Jim Jeffords

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, on Friday, September 26, 1997, I introduced legislation which amends title I of the Employee Retirement Income Security Act of 1974 [ERISA] to permit investment advisers registered with State securities regulators to continue to serve as investment managers to ERISA plans. At the end of last Congress, the Investment Supervision Coordination Act, landmark bipartisan legislation that adopted a new approach for regulating investment advisers, was passed and signed into law. Under this legislation, beginning July 8, 1997, States are assigned primary responsibility for regulating smaller investment advisers and the Securities and Exchange Commission is assigned primary responsibility for regulating larger investment advisers. Prior to the passage of the legislation, the issue arose that smaller investment advisers registered only with the States--and prohibited from registering with the SEC--would no longer meet the definition of investment manager under ERISA because the current Federal law definition only recognized advisers registered with the Securities and Exchange Commission. As a temporary measure, a 2- year sunset provision was included in the securities reform legislation extending the qualification of State registered investment advisers as investment managers under ERISA for 2 years. The purpose of this provision was to address the problem on an immediate basis while concurrently giving the congressional committees with jurisdiction over ERISA matters the opportunity to review and act on the issue. We have reviewed this issue and have developed the legislation that I am introducing today to permanently correct this problem. Without this legislation, State licensed investment advisers who, because of the securities reform legislation, no longer are permitted to register with the Securities and Exchange Commission will be unable to continue to be qualified to serve as investment managers to pension and welfare plans covered by ERISA. Without this legislation, the practices of thousands of small investment advisers, investment advisory firms and their supervision of client 401(k) and certain other pension plans will be seriously disrupted after October 10, 1998. For business reasons, it is necessary for an investment adviser seeking to advise and manage assets of employee benefit plans subject to ERISA to meet ERISA's definition of investment manager. It is also important, for business reasons, to eliminate the uncertainty about the status of small investment advisers as investment managers under ERISA. This uncertainty makes it difficult for such advisers to acquire new ERISA plan clients and may well cause the loss of existing clients. Arthus Levitt, chairman of the Securities and Exchange Commission, has written a letter expressing the need for this legislation and his support for this effort to correct this problem. I ask that a copy of Chairman Levitt's letter be inserted in the Record. It is my understanding that this bill is supported by the Department of Labor. In addition, this bill is supported by the Institute of Certified Financial Planners, the National Association of Personal Financial Advisors, the International Association for Financial Planning, the American Institute of Certified Public Accountants, and the North American Securities Administrators Association, Inc. Mr. President, the sooner that Congress responds in a positive fashion to correct this problem, the better for small advisers and the capital management marketplace. The letter follows: U.S. Securities and Exchange Commission, Washington, DC, April 7, 1997. Hon. James M. Jeffords, Chairman, Committee on Labor and Human Resources, U.S. Senate, Washington, DC. Dear Chairman Jeffords: I am writing to urge that the Senate Committee on Labor and Human Resources consider enacting legislation to amend the Employee Retirement Income Security Act of 1974 (``ERISA'') in a small but terribly important way. Unless the Congress acts quickly, thousands of small investment adviser firms, and their employees, risk having their businesses and their livelihoods inadvertently disrupted by changes to federal securities laws that were enacted during the last Congress. At the very end of its last session, Congress passed the Investment Advisers Supervision Coordination Act. This was landmark bipartisan legislation that replaced an overlapping and duplicative state and federal regulatory scheme with a new approach that divided responsibility for investment adviser supervision: states were assigned primary responsibility for regulating smaller investment advisers, and the Securities and Exchange Commission was assigned primarily responsibility for regulating larger investment advisers. We supported this approach. Under the Coordination Act takes effect in the next few months, most of the nation's 23,500 investment adviser firms--regardless of their size--will continue to be registered with the SEC, as they have for many decades. Once the Act becomes effective, however, we estimate that as many as 16,000 firms will be required to withdraw their federal registration. Indeed, this requirement is crucial if the Act's overall intent of reducing overlapping and duplicative regulation is to be realized. But the withdrawal of federal registration is also what causes the problem for these firms under ERISA. As a practical business matter, it is a virtual necessity for a professional money manager (such as an investment adviser) seeking to serve employee benefit plans subject to ERISA to meet ERISA's definition of ``investment manager.'' The term is defined in ERISA to include only investment advisers registered with the SEC, and certain banks and insurance companies. Once the Coordination Act becomes effective, large advisers registered with the SEC will of course continue to meet the definition. But small advisory firms will not be able to meet the definition of investment manager because they will be registered with the states rather than with the SEC. Thus they may well be precluded from providing advisory services to employee benefit plans subject to ERISA, even if they have been doing so successfully for many years. The sponsors of the Coordination Act were aware that the interplay between the Act and ERISA could have substantial detrimental consequences for small advisers, and thus added an amendment to ERISA during the House-Senate Conference on the Act. The ERISA amendment provided that investment advisers registered with a state can serve as ``investment managers'' for two years, or through October 12, 1998. My staff has been told that this ``sunset'' provision was included in the ERISA amendment so that the appropriate congressional committees with jurisdiction over ERISA could have a reasonable amount of time to review the amendment before deciding whether to make it permanent. Apart from that important procedural issue, I am not aware of any other considerations that would suggest the need for the ERISA amendment to expire in two years. I believe that the Congress should move as quickly as possible to enact legislation that eliminates the sunset provision, and permanently enables properly registered state investment advisers to continue their service as investment managers under ERISA. There is no reason to wait until 1998 to do so. In fact, many small investment advisers believe that the ongoing uncertainty about their status as ``investment managers'' under ERISA is making it difficult for them to acquire new ERISA plan clients, and may even cause them to lose existing clients. Some advisers think the harm they could suffer, even before the expiration of the sunset provision next year, could be irreparable, and it is easy to see why. It is only through the swift action of your Committee that these unintended and unnecessary consequences for thousands of successful small businesses can be avoided. If you or your staff would like additional information about this matter, please do not hesitate to contact me at 942-0100, or Barry P. Barbash, Director of the Division of Investment Management, or Robert E. Plaze, an Associate Director in the Division, at 942-0720. Sincerely, Arthur Levitt.

