J. Kerrey

Mr. KERREY

Mr. KERREY. I believe we need to be very careful not to increase, in an unnecessary fashion, that risk. And this amendment will reduce that risk. It will not increase takings claims against the Government. It will not increase litigation as a consequence of saying that we are not going to allow continued and new unitary thrift acquisition and new commercial interests to come in and purchase savings and loans. Mr. President, I appreciate the fine work the Senator from Texas has done and the Senator from Maryland has done. I hope we can get this legislation in a form that I can support, because I believe financial services modernization is something that has long been needed and is long overdue.

Mr. KERREY. Yes, I yield.

Mr. KERREY. Mr. President, first, I thank the distinguished Senator from Texas and the Senator from Maryland. There are a number of provisions in this legislation for which I thank them. One of the things all of us have to do when looking at this piece of legislation is ask the question whether or not we are going to be able to maintain the safety and soundness of the banking system. It is a pretty dramatic change allowing companies that previously had been prohibited in certain lines of business to engage in those lines of business. I want to make it clear, I reached the conclusion that we do have the regulatory capacity to maintain safety and soundness, whichever piece of legislation emerges here. I appreciate very much the work of the Senator from Texas on this, as well as the work of the Senator from Maryland. I will point out a couple of things, as well, that I am very much grateful for, and one of them has to do with modernizing the Federal Home Loan Bank System that allows rural banks and other banks to have access to credit. I think it is a very important provision. Senator Hagel offered it, and I commend him for his leadership on it. I also want to make it clear on the CRA, at some point it is going to get to conference. I do support what Senator Gramm is doing to provide exemptions to banks under $100 million. Under urgings, I had conversations with my larger banks who do not find themselves with the kind of difficulties of being coerced into making payments, as he noted exists in other parts of the country. While I support under 100, I do not support the other changes that are being proposed. As to this amendment, the takings issue, Congress does this all the time. In fact, my guess is there could be people who make a claim that because the bill itself is passing, they are going to suffer a loss of value in their business. Gosh, we debate the ethanol provision and we debate tax credits for the oil industry all the time. Sometimes you get it, sometimes you do not get it, but you do not file a claim against the Government as a consequence of that action. People could file a takings action against this bill based upon what the Senator from Texas just argued. The Winstar case does not open up the door. Indeed, the Winstar case is being appealed itself. The Winstar case does not open up the door to prevent Congress from passing legislation in trying to modernize our banking system.

Mr. KERREY

Mr. KERREY. Mr. President, I rise today to state my strong opposition to the McCain-Biden resolution currently pending before the Senate. I intend to vote to table this resolution. I continue to have concerns about both the failure of diplomacy that led to the use of force in Kosovo and the current military strategy being employed. But now that U.S. Armed Forces are engaged, we should send a strong message of unity and determination to see the mission through. President Milosevic should know both the U.S. Senate and the American people remain committed to achieving our objectives. I will vote to table S.J. Res. 20 for three reasons. First, the language contained in the resolution is too broad. I respect what Senators McCain and Biden are trying to accomplish with this resolution; they are trying to increase the chance of success of our military operation. However, I do not support giving the President of the United States the authority to ``use all necessary force'' to accomplish our goals in Kosovo. I find it disturbing that the United States Senate is considering a resolution that would give the President more authority to exercise military force than he has requested. Passage of this resolution would be the equivalent of giving the President a blank check to operate militarily in Yugoslavia. Secondly, passage of the resolution would abrogate Congressional responsibility for the conduct of this war. The Constitution provides the Congress with a clear role in the use of military force. While the President has consistently stated his belief that ground forces will not be used in a non-permissive environment, passage of this resolution would allow the President to reverse his position without prior Congressional authorization. To be clear, Mr. President, if this resolution were to pass, the President would be able to commit the full might of the U.S. military in Kosovo without first coming to the Congress and explaining the mission, without explaining the military objectives, without explaining the exit strategy, and without explaining how such a deployment would affect our military commitments around the world. Mr. President, the American people should expect more from their elected representatives; Congress should not surrender its Constitutional responsibilities in this matter. Finally, I oppose the McCain-Biden resolution because it is the wrong legislative statement at the wrong time. While I recognize S.J. Res. 20 is before the Senate due to the parliamentary intricacies of the War Powers Act, it does not provide an appropriate starting point for a Senate debate. The truth is, the Senate is long-overdue in conducting a real debate over our role in Kosovo. What are our objectives? What are our long-term strategic interests in the Balkans? How do our military actions Kosovo affect our commitments to peace and stability throughout the world? These are the sort of fundamental questions we should be debating on the floor today. Rather than providing a starting point for discussing our policy options, the McCain-Biden resolution merely provides the final answer: the President knows best. This is not the statement I want to provide to the people of Nebraska. I remain hopeful that the current air campaign will bring about a return to diplomacy. President Milosevic must realize that NATO's objectives--to stop the humanitarian tragedy in Kosovo, return the Kosovar people to their homes, and re-establish Kosovar autonomy--will be achieved. The only hope for the Serbian people is a negotiated settlement. In the mean time, the United States and our NATO allies should continue to apply pressure on the Serbian government while working with nations like Russia to establish the basis for a settlement. In the long-run, the United States and Europe are going to have to address the issues of peace and stability in the Balkans in a larger context of economic development and ethnic security. Mr. President, Congress does have a role to play, both in the short- term discussion of our current military actions and in the long-term discussion of our broader policy in the Balkans. We must begin to talk about these issues in a serious manner or continue to face the prospect of having our decisions made for us as events pass us by. Mr. President, let's table the McCain-Biden resolution and begin a real debate on Kosovo and our national security interests.

Mr. KERREY

Mr. KERREY. I am pleased to join the Senator from Idaho. This amendment would apply the same budgetary restrictions to mandatory programs that we have on discretionary programs. Mandatory programs are growing faster than the discretionary programs. We are converting our budget from one that used to be almost entirely discretionary, endowing our future, into a budget that is largely mandated by law. This simply says if we are going to add a new mandatory program, you do as you would with the discretionary program: You need to have 60 votes to get the job done. It doesn't mean you can't; it just raises the bar as high as it is on discretionary programs. I hope my colleagues see the wisdom of this and will support it.

