Chuck Hagel

Mr. HAGEL

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 Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. HAGEL

Mr. HAGEL. For the information of all Senators, when the Senate reconvenes on Tuesday at 9:30 a.m., there will be an immediate rollcall vote on adoption of the military construction appropriations conference report. Following that vote, the Senate will begin consideration of S. 2334, the foreign operations appropriations bill. Members are encouraged to offer and debate amendments to the foreign operations bill so that substantial progress can be made on this important piece of legislation during Tuesday's session. Also on Tuesday, the Senate may consider the Texas compact conference report on a 4-hour time agreement, and any other legislative or executive items that may be cleared for action.

Mr. HAGEL

Mr. HAGEL. If there is no further business to come before the Senate, I now ask unanimous consent that the Senate stand in recess under the previous order.

Mr. HAGEL

Mr. HAGEL. Madam President, I ask unanimous consent that H.R. 1502 be discharged from the Committee on Governmental Affairs and referred to the Committee on Environment and Public Works.

Mr. HAGEL

Mr. HAGEL. Madam President, I ask unanimous consent that when the Senate completes its business today, it stand in recess until 9:30 a.m. on Tuesday, September 1. I further ask that when the Senate reconvenes on Tuesday, it begin consideration of the military construction appropriations conference report under the consent agreement of July 31.

Mr. HAGEL. Madam President, I further ask consent that the Senate stand in recess from 12:30 until 2:15 tomorrow, to allow the weekly party caucuses to meet.

Mr. HAGEL

Mr. HAGEL. Madam President, I now ask for its second reading, and object to my own request on behalf of my colleagues.

Mr. HAGEL. Madam President, I understand that H.R. 2183, which was just received from the House, is at the desk, and I now ask for its first reading.

Mr. HAGEL

Mr. HAGEL. Madam President, as in executive session, I ask unanimous consent that the injunction of secrecy be removed from the following treaty transmitted to the Senate on August 31, 1998, by the President of the United States: Treaty with Guatemala for Return of Stolen, Robbed, Embezzled or Appropriated Vehicles and Aircraft (Treaty Document 105-58); I further ask that the treaty be considered as having been read for the first time; that it be referred, with accompanying papers to the Committee on Foreign Relations and ordered to be printed; and that the President's message be printed in the Record.

Mr. HAGEL

Mr. HAGEL. Mr. President, I yield the floor and suggest the absence of a quorum.

Mr. HAGEL

Mr. HAGEL. Thank you, Mr. President. Mr. President, I rise to support, as an original cosponsor, the Family Investment and Rural Savings Tax Act of 1998. I thank the majority leader, Senator Lott, for working with many of us to make tax relief for farmers and ranchers a very top priority this year. Mr. President, I am not a farmer. When I want advice about agricultural issues, I ask farmers, I ask ranchers. About a month ago, the Senators offering this bill, and several others concerned about the problems facing rural America, agriculture today, right now, sat down with every major farm and commodity group in America. These representatives of American agriculture--real agriculture--told us the same thing I hear repeatedly from ranchers and farmers across my State of Nebraska: ``We do not want to go back to the failed Government supply and demand policies of the past.'' That is clear. They told us very clearly that there are three things--three things--Congress can do to help America's farmers and ranchers: One, open up more export markets; two, tax relief; and, three, reduce Government regulation. This, after all, Mr. President, was indeed the promise of the 1996 Freedom to Farm Act. Those of us on the floor today and our colleagues have been working very hard over the last few months to open more markets overseas, especially in the area of dealing with unilateral sanctions. And we are going to keep pushing aggressively for important export tools, important for all of America, not just American agriculture, important tools like fast track, and reform and complete funding for the IMF. This bill we are introducing today goes to the second point. It will provide real and meaningful tax relief, tax relief to America's agricultural producers. It will provide farmers and ranchers with the tools they need in managing the unique financial situations that they alone face on their farms and ranches. This bill has three provisions, which Senator Grassley has just outlined accurately and succinctly: One, the farm and ranch risk management accounts; two, the permanent extension of income averaging for farmers; and, three, reduction of capital gains rates not just for American agriculture but for all of America. Mr. President, I have said over the last 2 years I would like to see the capital gains tax completely eliminated. But that is a debate for another day. However, this bill is a major step in the right direction. This bill will mean lower taxes for our farmers and ranchers and many Americans. It is the right thing to do. I hope a majority of my colleagues will join us in support of this bill, an important bill for America, an important bill for our farmers and ranchers.

