. That is what we have proposed in this legislation and why I urge passage of the National Monument Fairness Act of 1997. This bill will preserve the President's ability to act to protect lands of historic and scientific significance that are threatened with development. However, the act will promote greater environmental stewardship by forcing the executive branch to consider the views of local and State officials prior to making large-scale changes in land designation and management. Finally, the requirement that massive monument proposals be passed through the Congress, under the strictures of article I of the Constitution, will ensure that all Americans have a say in land policy decisions that fundamentally change the Nation. And, this, Mr. President, may be the most compelling reason of all to enact this measure. I invite Senators to join me in support of this legislation and ask unanimous consent that the text of the bill be printed in the Record.

Mr. HATCH

Mr. HATCH. I yield. privilege of the floor

Mr. HATCH. Mr. President, we should inform the Senate that our intent is to yield back the time if we can by 5:15 so people can vote at that time. It could be just a wee bit longer than that. That is our intention. Those who want to come over and use the time need to come now. I yield 10 minutes to the distinguished Senator from Pennsylvania, who is a distinguished member of the Judiciary Committee.

Mr. HATCH. Mr. President, I have been sitting here listening to this. In all honesty, I would like to see one person come to this floor and say one reason why Merrick Garland does not deserve this position. It has been almost a year. In the last Congress, I must have gone on this issue, trying to get him up, for most of that time. First, there was the 12th seat, he was going to get that. Then, when Buckley retired, everybody that I know of, who knows anything about it, other than some of our outside groups who do not seem to want any judges, said that we need the 11th seat. As I suspected, nobody in this body is willing to challenge the merit of Merrick Garland's nomination. I have not heard one challenge to him yet. In fact, they openly concede that Mr. Garland is highly qualified to be an appellate judge. Rather, they use arguments that the D.C. circuit does not need 12 judges in order to oppose the confirmation of Mr. Garland for the 11th seat on this court. There is not a harder-nosed conservative or more decent conservative that I know than Larry Silberman. I talked to him personally. If he said to me they did not need the 10th seat, I could understand this argument, and I could understand this minirebellion that is occurring. But he said they needed the 11th seat. If he had said, ``All we need are 10 seats, we don't need the 11th or 12th,'' I would have been on his side, and it would not be because of partisan politics, it would be because I trust him and I believe in his integrity. But I called him personally and he said, ``Yes, we do need the 11th seat.'' My colleague from Alabama circulated a letter saying confirming Merrick Garland would be a ``ripoff'' of the taxpayers. Having just led the fight for the balanced budget amendment, I do not think that is quite fair. I am never going to rip off the taxpayers. But I will tell you one thing, playing politics with judges is unfair, and I am sick of it, and, frankly, we are going to see what happens around here. A ``ripoff?'' Let's be serious about this, folks. This is a serious matter. My colleague referred to the testimony of Chief Judge Wilkinson of the fourth circuit. That is a different matter. I have challenged the distinguished chairman of the Subcommittee on Courts to look into that, and I am going to be heavily guided by what Senator Grassley comes up with. The statements of Judge Tjoflat from the eleventh circuit has also been mentioned. But what do the judges on the D.C. circuit court say? It is one thing for Wilkinson to get up and make a comment, it is another thing for Tjoflat, who has problems in that circuit, but what do the judges on the D.C. circuit say? Both Chief Judge Edwards and Judge Silberman, a respected conservative, agree that, in Judge Silberman's words ``it would be a mistake, a serious mistake for Congress to reduce the D.C. circuit down below 11 judges.'' If I did not believe that, I would not have brought this judgeship nomination to the floor. I have to tell you, if anybody doubts my integrity, I want to see them afterwards. As for the statistics that have been cited, with all due respect, they are not a fair or accurate characterization of the D.C. circuit's caseload relative to the other circuits' caseloads. I made that case earlier. I am prepared to yield back the time if the other side is prepared to yield back their time. Is there anybody going to want to speak on the other side?

