Tim Hutchinson

Mr. HUTCHINSON

Mr. HUTCHINSON. I only anticipate perhaps 5 minutes.

Mr. HUTCHINSON. I inquire, do you have other Senators wishing to speak on behalf of your amendment?

Mr. HUTCHINSON. Madam President, how much time do we have remaining?

Mr. HUTCHINSON. Will the Senator yield?

Mr. HUTCHINSON. No. I was going to inquire of the Chair the amount of time left in this debate.

Mr. HUTCHINSON

Mr. HUTCHINSON. Senator Sessions, you are exactly right. One of the areas that this Republican-controlled Congress has pushed for most strongly has been local control. In welfare reform, in a whole host of areas, we said, ``Let's flow that power back out of Washington, back to the States.'' There is no better example, I think, of where we could do that than in the area of the arts. We not only have a 20-percent overhead that we are paying just by having this bureaucracy of almost 150 employees dispensing this money, but we have a small group that makes decisions on what will be funded across this country, if you will, making themselves the arbiters of what is good art, and the control of our constituents is minimized because of the distance, the inability to really affect the decisions that are made. So, yes, I think the citizens of Alabama, the citizens of my home State of Arkansas, will have much greater input dealing with the Arkansas Arts Council or the Alabama Legislature, or the Governor's office than trying to affect the decisions that are made in Washington, DC, by a select group.

Mr. HUTCHINSON. I thank the Senator from Alabama for his question and thank him for his support and cosponsorship of this amendment. My answer is an unequivocal yes, that is accurate; the incidents that Senator Helms cited, to my knowledge, are accurate. And I secondly answer your question by saying, yes, there are many institutions in Arkansas very interested in the arts, very interested in promoting the arts within the State of Arkansas, many that have a great relationship with the local schools and foster arts education in those local schools who would rejoice at having additional funds. The State of Arkansas would more than double what would be available for arts in the State of Arkansas by going to the block grant approach. Senator Gregg, commenting earlier, was defending the distribution of these funds to a few select cities--one-third of all grants going to six cities. I say that many of those institutions currently receiving grants, like the Boston Symphony or like the Metropolitan Opera, are very well endowed, have very high annual incomes, have a huge base of support, and are less needy and less dependent upon any kind of Federal help than, say, the University of Arkansas or the University of Central Arkansas, or the University of Arkansas at Pine Bluff, or the many other fine institutions in Arkansas that would be able to work with our local schools and the Arkansas Arts Council, which received just a little over $400,000 last year. That was all the State of Arkansas received. The Whitney Museum by itself received almost as much as the State of Arkansas, and if I am correct, I believe the State of Alabama was in a similar dilemma.