Mr. HAGEL

Mr. HAGEL. Thank you, Mr. President. Mr. President, I rise to support, as an original cosponsor, the Family Investment and Rural Savings Tax Act of 1998. I thank the majority leader, Senator Lott, for working with many of us to make tax relief for farmers and ranchers a very top priority this year. Mr. President, I am not a farmer. When I want advice about agricultural issues, I ask farmers, I ask ranchers. About a month ago, the Senators offering this bill, and several others concerned about the problems facing rural America, agriculture today, right now, sat down with every major farm and commodity group in America. These representatives of American agriculture--real agriculture--told us the same thing I hear repeatedly from ranchers and farmers across my State of Nebraska: ``We do not want to go back to the failed Government supply and demand policies of the past.'' That is clear. They told us very clearly that there are three things--three things--Congress can do to help America's farmers and ranchers: One, open up more export markets; two, tax relief; and, three, reduce Government regulation. This, after all, Mr. President, was indeed the promise of the 1996 Freedom to Farm Act. Those of us on the floor today and our colleagues have been working very hard over the last few months to open more markets overseas, especially in the area of dealing with unilateral sanctions. And we are going to keep pushing aggressively for important export tools, important for all of America, not just American agriculture, important tools like fast track, and reform and complete funding for the IMF. This bill we are introducing today goes to the second point. It will provide real and meaningful tax relief, tax relief to America's agricultural producers. It will provide farmers and ranchers with the tools they need in managing the unique financial situations that they alone face on their farms and ranches. This bill has three provisions, which Senator Grassley has just outlined accurately and succinctly: One, the farm and ranch risk management accounts; two, the permanent extension of income averaging for farmers; and, three, reduction of capital gains rates not just for American agriculture but for all of America. Mr. President, I have said over the last 2 years I would like to see the capital gains tax completely eliminated. But that is a debate for another day. However, this bill is a major step in the right direction. This bill will mean lower taxes for our farmers and ranchers and many Americans. It is the right thing to do. I hope a majority of my colleagues will join us in support of this bill, an important bill for America, an important bill for our farmers and ranchers.

Mr. HAGEL

Mr. HAGEL. Mr. President, I rise this afternoon to add my tribute and honor to our fallen comrades and colleagues, Officers Chestnut and Gibson, whose bodies lie in state in the Capitol Rotunda just down the hall, where Members of the House and Senate paid tribute this morning. I am not nearly eloquent enough to express the feelings, certainly, that all of us have about what these two men did mean to us, what all of our officers, protectors, men and women who guard over us and our population that visits this great and magnificent Capitol, this Capitol that represents free men and women, this Capitol that represents the best hope for mankind, mean to us. What I would like to offer is a saying that I have found comforting over the years and I believe applies very much to our fallen heroes. And that saying goes like this--that man is a success who has lived well, laughed often, and loved much; who has gained the respect of men and the love of children, who leaves the world better than he found it, whether through an improved poppy, a perfect poem or a rescued soul, who never failed to appreciate the beauty of nature, and always gave the best he had. Officers Chestnut and Gibson gave the best they had and the America they leave behind is a better place. Mr. President, I thank the Chair. I yield the floor.

Mr. HAGEL

Mr. HAGEL. I thank the Chair. Madam President, I am a supporter of credit unions. I have been a member of a credit union. I have been on the board of a credit union. I support the original charter for their original purpose. But if we are going to change the rules and allow tax-exempt credit unions to get more and more into commercial lending and have essentially unlimited access to new members, with the common bond being realistically eliminated, then additional safety and soundness measures are going to have to be required. My amendment strengthens the safety and soundness of credit unions with open and honest accounting. It brings some market fairness to the relationship between tax-exempt credit unions and tax- paying small community banks, and it refocuses on the original intent of credit unions--on consumer loans and services. I encourage my colleagues to vote against tabling the Hagel-Bennett amendment. Vote no. I thank the Chair. Mr. D'AMATO addressed the Chair.

Mr. HAGEL. I yield my time back to my distinguished colleagues. They need some help with their argument.