Mr. HATCH. Madam President, I want to thank my colleagues who voted for Judge Merrick Garland. I believe they did what was right. With regard to Federal judgeships, we ought to do what is right. I take this job as seriously as anything I have ever done in the Senate. I want to thank my colleagues who voted with us for supporting the nominee. Having said that, there have been a serious number of nominees whom we have confirmed in the past who have proven to be activist judges once they got on the bench and who told us when they were before the committee they would not be activist and they would not undermine the role of the judiciary by legislating from the bench. Then they get to the bench and they start legislating from the bench. I want them to know, and I want to send a warning to the judiciary right now, if they are going to continue to disregard the law, if they are going to continue, in many respects, to bypass the democratic processes of this country, if they are going to start substituting their own policy preferences for what the law really says, then it is going to be a tough time around here. This vote proves it. I don't feel good about all those who voted against this nomination, but the fact of the matter is that there is some reason for their doing so. Republicans are fed up with these judges who disregard the role of judging once they get to the courts, after having told us and promised that they will abide by the role of judging. Now, I am upset--there is no question about that--because I think the finest nominee that I have seen from this administration is Merrick Garland, and I think he deserved better. But I also understand my colleagues. I am sending a warning out right now that these judges who are sitting on the bench better start thinking about the role of judging and quit trying to do our jobs. We have to stand for reelection. That is why the buck should stop here--not with some Federal judge who is doing what he or she thinks is better for humanity and mankind. We have judges on the Ninth Circuit Court of Appeals who could care less about what the Congress says, or what the President says, or what the legislative and executive branches say. That is why they are reversed so routinely by the Supreme Court. It is pathetic. I don't mean to single them out, but it is the most glaring example of activist judges in this country. Let me just say this. I am sending a message right now that I intend to move forward with judges, and, if this administration will send decent people up here who will abide by the rule of judging and the rule of law and quit substituting their own policy preferences and finding excuses for every criminal that comes before them, they are going to have support from me. I hope they will have more support from the Judiciary Committee in the future. But if they are going to send up more activists, there is going to be war. I don't think the judiciary has ever had a better friend than Orrin Hatch; I know they haven't. I will fight for them. I think they ought to be getting more pay. I think we ought to support them in every way we possibly can. They are tough jobs, they are cloistered jobs. They are difficult jobs. They take great intellectual acumen and ability. Madam President, I am telling you, we have far too many judges on both the left and the right who disregard what the rule of judging is and who legislate from the bench as superlegislators in black robes who disregard the democratic processes in this country and who do whatever they feel like doing. They are undermining the judiciary, and they are putting the judiciary in this country in jeopardy. I am darn sick of it. My colleagues on our side are sick of it. I don't care whether it is activism from the right or from the left; it is wrong. We ought to stop it, and the judiciary is the only place where it can be stopped. I once had one of the most eminent legal thinkers in the country say that he has never seen anybody on the Supreme Court move to the right; they have always moved to the left as they have grown. I would like to not worry about whether they are moving right or left, but whether they are doing the job that judges should do. I am serving notice to the Senate, too. I am chairman of the Senate Judiciary Committee, and I take this responsibility seriously. I want everybody in this body to know I take it seriously. It means a lot to me. I have tried a lot of cases in Federal courts. I have tried a lot of cases in State courts. I have a lot of respect for the judiciary. So I take this seriously, and I don't want politics ever to be played with it. I get a little tired of the other side bleating about politics, after the years and years of their mistreatment of Reagan and Bush judges and the glaring, inexcusable examples where they treated Republican nominees in a shamefully unfair way. Nobody could ever forget the Rehnquist nomination, the Bork nomination, and even the Souter nomination, where he wasn't treated quite as well as he should have been--and above all, the Clarence Thomas nomination; it was abysmal. Those were low points in Senate history. So I don't think either side has a right to start bleating about who is righteous on judges. I intend to do the best I can here. I want my colleagues to know that. I certainly want to place my colleagues on my side, and I certainly want to do the right thing for all concerned. This is an important nomination. I believe Merrick Garland will go on to distinction. Nobody will be more disappointed than I if he turns out to be an activist judge in the end. If he does, I think he will be one of the principal underminers in the Federal judiciary in the history of this country. But he told me he will not do that, and I trust that he will not. That doesn't mean we have to agree on every case that comes before any of these courts; we are going to have disagreements. And just because you disagree with one judge doesn't mean that judge should be impeached either. To throw around the issue of impeachment because you disagree with a judge here and there is wrong. There are some lame-brained decisions out there, we all know that. Some of them are occurring primarily in California. Frankly, we have to get rid of the politics with regard to judges and start doing what's right. With every fiber of my body, I am going to try to do right with respect to judges because I respect that branch so much. To me, our freedoms would not have been preserved without that branch. But the way some of these judges are acting, our freedoms are being eroded by some in that branch. It is time for them to wake up and realize that that has to end. I yield the floor.