Mr. HUTCHINSON. Thank you, Mr. President. Just responding to some of the comments of my colleague concerning the National Endowment for the Arts and the need to preserve and maintain that national entity, I think that if the record is examined, as it has been examined by the General Accounting Office and the inspector general's office, that the record of the National Endowment is not only deplorable but fails to justify its continued funding and continued existence. The issue of whether or not the Government plays a role in funding for the arts aside, the best means of providing the limited funding, the $100 million approximately that has been appropriated for arts this year directly in the NEA, I think is clear that that money would best be used by eliminating the existence of the National Endowment and allowing the funds to flow directly to the Governors, to the various States for distribution to those programs and those projects and those artists within the States that are most deserving. In fact, the notion that we are better off with a national endowment that funds six States disproportionately, that funds certain congressional districts and certain States disproportionately, cannot be validated and cannot continue to be justified. We have a General Accounting Office report indicating that the administrative costs of the NEA, at almost 20 cents on the dollar, is higher than most other Federal agencies, much, much higher than the National Endowment for the Humanities. The mission statement for the National Endowment is simply that they are to broaden access to the arts. In effect, they are mandated to provide arts to underserved areas in this country. Yet, if you look at where the National Endowment today is sending those funds, it in no way corresponds to the mission that they have been given by this Congress to serve those areas which are, if you will, culturally deprived or who have less access to these arts programs. Six cities getting over one-third of the direct grants from the NEA cannot be justified. When we had--and the chairman is on the floor this morning--our hearing on the National Endowment in April, and Jane Alexander came in and testified before us, I questioned her as to why, in view of the mission of the NEA to provide arts for underserved areas, in view of that mission, why, out of 12 grant proposals from the State of Arkansas last year, was only 1 approved and the Arkansas Arts Council got approximately $400,000 last year. That equates to little more than many grants for single exhibits across this country. Her answer was that it is only in certain select States that we find the environment such to foster the arts. And she gave the analogy of growing apples. She said, apples grow everywhere, but there are certain areas of the country in which they are more productive. I think the implication that there are parts of this country that do not have potential artists, there are parts of this country that among their populations do not have those ready to blossom into writers and sculptors and authors, I think, is the very epitome of the elitism that the American people find so offensive by the National Endowment. So to my colleagues who believe that there is an important role that the Government plays in subsidizing and supporting arts, to those of my colleagues who feel very adamantly that we must show our support to culture and to the arts in general in this country by providing some seed money, I ask you to consider the possibility that we would be far better off eliminating the controversial and I think indefensible actions of the National Endowment, eliminate the NEA as it has traditionally existed, and allow that appropriation, exactly the same amount of money, the $100 million to be sent directly to the States on this basis: A $500,000 grant to every State, $200,000 to every territory, the remainder of the appropriation to be distributed on a strictly per capita basis. I ask you, could anything be more fair than that? If we took that simple formula, and we said that there will only be 1 percent spent for administrative costs on the Federal level, that the Department of Treasury can spend no more than $1 million to write those checks, and that the State arts councils or the State legislatures or the Governors can spend no more than 15 percent in overhead, that if we adopt that simple formula, the result is that 45 of the 50 States will come out ahead, that 45 of the 50 States will have more resources to fund arts in their States than under the current status quo which this bill, with all due respect, maintains. I simply ask my colleagues in the Senate, how can we, with a straight face, no matter which side we are on on the concept of whether the Government ought to be involved in the arts, how can we, with a straight face, face our constituents and say, we are going to defend 20 percent administrative costs, we are going to defend one-third of the grants going to six cities, we are going to defend three-fourths of the grants going to congressional districts represented by Democrats? I just want to tell you, Mr. President, I do not believe those congressional districts represented by Democrats in this country are intrinsically less cultured or more culturally deprived or in more need of those arts grants than those congressional districts that happen to be represented by Republicans. Yet there has been a clear bias, with 75 cents out of every $1 going to congressional districts represented by Democrats. It has been very selective funding by a group of elitists in Washington, bureaucrats in Washington, who make themselves the arbiters of what is good art and what is culture and where it should be funded. So I say consider an option that would say we will end the National Endowment, we will block grant the money to the States on a fair, fair, fair formula based upon the resident population. The result is that 45 States are going to have more money for the arts, more money to help the local writer, more money to go to the schools for education programs in the arts, more money to help that struggling artist who may not have an opportunity and may not happen to live in the six blessed cities that have been honored by the NEA with over one-third of the grants. So when this amendment is debated and when this amendment is voted on, I trust later today, I ask my colleagues to look at that breakdown, to look at that chart, and to consider the fact that their State will come out ahead, that their Governor, their State legislature, or their State arts council will have more money to support their local efforts than under the status quo. Remember that we are not responsible to a few culture elitists. We are responsible to our constituents in our States for how those limited resources are spent and how we can support the arts. I believe it is fair. I believe it is equitable. I believe it makes eminent common sense. If we will just break out of our lock that the status quo has held over us in the disproportionate influence that this group at the NEA has had in this Congress and consider that there might be a better way, then I think the moral high ground is certainly on behalf of this amendment. I ask my colleagues to support it later today. I yield the floor.

Mr. HUTCHINSON. Would the Senator yield for a question?

Mr. HUTCHINSON. The Senator explained some, I think, valid points concerning the role of our Government support for the arts. My question concerns the very, very high administrative costs that the National Endowment has experienced, approaching 20 cents on the dollar in administration, and the fact that the distribution of the funds from the National Endowment have gone primarily to very few cities in the country. In fact, I think one-third of all of the direct grants go to six cities in the United States. And the fact is that the Whitney Museum in one exhibit received $400,000, received as much as the entire State of Arkansas last year. So my question is, if we are to continue a Government role in funding the arts, would it not be better to eliminate the National Endowment, block grant those funds directly to the States, cutting out the 20 percent in administrative costs and the inequities in the funding formulas for the funding decisions of the National Endowment--and of course I have offered an amendment that would do exactly that--and provide 45 of the 50 States with more money for the arts than they currently receive under the status quo approach that we find in this bill?