Mr. HAGEL. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. HAGEL. Mr. President, may I respond to my friend and chairman. He made some good points, legitimate questions, as did the ranking member of the Senate Banking Committee. Let me first assure my friend from New York what this amendment is about. It is not about mischief-making. It is not about burdening credit unions. It is about things like open, honest accounting. I just don't understand why anyone would reject or object to a clear understanding of what the commercial loan portfolio is for any credit union. Why would you object to taking any loan, a commercial loan, under $50,000, and putting it in an appropriate accounting category in a portfolio? It is not about burdening the accounting process. It is about open, honest accounting. When my friend talks about burdening these small credit unions by forcing them to bring in professionals who have had a minimum of 2 years in commercial lending, you mention my amendment, did I understand my amendment. I understand it, I think, fairly well, and I will read you from what we say in here. We talk about the NCUA's general counsel position on this, as has stated that the requirement that we put in this amendment could be met by hiring contract assistants on a case-by- case basis. Now, this should be, like any financial institution, about solid accounting. I don't know of anybody who doesn't agree with that or who would not want that, so that the members of a credit union know exactly how large the commercial portfolio is of the credit union they belong to. There are a couple of other things I want to address, including the issue of large credit unions who would have to scale back within a month or two, or would have to cash in their loans. I read, Mr. President, from the Banking Committee document here on page 10 of the report. It talks about the four exemptions; the four exemptions are pretty clear. You know about these: ``Loans for such purposes as agriculture, self-employment, small business, large up-front investment, maintenance. . . .'' And it goes on and on. These are all areas that are exempt from my amendment. Let's also talk about what this bill is doing and what the House bill did in response to the Supreme Court decision. We now, in effect, have no common bond anymore at all. There is no common bond at all. Now, if there is no common bond left in the credit union policy philosophy-- getting somewhat to what my colleague and friend from Utah has been talking about--then is it not appropriate to probe somewhat, saying, well, if we all want to live with the 1934, 1937 statute that says no taxes, but also no common bond, and no this, no that--I am not sure that is a very wise thing to do. If we are going to have some changes--and markets change and the financial service industry is dynamic, as demands change, needs change, supply changes--then it is appropriate to focus on some of these areas I believe we have focused on. The chairman is right. His mark that came out of committee was much better, much more responsible, much more accountable than the House version. He is exactly right. What Senator Bennett and I and others are saying is that we need to continue to focus on some of these areas of great concern, because when you open up credit unions to where they are now going to be opened up, where there is absolutely no common bond, and then you say, well, you can go forward and lend commercially, yet, don't bother us with the facts, we are not going to count any commercial loan less than $50,000, and we really don't have a good accounting as to how much is in the commercial loan portfolio, then I am not sure how accountable and responsible that is. So those are just a couple of items that I wanted to address. These are important issues. These are important questions. This is an important issue. With that, I appreciate an opportunity to further explain some of the dynamics of our amendment. I yield the floor. Mr. BENNETT addressed the Chair.