Mr. KERREY

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

Mr. KERREY. Mr. President I rise today to talk about the great progress we have made reducing our federal deficits. I am proud to have participated in and voted for three budget acts--in 1990, 1993, and 1997--which have radically altered the fiscal condition of the Federal government and the debate about how the public's hard-earned tax dollars should be spent. When I arrived in the Senate 10 years ago, we had a deficit of $205.2 billion. We were awash in a sea of red ink. Budgeteers were predicting deficits as far as the eye could see. In fact, since 1989, our publicly-held debt has increased from $2 trillion to $3.7 trillion. Hundreds of billions of dollars of borrowing was needed every year to fund the Federal budget. This borrowing had two effects: it kept interest rates for all public borrowing higher than necessary and it caused the net interest costs of the U.S. government to rise as a share of total Federal spending. After the enactment of these three budget acts--particularly the 1993 and 1997 budget acts--and on account of impressive gains in private sector productivity and growth, we were able to reverse the deficit trend. Deficits have continued to shrink since 1994--and we were able to celebrate our first unified budget surplus (counting Social Security) of $70 billion last year. I am hopeful that the Congressional Budget Office's August re-estimate will allow this Congress to celebrate its first real budget surplus since 1960. Deficits are yesterday's problem. Today, budgeteers are telling us to expect budget surpluses as far as the eye can see. I am proud to say that we are able to celebrate the fruits of our fiscal restraint--not because we had to abide by an inflexible constitutional amendment--but because we had the sheer will and political courage to put ourselves on a spending diet. Americans should feel good about that. And my colleagues who took the tough votes on fiscal restraint should also feel good about the budget surpluses we are now enjoying. Through our progress on controlling spending, we have also made some progress on entitlement and net interest expenditures. Back in 1994, I co-chaired the National Commission on Entitlement and Tax Reform. In its final report, the Commission predicted that ``without changes to programs or increased taxes, entitlements and interest on the national debt are projected to consume all federal revenues by 2012. In 2030, entitlement spending alone will exceed all Federal receipts.'' The fiscal restraint that we have displayed in the succeeding 5 years has changed the short-term picture of entitlement and interest expenditures dramatically. Today, about 53% of our Federal budget is spent on mandatory programs like Social Security and Medicare; 34% of our budget is dedicated to discretionary spending (like NASA, NIH, roads and bridges, and the armed forces); and 13% of the budget is spent on interest on our national debt. Depending upon whose numbers you look at--the Republican Budget Resolution, the President's budget, or the CBO projections--our fiscal discipline will allow us to pay down our publicly-held debt and reduce our net interest costs. These interest payments will continue to decline as a percentage of our total spending--from about 13% today to somewhere between 3 and 5 percent by 2009. Although discretionary spending will continue to decline as a percentage of total spending-- this decline will occur more slowly than previously predicted. Over the next decade, discretionary expenditures will decline from about a third of total expenditures to about a fourth of total expenditures by 2009. And although mandatory spending will continue to rise as a percentage of total expenditures--from 53% today to 70% of spending by 2009--it will grow at a slower rate than we had previously predicted. The strong growth in our economy and the subsequent strong growth in the taxable wage base has increased the solvency of our Medicare HI and Social Security OASDI Trust Funds. That same report from the Bipartisan Commission on Tax and Entitlement Reform predicted back in 1994 that with no changes, the HI Fund would be insolvent in 2001. But the latest statistics show that the HI Fund will be solvent until somewhere in the year 2010. Our 1994 report also noted that the Social Security would become solvent in 2029. In 1998, the Trustees of the Social Security Trust Funds announced that our strong growth would extend the solvency of the OASDI Trust Funds to 2032--and I have reason to believe that the short-term solvency of the Trust Funds will be extended even further after the Trustees release their 1999 report next week. While we should pat ourselves on the back for our tough votes in 1990, 1993, and 1997, we must remember that our agenda remains unfinished. Today, I want to challenge the Senate to start tackling the last piece of unfinished business. I am, of course, referring to the biggest political problem facing our generation of legislators: how do we work together in a bipartisan manner to modernize, reform, and improve the Medicare and Social Security programs for our children and grandchildren? Our demonstrated fiscal responsibility has bought us some time--and some breathing room--to think about how we want to reform our safety net programs, restore solvency to our entitlement Trust Funds, and reduce the out-year proportions of the budget which finance our entitlement programs. Although we've slowed the growth in our entitlement programs, it must not go unnoticed that this year we will spend $20 billion more in Medicare and Social Security benefits than last year--and next year we will spend $30 billion more than this year. That $30 billion increase in Medicare and Social Security benefits is more than our total combined expenditures on the State, Justice, and Commerce Departments during 1999. The additional money we will spend each year on Social Security and Medicare benefits will only begin to increase as the first Baby Boomers start retiring during the next decade. The President's own budget outlines for us the troubling long-run budget projections for the Social Security and Medicare programs. Right now, we spend the equivalent of 4.5% of GDP on Social Security benefits and about 3.6% of GDP on Medicare and Medicaid. By the year 2050, we will be spending about 7.2% of GDP on Social Security benefits and 9.7% of GDP on Medicare and Medicaid benefits. This is a dramatic increase in entitlement expenditures--a doubling from 8.1% of GDP today to 16.9% of GDP in 2050. My Nebraska constituents need to know that the more we spend on entitlements, the fewer tax dollars will be available for the education and training of our children, or the research and development of new medicinal drugs, or space exploration. The analytical tables in the President's budget show that discretionary expenditures will continue to decline from about 7.6% of GDP today, to about 3.6% of GDP in 2075. I want to challenge my colleagues to seize upon the opportunity to modernize, reform, and improve Medicare and Social Security during this era of budget surpluses. We need to think about helping people become less dependent on the government for their retirement security. For example, I support the idea of allowing individuals to have a payroll tax cut of 2 percentage points, which they could invest in individual accounts. But these individual accounts are not the end in itself--but the means to an end. The means to a more independent retirement--a retirement that involves the ownership of wealth and the creation of an asset that can be passed on to heirs. We need to decrease the demand of future retirees on the government by making changes to Social Security that reduce costs--but also provide retirement security. Efforts to reduce the costs of the program are made harder by changes to the Social Security program enacted back in 1983. Some of my colleagues--particularly Senator Moynihan--may remember that back in 1983, Congress agreed to ``pre-fund'' the Social Security benefits of the Baby Boom generation by allowing the program to take in more income than it needed to pay the benefits of current beneficiaries. This excess payroll tax money was supposed to flow into a Social Security Trust Fund. As we all know, this money was borrowed from the Trust Fund throughout most of the Reagan, Bush and Clinton years to finance the general operations of government. When Treasury starts paying back the money it borrowed from the Trust Fund in 2013, it will pay these IOUs with general revenues--meaning individual and corporate income tax dollars. Most of my constituents are probably not aware that these changes in 1983 will give beneficiaries from the Baby Boom generation a claim on $6.85 trillion of income tax revenues--in addition to the payroll tax claim they already have on tomorrow's workers. The President is proposing to increase the Baby Boomers' claim on income tax dollars to over $30 trillion. I do not support this change--I believe that we have an obligation to make structural reforms to the program within the current payroll tax structure. I applaud many of my Democratic colleagues who have taken a courageous step in opposing this misguided effort to ``save'' Social Security through additional income tax dollars. But I want to remind my colleagues on both sides of the aisle that simply setting aside the surplus for Social Security or Medicare reform is not a reform plan--it is a debt reduction plan. I encourage my colleagues on both sides of the aisle to have an honest and open debate about the way we want to finance and reform the Social Security program. I believe that Congress and the President can and should work together to achieve real structural reforms in the program--and do so in a way that helps low-income Americans and that shares costs across all generations. In addition, I would argue that we need to modernize the Medicare program to expand choice, increase competition, and include prescription drugs. As those of us who served on the National Bipartisan Commission on the Future of Medicare know through painful experience, Medicare poses an even more difficult problem than Social Security reform. By providing health care coverage, it provides a second essential element of retirement security for older Americans, as well as serving as an important safety net for disabled Americans who can no longer work. Medicare spending is unpredictable and, to a certain extent, uncontrollable--spending growth is largely driven by the amount of health services that beneficiaries use, technological developments in medicine, and--particularly in the future--enrollment growth. And to complicate matters further, the public is not yet ready to undertake a significant change to the Medicare program. They know how valuable the current program is to themselves, their parents and grandparents. They want to be sure that they have the same coverage, or better, when they retire. And they don't see the need to make hard decisions about spending and benefits. We need to look at these difficult dynamics and make the difficult choices that are necessary to keep the Medicare program solvent while ensuring that we have the flexibility we need within the Federal budget to address other national priorities. Last week, I voted with nine other Commissioners to adopt a more competitively-based model for financing and administering the Medicare program. I think this type of reform will move us in the right direction by helping us control costs, and ultimately helping us improve benefits. We can't simply pour new general revenues into an un-reformed Medicare program, and wait to deal with the larger problems at a later date. The surpluses that have appeared, in part due to our fiscal discipline, provide us with a unique opportunity to reform our growing entitlements burden. The choices involved in achieving Medicare or Social Security reform are tough--and may even require some tax increases or benefit cuts. The pain of tax increases or benefit cuts will be made much less harsh if we use these budget surpluses to help reform our Social Security and Medicare programs. I do not believe we should use the on-budget surpluses for a debt swap or for a large tax cut that will primarily go to high income individuals. We must avoid the instant gratification of a large tax cut at the expense of the delayed gratification that comes with reforming our entitlement programs and reducing the tax burden on future workers. I look forward to working with the House, the Senate, and the President to complete this unfinished agenda.

Mr. KERREY

Mr. KERREY. Mr. President, I rise to discuss the crisis in Kosovo. President Clinton and our NATO allies are at the point of having no other option except to conduct air attacks against Yugoslav forces operating in and near the Yugoslav province of Kosovo. I regret we are at this point, but that doesn't change the facts. At this crucial moment, Congress should not tie the President's hands or give Mr. Milosevic the slightest reason to believe the United States will not join with its allies in airstrikes against the Yugoslav units that are burning and shooting their way through Kosovo as I speak. For this reason I will vote for the resolution. A requirement to use military force often follows a failure of diplomacy. That is not the case in Kosovo; this Administration and our major European allies have worked hard to bring about a just and peaceful outcome in this Albanian-majority province which also has such powerful historic and emotional significance for Serbs. A just and peaceful outcome would have been possible, but for the unwillingness of the Milosevic regime to govern Kosovo on any basis other than force and fear. Common sense and appeals to higher motives did no good, and now force will meet overwhelming force in what can only be a tragic outcome for many Yugoslav soldiers. The President is out of options, and we must support him and the aircrews who will carry out his orders. But I am under no illusions that airstrikes will fix the Kosovo problem. The best I hope for is that the airstrikes will bring Milosevic back to the table to accept a NATO-brokered agreement for a peaceful transition in Kosovo. Such an outcome would at least stop the killing and would accustom all in the region to the idea of an autonomous Kosovo. Even if we succeed to this extent--and it is by no means certain we will--the underlying instability in the region will persist. The Kosovo problem is really the problem of a minority ethnic group, the Albanians of Serbia, who have not been fully accommodated. The Albanian minority in Macedonia has the same problem. Within Albania proper there is an ethnic Greek minority, and concern for that minority has created tension in the past between Greece and Albania. My point is not to induce despair about the complexities and complexes of this one small corner of the Balkans, but rather to encourage Congress and the Administration to see the region as a unity and work simultaneously in all the affected countries to promote solutions. Just fixing Kosovo won't do it, and I'm not confident we can do even that. If airstrikes can begin a transition to a Kosovo settlement, the next step will be the insertion of a ground force to keep the transition peaceful. The Administration has proposed this force include about 4,000 American soldiers or Marines, and has promised to deploy this force only in a ``permissive'' environment--meaning a Kosovo in which at least the leaders of the various factions agree to the presence of our troops. Mr. President, the resolution before us does not deal with the question of ground troops. When that question does arise, I will oppose any deployment of U.S. personnel on the ground in Kosovo. The stability of the entire planet depends on the readiness and availability of the U.S. Armed Forces. We should not fritter them away in peacekeeping missions in countries which do not rise to the level of vital American interests. We should keep them ready for the contingencies that are truly in our league: Iraq and the Persian Gulf, the Koreas, Russian nuclear forces. Europe contains wealthy countries with the militaries that could take on local European missions like Kosovo. It is their problem, and they should step up to it. Mr. President, several other reasons are raised to justify U.S. deployments to Kosovo. Some assert a ``domino effect'' from Kosovo will plunge Europe into war. After all, they say, World War I started in the Balkans. But the alliance systems, rival empires, and hair trigger mobilization plans of 1914 are nowhere apparent in today's Europe, so there is no need to fear a return of World War I. We are then told the instability could eventually cause war between Greece and Turkey. But Greece and Turkey could have fought over many things over the last forty years, most recently the Ocalan affair, and they did not. There are rational leaders in Athens and Ankara who know their own interests. Kosovo will not set them off. As I said, the Administration should be praised for working for years on the thankless task of trying to bring peace to Kosovo. At this point, airstrikes are the last option available. The people of Kosovo, as well the Serbian people and all the people of the region, deserve a dignified, secure peace. Diplomacy, supported by U.S. and other NATO airpower and, when appropriate, European ground troops, should aim to bring this peace about. The United States should concentrate on the bigger problems which truly threaten us. I yield the floor.