Mr. HUTCHINSON. That, of course, is the whole concept behind our amendment--local control. Send the money back to the States, the Governors, the State legislatures, and the State arts council would have the discretion to increase funding. In the case of Alabama, and I do not have the exact numbers in front of me, but the amount of resources available to the State of Alabama would be greatly enhanced under the block grants approach in which we send a $500,000 grant to every State, and then simply distribute it on a per capita basis. That would allow the State of Alabama to give much more to the Shakespearean theater. I was interested to hear your comments yesterday quoting Anthony Hopkins and his appreciation for that Shakespeare theater there in Montgomery. So the needed resources would be much more available, and that would be controlled locally. So insomuch as there was local support in Alabama for increased funding, I think the opportunity would be much enhanced. Frankly, I am puzzled why anyone would oppose the approach that you and I are offering. I can understand the 5 States that would lose funding being opposed to this, but the 45 States and the Senators from the 45 States that would see their funding for the arts increased under our approach while eliminating bureaucracy in Washington, it is really difficult for me to see how someone objects to that.

Mr. HUTCHINSON. I believe those local schools in rural communities across our States and all across this country have a much more legitimate claim to those funds than where those funds have gone under the current status quo of the NEA. I grew up in a town with a population, when I lived there, of 894. I can remember in junior high school it being one of the great thrills when we were able to take a field trip 40 miles to the University of Arkansas and watch a Shakespearean play. That is the first time I had ever seen a Shakespearean play. Those kind of opportunities to the small communities of this country would be increased so much if we eliminated the Washington bureaucracy and allowed that money to flow back to the States. The objectionable art, Senator Sessions, that you cited yesterday, that Senator Helms spent a great deal of time on, that has characterized much of the debate around the NEA in recent years--if a local arts council, the State arts council, or State legislature or Governor made a decision to fund something that the mass of the people found highly objectionable, I guarantee you they will be more responsible in that State legislature or that State arts council, or that Governor will be far more responsive to the complaints of the people than a faraway bureaucracy in Washington, DC, in some ivory tower making those decisions.

Mr. HUTCHINSON

Mr. HUTCHINSON. Mr. President, this amendment supports one of our most fundamental rights, the right of property ownership. This fundamental right, I believe, is threatened by an Executive order signed by the President on September 11 designating the American Heritage Rivers Initiative. This initiative is intended ``to help communities and protect the river resources in a way that integrates natural resource protection, economic development, and the preservation of historic and cultural values.'' Who could be opposed to that? That, I think, is a goal that all of us share. However, in the eyes of those who live along these historic rivers, this initiative is just another Washington power grab for valuable river front property. It is another Washington intrusion under the guise of a program that has never--has never--been authorized or appropriated. This Executive order allows for eight Cabinet Departments--the Departments of Defense, Justice, Transportation, Agriculture, Commerce, Housing and Urban Development, Interior, and Energy--along with four Government agencies--the EPA, the NEA, the NEH, and the Advisory Council on Historic Preservation--to decide what happens to America's rivers. I ask you, what does a Washington bureaucrat know about the Arkansas River or the White River, or any of the 16 leading candidates to be designated as American heritage rivers? I have listened to my constituents, and they want vibrant river front communities that are reflective of the needs of the values of the local community in which they live and work. They want a community-led process that will make the right decisions for their particular community, not a federally dominated process that could dictate to property owners how they can use their land. The amendment that I offer allows for the river front renaissance that so many of our communities desperately need, while offering protections for the average property owner and members of the community that must live with the decisions that are made. My amendment provides the necessary safeguard for property owners and communities, while at the same time allowing these river communities to benefit from the Federal funds that are available to improve their polluted or damaged river areas and spur economic development. Specifically, my amendment requires that the list of 10 rivers, nominated through the American Rivers Heritage Initiative, be submitted for congressional review. It also ensures that the nominations for the initiative will be subject to existing priorities that have been established by the Clean Water Act and the Safe Drinking Water Act. Most importantly, this amendment ensures protection of private property owners who live and own property along the river proposed for nomination as an American heritage river. It requires that all property owners holding title to land directly abutting the river bank shall be consulted, shall be asked to offer letters of support or letters of opposition to the nomination as an American heritage river. This amendment also protects vital community interests by defining what constitutes a river community. Under the Executive order--a flawed Executive order, indeed--anyone who is so inclined can nominate a river or have input into the nomination process without any relationship-- business, property ownership, any kind of connection--anywhere near the river under consideration. My amendment defines the river community as those persons who own property, reside, or who regularly conduct business within 10 miles of the river considered for designation. This ensures that the real interest of the community is truly reflected in the development, design, and operation of a river that receives the designation of an American heritage river. This, I think, is an important issue. It is an issue that many of my constituents have been energized about. It has just recently come onto the scene, in one sense, because the Executive order was issued September 11, and the President is seeking to implement this. So I think it is appropriate for us on this Interior appropriations bill to provide some safeguards and to ensure that while the initiative moves forward, that the right of the property owners along these rivers is protected; that there is a process that is in place to ensure that those who are most vitally affected by the initiative will have input in the process, will have some input, have some say as to whether or not that river should be so designated. While it ensures the environmental protections of the Safe Drinking Water Act and Clean Water Act, it will also ensure that these communities, many times with damaged rivers and polluted waters, will have access to vital Federal funds to ensure that those communities can be reinvigorated. So I ask my colleagues to join me in support of this amendment as a safeguard for private property and for American communities. Thank you, Mr. President. I yield the floor. Mr. GORTON addressed the Chair.