Mr. HAGEL. Mr. President, I am offering this amendment today on behalf of myself, Senators Bennett, Nickles, Roberts, Helms, Shelby, Enzi, and Grams. Before I address this amendment, I want to say that I am grateful, as all our members on the Banking Committee, for Chairman D'Amato bringing this important piece of legislation up, focusing on it with some dispatch, getting it out of committee and onto the floor of the Senate. Also, I wish to thank the ranking member of the Banking Committee, Senator Sarbanes, for his leadership as well. As I suspect, both Chairman D'Amato and Senator Sarbanes are not going to agree with my amendment. Nevertheless, I am grateful that they have focused on this issue and provided the kind of leadership that is important on these financial service matters. Mr. President, I support credit unions and the cost-efficient service they provide to their members. Our amendment, which we are offering today, is not designed to hurt credit unions. To the contrary, our amendment is designed to keep credit unions strong, secure, and focused on their special role of serving consumers. It does that by preventing the unchecked expansion of credit unions into commercial lending. Currently, there are no limitations on how much commercial lending in which a credit union may engage. Let me emphasize that our amendment does not prevent credit unions from making commercial loans. Our amendment has essentially three main points: First, we would lower the commercial lending cap contained in H.R. 1151 from 12.25 percent of a credit union's assets to 7 percent of a credit union's assets. This would establish for the first time a cap on commercial lending by credit unions. But the cap currently contained in H.R. 1151 is arbitrary, and because of an accounting loophole, is essentially meaningless. We share with the authors of H.R. 1151 the belief that credit union commercial lending should be limited. But we also believe those limits should be relevant and be meaningful. The 12.25 percent of assets commercial lending cap now in H.R. 1151 is completely arbitrary. Our amendment's 7-percent cap is tied directly to the amount of capital that H.R. 1151 requires a ``well-capitalized'' credit union to keep in reserve. Let me explain what this means. Credit unions, like all other financial institutions, are required by their regulators to keep a certain amount of ready capital on hand as a cushion in case of hard times--a sort of ``rainy day'' fund. H.R. 1151 would, for the first time, establish a target amount of capital that a well-capitalized credit union should keep in reserve, and would prohibit credit unions from making commercial loans if they fall too far below that target. By tying commercial loans dollar for dollar to capital reserves, we strengthen the safety and soundness of credit unions that choose to engage in business lending. We must make sure that credit unions cannot risk more of their loan portfolio on commercial ventures than they have reserve capital ready to back up the loans if those loans go bad. We protect the consumer. We protect the credit union members. Credit unions would have a 3-year grace period to comply with this cap. Our amendment will help H.R. 1151 to better achieve its main purpose, which is described, by the way, in the Banking Committee report on H.R. 1151. This is the actual language coming out of the Senate Banking Committee. And I quote: . . . [to] ensure that credit unions continue to fulfill their specified mission of meeting the credit and savings needs of consumers, especially persons of modest means, through an emphasis on consumer rather than business loans. Second, our amendment would require that all of a credit union's commercial loans must count toward its cap. Current National Credit Union Administration policy, which would be codified by H.R. 1151, excludes any commercial loans made to a single member that totals less than $50,000 from being counted as commercial loans. Mr. President, you heard it right. That is right. Current regulations, which H.R. 1151 would codify, say that a commercial loan is not a commercial loan if it is less than $50,000. With this loophole, there is no accurate, full, or honest accounting for commercial lending in credit unions. This makes no sense. No other financial institution enjoys this sort of charade and slight of hand. This loophole makes any commercial lending cap meaningless, because it permits an unlimited number of commercial loans so long as each of those loans is less than $50,000. Our amendment would require truth in accounting--truth in accounting--for all commercial loans. Third, our amendment codifies current NCUA policy that requires a credit union to use qualified personnel to administer commercial loans. Our language states that a commercial loan officer must have 2 years experience in his field. This is a commonsense provision that needs to be codified. For those smaller credit unions that feel this would be a new regulatory burden, there are three responses. We are simply codifying current NCUA policy, and we provide a 3-year phase-in for compliance with this provision. The experience requirement will not force credit unions who make a few small commercial loans to hire a full-time staffer. The NCUA's general counsel has stated that this requirement could be met by hiring contract assistance on a case- by-case basis. This is a very basic safety and soundness provision. Let me be very clear about what our amendment does not do. Our amendment does not--does not--restrict credit for farmers, small business owners, or low-income areas that rely on credit unions. That's because H.R. 1151, as reported