Mr. HATCH. I move to lay it on the table. The motion to lay on the table was agreed to.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce a measure to further the commitment of the Republican Congress to support the expansion of the Boys and Girls Clubs of America, one of the best examples of proven youth crime prevention. I am pleased to be joined in introducing this bill by a bipartisan group of Senators, including Senator Biden, the ranking Democrat on the Youth Violence Subcommittee, Senator Stevens, the chairman of the Senate Appropriations Committee, Senator Gregg, the chairman of the Commerce, Justice, State Appropriations Subcommittee, and Senator Kohl, who serves on the Judiciary Committee. Our legislation addresses our continuing initiative to ensure that, with Federal seed money, the Boys and Girls Clubs of America are able to expand to serve an additional 1 million young people through at least 2,500 clubs by the year 2000. The dedication of all of these Members demonstrates our commitment to both authorize and fund this effort. Last year, in a bipartisan effort, the Republican Congress enacted legislation I authored to authorize $100 million in Federal seed money over 5 years to establish and expand Boys and Girls Clubs in public housing and distressed areas throughout our country. With the help of the Appropriations Committee, we have fully funded this initiative. The bill we are introducing today streamlines the application process for these funds, and permits a small amount of the funds to be used to establish a role model speakers' program to encourage and motivate young people nationwide. It is important to note that what we are providing is seed money for the construction and expansion of clubs to serve our young people. This is bricks and mortar money to open clubs, and after they are opened they will operate without any significant Federal funds. In my view, this is a model for the proper role of the Federal Government in crime prevention. The days are over when we can afford vast never-ending federally run programs. According to a GAO report last year, over the past 30 years, Congress has created 131 separate Federal programs, administered by 16 different agencies, to serve delinquent and at-risk youth. These programs cost $4 billion in fiscal year 1995. Yet we have not made significant progress in keeping our young people away from crime and drugs. What we can and must afford is short-term, solid support for proven private sector programs like the Boys and Girls Clubs that really do make a difference. Boys and Girls Clubs are among the most effective nationwide programs to assist youth to grow into honest, caring, involved, and law-abiding adults. We know that Boys and Girls Clubs work. Researchers at Columbia University found that public housing developments in which there was an active Boys and Girls Club had a 25 percent reduction in the presence of crack cocaine, a 22 percent reduction in overall drug activity, and a 13 percent reduction in juvenile crime. Members of Boys and Girls Clubs also do better in school, are less attracted to gangs, and feel better about themselves. Distinguished alumni of Boys and Girls Clubs include role models such as actor Denzel Washington, basketball superstar Michael Jordan, and San Francisco 49ers quarterback Steve Young. More important, however, are the uncelebrated success stories--the miracles performed by Boys and Girls Clubs every day. At a Judiciary Committee hearing today, we have some of these miracles with us. Amador Guzman, from my State of Utah, told us how he believes the club in his neighborhood saved his life, by keeping him from gangs, drugs, and violence. The reason Boys and Girls Clubs work, and the Republican Congress wants to do more for them is because they are locally run, and depend mostly on community involvement for their success. Never have our youth had a greater need for the positive influence of Boys and Girls Clubs, and never has the work of the clubs been more critical. Our young people are being assaulted from all sides with destructive messages. For instance, drug use is on the rise. Recent statistics reconfirm that drugs are ensnaring young people as never