Mr. JEFFORDS

Mr. JEFFORDS. I ask unanimous consent to set aside temporarily the pending amendment and I will withdraw it so it will be back pending at the time.

Mr. JEFFORDS. Mr. President, I don't anticipate taking very long. I want to raise a very important issue relative to the District of Columbia. First of all, I want to commend the subcommittee chairman. I served just ahead of him in that capacity. I know of the tremendous responsibility he has, and I have admired the way he has been handling his job. I have also admired the way they have put the bill together this year to help the city of Washington. But there are problems that are really beyond the possibility of the subcommittee to correct. These are what I want to discuss today. First of all, let us remember what the important issues facing this Nation are and reflect and look at the District of Columbia with respect to those. The District of Columbia, as we all know, is the Nation's Capital. But I think sometimes we Members have a tendency to forget that we are responsible now for the city of Washington. We, in 1974, turned the city over to home rule. As that experience turned out to be rife with difficulty for the residents of D.C., Congress made efforts to become more vigorously involved with the city's governance. By getting more directly involved, particularly with regard to the education system, we therefore made ourselves, the Members of this body and the House, directly responsible to the people of the District of Columbia. And furthermore, we became more directly responsible to the people of the Nation overall that we would have to do what is necessary to make this Capital a capital we can all be proud of. Can you be proud of the United States Capital when the top issue in this Nation right now is education and here in Washington we continue to have some of the lowest educational scores and standards in the country? We are doing our jobs as leaders in a major metropolitan area; how can we turn this city into a model for the Nation to show how we can take the cities and help them become educational enterprises that are functioning well and that are delivering our young people into society with the skills they need to be able to make this Nation strong? This is a national problem of the highest priority. But let us take a look at the District of Columbia and where we stand as far as what we are doing for it and the distance that we have to go. As I said, I had the job that the Senator from North Carolina has, the chairmanship of the subcommittee, and I took that responsibility very, very seriously. Working with Congressman Gunderson on the other side, we developed an educational program for the city. We worked long and hard at it. We got it approved, and it is in law. It sets out the goals and methodology and the means for us to take this city and turn it from the worst--and I will explain that later--in educational results of any city in this country. Second--and I will talk about that even more quickly--we also have about the worst infrastructure of any school system in this country-- the worst. So if we are going to make real progress in turning this education system around we have a long way to go. We set the framework a couple years ago when we took over the city. We created, first, the Control Board, which now has more of the mayoral responsibilities, or is more analogous to a board of aldermen. They then created a school board to take a look and see what they could do to take this city and to change it into a city that we could be proud of. We have all recently noted that the schools didn't open on time. Children were ready to come in, but the roofs were leaking, books had not been delivered. What happened? We had an amount of money for emergency repairs that had been appropriated--but that money, about $86 million came from the remainder of existing funds, and other one-time piece meal funding, not through a dedicated, sustainable revenue stream. It will just not be the right way to go to meet the needs we have, particularly with regard to infrastructure. Take a look at this chart. You can see that if this situation is not the worst in the Nation, it is pretty close. Look at these statistics from a General Services Administration study, which I will make a part of the Record, which goes through these infrastructure categories item-by-item to show where this city is. Exterior walls: The national average for having problems is 27 percent. We have 72 percent of our exterior walls and windows which are bad and not meeting codes. Next one: Roofs. This probably has improved a little since we spent $70 million fixing roofs this fall. But a year ago, only 27 percent of the schools in this country had poor roofs--but in the District we had 60-some percent of the roofs that were not meeting code. This does not mean they are beautiful; they just do not meet the code and safety violations. Heating and ventilation, and air conditioning: The national average, 36 percent below code; Washington D.C., 66 percent. Plumbing: Sixty-five percent of the plumbing doesn't meet code in D.C.'s schools--65 percent. Electrical and lighting: Fifty-three percent of the District's school's are in code violations in this category Life safety codes: Fifty-one percent of our schools are in violation of life safety codes. Would you trust your own children to that? I think not. Power for technology: This is where we are doing the best, fortunately. But, still, 41 percent of the schools don't have power to utilize technology. I am talking here about the Nation's Capital, the city that we would like to point to to show as an example of how a school system should be run. Keep that in mind. Let's take a look at this next chart to see what is going to happen. For 3 years in a row we have had the schools not opened on time because of violations. Well, this is according to the GSA. The amount of repairs, cost of repairs to meet code, plus some other essential repair: $2 billion--that is with a ``b''--2 billion dollars' worth of repairs that are necessary in order to get our schools in compliance with the safety codes and other codes. We managed to get $86 million available this year. That was the high point. We put $50 million the year before. Divide $86 million into $2 billion, and you will see that somewhere between 20, 30, or 40 years from now depending on what you spend each year, those schools are going to be in code--our Nation's Capital. That is inexcusable. You tell me how we are going to get $2 billion to be able to fix those schools. Is this subcommittee going to appropriate $2 billion? Of course not. I went from the Appropriations Committee to the Finance Committee, because I knew that was where the action was going to be. There is a lot of money out of there--$35 billion for education. So to the Finance Committee, I said, ``Hey. We ought to fix these schools.'' So I had an amendment to get $1 billion--only one $1 billion--to get half the job done. I came within one vote of passing that in the Finance Committee. That was one of those meetings in the middle of the night where nobody was quite present. But, anyway, I came within one vote of getting it. I finally got $50 million. That would have paid part of this year. We went to conference. And they said, ``No. We would much rather create more jobs in the city. We would much rather give things like tax credits for buying new houses, and all of these kinds of things.'' So I went after the $50 million. But I did get a commitment from the head of OMB. I will get into that in the later part of the discussion here. But he agreed with me that we ought to do something, and that he would go with me and travel and talk with the Governors of Maryland and Virginia. I intend to do that, and see whether we can work something out. That will get to the solution which I will get to a little later. Now let's take a look at where we are as far as the achievement of our young people and take a look at this, if you want to get depressed. This chart shows where the District of Columbia is in red. We put the District of Columbia in red each time where it belongs. And this shows the Northeast average; the national average levels. These are fourth grade students scored at or above basic reading achievement levels. And it was down 6 percent from 1992. We took these from 1994. Twenty-eight percent of the children in the District of Columbia were passing the assessment for reading. In 1993, it went down 6 percent to 22 percent. If we are going to make the District of Columbia the model for the Nation to follow, we are kind of headed in the wrong direction. So what are we going to do about that? I will also get to that in a little bit. Right now I think it would be appropriate to go to the next phase where I am going to offer the amendment. Amendment No. 1266 (Purpose: To provide for a regional education and work force training system in the metropolitan Washington area, to improve the school facilities of the District of Columbia, and to fund such activities in part by an income tax on nonresident workers in the District of Columbia)

Mr. JEFFORDS. Mr. President, I have an amendment at the desk. I would especially want to alert my Virginia and Maryland Senators that they don't need to jump out of their chairs and run over to the floor right now because I intend to withdraw it when I am finished. I offer the amendment.

Mr. JEFFORDS. Mr. President, I ask unanimous consent that the purpose be read. It is relatively short. The amendment is unfortunately quite long.

Mr. JEFFORDS. I ask unanimous consent that reading of the amendment be dispensed with.