by the Banking Committee, already contains several generous exceptions to the commercial lending cap--and our amendment does nothing to change these important exceptions. The four exceptions are: First, a credit union that is primarily engaged in business lending, which includes agricultural and small business lending, will not be subject to the commercial lending cap. That means those credit unions that qualify for this exemption can make agriculture or small business loans without any limits. Second, a credit union that is chartered for the purpose of business lending will not be subject to the cap. This means an agriculture co-op credit union would be exempt from the cap. Third, a credit union that serves predominantly low-income members will be exempt from the cap. This ensures that low-income areas, many of them located in urban areas, are not hurt by the new commercial lending restrictions. Fourth, a credit union that is determined to be a ``community development financial institution,'' as defined in existing banking law, will be exempt from the cap. This exception is intended to help low-income community development efforts across the Nation. Mr. President, only 13 percent of the 11,400 credit unions across this country, including Federal- and State-chartered, have any commercial loans at all. That is according to the Credit Union National Association. Our amendment has absolutely no effect on the other 87 percent of credit unions that choose not to make commercial loans. And even of that 13 percent of credit unions that are in the commercial lending business, the vast majority will not be restricted by the 7 percent of assets cap that our amendment proposes. That is because commercial loans currently constitute only 1 percent of total credit union assets, according to the Credit Union National Association. Why should credit unions be subject to a meaningful commercial lending cap? There are several answers to that question. First, credit unions, as stated in the preamble of the Federal Credit Union Act of 1934, were created by Congress to make, and I quote from the preamble: ``credit more available to people of small means.'' To achieve this goal, Congress exempted credit unions from paying Federal income taxes. Credit unions do not pay any Federal income taxes. When thrifts were exempt from income taxes before 1952, Congress prohibited them from making any commercial loans because of their tax-exempt status. A second reason to have meaningful limits on commercial lending is to ensure fair competition--competition between small banks and credit unions in the commercial lending arena. Credit unions' tax exemption allows them to offer lower interest rates on loans and higher interest rates on savings accounts and certificates of deposit. The third reason to have meaningful limits on commercial lending is to protect taxpayers by ensuring the safety and soundness of the credit union system. The Federal Government stands behind each credit union depositor, insuring deposits up to $100,000. If a serious financial crisis in the credit union system depleted the Credit Union Share Insurance Fund--which is Federal deposit insurance for credit unions-- then the Federal Government would have to step in with taxpayer funds to protect depositors against loss. I have several concerns about credit union safety and soundness: First, unlike banks and thrifts, credit unions--as non-profit entities--cannot issue stock to replenish their capital reserves during hard times. That's a real weakness when a quick capital infusion is needed--such as during a time of defaults, such as during the 1980s when we all recall the tragedy of the S&Ls, when capital levels fell quickly and new capital was required immediately. Second, we've seen commercial loans put credit unions in danger before. Rhode Island experienced a credit union crisis in 1991 that resulted in the failure of a State-chartered private deposit insurance fund. The crisis was, in part, caused by excessive and risky commercial lending. Thirteen of the State's credit unions were permanently closed, and the state sought Federal assistance to repay depositors. Third, by their own admission, credit unions make loans to those who don't qualify for credit at banks. This is their strength. This is the strength of a credit union, serving those who do not receive service at traditional financial institutions. However, this is also a very important area of concern, because this means credit unions are many times making very high risk loans to people whose credit history makes them ineligible for loans elsewhere. Fourth, all banks and thrifts are required to abide by risk-based capital standards. This means they must set aside more capital, depending on how risky their loans are. Unfortunately, credit unions don't have risk-based capital standards today. Now, H.R. 1151 makes a weak, valiant but weak, attempt to address this issue by regulating capital standards for ``complex credit unions,'' but that effort is neither clear nor meaningful. That is why our 7-percent-of-assets cap, which ties credit union commercial loans dollar for dollar to capital reserves, makes sense. This protects the credit union members whose money is at risk. In summary, our amendment strengthens the safety and soundness of credit unions with open and honest accounting. It brings market fairness to the relationship between tax-exempt credit unions and tax- paying small community banks, and it refocuses the original intent of credit unions on consumer loans and services. I hope my colleagues will support this important amendment. I reserve the remainder of my time and yield the floor.