before. Overall drug use by youth ages 12 to 17 rose 105 percent between 1992 and 1995, and 33 percent between 1994 and 1995; 10.9 percent of our young people now use drugs on a monthly basis, and monthly use of marijuana is up 37 percent, monthly use of LSD is up 54 percent, and monthly cocaine use by youth is up 166 percent between 1994 and 1995. Our young people are also being assaulted by gangs. By some estimates, there are more than 3,875 youth gangs, with 200,000 members, in the Nation's 79 largest cities, and the numbers are going up. Even my State of Utah has not been immune from this scourge. In Salt Lake City, since 1992, the number of identified gangs has increased 55 percent, from 185 to 288. The number of gang members has increased 146 percent, from 1,438 to 3545; and the number of gang-related crimes has increased a staggering 279 percent, from 1741 in 1992 to 6611 in 1996. Shockingly, 208 of these involved drive-by shootings. Every day, our young people are being bombarded with cultural messages in music, movies, and television that undermine the development of core values of citizenship. Popular culture and the media glorify drug use, meaningless violence, and sex without commitment. The importance of Boys and Girls Clubs in fighting drug abuse, gang recruitment, and moral poverty cannot be overstated. The clubs across the country are a bulwark for our young people and deserve all the support we can give. Indeed, Federal efforts are already paying off. Using over $15 million in seed money appropriated for fiscal year 1996, the Boys and Girls Clubs of America opened 208 new clubs in 1996. These clubs are providing positive places of hope, safety, learning, and encouragement for about 180,000 more kids today than in 1995. In my state of Utah, these funds have helped keep an additional 6,573 kids away from gangs, drugs, and crime. The $20 million appropriated for fiscal year 1997 is expected to result in another 200 clubs and 200,000 more kids involved in clubs. We need now to redouble our efforts. The legislation we introduce today demonstrates our commitment to do that. I urge my colleagues to support it.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce a measure to further the commitment of the Republican Congress to support the expansion of the Boys and Girls Clubs of America, one of the best examples of proven youth crime prevention. I am pleased to be joined in introducing this bill by a bipartisan group of Senators, including Senator Biden, the ranking Democrat on the Youth Violence Subcommittee, Senator Stevens, the chairman of the Senate Appropriations Committee, Senator Gregg, the chairman of the Commerce, Justice, State Appropriations Subcommittee, and Senator Kohl, who serves on the Judiciary Committee. Our legislation addresses our continuing initiative to ensure that, with Federal seed money, the Boys and Girls Clubs of America are able to expand to serve an additional 1 million young people through at least 2,500 clubs by the year 2000. The dedication of all of these Members demonstrates our commitment to both authorize and fund this effort. Last year, in a bipartisan effort, the Republican Congress enacted legislation I authored to authorize $100 million in Federal seed money over 5 years to establish and expand Boys and Girls Clubs in public housing and distressed areas throughout our country. With the help of the Appropriations Committee, we have fully funded this initiative. The bill we are introducing today streamlines the application process for these funds, and permits a small amount of the funds to be used to establish a role model speakers' program to encourage and motivate young people nationwide. It is important to note that what we are providing is seed money for the construction and expansion of clubs to serve our young people. This is bricks and mortar money to open clubs, and after they are opened they will operate without any significant Federal funds. In my view, this is a model for the proper role of the Federal Government in crime prevention. The days are over when we can afford vast never-ending federally run programs. According to a GAO report last year, over the past 30 years, Congress has created 