Jim Jeffords

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, it gives me great pleasure to extend my heartfelt congratulations to the Vermont State Police on the occasion of their 50th anniversary. It all started on July 1, 1947, when the Department of Public Safety, home of the Vermont State Police, was established by the Vermont General Assembly. Although Vermont was one of the last in the Nation to create a State police force, it is widely regarded as one of the country's best. At its inception, it was comprised of 55 State troopers and 7 civilians. During the department's 50 years of service, Vermont's population has increased by over 50 percent. As Vermont changed, so did the department. Today, it also includes a larger civilian force to assist with laboratory procedures and other non-law enforcement related work. Technological advances such as the introduction of radar as a speed enforcement tool, the purchase of the first polygraph instrument, and the creation of a mobile crime lab unit all increased the department's ability to deal with the rising challenges facing law enforcement today. The changing societal and family dynamics have greatly impacted our police force. Today, our troopers must be trained differently to meet these challenges. What remains the same, however, is the dedication, professionalism, and exemplary service we have been accustomed to--in spite of the ever present dangers of the job. On any given day, a trooper's job might range from assisting a stranded motorist on Interstate 89 to a homicide call in the northeast kingdom. For 50 years the department has helped improve our communities and given our citizens a sense of security. On behalf of all Vermonters I would like to thank the Department of Public Safety, and wish them continued success.

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 Thursday, July 24, 1997, 10:00 a.m., in SD-430 of the Senate Dirksen Building. The subject of the hearing is Higher Education Act Reauthorization; Title IV. For further information, please call the committee, 202/224-5375. committee on labor and human resources

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, 3 days ago, the heavens opened over northern Vermont. Torrential rains sent floodwaters ripping through communities and over farmland, tearing bridges from their foundations, shredding roads and stranding hundreds of people. The floods that swept through sections of northern Vermont were the worst in over 70 years. Up to 6 inches of rain fell overnight. Flash floods turned quiet rivers and streams into raging waterways in the early morning darkness, disrupting the peaceful existence of thousands of Vermonters. Yesterday, I spoke with several town officials and residents who were hit the hardest. They gave me firsthand accounts of the damage to their communities. In some towns, bridges were swept away, roads were washed out, pavements were ripped up, cars and trucks were overturned, perhaps were destroyed, trees were uprooted, homes were lifted from their foundations and filled with water. Monday night's torrential rains were followed by a day of heroism-- neighbors, rescue workers, families and friends came together in Vermont's close communities. In Eden, 300 Cub Scouts were evacuated after the bridge into their camp was washed away. In Cambridge, rescue workers saved a 14-year-old girl and her dog who were stranded on a washed out roadway. In Montgomery, 11 people were pulled from a mobile home roof and carried to safety in a bucket loader moments before the trailer was swept away. Volunteers made 1,000 sandwiches for rescue workers, and neighbors opened their homes to those who were driven from their own. There are many courageous stories and events that took place during the crisis, and knowing Vermonters like I do, I know there were many more heroic stories long after the rivers had receded and the officials had left town. Mr. President, I am proud of and commend the Vermonters who united during this time of disaster to save lives and communities. The damage has been substantial and much work still needs to be done. I stand ready in every way to assist, if possible, the people of Vermont to help rebuild their communities and lives. I know our Governor has surveyed the situation and he has made recommendations to the President for Federal help. I know the congressional delegation from Vermont is doing all it can to make sure the lives that have been disrupted are put back as close to normal as possible as soon as possible. Mr. President, I thank you for this time. I yield the floor and make a point of order that a quorum is not present. The PRESIDING OFFICER (Mr. Hutchinson]. The clerk will call the roll.

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, I ask unanimous consent I be allowed to speak as if in morning business for a period not to exceed 5 minutes.