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

Mr. HAGEL

Mr. HAGEL. Thank you, Mr. President. Mr. President, I rise to support this amendment sponsored by my good friend and colleague, the senior Senator from Nebraska, Senator Kerrey. As Senator Kerrey has very directly stated, this amendment is an attempt to bring some much-needed common sense--common sense, Mr. President, common sense--to the EPA regulatory process. We are not in any way attempting to amend the Safe Drinking Water Act. I commend my colleague from Rhode Island, the distinguished chairman of the Environment and Public Works Committee, Senator Chafee, for his hard work in crafting this bill over the years and having brought it up to date and focused on what is important, and that is to protect the safety of our drinking water. It is important that we be clear on this point. We are not attempting to amend the Public Works Committee's hard efforts, the Safe Drinking Water Act. No attempt is being made to amend the Safe Drinking Water Act. What we are asking here is EPA delay the enforcement of copper regulations until the completion of scientific studies that are already underway. Regulations imposed by the EPA on copper levels in drinking water are unrealistic and will impose financial hardships on a number of communities in Nebraska. Is it too much to ask--really, is it too much to ask--that scientific studies be completed before costs are imposed? Mr. President, that is just common sense. The town of Hastings, NE, population 23,000, will be forced to pay over $1 million in the first year to comply with these onerous regulations and $250,000 the year after that. More than 60 Nebraska water systems face similar financial burdens because of the EPA's enforcement of these copper regulations. The most incredible part of this issue is that the EPA has not proven that there is a health risk. As my friend, Senator Kerrey, said, they want to prove it; they want to tell us we have it, but they can't make the scientific link. The EPA used case studies to set these copper levels, some of which are over 40 years old, and often included only a few people. One EPA case study from 1957 refers to 15 nurses, 10 of which got sick after drinking cocktails with between 5.3 and 32 milligrams of copper--very strong scientific evidence. Yet, a 1994 interim study conducted by the Centers for Disease Control and Prevention found that EPA's copper standard seriously exaggerated health effects in Nebraska due to water consumption. In comparison, the CDC study conducted in 1994 to examine almost 200 households in Nebraska in a controlled, scientific way, found no relationship between the copper concentrations and illness. One of the problems in Nebraska, Mr. President, is that copper does not come from the city's water system. It comes from copper pipes-- copper pipes--in individual homes. Yet only six of the homes tested, in Hastings, NE, had copper levels above the EPA standards. And for those six homes, the EPA is going to force the people of the entire town in Nebraska to spend millions of dollars to change the system. This is folly. This is nonsense. This is one of the most clear examples of EPA zealousness that I think I have ever seen. The State of Nebraska has attempted to make its case with the EPA but has been repeatedly dismissed. The State suggested allowing residents to let the water run in the taps for a short period of time before using water for drinking. Nebraska's Department of Health and Human Services would have used a public education program to ensure that this ``flushing'' method was done correctly. Residents already did this on their own and copper levels dropped to nearly zero--copper levels dropped to nearly zero--after letting the tap run for a few seconds. The State also said it would pay to replace the copper plumbing for affected households. The attorney general of the State of Nebraska has filed a lawsuit to try to block the EPA enforcement of these regulations until we have some sound science. And the Governor, Governor Nelson, is involved. The attitude of the EPA toward the people of Nebraska has been one of supreme arrogance. Some of my colleagues may wonder why this is such a problem in Nebraska. Why haven't they heard about this in their States? Well, Nebraska is unique, not only because we play decent football, Mr. President, but also because we rely, almost exclusively, on groundwater for our water supplies. Because of this, some towns and cities in Nebraska do not have a central water system but a number of systems that feed into the main system. For these towns of Nebraska, treating drinking water means treating each individual well, which drastically increases costs. And for what? The people of Nebraska do not want unsafe drinking water; of course they don't. If there was a real health risk, they would pay to have the water treated. But when the scientific evidence shows no health risk, when the EPA rejects every commonsense alternative--many of what my colleague from Nebraska talked about--what are the people of Nebraska to do? They have turned to their congressional delegation. They have turned to their Congress and asked for help. The Constitution gives Congress the authority to decide whether or not Federal agencies can spend the money of the American taxpayers, what they spend it on, and why they spend it. Too often we have neglected this authority and let Federal agencies run right over the top of the American people, the very people who pay the bills--the taxpayers. But we don't have a voice. That is why Senator Kerrey and I are on the floor today. We are here to bring the case of the people of Nebraska to the Senate, as our colleagues are doing in the House. We have no other recourse, Mr. President. Again, we are not attempting to amend the Safe Drinking Water Act. We are asking to change the regulations so that we have some ability, some flexibility to wait until we have sound science. What an outrageous request. What an outrageous request. Mr. President, dealing with the EPA is like wandering around in the Land of Oz, this mystical land. But we wish to pull back the curtain and get to some reality and common sense. It is my hope, as is the hope of my friend and colleague, the senior Senator from Nebraska, that our colleagues will listen to this plea and will assist us in this effort. We are grateful for an opportunity to tell our story--a real story. Thank you. I yield the floor.

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

Mr. HAGEL

Mr. HAGEL. Mr. President, I rise this evening to strongly support this amendment. We have heard a number of dynamics--issues, good questions, relevant questions--about what is being attempted in this amendment. Mr. President, we are not talking about some revolutionary change in our foreign policy here. What we are talking about is what works. We are talking about common sense, relevance. There has been much talk tonight about humanitarian issues, human rights, trade, foreign policy, national security, all wrapped up into this debate. But my goodness, Mr. President, as we are about to embark on a new century, a new millennium, the greatest power on the Earth, the greatest power the world has ever seen, are we to rely on embargoing medicine and food to leverage and implement our policy and our position in the word? I don't think so. We are better than that. We have heard much conversation tonight about unilateral sanctions, multilateral sanctions. The world has changed, shifted. There is no nation on Earth today that can't get medicine and food, commodities, services, products, somewhere else. They don't need to go through the United States. So, in fact, what are we doing? Are we isolating some other country? Are we isolating a leader? No; we are isolating ourselves. We are isolating our farmers. We are isolating our ranchers, our producers, our people, our future, our growth. And for what? We are not compromising our national security when we talk about these issues of medicine and food. We are not exchanging trade for security. We have gotten a little off focus here this evening in some of this debate, a little bit off focus. Foreign policy is about dynamic change, about a world of great change, a world of hope and opportunity. It is about our role in the world and how we best position ourselves in the world to make our point. The question always comes back to, How best do we do that? How best do we leverage what we have? What works? Does withholding food and medicine work? Well, look around; look around. This is not some fly-by- night quick deal that we are talking about here. We have debated these issues. My colleagues have talked about efforts, which I have been part of, to get hearings. Again, I go back to one point of reality here: This is not a revolutionary shift in policy. And if, in fact, we are to enlist more allies and do what America has always done--defend and enhance more liberty for more people--we come back to the question of how we do that. Does trade and commerce improve people's lives? Does it open societies? I think history has answered that rather clearly. Yes, I am from a Midwestern State. I am from a large agriculture exporting State. That is important. Those interests are important. But there is not a farmer in Nebraska who is saying, ``I would trade America's national interests in the world'' --or even entertaining that bargain--``for selling more corn or beef.'' So let's not mislead anyone here tonight that that is the trade. That is not the trade here. That is not what we are talking about. We are talking about what works and who is really penalized here. I can go through a list. You all know about what has happened when wheat embargoes have been put on. President Nixon in 1973 banned soybean exports. What has that done? Well, it has made Brazil a very significant soybean producer, is what it has done. I have pages of these things to talk about, specifically narrow, focused issues on agriculture and medicine. But in the interest of time and the interest of good judgment, so that my colleagues won't be completely offended by this debate, suffice it to say that this is a debate about the totality and the completeness of what encompasses foreign policy, and trade is part of that--trade is part of it--and how we best work our way in to nations that don't have the same values and standards and morals and respect for rights as we do. I close by a point I made at the beginning of my remarks. A great power, the greatest power on Earth, this Nation that has done so much for so many for so long, should not need to rely on embargoes for food and medicine to implement and further our policy. I hope my colleagues look at this in the completeness of how we, who have offered this, intend it to be viewed and would support this amendment. I yield the floor.