Mr. KERREY

Mr. KERREY. Mr. President, I rise today to talk about the financing of the Social Security program. The President's plan to reserve the surpluses for Social Security has presented us with an opportunity to have a discussion about the way Social Security is currently financed-- and to have a debate about how we want to finance the Social Security system in the future. I want to say at the outset that some of my colleagues on both sides of the aisle have closely examined the President's proposal to infuse the Social Security system with general revenues--and decided not to support a financing reform mechanism that does not lead to structural reforms. For my colleagues on the Democratic side who have decided not to support general revenue transfers to Social Security, this is a politically difficult position to support--but a commendable one. With his plan to reserve the surpluses for Social Security, the President has helped me to understand for the first time that the Social Security program is facing a serious funding problem in the year 2013. I now realize that in 2013, the payroll tax dollars flowing into the Social Security program will no longer be large enough to fund the current level of benefits. As a result, the Social Security Administration will start cashing in its trust fund assets--those special-issue Treasury bonds--to pay for Social Security benefits. The Treasury has to make good on these bonds by giving Social Security a portion of general revenues. This means that starting in 2013, Social Security beneficiaries have a claim on not only the payroll tax dollars, but also the income tax dollars of working Americans. Let me say that again, Mr. President. Starting in 2013, Social Security beneficiaries have a claim on both the payroll tax dollars and the income tax dollars of working Americans. So as not to mislead, let me say that these beneficiaries will also have a claim on other general revenues, such as corporate income tax dollars. Furthermore, in order for the Treasury to make good on these obligations without cutting discretionary spending, it is likely Congress will either have to raise income taxes or return to deficit spending. Now under current law, this infusion of general revenues into Social Security is scheduled to end in 2032--at which point a future Congress will have to decide whether to raise payroll taxes or cut benefits. The President's proposal allows this Congress to pass the responsibility for enacting reform off to the Congress convening in 2055. Furthermore, what the President proposes to do is to fund a substantially larger portion of the program with income tax dollars. In fact, he is turning a funding problem into a funding virtue by guaranteeing that future income tax dollars will continue to fund Social Security benefits until 2055. This means that the baby boomers will have an even larger claim on future tax dollars. On how many future income tax dollars do the boomers have a claim? Well, in fact, the Social Security actuaries have quantified for us exactly how many more general revenues will be given to the Social Security program as a result of the President's plan. According to the actuaries, Social Security beneficiaries already have a claim on general revenues worth $6.45 trillion in nominal dollars. President Clinton will commit an additional $24.765 trillion in general revenues to the Social Security program between the years of 2015 and 2055--for a total of $31.215 trillion in general revenues. You heard me correctly, the President's plan commits an additional $24.765 trillion of general revenues--$4.85 trillion in constant 1999 dollars--to pay for Social Security benefits--above and beyond the 12.4 percent payroll tax that is levied on all workers. This chart demonstrates that in any given year we will be committing up to $2 trillion of general revenues for Social Security benefits. If you look at this in terms of constant 1999 dollars, we are talking about $200 to $300 billion of general revenues that will be committed to Social Security each year in the 2030s, 2040s, and 2050s. If you look at it in terms of a percentage of GDP, the Clinton plan will divert general revenues worth 1.5 percent of GDP to Social Security for each year from 2032 through 2055. That is a general revenue transfer each year nearly as large as the entire defense budget. Now it may come as a surprise to my constituents watching this at home to hear that the President is committing massive amounts of future general revenues to Social Security. And the reason they aren't aware of this fact is because he has made no effort to inform them. He has cleverly hidden his proposal behind the rhetoric of ``saving the surplus for Social Security.'' If the President wants to openly make the case for funding more Social Security benefits through income tax dollars, let me be the first to encourage an open and honest debate on that very subject. In fact, it is a very Democratic argument to fund Social Security through the more progressive income tax rather than the regressive payroll tax. But I encourage him to enter this debate candidly and to explain to the American public the tradeoffs of infusing general revenues into the Social Security program. I have heard the group of us who are working on substantive Social Security reforms--Senators Moynihan, Breaux, Gregg, and Santorum-- referred to as the ``Pain Caucus'' because we advocate structural reforms to the system through benefit changes or future payroll tax adjustments. Well, we believe less in pain that in truth in advertising. The President also has a great deal of pain in his plan--a hidden pain in the form of income tax increases that will be borne by future generations of Americans. I strongly disapprove of a plan that provides a false sense of complacency that Social Security has been saved by this nebulous and vague idea of ``saving the surplus''--while failing to disclose the real pain that will be imposed on future generations. Let me talk for a moment about the history of the Social Security program and its financing. The idea of a Social Security program was first discussed by Frances Perkins as a means for providing the widows of coal miners a financial safety net. Today, the Social Security program provides an intergenerational financial safety net to retirees and the disabled, and their spouses, survivors, and dependents. Social Security has always been financed by a tax on payroll. When the program began, the total payroll tax was 1 percent of the first $3,000 of earnings--paid for by both the employer and employee. Today, all covered employees pay a Social Security payroll tax that is equal to 6.2 percent of the first $72,600 of their annual wages. In addition, the employer must pay an additional 6.2 percent payroll tax on the first $72,600 of each employee's wages. The excess Social Security payroll tax income has always resided in a trust fund. Through the 1970s, this trust fund generally had only enough assets to pay for about one year's worth of benefits. The 1977 Social Security amendments marked the first time that the trust funds were allowed to accrue substantial assets--though this accrual was not necessarily deliberate. During the 1983 reforms, Congress made this implicit accrual of assets explicit--and declared its goal to be the prefunding of the baby boom generation's Social Security benefits. Congress tried to pre-fund the baby boom generation by accelerating the payroll tax rate schedule increases that were agreed to in the 1977 amendments, by covering all federal government and non-profit employees, and by raising the payroll tax rate on the self-employed. Not surprisingly, several Presidential administrations took advantage of the overflowing Social Security coffers--and used an overlevy of the payroll tax to fund both the general operations of government and expensive income tax cuts. Many of the payroll tax dollars that flowed into the trust funds were immediately borrowed to pay for tanks, roads, and schools. Many of these payroll tax dollars were also used to offset major income tax breaks. Is it any surprise that Reagan was able to afford a reduction in the top marginal tax rate from 70 to 50 percent in 1981 and from 50 to 28 percent in 1986 in the wake of the payroll tax hikes of 1977 and 1983? The irony is that the story has now come full circle. While former Presidents financed income tax cuts with payroll tax hikes, Mr. Clinton now wants to maintain a lower-than-necessary payroll tax rate by increasing future income tax revenues. Mr. President, one of my goals today is to make clear my desire that this Congress and this President have an honest debate about how to finance Social Security. But one of my other goals today is to talk about the need to reform the program to improve the lives of our Nation's minimum wage workers. As many of my 206,278 Nebraska constituents collecting old-age Social Security benefits can attest-- Social Security is not a generous program. In fact, the average old-age benefit in Nebraska is under $750 a month. When you factor in rent, food, prescription drug benefits, and part B premiums, $750 is not a generous benefit. As many of my colleagues may know, the size of a retiree's Social Security check depends on a number of important factors--how much you worked, how much you earned, and at what age you retire. In order to determine your monthly benefit, the Social Security Administration takes all of this information and applies a complicated benefit formula designed to replace a portion of the monthly income to which you have become accustomed over the course of your life. This replacement formula is not very generous for low-wage, low-skill workers or for workers who have been in and out of the workforce sporadically. The way it works is that Social Security will replace 90 percent of the first $505 of average indexed monthly earnings (AIME) over your lifetime; plus 32 percent of the next $2,538 of earnings; and 15 percent of any earnings over $3,043 per month. Complicated? Yes. But what this means is that a worker who has been consistently in the workforce and has had lifetime annual earnings of $10,000 per year will receive a Social Security benefit check of about $564. This is not substantial--and barely livable. What I propose to do is change the benefit formula to replace a larger portion of the income of these low-income, low-skilled workers who play a very important role in our service economy. And I propose doing this in a cost neutral way. By simply changing the replacement formula, we can boost that workers' monthly income by 22 percent. What I have tried to show this morning is that we need to have an honest and open debate about the way we want to finance the Social Security program. We also need to have a candid and constructive discussion about Social Security reforms that will improve the retirement security of all working Americans--including those working Americans who are toiling away at low-paying service sector jobs. I believe that Congress and the President can and should work together to achieve real structural reforms in the program--and do so in a way that helps low-income Americans and that shares costs across all generations. Mr. President, Harry Truman had a sign on his desk which read: ``The buck stops here.'' Unfortunately, what this President's plan is saying is that the buck stops there--in 2055. Our generation has a historic opportunity to make some sacrifices now, so that our children and grandchildren may benefit from our having served this nation. The sacrifices we make may not be as dramatic as those of the generation that lived during Harry Truman's Presidency, but they will have a significant impact on the future of our Nation. I thank the Chair and yield the floor.