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

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, today, there are more than 12 million children under the age of five--including half of all infants under one year of age--who spend at least part of their day being cared for by someone other than their parents. There are millions more school-aged children under the age of twelve who are in some form of child care at the beginning and end of the school day as well as during school holidays and vacations. And more six to twelve year olds who are latchkey kids--returning home from school to no supervision because parents are working and there are few, if any, alternatives. The past two decades have seen a dramatic rise in the number of women in the paid labor force. Women now constitute 46% of our nation's labor force. Most women are working to meet their family's basic needs. More than 60% of women with pre-school aged children are employed full- or part-time. Their employment is not a choice, but an essential part of their family's economic survival. And for most of these families, child care is not an option, but a requirement. Many of the traditional sources of child care are no longer available--as many of the friends, neighbors, grandparents, and other relatives who used to be available to provide child care are also working. Research has repeatedly demonstrated that for parents who must work, child care services that are dependable and of high quality make it easier to find and keep a job. Good child care helps parents reach and maintain economic self-sufficiency. Congress acknowledged this when it passed welfare reform last year, which dramatically increased the amount of entitlement money available for child care. Steady increases in the number of employed women with young children, combined with last year's welfare reforms, have placed tremendous pressures on communities to dramatically expand the amount of available child care. While the supply of child care has increased over the past 10 years, there are still significant shortages for parents in rural areas, those with school-aged children or infants, and for lower-income families. I think that few of us know how much child care costs. The Senate Employee's Child Care Center costs between $150 and $175 a week--$7,800 to $9,100 a year. That places it in the high-middle range in terms of costs for the Washington, D.C. area. The younger the child, the higher the costs--and Senate Employee's Child Care Center does not accept children under 18 months old, the most expensive type of child care. The costs of child care are almost wholly dependent upon the geographic area, the type of child care, and the age of the child. For example, a family purchasing full-time child care services for a four- year-old in rural New York using a family child care home may pay as little as $60 a week. In contrast, a family with an infant using a child care center in New York City may pay more than $250 a week. For a 3- to 4-year-old child, the least expensive age group, the national average for center-based child care is $4,600 a year. The average cost for high quality care, such as that provided by the Senate Employee's Child Care Center, is between $8,500 and $9,100 a year. The cost of family-based child care is generally less expensive, while in- home care with a nanny or au pair is generally more expensive. A family normally spends about twenty-percent of its income on housing and ten-percent on food. The costs of child care for a low-or middle-income family can rival the cost of housing and be double the cost of food. Even though most of us recognize the critical part that child care plays in the economic survival of families, we often fail to recognize it as a basic cost which consumes a significant portion of a family's income. Parents can only purchase child care they can afford. Those who do find care that is affordable and convenient are often unsatisfied with the quality of the care their child receives. In fact, one quarter of all parents would change their child care arrangement if they could find and afford something better. Since 1990, the costs of child care have risen about six-percent annually. This is almost triple the annual increase in the cost of living. At the same time, there are strong indicators that the quality of child care has significantly decreased during that same period of time. Parents are paying more but getting less. The quality of child care in America is very troubling. A recent nationwide study found that forty-percent of the child care provided to infants in child care centers was potentially injurious. Fifteen- percent of center-based child care providers for all pre-schoolers are so bad that a child's health and safety are threatened; seventy-percent are mediocre--not hurting or helping children; and fifteen-percent actively promote a child's development. Center-based child care, the object of this study, is the most heavily regulated and frequently monitored type of child care. There are strong indications that care for children in less regulated settings, such as family-based child care and in-home care, is far worse. Combining the research on the quality of child care with the breakthroughs on the development of the human brain produces a very disturbing situation. Many children enter child care by eleven weeks of age, are in care for close to 30 hours a week, and often stay in some form of child care until they enter school. During that same period of life, a child's brain is undergoing a series of extraordinary changes. In the first three years of life, the brain either makes the connections it needs for learning or it atrophies, making later efforts at remediation in learning, behavior, and thinking difficult, at best. The experiences and stimulation that a caretaker provide to a child are the foundations upon which all future learning is built. The brain's greatest and most critical growth spurt is between birth and ten years of age--precisely the time when non-parental child care is most frequently utilized. A Time magazine special report on ``How a Child's Brain Develops'' (February 3, 1997) said it best, ``. . . Good, affordable day care is not a luxury or a fringe benefit for welfare mothers and working parents but essential brain food for the next generation.'' While bad child care can seriously impair a child's development, high-quality child care significantly increases the chances of good developmental outcomes for children. Think about it. At the most important time in the development of a child's brain, more than twelve million children are being cared for by people who are paid less than the person who picks up your garbage each week, and are required to have less training than the person who cuts your hair, and less skill-based testing than the person delivering packages to your house. Child care providers play an important role in a child's development, for they help fine-tune the child's capacity to think and process information, social skills, emotional health, and acquisition of language. Last year, our goal in child care was to streamline federal assistance by creating a cohesive structure for federal assistance and to provide sufficient government funds to subsidize child care for welfare recipients who were transitioning into work. This year our goal must be to promote the healthy development of children in child care. I am worried that the pressure of the need to accommodate the increasing demand for child care will force many into forgoing quality just to increase the number of child care slots available. I rise today to introduce legislation entitled ``Creating Improved Delivery of Child Care: Affordable, Reliable, and Educational Act of 1997,'' the CIDCARE Act. It incorporates modifications to the tax code, an incentive grant program for states (including wage subsidies for child care providers who get additional training and education and a grant program to encourage small business partnerships to provide child care for employees), a technology-based infrastructure for the professional development of child care providers, educational loan forgiveness for child care providers, requirements that states include the cost of child care in the calculation of child support orders, expansion of the federal government's technical assistance and information dissemination role, and requirements that child care centers located in federal facilities to meet high quality standards of care. There is no one thing--no magic bullet--that will ensure higher quality child care. Each of these provisions has been included to solve a specific problem or break through a barrier that has hampered efforts to improve the quality of child care. Taken as a whole, these provisions represent a comprehensive effort to increase the supply while simultaneously creating a demand for high-quality child care, and make it affordable for low- and middle-income families. To offset the cost of these changes, the bill reduces, but does not eliminate, the dependent care tax credit for upper income taxpayers. Over a 5-year period, it gradually decreases the amount that an employee can place in a dependent care assistance plan used to reimburse nonaccredited or non-credential child care. In addition, the legislation expands the coordinated enforcement efforts of the Internal Revenue Service and the HHS Office of Child Support Enforcement, which will significantly reduce the amount of fraud related to illegal tax deduction and credit claims by noncustodial, noncontributing parents. The first provision in CIDCARE makes several changes in the Child and Dependent Care Tax Credit [CDCTC]. This tax credit is the largest tax- based subsidy for child care. The bill raises the income level for the receipt of the highest percentage of employment-related child care costs from $10,000 to $20,000. The percentage is decreased at a rate of 1 percent for each additional $2,500 in adjusted gross income and sets a minimum percentage of 10 percent for incomes of $70,000 and above. This change represents a more equitable distribution of limited resources based on the percentage of income a family must use to meet child care expenses. For families qualifying for the EITC, the legislation makes the child care tax credit refundable, on a quarterly basis. This will enable many low-income working families to move from part-time to full-time employment, by easing the burden of child care costs and having the money available at regular intervals throughout the year. Another revision to the Child Care Tax Credit establishes, over a 5- year period, different rates for the tax credit, dependent on whether the child care is provided in an accredited child care facility or by a credentialed professional. This will reward parents who choose high- quality child care and help defray the additional costs of that care. I am sensitive to the concerns of colleagues who object to reducing the child care tax credit. But before you judge this reduction too harshly, let's put it into perspective. The tax credit remains at or above the current rate of 20 percent for parents with adjusted gross incomes of $45,000 or less, regardless of the type of child care. The median income of families with children nationally is $37,000. While there are wide differences in between States, there are only four States where the median exceeds $45,000 AGI, triggering a reduction in the current rate of 20 percent. The median income in most States is significantly below this trigger. At the end of the 5-year phase in period, the tax credit remains at or above the current 20 percent rate for families with an AGI of $55,000--if they choose high-quality child care. No States have median incomes of families with children which exceed this which triggers a reduction below current child care tax rate. Families with incomes at or above $70,000 will still receive a tax credit of ten percent, increased to 12.5% if high quality care is used. In terms of money, a one percent decrease in the child care tax credit equals $24 when care for one child is claimed, and $48 for two or more children. Families making $70,000 or more are the hardest hit by my legislation. Yet their maximum financial cost is $240 a year for one child,or $480 a year for two or more children--about half of one percent of their adjusted gross income. The second area of changes occurs in the Dependent Care Assistance Plan (DCAP). The CIDCARE Act increases the amount that an employee can contribute to a DCAP account, if the funds are used to pay for the care of two or more eligible persons. In addition, the amount of DCAP contributions is increased for high-quality care and decreased for care that is provided by an unaccredited child care facility or a person who has not received a professional credential. At the end of the five year phase in, the maximum decrease in the DCAP amount for unaccredited care is 20% lower than the current ceiling on contributions. These differential rates are phased in over a five year period in order for child care providers to achieve accreditation or become credentialed in child care. Current law prohibits DCAP from being used to pay relatives for care. While I support needed controls on the use of DCAP accounts in most cases, my legislation would make a very limited exception to this prohibition. DCAP payments could be made to pay a parent or grandparent to care for a newborn child. The DCAP account could be joined at anytime during a pregnancy. The funds would be available for up to 12 months from the date of deposit into the employee's DCAP account-- because babies have a timetable all their own when it comes to being born. The last change CIDCARE makes in the Dependent Care Assistance Plan is a requirement that federal employees have the opportunity to contribute to DCAP. Private employees, as well as many state and local governments, have had DCAP available for their employees since 1981. Consistent with the intent of the Congressional Accountability Act, I want to make this child care subsidy available to federal workers, including legislative branch employees. Child care is a growing concern to businesses, big and small. Employers are coming to the realization that affordable, convenient high-quality child care is a critical element in hiring and retaining skilled employees. Many companies, such as Johnson & Johnson, IBM, and others have been very innovative in providing child care assistance for their employees. Small businesses in particular are finding it difficult to meet the child care needs of their employees, but recognize the importance of that help. The CIDCARE Act creates a tax credit for employers providing or otherwise supporting high-quality child care arrangements for their employees. On the Budget Reconciliation bill passed by the Senate, Senator Kohl introduced an amendment to provide a time-limited tax credit for employers who provide child care for their employees. To reinforce the importance of the Kohl amendment, I have included it in CIDCARE. Fifty percent of the expenses incurred by a business to meet the child care needs of employees will be credited toward the business' Federal tax liability. Eligible expenses are capped at $150,000 per year, and the tax credit sunsets after three years. Costs allowed to businesses under this provision include startup costs, renovations to meet accreditation standards, professional development for child care providers, general operating expenses, subsidized child care for lower paid employees, support for child care resource and referral services and other child care activities. These provisions encourage business involvement and innovation in meeting the child care needs of employees and increasing the demand for higher quality child care. Current law prohibits businesses from receiving a charitable deduction for donations made to public entities, such as schools and child care services. CIDCARE will extend eligibility for a business charitable deduction to the donation of educational equipment and supplies donated to public schools, public child care providers, and public child care support entities, such as resource and referral services. If child care is to improve and meet the developmental needs of our Nation's children, every available resource must be made available. Computers which are discarded because they are too slow or have insufficient hard drive capacity, can be the first step into the computer-age for a small child or the link to professional training for a child care provider. A critical part of improving the quality of child care is professional development for child care providers. Since the 1970's there has been a decline in child care teacher salaries. In 1990, teachers in child care centers earned an average of $11,500 a year. Assistant teachers, the largest growing segment of child care professionals, were paid 10- to 20-percent less than child care teachers. The 1990 annual income of regulated family child care providers was $10,944 which translates to about $4 an hour. Nonregulated family child care, generally comprised of providers taking care of a smaller number of children, earned an average of $4,275 a year--substantially less than minimum wage. With these wages, it is easy to understand why more child care providers do not participate in professional training or attend college classes to improve their skills. The costs of applying for and receiving certification as a qualified child care professional are minimal, but understandably out of reach for many child care providers. This legislation will exempt expenses directly related to child care accreditation or becoming credentialed from the 2 percent floor that is applied to miscellaneous itemized deductions. This will at least permit child care providers to receive a full deduction for the expenses associated with improving the child care services which they provide. This incentive for professional growth and the development of new skills is a small but critical part of my overall effort to support high-quality child care. The last tax modification in CIDCARE creates a very limited exception to the executive use rule governing the tax deduction for home office expenses. The legislation will permit the mixed use of home office space for business and personal purposes to allow a person to care for his or her child. In some ways, the need for this exception comes down to fundamental fairness. How many school holidays, snow days and other times do children accompany their parents into work? I can always tell when the schools are unexpectedly closed, by the increased number of little people I see in Senate offices and eateries. I have been in Senate offices and other workplaces where a crib or playpen is clearly in evidence. Yet, none of us question whether our offices are exclusively for business use. One of the big incentives for telecommuting and home-based business is to allow parents to have more time with their families, yet existing law would keep a new mother from legitimately claiming a home office deduction if she has her child sleeping in a crib in a corner of the room where she is working. The non-tax related provisions of the legislation are designed to complement and work with the tax provisions. In order for families to be able to take advantage of the increased tax credits for child care in an accredited center or with a provider who has received a child care credential, there need to be more of these high quality centers and better trained providers. Child care providers must have easy, affordable access to training and other activities which will lead to accreditation and credentialing. This effort will require that the federal government join forces with states and the business community. Parents must be made aware of how to identify quality child care and its importance in their children's lives. And the federal government should set an example by requiring that child care centers located in federal facilities meet higher standards of care. It will take all of these provisions, working together, to improve the quality of child care for our children. The CIDCARE Act will require that states include the cost of child care in the calculation of child support obligations. When a custodial parent is employed or actively seeking employment, the state procedures for the determination of the amount of child support need to include an amount equal to or more than the child care rates used by the state to administer the Child Care and Development Block Grant Act. When child care is being provided in an accredited child care center or by a credentialed child care that rate will be increased by fifty-percent. Since the passage of the Child Care and Development Act in 1990, states have been setting ``market'' or ``comparable'' rates for child care. CIDCARE uses those rates as a baseline for adding the cost of child care to the amount of child support which a non-custodial parent will be required to pay. Current child support calculations include estimates of the other basic expenses necessary to provide financially for a child. In many instances, the expense of child care is the direct result of the divorce or lack of financial support from the non-custodial parent. It is only fair that child care expenses be included in those calculations. If the custodial parent secures higher quality child care, the non-custodial parent will share in the additional costs of that care. Children should not be forced into poor quality child care because a non-custodial parent refused to share in the additional expense of higher quality care. The CIDCARE bill establishes a $260 million competitive grant program to assist states in improving the quality of child care. To be eligible, a state must not have reduced the scope or otherwise decreased the state's licensing requirements since 1995, must be in compliance with the requirements of the Child Care and Development Block Grant, must have drawn down at least 80% of the amount awarded to the state in federal entitlement child care funds requiring a state match, and must conduct annual on-site monitoring of state licensed or otherwise regulated child care facilities, with at least one unannounced visit every 3 years. The legislation requires that a Priority be given to states that raise at least a 10% match for the federal funds from business or other private sources. States must use at least 20% of the grant funds awarded to establish a subsidy program to provide salary increases to child care providers who are credentialed in the state. The low level of child care wages is the most often cited reason for the tremendous staff turnover in the child care profession. In areas where child care subsidies as low as fifty cents an hour are put in place, the staff turnover rate drops dramatically. The wage subsidy also will encourage more child care providers to get additional training or advance their education. In addition, states will need to use at least twenty-percent of the funds awarded for a grant program to provide start-up funds for partnerships of small businesses to develop and operate child care cooperative services for their employees. While large employers have both the number of employees to justify an on- or near-site child care center and the additional financial resources for start-up costs, small businesses have been struggling with ways to help their employees meet their child care needs. This grant program will provide time-limited help for partnerships of small businesses who work together to develop child care resources for their employees. States can use the remainder of grant funds awarded for any of the following activities: developing standards for of entities applying for state recognition for the accreditation and credentialing of child care providers; establishing a scholarship program to help child care providers meet the costs of education and training; expanding state- based child care training and technical assistance activities; improve consumer education efforts including the expansion of resource and referral services and child care complaint systems; providing increased rates of reimbursement provided under federal or state child care assistance for children with special needs; purchasing special supplies, equipment, or meeting other extraordinary expenses necessary for the care of special needs children for distribution to child care providers serving special needs children, or providing increased rates of reimbursement provided under federal or state child care assistance for accredited and credentialed care. Each of these activities has been demonstrated to be a contributing factor in improving the quality of child care. Parents, child care providers, employers, and others need a constantly updated source of information about improving the quality of child care. States need a central depository where they can learn what other states are doing as well as a place where they can contribute their own ideas and activities from which others can learn. The collection and dissemination of information, demonstrations, and technology is one of the most important roles of the federal government. Under provisions in the CIDCARE Act, the Department of Health and Human Services (HHS) will collect information about the importance of high quality child care (including what it is, how to identify it, why it is important for children), and in partnership with the ADCouncil or similar professional advertising entity, distribute that information through a national public awareness campaign and other mechanisms. To increase the capacity of child care credentialing and accreditation entities, HHS will award competitive grants to child care credentialing and accreditation entities that have not been in existence more than 10 years for the purpose of refining and evaluating their procedures for and methods of granting child care accreditation and/or credentialing. The legislation authorizes $10 million annually, to conduct these information and technology transfer activities. The CIDCARE Act authorizes $50 million a year to create and operate a technology-based training infrastructure to enable child care providers nationwide to receive the training, education, and support they need to improve the quality of child care. The bill builds upon existing distance learning, Internet, and satellite resources, with sufficient funding to expand access to affordable child care training and information. The primary focus of the infrastructure will be to disseminate the training necessary to become an accredited child care center or a credentialed child care professional. Training and education, delivered at a minimal cost and accessible to individuals within 25 miles of their homes, will remove one of the most substantial barriers to child care credentialing and accreditation. Essentially, the legislation establishes a child care training and education interactive ``network'', which will be used by child care credentialing and accreditation entities for training, skills testing, and other activities needed to achieve and maintain child care credentialing and accreditation. Entities recognized by 2 or more states as providing accepted child care credentialing or accreditation services will be active participants in decisions governing the use of the child care ``training network.'' Time lines for the creation and implementation of the infrastructure and caps on administrative costs are included in the bill provide both financial and programmatic accountability. Through the child care training infrastructure, a no interest revolving loan fund is established to enable child care providers and child care support entities to purchase computers, satellite dishes, and other technological equipment which enable them to participate in the child care training provided on the national infrastructure. For the first five years of the legislation, at least ten-percent of the funds appropriated for the child care training infrastructure will be placed into the revolving loan fund. This part of CIDCARE, like similar federal loan programs, establishes that the funds be kept in a separate interest bearing account, establishes application procedures, terms and conditions for the approval of such loans, and procedures for handling loan defaults. At the current time, child care centers located in federal facilities are not required to meet even basic safety and health requirements. They are not subject to state or local laws or regulations governing the operation of a child care center. The CIDCARE Act will require federal child care centers (those in buildings leased or owned by the federal government--legislative, executive, judicial branches) to meet all state and local licensing and other regulatory requirements related to the provision of child care, within six months of the passage of this legislation--or make substantial progress towards meeting those requirements. The appropriate Administrator of each branch of government shall issue regulations specifying center-based child care accreditation standards and require all child care facilities in federal buildings under their control achieve accreditation within 3 years of the passage of this legislation. If the child care program located in a federal facility fails to be in compliance, or show substantial compliance with state and local licensing requirements within six months or with the identified accreditation standards within three years, the agency must cease providing child care in that child care center. On-site monitoring to ensure compliance with these regulations and standards must be performed by an outside entity. The legislation authorizes $900 thousand to the General Services Administration (GSA) to implement this provision. CIDCARE will require that federal child care programs provided by the Corporation for National and Community Service, the Departments of Defense, Education, Housing and Urban Affairs, Justice, and Labor, will ensure, to the maximum extent possible, that by October 1, 2001, any child care made available through programs funded or operated by those Departments and the Corporation, be provided by an accredited child care facility or a credentialed child care professional. The federal government needs to demonstrate a commitment to quality child care, by raising the standards it applies to its own programs. The CIDCARE Act will expand the Community Development Block Grant to include the renovation or upgrading of child care facilities to meet accreditation standards as an allowable use of the grant funds. It also will extend existing Perkins and Stafford Loan forgiveness programs to include persons who work as credentialed professionals in a child care setting. Just as these loan forgiveness programs helped encourage more people to become teachers, I hope that this extension of these two educational loan programs to child care providers will result in more and better qualified child care providers. To be eligible for loan forgiveness, the person must be employed full time providing child care services and have a degree in early childhood education or development or receive professional child care credentials. The need for high-quality child care is compelling. Having affordable, convenient child care is tied directly to a family's ability to produce income. Good child care can be an effective way to support the healthy development of children, particularly in the acquisition of social and language skills. For the millions of children who spend much of their preschool lives and many of their nonschool hours being cared for by someone other than their parents, child care provides the foundation upon which all future education will be built-- and determines to a large extent whether that foundation will be strong or weak. As we all know, quality child care costs money. It costs money to parents who bear the biggest burden for the cost of child care. It costs businesses both through the direct assistance that they provide to employees to help with the costs of child care, and through their ability to hire and retain a skilled work force. It costs Government through existing tax provisions, direct spending, and discretionary spending targeted at child care. But the costs of not making this investment are even higher. Those costs can be measured in the expense of remedial education, the expansion of an unskilled labor force, the increase in prison populations, and most importantly, the blunted potential of millions of children. I urge my colleagues to join Senator Dodd, Senator Roberts and me in support of the CIDCARE bill. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, today, there are more than 12 million children under the age of five--including half of all infants under one year of age--who spend at least part of their day being cared for by someone other than their parents. There are millions more school-aged children under the age of twelve who are in some form of child care at the beginning and end of the school day as well as during school holidays and vacations. And more six to twelve year olds who are latchkey kids--returning home from school to no supervision because parents are working and there are few, if any, alternatives. The past two decades have seen a dramatic rise in the number of women in the paid labor force. Women now constitute 46% of our nation's labor force. Most women are working to meet their family's basic needs. More than 60% of women with pre-school aged children are employed full- or part-time. Their employment is not a choice, but an essential part of their family's economic survival. And for most of these families, child care is not an option, but a requirement. Many of the traditional sources of child care are no longer available--as many of the friends, neighbors, grandparents, and other relatives who used to be available to provide child care are also working. Research has repeatedly demonstrated that for parents who must work, child care services that are dependable and of high quality make it easier to find and keep a job. Good child care helps parents reach and maintain economic self-sufficiency. Congress acknowledged this when it passed welfare reform last year, which dramatically increased the amount of entitlement money available for child care. Steady increases in the number of employed women with young children, combined with last year's welfare reforms, have placed tremendous pressures on communities to dramatically expand the amount of available child care. While the supply of child care has increased over the past 10 years, there are still significant shortages for parents in rural areas, those with school-aged children or infants, and for lower-income families. I think that few of us know how much child care costs. The Senate Employee's Child Care Center costs between $150 and $175 a week--$7,800 to $9,100 a year. That places it in the high-middle range in terms of costs for the Washington, D.C. area. The younger the child, the higher the costs--and Senate Employee's Child Care Center does not accept children under 18 months old, the most expensive type of child care. The costs of child care are almost wholly dependent upon the geographic area, the type of child care, and the age of the child. For example, a family purchasing full-time child care services for a four- year-old in rural New York using a family child care home may pay as little as $60 a week. In contrast, a family with an infant using a child care center in New York City may pay more than $250 a week. For a 3- to 4-year-old child, the least expensive age group, the national average for center-based child care is $4,600 a year. The average cost for high quality care, such as that provided by the Senate Employee's Child Care Center, is between $8,500 and $9,100 a year. The cost of family-based child care is generally less expensive, while in- home care with a nanny or au pair is generally more expensive. A family normally spends about twenty-percent of its income on housing and ten-percent on food. The costs of child care for a low-or middle-income family can rival the cost of housing and be double the cost of food. Even though most of us recognize the critical part that child care plays in the economic survival of families, we often fail to recognize it as a basic cost which consumes a significant portion of a family's income. Parents can only purchase child care they can afford. Those who do find care that is affordable and convenient are often unsatisfied with the quality of the care their child receives. In fact, one quarter of all parents would change their child care arrangement if they could find and afford something better. Since 1990, the costs of child care have risen about six-percent annually. This is almost triple the annual increase in the cost of living. At the same time, there are strong indicators that the quality of child care has significantly decreased during that same period of time. Parents are paying more but getting less. The quality of child care in America is very troubling. A recent nationwide study found that forty-percent of the child care provided to infants in child care centers was potentially injurious. Fifteen- percent of center-based child care providers for all pre-schoolers are so bad that a child's health and safety are threatened; seventy-percent are mediocre--not hurting or helping children; and fifteen-percent actively promote a child's development. Center-based child care, the object of this study, is the most heavily regulated and frequently monitored type of child care. There are strong indications that care for children in less regulated settings, such as family-based child care and in-home care, is far worse. Combining the research on the quality of child care with the breakthroughs on the development of the human brain produces a very disturbing situation. Many children enter child care by eleven weeks of age, are in care for close to 30 hours a week, and often stay in some form of child care until they enter school. During that same period of life, a child's brain is undergoing a series of extraordinary changes. In the first three years of life, the brain either makes the connections it needs for learning or it atrophies, making later efforts at remediation in learning, behavior, and thinking difficult, at best. The experiences and stimulation that a caretaker provide to a child are the foundations upon which all future learning is built. The brain's greatest and most critical growth spurt is between birth and ten years of age--precisely the time when non-parental child care is most frequently utilized. A Time magazine special report on ``How a Child's Brain Develops'' (February 3, 1997) said it best, ``. . . Good, affordable day care is not a luxury or a fringe benefit for welfare mothers and working parents but essential brain food for the next generation.'' While bad child care can seriously impair a child's development, high-quality child care significantly increases the chances of good developmental outcomes for children. Think about it. At the most important time in the development of a child's brain, more than twelve million children are being cared for by people who are paid less than the person who picks up your garbage each week, and are required to have less training than the person who cuts your hair, and less skill-based testing than the person delivering packages to your house. Child care providers play an important role in a child's development, for they help fine-tune the child's capacity to think and process information, social skills, emotional health, and acquisition of language. Last year, our goal in child care was to streamline federal assistance by creating a cohesive structure for federal assistance and to provide sufficient government funds to subsidize child care for welfare recipients who were transitioning into work. This year our goal must be to promote the healthy development of children in child care. I am worried that the pressure of the need to accommodate the increasing demand for child care will force many into forgoing quality just to increase the number of child care slots available. I rise today to introduce legislation entitled ``Creating Improved Delivery of Child Care: Affordable, Reliable, and Educational Act of 1997,'' the CIDCARE Act. It incorporates modifications to the tax code, an incentive grant program for states (including wage subsidies for child care providers who get additional training and education and a grant program to encourage small business partnerships to provide child care for employees), a technology-based infrastructure for the professional development of child care providers, educational loan forgiveness for child care providers, requirements that states include the cost of child care in the calculation of child support orders, expansion of the federal government's technical assistance and information dissemination role, and requirements that child care centers located in federal facilities to meet high quality standards of care. There is no one thing--no magic bullet--that will ensure higher quality child care. Each of these provisions has been included to solve a specific problem or break through a barrier that has hampered efforts to improve the quality of child care. Taken as a whole, these provisions represent a comprehensive effort to increase the supply while simultaneously creating a demand for high-quality child care, and make it affordable for low- and middle-income families. To offset the cost of these changes, the bill reduces, but does not eliminate, the dependent care tax credit for upper income taxpayers. Over a 5-year period, it gradually decreases the amount that an employee can place in a dependent care assistance plan used to reimburse nonaccredited or non-credential child care. In addition, the legislation expands the coordinated enforcement efforts of the Internal Revenue Service and the HHS Office of Child Support Enforcement, which will significantly reduce the amount of fraud related to illegal tax deduction and credit claims by noncustodial, noncontributing parents. The first provision in CIDCARE makes several changes in the Child and Dependent Care Tax Credit [CDCTC]. This tax credit is the largest tax- based subsidy for child care. The bill raises the income level for the receipt of the highest percentage of employment-related child care costs from $10,000 to $20,000. The percentage is decreased at a rate of 1 percent for each additional $2,500 in adjusted gross income and sets a minimum percentage of 10 percent for incomes of $70,000 and above. This change represents a more equitable distribution of limited resources based on the percentage of income a family must use to meet child care expenses. For families qualifying for the EITC, the legislation makes the child care tax credit refundable, on a quarterly basis. This will enable many low-income working families to move from part-time to full-time employment, by easing the burden of child care costs and having the money available at regular intervals throughout the year. Another revision to the Child Care Tax Credit establishes, over a 5- year period, different rates for the tax credit, dependent on whether the child care is provided in an accredited child care facility or by a credentialed professional. This will reward parents who choose high- quality child care and help defray the additional costs of that care. I am sensitive to the concerns of colleagues who object to reducing the child care tax credit. But before you judge this reduction too harshly, let's put it into perspective. The tax credit remains at or above the current rate of 20 percent for parents with adjusted gross incomes of $45,000 or less, regardless of the type of child care. The median income of families with children nationally is $37,000. While there are wide differences in between States, there are only four States where the median exceeds $45,000 AGI, triggering a reduction in the current rate of 20 percent. The median income in most States is significantly below this trigger. At the end of the 5-year phase in period, the tax credit remains at or above the current 20 percent rate for families with an AGI of $55,000--if they choose high-quality child care. No States have median incomes of families with children which exceed this which triggers a reduction below current child care tax rate. Families with incomes at or above $70,000 will still receive a tax credit of ten percent, increased to 12.5% if high quality care is used. In terms of money, a one percent decrease in the child care tax credit equals $24 when care for one child is claimed, and $48 for two or more children. Families making $70,000 or more are the hardest hit by my legislation. Yet their maximum financial cost is $240 a year for one child,or $480 a year for two or more children--about half of one percent of their adjusted gross income. The second area of changes occurs in the Dependent Care Assistance Plan (DCAP). The CIDCARE Act increases the amount that an employee can contribute to a DCAP account, if the funds are used to pay for the care of two or more eligible persons. In addition, the amount of DCAP contributions is increased for high-quality care and decreased for care that is provided by an unaccredited child care facility or a person who has not received a professional credential. At the end of the five year phase in, the maximum decrease in the DCAP amount for unaccredited care is 20% lower than the current ceiling on contributions. These differential rates are phased in over a five year period in order for child care providers to achieve accreditation or become credentialed in child care. Current law prohibits DCAP from being used to pay relatives for care. While I support needed controls on the use of DCAP accounts in most cases, my legislation would make a very limited exception to this prohibition. DCAP payments could be made to pay a parent or grandparent to care for a newborn child. The DCAP account could be joined at anytime during a pregnancy. The funds would be available for up to 12 months from the date of deposit into the employee's DCAP account-- because babies have a timetable all their own when it comes to being born. The last change CIDCARE makes in the Dependent Care Assistance Plan is a requirement that federal employees have the opportunity to contribute to DCAP. Private employees, as well as many state and local governments, have had DCAP available for their employees since 1981. Consistent with the intent of the Congressional Accountability Act, I want to make this child care subsidy available to federal workers, including legislative branch employees. Child care is a growing concern to businesses, big and small. Employers are coming to the realization that affordable, convenient high-quality child care is a critical element in hiring and retaining skilled employees. Many companies, such as Johnson & Johnson, IBM, and others have been very innovative in providing child care assistance for their employees. Small businesses in particular are finding it difficult to meet the child care needs of their employees, but recognize the importance of that help. The CIDCARE Act creates a tax credit for employers providing or otherwise supporting high-quality child care arrangements for their employees. On the Budget Reconciliation bill passed by the Senate, Senator Kohl introduced an amendment to provide a time-limited tax credit for employers who provide child care for their employees. To reinforce the importance of the Kohl amendment, I have included it in CIDCARE. Fifty percent of the expenses incurred by a business to meet the child care needs of employees will be credited toward the business' Federal tax liability. Eligible expenses are capped at $150,000 per year, and the tax credit sunsets after three years. Costs allowed to businesses under this provision include startup costs, renovations to meet accreditation standards, professional development for child care providers, general operating expenses, subsidized child care for lower paid employees, support for child care resource and referral services and other child care activities. These provisions encourage business involvement and innovation in meeting the child care needs of employees and increasing the demand for higher quality child care. Current law prohibits businesses from receiving a charitable deduction for donations made to public entities, such as schools and child care services. CIDCARE will extend eligibility for a business charitable deduction to the donation of educational equipment and supplies donated to public schools, public child care providers, and public child care support entities, such as resource and referral services. If child care is to improve and meet the developmental needs of our Nation's children, every available resource must be made available. Computers which are discarded because they are too slow or have insufficient hard drive capacity, can be the first step into the computer-age for a small child or the link to professional training for a child care provider. A critical part of improving the quality of child care is professional development for child care providers. Since the 1970's there has been a decline in child care teacher salaries. In 1990, teachers in child care centers earned an average of $11,500 a year. Assistant teachers, the largest growing segment of child care professionals, were paid 10- to 20-percent less than child care teachers. The 1990 annual income of regulated family child care providers was $10,944 which translates to about $4 an hour. Nonregulated family child care, generally comprised of providers taking care of a smaller number of children, earned an average of $4,275 a year--substantially less than minimum wage. With these wages, it is easy to understand why more child care providers do not participate in professional training or attend college classes to improve their skills. The costs of applying for and receiving certification as a qualified child care professional are minimal, but understandably out of reach for many child care providers. This legislation will exempt expenses directly related to child care accreditation or becoming credentialed from the 2 percent floor that is applied to miscellaneous itemized deductions. This will at least permit child care providers to receive a full deduction for the expenses associated with improving the child care services which they provide. This incentive for professional growth and the development of new skills is a small but critical part of my overall effort to support high-quality child care. The last tax modification in CIDCARE creates a very limited exception to the executive use rule governing the tax deduction for home office expenses. The legislation will permit the mixed use of home office space for business and personal purposes to allow a person to care for his or her child. In some ways, the need for this exception comes down to fundamental fairness. How many school holidays, snow days and other times do children accompany their parents into work? I can always tell when the schools are unexpectedly closed, by the increased number of little people I see in Senate offices and eateries. I have been in Senate offices and other workplaces where a crib or playpen is clearly in evidence. Yet, none of us question whether our offices are exclusively for business use. One of the big incentives for telecommuting and home-based business is to allow parents to have more time with their families, yet existing law would keep a new mother from legitimately claiming a home office deduction if she has her child sleeping in a crib in a corner of the room where she is working. The non-tax related provisions of the legislation are designed to complement and work with the tax provisions. In order for families to be able to take advantage of the increased tax credits for child care in an accredited center or with a provider who has received a child care credential, there need to be more of these high quality centers and better trained providers. Child care providers must have easy, affordable access to training and other activities which will lead to accreditation and credentialing. This effort will require that the federal government join forces with states and the business community. Parents must be made aware of how to identify quality child care and its importance in their children's lives. And the federal government should set an example by requiring that child care centers located in federal facilities meet higher standards of care. It will take all of these provisions, working together, to improve the quality of child care for our children. The CIDCARE Act will require that states include the cost of child care in the calculation of child support obligations. When a custodial parent is employed or actively seeking employment, the state procedures for the determination of the amount of child support need to include an amount equal to or more than the child care rates used by the state to administer the Child Care and Development Block Grant Act. When child care is being provided in an accredited child care center or by a credentialed child care that rate will be increased by fifty-percent. Since the passage of the Child Care and Development Act in 1990, states have been setting ``market'' or ``comparable'' rates for child care. CIDCARE uses those rates as a baseline for adding the cost of child care to the amount of child support which a non-custodial parent will be required to pay. Current child support calculations include estimates of the other basic expenses necessary to provide financially for a child. In many instances, the expense of child care is the direct result of the divorce or lack of financial support from the non-custodial parent. It is only fair that child care expenses be included in those calculations. If the custodial parent secures higher quality child care, the non-custodial parent will share in the additional costs of that care. Children should not be forced into poor quality child care because a non-custodial parent refused to share in the additional expense of higher quality care. The CIDCARE bill establishes a $260 million competitive grant program to assist states in improving the quality of child care. To be eligible, a state must not have reduced the scope or otherwise decreased the state's licensing requirements since 1995, must be in compliance with the requirements of the Child Care and Development Block Grant, must have drawn down at least 80% of the amount awarded to the state in federal entitlement child care funds requiring a state match, and must conduct annual on-site monitoring of state licensed or otherwise regulated child care facilities, with at least one unannounced visit every 3 years. The legislation requires that a Priority be given to states that raise at least a 10% match for the federal funds from business or other private sources. States must use at least 20% of the grant funds awarded to establish a subsidy program to provide salary increases to child care providers who are credentialed in the state. The low level of child care wages is the most often cited reason for the tremendous staff turnover in the child care profession. In areas where child care subsidies as low as fifty cents an hour are put in place, the staff turnover rate drops dramatically. The wage subsidy also will encourage more child care providers to get additional training or advance their education. In addition, states will need to use at least twenty-percent of the funds awarded for a grant program to provide start-up funds for partnerships of small businesses to develop and operate child care cooperative services for their employees. While large employers have both the number of employees to justify an on- or near-site child care center and the additional financial resources for start-up costs, small businesses have been struggling with ways to help their employees meet their child care needs. This grant program will provide time-limited help for partnerships of small businesses who work together to develop child care resources for their employees. States can use the remainder of grant funds awarded for any of the following activities: developing standards for of entities applying for state recognition for the accreditation and credentialing of child care providers; establishing a scholarship program to help child care providers meet the costs of education and training; expanding state- based child care training and technical assistance activities; improve consumer education efforts including the expansion of resource and referral services and child care complaint systems; providing increased rates of reimbursement provided under federal or state child care assistance for children with special needs; purchasing special supplies, equipment, or meeting other extraordinary expenses necessary for the care of special needs children for distribution to child care providers serving special needs children, or providing increased rates of reimbursement provided under federal or state child care assistance for accredited and credentialed care. Each of these activities has been demonstrated to be a contributing factor in improving the quality of child care. Parents, child care providers, employers, and others need a constantly updated source of information about improving the quality of child care. States need a central depository where they can learn what other states are doing as well as a place where they can contribute their own ideas and activities from which others can learn. The collection and dissemination of information, demonstrations, and technology is one of the most important roles of the federal government. Under provisions in the CIDCARE Act, the Department of Health and Human Services (HHS) will collect information about the importance of high quality child care (including what it is, how to identify it, why it is important for children), and in partnership with the ADCouncil or similar professional advertising entity, distribute that information through a national public awareness campaign and other mechanisms. To increase the capacity of child care credentialing and accreditation entities, HHS will award competitive grants to child care credentialing and accreditation entities that have not been in existence more than 10 years for the purpose of refining and evaluating their procedures for and methods of granting child care accreditation and/or credentialing. The legislation authorizes $10 million annually, to conduct these information and technology transfer activities. The CIDCARE Act authorizes $50 million a year to create and operate a technology-based training infrastructure to enable child care providers nationwide to receive the training, education, and support they need to improve the quality of child care. The bill builds upon existing distance learning, Internet, and satellite resources, with sufficient funding to expand access to affordable child care training and information. The primary focus of the infrastructure will be to disseminate the training necessary to become an accredited child care center or a credentialed child care professional. Training and education, delivered at a minimal cost and accessible to individuals within 25 miles of their homes, will remove one of the most substantial barriers to child care credentialing and accreditation. Essentially, the legislation establishes a child care training and education interactive ``network'', which will be used by child care credentialing and accreditation entities for training, skills testing, and other activities needed to achieve and maintain child care credentialing and accreditation. Entities recognized by 2 or more states as providing accepted child care credentialing or accreditation services will be active participants in decisions governing the use of the child care ``training network.'' Time lines for the creation and implementation of the infrastructure and caps on administrative costs are included in the bill provide both financial and programmatic accountability. Through the child care training infrastructure, a no interest revolving loan fund is established to enable child care providers and child care support entities to purchase computers, satellite dishes, and other technological equipment which enable them to participate in the child care training provided on the national infrastructure. For the first five years of the legislation, at least ten-percent of the funds appropriated for the child care training infrastructure will be placed into the revolving loan fund. This part of CIDCARE, like similar federal loan programs, establishes that the funds be kept in a separate interest bearing account, establishes application procedures, terms and conditions for the approval of such loans, and procedures for handling loan defaults. At the current time, child care centers located in federal facilities are not required to meet even basic safety and health requirements. They are not subject to state or local laws or regulations governing the operation of a child care center. The CIDCARE Act will require federal child care centers (those in buildings leased or owned by the federal government--legislative, executive, judicial branches) to meet all state and local licensing and other regulatory requirements related to the provision of child care, within six months of the passage of this legislation--or make substantial progress towards meeting those requirements. The appropriate Administrator of each branch of government shall issue regulations specifying center-based child care accreditation standards and require all child care facilities in federal buildings under their control achieve accreditation within 3 years of the passage of this legislation. If the child care program located in a federal facility fails to be in compliance, or show substantial compliance with state and local licensing requirements within six months or with the identified accreditation standards within three years, the agency must cease providing child care in that child care center. On-site monitoring to ensure compliance with these regulations and standards must be performed by an outside entity. The legislation authorizes $900 thousand to the General Services Administration (GSA) to implement this provision. CIDCARE will require that federal child care programs provided by the Corporation for National and Community Service, the Departments of Defense, Education, Housing and Urban Affairs, Justice, and Labor, will ensure, to the maximum extent possible, that by October 1, 2001, any child care made available through programs funded or operated by those Departments and the Corporation, be provided by an accredited child care facility or a credentialed child care professional. The federal government needs to demonstrate a commitment to quality child care, by raising the standards it applies to its own programs. The CIDCARE Act will expand the Community Development Block Grant to include the renovation or upgrading of child care facilities to meet accreditation standards as an allowable use of the grant funds. It also will extend existing Perkins and Stafford Loan forgiveness programs to include persons who work as credentialed professionals in a child care setting. Just as these loan forgiveness programs helped encourage more people to become teachers, I hope that this extension of these two educational loan programs to child care providers will result in more and better qualified child care providers. To be eligible for loan forgiveness, the person must be employed full time providing child care services and have a degree in early childhood education or development or receive professional child care credentials. The need for high-quality child care is compelling. Having affordable, convenient child care is tied directly to a family's ability to produce income. Good child care can be an effective way to support the healthy development of children, particularly in the acquisition of social and language skills. For the millions of children who spend much of their preschool lives and many of their nonschool hours being cared for by someone other than their parents, child care provides the foundation upon which all future education will be built-- and determines to a large extent whether that foundation will be strong or weak. As we all know, quality child care costs money. It costs money to parents who bear the biggest burden for the cost of child care. It costs businesses both through the direct assistance that they provide to employees to help with the costs of child care, and through their ability to hire and retain a skilled work force. It costs Government through existing tax provisions, direct spending, and discretionary spending targeted at child care. But the costs of not making this investment are even higher. Those costs can be measured in the expense of remedial education, the expansion of an unskilled labor force, the increase in prison populations, and most importantly, the blunted potential of millions of children. I urge my colleagues to join Senator Dodd, Senator Roberts and me in support of the CIDCARE bill. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, today I voice my support for meeting U.S. commitments to the International Development Association [IDA] by fully funding replenishment to IDA-10 and IDA-11. The International Development Association was established in 1960 to lend to the poorest and least creditworthy developing countries on confessional terms. Only countries with a per capita income below $905 with limited or no ability to borrow on market terms and a record of using IDA resources effectively are eligible. Currently, 79 counties meet IDA's loan criteria--55 percent of the world's population. Twenty countries have graduated from IDA. Very notably, three of these graduate countries--Botswana, Korea, and Turkey--are now IDA donors. This is a solid rate of success. IDA provides development assistance to poor countries through loans, rather than grants. Loans must be repaid in full. IDA funds come largely from contributions of 35 donor countries negotiated in general replenishment. Increasingly, repayments of past IDA loans are supplementing IDA income. As a result, the U.S. share of contributions to IDA has decreased by 20 percent since it was established in 1960. The administration's request of $1.035 billion for IDA is divided into two parts: $235 million to meet U.S. payments to IDA's 10th replenishment and $800 million for the first of two U.S. payments for IDA-11. The subcommittee recommends $950 million in funding for IDA for fiscal year 1998. This would fully fund the first U.S. payment for IDA- 11 but not fully meet payment owned for IDA-10. I support increasing the appropriation for IDA by $84.5 million to fund both replenishments in full. I appreciate the work that the subcommittee has done to address a major concern associated with IDA: Restrictions on U.S. procurement opportunities imposed by the Interim Trust Fund [ITF]. The ITF was created by donors who did not want to disrupt IDA's operations by leaving a 1-year gap in new funding when the U.S. budget situation precluded us from meeting commitments to both IDA-11 and IDA-10. At that time, controversy emerged over the terms of the ITF which limited decisionmaking and procurement to contributing countries only. As a result, U.S. officials and businesses were excluded from participating in projects financed by the $3.3 million fund. Last year, the Foreign Operations appropriations bill contained a provision that required the administration to work with other donors to modify procurement restrictions. The administration has negotiated an agreement with the ITF whereby $1 billion, or about one-third, of projects financed by the trust fund have not yet been completed. Full funding of IDA-10 and IDA- 11 will allow U.S. firms to bid on these contracts. The Foreign Operations Subcommittee's efforts on the matter of U.S. procurement are commendable. Section 569