Mr. HAGEL. Thank you, Madam President. I rise to support Senator Lugar's amendment. I am an original cosponsor of that amendment. I am an original cosponsor of the Lugar amendment because I believe the Lugar amendment applies some common sense and some relevancy to the issue of sanctions. I know that we have a bipartisan task force on sanctions. I think most of this body supports the efforts of that task force, but I don't see any conflict in what Senator Lugar is proposing today, and what Senator Dodd and others will propose later, with the task force assignment. It is interesting to note that since 1993 we have imposed 65 unilateral sanctions on 35 nations. We have some responsibility to give some focus and some understanding to our trade policy, which is part of our foreign policy, which is connected to our national security, which is connected to our economy and jobs and growth and productivity. I fail to appreciate why this is not relevant, why this is not important. This is not getting in the way of the task force. The task force, as I understand it, is to help frame up this issue. This amendment would not undo any existing sanctions. This amendment would establish a process for a more rational consideration of future use of sanctions. Sanctions surely must remain a tool of foreign policy, but sanctions are not foreign policy. Sanctions are only effective when they are multilateral. The world is dynamic. The world is changing. Trade is spherical. It moves. It will move right over the top of us unless we attempt to manage the movement. Every great event in history has produced new opportunities, new challenges, new threats, new uncertainties, and the collapse of the Soviet empire has given the world great new opportunities and hope. Only one nation on Earth can help lead the nations of the world to that hope and opportunity, and trade surely must be a major part of that. Why in the world would we continue to impose unworkable, unachievable, outdated, irrelevant policy rather than looking forward, getting us into the next century, with the promise that only this country can give? Does anybody really believe, in this body, that any nation on Earth cannot get any service, any commodity, any product if they want it from some other nation? Of course not. This is a new world. Both the President and the Congress want some control of the issue of sanctions. We want some definition of what this is about. The Congress of the United States owes this Nation some leadership on this issue. The President must lead on this issue. Senator Lugar has described his amendment in detail. It would sunset new sanctions after 2 years. The way it is now, Madam President, we go on and on with sanctions. This amendment starts to clean up sanctions. Do we need them? Are they relevant? Does the world change? I fail to see that that is a threat to our foreign policy and to those who wish us ill. It would require cost-benefit studies. My goodness, imagine that. What a terrible thing--a cost-benefit study. It would require an effort, first, to make sanctions multilateral. It would require an evaluation of whether a sanction is likely to achieve its policy goal. Again--again--what a questionable objective. My goodness, actually focusing on an action and figuring out, if you can, if there are consequences, if it is workable. I know some in this body care occasionally about a headline, about a press release. A CRS study, January 22, 1998--this year--listed 97, total, unilateral sanctions now in place. Since that report came out, we have added sanctions against India and Pakistan, for a total of at least 99 sanctions now in place. We dealt with some of that a little earlier. A study by the National Association of Manufacturers found that from 1993 to 1996 we imposed, as I mentioned, another 61 sanctions. These 35 nations--these 35 nations--where we have imposed these sanctions make up 42 percent of the world population. Almost half of the 5.5 billion people on the Earth are included in these sanctions and 19 percent of the world's export market--$800 billion. Who are we kidding here? Who are we hurting? We are not isolating anybody except ourselves. We are isolating our producers, our farmers, our ranchers, our manufacturers. We are isolating ourselves. And for what end? Bring a little sanity and common sense to this? I think so. I think so. I might add, is there something really wrong about business actually stepping into this debate? Is there something really wrong about having business say, ``Gee, we're being hurt''? Is that a special interest? Is American business a special interest? Is industry a special interest, people who work in business and the industry, produce jobs, create wealth, pay taxes? Be careful of that special interest. Be careful of that special interest. That is America. That is why we are the most powerful, dominant, free nation on Earth. A new study by the International Institute of Economics estimates that, in 1995 alone, unilateral sanctions cost Americans $20 billion in lost exports, losing 200,000 jobs. That does not include, Madam President, what is referred to as the ``downstream loss.'' The downstream loss, when you lose markets--it means the suppliers and the jobs and the adjunct jobs--no way to really calculate that. The National Foreign Trade Council has identified 41 separate legislative studies on the books that either require or authorize the imposition of unilateral sanctions. Well, it goes on and on. The fact is, Madam President, what Senator Lugar is doing is important. It is really relevant to today. It is more relevant to our future. It is relevant to our place in the world. What is the U.S. interest in the world? It is relevant to our children, and it is relevant to everything we are and who we are. That is why I strongly support this, why I was an original cosponsor, and why I urge my colleagues to vote in favor of this amendment. Madam President, thank you. I yield the floor. Mr. DORGAN addressed the Chair.