Mr. KERREY

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

Mr. KERREY

Mr. KERREY. I want to thank Senator Edwards, Senator Hagel, Senator Daschle, Senator Boxer, Senator Durbin, and all the others who have spoken. I appreciate very much and am very moved by these words and more moved by the friendships in this body. Thirty years ago is a long time. I am reminded of a slogan at the beginning of any exercise to remember what happened, especially in combat 30 years ago, and I will give you the watered-down version of that slogan. The only difference between a fairy tale and a war story is, the fairy tale always begins, ``Once upon a time,'' and the war story always starts off, ``No kidding, this is true; I was there.'' We don't necessarily have perfect memories when it comes to bringing back that moment and I, for one, have always been very uncomfortable-- and Bob Bennett earlier said he wanted to make me uncomfortable by saying some nice things about me. I have been uncomfortable for almost 30 years to be introduced as a hero, and it made me somewhat uncomfortable in part because I did do something that was simply my duty; I didn't feel that evening that I had done anything necessarily out of the ordinary. Indeed, John McCain's father upgraded my award from a Navy Cross to a Medal of Honor. Otherwise, this event might not be happening at all. There are many men, Senator Inouye will tell you, who received nothing, whose actions weren't seen or were seen by somebody who didn't like them, or were seen by somebody who liked them but couldn't write very well, or something else happened to their award along the way. So I am aware that there are many people who have done heroic things that were not so recognized. As a consequence of being introduced all the time and being given many opportunities to think what it means to be a hero--and I again appreciate very much all this recognition--my heroes are those who sustained an effort. In my case, it was the effort of a single night. Who knows; in the daytime, I may have performed differently. I may have, under different circumstances, done things differently. The heroes who are impressive to me are those who sustained the efforts, whose bravery, whose courage, is called upon every single day. I think of my mother; I think of my father. I think of millions of men and women who, as mothers and fathers, sustained the bravery and the courage needed to be a good parent. I think of all those volunteers who came out not just to my hospital--I watched Bob Dole on television in 1988 in Russell, KS, break down at the start of his Presidential campaign as he remembered what it was like to come home to Russell, KS, and be welcomed into the arms of people who took up a collection so he could travel to see his father. The heroes in my life are the people in Lincoln, NE, who welcomed me home and who gave me far more than I thought I had a right to deserve. One of the people in my life who has been very important--I have never met him, but I read his work; indeed, he was killed shortly before I went to Vietnam. Although he was a great opponent of the war, he came back in an airplane, along with other men who had been killed in that war--is a man by the name of Thomas Merton. Merton wrote, Human nature has a way of making very specious arguments to suit its own cowardice and its lack of generosity. I find myself falling victim to that understandable human part of myself. I do sometimes exhibit cowardice. I do sometimes exhibit a lack of generosity. All of us, I suspect, have those moments. It is the ever-present need to sustain the bravery to do the right thing that impresses me the most. Those whose brave acts are done, knowing there will be no recognition, knowing there will be no moment when they will be recognized and stand before their colleagues, trembling and wondering what to say in response--it is those brave acts that are done anonymously that are most important of all. I have received a gift in many ways as a consequence not just of the award and considering what heroes are but also as a consequence of my injury. I don't know if Senator Inouye feels the same way. I remember a night almost 30 years ago to the day, in 1969, when a nurse came into my room very late at night. It was a difficult night for me. And among other things, she said to me that I was lucky to be alive and that I would get through this, I would survive it, I would get through this valley of pain that I was in at the moment. Well, I remember not believing that. I believed that I was not necessarily lucky to be alive at all at that particular moment of my suffering. Today I recognize that she was absolutely right, that I was lucky to experience suffering and know that you do not have to feel pain for pain to exist, that it is out there as I speak, as we hear these words. That suffering is universal is a lesson I was given in 1969, and perhaps of all the lessons I was given, it was the most important of all. I was also given a gift in discovering that the world is much bigger. It is not just us white men from Lincoln, NE, who grew up in a middle class home and had a great deal of abundance as a result of two rather extraordinary and loving people. It is a world composed of many colors, many creeds. It is a world composed of over 6 billion people, not just the 270 million who live in the United States of America. I have been taught and had the chance to learn that you do not really heal until you have the willingness, courage and bravery to forgive people who you believe have done you wrong. I would not be back in public service, I do not think, were it not for Walter Capps, who invited me to come to Santa Barbara to teach a class on Vietnam, where in studying the history of that war I was able to forgive a man I hated--Richard Nixon. I doubt that former President Nixon felt any relief in that moment when I forgave him, understanding as I did then how easy it is to make mistakes when you are given power. But I was the one who was healed. I was the one who was liberated. I was the one who was able then to live a different life as a consequence of my having the courage in that moment to forgive. I have discovered, through my own healing, that the most powerful thing that we can give, the most valuable thing we can give another human being costs us nothing. It is merely kindness. It is merely laying a hand on someone and saying to them, as that nurse said to me, that it will be all right; you are not alone here tonight; you are not alone with this suffering that you are feeling. I also learned through service in the Senate. Oddly enough, at a time when people think that the only reason that we are given to vote a certain way is because there are financial contributions hanging in the balance, I have learned in this Senate that a nation can be heroic. I discovered on the Appropriations Committee, of all things, that that hospital in Philadelphia was not there by accident. It was there because a law passed this Congress--a law that was signed by Richard Nixon--authorizing that hospital to be operated, authorizing those nurses, those doctors and all the rest of those wonderful people to be there to save my life. A law made that possible. I made no financial contributions in 1969. There wasn't a politician in America who I liked. Yet, this great Nation allowed its Congress to pass a law that gave me a chance to put my life back together. In 1990 and 1991, as a Senator, I went back to Southeast Asia, with the Bush administration, trying to find a way to bring peace to Cambodia. We succeeded in 1992. But in going back, especially to Vietnam in 1991, and especially in the South, I discovered again something rather remarkable about the people of this great country-- that though I still believed the war was a tragic mistake and that we made lots of errors along the way, the people of South Vietnam repeatedly said to me, ``We know you came here to fight and put your life on the line for strangers, and that you were willing to die for us will not be forgotten.'' I sat, along with my colleagues, and listened to Kim Dae-jung of South Korea say the very same thing in even more personal ways. Our Nation can be heroic by recognizing that we might write laws that give all of us a chance at the American dream, and by recognizing that as a great nation there will come a time when we must risk it all, not for the freedom of people that we know but for the freedom of strangers. I did, as John Kerry said earlier, come back to the United States of America an angry and bitter person. I did not have my patriotism intact. I had gone to the war patriotic because it was a duty, and I stand here today before you honored by your words, moved by your sentiment, and to tell you that I love the United States of America because it not only has given me more than I have given it, but time and time again it has stood for the right thing, not just at home but abroad. I appreciate just the chance to be able to come to this floor and offer my views on what our laws ought to be. I appreciate very much more than I can say to all of you--Senator Edwards, Senator Daschle, Senator Hagel, and the others who have spoken--your sentiment, your words and, most of all, your friendship. Mr. President, I yield the floor.

Mr. KERREY

Mr. KERREY. Mr. President, I rise today to offer my support for S. 257, the National Missile Defense Act currently pending before the Senate. I do so with the firm belief that passage of this legislation will help keep the American people safe. Given the seriousness of the threat posed by ballistic missiles, it is our duty to act to confront this threat through the development of a national missile defense system. I believe some of the controversy surrounding this piece of legislation comes from the misperception of what national missile defense really is. Mr. President, we are not proposing to build a star wars-style system. We are not proposing to build a system designed to counter a massive nuclear attack from the Soviet Union. That plan was unworkable in the 1980s and is unnecessary today. Instead, the missile defense system we are talking about today is a limited system, designed to protect the United States from rogue-state ballistic missile launches and accidental launches--precisely the kind of threats that will not be countered by our traditional reliance on deterrence. The truth is, Mr. President, we do not currently possess the ability to protect the American people from these threats. But we should. The legislation we are debating today would take the first step toward protecting the United States by declaring it to be the official policy of the United States to deploy a national missile defense system. The bill before us does not identify a particular system for deployment It does not authorize or appropriate a single dollar. These are decisions that will be left up to this and future Congresses. Instead, the National Missile Defense Act simply states that the United States should deploy a missile defense system to protect the American people. Mr. President, perhaps the only situation worse than not having an adequate missile defense system to protect the American people, is deploying a system that has not been proven feasible. I am pleased with the recent announcement by the Clinton administration that they plan to increase spending on missile defense research by $6 billion over the next five years. I applaud the administration's decision to fund missile defense in the fiscal year 2000 Defense budget so that a decision to deploy a missile defense in 2005 could be made as early as June of next year. We should all take note of the outstanding scientific and engineering efforts which have been ongoing for years in the Defense Department to get us to this point. This administration deserves credit for vigorously attacking the very daunting set of scientific and engineering challenges by which a bullet can strike another bullet. At the same time, development of a system will only come through further research and development and a rigorous testing regime. Many opponents of this legislation have asked why should we take this step now? It's true, the threat of ballistic missiles is not a new one. The American people have lived for decades under this threat. In fact, during the cold war, the Soviet Union had thousands of nuclear-tipped ballistic missiles pointed, ready to shoot at American cities. What has changed is the source of the ballistic missile threat. During the cold war, and even today, we used the power of deterrence to protect ourselves. Nations like Russia and China know that an attack on America would be met with an immediate and overwhelming response by United States forces. They were and still are deterred by a calculation of their own self-interest. However, the underlying assumption of deterrence is rational behavior by the other side. None of the emerging threats--whether they be terrorist states or rouge or desperate individuals--can be counted on to respond rationally to the threat of retaliation. In the past, I have voted against cloture on the motion to proceed to this bill. However, two distinct events over the last few months have highlighted the changed nature of the threat and have led me to support this legislation. First, the release of the Rumsfeld Commission Report last July stated that the newer ballistic missile threats are developing from countries like Iran, Iraq, and North Korea. The report went on to state that these nations could be able to acquire the capability to inflict major destruction on the United States within about 5 years of a decision to acquire ballistic missiles. Furthermore, the Rumsfeld Report warmed that these emerging threats had more mature capabilities than previous assessments has thought possible. Then, almost on cue, North Korea tested the Taepo Dong I missile on August 31, 1998. The details of this test have been widely reported in the media. But the real lesson of this missile test was that our intelligence community was surprised by the North Koreans' ability to launch a three-stage missile. We saw that North Korea may have the ability to hit parts of the United States with a missile with a small payload. We also know that the North Koreans continue to work on the Taepo Dong II; an intercontinental missile with the capability of reaching the United States mainland. In addition, North Korea's nuclear capability and nuclear ambitions turn these missile developments into a clear strategic warning. Mr. President, aside from demonstrating the validity of the conclusions of the Rumsfeld Report, the North Korean missile test put a face on the emerging ballistic missile threat. There may not be a more unpredictable regime on earth than that of Kim Jong II. A government which continues to pour resources into weapons of mass destruction while its people undergo a famine is beyond our understanding. But I have no doubt of North Korea's willingness to use ballistic missiles-- in an all-out desperate act of terror--against United States cities. Traditional threats of massive retaliation are unlikely to deter a man as unstable as Kim Jong II. They will not likely deter the Iranian or Libyan governments or other future rogue states. Instead, we must protect our nation through a limited missile defense. Time remains for us to counter this threat. But we must act now. Mr. President, opponents of this legislation have valid concerns about how national missile defense will affect our relationship with Russia. I share these concerns. Our long-term global interests are best secured by maintaining a cooperative relationship with Russia. While a wide variety of Russian political leaders have expressed their opposition to United States national missile defense, I do not believe Russian opposition is insurmountable. Just as our allies like Britain and France realize United States national missile defense is not directed against them, the Russians can be convinced the threats we seek to counter through missile defense come from unauthorized and rouge-nation launches. Furthermore, these are threats--given their proximity to countries like Iraq, Iran, and North Kora--Russia must also confront. Although Russia has deployed an ABM system around Moscow, there is nothing particular about Russia that will make it impervious to these threats. Mr. President, in their vulnerability I see a chance to engage Russia; to work cooperatively to confront the mutual threat of ballistic missile proliferation. By jointly developing national missile defense with Russia, we will make our citizens safer and improve our bilateral relationship. Similarly, the problems presented by the ABM Treaty may in fact present opportunities. There is no reason why we can't work with Russia to adapt the ABM Treaty to reflect the changes that have occurred in the world since the treaty was signed in 1972. At that time, we could not anticipate the proliferation of ballistic missile technology we face today. By changing the treaty to allow each side to develop a limited missile defense system to protect from unauthorized or rogue launches, we can address the threat, maintain the treaty, and not upset the strategic balance ABM sought to create. Mr. President, I see further opportunity to reduce the threat of ballistic missiles and make significant strides in our relationship with Russia. In the past, and again today, I call on the President to seize this opportunity to make a bold gesture to reduce the danger posed by United States and Russian strategic nuclear weapons. More than 6 years after the end of the cold war, both the United States and Russia maintain thousands of nuclear weapons on hair-trigger alert. My fear, Mr. President, is our maintenance of more weapons than we need to defend our interests is prompting Russia to keep more weapons than she is able to control. I have proposed that the President, acting in his capacity as Commander in Chief, order the immediate elimination of U.S. strategic nuclear forces in excess of proposed START III levels. Such a bold gesture would give the Russians the security to act reciprocally. Russia not only wants to follow our lead in such reductions, it must. Russia's own Defense Minister recently said, publicly, that Russia is thinking of its long-term nuclear arsenal in terms of hundreds, not thousands. To help Russia accomplish these reductions, Congress must be prepared to provide funding through the Nunn-Lugar Cooperative Threat Reduction Program. We should spend whatever is necessary to help Russia dismantle and secure its nuclear arsenal. The best form of missile defense is helping Russia destroy its missiles. Mr. President, my support for the bill before you comes from my belief that its passage will make Americans safer. The time to prepare for the emerging threat of ballistic missiles is today. The legislation before us sets us on the path to confront these threats in a real and manageable way. I strongly encourage my colleagues support for this legislation and I yield the floor. Mr. COCHRAN addressed the Chair.