Mr. JEFFORDS. Mr. President, I thought that last sentence might stir up some anxiety. So I wanted to make sure that I reassured Senators that I would withdraw it. But I did want to reemphasize that I intend to meet with the OMB director and with the Governors of Maryland and Virginia, and lay out this plan which will help the District. But it will also help the two surrounding States. So hopefully we can get an agreement to go forward with this, if we could, one, raise the $2 billion to take care of the infrastructure problem; and, two, share 50-50 the ability to create the kind of skilled training that is necessary in this metropolitan area in order to provide skilled workers for the 50,000 jobs that are available in this region which are not being filled at this time. Before I go on, I want to say that the things which I am saying here and recommending are not things that Jim Jeffords decided when he was losing his mind or something, as somebody would think about standing up here and trying to help the District of Columbia. But this book everyone ought to be required to read in the Congress, which is ``The Orphaned Capital,'' and it is by Carol O'Clanahan, at the Brookings Institution. This was done on behalf of the city to explain the mess we are in, and possible solutions as to how to get out of the mess. So, again I want to emphasize that what I am trying to do today is to challenge the delegations from Maryland and Virginia, or anybody else, to say show me if you have a better way to come up with $2 billion so that we are not embarrassed by having our schools shut down. Let me tell you why they will end up shutting down again if we don't come up with something. There is a group called Parents United. And they are upset with the fact that their kids are going to schools that are unsafe. So each year they go to a judge who is very friendly to them and who likes to make us look stupid. So that judge shuts the schools down each year. And they have about 20 to 40 years to go, depending on how much we put up each year with these code violations. So they will pick on a number of code violations. The boilers are about to blow in several of the schools. So maybe this winter the Christmas holidays may get extended, if they decide to go and get the boilers fixed, although I hope they will be able to fix the boilers without that. But anyway, they will each time go, and they will get the court to order the schools to be repaired. But as you say, with $2 billion to go in doing it with $50 million to $80 million a year, it will take a while. I don't want to have to spend the rest of my time here being embarrassed every year about why these schools are not being opened. So let's take a look at what the positive side of the events are. Let me tell you what we have here, just to give you some credence on what I am saying. Look at this Washington Post editorial the shortage of workers in this regional area for the information technology jobs available. But, as I mentioned earlier, there is a serious labor market shortage in this area. We have a burgeoning development of technology-based jobs--not only in the information industry but in every sector of our economy. These jobs are available in a location that's nice and convenient to the Capitol. There are 50,000 jobs out there right now that cannot be filled. And these are $20- $30- and $40-an-hour jobs that cannot be filled because the schools, the high schools in this area, even though we have some good ones out in the suburbs, are not graduating people from high school with the capacity they should have to take these jobs. I want to mention this to give you an idea of the dimension of the problem. If we could fill these jobs, it would increase the revenues in the area available by $3.5 billion annually. We are talking about an enormous amount. Keep that figure in mind. That is the potential that we could do. Keep also in mind the fact that in this city now two- thirds of the workers are living in the suburbs. That is up by one-half from several years ago when everybody flooded out of the city. I will remind you. Why did they flood out? Two reasons: One, crime; and, back and forth between number one and two, the schools. The schools are lousy. I am not going to bring my kids up here. I am taking them to the suburbs. So now two-thirds of the workers go out. Do you know what they take with them? They take with them $20 billion a year--$20 billion a year that goes out to be taxed by Virginia and Maryland. Do you want to know why Virginia and Maryland are going to get upset? Because if I try to take some of that, wow. That is going to be revenue out of their pockets. That is why I want to emphasize that if we increase the revenues by $3.5 billion, it will help reduce the impact of removing it. And we are not going to take all of it anyway. How much comes back in from people working out? One percent of that. One percent comes from workers working out of the District--outside the District, coming back into the District. It is a huge disparity. Another fact that I want to mention--this one is very, very important to remember. Washington, DC, is the only city in America which is in an interstate area where its workers cannot--cannot--be taxed on their wages before they go home. It is the only city in America that is in that situation. All of the cities that are in an interstate situation have taxes on the nonresidents. So part of the work revenue stays. The highest I think is 4 percent. The average is around 2 or 3 percent. Just keep that figure in mind because you have a huge amount of money