Mr. HAGEL

Mr. HAGEL. Mr. President, thank you. I wish to first congratulate the bipartisan leadership in this body, the leadership of our two leaders, Senator Lott and Senator Daschle, for addressing this issue and addressing the more encompassing issue of sanctions in total. I want to also thank my friends and colleagues, Senators Biden and McConnell, for their active leadership on this issue. This is a strong first step. We need a comprehensive trade package, a comprehensive package we will talk about and address. Yes, sanctions; sanction reviews--a number of my colleagues and I have worked on this issue for the last year. We have legislation pending. Senator Lugar has been a leader in this area. We need to address the IMF issue as a Congress. We will be addressing MFN status with China and fast track. But a complete package. This is a strong first step. This is the beginning of the larger debate that this Congress will have and must have about the role of the United States in the world and how we intend to engage the world, and trade is a very important part of that. Our relationships with other nations must not be held captive to one issue. But our relationships with other nations are complicated. They include trade, of course, commerce. They include U.S. interests abroad, national defense, and human rights. But we must not allow one dynamic of our relationship with all our other nations on this globe to be held captive to just one issue. History has shown, Mr. President, that trade and commerce engagement in reaching out does more to change attitudes and alter behavior than any one thing. Why? It improves diets; it improves standards of living; it opens society; it exposes people who have lived under totalitarian rule, who have had limited exposure to freedom, to liberty, to economic freedom, products, choice, consumerism. That is what trade does. Not one among us believes that just trade alone is all we need. But it is an important, integral part of our relationships around the world. We live in a very dynamic time. The light of change today in the world is unprecedented in modern history, and maybe all of history. That change is spherical. It is moving. It touches every life in every way. Food, fiber, housing, and trade are common denominators of mutual interests of all the peoples of the world. We must not isolate ourselves. Unilateral sanctions isolate those who impose unilateral sanctions. We need dynamic policies for dynamic times. The world is not static. This is a good beginning. This is a significant beginning. Our leadership in this body has seized the moment at a critical time as we have witnessed our President in China for 9 days dealing with many of these issues. We know we have far to go in all dynamics with respect to our relationships with China, Pakistan, with India, all nations. But trade and commerce will play a vital role in building those relationships, enhancing the freedoms and liberties of people throughout the globe. We in the United States must play a full, dynamic leadership role in that process. Mr. President, I am very proud to join my friends and colleagues who have worked on this diligently, who will continue to provide leadership, not just to this body but to the country, to the world, and to our farmers and our ranchers, our producers, and our citizens. We are all interconnected. We do live in a global village underpinned by a global economy. I encourage all of my colleagues to vote for this very important amendment. Again, I say to my colleagues that this is an engagement we must all be part of. I yield the floor. Mr. BIDEN addressed the Chair.

Mr. HAGEL

Mr. HAGEL. I thank the Chair.