Mr. KERREY

Mr. KERREY. Mr. President, I voted today in support of the Gramm amendment which supports my belief that the FDIC's ``Know Your Customer'' regulation should be withdrawn. This vote mirrors my earlier action where I had written to FDIC Chairwoman Tanoue asking her to withdrawal the regulation. While I commend FDIC's effort to identify and crack down on illegal activity, I am deeply concerned the ``Know Your Customer'' regulation will threaten the financial privacy of Nebraska customers. When federal regulators consider any regulation like ``Know Your Customer,'' the private relationship between customers and their financial institutions should be given the utmost consideration. I believe ``Know Your Own Customer'' would severely strain this relationship. Customers should feel confident that their financial transactions are done in confidence and not subject to uninvited searches. Bankers in Nebraska already report large cash transactions, violations of federal law and potential money laundering activity without invading the privacy of their customers. ``Know Your Customer'' would require financial officers to infringe on their customers' privacy, damaging public perception of the banking industry. On behalf of the many Nebraskans, customers and bankers, who have relayed similar concerns with me, I am pleased the United States Senate has taken this action. In the meantime, I will remain committed to see that FDIC withdraws the ``Know Your Customer'' regulation.

Mr. KERREY

Mr. KERREY. Mr. President, earlier this morning, Senator Grassley of Iowa introduced a bill that I am a cosponsor of called the International Child Welfare Protection Act. I would like to talk about that piece of legislation and the objective of that legislation. I first became aware of this problem through the efforts of the junior Senator from Iowa, Tom Harkin, who came before the Finance Committee earlier this year to describe the need to put in our trade authority language that would have the negotiators negotiating for the purpose of reducing the use of child labor worldwide. I support that. I believe the Finance Committee should, when we mark up the normal trade authority, put that language in. My hope is that this piece of legislation will provide a stimulus to do that. This legislation Senator Grassley and I are introducing says that economic growth is not just about the bottom line; it is about improving human lives. I believe this piece of legislation can help do that, Mr. President, by taking an incentive-based approach to encourage developing countries to do the right thing on child labor. Instead of threatening them with access to U.S. markets, this bill says we are going to hold out an incentive and offer them U.S. markets at a price they currently can't access. Now, the action we ask them to take in exchange is to sign the International Labor Organization's Convention on Child Labor. That convention states that the minimum age for admission to employment shall not be less than the age of completion of compulsory schooling: either 14, 15, or 16 years of age. For that agreement, we will provide preferential access to the world's largest consumer market for additional products. As I said, I believe this is a good move for the United States to make. I think it does provide incentives, for developing nations especially, to change their own policies toward child labor. But I also think it is important to try to get into our negotiating authority language that directs our negotiators to keep child labor in mind and try to negotiate for the purpose of reducing the use of child labor in nations with which we trade. There should be a connection between trade and growing the middle-class worldwide. Unfortunately, all too often, trade is measured only in terms of the dollars that we export and the dollars we import. For me, it is far better and more likely that we will have public support for good, open trade policies, if we use trade as a means to an objective, not just to produce a better bottom line, not just to produce higher trade numbers, but to increase the standard of living of people in the United States and to increase the standard of living of people throughout the world. The single best way for us to assure access for U.S. goods overseas is for us to help the middle class grow in other countries. The only way to do that is for people to produce and sell goods that other countries want to buy and their own people can afford. It is a very difficult process for developing nations. We went through it in the United States of America. But for those developing nations to lift their middle class, they have to open up their markets and subject their businesses to competition. Otherwise, their standard of living will constantly be depressed as a result of simply saying that we are only going to complete up to the standard of our domestic marketplace. When I talk about international trade issues, Mr. President, that is the fundamental truth with which I began. Free trade--reducing tariffs both here and abroad--will help the middle class to grow. And a prosperous and growing middle class has a positive effect on the issues we face in trade policy today. Indeed, I argue that it is one of the reasons we have struggled to get normal trade authority from the President. As least as I see it in Nebraska, there is growing skepticism that there is a connection between the standard of living of the people who are in the workforce today and the trade policies. Many of my citizens have reached a conclusion that there is a negative connection, and that free trade policies have depressed their standard of living and made it more difficult for them to earn the wages they feel they deserve as a consequence of the work they are doing every day. We have many problem in trade policies that make it difficult for us to convince the American people that free trade is unquestionably a good thing. The legislation Senator Grassley and I have introduced today says we want to make progress on these issues. The International Labor Organization estimates that more than 250 million children worldwide between the ages of 5 and 14 are obliged to work either full-time or part-time in developing countries alone. Many work under condition that are debilitating for their physical, moral, or emotional well-being. Far too many are employed in the fields, rug factories, and electronic factories that hope to export products to the United States of America. What this bill does is go directly to that desire. This bill would immediately cause other countries to say, desire. This bill would immediately cause other countries to say, ``We can sell products to the U.S. consumers that we could not sell before. All we have to do is agree to an internationally recognized standard on child labor.'' If they sign that agreement today, they gain access to American markets and American dollars tomorrow. It is an approach that has worked for the Europeans. It is an incentive-based, rather than a punitive, approach; it is a trade policy that is increasingly recognized as a better way to proceed on some of these very difficult issues. We want children to be the beneficiaries of economic growth, not the engines of it. To us, it is evident that it is self-defeating for economic growth to come at the expense of our children. This bill is a step in the right direction, and I hope it represents to the people I serve that I am willing, in fact, I look forward to coming to the table on these very difficult and sticky trade issues that have divided us in the past. I hope it is seen, as well, as an important first step--but a first step only--in reducing the terrible consequences of allowing these young children to be used for labor in these developing countries. It is a very important issue that Senator Harkin has worked on for years. He brought it to the attention of the Finance Committee. I believe the committee is responding in a first-step fashion, and I hope they will follow this action with further changes in the negotiating language that will say to our negotiators: we want you to put child labor at the top of your concerns when you are negotiating trade agreement.