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

Mr. HUTCHINSON. Mr. President, I ask unanimous consent to set aside the pending committee amendments and call up amendment No. 1196.

Mr. HUTCHINSON

Mr. HUTCHINSON. Ms. Alexander said, ``* * * the areas of nurturing and development of artists tend to be located in a few States * * *'' I take great exception to that. In fact, I take great offense to that statement. I believe artists are everywhere--in every city, town, and county across this Nation, in every home, in every schoolyard, in every playground in America. It is time that talent is recognized and realized. It is time that the elitist attitude that says that the pools of artistic talent in this country are restricted to a few small States is rejected once and for all. In fact, my home State of Arkansas is the home State to many famous artists; John Grisham, author; William McNamara, painter; Billy Bob Thornton, Academy Award winner for his role in ``Slingblade''; Mary Steenburgen, actress; Vance Randolph, famous folklorist; and Maya Angelou, famous poet. On and on the list goes. So the pool of talent in this country is not restricted to a few States where we should put our limited resources from the National Endowment. Simply put, my proposal would cut out the Washington middleman and send the arts dollars down to the States so that those who are closest to the unknown writer, the start-up band, or the schoolchild, can make the decisions as to where those wise investments will be made to those individuals who might otherwise have been passed over for the well- endowed Whitney Museum or the Boston Symphony, which has a $43 million annual income, or the Art Institute of Chicago, which has a $96 million annual income, or the Metropolitan Opera, which has $133 million in total annual income. In giving grants to those great, but well-endowed institutions, we rob from those who need it most and who would best fulfill the mandate that the National Endowment espouses. Additionally, by getting the decisionmaking out of Washington, the nearly 20 percent in administrative overhead the agency currently maintains is virtually abolished. That 20 percent currently being spent on administrative overhead in Washington would be awarded back to the States. It is the artists all across America who win under this proposal, who stand to be recognized by their home State rather than by a bloated bureaucracy in Washington. In fact, as we will demonstrate on this chart--and I hope that all of my colleagues in the Senate will take a look--we will have a handout for them--45 out of 50 States will gain under this block grant proposal. Cut out the 20-percent administrative overhead, limit administrative costs to 1 percent, write the checks to the Governors, send it to the States' art councils or to the State legislatures, and in so doing we will have more resources to send directly to those who will benefit most from them. In fact, all but a few States--45 out of 50--will increase arts dollars compared to last year. Most notably, for Senators Mack and Graham from the State of Florida--Florida will receive almost $3.4 million more than last year, while the artists in Texas, Senator Hutchison's State, will benefit from close to $3 million more than in fiscal year 1997. How do we do that? We take that 20 percent bloated administrative cost in Washington, eliminate the National Endowment, let the Secretary of the Treasury write a check to the Governors to go through the legislature or the State arts councils, limit State administrative spending to 15 percent, impose strict auditing requirements, award a $500,000 basic grant to each State, and then expend the remainder of those dollars under a per capita formula--45 out of 50 States will be winners. Florida, $3.4 million; Texas, $3 million. This commonsense solution seeks to give the dollars directly to the States in an equitable fashion, particularly to many underserved areas, and, most importantly, permits more local control of this money. Moreover, this proposal includes clear and precise language requiring States to conduct strict audits on the Federal dollars they receive, as well as submit a report for public inspection within that State. Let the public know how the money is being spent. Let the public have the reassurance that audits are being performed and that strict accounting measures are being followed. Any State found to have misused their Federal funds under the guidelines set forth in this amendment will be required to repay the money, plus a 10-percent penalty, to the Treasury. Mr. President, in my efforts to find a solution to the current inequities that exist in the distribution of arts dollars, I solicited feedback on this proposal from a number of individuals, including our current Governor of the State of Arkansas, Gov. Mike Huckabee. We had staff talk with his staff. I personally talked with Governor Huckabee, and was encouraged by his enthusiastic response to this block grant approach. I asked him point blank, ``Would Arkansas benefit from having more control over arts dollars for the budding artists, musicians, writers, and actors in Arkansas?'' I am very pleased to report that he gave a resounding thumbs-up to this proposal. He believes very much that this proposal will benefit the State of Arkansas. I quote from Gov. Huckabee's letter. Mr. President, I ask unanimous consent to have printed in the Record the entire letter from Governor Mike Huckabee from the State of Arkansas.