that flows out of the District into Maryland and Virginia, which grab hold of it and throw into their treasury. Everybody would like to be able to do that. So that is the situation we are in. Now the question is, How can we make an equitable system, granted that this city is restrained? How are we restrained? Let me tell you how that happened. Back in 1974, when the District of Columbia went to home rule, a very astute Member of the House said, ``Hey. Every other city in this country grabs money from the workers.'' And that Representative was from Virginia, naturally, and offered an amendment which passed that said the District of Columbia is prohibited from taxing workers, nonresident workers. And that is still in the law. So right now, unlike any other city in America in a similar situation, the District of Columbia cannot tax the nonresident income. Well, it seemed to me that under that circumstance it would be appropriate to take a look to see if we could not just nick it and take some money back to float the bond for the $2 billion needed for the infrastructure code repairs. That is what this amendment does. But in addition to that, to be more wise and also make it more appealing, my amendment will take money from the nonresident workers, the tax money that goes to Annapolis and Richmond, and bring it back into counties of Maryland and Virginia that border the District of Columbia. So in the final analysis we start out and ease it in, phase it in so that it would have a slow differential in the impact it has on those States starting off with money to repair the schools. That will take about 1 percent. We could phase that in in a couple years. One percent would take care of the bonds to raise $2 billion. Then, if we can go to 3 percent, split that so that it equals half the money going to the suburbs and half to the District of Columbia--that is including the infrastructure repairs--we can then create what needs to be done, a system to be able to coordinate the schools in these areas to find out where best to have skill training. For instance, I would recommend we take UDC, the University of the District of Columbia, and make it into a skill training center. Give it a new purpose. It could be used for those purposes. And these grants would be given out in cooperation with the Department of Education and the Department of Labor. I did not want to give it to the Federal Government, but that does make it necessary for interstate compacts. So then we could create the system. Let's take a look back at the Washington Post. What it is talking about is where the jobless could be given jobs. I want to give validity to what I am saying. They are aware of this. The business community is also aware of what I am trying to do and very supportive, and the educators are, of course, too. I have spoken with the leaders of the exploding high- technology industry from Virginia and Maryland, and they note that the boom has been so dramatic that they're worried about finding enough people to work for them. Then note the plight of the District, where businesses evaporate and unemployment is the highest in the region. The obvious but so far elusive solution: match the District of Columbia jobless with Northern Virginia jobs. So this is known as an area of need. So what I am recommending with this amendment is that we ought to work together as a region. And this can be done nationally. I would say the Senator from North Carolina, when we discussed this some time ago, pointed out in North Carolina they have developed these things, and the South has been very astute. We in the Northeast and the rest of the country ought to be aware of what they are doing. They are working together in a region. They are inviting businesses to come in. They are creating skill training in order to make sure that they can get the jobs and get the businesses to locate in their States to provide them with what is necessary. Now, I am hopeful that when the other States look at this they will realize, if we come in and just take a little bit of the money, which any other city in this country could do that is in this interstate situation, we must make sure we turn this city around and move it in the right direction, first, by fixing up the schools. Now, certainly I am embarrassed, and I hope all of my colleagues are embarrassed, by the fact that this city has the worst school infrastructure in the country and that such a huge number of our schools are unfit. With $2 billion, I hope they would take notice and join me in trying to do something about it. But I also point out that it does not make any difference to me how we do it. I would challenge the Senators from Virginia and Maryland, if they do not like the fact that some of the money may be taken from their State capitals and moved down into their counties near here or some into the District of Columbia, then suggest another alternative. I urge any of my colleagues to figure out how we can raise $2 billion over the next couple years so that we can get these schools fixed so we do not have to go through the difficult period of time each year of being embarrassed by the District of Columbia school system. In winding up, I urge that we will get your attention because I think it is easy for us, as so many Members do when I talk to them, to say, ``Oh, that's Mayor Marion Barry's problem. He made a mess out of it.'' That may be true. But that is not the solution. We are responsible. We are the ones who have to come up with a solution, and if we do not do it, then I am sad for the kids in these schools. I am sad for the city, and