Mr. KERREY

Mr. KERREY. Mr. President, earlier this morning, Senator Grassley of Iowa introduced a bill that I am a cosponsor of called the International Child Welfare Protection Act. I would like to talk about that piece of legislation and the objective of that legislation. I first became aware of this problem through the efforts of the junior Senator from Iowa, Tom Harkin, who came before the Finance Committee earlier this year to describe the need to put in our trade authority language that would have the negotiators negotiating for the purpose of reducing the use of child labor worldwide. I support that. I believe the Finance Committee should, when we mark up the normal trade authority, put that language in. My hope is that this piece of legislation will provide a stimulus to do that. This legislation Senator Grassley and I are introducing says that economic growth is not just about the bottom line; it is about improving human lives. I believe this piece of legislation can help do that, Mr. President, by taking an incentive-based approach to encourage developing countries to do the right thing on child labor. Instead of threatening them with access to U.S. markets, this bill says we are going to hold out an incentive and offer them U.S. markets at a price they currently can't access. Now, the action we ask them to take in exchange is to sign the International Labor Organization's Convention on Child Labor. That convention states that the minimum age for admission to employment shall not be less than the age of completion of compulsory schooling: either 14, 15, or 16 years of age. For that agreement, we will provide preferential access to the world's largest consumer market for additional products. As I said, I believe this is a good move for the United States to make. I think it does provide incentives, for developing nations especially, to change their own policies toward child labor. But I also think it is important to try to get into our negotiating authority language that directs our negotiators to keep child labor in mind and try to negotiate for the purpose of reducing the use of child labor in nations with which we trade. There should be a connection between trade and growing the middle-class worldwide. Unfortunately, all too often, trade is measured only in terms of the dollars that we export and the dollars we import. For me, it is far better and more likely that we will have public support for good, open trade policies, if we use trade as a means to an objective, not just to produce a better bottom line, not just to produce higher trade numbers, but to increase the standard of living of people in the United States and to increase the standard of living of people throughout the world. The single best way for us to assure access for U.S. goods overseas is for us to help the middle class grow in other countries. The only way to do that is for people to produce and sell goods that other countries want to buy and their own people can afford. It is a very difficult process for developing nations. We went through it in the United States of America. But for those developing nations to lift their middle class, they have to open up their markets and subject their businesses to competition. Otherwise, their standard of living will constantly be depressed as a result of simply saying that we are only going to complete up to the standard of our domestic marketplace. When I talk about international trade issues, Mr. President, that is the fundamental truth with which I began. Free trade--reducing tariffs both here and abroad--will help the middle class to grow. And a prosperous and growing middle class has a positive effect on the issues we face in trade policy today. Indeed, I argue that it is one of the reasons we have struggled to get normal trade authority from the President. As least as I see it in Nebraska, there is growing skepticism that there is a connection between the standard of living of the people who are in the workforce today and the trade policies. Many of my citizens have reached a conclusion that there is a negative connection, and that free trade policies have depressed their standard of living and made it more difficult for them to earn the wages they feel they deserve as a consequence of the work they are doing every day. We have many problem in trade policies that make it difficult for us to convince the American people that free trade is unquestionably a good thing. The legislation Senator Grassley and I have introduced today says we want to make progress on these issues. The International Labor Organization estimates that more than 250 million children worldwide between the ages of 5 and 14 are obliged to work either full-time or part-time in developing countries alone. Many work under condition that are debilitating for their physical, moral, or emotional well-being. Far too many are employed in the fields, rug factories, and electronic factories that hope to export products to the United States of America. What this bill does is go directly to that desire. This bill would immediately cause other countries to say, desire. This bill would immediately cause other countries to say, ``We can sell products to the U.S. consumers that we could not sell before. All we have to do is agree to an internationally recognized standard on child labor.'' If they sign that agreement today, they gain access to American markets and American dollars tomorrow. It is an approach that has worked for the Europeans. It is an incentive-based, rather than a punitive, approach; it is a trade policy that is increasingly recognized as a better way to proceed on some of these very difficult issues. We want children to be the beneficiaries of economic growth, not the engines of it. To us, it is evident that it is self-defeating for economic growth to come at the expense of our children. This bill is a step in the right direction, and I hope it represents to the people I serve that I am willing, in fact, I look forward to coming to the table on these very difficult and sticky trade issues that have divided us in the past. I hope it is seen, as well, as an important first step--but a first step only--in reducing the terrible consequences of allowing these young children to be used for labor in these developing countries. It is a very important issue that Senator Harkin has worked on for years. He brought it to the attention of the Finance Committee. I believe the committee is responding in a first-step fashion, and I hope they will follow this action with further changes in the negotiating language that will say to our negotiators: we want you to put child labor at the top of your concerns when you are negotiating trade agreement.

Mr. KERREY

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

Mr. KERREY

Mr. KERREY. Mr. President, was the unanimous consent agreed to, to end the quorum call?

Mr. KERREY. Mr. President, I think there is something that is going to happen at 5:00. I am going to talk for a while and wait and see if the leaders can resolve the little stalemate we have going on on the floor right now. Title I is a very important program in Nebraska. It serves somewhere between 37,000 and 38,000 students, but costs us about $800 per student per year. We have about 80 schools that have schoolwide Title I programs and about 350 that are in the targeted program. One of the concerns I have in general with education is, we typically are fighting with peanuts. I do not mean to say that $8 billion is peanuts, but relative to the cost of some of our larger programs we rarely debate around here, Title I is still a relatively low-cost program. By that I mean, one of my issues since I have come here to the U.S. Senate has been to try to alert both the people of Nebraska, as well as the people in the Senate, that we have a tremendous problem with our growing mandatory programs: Social Security, Medicare, the long-term portion of Medicaid. I must say I am not very pleased with the progress of that debate this year. We are fighting ourselves with a significant amount of constraint in discretionary spending. There is a big debate going on right now whether we ought to lift the budget caps that are currently imposed to $574 billion for this year for budget outlays. One of the reasons there is pressure on that is these mandatory programs continue to take a larger and larger share of the total budget. For all the talk about Medicare in the last few years, you would have thought we cut it. During the 1997 balanced budget agreement, I know many people were concerned that we were cutting Medicare. Medicare continues to go up about $20 billion per year over the next 10 years. We have to decide, it seems to me, if we are going to maintain laws that place a minimal amount of restriction on business, that keep kind of an entrepreneurial spirit alive and well in the United States of America. I am in favor of cutting some of the regulations we have on business today. We do not impose a great deal of restriction on what people are required to do with their employees. We have minimum wage laws, but, beyond that, we do not require health insurance and we do not require pensions like many other nations do. If we are going to do that, it seems to me we are going to have to reexamine the fundamental laws we have governing our so-called safety net. That is going to lead us, it seems to me, both to change the structure of our Social Security system as well as to change the structure of our health care system. Unfortunately, what happens is, we get terrified about the time an election shows up, and we get concerned about whether or not changing eligibility age or some other adjustments in the cost of these programs will enable us to survive an election. As a consequence, we rarely take any action. Indeed, I must say the President's budget, though it is attractive in many ways, has a couple of significant flaws that make this problem even worse, in my view at least. The biggest flaw is that the President requires us to take the surplus and exchange publicly held debt and transfer it over to, in one place, the Medicare trust fund, the other, the Social Security trust fund--nearly 65 percent I believe the total number is. What this is going to do is give people who are eligible either for an old-age benefit or health care benefit out in the future a larger and larger claim than they have even now on our taxes. I say that preliminarily, because I examined the Title I program considerably in my State and I see it is doing a great deal of good. It is not just being used for low-income people, although free and reduced-price lunch guidelines mean schools that have incomes of $31,000 for a family of four would qualify. Mr. President, $31,000 is typically Mom and Dad--at least in my community--both out there working like mad, trying to make ends meet. It is not what people would think of when they think of traditional ``poor'' folks. In this case, we have more poverty on a percentage basis in rural Nebraska than we do in urban Nebraska, and, as a consequence, these Title I funds are enormously important. They are like a lifeline. There are 37,000 students being served by it. That is about 17,000 short of the total who are eligible. We have another 17,000 schoolchildren out there who are eligible, by Federal guidelines, to be assisted. As you examine what is being done by these schools, how they are using these basic grants and the concentration grants, you can begin to get an idea not only of the problems that are being faced but the need that is there and the good that gets done if we are able to provide these Title I funds. Under the Ed-Flex bill, which I like a lot, we are granting the States some additional flexibility which will be enormously helpful in my State, especially in the rural areas. I have been using this piece of legislation as an opportunity to work with the Department of Education to get them to help Nebraska--in fact, get a waiver to help us develop our Title I plan, using the standards and assessment of the local districts. The State would approve those local plans, but it is not quite a State plan. We have been having difficulty getting that waiver, and I thank the Department of Education for helping us accomplish this goal. Secretary Riley has been enormously helpful in that regard. It gives us another window into the problems we are facing right now of children of lower- income working families. Understand that the world has changed considerably. I graduated from high school in 1961, just shortly before the ice started to recede back up into the North. In 1961, three-fourths of my graduating class went right into the workforce. There were good jobs available in 1961 that supported a family at the Havelock shops for Burlington Northern, at Goodyear, at Western Electric, the new AT&T plant that just opened up in Omaha. They were good jobs. The rule was, you went out and got a job. That job supported your family. You did a little time in the service. You came back from the service. The job was there, and you worked at it for the rest of your life. Mr. President, a third of our high school graduates who are going straight into the workforce today find a much different situation. I support free trade. I want our laws to provide us with free trade opportunities. But that puts a tremendous amount of pressure on these young people to compete in a global economy in a way that I was not required to do when I graduated in 1961. I would like to keep the restrictions on business to a minimum so that we can grow our economy and allow entrepreneurs and the energy of the entrepreneur community to create new jobs and wealth in America. But if we are going to have both of those things, it seems to me what we have to do is be very diligent in the first place about being willing to tackle these mandatory programs where a larger and larger share of our budget is going, but we are also going to have to be willing to invest in these young people and give this lifeline to the State and local educators who are trying to make Title I a program that does, in fact, give our young people the reading skills, the math skills, and the other skills they are going to need when they graduate from high school. I am very much troubled about that one-third of the class who are now going right from high school into the workforce with the kind of skills that they have, given what the marketplace is asking them to have in order to get the kind of job they are going to need to support their families. Title I is one of the bills that has been mentioned repeatedly here on the floor of the Senate, especially by people who are concerned about the impact of this Ed-Flex bill--I believe Ed-Flex is going to enable us to make Title I an even better program than it is right now. Now Title I is one of those programs that has a name on it, a number on it--I know when I talk to educators, I sometimes have to get a translator to tell me what exactly they are talking about--but it also has people behind it. When you see the impact of Title I, at least in my communities, it is a program that not only deserves to be supported, Mr. President, but, in my judgment, when we reauthorize the Elementary and Secondary Education Act, we need to find a way to put more money into Title I. We made significant reform in 1994 requiring standards to be developed, requiring assessments to be developed. We made it a much better program. But in my State there are 17,000 eligible kids whom we cannot serve simply because we don't have enough money to get the job done. There are few programs right now in education--in fact, there is none in education-- that I believe does more in my State to help our children acquire the skills they are going to need when they graduate and go into the workforce to earn the kind of living they will need to support a family and to achieve the American dream. I see the distinguished chairman has walked back on the floor. I am prepared to yield the floor.