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, the Tennessee Valley Authority was created as part of the New Deal to bring economic development and electricity to the Tennessee Valley. Much has changed since the 1930's. Fortunately, rural Americans now enjoy electricity, and the economy of the Tennessee Valley has improved significantly. That region's economy, in fact, is doing quite well and now is home to industry and businesses like Saturn Automotive and Gateway Computer. It's time for TVA to change, too. Over the past six decades, TVA has become, by its own measure, the Nation's largest electric utility company, providing some of the cheapest electricity in the Nation. TVA's current managers are trying aggressively to prepare this giant government-owned utility for the competition that may result from deregulation. Earlier this year, in testimony before the Energy and Water Development Appropriations Subcommittee, TVA's Chairman argued that, in order to help prepare for this competition, the direct Federal appropriation to TVA should end. In fact, he stated, ``With your help, we can end taxpayer funding of TVA appropriated programs and begin a new era for TVA.'' It is my understanding that the Energy and Water Development Appropriations Subcommittee has voted to codify that request. Reforming TVA should no longer be a controversial activity. More and more lawmakers have introduced bills to re-think the giant agency as we look toward a deregulated electricity industry and a balanced Federal budget. Even TVA's Chair, as mentioned before, has stated that the agency should forego its $106 million annual appropriation. TVA's former chief financial officer has gone further, arguing that the Federal Government should sell TVA. Sale, he argues, would generate big savings for taxpayers; reduce the Federal debt; provide a model for privatization; and move one of the largest electric companies out from under the burden of Federal bureaucracy into the private sector, where it would pay taxes. Mr. President, I urge my Senate colleagues who will sit on the conference committee to take a first step toward reforming TVA by eliminating the agency's entire appropriation. I also urge my colleagues to consider more substantial changes to TVA in the context of reducing taxpayer subsidies and opening the electricity market to true competition.