I am sad for all of us who will be embarrassed, instead of having the Nation's Capital pointed to, as it could be, as a model to follow, and ridiculed and we feel so sorry for those kids. Now, let me talk a little bit also about other things that can be done to help the city and that are being done. I have lived here now close to 25 years. I have lived right in the District. I have not gone out to the suburbs so I know what's going on here and I have seen it improved; I have seen it getting better; but I feel very responsible for it. And so I hope that we will see as we move forward that we can change this city around. I am hopeful that we will have that responsibility, recognize it and do something about it. In addition to what I have already told you about, I would also like to mention what the private sector has been doing to assist. We ought to keep our eye on the private sector because they are showing us their ability through volunteering. Let me talk about two programs that I have been working with the private sector. One looks at one of the most difficult problems the Nation has, and that is reading. You saw the record, the horrible record of the District of Columbia in reading. We have started a program called ``Everybody Wins!'' This is a lunchtime volunteer reading program that pairs caring adults with elementary school children in Title 1 schools to help them learn to read and learn the value of reading and education. Senate volunteers go every Tuesday to the Brent School to read over here on the Hill and the House volunteers go down to the John Tyler school. All in all we now have around 300 House and Senate staff who read in the program. We began ``Everybody Wins!'' up here on the Hill to generate awareness with the private sector and others of how fantastic a program it is and how easy and effective it is to get involved and this year we will have about 1,200 volunteers all across the city who are reading to kids in first through sixth grades to make sure at the end of the third grade they know how to read--a great program. It is a non-profit educational foundation funded by the private sector, with the whole effort led by the PGA Tour and the Tour Wives Association. The PGA Tour is under the leadership of Commissioner Tim Finchem, who is really making children and education a priority, and I commend him for all his help. We have been able to raise some money each year at a fundraiser called ``Links to Literacy.'' The entire House and Senate leadership from both sides of the aisle joined me and Senator Kennedy in spearheading this event. We will have another fundraiser this spring where ``everybody wins'' so that we can make progress toward our goal of having every elementary school child in the D.C. public schools read with an adult volunteer once a week at lunchtime. Secondly, the area of greatest difficulty--and here is another area where the District of Columbia leads the Nation, I think--is school dropouts. Forty percent of the kids in the District of Columbia system who start do not finish, and that I tell you is very much related to the serious crime problem because 80 percent of the people that are in jails are school dropouts. I traveled out to San Diego and visited a program there which was set up by the private sector called ``Operation FitKids.'' This program was founded by a man named Ken Germano who works in the fitness industry and who is passionately dedicated to underprivileged kids. He figured out a way for the fitness industry to donate used equipment to schools to create safe, educational fitness centers in the middle and high schools. Now you have to have the biggest and best equipment in order to attract people. I know I watch television. Every couple weeks there is a new way to tread the mill and those kinds of things. My colleague Senator Kohl has joined with me to bring this great program to the District of Columbia. This summer we were able to have half a million dollars worth of equipment that has been donated to four of the middle schools and high schools in our city's worst areas to help young people with a place to go to exercise and to communicate with each other and to learn life-long healthy habits. To make this work we had to form a partnership with a local university and American University stepped right up to the plate and we now will have a big launch event this Fall to get the word out about how more people can get involved. Another area. Representative Cass Ballenger has been working with the private sector and contractors, saying, will you help? Will you help do things with a little money? In other words, try to get donated whatever is needed to help fix these schools. And they say yes. Ballenger said, well, the problem is we can't do much about it because of the Davis- Bacon Act. And hopefully at the same time we do this we could get an agreement to lift the Davis-Bacon Act, or at least the size of contracts which are needed to be met so that we could take that money and do it with much less by being able to get around the Davis-Bacon Act. So the private sector is ready to help. I am certainly ready to help. A number of my colleagues are. But it is up to the rest of the Senate and the House to really say we are going to make this capital the best in the country, not the worst. And right now we are embarrassed, and I am embarrassed, but I am hopeful a year from now we will be on the road to progress and I am going to do everything I can to make sure that we are on that road. Mr. President, I am pleased to yield back the remainder of my time. I withdraw my amendment.