Mr. HUTCHINSON. We have heard many arguments over the years that the National Endowment for the Arts [NEA] is not living up to its original intent of ``broadening public access to the arts.'' In fact, in NEA's original mandate and mission statement, they are charged with the responsibility of broadening public access to the arts. That is the key question: Have they really fulfilled that? We have heard a lot of debate through the years as to whether the NEA has really fulfilled that mandate. In fact, one-third of the Federal share currently goes to six of the largest cities in the country. The agency, in addition to sending most of those direct grants to six large cities, has also demonstrated soaring administrative costs. Nearly 20 percent of every dollar that the National Endowment for the Arts expends is spent in overhead here in Washington, DC--much more than most of the Federal agencies--even more, for instance, than the National Endowment for Humanities (NEH). NEH's overhead costs are much, much less than that 19 to 20 percent figure. Furthermore, the NEA continues to fund what many Americans believe is objectionable art. While we have heard a lot of debate on those issues--the administrative costs, the formula, whether or not it is fulfilling its mandate--very few actual solutions have been offered. So, this afternoon, I want to present what I think is a common-sense solution to the problems that we have seen in the National Endowment for the Arts. I ask the question: What happens to the novice artist, or the songwriter in middle America, when the NEA funnels one-third of its direct grant funds to only six cities? Those cities are New York, Boston, MA, Los Angeles, CA, Chicago, IL, San Francisco, CA, and the District of Columbia. Each one of these six cities already has well- established arts communities. Yet, the NEA continues to pour a huge amount of its limited resources--over one-third of its direct grants-- to those six cities. So what happens to that new artist, that songwriter just starting out in Arkansas, or in the State of Oklahoma, or in Iowa, or the startup band in Small Town, U.S.A., who doesn't have their dreams realized, when one-fifth of direct grants are sent to multimillion dollar arts organizations who already benefit from over $11 billion in private giving each year? In fact, the private giving to the arts, combined with what is spent and purchased on tickets, is almost equal to that which is spent on professional sports in this country. And most tragic of all, I believe, is: What about the children? As my colleague, Senator Hutchison from Texas, spoke so eloquently on, the children in rural towns across this Nation who only dream of ever seeing the lavish theaters in New York City--what happens to them when they are denied the opportunity to perform a school play because bureaucrats in Washington awarded $400,000 to the Whitney Museum for one single exhibit rather than their school play? Mr. President, how can we justify this kind of very, very selective spending? For instance, in the State of Arkansas, the average per- person expenditure from the National Endowment for the Arts amounted to, if you divided it up for every man, woman, and child in the State, 17 cents per person. The State of Arkansas has a per capita income of about $18,000. My home State received, out of the $99.5 million appropriated for fiscal year 1997, approximately 17 cents per person. And then we turn around and look at the State of Massachusetts, which has a per capita income of $30,000--not quite, but almost twice the income in the State of Arkansas--and the National Endowment for the Arts has decided in its infinite wisdom to spend 60 cents per person in the State of Massachusetts. That is what I regard as very selective spending. In the State of Mississippi, with a per capita income of about $18,000 per person, they received about 25 cents per person from the NEA last year, while the State of New York, which has a per capita income of $29,000 per person, received $1 per person from the National Endowment for the Arts. After looking more closely at the per capita numbers, the NEA used very selective funding. The Midwestern State of Iowa, with a per capita income of $22,000, received 20 cents per person, while the State of Maryland, with a higher per capita income of $27,000, received more than twice the per capita expenditure than the State of Iowa--Maryland received 45 cents per person. That is very, very selective spending on the part of the National Endowment for the Arts. How can we justify that? Then when you break it down by political party, it becomes even more intriguing. Last year, NEA funding totaling close to $45 million was sent to congressional districts represented by Democrats in Congress, while about $14 million was sent to congressional districts represented by Republicans across the country. If you break that down by the number of direct grants from the National Endowment for the Arts, you find that almost 1,300 direct grants went to congressional districts represented by Democrats, while only 408 went to congressional districts represented by Republicans. When the funding is broken down per district, on average, about $223,000 was sent to districts represented by Democrats, and on average, about $60,000--almost one-fourth--went to congressional districts represented by Republicans. And you can go on and on. The fact is that $3 out of every $4 going to the States is going to congressional districts represented by Democrats. That is very selective funding. As one observer in Arkansas said, ``Why not send the $100 million to the Democratic National Committee and cut out the middle man?'' It has become a very selective funding formula used by the National Endowment for the Arts. Well, I cannot and will not justify what I think is inequitable and out-of-control spending by an elitist agency rife with problems and abuses. So, Mr. President, it is time to bring this funding into line and it is time for a solution. So I rise today, along with several of my colleagues, to offer a solution. I see Senator Sessions here on the floor. I hope he will speak as a cosponsor of this amendment. I offer a solution that gets the money down to the artists, the songwriters, that startup band, that local writer, the painter on the local level and, most importantly, down to our children--a solution that fulfills the NEA's original mandate and mission statement of ``broadening public access to the arts.'' When you look at what is spent in Mississippi as compared to what is spent in New York, or in Massachusetts as compared to what is spent in Iowa, I think there is no one who can, with a straight face, defend the National Endowment for the Arts and say they are fulfilling their mission statement of broadening public access to the arts. So the amendment I am offering today supports my belief that there are potential artists everywhere and in every corner of every State. From the plains of Wyoming to the mountains in West Virginia, from the Mississippi Delta to the potato fields of Iowa, we have budding artists, potential artists, everywhere. Contrary to Jane Alexander's notion that ``the areas of nurturing and development of artists tend to be located in a few States . . . ''--by the way, Jane Alexander made that statement in our April hearing before the Labor and Human Resources Committee. Mr. President, I ask unanimous consent that her statement made before the Labor and Human Resources Committee be printed in the Record.