Mr. KERREY. I cannot possibly talk for another 20 minutes, so I yield the floor. Several Senators addressed the Chair.

Mr. KERREY

Mr. KERREY. Mr. President, I rise today to introduce with Senator Roberts the Crop Insurance for the 21st Century Act. This bill will make crop insurance more affordable, more flexible, and more responsive to the changing needs of farmers. That has been our goal from the start, when we asked for help from farmers in Nebraska, in Kansas, and from the many farm, commodity, banking and crop insurance interests that work with producers. They responded with a multitude of ideas, and those ideas form the basis for this bill. The basic structure of the crop insurance program was set out in 1980, and much of that structure remains in place today. Congress last reformed the crop insurance program in 1994, when we created new opportunities for private sector delivery of policies and risk sharing. And our success has been great--more than 181 million acres are enrolled in the program today, up almost 100 million acres since 1993. But we are now seeing participation on the decline. That is cause for concern. And last year, we discovered more cause for concern. Farmers in the northern plains who had been reliable buyers of crop insurance found that it was no longer offering much protection, after repeated years of weather-related disasters. Other farmers across the country made the seemingly improbable decision not to buy a 100 percent subsidized catastrophic policy because they found it worthless--so worthless they wouldn't spend even $50 for the administrative fee. And they then chose not to purchase a buy-up policy, either. And of greatest concern was the inevitable ad hoc disaster program, which Congress had theoretically eliminated in 1994. We spent an additional $6 billion on disaster aid last year in part to make up for these problems. And there are no substantive changes in the program to ward off another disaster bill this year. We will spend at least $18 billion this fiscal year to support agriculture. And the crisis is only deepening. Will this bill fix that crisis? No. Crop insurance does not and can not provide income. If you're getting a check from your insurance company--for your car, or your house, or your farm--you've lost money. But the program today no longer provides even enough support to keep most farmers in business after a couple of loss years. How can it, when most of them have a 35 percent deductible? For a farm operation with $500,000 worth of production, that means the farmer absorbs the first $175,000 of loss. Let me give you an example of how the economics of crop insurance work today. Doug Schmale of Lodgepole, NE, grows about 1,500 acres of wheat on his farm. He's a believer in crop insurance and buys it every year. And now he buys CRC, because he understands that covering revenue is an improvement over just covering yields. Doug says the reason he only buys 65 percent coverage is because, ``That's where it makes the most sense, because that's where the government puts the money. But it's still not adequate.'' Doug is insuring 26 bushels of wheat per acre, which he admits is nowhere close to what he can live on. And since 1987 he's only collected on his insurance policy twice. And he pays about $8,000 a year to buy it, every year. What Doug wants is to buy a 75 percent CRC policy. But if he does that today, his costs will more than double. He'll go from $4.72 an acre to $9.75. And that's not even an option when wheat is only worth $3.00. Doug says that this bill will finally make coverage affordable for him. He'll get enough coverage--at a price he can afford--to stay in business if he has two bad years in a row. There's been a lot of talk about ``safety nets'' over the past few years. And we all know that we wouldn't insure our houses with a 35 percent deductible. But the economics of agriculture say to farmers, ``Underinsure,'' especially now, when every dollar per acre makes an enormous difference. Congress must help change that message. Our message to farmers must be, ``We want you to insure your farm operation for enough coverage that your policy has some value. We want you to be able to take into account crop rotation, new crops and new land. If you have an unbelievable run of bad luck with the weather, we want crop insurance to help you stay in business. ``And we will help you do it.'' Additionally, this bill recognizes that many farmers are trying new crops and in fact other government policies have encouraged them to do so. The crop insurance program offers little option but to underinsure or go without coverage. This bill would required changes in the program to take that into account. And just as importantly, this bill takes a big step toward restructuring the agency that oversees the program. Unbelievably, the statute now makes the board of directors responsible for reporting to the government agency, instead of having the agency report to the Board. We'll put the board of directors at the top of the hierarchy where they belong. By making changes in the administration of the program, we'll come closer to the flexible and responsive risk management program that farmers expect. That may be the most important thing we accomplish. Senator Roberts and I have worked together on crop insurance in the past, and we are happy to take the lead again. And I reiterate: this is not the panacea to the financial crisis in rural America, but it is a worthwhile first step. I look forward to a renewed spirit of bipartisanship on ag issues, and we are starting here today. Mr. President, quite simply, this piece of legislation will make crop insurance more affordable, more flexible and more responsive to the changing needs of farmers. That has been our goal from the start, for farmers in Nebraska, farmers in Kansas and farmers throughout the country. The basic structure of the Crop Insurance Program was set in place in 1980. Much of that structure remains in place today. The last time Congress changed the law was in 1994, and at that time we created new opportunities for private sector delivery of policies and risk sharing. It is a model, in my judgment, Mr. President, that has worked. The taxpayers take half the risk; the private sector takes half the risk. They are the ones out selling the product and, as a consequence, there is far less taxpayer exposure than there would be otherwise. Senator Roberts just alluded to it. In fact, I think he did more than just allude to it. He said it directly. The ad hoc disaster program we believed we were ending in 1994, when we passed the crop insurance bill, well, it came back last year with a vengeance for $6 billion. It is not a very efficient way of helping businesspeople, family-operated farms that suffer losses. It is a very inefficient way. Typically it costs us a great deal more money and typically it does not benefit the people who need it the most. What crop insurance gives the farmer is a management tool that they can use to manage risk. It is not a replacement for other programs. It is not a replacement for income. It is a tool that they can use to manage the considerable risk of manufacturing a product outside. In 1994, after we created the program, we met with considerable success. We had 181 million acres that were enrolled in the program-- that is up from 100 million acres enrolled in 1993--but we are seeing participation rates decline. Last year we discovered more cause for concern when farmers in the northern plains who had been reliable buyers of crop insurance found that it was no longer offering much protection. They were unwilling to buy a 100-percent subsidized catastrophic policy because they found it was worthless. It is only 50 bucks, but they are telling us that it is worthless. Other concerns were expressed by farmers, to both Senator Roberts and I, and many other Members of Congress, about how to make this Crop Insurance Program work. We have tried, with this piece of legislation, to do that, by inverting the subsidies, by equalizing the subsidies for revenue insurance, by allowing revenue insurance to be offered for price as well as for yields, by changing the APH for multiyear losses, as well as making changes for farmers that are coming on line for the first time, by allowing livestock to be covered for the first time, a permissive piece, and, most importantly for me, by restructuring the Risk Management Agency itself, making the Risk Management Agency director responsive to the board and bringing on a new private sector entity to evaluate reinsurance and evaluate what, indeed, the market itself wanted to do. Mr. President, I would like to talk specifically about one individual, a man by the name of Doug Schmale from Lodgepole, NE. He grows about 1,500 acres of wheat on his farm. He likes crop insurance. He buys it every year and has bought it since 1987. He has collected but twice. I talked to him about the details. Listen to his details. It is the same thing we are hearing from farmers throughout the country. He buys 65 percent coverage, he said, because ``that's where it makes the most sense, because that's where the Government puts the money. But it's not adequate.'' It doesn't provide him with the protection he needs. That means he will be insuring about 26 bushels an acre, which he admits is nowhere close to what he can produce, nowhere near the kind of losses he would expect if he were to suffer a loss on that crop. What he would like to do is buy a 75 percent crop recovery policy. If he does that, the premiums are so high that, given the price of wheat, he cannot afford to buy it. Again, Mr. President, we are not talking about throwing a bunch of money out here. We are talking about allowing these subsidies to change so the private sector can sell the product easier. I must emphasize this over and over, that what crop insurance represents for the taxpayer is a terrific way to put a product out there to manage risk, because the private sector assumes half the loss. The private sector will suffer a significant loss if there are losses. So they are not going to be out there underwriting policies for things that they consider to be too risky, because they are on the line for half the loss. This piece of legislation represents a substantial step forward. We have pilot projects in there for beginning farmers. We have pilot projects in there, as well, for many of our southern friends who are concerned that cotton, because it is a lower-cost product, has not been able to get good underwriting. We have tried to accommodate concerns for many other crops as well. We believe that if we can get this legislation passed this year, it will be a giant step forward from what we had in 1994 and will continue us in the direction of saying that we are not going to have ad hoc disaster programs. We are going to allow the farmer himself to have a product that enables him to manage that risk and reduce the risk associated with a rather risky endeavor of production agriculture. I don't know if the Senator from Kansas has anymore enlightened, humorous remarks to make. I wonder if the Senator from Kansas will agree that what we saw after we passed the law in 1994 was a substantial increase in the number of acres that are covered, and the program is working, but we have kind of hit a wall. We reformed it considerably. We are moving more toward the market, but we have hit a wall. The market is basically saying, ``We have products that we can sell; our farmers will buy the products.'' But here are changes we need to make in this law and if you make these changes, we think you will find more acreage is underwritten, more satisfied customers and less need for ad hoc disaster, as a consequence.

Mr. KERREY. Mr. President, I appreciate that growing list of cosponsors. I hope this is a piece of legislation which we can persuade our friends on the Budget Committee to make room for. It will save us money in the long term. It will save us and prevent us from spending multibillions of dollars a year on ad hoc disaster assistance in some kind of a supplemental appropriation. I hope very much that we are able to get some additional room. I was disappointed we did not see it in the President's budget. He has a lot of new spending priorities. I think if we put this a bit ahead of some of the spending priorities, we ought to make room for it. I promise my colleagues, if we do that, if we change the law in this way, you will find we will be saving money in the long term trying to make certain that family-based agriculture, one of the most important parts of our economy, still producing this year at least $20 billion worth of surplus in trade--it is going to be down a it in 1999, but it is still an enormously important part of our economy--I assure my colleagues if we get room in our budget to include the cost of this expansion of crop insurance that it will save us money in the long term.