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, I would like to announce for information of the Senate and the public that a hearing of the Senate Committee on Labor and Human Resources will be held on Tuesday, September 30, 1997, 10 a.m., in SD-430 of the Senate Dirksen Building. The subject of the hearing is Tobacco Settlement part III. For further information, please call the committee, 202/224-5375. committee on labor and human resources

Mr. JEFFORDS. Mr. President, I would like to announce for information of the Senate and the public that a hearing of the Senate Committee on Labor and Human Resources will be held on Wednesday, October 1, 1997, 10 a.m., in SD-430 of the Senate Dirksen Building. The subject of the hearing is Voluntary Initiatives to Expand Health Insurance Coverage. For further information, please call the committee, 202/224-5375. committee on agriculture, nutrition, and forestry

Mr. JEFFORDS

Mr. JEFFORDS. I share the Senator's goal of ensuring a strong FDA and believe the modernization and revitalization provisions included in S. 830 make for a better FDA, not a weaker one. Like you I have had the opportunity to meet with industry groups here in Washington and with consumers, patients, and physicians both here and at home in Vermont. All of these interested parties have made important points about how to modernize the agency while ensuring that its stellar standard for public safety remain as strong as ever. Though Vermont doesn't have any of these large industries regulated by the FDA, all of us use their products. The people and the patient advocates of Vermont have told me that more needs to be done to ensure their timely access to the best therapies available. I believe we have accomplished that with this bill. I think that the Senator from Washington would agree that it's important to put aside once and for all that consumers, patients, and physicians universally oppose this measure. Vermont patient groups and their members--and I'm sure you have heard from your constituents--have told me that they support this effort to modernize the FDA. The Vermont Epilepsy Association, the Vermont Medical Society, the Vermont Association for the Deaf, the Vermont Board of Pharmacy, the Vermont Alliance for the Mentally Ill, and the Epilepsy Foundation of Vermont have all urged passage of the measure. At the national level we have heard from innumerable groups that support S. 830 and urge its passage. For example, the National Health Council--which includes the Arthritis Foundation, the National Multiple Sclerosis Society, and the Leukemia Society among its over 100 member organizations--took out a full-page advertisement in the Roll Call newspaper urging that the Senate move forward with this legislation. I agree with my colleague from Washington and you can be assured that if problems do arise, I would act quickly to address any threat to the public health. Simply because we are authorizing PDUFA for 5 years does not mean that we cannot change other sections of the Food, Drug and Cosmetic Act. It could also turn out that some of these reforms, like expanded third party review for medical devices, will become such a success that the FDA will want to extend the program beyond the pilot phase. Effective and aggressive oversight is one of the most important tools of the Labor and Human Resources Committee for making sure that the FDA can keep pace with the rapid changes in medical technology and still be a public health agency that is the envy of the world. I thank the Senator for her commitment to working toward real reforms that strengthen the FDA and the contributions she has made in crafting this bipartisan measure.