Mr. HUTCHINSON. I have an amendment that I would like to file. I will not offer it at this time, but I would like to file it.

Mr. HUTCHINSON. Mr. President, Governor Huckabee wrote, ``As a State, we have a need for the continued support of developing art talents, as well as making the arts available to the public.'' Then Governor Huckabee went on to state that he ``believes States have a better understanding of their needs and a much closer relationship with our constituents at the State level than a bureaucracy in Washington.'' I think what Governor Huckabee said would be echoed by Governors-- both Democrat and Republican--all across this country; that, if they could receive those funds directly, have control over them, be able to make the decisions as to where those grants should go, we will have a more productive arts community in each one of our States. Mr. President, it becomes increasingly harder to justify the existence of the National Endowment for the Arts' Washington bureaucracy when one takes a more careful look at the overhead and the salary costs of this agency. For example, from 1994 to 1996, the administrative costs of the National Endowment for the Arts went from a little over 14 percent in 1994, 14.4 percent, to almost 19 percent in 1996, at a time when the agency was cut by 39 percent, and was faced with a loss of 89 positions. The administrative costs amount to almost 20 cents on the dollar. At a time when the NEA was cutting budgets and the number of positions at the agency, administrative costs as a percentage of their budget went up to nearly 20 cents on every dollar of our constituents' hard-earned paychecks. My constituents in Arkansas wonder why it costs almost $19 million to distribute just over $50 million in NEA direct grant funds. They wonder for good reason--$19 million to distribute $50 million. These are their hard-earned tax dollars on the line. I don't doubt that many of my colleagues' constituents have exactly the same questions. A closer analysis of how the NEA spends its administrative budget raises even further questions about the efficiency and effectiveness of the agency. While the agency repeatedly complains of the draconian effects of the budget cuts on its staff, over 68 percent of the 154 individuals currently employed by the NEA earn over $50,000 per year. Let me repeat that. The agency complains about the burden that they are facing under the budget cuts that have been imposed over the last couple of years, but at the same time over 68 percent of their staff out of 154 individuals employed by the NEA, are earning over $50,000 per year. That is the equivalent of an average constituent in Arkansas earning three yearly salaries in just 1 year. To make matters worse, the NEA's own inspector general uncovered significant problems, deficiencies, and abuses during its audit of grantees from 1991 to 1996. This chart demonstrates some of the inspector general's findings--not a Republican committee nor a Republican chairman--but the NEA's own inspector general found this: Sixty-three percent of the grantees had project costs that were not reconcilable to their accounting records. That is well over half. Sixty-three percent of the grantees could not reconcile their accounting records. Seventy-nine percent, over three-fourths, had inadequate documentation of personnel costs charged to the grant. That is money going to individuals. That is personnel salaries that are unaccountable, according to the NEA's own inspector general. Fifty-three percent had failed to engage independent auditors to conduct grant audits as is required by OMB guidelines. The Office of Management and Budget requires that these audits be conducted, and over half did not do so. I am curious. Those who are advocates of the National Endowment, those who are advocates of maintaining the status quo--and I heard them speak on the floor of the Senate today--they speak eloquently on behalf of art; they speak eloquently on behalf of culture. But I have not heard any of them respond to these findings conducted by the inspector general that find blatant misuse of taxpayers' funds. Fifty-three percent--over half--not