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, I rise today to introduce the Arts and Humanities Amendments of 1997 along with my colleague from Massachusetts, Senator Kennedy and my colleague from Rhode Island, Senator Chafee. This legislation provides an authorization for the National Endowment for the Arts [NEA] and the National Endowment for the Humanities [NEH]--agencies which I believe contribute a great deal to the wealth and richness of our Nation. The bill that we are introducing today is based closely on the bill that was passed out of the Senate Labor and Human Resources Committee last Congress by a solid bipartisan vote of 12 to 4. The legislation reflected ideas and consideration from Senators on both sides of the aisle. The result of that collaboration was a strong bill, which makes substantial and needed changes to the agencies while allowing the agencies to continue what they do best--provide support for the arts and humanities in communities throughout this Nation. We began the reauthorization process this Congress in May with a hearing which focused on education programs in the arts and humanities. It was clear to me from that hearing that arts education programs and education programs in the humanities make a real difference in the lives of individuals of all ages and from all corners of the country. As a result of what I learned at the hearing, the bill that I am introducing today directs the NEA to use any funds appropriated above the fiscal year 1997 level for arts education programs, especially those innovative programs that integrate the arts in the teaching of other core academic subjects. The arts are important to ensuring the future academic success of our Nation's students. In fact, according to college board figures, students of the arts outperform their nonarts peers on the SAT. In 1995, those who had studied the arts for 4 or more years scored 59 points higher in the verbal and 44 points higher in the math portions of the SAT compared with students with no course work or experience in the arts. I have only to look in my backyard to understand the importance and value of the NEA and NEH. The benefits of NEA and NEH funding in Vermont are significant and far reaching. Thanks in part to a $30,000 grant from the NEA, folks in 26 Vermont communities will be able to hear the magnificent music of the Vermont Symphony Orchestra. The Vermont Symphony will perform for 12,000 school children as part of a school partnership program, opening their worlds to the magic and wonder of music, many for the first time. Our Vermont Arts Council, through the funds it receives from NEA will support a wide range of arts programs benefiting all Vermonters. The NEH makes a significant and positive difference in the State of Vermont, too. The Vermont Council on the Humanities is a national leader in creating literacy programs which reach individuals of all reading levels and all ages as a result of the funding provided by the NEH. The University of Vermont received a grant from the NEH to catalogue and preserve our State's local newspapers. This grant is part of a national initiative spearheaded by the NEH to ensure that the local papers which chronicle the history of our State and the Nation are available to future generations. This bill makes substantial improvement to the way these agencies do business. In addition, the legislation makes it clear that these agencies are meant to serve the American public, especially those who would not otherwise have the arts and humanities available to them. This bill proposes significant changes to current law. The changes are far reaching and go the fundamental operations of both the NEA and NEH. It is our hope that these changes will provide guidance and set priorities for funding for projects in an effort to increase access to programs and projects which are of the highest caliber. The legislation imposes a new structure on the NEA and NEH, and increases the percentage of funds made available to State councils. It places greater emphasis on ensuring Endowment programs reach underserved communities. The bill calls for a merging of many of the administrative functions of the Endowments with the intent of eliminating costly and unnecessary duplication. Administrative funds are capped on a sliding scale. In an effort to further streamline the agencies and cut bureaucracy, the number of members on the National Councils have been decreased. A provision has been included which empowers the NEA and NEH to recapture funds from grants that have gone on to commercial and financial success. Both Endowments are explicitly prohibited from using funds for purposes of lobbying or general membership services. Some changes apply only to the NEA. The legislation prohibits the NEA from making nonspecific seasonal support grants. It eliminates subgranting--only States, regional groups, and local arts agencies which are agencies of local government would have the authority to subgrant under this legislation. it restricts grants to individuals to the categories of literature, National Heritage, and Jazz Master fellowships. Non-Federal matching requirements are increased in the National Significance grant category to 3:1 and in some cases, 5:1. We have increased turnover in the panel system and increased lay person participation to ensure greater community involvement and input. In addition, panels are prohibited from recommending specific amounts of grants and will be required to recommend more grants than funding available. The Council, too, will have to recommend approval for more applications than there are funds available. These provision give the chair greater decisionmaking responsibility and make the chair more accountable for grants the agency makes. Lastly, but in my opinion one of the most important changes to this bill is the expansion of the Arts and Artifact Indemnity Act. This change will enable extraordinary domestic exhibitions to be eligible for Federal indemnification and afford more Americans access to the great artistic treasures of this Nation. Many of my colleagues in the House do not feel that there is a Federal role for the arts, but I do not agree with that position. The role of the States in distributing NEA funds is very important, and for that reasons, this legislation does increase the percentage of funds available to State arts and agencies and State humanities organizations. Still, in my view, there is an important national role that must be preserved. The New York-based Chamber Music America received an NEA grant of $145,000 for a residency program which benefited rural communities in Arkansas, California, Pennsylvania, Texas, Kentucky, Maine, and Oregon. The NEA made a grant to the YMCA in Chicago, IL, for its National Readings Tour of the National Writer's Voice project which established literary arts centers in YMCA's in New Mexico, South Dakota, New Jersey, California, North Carolina, New Hampshire, and Florida. Both these grants benefited people far beyond the boundary of the State that received the grant. They are just two examples of extraordinary arts programs that would not longer be available to people in my State or any other State if all NEA funds were block granted. In setting clear priorities for the NEA and NEH, and striking a balance between leadership at the State level and leadership at the national level, I am confident that both agencies will be even better able to serve their constituency--all the people of this country. I ask unanimous consent that a copy of the legislation be included as part of the Record.