Mr. JEFFORDS. I yield to the Senator from Washington, a member of the Senate Labor and Human Resources Committee for purposes of engaging in a colloquy.

Mr. JEFFORDS. Madam President, I yield 6 minutes to the Senator from Arkansas.

Mr. JEFFORDS. I ask unanimous consent that a letter from the Nonprescription Drug Manufacturers Association to Senator Lott be printed in the Record.

Mr. JEFFORDS. I believe the Senator is correct in his understanding.

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, first, I have a unanimous-consent request, which has been cleared on both sides. I ask unanimous consent that it be in order to consider amendment No. 1184, as modified, with changes that are at the desk; further, that the amendment be agreed to, and the motion to reconsider be laid upon the table. I'm sorry, Mr. President, I withdraw that request at this moment.

Mr. JEFFORDS. Mr. President, first of all, I thank the ranking member for his help on this bill. We agree on 19 out of 20 provisions. His steadfast and articulate objection to the 20th, relative to section 404, has been done sincerely and very well done on that issue. I believe that we have a good bill, but we remain open to suggestions, as always, as to how the bill can be improved. I am extremely pleased that the Senate has overwhelmingly approved S. 830 yesterday. I believe this is an important step forward for ensuring a stronger and more efficient FDA. Throughout this process, we have had the benefit of input from all interested parties on how best to modernize the Agency, while ensuring that its stellar standard for public safety remains as strong as ever. I am extremely proud of the strong support of this legislation expressed by the health community. For instance, the National Health Council, a coalition of over 100 health and patient organizations, has urged the Senate to move forward with this legislation. We have also received support from physician groups, including the American Medical Association and the American Academy of Pediatrics. We must remember that drugs and medical devices delayed at the FDA are often lives lost. When cardiac defibrillators were first developed in the late 1980's, they brought new hope and opportunity to many of the 350,000 Americans who would otherwise suffer sudden cardiac death each year. But the first version of this technology required opening the chest and separating the ribs to apply this technology to the heart. This procedure carried a 4.2 percent mortality rate. Improvements to this defibrillator technology were widely available in Europe two years before patients could benefit in this country. The new technology did not require cracking the patients chest, but only a small incision to allow the technology to be threaded through a vein into the heart. During this unnecessary 2-year delay, it is estimated that 1,056 Americans died from complications related to the more invasive technique. Delay does cost lives. And far from allowing dangerous products on the market as Senator Kennedy has alleged, section 404 of this bill keeps intact FDA's authority to investigate technological issues which raise new safety and effectiveness questions, does not limit FDA's enforcement authority, and does not touch FDA's regulations which require that medical device applications be truthful and not omit any material facts. Section 404 does quite appropriately keep FDA out of regulating the practice of medicine. That is important and we should fight to protect the intent of this provision. Patients will also benefit from other provisions of the bill including the registry of clinical trials, fast-track approval for drugs treating life-threatening diseases, expanded access to investigational therapies, and the incentives established to investigate pediatric uses of drugs. I want to thank the patient, consumer, and physician groups, and all the others we have worked with, for their commitment to working toward real reforms that strengthen the FDA and the contributions they have made in crafting this bipartisan measure. Mr. President, how much time do I have left?

Mr. JEFFORDS. I yield 2 minutes to the Senator from Florida.

Mr. JEFFORDS. I thank the Senator for his comments, and I want to praise him for his efforts with respect to off-label. This is an incredibly important amendment that Senator Mack and Senator Frist have worked out with the FDA and the minority. That is going to give a great deal of assistance to people in this country who are in need of help in straightening out a relatively difficult area with such preciseness. The Senator from Florida did a good job. Amendment No. 1184, As Modified Mr. President, I ask unanimous consent that it be in order to consider amendment No. 1184, as modified, with changes that are at the desk; further, that the amendment be agreed to, and the motion to reconsider be laid upon the table.