even complying with the Office of Management and Budget's requirement for independent audits. These numbers are alarming. They are intolerable. They compel us to change the status quo. The best way we can change it is to rid the country of the National Endowment and send the money down to the States where it can truly go to benefit arts on the local level and fulfill the original intent and mandate of the NEA. As if this scenario is not gruesome enough, how is it justifiable that the NEA assisted in promoting the President's William D. Ford Federal Direct Student Loan Program? That is correct--the NEA, under an interagency agreement with the Department of Education, provided design assistance for marketing materials promoting the President's Direct Student Loan Program. This is the National Endowment for the Arts. This is the agency originally established to broaden access to the arts in this country. This was the agency established so that underserved areas like Virginia, Arkansas, Oklahoma, and Alabama with start-up artists who want the opportunity to build a future in the arts community, would receive funding for these purposes. Instead, we find a grant going for surely a strictly political and not arts-oriented program--the promotion of the President's Direct Student Loan Program. You can take any position you want on the President's Direct Student Loan Program, whether that is the right way to go or not, but to use NEA funds to promote it--that is indefensible. Although the NEA claims that the Department of Education reimbursed the agency $100,000 under this agreement, the NEA reports that they have no accounting of the time or expenses they incurred in providing those services. Mr. President, how much more mismanagement of taxpayer money will we tolerate? When is enough, enough? Well, enough is enough for me. Mr. President, I cannot sit idly by while our tax dollars are used and abused by a Washington bureaucracy. The proposal I am offering today, along with several of my colleagues, is the fair solution to an agency run amok. It sends arts money directly to the States, eliminating the high administrative costs currently plaguing the agency. It shifts control from Washington bureaucrats to those closest to our artists and calls for strict auditing by the States. It initiates a more equitable distribution of Federal arts dollars on a per capita basis, benefiting more currently underserved areas, and significantly increasing the award amounts for all but a few States. Most of all, it makes good on the original mission of the NEA--to broaden public access to the arts. The horrendous realities I have outlined today have compelled many, including myself, to the conclusion that, over the years, the NEA has failed to live up to its legislative mandate of increasing access to the arts and has gotten into the business of picking favorites--making the National Endowment the arbiters of art in our culture. In summary, the NEA is rife with abuses: extravagant administrative costs; poor management, and a vacuum of oversight, according to the GAO; glaring inequities in distribution; a biased process where the East does better than the South, the big cities do better than rural America, Democratic districts do three times better than Republican districts, higher-income States fare better than lower-income States, and the haves get more and the have-nots continue to have not; wholesale failure to fulfill its original mission to broaden public access to the arts, and the adoption of a kind of trickle-down arts theory in which the arbiters of art reside primarily in Washington, DC. My amendment would end publicly subsidized cultural elitism by sending these decisions back to the States, more money for the arts and less for the bureaucrats, more resources for 45 of the 50 States and less for 5 States, more accountability and more local control. I urge my colleagues to support this amendment. It is fair. It is equitable. It is common sense. And the artists, musicians, and writers in your home State depend upon the resources that this amendment will make available. I yield the floor. Mr. WARNER addressed the Chair.