Mr. JEFFORDS

Mr. JEFFORDS. The report language on wind energy research, development and deployment restricts support for small wind, when in fact the Department of Energy has several ongoing research activities in this area. Is it the intention of the Senate that these and other cost-shared programs currently conducted in collaboration with DOE, the national laboratories, and U.S. industry should not be continued?

Mr. JEFFORDS. I thank the Chairman. consortium for plant biotechnology research

Mr. JEFFORDS. I Mr. President, thank the chairman for his excellent work on the fiscal year 1998 energy and water appropriations measure. Senator Domenici clearly understands the importance of renewable energy to the future of this Nation. I wish to commend him for his dedication to the development of solar, wind, biomass, and other technologies that are vital to our Nation's energy interests. I know many of my colleagues join me in thanking him for his leadership in this area. I would merely like to clarify a couple of the provisions regarding renewable energy in the energy and water appropriations bill.

Mr. JEFFORDS. In addition, is it the Senator's understanding that the Solar Thermal Power Program would receive an additional $4.8 million from available funds? And if so, of this amount, $3.8 million will be available for solar dish engine technologies and the remaining $1 million will go to the solar industrial programs. This would bring the total solar thermal account to $19.1 million. Further, is it also the Senator's understanding that the solar international account will receive an additional $2 million, bringing the total for this program to $4 million. Is it also the Senator's understanding that the program allocation will be used in support of the Committee on Renewable Energy Commerce and Trade?

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 Thursday, July 17, 1997, 2 p.m., in SD-430 of the Senate Dirksen Building. The subject of the hearing is Improving the Quality of Child Care. For further information, please call the committee, 202/224-5375. committee on energy and natural resources

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, I rise today to pay tribute to James Bowse. Jim died unexpectedly on Tuesday, June 17. As president/ chief executive officer at the Rutland Regional Medical Center since 1989, Jim was considered to be one of the most progressive and effective leaders in the field of health care. Jim understood the challenges facing community hospitals, but never lost sight of the human element in medicine. During his tenure at the Rutland facility Jim was instrumental in creating the first State-owned health maintenance organization [HMO]. He established a Rutland-based system of physicians to provide high quality service while simultaneously containing costs. Jim strove to develop a community approach in medicine. To that end, he maintained reserves to cover the costs associated with patients that could not afford the treatment they required. Jim was able to freeze patient fees since 1991, while doubling annual revenues to $100 billion. In addition, he played a vital role in the establishment of an orthopedic clinic and the expansion of outpatient services as well as preventative health projects. Jim had a great sense of humor and an uncanny ability to make the most complex issues seem simple. His dedication to the people of Vermont is in the State's finest tradition. Through his efforts, Jim made a lasting impression upon the community which will be slow to fade. I extend my condolences to his family and friends.