Mr. JEFFORDS. Mr. President, I ask unanimous consent that Senator Abraham be added as a cosponsor of S. 830.

Mr. JEFFORDS. Mr. President, if the minority is ready and will yield all remaining time, I will yield mine. It is my understanding the minority will yield this time. I yield the remainder of my time.

Mr. JEFFORDS. Mr. President, I ask unanimous consent that the administration policy that was received as a message be printed in the Record. I thank them for bringing it to our attention at this time.

Mr. JEFFORDS. Mr. President, I ask for the yeas and nays.

Mr. JEFFORDS. Mr. President, I move to reconsider the vote.

Mr. JEFFORDS. Mr. President, I thank my colleagues and I thank them profusely for their vote, for their support in the committee, and all the work that has gone into this. But, as we all know, there are people who work behind the scenes, those who are probably more responsible for this vote than we on the floor are. I just want to take a moment to thank the staff. In the office of Senate Legislative Counsel, Robin Bates, Elizabeth Aldridge, and Bill Baird worked tirelessly to produce countless bill drafts and amendments. And how they came out with them as expeditiously as they did, I'm not sure. The staff at CRS, especially Donna Vogt, and at GAO, including Bernice Steinhardt deserve thanks for their willingness to provide essential information and documents on extremely short notice. We must always remember to appreciate these organizations that provide so much assistance to the Congress. The staff to the members of the committee contributed greatly to the success of this bill. In particular, Vince Ventimiglia with Senator Coats' staff worked closely with ours in a true partnership on all aspects of S. 830. In addition, Kimberly Spaulding with Senator Gregg, Sue Ramthun with Senator Frist, Saira Sultan with Senator DeWine, and Kate Lambrew-Hull with Senator Hutchinson all played important roles in fashioning compromises on key provisions of this bill. Also, Mark Smith with Senator Mack's staff worked very hard to make the agreement on off- label dissemination of information possible. I would also like to thank the many staff of the administration who have worked on this legislation. In particular, I want to thank Bill Schultz, Diane Thompson, and Peggy Dotzel, of the FDA. Similarly, three staffers for members of the minority on the committee played pivotal roles even before committee markup took place in making this bill a bipartisan success. Lynne Lawrence with Senator Mikulski deserves special mention in recognition of her hard work in the last Congress on FDA reform and her willingness to put her future career plans on hold to commit herself again to the long hard job of bringing this bill to the floor this year. Jeanne Ireland with Senator Dodd and Linda DeGutis, a fellow with Senator Wellstone also provided invaluable assistance. Of course I would like to thank the Labor and Human Resources Committee majority and minority staffs who did the most work on this. In particular, I want to recognize Susan Hattan who stayed on with the committee after Senator Kassebaum's retirement. She, and another Senator Kassebaum staffer, Jane Williams, who is now on the staff of Representative Fred Upton, worked long hours last year to put FDA reform on the Senate agenda and brought a bill to successful committee markup in the last Congress--we stand here today in large part due to their hard work. On the minority staff, I would like to thank Nick Littlefield and David Nexon and two minority fellows Diane Robertson and Debbie Kochever. Finally, I would like to thank the majority staff director Mark Powden, Jay Hawkins, and majority fellow Sean Donohue. I want to take a moment to elaborate on my comments regarding one of the majority staff who has worked so diligently on this measure--Jay Hawkins. Jay joined my staff in January--literally hit the ground running--and I don't think he has stopped moving since. He has set a new standard of dedication for professional staff to find the best solution in a difficult and controversial policy arena. He has been saluted by other Senators' staffs, from both majority and minority offices, for his willingness to include them in all aspects of this effort. Mr. President, part of the job description for Senate staff is to take abuse. Jay unfortunately received more than his share, but it said more about his critics than him. More recently--a little more than a month ago--Jay lost his mother to her 4-year battle with cancer. My friend, Senator Hatch, acknowledged on the floor just yesterday this hardship Jay faced and was eloquent in his praise for both Jay and for his mother--Donna Lotz Hawkins. Mrs. Hawkins was not unfamiliar with challenge and adversity. She was an experienced mountain climber and conquered some of the world's most difficult mountains in the Alaska range, the Tetons, the Alps, and the Himalayas. She was a dedicated ocean swimmer and conquered the white waters in Waikiki and Maui. It is clear to us who know Jay that he too has the spirit of taking on the task when faced with adversity and challenge. We know the source of that sense of commitment and we cannot thank him enough for his efforts on this bill. I yield the floor.

Mr. JEFFORDS

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