131 separate Federal programs, administered by 16 different agencies, to serve delinquent and at-risk youth. These programs cost $4 billion in fiscal year 1995. Yet we have not made significant progress in keeping our young people away from crime and drugs. What we can and must afford is short-term, solid support for proven private sector programs like the Boys and Girls Clubs that really do make a difference. Boys and Girls Clubs are among the most effective nationwide programs to assist youth to grow into honest, caring, involved, and law-abiding adults. We know that Boys and Girls Clubs work. Researchers at Columbia University found that public housing developments in which there was an active Boys and Girls Club had a 25 percent reduction in the presence of crack cocaine, a 22 percent reduction in overall drug activity, and a 13 percent reduction in juvenile crime. Members of Boys and Girls Clubs also do better in school, are less attracted to gangs, and feel better about themselves. Distinguished alumni of Boys and Girls Clubs include role models such as actor Denzel Washington, basketball superstar Michael Jordan, and San Francisco 49ers quarterback Steve Young. More important, however, are the uncelebrated success stories--the miracles performed by Boys and Girls Clubs every day. At a Judiciary Committee hearing today, we have some of these miracles with us. Amador Guzman, from my State of Utah, told us how he believes the club in his neighborhood saved his life, by keeping him from gangs, drugs, and violence. The reason Boys and Girls Clubs work, and the Republican Congress wants to do more for them is because they are locally run, and depend mostly on community involvement for their success. Never have our youth had a greater need for the positive influence of Boys and Girls Clubs, and never has the work of the clubs been more critical. Our young people are being assaulted from all sides with destructive messages. For instance, drug use is on the rise. Recent statistics reconfirm that drugs are ensnaring young people as never before. Overall drug use by youth ages 12 to 17 rose 105 percent between 1992 and 1995, and 33 percent between 1994 and 1995; 10.9 percent of our young people now use drugs on a monthly basis, and monthly use of marijuana is up 37 percent, monthly use of LSD is up 54 percent, and monthly cocaine use by youth is up 166 percent between 1994 and 1995. Our young people are also being assaulted by gangs. By some estimates, there are more than 3,875 youth gangs, with 200,000 members, in the Nation's 79 largest cities, and the numbers are going up. Even my State of Utah has not been immune from this scourge. In Salt Lake City, since 1992, the number of identified gangs has increased 55 percent, from 185 to 288. The number of gang members has increased 146 percent, from 1,438 to 3545; and the number of gang-related crimes has increased a staggering 279 percent, from 1741 in 1992 to 6611 in 1996. Shockingly, 208 of these involved drive-by shootings. Every day, our young people are being bombarded with cultural messages in music, movies, and television that undermine the development of core values of citizenship. Popular culture and the media glorify drug use, meaningless violence, and sex without commitment. The importance of Boys and Girls Clubs in fighting drug abuse, gang recruitment, and moral poverty cannot be overstated. The clubs across the country are a bulwark for our young people and deserve all the support we can give. Indeed, Federal efforts are already paying off. Using over $15 million in seed money appropriated for fiscal year 1996, the Boys and Girls Clubs of America opened 208 new clubs in 1996. These clubs are providing positive places of hope, safety, learning, and encouragement for about 180,000 more kids today than in 1995. In my state of Utah, these funds have helped keep an additional 6,573 kids away from gangs, drugs, and crime. The $20 million appropriated for fiscal year 1997 is expected to result in another 200 clubs and 200,000 more kids involved in clubs. We need now to redouble our efforts. The legislation we introduce today demonstrates our commitment to do that. I urge my colleagues to support it.