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, I rise today to introduce the Arts and Humanities Amendments of 1997 along with my colleague from Massachusetts, Senator Kennedy and my colleague from Rhode Island, Senator Chafee. This legislation provides an authorization for the National Endowment for the Arts [NEA] and the National Endowment for the Humanities [NEH]--agencies which I believe contribute a great deal to the wealth and richness of our Nation. The bill that we are introducing today is based closely on the bill that was passed out of the Senate Labor and Human Resources Committee last Congress by a solid bipartisan vote of 12 to 4. The legislation reflected ideas and consideration from Senators on both sides of the aisle. The result of that collaboration was a strong bill, which makes substantial and needed changes to the agencies while allowing the agencies to continue what they do best--provide support for the arts and humanities in communities throughout this Nation. We began the reauthorization process this Congress in May with a hearing which focused on education programs in the arts and humanities. It was clear to me from that hearing that arts education programs and education programs in the humanities make a real difference in the lives of individuals of all ages and from all corners of the country. As a result of what I learned at the hearing, the bill that I am introducing today directs the NEA to use any funds appropriated above the fiscal year 1997 level for arts education programs, especially those innovative programs that integrate the arts in the teaching of other core academic subjects. The arts are important to ensuring the future academic success of our Nation's students. In fact, according to college board figures, students of the arts outperform their nonarts peers on the SAT. In 1995, those who had studied the arts for 4 or more years scored 59 points higher in the verbal and 44 points higher in the math portions of the SAT compared with students with no course work or experience in the arts. I have only to look in my backyard to understand the importance and value of the NEA and NEH. The benefits of NEA and NEH funding in Vermont are significant and far reaching. Thanks in part to a $30,000 grant from the NEA, folks in 26 Vermont communities will be able to hear the magnificent music of the Vermont Symphony Orchestra. The Vermont Symphony will perform for 12,000 school children as part of a school partnership program, opening their worlds to the magic and wonder of music, many for the first time. Our Vermont Arts Council, through the funds it receives from NEA will support a wide range of arts programs benefiting all Vermonters. The NEH makes a significant and positive difference in the State of Vermont, too. The Vermont Council on the Humanities is a national leader in creating literacy programs which reach individuals of all reading levels and all ages as a result of the funding provided by the NEH. The University of Vermont received a grant from the NEH to catalogue and preserve our State's local newspapers. This grant is part of a national initiative spearheaded by the NEH to ensure that the local papers which chronicle the history of our State and the Nation are available to future generations. This bill makes substantial improvement to the way these agencies do business. In addition, the legislation makes it clear that these agencies are meant to serve the American public, especially those who would not otherwise have the arts and humanities available to them. This bill proposes significant changes to current law. The changes are far reaching and go the fundamental operations of both the NEA and NEH. It is our hope that these changes will provide guidance and set priorities for funding for projects in an effort to increase access to programs and projects which are of the highest caliber. The legislation imposes a new structure on the NEA and NEH, and increases the percentage of funds made available to State councils. It places greater emphasis on ensuring Endowment programs reach underserved communities. The bill calls for a merging of many of the administrative functions of the Endowments with the intent of eliminating costly and unnecessary duplication. Administrative funds are capped on a sliding scale. In an effort to further streamline the agencies and cut bureaucracy, the number of members on the National Councils have been decreased. A provision has been included which empowers the NEA and NEH to recapture funds from grants that have gone on to commercial and financial success. Both Endowments are explicitly prohibited from using funds for purposes of lobbying or general membership services. Some changes apply only to the NEA. The legislation prohibits the NEA from making nonspecific seasonal support grants. It eliminates subgranting--only States, regional groups, and local arts agencies which are agencies of local government would have the authority to subgrant under this legislation. it restricts grants to individuals to the categories of literature, National Heritage, and Jazz Master fellowships. Non-Federal matching requirements are increased in the National Significance grant category to 3:1 and in some cases, 5:1. We have increased turnover in the panel system and increased lay person participation to ensure greater community involvement and input. In addition, panels are prohibited from recommending specific amounts of grants and will be required to recommend more grants than funding available. The Council, too, will have to recommend approval for more applications than there are funds available. These provision give the chair greater decisionmaking responsibility and make the chair more accountable for grants the agency makes. Lastly, but in my opinion one of the most important changes to this bill is the expansion of the Arts and Artifact Indemnity Act. This change will enable extraordinary domestic exhibitions to be eligible for Federal indemnification and afford more Americans access to the great artistic treasures of this Nation. Many of my colleagues in the House do not feel that there is a Federal role for the arts, but I do not agree with that position. The role of the States in distributing NEA funds is very important, and for that reasons, this legislation does increase the percentage of funds available to State arts and agencies and State humanities organizations. Still, in my view, there is an important national role that must be preserved. The New York-based Chamber Music America received an NEA grant of $145,000 for a residency program which benefited rural communities in Arkansas, California, Pennsylvania, Texas, Kentucky, Maine, and Oregon. The NEA made a grant to the YMCA in Chicago, IL, for its National Readings Tour of the National Writer's Voice project which established literary arts centers in YMCA's in New Mexico, South Dakota, New Jersey, California, North Carolina, New Hampshire, and Florida. Both these grants benefited people far beyond the boundary of the State that received the grant. They are just two examples of extraordinary arts programs that would not longer be available to people in my State or any other State if all NEA funds were block granted. In setting clear priorities for the NEA and NEH, and striking a balance between leadership at the State level and leadership at the national level, I am confident that both agencies will be even better able to serve their constituency--all the people of this country. I ask unanimous consent that a copy of the legislation be included as part of the Record.

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, I am pleased to be offering, with my colleague Senator Patrick Leahy, an amendment to the Department of Defense authorization bill to provide for the construction of a combined support and maintenance shop [CSMS] at Camp Johnson, VT. This project is to be constructed in Colchester, VT and used by the Vermont National Guard to meet its support level maintenance mission. The quantity, size and type of equipment now assigned to the Vermont Army National Guard have required them to propose the construction of this CSMS. The new facility will have administrative offices and allied shops as well as special bays for maintenance work on all types of vehicles. The design money for this project was approved by the Congress last year. The Vermont Army National Guard has stretched the limits of the current facility which was built over 40 years ago, in 1956. The current facility has very significant shortfalls in all office and shop areas. The existing work bays cannot accommodate the M-1 tank. In addition, essential maintenance and maintenance training is consistently delayed due to the lack of space. Without the construction of a new facility readiness of the Vermont Army National Guard will be adversely affected. In order to assure that the Vermont Army National Guard is ready at all times to meet the needs of our nation's defense, Senator Leahy and I have worked together on this project. I am pleased that the Vermont Army National Guard can move forward on this CSMS and hope that my colleagues will support the efforts that Senator Leahy and I have taken to insure that the Vermont Army National Guard can meet the military needs of our country in the next century. I commend Chairman Thurmond for his foresight to realize that his new facility is essential in order for the Vermont Army National Guard to meet the anticipated demands on them in the coming years.

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, more than 20 years ago Congress passed the Resource Conservation and Recovery Act to promote Government purchases of products made from recycled materials. Since then, State and local governments throughout the country have enacted similar policies. Ten years ago, only 13 States and a handful of local governments had buy recycled laws. Today, at least 45 States and more than 500 local governments have established legal requirements to purchase recycled content products. In 1993, the administration issued Executive Order 12873 which reinforced the principle of increasing the Federal Government's use of recycled-content products, especially paper products. Yet in 1996, the Department of Defense, the single largest consumer of copy paper in the world, had a compliance record of only 14 percent regarding its procurement of copy paper. Although DOD should be complimented for recently volunteering to buy only recycled-content copy paper, its decision was due to the General Services Administration's initiative to set the price of recycled paper at 5 cents cheaper than virgin paper. History leads us to assume that DOD will revert to the policy of buying virgin paper should the price shift a nickel. Well, Mr. President, price is important, but it is only one factor in the equation. As the largest user, DOD must be the role model for other Government agencies and comply with the intent of Congress and the administration. This amendment affords DOD the flexibility of buying nonrecycled paper if the price differential is unreasonable compared to virgin paper, while defining the term ``unreasonable'' as ``greater than 7 percent''. Additionally, the intent of this amendment is to cause Defense Department procurement offices to buy copy paper in an environmentally responsible manner and is not meant to place unreasonable constraints on the process. It, therefore, contains provisions which allow procuring agencies to choose not to buy the recycled paper if the product is unavailable within a reasonable period of time, or if the product does not meet reasonable performance standards. Finally, this amendment builds on the intent of the executive order and extends it into the 21st century. Under this amendment, the required postconsumer content will rise to 50 percent in 2004. This initiative is based upon ongoing technological advances within the paper industry and the expectation that they will push down the cost of recycled paper in future years. If DOD cannot meet this requirement, a provision is included in the amendment which will allow them to report to Congress for purposes of gaining a deferment. Mr. President, only through legislative action can we ensure that DOD will continue to shoulder its environmental responsibilities and serve as the role model it must be.

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, I understand this is a germaneness objection. I move to waive the Budget Act and ask for the yeas and nays.

Mr. JEFFORDS. Mr. President, I have a child care amendment at the desk.

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

Mr. JEFFORDS. Mr. President, this is a natural follow-on to the previous amendment. We are all aware of the need for good child care. There are more than 12 million children who are in child care. At least 15 percent are in care that is so bad that their health and safety are threatened; 40 percent of the infants in child care are in very risky situations. For the many parents who would change their child care if they could find and afford better, this amendment provides tax relief through the child care tax credits, and it helps business meet the child care needs of their employees through the business tax credits and deductions. We expand choices for parents, because if you can't afford the child care you find, you don't have much choice. Representatives of the religious and for-profit child care providers worked with us on the language related to accreditation and credentialing. I ask unanimous consent that the following Members be added as cosponsors: Senators Dodd, Roberts, Kohl, Landrieu, Snowe, Johnson, Chafee, D'Amato, Collins, Gordon Smith, Campbell, Kennedy, Enzi, Allard, Stevens, Grassley, Mikulski, Kerry, and Graham.

Mr. JEFFORDS. I reserve the remainder of my time, if I have any left.