Mr. KERREY

Mr. KERREY. Mr. President, I rise today to introduce with Senator Roberts the Crop Insurance for the 21st Century Act. This bill will make crop insurance more affordable, more flexible, and more responsive to the changing needs of farmers. That has been our goal from the start, when we asked for help from farmers in Nebraska, in Kansas, and from the many farm, commodity, banking and crop insurance interests that work with producers. They responded with a multitude of ideas, and those ideas form the basis for this bill. The basic structure of the crop insurance program was set out in 1980, and much of that structure remains in place today. Congress last reformed the crop insurance program in 1994, when we created new opportunities for private sector delivery of policies and risk sharing. And our success has been great--more than 181 million acres are enrolled in the program today, up almost 100 million acres since 1993. But we are now seeing participation on the decline. That is cause for concern. And last year, we discovered more cause for concern. Farmers in the northern plains who had been reliable buyers of crop insurance found that it was no longer offering much protection, after repeated years of weather-related disasters. Other farmers across the country made the seemingly improbable decision not to buy a 100 percent subsidized catastrophic policy because they found it worthless--so worthless they wouldn't spend even $50 for the administrative fee. And they then chose not to purchase a buy-up policy, either. And of greatest concern was the inevitable ad hoc disaster program, which Congress had theoretically eliminated in 1994. We spent an additional $6 billion on disaster aid last year in part to make up for these problems. And there are no substantive changes in the program to ward off another disaster bill this year. We will spend at least $18 billion this fiscal year to support agriculture. And the crisis is only deepening. Will this bill fix that crisis? No. Crop insurance does not and can not provide income. If you're getting a check from your insurance company--for your car, or your house, or your farm--you've lost money. But the program today no longer provides even enough support to keep most farmers in business after a couple of loss years. How can it, when most of them have a 35 percent deductible? For a farm operation with $500,000 worth of production, that means the farmer absorbs the first $175,000 of loss. Let me give you an example of how the economics of crop insurance work today. Doug Schmale of Lodgepole, NE, grows about 1,500 acres of wheat on his farm. He's a believer in crop insurance and buys it every year. And now he buys CRC, because he understands that covering revenue is an improvement over just covering yields. Doug says the reason he only buys 65 percent coverage is because, ``That's where it makes the most sense, because that's where the government puts the money. But it's still not adequate.'' Doug is insuring 26 bushels of wheat per acre, which he admits is nowhere close to what he can live on. And since 1987 he's only collected on his insurance policy twice. And he pays about $8,000 a year to buy it, every year. What Doug wants is to buy a 75 percent CRC policy. But if he does that today, his costs will more than double. He'll go from $4.72 an acre to $9.75. And that's not even an option when wheat is only worth $3.00. Doug says that this bill will finally make coverage affordable for him. He'll get enough coverage--at a price he can afford--to stay in business if he has two bad years in a row. There's been a lot of talk about ``safety nets'' over the past few years. And we all know that we wouldn't insure our houses with a 35 percent deductible. But the economics of agriculture say to farmers, ``Underinsure,'' especially now, when every dollar per acre makes an enormous difference. Congress must help change that message. Our message to farmers must be, ``We want you to insure your farm operation for enough coverage that your policy has some value. We want you to be able to take into account crop rotation, new crops and new land. If you have an unbelievable run of bad luck with the weather, we want crop insurance to help you stay in business. ``And we will help you do it.'' Additionally, this bill recognizes that many farmers are trying new crops and in fact other government policies have encouraged them to do so. The crop insurance program offers little option but to underinsure or go without coverage. This bill would required changes in the program to take that into account. And just as importantly, this bill takes a big step toward restructuring the agency that oversees the program. Unbelievably, the statute now makes the board of directors responsible for reporting to the government agency, instead of having the agency report to the Board. We'll put the board of directors at the top of the hierarchy where they belong. By making changes in the administration of the program, we'll come closer to the flexible and responsive risk management program that farmers expect. That may be the most important thing we accomplish. Senator Roberts and I have worked together on crop insurance in the past, and we are happy to take the lead again. And I reiterate: this is not the panacea to the financial crisis in rural America, but it is a worthwhile first step. I look forward to a renewed spirit of bipartisanship on ag issues, and we are starting here today. Mr. President, quite simply, this piece of legislation will make crop insurance more affordable, more flexible and more responsive to the changing needs of farmers. That has been our goal from the start, for farmers in Nebraska, farmers in Kansas and farmers throughout the country. The basic structure of the Crop Insurance Program was set in place in 1980. Much of that structure remains in place today. The last time Congress changed the law was in 1994, and at that time we created new opportunities for private sector delivery of policies and risk sharing. It is a model, in my judgment, Mr. President, that has worked. The taxpayers take half the risk; the private sector takes half the risk. They are the ones out selling the product and, as a consequence, there is far less taxpayer exposure than there would be otherwise. Senator Roberts just alluded to it. In fact, I think he did more than just allude to it. He said it directly. The ad hoc disaster program we believed we were ending in 1994, when we passed the crop insurance bill, well, it came back last year with a vengeance for $6 billion. It is not a very efficient way of helping businesspeople, family-operated farms that suffer losses. It is a very inefficient way. Typically it costs us a great deal more money and typically it does not benefit the people who need it the most. What crop insurance gives the farmer is a management tool that they can use to manage risk. It is not a replacement for other programs. It is not a replacement for income. It is a tool that they can use to manage the considerable risk of manufacturing a product outside. In 1994, after we created the program, we met with considerable success. We had 181 million acres that were enrolled in the program-- that is up from 100 million acres enrolled in 1993--but we are seeing participation rates decline. Last year we discovered more cause for concern when farmers in the northern plains who had been reliable buyers of crop insurance found that it was no longer offering much protection. They were unwilling to buy a 100-percent subsidized catastrophic policy because they found it was worthless. It is only 50 bucks, but they are telling us that it is worthless. Other concerns were expressed by farmers, to both Senator Roberts and I, and many other Members of Congress, about how to make this Crop Insurance Program work. We have tried, with this piece of legislation, to do that, by inverting the subsidies, by equalizing the subsidies for revenue insurance, by allowing revenue insurance to be offered for price as well as for yields, by changing the APH for multiyear losses, as well as making changes for farmers that are coming on line for the first time, by allowing livestock to be covered for the first time, a permissive piece, and, most importantly for me, by restructuring the Risk Management Agency itself, making the Risk Management Agency director responsive to the board and bringing on a new private sector entity to evaluate reinsurance and evaluate what, indeed, the market itself wanted to do. Mr. President, I would like to talk specifically about one individual, a man by the name of Doug Schmale from Lodgepole, NE. He grows about 1,500 acres of wheat on his farm. He likes crop insurance. He buys it every year and has bought it since 1987. He has collected but twice. I talked to him about the details. Listen to his details. It is the same thing we are hearing from farmers throughout the country. He buys 65 percent coverage, he said, because ``that's where it makes the most sense, because that's where the Government puts the money. But it's not adequate.'' It doesn't provide him with the protection he needs. That means he will be insuring about 26 bushels an acre, which he admits is nowhere close to what he can produce, nowhere near the kind of losses he would expect if he were to suffer a loss on that crop. What he would like to do is buy a 75 percent crop recovery policy. If he does that, the premiums are so high that, given the price of wheat, he cannot afford to buy it. Again, Mr. President, we are not talking about throwing a bunch of money out here. We are talking about allowing these subsidies to change so the private sector can sell the product easier. I must emphasize this over and over, that what crop insurance represents for the taxpayer is a terrific way to put a product out there to manage risk, because the private sector assumes half the loss. The private sector will suffer a significant loss if there are losses. So they are not going to be out there underwriting policies for things that they consider to be too risky, because they are on the line for half the loss. This piece of legislation represents a substantial step forward. We have pilot projects in there for beginning farmers. We have pilot projects in there, as well, for many of our southern friends who are concerned that cotton, because it is a lower-cost product, has not been able to get good underwriting. We have tried to accommodate concerns for many other crops as well. We believe that if we can get this legislation passed this year, it will be a giant step forward from what we had in 1994 and will continue us in the direction of saying that we are not going to have ad hoc disaster programs. We are going to allow the farmer himself to have a product that enables him to manage that risk and reduce the risk associated with a rather risky endeavor of production agriculture. I don't know if the Senator from Kansas has anymore enlightened, humorous remarks to make. I wonder if the Senator from Kansas will agree that what we saw after we passed the law in 1994 was a substantial increase in the number of acres that are covered, and the program is working, but we have kind of hit a wall. We reformed it considerably. We are moving more toward the market, but we have hit a wall. The market is basically saying, ``We have products that we can sell; our farmers will buy the products.'' But here are changes we need to make in this law and if you make these changes, we think you will find more acreage is underwritten, more satisfied customers and less need for ad hoc disaster, as a consequence.

Mr. KERREY. Mr. President, I appreciate that growing list of cosponsors. I hope this is a piece of legislation which we can persuade our friends on the Budget Committee to make room for. It will save us money in the long term. It will save us and prevent us from spending multibillions of dollars a year on ad hoc disaster assistance in some kind of a supplemental appropriation. I hope very much that we are able to get some additional room. I was disappointed we did not see it in the President's budget. He has a lot of new spending priorities. I think if we put this a bit ahead of some of the spending priorities, we ought to make room for it. I promise my colleagues, if we do that, if we change the law in this way, you will find we will be saving money in the long term trying to make certain that family-based agriculture, one of the most important parts of our economy, still producing this year at least $20 billion worth of surplus in trade--it is going to be down a it in 1999, but it is still an enormously important part of our economy--I assure my colleagues if we get room in our budget to include the cost of this expansion of crop insurance that it will save us money in the long term.

Mr. KERREY

Mr. KERREY. Mr. President, does the manager of the bill want to say something?

Mr. KERREY. Mr. President, I yield to the Senator from Vermont for his request.