Mr. HATCH

Mr. HATCH. Mr. President, under Federal law, the Attorney General may conduct a preliminary investigation to determine whether to apply to the special division of the Court of Appeals for the D.C. Circuit for appointment of an independent counsel whenever she receives specific information from a credible source constituting grounds for investigating whether a Federal criminal law was violated by a specified category of executive branch officials, or where she determines that there are grounds for investigating whether a criminal law has been violated, and conducting the investigation would create a conflict of interest. If, after conducting a preliminary investigation, the Attorney General determines that further investigation is warranted, she shall apply for the appointment of an independent counsel. The appointment of an independent counsel is a serious matter and one which the Attorney General should only initiate when necessary. That is why I, and many others, had refrained from joining the assortment of calls for Attorney General Reno to appoint an independent counsel in connection with the 1996 Presidential campaign. Yet, last week, all 10 Republicans on the Judiciary Committee felt the time had come to request such an appointment. We sent a letter to the Attorney General, as we are authorized to do by the independent counsel statute, requesting that she make an application for an independent counsel. I must confess, as I did then, to a degree of frustration with the Independent Counsel Act. Did I appreciate having to send our letter? Certainly not. However, the law sets forth a specific process by which Congress is to request that the Attorney General begin the process by which an independent counsel is appointed, and this process requires the Judiciary Committee to make what the other party will inevitably characterize as partisan charges in order to trigger the Attorney General's responsibilities. In order for Congress to trigger the most preliminary steps for the Department of Justice to take to consider the need for an independent counsel, the law essentially provides that the party not in control of the executive branch make specific charges when and if the Attorney General fails to act on her own. I would have preferred to have had the Attorney General seek an independent counsel on her own. But she has not done so. At the very least, I would have preferred that she conduct a preliminary investigation on her own. But she has refused to do even this. I would have preferred to have requested that she seek an independent counsel without having to set forth, in such a public manner as the law requires, the specific and credible evidence which warrants such an appointment. But in order for us to require the Attorney General to take certain minimal steps toward investigating whether an independent counsel is warranted, we were required by law to send our letter. In short, the Independent Counsel Act is the law of the land and, notwithstanding its relative flaws, we on the Judiciary Committee have an obligation to abide by it. I am hopeful that Attorney General Reno, for whom I continue to have great respect, will appreciate the concerns set forth in our letter, and will agree that an independent counsel should be appointed forthwith to investigate these matters. Recent developments have, I believe, made clear that a thorough Justice Department investigation into possible fundraising violations in connection with the 1996 Presidential campaign will raise an inherent conflict of interest, and certainly raises at least the appearance of such a conflict, and that the appointment of an independent counsel is therefore required to ensure public confidence in the integrity of our electoral process and system of justice. With respect to the proposed alternative resolution proposed by some of my colleagues on the other side of the aisle, Senate Joint Resolution 23, I must oppose this resolution. This resolution comes on the heels of a letter some of my Democrat colleagues have written to the Attorney General urging her, should she decide to apply for an independent counsel, to request an independent counsel who will investigate the ``full scope of fundraising irregularities.'' They argued in that letter that the Attorney General should ``avoid partisanship'' by instructing the independent counsel to investigate Republicans who have ``skirted the spirit'' of the law. I appreciate what my colleagues were doing with their letter and I appreciate what they are doing with this resolution. Their loyalty to their political party is duly noted. But, as I have said repeatedly, the appointment of an independent counsel is a serious matter and partisan proportionality should not be a consideration. Would these Senators have sent this letter had the majority not sent its letter? Would we be debating their resolution had the majority leader not turned to his resolution? I think we all know the answer to that question. Furthermore, neither their letter nor their resolution cite any congressional activities which independently warrant an independent counsel nor do they actually urge the Attorney General to appoint an independent counsel. The resolution before the Senate expresses the Sense of the Congress that the Attorney General should do only as she pleases. But, it goes on to provide, if she does decide to initiate the independent counsel process, the Attorney General should be sure to include