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, tomorrow I will introduce my amendment on child care. Today, there are more than 12 million children under the age of five--including half of all infants under one year of age--who spend at least part of their day being cared for by someone other than their parents. The past two decades have seen a dramatic rise in the number of women in the paid labor force. More than 60 percent of women with preschool aged children, are employed full- or part-time. For most of these families, child care is a requirement, not an option. Women now constitute 46 percent of our Nation's labor force. Most women are not working just to achieve a degree of personal growth outside the home, but to meet their family's basic needs. Their employment is not a choice, but an essential part of their family's economic survival. Similarly, child care that is affordable and convenient is necessary for most women working outside the home. Many of the traditional sources of child care are no longer available--as many of the friends, neighbors, grandparents, and other relatives who used to be available to provide child care are also working. Research has repeatedly demonstrated that for parents who must work, child care services that are dependable and of high quality make it easier to find and keep a job. Good child care helps parents reach and maintain economic self- sufficiency. There is a clear connection between child care and the production of income. Congress acknowledged this when is passed welfare reform last year. Since 1990, the costs of child care have risen about 6 percent annually. This is almost triple the annual increase in the cost of living. At the same time, there are strong indicators that the quality of child care has significantly decreased during that same period of time. Parents are paying more but getting less. The costs of child care are almost wholly dependent upon the geographic area, the type of child care, and the age of the child. For example, a family purchasing full-time child care services for a 4-year old in rural New York using a family child care home may pay as little as $60 a week. In contrast, a family with an infant using a child care center in New York City may pay more than $250 a week. I think that few of us know how much child care costs. The Senate Employee's Child Care Center costs between $150 and $175 a week--$7,800 to $9,100 a year. That puts it in the high-middle range in terms of costs for the Washington, DC area. The younger the child, the higher the costs--and Senate Employee's Child Care Center does not accept children under 18 months old. For a 3- to 4-year-old, which is the least expensive age group, the national average for center-based child care is $4,600 a year. The average cost for high quality care, such as that provided by the Senate Employee's Child Care Center, is between $8,500 and $9,100 a year. A family normally spends about 20 percent of its income on housing and 10 percent on food. The costs of child care for a low- or middle- income family can rival the cost of housing and be double the cost of food. Even though most of us recognize the critical part that child care plays in the economic survival of families, we often fail to recognize it as a basic cost which consumes a significant portion of a family's income. Parents can only purchase child care they can afford. While the supply of child care has increased over the past 10 years, shortages are still the norm for those in rural areas, those with school-aged children, and for lower-income families. Those who do find care that is affordable and convenient are often unsatisfied with the quality of the care their child receives. In fact, one quarter of all parents would change their child care arrangement if they could find and afford something better. The quality of child care in America is very troubling. A recent nationwide study found that 40 percent of the child care provided to infants in child care centers was potentially injurious. Fifteen- percent of center-based child care providers for all preschoolers are so bad that a child's health and safety are threatened; 70 percent are mediocre--not hurting or helping children; and 15 percent actively promote a child's development. Center-based child care, the object of this study, is the most heavily regulated and frequently monitored type of child care. Children in less regulated settings are predicted to be far worse. Combining the research on the quality of child care with the breakthroughs on the development of the human brain produces a very disturbing situation. Many children enter child care by 11 weeks of age, are in care for close to 30 hours a week, and often stay in some form of child care until they enter school. During that same period of life, a child's brain is undergoing a series of extraordinary changes. In the first 3 years of life, the brain either makes the connections it needs for learning or it atrophies, making later efforts at remediation in learning, behavior, and thinking difficult, at best. The experiences and stimulation that a caretaker provide to a child are the foundations upon which all future learning is built. The brain's greatest and most critical growth spurt is between birth and 10 years of age--precisely the time when non-parental child care is most frequently utilized. A Time magazine special report on ``How a Child's Brain Develops'' (February 3, 1997) said it best, ``. . . Good, affordable day care is not a luxury or a fringe benefit for welfare mothers and working parents but essential brain food for the next generation.'' While bad child care can seriously impair a child's development, high-quality child care significantly increases the chances of good developmental outcomes for children. Think about it. At the most important time in the development of a child's brain, 12 million children are being cared for by people who are paid less than the person who picks up your garbage each week, and are required to have less training and less skills-based testing than the person who cuts your hair. Child care providers play an important role in a child's development, for they help fine-tune the child's capacity to think and process information, social skills, emotional health, and acquisition of language. Last year, our goal in child care was to streamline Federal assistance by creating a cohesive structure for Federal assistance and to provide sufficient Government funds to subsidize child care for welfare recipients who were transitioning into work. This year our goal must be to promote the healthy development of children in child care. I am worried that the pressure of the need to accommodate the increasing demand for child care will force many into forgoing quality just to increase the number of child care slots available. This amendment, then, incorporates modifications to five different sections of the Tax Code. Each of the provisions has been included to solve a specific problem in an effort to improve the quality of child care. Taken as a whole, these provisions represent a comprehensive effort to increase the supply while simultaneously creating a demand for high-quality child care, and making it affordable for low- and middle-income families. To offset the cost of these changes, my amendment reduces, but does not eliminate, the dependent care tax credit for upper-income taxpayers and the amount that an employee can place in a dependent care assistance plan used to reimburse non-accredited or non-credential child care is gradually decreased. In addition, the amendment expands the coordinated enforcement efforts of the Internal Revenue Service and the HHS Office of Child Support Enforcement, which will significantly reduce the amount of fraud related to illegal tax deduction and credit claims by non-custodial parents. The first provision in the amendment makes several changes in the Child and Dependent Care Tax Credit [CDCTC]. This tax credit is the largest tax-based subsidy for child care. My amendment raises the income level for the receipt of the highest percentage of employment- related child care costs from $10,000 to $20,000. The percentage is decreased at a rate of 1 percent for each additional $2,500 in adjusted gross income and sets a minimum percentage of 10 percent for incomes of $70,000 and above. This change represents a more equitable distribution of limited resources based on the percentage of income a family must use to meet child care expenses. For families qualifying for the EITC, my amendment makes the child care tax credit refundable, on a quarterly basis. This will enable many low-income working families to move from part-time to full- time employment, by easing the burden of child care costs and having the money available at regular intervals throughout the year. Finally, the amendment establishes, over a 5-year period, different rates for the tax credit, dependent on whether the child care is provided in an accredited child care facility or by a credentialed professional. This will reward parents who choose high-quality child care and help defray the additional costs of that care. I am sensitive to the concerns of colleagues who object to reducing the child care tax credit. But before you judge this reduction too harshly, let's put it into perspective. The tax credit remains at or above the current rate of 20 percent for parents with adjusted gross incomes of $45,000 or less, regardless of the type of child care. The median income of families with children nationally is $37,000. While there are wide differences in between States, there are only four States where the median exceeds $45,000 AGI triggering a reduction in the current rate of 20 percent. Most States are significantly below this trigger. At the end of the 5-year phase in period, the tax credit remains at or above the current 20 percent rate for families with an AGI of $55,000. No States have median incomes of families with children which exceed the $55,000 AGI level for high quality child care which triggers a reduction below current child care tax rate. Families with incomes at or above $70,000 will still receive a tax credit of 10 percent, increased to 12.5 percent if high quality care is used. In terms of money, a 1 percent decrease in the child care tax credit equals $24 when care for one child is claimed, and $48 for two or more children. Families making $70,000 or more are the hardest hit by my amendment. Yet their maximum financial cost is $240 a year for one child, or $480 a year for two or more children--about half of one percent of their adjusted gross income. The second area of changes occurs in the Dependent Care Assistance Plan [DCAP]. The amendment increases the amount that an employee can contribute to a DCAP account, if the funds are used to pay for the care of two or more eligible persons. In addition, the amount of DCAP contributions is increased for high-quality care and decreased for care that is provided by an unaccredited child care facility or a person who has not received a professional credential. These differential rates are phased in over a 5-year period in order for child care providers to achieve accreditation or become credentialed in child care. Current law prohibits DCAP from being used to pay relatives for care. While I support needed controls on the use of DCAP accounts in most cases, my amendment would make a very limited exception to this prohibition. DCAP payments could be made to pay a parent or grandparent to care for a newborn child. The DCAP account could be joined at anytime during a pregnancy. The funds would be available for up to 12 months from the date of deposit into the employee's DCAP account-- because babies have a timetable all their own when it comes time to be born. The last change my amendment makes in DCAP is through the addition of a requirement that Federal employees have the opportunity to contribute to Dependent Care Assistance Plans. Private employees, as well as many State and local governments, have had DCAP available for their employees since 1981. Consistent with the intent of the Congressional Accountability Act, I want to make this child care subsidy available to Federal workers, including legislative branch employees. Child care is a growing concern to businesses big and small. Employers are coming to the realization that affordable, convenient high-quality child care is a critical element in hiring and retaining skilled employees. Many companies, such as Johnson & Johnson, IBM, and others have been very innovative in providing child care assistance for their employees. Small businesses in particular are finding it difficult to meet the child care needs of their employees, but recognize the importance of that help. I am defering to my colleague from Wisconsin, Senator Kohl, who has an excellent amendment providing a tax credit to businesses who provide child care services and support for their employees. My amendment included a similar provision, but because Senator Kohl has been working on this aspect of child care for so long, I dropped my provision and urge my colleagues to vote for his amendment as well as this one. Current law prohibits businesses from receiving a charitable deduction for donations made to public entities, such as schools and child care services. My amendment will extend eligibility for a business charitable deduction to the donation of educational equipment and supplies donated to public schools, public child care providers and public child care support entities, such as resource and referral services. If child care is to improve and meet the developmental needs of our Nation's children, every available resource must be made available. Computers which are discarded because they are too slow or have insufficient hard drive capacity, can be the first step into the computer-age for a small child or the link to professional training for a child care provider. A critical part of improving the quality of child care is professional development for child care providers. Since the 1970's there has been a decline in child care teacher salaries. In 1990, teachers in child care centers earned an average of $11,500 a year. Assistant teachers, the largest growing segment of child care professionals, were paid 10 to 20 percent less than child care teachers. The 1990 annual income of regulated family child care providers was $10,944 which translates to about $4 an hour. Nonregulated family child care, generally comprised of providers taking care of a smaller number of children, earned an average of $4,275 a year--substantially less than minimum wage. With these wages, it is easy to understand why more child care providers do not participate in professional training or attend college classes to improve their skills. The costs of applying for and receiving certification as a qualified child care professional are minimal, but understandably out of reach for many child care providers. My amendment will exempt expenses directly related to child care accreditation or becoming credentialed from the 2 percent floor that is applied to miscellaneous itemized deductions. This will at least permit child care providers to receive a full deduction for the expenses associated with improving the child care services which they provide. This incentive for professional growth and the development of new skills is a small but critical part of my overall effort to support high-quality child care. The last provision in my amendment creates a very limited exception to the executive use rule governing the tax deduction for home office expenses. The amendment will permit the mixed use of home office space for business and personal purposes to allow a person to care for his or her child. In some ways, the need for this exception comes down to fundamental fairness. How many school days, snow days and other times do children accompany their parents into work? I can always tell when the schools are unexpectedly closed, by the increased number of little people I see in Senate offices and eateries. I have been in Senate offices and other workplaces when a crib or playpen is clearly in evidence. Yet, none of us question whether our offices are exclusively for business use. One of the big incentives for telecommuting and home- based business is to allow parents to have more time with their families, yet existing law would keep a new mother from legitimately claiming a home office deduction if she has her child read a book or play in a corner of the room where she is working. The need for high-quality child care is compelling. Having affordable, convenient child care is tied directly to a family's ability to produce income. Good child care can be an effective way to support the healthy development of children, particularly in the acquisition of social and language skills. For the millions of children who spend much of their pre-school lives being cared for by someone other than their parents, child care provides the foundation upon which all future education will be built--and determines to a large extent whether that foundation will be strong or weak. As we all know, quality child care costs money. It costs money to parents who bear the biggest burden for the cost of child care. It costs businesses both through the direct assistance that they provide to employees to help with the costs of child care, and through their ability to hire and retain a skilled work force. It costs Government through existing tax provisions, direct spending, and discretionary spending targeted at child care. But the costs of not making this investment are even higher. Those costs can be measured in the cost of remedial education, the increase of an unskilled labor force, the increase in prison populations, and most importantly, the blunted potential of millions of children. I urge my colleagues to support my amendment to the budget reconciliation act. Mr. President, I ask unanimous consent that additional material be printed in the Record.