Mr. HUTCHINSON

Mr. HUTCHINSON. Mr. President, I rise today full of sadness. Mr. William Powell of Bella Vista, AR, has recently passed away. I came to know Mr. Powell as 1 of the 82 American airmen that were held prisoner of war at the Buchenwald concentration camp during World War II. During my tenure in Congress, I have introduced two resolutions that would have given appropriate and well-deserved recognition to this group of World War II prisoners. These brave airmen were different from other allied prisoners, because they were held at Buchenwald--a Nazi concentration camp--and therefore not subject to the protections of the Geneva Convention. Tragically, Mr. President, the United States has never formally recognized the service, sacrifice, and bravery of these American airmen while they were held as political prisoners. Even more tragically, the United States and this Congress will never have the opportunity to express our admiration to Mr. Powell. When I introduced Senate Concurrent Resolution 32 in this Congress, on Thursday, June 12, I contacted Mr. Powell. He responded by saying, and I quote: The recognition is long overdue. For decades, the Department of Defense and the International Red Cross have stated that there were no military personnel in Buchenwald. Yet as someone who was imprisoned there for 4 months, I know of at least 55 other American soldiers who endured the hardships of this camp. Two men even lost their lives there. And nearly all suffered diseases later in life because of the treatment they received while in Buchenwald. In the late 70s, early 80s, I joined with the other survivors of Buchenwald to push this government to recognize our service. We never wanted any money, we just wanted the United States Government to say, ``Yes you were there, and we appreciate what you went through.'' Mr. William Powell was a good man, a true patriot, and while this resolution that I spoke of earlier, Senate Concurrent Resolution 32, has yet to pass this body, I urge my colleagues to join with me in passing it, in honor of Mr. William Powell. My thoughts and prayers are with his family.

Mr. HUTCHINSON

Mr. HUTCHINSON. Mr. President, I rise today, along with my friend and colleague Congressman Jim Saxton, to submit a concurrent resolution that condemns, in the strongest possible terms, today's bombing in Jerusalem on Ben Yehuda Street. Three bombs exploded in Jerusalem today killing at least 8 people and injuring more than 165 others. Mr. President, once again the world watches in horror as innocent citizens get blown up in a Jerusalem marketplace. Just weeks after a tragic bombing incident in July, Yasser Arafat publicly embraced the leader of Hamas. Two weeks later, today, three more bombs kill and maim civilians on a crowded shopping street in Jerusalem. Mr. President, I am outraged by these continued terrorist actions under the watch of the Palestinian Authority. Mr. President, among other things, the resolution that I offer today would require Congress to: Reaffirm that the United States should fully cooperate with the state of Israel in helping to stem the tide of terrorism, which has threatened the Oslo process and the stability of this vital region; express its deepest condolences to the families of the victims of this latest bombing and express its solidarity with the people of the State of Israel; and affirm that the United States should provide no monetary or other assistance to the Palestinian Authority until it has fulfilled its obligations under the Oslo accords. To many of my colleagues that may not already know this, I have just returned from Israel, where I walked up and down Ben Yehuda street. Therefore, this resolution hits close to home for me. Mr. President, it is time for Arafat to live up to the commitments he made in the Oslo accords and break the back of the terrorist infrastructure in Palestine. I urge my colleagues to join me in condemning today's terrorist acts and cosponsor this important legislation.

Mr. HUTCHINSON

Mr. HUTCHINSON. Mr. President, the United Kingdom deregulated its electric utilities in 1990. There is now a central power pool. Power stations with capacities of over 10 megawatts are ordinarily required to sell all electricity generated into the pool. Consumers buy from the pool or from regional electric companies that buy from the pool Thus, for example, if an independent generator wanted to build a power station to supply electricity to an oil refinery in England, it might lease land from the refinery and build the power station. However, a direct sale of electricity to the refinery would not be permitted. The generator would sell electricity to the pool, and the refinery would buy from that pool. The pool prices change each half hour based on demand and supply and, therefore, fluctuate frequently. The refinery will want protection against price fluctuations. Consequently, it will enter into a contract for differences with the generator. The parties will agree on a schedule of fixed prices that the generator would have charged had the generator been free to make a direct sale. When the pool price exceeds the agreed price in the schedule, the generator will pay the refinery the difference. The refinery will pay the generator the difference when the pool price is less. Thus, the differences contract is a way for both parties to buy certainty. The generator is certain of his revenue stream. The refinery is certain of how much electricity will cost over an extended period. It is a hedging agreement. It my understanding that the relevant provision in the bill does not turn payments under such differences contracts into subpart F income. Would the Chairman clarify this understanding?

Mr. HUTCHINSON. I thank the Chairman. amtrak

Mr. HUTCHINSON

Mr. HUTCHINSON. Mr. President, I suggest the absence of a quorum.

Mr. HUTCHINSON

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