Members of Congress. It seems my colleagues want to have the best of both worlds. It appears from the language of their alternative resolution that they do not want to go on record as having asked for an independent counsel. But, heaven forbid, should an independent counsel be appointed, he or she should be instructed to initiate a partisan fishing expedition of Congress. The Democrats' proposal that an independent counsel, if appointed, should have jurisdiction to investigate Members of Congress is insupportable under the independent counsel statute. The entire purpose of the statute is to avoid the existence or appearance of a conflict of interest in Justice Department investigations. This conflict is inherent whenever an investigation involves any of the high-ranking executive branch officials enumerated in 28 U.S.C. 591(a), and may also arise--and indeed has been found by the Attorney General to have arisen--when an investigation involves other executive branch officials. 28 U.S.C. 591(c)(1). Such a conflict plainly does not, however, ordinarily exist with respect to Justice Department investigations of Members of Congress. As the Senate Report on the Independent Counsel Reauthorization Act states: . . . no inherent conflict exists in Justice Department investigations and prosecutions of Members of Congress. This conflict does not exist, because the Attorney General is not part of the legislative branch and is not under the control of any Member of Congress. The Department also has a long history of successful prosecutions of Members of Congress. . . . Public perception of a conflict of interest is also not a problem. . . . Also, in 1993, the Department of Justice testified that no inherent conflict of interests in its prosecuting Members of Congress. . . . The statute does provide that the Attorney General may conduct a preliminary investigation with respect to a Member of Congress where first ``the Attorney General receives information sufficient to constitute grounds to investigate whether a Member of Congress may have violated'' a Federal criminal law, and second the Attorney General ``determines that it would be in the public interest'' to conduct a preliminary investigation. 28 United States Code 591(c)(2). Neither of these two required findings are even suggested by the Democrats' proposed resolution, nor does it appear that they could even arguably be present here. First, the Democrats have made no specific allegations that a Member of Congress has violated a criminal law, thus warranting further investigation. Whereas the Attorney General has for over 3 months been conducting an extensive investigation into alleged fundraising violations by members of the Democratic National Committee [DNC] and the executive branch, I am aware of no such investigation pertaining to Members of Congress, and the Democrats' proposed resolution does not even purport to make such allegations. The independent counsel statute plainly does not authorize the appointment of an independent counsel with jurisdiction to go on an undefined fishing expedition to dig up unspecified violations by Members of Congress. Second, I can imagine no reason--and my Democrat colleagues have suggested none--why it would be in the public interest to initiate independent counsel proceedings with respect to Members of Congress. The legislative history clearly indicates that there are two instances when independent counsel proceedings are in the public interest under section 591(c)(2). The first is where there would be a real or apparent conflict of interest for the Attorney General to investigate a Member of Congress. While we could imagine that there might be instances in which an Attorney General would have a conflict in investigating Members of Congress of the same party, only in the most extraordinary circumstance would an Attorney General have a conflict in investigating Members of the other party. In any event, we are confident that this Attorney General is fully capable of investigating Members of Congress of both parties. The third reason for initiating independent counsel proceedings with respect to Members of Congress is when ``there is a danger of disparate treatment if the case were handled by the Department of Justice,'' such that ``a Member of Congress were unfairly subjected to a more rigorous application of criminal law than other citizens.'' This danger, however, clearly does not arise with respect to allegations that laws regulating the fundraising activities of public officials have been violated; if the law only applies to public officials, there is no possibility of disparate treatment between Members of Congress and private citizens. In any event, my colleagues on the other side of the aisle have not even attempted to articulate why there would be a danger of disparate treatment if the Justice Department were to investigate Members of Congress. In closing, Attorney General Reno has appointed four independent counsels to date. It is the sense of a majority of the members of the Judiciary Committee that the need to avoid even the appearance of a conflict of interest, and thereby to ensure the public's confidence in our system of justice, requires an independent counsel in connection with the 1996 Presidential campaign. However, the record does not warrant, nor does the law permit, the appointment of an independent counsel to investigate Congress. Accordingly, I urge my colleagues to oppose Senate Joint Resolution 23.